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Maryland Lawsuit

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Fairfield 1st said:
That's a great analysis. My questions are then 1. Isn't this still a breach of contract case? 2. And if so, doesn't the ACC have a duty to mitigate their damages, and 3 wouldn't bringing Notre Dame in indicate no pecuniary loss?
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No, it is withdrawal from a conference in accordance with agreed upon procedures and fees. The contract is being breached by MD who does not want to pay what it is contractually obligated to pay. The ACC has a mechanism to allow withdrawal of membership. It has a notification period and a dollar amount. MD does not want to pay what they have to according to those rules/contract. MD sued first and the ACC countered saying, leave but follow the rules of the conference that were put in place while you were a member of the conference. Adding ND or Lville has nothing to do with MD exercising their right to withdraw. The economic impact of MD leaving is not the basis of the lawsuit. It is just a simple fact that MD does not want to pay and the ACC saying follow the rules and procedures.
 
upstater said:
B1G is liable in the same way that the B12 was liable last year in the West Virginia case. If Maryland doesn't settle with the ACC, it can't leave.
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That is simply not true.
 
upstater said:
That was the point with West Virginia though. Could they leave before settling their business with the BE? Would the B12 take a team with unsettled business?

Lots of lawyers opined that whoever took them might be open to becoming a party in a lawsuit for taking a team prior to settling their exit with their old conference.
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The accelerated timeline was the issue in the WVU case. The Big East was seeking specific performance of the 27-month waiting period. The ACC is seeking performance of an obligation to pay. The remedy is not keeping MD in the ACC. The only available remedy is Money.
 
06029 said:
No, it is withdrawal from a conference in accordance with agreed upon procedures and fees. The contract is being breached by MD who does not want to pay what it is contractually obligated to pay. The ACC has a mechanism to allow withdrawal of membership. It has a notification period and a dollar amount. MD does not want to pay what they have to according to those rules/contract. MD sued first and the ACC countered saying, leave but follow the rules of the conference that were put in place while you were a member of the conference. Adding ND or Lville has nothing to do with MD exercising their right to withdraw. The economic impact of MD leaving is not the basis of the lawsuit. It is just a simple fact that MD does not want to pay and the ACC saying follow the rules and procedures.
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But if the fee is not related to the economic impact, the argument is that it is not enforceable.
 
06029 said:
No, it is withdrawal from a conference in accordance with agreed upon procedures and fees. The contract is being breached by MD who does not want to pay what it is contractually obligated to pay. The ACC has a mechanism to allow withdrawal of membership. It has a notification period and a dollar amount. MD does not want to pay what they have to according to those rules/contract. MD sued first and the ACC countered saying, leave but follow the rules of the conference that were put in place while you were a member of the conference. Adding ND or Lville has nothing to do with MD exercising their right to withdraw. The economic impact of MD leaving is not the basis of the lawsuit. It is just a simple fact that MD does not want to pay and the ACC saying follow the rules and procedures.
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This is my understanding of the case as well. This case is not about whether this is a penalty, damages, etc. at all. This case is about whether the ACC By-Laws and the Procedures for Creating them and modifying them by the votes of the ACC Council of Presidents is in fact a Valid Contract in the State of North Carolina and that the University of Maryland is bound by the terms of the Contract since they were a member of the ACC.

Once the ACC By-Laws are determined to be a binding Contract. Then the exit fee provision is just a term of the contract that Maryland is bound by regardless of what it's about. Maryland may not have voted for it, but the Contract also has a provision for amendment that requires 75% vote or something. Once the By-Laws are determined to be a binding Contract, then Maryland is bound by the voting rules as well.

It's all about whether those By-Laws are in fact a contract. If it is a contract, then Maryland is paying.
 
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upstater said:
I didn't say the situations were exactly similar. Read my first post before taking this out of context. I wrote that Maryland might be extended by the length of the suit because if they leave prior to resolving their exit, it may embroil the B1G. I never said the B1G needed Maryland to leave now. I only pointed out that Maryland has incentive to settle this because they may not be able to leave until it's settled, and that's why I cited the West Virginia case.
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Maryland does not need to stay longer than it agreed to by contract whether there is an amount in dispute or not and the Big will not be involved or have any liability unless they are requiring Maryland to leave early
 
btstimpy said:
This is my understanding of the case as well. This case is not about whether this is a penalty, damages, etc. at all. This case is about whether the ACC By-Laws and the Procedures for Creating them and modifying them by the votes of the ACC Council of Presidents is in fact a Valid Contract in the State of North Carolina and that the University of Maryland is bound by the terms of the Contract since they were a member of the ACC.

