(03-31-2014 10:17 PM)Lurker Above Wrote:  

(03-31-2014 04:53 PM)TerryD Wrote:  

(03-31-2014 04:44 PM)Lurker Above Wrote:  

(03-31-2014 12:16 PM)Dasville Wrote:  The ACC is asking the "bigger" question. The ACC can not negotiate the exit factor increase from 1.25 x the YOB to 3 x the YOB until it is determined whether or not the exit bylaw applies to The University of Maryland.

Here is one lawyers summary of the case:

http://www.testudotimes.com/2012/11/28/3...6342-fight


excerpt:


Clearly, the ACC has the more straight-forward argument in this case. As the Complaint points out, Maryland is a member of the ACC, and has agreed to bound by the constitution and bylaws of the ACC. Even though Maryland did not vote for increasing the exit fee, such exit fee passed by a 10-2 vote, and is therefore binding upon Maryland. It is interesting to note that the bylaw does not state that the exit fee is $52,226,342, but rather three times the operating budget of the entire league. We'll get back to that point in a minute.

The Complaint filed by ACC asks the Court to determine whether the aforementioned bylaw is valid and binding on Maryland. That's surprisingly it. The Complaint asks for Declaratory Relief, in which a judge determines the legality of an issue actually in question between the parties. The request for jury trial is limited to only those issues triable by a jury; ie, not whether the bylaw is binding, but any other triable issue briefed or argued along the way.

One particularly troublesome part for Maryland is the potential for the ACC to withhold distributions due to Maryland in 2013 in order to fund the exit fee, pursuant to the third to last sentence of the above quoted bylaw. This would impact Maryland's cash flow and put Maryland in a severe position of weakness. Withholding 2013 distributions would be allowed because the bylaw says for any Conference year.

That is an old article and you might want to read the rest of it, which highly favors Maryland's legal position, as could be expected on a Maryland website. If you did read the article you would know what you posted was not his "summary of the case". His legal opinion is opposite than what your quote suggests.

Here is the more pertinent parts of the article you posted:

"President Loh, sounding every bit like the former law professor that he is, succinctly summarized Maryland's positions back in September, 2012 when he said:

"The law says that when you have liquidated damages, and in advance you anticipate a breaching of the contract, we will decide what the damages will be. You talk about damages, not penalties, and it has to be a reasonable estimate. That's the law. We live in a free economy. We want people to move freely in and out of relationships. That's the philosophical principle. What constitutes reasonable? That's for a court to decide. But if the damages are so huge that it prevents the mobility, the free movement of people, then I think it's not good for society. Others may not be looking at it from this principle, and that's their prerogative.

"Regrettably, the allegations in the Complaint center on the public statements made by President Loh, as well as the fact the he participated in the discussions to raise the exit fee. Let's examine this quote point by point.

"1. Liquidated Damages

The concept of liquidated damages is that, in a scenario where actual damages are difficult to predict, the parties to a contract can agree on an amount to be paid in damages in the event of a breach. Such amount must be reasonable, and liquidated damages are meant to be just compensation, not a penalty. Loh correctly cuts to the heart of the exit fee issue, namely that it is a penalty, and not a reasonable estimate of damages. Clearly a reasonable legal mind could easily conclude that one school paying three times the operating budget of the entire conference is not a reasonable estimate of damages for such schools absence from the conference.

The idea of Maryland's value to the ACC is tough to approximate, but three times the ACC's operating budget is disproportionate with the harm suffered by the ACC and the remaining members. The entire point of contract damages is to make the non-breaching party whole, not to punish the breaching party. Simply put, the ACC and the remaining members will decidedly not be out $52,226,342 come 2014, and will never have to write a check for such amount. Given the state of college athletics it seems clear that the increased fee was meant to discourage ACC schools from leaving and harm them if they left.

"2. Illegal restraint of trade

Loh makes this point a little more subtly, but essentially such a high exit fee will restrict the ability of ACC member schools to decide for themselves which conference they should align with. In an open market capitalist economy, people have the ability to change relationships and move as they see fit. As such, restrictions on that free movement are illegal. Clearly, society is no better off thanks to the ACC's higher exit fee, and is in fact worse off due to the restrained ability of ACC schools to look out for their best interests. The high exit fee is completely self serving to the ACC and does not benefit the general population at all.

