ACC, Maryland exit lawsuit before NC appeals court - WFLA News Channel 8

ACC, Maryland exit lawsuit before NC appeals court

Posted: Updated:
RALEIGH, N.C. -

Judges in North Carolina were asked Thursday to bow out of a role in deciding whether to slow down the big-money game of musical chairs involving universities, athletics conferences and billions of dollars in broadcast revenues.

North Carolina's Court of Appeals heard arguments in a lawsuit that seeks to force the University of Maryland to pay a $52 million exit fee for leaving the Atlantic Coast Conference. A ruling could take several months, and any decision could be appealed to the state Supreme Court.

The ACC sued Maryland in North Carolina, where the conference is headquartered, after the school said in November it is leaving for the Big Ten Conference. The university responded by suing the ACC in Maryland in January, calling the amount an illegal penalty. A Maryland judge has put the school's lawsuit on hold until North Carolina courts issue a final judgment. Maryland's ACC departure is scheduled for July.

Maryland's attorneys argue in court filings that North Carolina courts shouldn't consider the ACC's lawsuit because the school is an arm of the state, and states enjoy sovereign immunity that protects them from lawsuits. Judge Robert N. Hunter Jr., one of the three judges on the panel hearing the case, noted that judges in one of the states had to decide the dispute.

"There is some forum shopping between the state of Maryland and the ACC and they beat you to the courthouse," Hunter said. "You seem to think that Maryland judges have some superior ability to North Carolina judges to resolve this matter."

The ACC's lawyers dispute that argument, contending sovereign immunity doesn't exist across state lines or in contract claims.

"Maryland can only have immunity in Maryland," said Alan W. Duncan, a Greensboro lawyer representing the ACC.

Coming court decisions will set the size of a likely financial settlement as well as help develop ground rules on financial penalties tied to shifting sports allegiances, said Paul Haagen, a Duke University law professor and co-director of the school's sports law center.

"Exit fees are here. They're here to stay and they're here basically to prevent schools from capitalizing on their own short-term self-interest at the expense of the other schools in the conference," he said.

The $52 million fee is the highest penalty ever assessed on a school for leaving an athletic conference and would be nearly equal to the school's yearly athletic budget, Maryland's attorney general's office said in May. The school's athletic department last year cut seven sports teams as it struggled with multimillion-dollar annual losses.

These are preliminary issues before courts have to decide the bigger issue — whether the exit fee's size is justifiable, Haagen said.

The ACC's exit fee was around $12 million to $14 million before September 2011. That's when the league announced it would add Pittsburgh and Syracuse from the Big East, which led the league to raise the cost to $20 million. The fee was raised again last September with the addition of Notre Dame in all sports except football. The revised fee is equal to three times the conference's $17 million annual operating budget.

Maryland argues the increased exit payment provision adopted about two months before it announced it is leaving — over the votes of Maryland President Wallace Loh and Florida State University — is invalid.

If a settlement isn't reached, the dispute could have a lasting influence by setting a guidepost on how athletic conferences can enforce unity, Duke University's Haagen said. Courts will have to decide whether the ACC exit provision was set by estimating the damages to other schools when conference members depart, or is an illegal penalty clause, he said. For example, while a home construction contract with a builder can make the builder responsible for hotel bills if the job isn't done by an expected date, it can't seek to simply punish the builder with an extreme penalty, Haagen said.

"Here the amounts are very high. Is it really what the ACC and other institutions will lose as a result of losing Maryland in terms of scheduling, planning, damage to the brand?" Haagen said. "Or, is this an attempt to hold them in or punish them for leaving that has nothing to do with the actual harm suffered?"

  • North Carolina NewsMore>>

  • NC strawberry growers expect strong season

    NC strawberry growers expect strong season

    Thursday, April 24 2014 6:18 AM EDT2014-04-24 10:18:54 GMT
    North Carolina strawberry growers are expecting a strong season despite the late spell of cold weather.
    North Carolina strawberry growers are expecting a strong season despite the late spell of cold weather.
  • NC GOP Senate candidates face off as early voting begins