Once the ACC By-Laws are determined to be a binding Contract. Then the exit fee provision is just a term of the contract that Maryland is bound by regardless of what it's about. Maryland may not have voted for it, but the Contract also has a provision for amendment that requires 75% vote or something. Once the By-Laws are determined to be a binding Contract, then Maryland is bound by the voting rules as well.

It's all about whether those By-Laws are in fact a contract. If it is a contract, then Maryland is paying.
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If the by-laws are a contract, then the court must decide the issue of whether the exit clause is a clause relating to the breach of that contract or part of the consideration paid by the membership schools for the performance of the contract. I think that the latter is a pretty weak argument.
 
Excalibur said:
If the by-laws are a contract, then the court must decide the issue of whether the exit clause is a clause relating to the breach of that contract or part of the consideration paid by the membership schools for the performance of the contract. I think that the latter is a pretty weak argument.
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If the exit clause is part of the contract, Maryland would be in breach by not paying it. If Maryland wants to make the case that the ACC is in breach regarding another part of the contract and the ACC's performance, Maryland is free to do so. That's part of what WVU was arguing against the Big East. Not knowing the full terms of the contract, wouldn't know at this point.

Maryland is arguing now that: North Carolina doesn't have juridiction, ACC is not performing because they are holding back collateral, and ACC is excluding Maryland from information that other members are receiving while they are still a member and haven't submitted their official withdrawal. These actually seem very weak.
 
Excalibur said:
If the by-laws are a contract, then the court must decide the issue of whether the exit clause is a clause relating to the breach of that contract or part of the consideration paid by the membership schools for the performance of the contract. I think that the latter is a pretty weak argument.
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Agreed. Even if it is a contract, liquidated damages clauses will not always be enforceable. I am sure Maryland is arguing both that it is not bound by the change at all, that the fee increase is not binding and separately that if it is binding it is an unenforceable penalty rather than a reasonable liquidated damages clause that seeks to set damages that would otherwise be difficult to determine. If they aren't arguing both those things, they need new lawyers.
 
06029 said:
MD sued first and the ACC countered saying, leave but follow the rules of the conference that were put in place while you were a member of the conference. Adding ND or Lville has nothing to do with MD exercising their right to withdraw. The economic impact of MD leaving is not the basis of the lawsuit. It is just a simple fact that MD does not want to pay and the ACC saying follow the rules and procedures.
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Maryland didn't sue first, the ACC did. It filed a suit on November 27, 2012. The Maryland AG filed a suit on January 18, 2013. Also, according to Maryland's complaint, it's not saying that it doesn't think it should have to pay an exit fee. It's saying that the most recent exit fee it voted against is arbitrary and capricious.

The ACC certainly didn't do itself any favors by adding Notre Dame early. No chance swapping Maryland for Notre Dame and Louisville caused anyone $50 million in damages. I can't wait to see the ACC this up like it effs everything else up.
 
btstimpy said:
If the exit clause is part of the contract, Maryland would be in breach by not paying it. If Maryland wants to make the case that the ACC is in breach regarding another part of the contract and the ACC's performance, Maryland is free to do so. That's part of what WVU was arguing against the Big East. Not knowing the full terms of the contract, wouldn't know at this point.
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The argument is not over whether it's part of the contract, it's over the nature of the clause. Liquidated damages provisions are very much "a part" of the contracts in which they appear.
 
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Don't know all the parts of this deal but I do know that liquidated damages have recently been overturned in several places because they were deemed by the court to be unrelated to the actual damages suffered, and even despite the fact that both parties agreed to them by contract. In fact recently almost all of our contracts which have liquidated damages clauses contain language saying that the parties agree not to challenge the amount of these damages even if they challenge other aspects. The only argument is over whether they are due, not the amount.
 
Excalibur said:
The argument is not over whether it's part of the contract, it's over the nature of the clause. Liquidated damages provisions are very much "a part" of the contracts in which they appear.
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It's a clause proposed via motion by the University of Maryland, Dr. Loh himself. And it was originally passed unanimously by all of the Council of Presidents. Maryland voted against increasing the amount, but the Clause is a Maryland proposed addition to the contract itself.
 
freescooter said:
Don't know all the parts of this deal but I do know that liquidated damages have recently been overturned in several places because they were deemed by the court to be unrelated to the actual damages suffered, and even despite the fact that both parties agreed to them by contract. In fact recently almost all of our contracts which have liquidated damages clauses contain language saying that the parties agree not to challenge the amount of these damages even if they challenge other aspects. The only argument is over whether they are due, not the amount.
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Right, and that's where the negotiations start
 
B1GALUM said:
"ACC’s motion to dismiss Maryland lawsuit scheduled for hearing next week" "Next week might bring some clarity to the legal battle between Maryland and the ACC."
http://www.washingtonpost.com/blogs...land-lawsuit-scheduled-for-hearing-next-week/
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The article serves as a nice recap of what has occurred. The important ruling was the North Carolina court denying Maryland's mtd. As long as the original damages case in north Carolina is open this suit means little more than complicating the matter.
 