"3. Arbitrary and Capricious

This point is an off shoot of the liquidated damages argument, and essentially alleges that the ACC pulled the $52,226,342 number out of the air. The previous penalty was 1 ¼ times the operating budget, and the ACC will need to show some reason for increasing to 3 times the budget as opposed to 1 ½ or 2 times the budget.

"4. Timing

The $52,226,342 is calculated on the budget from July 1, 2012 to June 30, 2013, dates which, as of now, Maryland will be in the ACC. It stands to reason that the exit fee shouldn't be due until 7/1/2014 at the earliest, the date Maryland actually exits the ACC, since the ACC will profit off Maryland in 2013. Asking for a declaratory judgment now takes the position that Maryland's announced departure is an anticipatory breach of the ACC constitution and bylaws. The ACC's request for declaratory judgment, however, because if the exit fee is meant to compensate the conference and the remaining league members for the absence of the departing member going forward, it should not be due until after Maryland leaves and for several years thereafter.

"I would expect Maryland to prevail on the theory that the amount of the exit fee is an arbitrary and capricious penalty, meant to harm Maryland, rather than to reasonably compensate the ACC for the loss of a league member."

All of the above is pretty close to what I've been saying all along. Of course, this article was written before Maryland filed its counterclaim for $156 million. As to those issues you could refer to my earlier posts in this thread. That is, if you want a more informed opinion...

Agreed. I don't think that is seriously debatable.

It seems extremely unlikely that the ACC will get anywhere near $52 million.

Will they get the $20 million that Maryland previously pushed for and agreed to pay as a potential exit fee?

Will the parties settle? At what figure?

I throw a dart at $27 million. It might end up being what the ACC withholds?

You and I agree completely as to how this thing most likely plays out, which is a settlement for around $27 million, which I believe [/b[b]]is about how much the ACC can withhold through June.

By then the ACC would have to think long and hard about continuing with a case incurring attorney's fees against a state entity that would be hard to collect against. Also, if they lost the ACC would likely owe Maryland a lot of money.

In contrast, Maryland would have a tougher choice. The most Maryland could loose at that point is another $20 million, plus attorney's fees, which is still a lot of money, but they might be looking at getting treble damages on the amount withheld to that point, which could be approaching $90 million. I guess it all boils down to how confident Maryland is in its case.

As lawyers, we know cases, no matter how contentious, usually boils down to money. We also know when clients say it's not about the money it usually is, and when it's not it needs to be for their sake so the case can settle. A bird in the hand... However, sometimes politics intervenes and makes settlement harder.

Again, I think this case will settle as discussed above, but what if Maryland politics and the ACC's sense of self-preservation prevents settlement? What if this case does go to trial? What if Maryland can produce a Motion for Summary Judgment that a NC judge feels compelled to grant? How much of a precedent could this case set?

The more I think about this case the more I realize this case is different. While Maryland was in dire straits fiscally when they decided to leave the ACC for the B1G they were not near as desperate as any of the G5 schools jumping into a P5 lifeboat. What is obvious is that Maryland has fight in them, and they do not seem willing to wait until June. We both know discovery is part and parcel of litigation, but in the realm of conference realignment subpoenaing media companies is not.

Once again, I think this case settles because Maryland should do what's in Maryland's best interest, which usually means settle, but I cannot shake the feeling something else is in play here. Maybe it's all of the change in the air concerning college athletes, but if big change is coming then a ruling in this case could be the catalyst.

My revised prediction? I think the case settles for $27 to 30 million (Such is the safe bet because the vast majority of cases settle), but I think Maryland files a Motion for Summary Judgment first. I look forward to reading it.

Two last thoughts;

First, if the total payment to the ACC is less than the amount the ACC can withhold from Maryland through June then such settlement would have the same effect as a ruling by the Court as far as precedent value in conference realignment as to exit fees.

Second, if the case goes to trial and Maryland prevails then such ruling will likely include the Court stating a conference cannot restrict trade to prevent a school from leaving a conference for greener pastures, and such ruling would not be confined to just voiding a penal liquidated damages clause. Such a ruling would likely contain language that would be broad enough to encompass grant of rights to the extent they try to prevent trade by having restrictions on conference withdrawal beyond actual damages to the conference or the third party media networks who have purchased such rights.

