Maryland’s $157 million counterclaim: ACC recruited B1G schools | Page 21 | The Boneyard

Maryland’s $157 million counterclaim: ACC recruited B1G schools

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If I voted previously to authorize the membership to pass rules by 75% vote that I would be bound by, then yes. And if I felt strongly enough about it, I'd ask for another vote to exempt me personally. That request was not made. In fact no special consideration was requested.

I think you're simplifying your summary of the ACC's by-laws and notice provisions. Of course, running with your argument, why don't the ACC's teams sneak up on FSU and Clemson at the next meeting and make the exit penalty $520 million?

Under your theory, they can. So why don't they?
 
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Out of curiosity, assume you're a member in a book club. The club votes at a meeting properly called and held (with everyone voting in favor but you) that if you stop coming to meetings, you (and every other member) owes the club $1M. You really think that you owe the $1M and there are no issues you could raise as a defense as to whether you really gave the organization power to hold you to that?

A multibillion dollar organization membership and a book club membership are 2 completely separate cases.

Generally you don't sign a legally binding contract to join a book club. In this case, Maryland signed a legally binding contract to join and stay a member of the ACC. This meant that they were subject to a rule passing with 75% of members voting for it.

A better example is HOA's. There have been many cases of people getting evicted from their homes or paying large amounts of money to settle HOA fines where the homeowner may not have agreed with them or voted against them. In several cases the laws were passed after the homeowner bought the house. You could easily argue that the HOA laws were punitive or excessive but the fact is that in nearly all cases, the law has sided with the HOA's.

Maryland knew and accepted the ACC's laws for a long time and they benefited Maryland well. They decided to bolt for the B1G when they saw what they thought was a better opportunity and all the sudden they don't agree with the laws that were fine before. I'm quite sure that if the ACC had imploded due to Maryland's action, Maryland could have cared less. Maryland is trying to weasel out of their obligation plain and simple.
 
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Involved how, Southron? It needs to be involved in a way that relevant to the suit, to an allegation or defense at issue in the suit. I don't think it is, based upon my recollection of what's been alleged to date. Now, if the ACC made a interference with contract allegation that would change things. If they did, might not other schools do the same to the ACC? Then, as billybud says, things would get interesting.

In the decision-making process, perhaps. Guys like Delany and Swofford are control freaks. They might plead ignorance, but, you can be certain that they know full damn well whats going on within their fiefdoms.

What you say is 100 percent true. His relevance to any legal action would have to proven, and, the ACC does not have that. At least that I know of. One of those what you know and what you can prove type things.


I think the 17 million number may turn out to be where they end up, but you can make a case for none that is pretty reasonable.

I do not see any scenario where they can make a case for zero, seeing as how they DID vote for the original $17M.

Unless the court says that the ACC can keep $17M out of what they've withheld to this point.
 
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I think you're simplifying your summary of the ACC's by-laws and notice provisions. Of course, running with your argument, why don't the ACC's teams sneak up on FSU and Clemson at the next meeting and make the exit penalty $520 million?

Under your theory, they can. So why don't they?

The only sneaky party involved was Maryland, and they are leaving. What makes it doubly sneaky is that the whole Exit Fee idea is Maryland's idea to begin with. They were so sneaky they blindsided their own fans. Many of them are still perturbed. The wishes of the rest of the members and dialog between the rest are quite open. No need for sneaky.
 
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A multibillion dollar organization membership and a book club membership are 2 completely separate cases.

Generally you don't sign a legally binding contract to join a book club. In this case, Maryland signed a legally binding contract to join and stay a member of the ACC. This meant that they were subject to a rule passing with 75% of members voting for it.

A better example is HOA's. There have been many cases of people getting evicted from their homes or paying large amounts of money to settle HOA fines where the homeowner may not have agreed with them or voted against them. In several cases the laws were passed after the homeowner bought the house. You could easily argue that the HOA laws were punitive or excessive but the fact is that in nearly all cases, the law has sided with the HOA's.

Maryland knew and accepted the ACC's laws for a long time and they benefited Maryland well. They decided to bolt for the B1G when they saw what they thought was a better opportunity and all the sudden they don't agree with the laws that were fine before. I'm quite sure that if the ACC had imploded due to Maryland's action, Maryland could have cared less. Maryland is trying to weasel out of their obligation plain and simple.

No, that's not a better example because states generally specifically regulate and authorize homeowners associations.
 