    NC GOP Senate candidates face off as early voting begins

    Wednesday, April 23 2014 11:15 PM EDT2014-04-24 03:15:49 GMT
    The four top-polling Republican Senate candidates, vying to unseat Democrat Kay Hagan, debated on Wednesday night in Raleigh, the night before early voting was set to begin. The primary is May 6, but voters can start heading to the polls on Thursday.During the half hour televised debate, State House of Representatives Speaker Thom Tillis of Charlotte said he was leading a conservative revolution in Raleigh, cutting regulations and taking credit for falling unemployment numbers. Tillis faces c...
    The four top-polling Republican Senate candidates, vying to unseat Democrat Kay Hagan, debated on Wednesday night in Raleigh, the night before early voting was set to begin. The primary is May 6, but voters can start heading to the polls on Thursday.During the half hour televised debate, State House of Representatives Speaker Thom Tillis of Charlotte said he was leading a conservative revolution in Raleigh, cutting regulations and taking credit for falling unemployment numbers. Tillis faces c...
  • NC judge to rule against teacher tenure state law

    NC judge to rule against teacher tenure state law

    Wednesday, April 23 2014 7:18 PM EDT2014-04-23 23:18:26 GMT
    A Guilford County judge is backing two school districts fighting a North Carolina law that phases out job protections for public school teachers in favor of employment contracts.
    A Guilford County judge is backing two school districts fighting a North Carolina law that phases out job protections for public school teachers in favor of employment contracts.
  • Most Popular StoriesMost Popular StoriesMore>>

  • Mom bites off dog's ear to save daughter during attack

    Mom bites off dog's ear to save daughter during attack

    Tuesday, April 22 2014 2:49 PM EDT2014-04-22 18:49:19 GMT
    Image from CNN/KHOU-TVImage from CNN/KHOU-TV
    In a backyard in Alvin, swings a very lucky girl. Her name is Mackenzi Plass, or Kenzi for short, and she survived a dog attack and has undergone several surgeries."She'll be two and a half in May," said her very proud mother Chelsi Camp. "She's doing great. You wouldn't know it if you couldn't see."Mackenzi has scars on her face after the ordeal just weeks ago that put her mother's animal instincts to the test."You do whatever you can," said Camp. "I don't have physical strength at my side."...
    In a backyard in Alvin, swings a very lucky girl. Her name is Mackenzi Plass, or Kenzi for short, and she survived a dog attack and has undergone several surgeries."She'll be two and a half in May," said her very proud mother Chelsi Camp. "She's doing great. You wouldn't know it if you couldn't see."Mackenzi has scars on her face after the ordeal just weeks ago that put her mother's animal instincts to the test."You do whatever you can," said Camp. "I don't have physical strength at my side."...
  • Owner of Raleigh 'Party Mansion' guilty of tax evasion

    Owner of Raleigh 'Party Mansion' guilty of tax evasion

    Monday, April 14 2014 4:07 PM EDT2014-04-14 20:07:04 GMT
    Claude Verbal II, who now lives in Miami, pleads guilty to a number of federal tax evasion charges.
    Claude Verbal II, who now lives in Miami, pleads guilty to a number of federal tax evasion charges.
  • Piedmont Farm Tour

    Piedmont Farm Tour

    Piedmont Farm Tour

    Wednesday, April 23 2014 12:25 PM EDT2014-04-23 16:25:38 GMT
    The 2014 Piedmont Farm Tour is happening April 26-27 from 2-6pm both days! Come learn about the Triangle’s local and organic farm food scene. Meet local farmers tour their farms!View ourGoogle Interactive Mapfor alist ofthe exceptional farms on the tour this year – with driving directions!Download a PDF of theFarm Tour Brochure - Farm tour maps, directions and descriptions of all the fun things to do at each farm! How to Take the Piedmont Farm Tour Load up a car with your friends andfamily...
    The 2014 Piedmont Farm Tour is happening April 26-27 from 2-6pm both days! Come learn about the Triangle’s local and organic farm food scene. Meet local farmers tour their farms!View ourGoogle Interactive Mapfor alist ofthe exceptional farms on the tour this year – with driving directions!Download a PDF of theFarm Tour Brochure - Farm tour maps, directions and descriptions of all the fun things to do at each farm! How to Take the Piedmont Farm Tour Load up a car with your friends andfamily...
Powered by WorldNow

200 South Parker Street, Tampa, FL 33606

Telephone: 813.228.8888
Fax: 813.225.2770
Email: news@wfla.com

Can’t find something?
Powered by WorldNow
All content © Copyright 2000 - 2014 Media General Communications Holdings, LLC. A Media General Company.