Best Wishes,

Lurker Above

please see:

http://www.big12sports.com/ViewArticle.d...ID=1514844


The Big 12 exit fee would be approximately $40 million.

Section 3 in the bylaw section in the above link regarding Big12 exit.

And also see SEC GOR and B1G GOR.

Also please produce the B1G exiting bylaws (I am curious to see those since this is the contract Maryland will be entering into and, by admission, will proclaim valid and binding)!



I would like a response from both you and TerryD (since you are in lock step) regarding the difference between the ACC bylaws regarding exit, the Big 12 bylaws regarding exit as well as a team exiting the SEC or B1G. Specifically, if any random team from each conference were to notice an exit, what rules are they held accountable to?


****. I'm sorry but I had to edit my post somewhat. There are so many "ifs" in the post I am responding to that it has become a hypothetical. No need for TerryD or Lurker to respond. Sorry and I might have missed a couple!

One question I will ask..... did the Big Ten have a contingency on Maryland's admission? Did the Big Ten have an admission criteria or are they accepting Maryland into membership (paying them) no matter what? Anybody know and supply proof?

(03-31-2014 10:43 PM)Dasville Wrote:  

(03-31-2014 10:17 PM)Lurker Above Wrote:  

(03-31-2014 04:53 PM)TerryD Wrote:  

(03-31-2014 04:44 PM)Lurker Above Wrote:  

(03-31-2014 12:16 PM)Dasville Wrote:  The ACC is asking the "bigger" question. The ACC can not negotiate the exit factor increase from 1.25 x the YOB to 3 x the YOB until it is determined whether or not the exit bylaw applies to The University of Maryland.

Here is one lawyers summary of the case:

http://www.testudotimes.com/2012/11/28/3...6342-fight


excerpt:


Clearly, the ACC has the more straight-forward argument in this case. As the Complaint points out, Maryland is a member of the ACC, and has agreed to bound by the constitution and bylaws of the ACC. Even though Maryland did not vote for increasing the exit fee, such exit fee passed by a 10-2 vote, and is therefore binding upon Maryland. It is interesting to note that the bylaw does not state that the exit fee is $52,226,342, but rather three times the operating budget of the entire league. We'll get back to that point in a minute.

The Complaint filed by ACC asks the Court to determine whether the aforementioned bylaw is valid and binding on Maryland. That's surprisingly it. The Complaint asks for Declaratory Relief, in which a judge determines the legality of an issue actually in question between the parties. The request for jury trial is limited to only those issues triable by a jury; ie, not whether the bylaw is binding, but any other triable issue briefed or argued along the way.

One particularly troublesome part for Maryland is the potential for the ACC to withhold distributions due to Maryland in 2013 in order to fund the exit fee, pursuant to the third to last sentence of the above quoted bylaw. This would impact Maryland's cash flow and put Maryland in a severe position of weakness. Withholding 2013 distributions would be allowed because the bylaw says for any Conference year.

That is an old article and you might want to read the rest of it, which highly favors Maryland's legal position, as could be expected on a Maryland website. If you did read the article you would know what you posted was not his "summary of the case". His legal opinion is opposite than what your quote suggests.

Here is the more pertinent parts of the article you posted:

"President Loh, sounding every bit like the former law professor that he is, succinctly summarized Maryland's positions back in September, 2012 when he said:

"The law says that when you have liquidated damages, and in advance you anticipate a breaching of the contract, we will decide what the damages will be. You talk about damages, not penalties, and it has to be a reasonable estimate. That's the law. We live in a free economy. We want people to move freely in and out of relationships. That's the philosophical principle. What constitutes reasonable? That's for a court to decide. But if the damages are so huge that it prevents the mobility, the free movement of people, then I think it's not good for society. Others may not be looking at it from this principle, and that's their prerogative.

"Regrettably, the allegations in the Complaint center on the public statements made by President Loh, as well as the fact the he participated in the discussions to raise the exit fee. Let's examine this quote point by point.