What if the court were to find that the penalty clause was in violation of the commerce clause? Would that pave the way for GORs to be throw out? Just a thought.
 
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CL82 said:
What if the court were to find that the penalty clause was in violation of the commerce clause? Would that pave the way for GORs to be throw out? Just a thought.
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A North Carolina court is not going to decide this case on Federal constitutional grounds. All courts, including the U.S. Supreme Court, try to avoid constitutional questions and decide cases on other grounds (constitutional questions are decided only as a sort of last resort).

My semi-educated guess (over 26 years as a civil litigation lawyer) is that the discovery phase will take a year or more.

The trial may not be for another year and a half, perhaps longer.

The parties will end up settling, but not just yet. The lawyers have a lot of billable hours to earn. The ACC may want to try to wear Maryland down a bit or just keep the lawsuit going to show they are "vigorously" defending the exit fee provision.
 
TerryD said:
A North Carolina court is not going to decide this case on Federal constitutional grounds. All courts, including the U.S. Supreme Court, try to avoid constitutional questions and decide cases on other grounds (constitutional questions are decided only as a sort of last resort).

My semi-educated guess (over 26 years as a civil litigation lawyer) is that the discovery phase will take a year or more.

The trial may not be for another year and a half, perhaps longer.

The parties will end up settling, but not just yet. The lawyers have a lot of billable hours to earn. The ACC may want to try to wear Maryland down a bit or just keep the lawsuit going to show they are "vigorously" defending the exit fee provision.
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I don't disagree but both parties are claiming Federal issue, anti-Trust vs. commerce clause, so it may be hard to avoid. I do agree that it will settle, maybe sooner than we think, since the $50M is no longer the ACC's primary defense against defection.
 
http://www.newsobserver.com/2013/05...er-mds-acc-exit-goes.html?utm_medium=referral

The Associated Press

UPPER MARLBORO, Md. — A judge in Prince George's County will hear arguments in a lawsuit over the University of Maryland's withdrawal from the Atlantic Coast Conference.
Maryland announced in November that it will leave the ACC for the Big Ten in 2014. The ACC sued the school in North Carolina to make it pay a $52 million penalty for exiting the conference. Maryland responded by suing the ACC in a Maryland court, calling the penalty illegal.

The ACC is asking Maryland's lawsuit be dismissed or stayed until the lawsuit in North Carolina is concluded. Maryland says the withdrawal penalty would wipe out nearly its entire athletic budget and is illegal under Maryland antitrust law.

Arguments are scheduled for Thursday in Prince George's County Circuit Court.
 
Here's a dream for all of us: By some strange twist of fate, Maryland decides to stay in the ACC resulting in a 15 team ACC and a 13 team Big 10!

Unfortunately, I just woke up.
 
alex_prewitt 4:14pm via Echofon ( University of Maryland writer for @PostSports )
Finished up in court. Arguments presented for both sides. Judge John Davey will provide a written opinion "as soon as possible."

alex_prewitt 4:25pm via Echofon
Assistant attorney general John Kuchno, who represented UMd., said the university still hasn't formally notified the ACC it's leaving.

alex_prewitt 4:25pm via Echofon
According to Kuchno, Maryland isn't required to do so until July 1 of the following year, so July 1, 2013.
 
huskymedic said:
alex_prewitt 4:25pm via Echofon
Assistant attorney general John Kuchno, who represented UMd., said the university still hasn't formally notified the ACC it's leaving.
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Saw that. They have till July 1st most likely. Would be awesome if they changed their mind but that's not going to happen.
 
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UConn Dan said:
Saw that. They have till July 1st most likely. Would be awesome if they changed their mind but that's not going to happen.
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Yes.....and yes.
 
Maybe this is why Calhoun said that we won't find a new conference until this gets settled. Either Maryland goes to B1G and ACC wants to add 16 or Maryland stays and UCONN goes to B1G.
 
The Funster said:
Does anyone else find it fascinating that MD has not officially notified the ACC that it is leaving?
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Not really. They will likely notify the ACC on the last possible day. Once notifying the ACC of departure they may lose voting rights, conference payouts, among other benefits of members.
 
UConn Dan said:
Saw that. They have till July 1st most likely. Would be awesome if they changed their mind but that's not going to happen.
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Not going happen because they already committed to the B1G and probably signed the GOR, but equally funny scenario would be if they submitted the paperwork for leaving after the deadline. This could create an awesome legal battle between ACC and B1G with both conferences claiming the rights to Maryland in 2014.
 
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