Class-Action Lawsuit Accuses Rutgers Leadership of Breaching Fiduciary Duty to Taxpayers Through ‘Wasteful and Unlawful’ Diversion of Public Funds to Athletics Program

Relevant Documents:
Complaint
Rutgers 2026 Fiscal Year Budget

A New Jersey resident filed a class-action lawsuit on behalf of the state’s taxpayers against Rutgers University seeking court intervention “to halt the ongoing wasteful and unlawful diversion of public funds” in connection with its intercollegiate athletics program.

The lawsuit – filed March 31 by Hector Rodriguez in Middlesex County, New Jersey, state court – accuses Rutgers University leadership of allowing its athletics department to accumulate more than $500 million in deficits since joining the Big Ten Conference in 2014 and financing the deficits through taxpayer-funded appropriations, transfers from the university’s operating budget and mandatory student fees. Rodriguez says that the deficits show university leadership is breaching its fiduciary duty and represent a “systemic misuse of public resources undertaken without meaningful oversight, without legislative authorization, and without a credible plan for fiscal sustainability.”

The lawsuit names Rutgers University, the Rutgers Board of Governors, the Rutgers Board of Trustees and Rutgers President William Tate IV as defendants.

Rodriguez asks the court to declare that Rutgers’ continued subsidization of athletics department deficits with public funds violates state law, to enjoin the defendants from approving or funding the athletics department deficit using taxpayer funds without legislative authorization and to order Rutgers to make restitution to the state for all amounts deemed to have been improperly used.

The plaintiff also asks the court to order Rutgers to publicly disclose detailed financial records regarding athletics expenditures, undertake an independent financial audit of the Rutgers athletics department and implement fiscal oversight mechanisms to prevent future deficits.

Finally, Rodriguez asks the court to find that the lawsuit is properly a class action and certify the proposed class of all state residents who paid state taxes for the period of 2014 through March 31, 2026, asserting that the action meets the numerosity, commonality, typicality, adequacy of representation and superiority requirements.

The complaint asserts that Rutgers’ leadership, including its board of governors and board of trustees, breached their fiduciary duty to the plaintiff and all New Jersey taxpayers by “approving hundreds of millions of dollars in cumulative deficits without effective oversight.” Because Rutgers relies on public funds for much of its budget, this breach of fiduciary duty “has harmed and continues to harm New Jersey taxpayers,” according to the complaint.

The lawsuit says the university has spent $123.3 million on athletics per year since joining the Big Ten, with revenue of $106 million per year, and that Rutgers athletics had a $78 million deficit in fiscal year 2025. The school’s FY 2026 budget includes $15 million in revenue from student tuition and fees, along with $2.1 million of allocated university support, to help cover the athletics department deficit.

Rutgers ranks 15th out of the Big Ten’s 16 public schools in athletics revenue, according to the lawsuit. The complaint also notes that the university is one of three public schools in the Big Ten to receive direct subsidies for athletics from their state budget over the past three fiscal years, with Rutgers receiving $27.2 million.

Rodriguez’s lawsuit follows a history of other lawsuits against Rutgers’ athletics department with regard to its financial practices, including 2020 and 2021 lawsuits by Rutgers’ academic faculty regarding disclosure of athletics financial data.

Rodriguez is represented by Barry Eichen of Eichen Crutchlow Zaslow and Bruce Nagel of Nagel Rice.

Rutgers has not received full revenue shares from the Big Ten for the first six years of its membership and borrowed $48 million from the Big Ten against future earnings from fiscal years 2018 to 2020, according to a 2026 analysis by the New York Times. Because of the prior borrowing, Rutgers is not scheduled to receive full revenue shares from the Big Ten until 2027. According to the Big Ten’s 2024 tax filings, Rutgers received $61.5 million from the conference, compared with a full share of $63 million.

Data from the Knight-Newhouse College Athletics Database indicates that Rutgers’ athletic expenses were in line with the median Big Ten school as of FY 2024 at $178.3 million, though its revenue was only $136.8 million compared with a Big Ten median of $173.6 million. Disparities in spending are particularly notable with regard to Rutgers’ football spending, which at $64.4 million is above the Big Ten median of $58.9 million. Since 2015, Rutgers’ spending on football has increased 245%. In a statement in 2025 from then-interim Athletic Director Ryan Pissari, Rutgers also committed to disbursing the full $20.5 million annually to athletes allowed by the House v. NCAA settlement, noting that the money would likely come from the university.