"1. Liquidated Damages

The concept of liquidated damages is that, in a scenario where actual damages are difficult to predict, the parties to a contract can agree on an amount to be paid in damages in the event of a breach. Such amount must be reasonable, and liquidated damages are meant to be just compensation, not a penalty. Loh correctly cuts to the heart of the exit fee issue, namely that it is a penalty, and not a reasonable estimate of damages. Clearly a reasonable legal mind could easily conclude that one school paying three times the operating budget of the entire conference is not a reasonable estimate of damages for such schools absence from the conference.

The idea of Maryland's value to the ACC is tough to approximate, but three times the ACC's operating budget is disproportionate with the harm suffered by the ACC and the remaining members. The entire point of contract damages is to make the non-breaching party whole, not to punish the breaching party. Simply put, the ACC and the remaining members will decidedly not be out $52,226,342 come 2014, and will never have to write a check for such amount. Given the state of college athletics it seems clear that the increased fee was meant to discourage ACC schools from leaving and harm them if they left.

"2. Illegal restraint of trade

Loh makes this point a little more subtly, but essentially such a high exit fee will restrict the ability of ACC member schools to decide for themselves which conference they should align with. In an open market capitalist economy, people have the ability to change relationships and move as they see fit. As such, restrictions on that free movement are illegal. Clearly, society is no better off thanks to the ACC's higher exit fee, and is in fact worse off due to the restrained ability of ACC schools to look out for their best interests. The high exit fee is completely self serving to the ACC and does not benefit the general population at all.

"3. Arbitrary and Capricious

This point is an off shoot of the liquidated damages argument, and essentially alleges that the ACC pulled the $52,226,342 number out of the air. The previous penalty was 1 ¼ times the operating budget, and the ACC will need to show some reason for increasing to 3 times the budget as opposed to 1 ½ or 2 times the budget.

"4. Timing

The $52,226,342 is calculated on the budget from July 1, 2012 to June 30, 2013, dates which, as of now, Maryland will be in the ACC. It stands to reason that the exit fee shouldn't be due until 7/1/2014 at the earliest, the date Maryland actually exits the ACC, since the ACC will profit off Maryland in 2013. Asking for a declaratory judgment now takes the position that Maryland's announced departure is an anticipatory breach of the ACC constitution and bylaws. The ACC's request for declaratory judgment, however, because if the exit fee is meant to compensate the conference and the remaining league members for the absence of the departing member going forward, it should not be due until after Maryland leaves and for several years thereafter.

"I would expect Maryland to prevail on the theory that the amount of the exit fee is an arbitrary and capricious penalty, meant to harm Maryland, rather than to reasonably compensate the ACC for the loss of a league member."

All of the above is pretty close to what I've been saying all along. Of course, this article was written before Maryland filed its counterclaim for $156 million. As to those issues you could refer to my earlier posts in this thread. That is, if you want a more informed opinion...

Agreed. I don't think that is seriously debatable.

It seems extremely unlikely that the ACC will get anywhere near $52 million.

Will they get the $20 million that Maryland previously pushed for and agreed to pay as a potential exit fee?

Will the parties settle? At what figure?

I throw a dart at $27 million. It might end up being what the ACC withholds?

You and I agree completely as to how this thing most likely plays out, which is a settlement for around $27 million, which I believe [/b[b]]is about how much the ACC can withhold through June.

By then the ACC would have to think long and hard about continuing with a case incurring attorney's fees against a state entity that would be hard to collect against. Also, if they lost the ACC would likely owe Maryland a lot of money.

In contrast, Maryland would have a tougher choice. The most Maryland could loose at that point is another $20 million, plus attorney's fees, which is still a lot of money, but they might be looking at getting treble damages on the amount withheld to that point, which could be approaching $90 million. I guess it all boils down to how confident Maryland is in its case.

As lawyers, we know cases, no matter how contentious, usually boils down to money. We also know when clients say it's not about the money it usually is, and when it's not it needs to be for their sake so the case can settle. A bird in the hand... However, sometimes politics intervenes and makes settlement harder.

Again, I think this case will settle as discussed above, but what if Maryland politics and the ACC's sense of self-preservation prevents settlement? What if this case does go to trial? What if Maryland can produce a Motion for Summary Judgment that a NC judge feels compelled to grant? How much of a precedent could this case set?