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No, that's not a better example because states generally specifically regulate and authorize homeowners associations.
Fees are not generally not excessive, nor punitive.
 
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The only sneaky party involved was Maryland, and they are leaving. What makes it doubly sneaky is that the whole Exit Fee idea is Maryland's idea to begin with. They were so sneaky they blindsided their own fans. Many of them are still perturbed. The wishes of the rest of the members and dialog between the rest are quite open. No need for sneaky.

Let's put it this way -- isn't it in (pick 8 lower schools in the ACC, like Wake Forest, Pitt, Syracuse, Miami, Louisville, N.C. State, Boston College)'s best interest to lock down FSU and Clemson forever?

So, why not $5.2 billion as an exit fee?
 
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Let's put it this way -- isn't it in (pick 8 lower schools in the ACC, like Wake Forest, Pitt, Syracuse, Miami, Louisville, N.C. State, Boston College)'s best interest to lock down FSU and Clemson forever?

So, why not $5.2 billion as an exit fee?

Not following what you mean by lower. Smaller enrollment? Smaller football stadium? The Exit Fee is based on operating revenue. It's not arbitrary. And no one is locked down. Anyone that wants to leave can pay the fee and leave as well as leave their broadcast rights behind.
 

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Not following what you mean by lower. Smaller enrollment? Smaller football stadium? The Exit Fee is based on operating revenue. It's not arbitrary. And no one is locked down. Anyone that wants to leave can pay the fee and leave as well as leave their broadcast rights behind.

"Lower" = "Crappier programs with no other conference options"

The irony is that the programs that he suggests locking down are not the ones with particularly good options elsewhere.
 
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"Lower" = "Crappier programs with no other conference options"

The irony is that the programs that he suggests locking down are not the ones with particularly good options elsewhere.

Ah. Less desireable by the SEC's or Big Ten's expansion criteria. Got it. Wasn't sure what was meant by lower.
 
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If I voted previously to authorize the membership to pass rules by 75% vote that I would be bound by, then yes. And if I felt strongly enough about it, I'd ask for another vote to exempt me personally. That request was not made. In fact no special consideration was requested.
btstimpy, I am a UMD grad and fan, so it will be no surprise my take is a bit different from yours.

I agree with your first statement that members are bound to bylaws that pass even if they oppose. That's not in dispute. The problem here is that it appears that the increased exit fee proposal was not given a proper amount of time to be deliberated amongst the conference presidents, and to have it effective immediately. Even if the bylaws allow such important proposals to be rammed through, and if the immediate effective date was also allowed by the bylaws, they have to be legal. For example, if the presidents passed a bylaw that ACC member fans are allowed to throw batteries at their opponents athletes, this would not be allowed. In my opinion, an exit fee of $52,000,000 is way too excessive, and perhaps illegal, besides being unethical. So, the NC court will have to decide if the bylaws were, in fact, followed, and if they were, if such an exit fee is legal. And from what I heard, this may have been done to appease Notre Dame to keep schools from leaving. If true, this makes the exit fee smell even more.

What is galling about this is how Swofford insists Maryland follow the bylaws that were questionably enacted, while not insisting that the last four members they poached from the Big East honor the Big East bylaws of the 27-month notice. I suppose that this is irrelevant to the case at hand, but does expose Swofford's gross hypocrisy. Somehow, he found nothing wrong with poaching seven teams from another conference, but has a hissy fit when one school leaves his conference.

It is unfortunate that the ACC decided to drag this out. In the interest of fairness and sportsmanship, Dr. Loh, Dr. Sullivan, and the other ACC presidents should have met in executive session, without Swofford, and hammered out an agreement, such as allowing Maryland to leave with the $20,000,000 exit fee that they agreed to in the past, shake hands, wish each other luck, and move on.

Unfortunately, Maryland has also made mistakes throughout this process. While I agree with Dr. Loh that an exit fee is appropriate, I thought that $20,000,000 was too high. If the bylaws allow for a president to reconsider a bylaw (even though such actions would most likely end up in the circular file before being considered), and Dr. Loh failed to do so, that would be a mistake. I also believe that Maryland voting for Notre Dame half-a--ed membership was a gross mistake. If this happened before Maryland was seriously considering leaving, they should have voted against. Otherwise, they should have abstained. Maryland may not have followed their own procedures for switching conferences, and they may have (if they haven't already) to answer for that. But this mistake has nothing to do with the ACC. I also find throwing batteries at opposing athletes/fans and other unsportsmanlike or criminal activities disgusting, and more effort should be employed to deter this.

