## Facts

- The New Jersey Attorney General, Anne Milgram, brought a civil action against the Trustees of the Stevens Institute of Technology, a New Jersey nonprofit educational institution.
- The dispute centered on the university’s governance and financial-management practices and the board’s oversight of institutional decision-making.
- The parties resolved the matter through a consent judgment entered by the New Jersey Superior Court in 2010.
- Under the consent judgment, the Board of Trustees agreed to impose term limits on the chairman and vice-chairman of the board.
- The Board agreed to strengthen fiscal controls and budgetary policy.
- The Board agreed to limit the university president’s role on the board.
- The Board agreed to make changes to committee and sub-committee governance, including how committees are structured and how they operate within the board’s oversight framework.

## Issues

1. May a court enter a consent judgment in an Attorney General enforcement action that requires a nonprofit university’s board to adopt specified governance and financial-control reforms?

## Decision

- The court entered the parties’ consent judgment, resolving the case without a litigated merits determination.
- The consent judgment required governance changes, including term limits for the board chairman and vice-chairman.
- The consent judgment required changes to financial controls and budgetary policy to strengthen board oversight of fiscal decisions.
- The consent judgment limited the university president’s role on the board.
- The consent judgment required changes to committee and sub-committee governance.

## Legal Principles

- A consent judgment is a court-approved settlement that becomes an enforceable court order, even though it reflects the parties’ agreement rather than findings after trial.
- In matters involving charitable and nonprofit entities, a state attorney general may seek judicial relief aimed at protecting charitable assets and proper governance.
- Trustees of a nonprofit educational institution have fiduciary duties that include informed oversight of finances, budgets, and internal controls, and governance structures may be adjusted by agreement to address oversight weaknesses.
- Board governance tools such as leadership term limits, clearer committee authority, and limits on management participation in board functions can be used to reduce conflicts and concentrate accountability within the board.

## Conclusion

*Milgram v. Trustees of the Stevens Institute of Technology* concluded with a consent judgment in which the court approved negotiated reforms requiring board leadership term limits, tighter fiscal and budget controls, limits on the university president’s board role, and changes to committee governance, thereby resolving the Attorney General’s action without a contested decision on liability.


Milgram v. Trustees of the Stevens Institute of Technology, No. HUD-C-115-09 (2010)