The more I think about this case the more I realize this case is different. While Maryland was in dire straits fiscally when they decided to leave the ACC for the B1G they were not near as desperate as any of the G5 schools jumping into a P5 lifeboat. What is obvious is that Maryland has fight in them, and they do not seem willing to wait until June. We both know discovery is part and parcel of litigation, but in the realm of conference realignment subpoenaing media companies is not.

Once again, I think this case settles because Maryland should do what's in Maryland's best interest, which usually means settle, but I cannot shake the feeling something else is in play here. Maybe it's all of the change in the air concerning college athletes, but if big change is coming then a ruling in this case could be the catalyst.

My revised prediction? I think the case settles for $27 to 30 million (Such is the safe bet because the vast majority of cases settle), but I think Maryland files a Motion for Summary Judgment first. I look forward to reading it.

Two last thoughts;

First, if the total payment to the ACC is less than the amount the ACC can withhold from Maryland through June then such settlement would have the same effect as a ruling by the Court as far as precedent value in conference realignment as to exit fees.

Second, if the case goes to trial and Maryland prevails then such ruling will likely include the Court stating a conference cannot restrict trade to prevent a school from leaving a conference for greener pastures, and such ruling would not be confined to just voiding a penal liquidated damages clause. Such a ruling would likely contain language that would be broad enough to encompass grant of rights to the extent they try to prevent trade by having restrictions on conference withdrawal beyond actual damages to the conference or the third party media networks who have purchased such rights.

Best Wishes,

Lurker Above

please see:

http://www.big12sports.com/ViewArticle.d...ID=1514844


The Big 12 exit fee would be approximately $40 million.

Section 3 in the bylaw section in the above link regarding Big12 exit.

And also see SEC GOR and B1G GOR.

Also please produce the B1G exiting bylaws (I am curious to see those since this is the contract Maryland will be entering into and, by admission, will proclaim valid and binding)!



I would like a response from both you and TerryD (since you are in lock step) regarding the difference between the ACC bylaws regarding exit, the Big 12 bylaws regarding exit as well as a team exiting the SEC or B1G. Specifically, if any random team from each conference were to notice an exit, what rules are they held accountable to?


****. I'm sorry but I had to edit my post somewhat. There are so many "ifs" in the post I am responding to that it has become a hypothetical. No need for TerryD or Lurker to respond. Sorry and I might have missed a couple!

Lol, you have highlighted all of the "attorney speak". That is how most lawyers talk.

Any lawyer who speaks with any certain, absolute conviction on just about any legal topic is going to be wrong, often.

Any lawyer who speak in absolutes about what a judge or jury might do in a particular case is setting himself up for any angry client, at least.

The truth is, as I learned in first year law school back in 1983, many legal questions can be accurately answered with:

"It all depends."

We can all think we know how things will turn out, we can give educated guesses, that is the best we can do.

It is more art than science.

I have left many appellate court oral arguments thinking "That went well" only to have the panel rule against me.

Conversely, I have often left thinking "Man, they kicked my ass, the didn't like our position at all" and have the panel rule in my client's favor.

To take a high profile case, many "legal experts" thought the United States Supreme Court would strike down the Affordable Care Act.

Remember all of the backtracking and crawfishing of legal analysts who were certain of the outcome?

Most jury trials are crap shoots. I have seen many juries decide cases on things other than the evidence, sometimes in my favor. :)

Sometimes not.

That is why most cases settle. Nobody is really that anxious to let twelve strangers decide their fate.

(04-01-2014 12:10 AM)Dasville Wrote:  One question I will ask..... did the Big Ten have a contingency on Maryland's admission? Did the Big Ten have an admission criteria or are they accepting Maryland into membership (paying them) no matter what? Anybody know and supply proof?

Everybody knows. This lawsuit is about money. Its irrelevant to Maryland joining the Big 10.

(04-01-2014 08:14 AM)bullet Wrote:  

(04-01-2014 12:10 AM)Dasville Wrote:  One question I will ask..... did the Big Ten have a contingency on Maryland's admission? Did the Big Ten have an admission criteria or are they accepting Maryland into membership (paying them) no matter what? Anybody know and supply proof?