I was pro-ACC, but gradually became disenchanted. I think Notre Dame's partial admission sealed it. I think Maryland's move to BIG is a positive move. I understand that sometimes the devil you know may end up being not as bad. We'll see.

I like UConn9604's bet. It appears that depending on which of our argument is correct, the final judgment will be either less than $25,000,000 or greater than $50,000,000. Another possibility is that neither the ACC or Maryland really wants this to go to court, and settle for something in between.
 
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If your state belongs to the union, and your state delegation opposes a new federal law but the majority passes it...does it hold effect for your state? Can a state just skip by Obamacare?

Was the federal government wrong to order troops out to enforce integration in Arkansas and Alabama schools over the wishes of those states?

When you belong to an organization that specifies in the bylaws (constitution) how voting decides issues, then you are stuck with the decisions that are properly arrived at.

The question of the estimate of liquidated damages as expressed in an exit fee being more of a punitive measure then an actual estimate of damage is another topic altogether.

We tend to mix the two.
 

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Judgement ACC. $52 Million. I'll set the date to meet you to discus
^^ ? ^^

We'll see how it comes out.
 
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billybud, what if 8 of the 12 members (whatever the block necessary is) pass a resolution that in order for Louisville to be granted full acceptance into the league, that all ACC presidents must have sexual relations with Pitino's next mistress.

Will that be legal just because 2/3 voted for it?

My point is, I'm not sure a majority of league members can simply pass whatever they want over the minority if it is deemed ludicrous by a judge. Which the ACC's new exit fee appears to be...
 
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You are mixing the two...as I stated in my above post.

Sure...if the judge finds that the exit fee is not a reflection of approximated damages but rather designed to be a punitive measure, there is plenty of precedence that the court will find the exit fee to be not valid.

That is a completely separate argument from the validity of a majority vote.

If the US demands that states all prohibit the wearing of hats, the court (Supreme) would toss the provision. Based not on the voting of the congress, but on the issue itself.
 
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I would be surprised at a $52 million judgment. In a suit that revolves around the intricacies of a contract (the bylaws) vs the actions of the parties, that contract must be examined in context of the actions that the parties took.

If the contract has a clause that requires a 15 day notice for an amendment and that notice was not given, then one might assume that the amendment action was not consistent with the bylaws requirement. And, thus, may not be valid.

FSU's President went on the record that he was blindsided at the meeting by the amendment and called the BOT Chair overnight to discuss it. The FSU BOT Chair went on the record as opposing.

Sounds to me that there is a real process weakness in the ACC case. Process, as delineated in the bylaws, not followed = invalid result of process.

One of Maryland's complaints in the countersuit is not receiving the proposed amendment 15 days before the meeting. The amendment was to change the multiplier in the exit fee language from 1.5 times operating revenue to 3.0 times operating revenue. The original 2011 amendment submitted with the 15 days notice was for the 3.0 times. The 2012 vote restored the original proposed language. The rule doesn't stipulate anything about the same amendment being voted on multiple times. Keep in mind that Maryland has publicly stated it won't pay either (1.5 or 3.0). Dr. Wallace Loh thinks exit fees are illegal now after proposing it originally.

The correspondence regarding the agenda of the meeting that took place between the ACC office and the members is not public. Part of the agenda we know about is the vote to offer membership to Notre Dame with the special terms of the 5 football games. We know that this agreement was reached weeks before the meeting and the announcement was waiting on the meeting. One would assume that Maryland and the other Presidents had some notice of the Notre Dame vote, and if so also notice of the other orders of business and probably weeks ahead. That would include restoration of the 3.0 multiplier with no language change. The ACC will need to show that.

Maryland is claiming that they had no idea what the meeting they attended was about. Yet Dr. Wallace Loh showeed up, actively debated the issue, and voted. The motion on the original exit fee was his to begin with in 2011. If the court rules that he was blindsided and no notice of exit fee deliberations would be discussed was given, Maryland at minum should be responsible for the 1.5 X operating revenue or $26 million and change. If Dr. Barron had no idea about the desire of the Council to vote on this, perhaps Dr. Loh didn't either. But the language had been provided 15 days in advance once in 2011.
 
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btstimpy, I am a UMD grad and fan, so it will be no surprise my take is a bit different from yours.