Everybody knows. This lawsuit is about money. Its irrelevant to Maryland joining the Big 10.

My question is prompted by the way the SEC handled expansion.

http://sportsillustrated.cnn.com/2011/fo...index.html


excerpt:

SEC presidents voted to accept Texas A&M last week, but the invitation was contingent on Texas A&M being free of legal issues regarding its departure from the Big 12.





Has any University switched conferences and still had legal issues unsettled before joining their new conference?

(04-01-2014 03:50 PM)Dasville Wrote:  

(04-01-2014 08:14 AM)bullet Wrote:  

(04-01-2014 12:10 AM)Dasville Wrote:  One question I will ask..... did the Big Ten have a contingency on Maryland's admission? Did the Big Ten have an admission criteria or are they accepting Maryland into membership (paying them) no matter what? Anybody know and supply proof?

Everybody knows. This lawsuit is about money. Its irrelevant to Maryland joining the Big 10.

My question is prompted by the way the SEC handled expansion.

http://sportsillustrated.cnn.com/2011/fo...index.html


excerpt:

SEC presidents voted to accept Texas A&M last week, but the invitation was contingent on Texas A&M being free of legal issues regarding its departure from the Big 12.





Has any University switched conferences and still had legal issues unsettled before joining their new conference?

Baylor was threatening tampering lawsuits. That is very different from a lawsuit over exit fees. The first put the SEC at risk. The 2nd just puts the leaving school at risk. The SEC formally invited A&M once the tampering issue was put to bed and long before A&M settled their exit fee.

(04-01-2014 04:03 PM)bullet Wrote:  

(04-01-2014 03:50 PM)Dasville Wrote:  

(04-01-2014 08:14 AM)bullet Wrote:  

(04-01-2014 12:10 AM)Dasville Wrote:  One question I will ask..... did the Big Ten have a contingency on Maryland's admission? Did the Big Ten have an admission criteria or are they accepting Maryland into membership (paying them) no matter what? Anybody know and supply proof?

Everybody knows. This lawsuit is about money. Its irrelevant to Maryland joining the Big 10.

My question is prompted by the way the SEC handled expansion.

http://sportsillustrated.cnn.com/2011/fo...index.html


excerpt:

SEC presidents voted to accept Texas A&M last week, but the invitation was contingent on Texas A&M being free of legal issues regarding its departure from the Big 12.





Has any University switched conferences and still had legal issues unsettled before joining their new conference?

Baylor was threatening tampering lawsuits. That is very different from a lawsuit over exit fees. The first put the SEC at risk. The 2nd just puts the leaving school at risk. The SEC formally invited A&M once the tampering issue was put to bed and long before A&M settled their exit fee.

What about this wording?


http://www.nj.com/education/2014/02/rutg...t_fee.html

excerpt:

Rutgers has reached a tentative agreement with the former Big East to settle a lawsuit over the $10 million exit fee the school was supposed to pay for taking its teams to the Big Ten.

University officials declined to discuss the terms of the agreement, which would clear the way for Rutgers to officially join the more prestigious and lucrative Big Ten, as planned, on July 1.



I'll be happy to supply many different links with the same type language if you like. I only link the articles I read.

(04-01-2014 04:29 PM)Dasville Wrote:  

(04-01-2014 04:03 PM)bullet Wrote:  

(04-01-2014 03:50 PM)Dasville Wrote:  

(04-01-2014 08:14 AM)bullet Wrote:  

(04-01-2014 12:10 AM)Dasville Wrote:  One question I will ask..... did the Big Ten have a contingency on Maryland's admission? Did the Big Ten have an admission criteria or are they accepting Maryland into membership (paying them) no matter what? Anybody know and supply proof?

Everybody knows. This lawsuit is about money. Its irrelevant to Maryland joining the Big 10.

My question is prompted by the way the SEC handled expansion.

http://sportsillustrated.cnn.com/2011/fo...index.html


excerpt:

SEC presidents voted to accept Texas A&M last week, but the invitation was contingent on Texas A&M being free of legal issues regarding its departure from the Big 12.





Has any University switched conferences and still had legal issues unsettled before joining their new conference?

Baylor was threatening tampering lawsuits. That is very different from a lawsuit over exit fees. The first put the SEC at risk. The 2nd just puts the leaving school at risk. The SEC formally invited A&M once the tampering issue was put to bed and long before A&M settled their exit fee.

What about this wording?


http://www.nj.com/education/2014/02/rutg...t_fee.html

excerpt:

Rutgers has reached a tentative agreement with the former Big East to settle a lawsuit over the $10 million exit fee the school was supposed to pay for taking its teams to the Big Ten.

University officials declined to discuss the terms of the agreement, which would clear the way for Rutgers to officially join the more prestigious and lucrative Big Ten, as planned, on July 1.



I'll be happy to supply many different links with the same type language if you like. I only link the articles I read.

Some of the Big East issues were different because they had a 2 year notice requirement. Now the Big East would never get an injunction issued and probably wouldn't even try, but there was a very remote risk that there could be a judge to do that. WVU was willing to risk that and told them to fly a kite on the 2 year requirement. The Big 12 and ACC exits didn't have that problem. They notified in sufficient time according to the by-laws.

And sometimes the wording doesn't mean anything. Its just a sportswriter talking without knowing the issues. On realignment and money, very few of them do and about the same limited number care.

(04-01-2014 06:10 AM)TerryD Wrote:  

(03-31-2014 10:43 PM)Dasville Wrote:  

(03-31-2014 10:17 PM)Lurker Above Wrote:  

(03-31-2014 04:53 PM)TerryD Wrote:  

(03-31-2014 04:44 PM)Lurker Above Wrote:  That is an old article and you might want to read the rest of it, which highly favors Maryland's legal position, as could be expected on a Maryland website. If you did read the article you would know what you posted was not his "summary of the case". His legal opinion is opposite than what your quote suggests.

Here is the more pertinent parts of the article you posted:

"President Loh, sounding every bit like the former law professor that he is, succinctly summarized Maryland's positions back in September, 2012 when he said:

"The law says that when you have liquidated damages, and in advance you anticipate a breaching of the contract, we will decide what the damages will be. You talk about damages, not penalties, and it has to be a reasonable estimate. That's the law. We live in a free economy. We want people to move freely in and out of relationships. That's the philosophical principle. What constitutes reasonable? That's for a court to decide. But if the damages are so huge that it prevents the mobility, the free movement of people, then I think it's not good for society. Others may not be looking at it from this principle, and that's their prerogative.

"Regrettably, the allegations in the Complaint center on the public statements made by President Loh, as well as the fact the he participated in the discussions to raise the exit fee. Let's examine this quote point by point.

"1. Liquidated Damages

The concept of liquidated damages is that, in a scenario where actual damages are difficult to predict, the parties to a contract can agree on an amount to be paid in damages in the event of a breach. Such amount must be reasonable, and liquidated damages are meant to be just compensation, not a penalty. Loh correctly cuts to the heart of the exit fee issue, namely that it is a penalty, and not a reasonable estimate of damages. Clearly a reasonable legal mind could easily conclude that one school paying three times the operating budget of the entire conference is not a reasonable estimate of damages for such schools absence from the conference.

The idea of Maryland's value to the ACC is tough to approximate, but three times the ACC's operating budget is disproportionate with the harm suffered by the ACC and the remaining members. The entire point of contract damages is to make the non-breaching party whole, not to punish the breaching party. Simply put, the ACC and the remaining members will decidedly not be out $52,226,342 come 2014, and will never have to write a check for such amount. Given the state of college athletics it seems clear that the increased fee was meant to discourage ACC schools from leaving and harm them if they left.

"2. Illegal restraint of trade

Loh makes this point a little more subtly, but essentially such a high exit fee will restrict the ability of ACC member schools to decide for themselves which conference they should align with. In an open market capitalist economy, people have the ability to change relationships and move as they see fit. As such, restrictions on that free movement are illegal. Clearly, society is no better off thanks to the ACC's higher exit fee, and is in fact worse off due to the restrained ability of ACC schools to look out for their best interests. The high exit fee is completely self serving to the ACC and does not benefit the general population at all.