What is galling about this is how Swofford insists Maryland follow the bylaws that were questionably enacted, while not insisting that the last four members they poached from the Big East honor the Big East bylaws of the 27-month notice. I suppose that this is irrelevant to the case at hand, but does expose Swofford's gross hypocrisy. Somehow, he found nothing wrong with poaching seven teams from another conference, but has a hissy fit when one school leaves his conference.
The big difference is that UWV set the precedent in the Big East that leaving early was possible through some form of negotiation/payment. Lville, Pitt and Cuse just followed their precedent with the BE. The schools that left did the negotiating. That the BE leadership caved to UWV is not Swofford's fault. The BE let people leave early, they just had to pay for it. The BE also did not have a Grant of Rights issue that the ACC has. The ACC is not the BE when it comes to teams leaving and is standing firm over the fee.

The only hope that MD has for prevailing is that the ACC did not correctly follow their bylaws. That they bypassed some notification period, debate period or something like that. That is how the BE lost their increased fee lawsuit against BC (which in hindsight was a minuscule amount). The questionably enacted part of your argument is the only possible out for MD if the ACC was stupid enough to not learn from the BE. While the amount may seem excessive, the burden of proof is on MD that it was not enacted properly or that injures MD irreparably. Since MD is joining a conference that pays them more, the second argument is unlikely to prevail. And if the ACC followed the bylaws to the exact letter, then MD has nothing. MD subpoenaing Pitt and Wake this past week regarding their reaching out to B1G teams kind of shows that MD is really reaching for almost anything at this point.

At this point, legal bills are running in the millions for both sides. Time to negotiate a settlement. Only lawyers win at this point. ACC gets 75% of the fee ($39mm). Both sides claim a win.
 
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If your state belongs to the union, and your state delegation opposes a new federal law but the majority passes it...does it hold effect for your state? Can a state just skip by Obamacare?

Was the federal government wrong to order troops out to enforce integration in Arkansas and Alabama schools over the wishes of those states?

When you belong to an organization that specifies in the bylaws (constitution) how voting decides issues, then you are stuck with the decisions that are properly arrived at.

The question of the estimate of liquidated damages as expressed in an exit fee being more of a punitive measure then an actual estimate of damage is another topic altogether.

We tend to mix the two.

You are comparing the power of sovereign states over its citizens to non-profit organizations over its members? Seriously?
 

WestHartHusk

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You are comparing the power of sovereign states over its citizens to non-profit organizations over its members? Seriously?

Biz - stop trying to make the world so complicated. Of course federalism operates on the same principles as a condo board.
 
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way too complicated....just an allegory of majority rule...not con law.
 
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way too complicated....just an allegory of majority rule...not con law.

Let me try to make it simple for you. When you become a member of a non-profit organization, whatever its rules say about amending its charter and by-laws, you are not giving the organization the power to tell you that if you leave you have to divorce your wife or give all your assets to the Mormon Church. The rules for governing the organization have to be closely enough related to the purpose of the organization to make it fair for you to be bound by them.

Was the ACC's exit fee fairly related enough to be imposed upon MD and FSU over their objections? Maybe. Maybe not. But it's certainly an issue.
 
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Some folks on the board mix the two issues together...the contract law issue re exit fee as an approximated damage

... and the issue of the ability of a majority vote to set a standard that might bind a dissenting member.

that's it..
 
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As stated over and over...

The main issues will be..

1...the issue of whether the exit fee is deemed to be punitive vs reasonable.

2...whether the ACC followed the internal procedures set forth in their bylaws to affect a valid amendment.
 

WestHartHusk

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As stated over and over...

The main issues will be..

1...the issue of whether the exit fee is deemed to be punitive vs reasonable.

2...whether the ACC followed the internal procedures set forth in their bylaws to affect a valid amendment.

It's really not about "reasonableness" - it's about whether the exit fee represented a fair estimate of the damages that the ACC expected to incur as the result of one of its members leaving. Given what they knew about their TV contract, bowl tie-in's, and other available schools to backfill a departing member, the ACC will have a very hard-time justifying that fee. Especially given that no school has actually been harmed financially - except, you know, UConn/Cinci/USF.
 
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As I posted earlier...same sentiment different words...


"
Sure...if the judge finds that the exit fee is not a reflection of approximated damages but rather designed to be a punitive measure, there is plenty of precedence that the court will find the exit fee to be not valid."

When I posted several posts later I used finding the fee "reasonable" as a one word short hand way of saying what I already had posted.
 
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