"3. Arbitrary and Capricious

This point is an off shoot of the liquidated damages argument, and essentially alleges that the ACC pulled the $52,226,342 number out of the air. The previous penalty was 1 ¼ times the operating budget, and the ACC will need to show some reason for increasing to 3 times the budget as opposed to 1 ½ or 2 times the budget.

"4. Timing

The $52,226,342 is calculated on the budget from July 1, 2012 to June 30, 2013, dates which, as of now, Maryland will be in the ACC. It stands to reason that the exit fee shouldn't be due until 7/1/2014 at the earliest, the date Maryland actually exits the ACC, since the ACC will profit off Maryland in 2013. Asking for a declaratory judgment now takes the position that Maryland's announced departure is an anticipatory breach of the ACC constitution and bylaws. The ACC's request for declaratory judgment, however, because if the exit fee is meant to compensate the conference and the remaining league members for the absence of the departing member going forward, it should not be due until after Maryland leaves and for several years thereafter.

"I would expect Maryland to prevail on the theory that the amount of the exit fee is an arbitrary and capricious penalty, meant to harm Maryland, rather than to reasonably compensate the ACC for the loss of a league member."

All of the above is pretty close to what I've been saying all along. Of course, this article was written before Maryland filed its counterclaim for $156 million. As to those issues you could refer to my earlier posts in this thread. That is, if you want a more informed opinion...

Agreed. I don't think that is seriously debatable.

It seems extremely unlikely that the ACC will get anywhere near $52 million.

Will they get the $20 million that Maryland previously pushed for and agreed to pay as a potential exit fee?

Will the parties settle? At what figure?

I throw a dart at $27 million. It might end up being what the ACC withholds?

You and I agree completely as to how this thing most likely plays out, which is a settlement for around $27 million, which I believe [/b[b]]is about how much the ACC can withhold through June.

By then the ACC would have to think long and hard about continuing with a case incurring attorney's fees against a state entity that would be hard to collect against. Also, if they lost the ACC would likely owe Maryland a lot of money.

In contrast, Maryland would have a tougher choice. The most Maryland could loose at that point is another $20 million, plus attorney's fees, which is still a lot of money, but they might be looking at getting treble damages on the amount withheld to that point, which could be approaching $90 million. I guess it all boils down to how confident Maryland is in its case.

As lawyers, we know cases, no matter how contentious, usually boils down to money. We also know when clients say it's not about the money it usually is, and when it's not it needs to be for their sake so the case can settle. A bird in the hand... However, sometimes politics intervenes and makes settlement harder.

Again, I think this case will settle as discussed above, but what if Maryland politics and the ACC's sense of self-preservation prevents settlement? What if this case does go to trial? What if Maryland can produce a Motion for Summary Judgment that a NC judge feels compelled to grant? How much of a precedent could this case set?

The more I think about this case the more I realize this case is different. While Maryland was in dire straits fiscally when they decided to leave the ACC for the B1G they were not near as desperate as any of the G5 schools jumping into a P5 lifeboat. What is obvious is that Maryland has fight in them, and they do not seem willing to wait until June. We both know discovery is part and parcel of litigation, but in the realm of conference realignment subpoenaing media companies is not.

Once again, I think this case settles because Maryland should do what's in Maryland's best interest, which usually means settle, but I cannot shake the feeling something else is in play here. Maybe it's all of the change in the air concerning college athletes, but if big change is coming then a ruling in this case could be the catalyst.

My revised prediction? I think the case settles for $27 to 30 million (Such is the safe bet because the vast majority of cases settle), but I think Maryland files a Motion for Summary Judgment first. I look forward to reading it.

Two last thoughts;

First, if the total payment to the ACC is less than the amount the ACC can withhold from Maryland through June then such settlement would have the same effect as a ruling by the Court as far as precedent value in conference realignment as to exit fees.

Second, if the case goes to trial and Maryland prevails then such ruling will likely include the Court stating a conference cannot restrict trade to prevent a school from leaving a conference for greener pastures, and such ruling would not be confined to just voiding a penal liquidated damages clause. Such a ruling would likely contain language that would be broad enough to encompass grant of rights to the extent they try to prevent trade by having restrictions on conference withdrawal beyond actual damages to the conference or the third party media networks who have purchased such rights.

Best Wishes,

Lurker Above

please see:

http://www.big12sports.com/ViewArticle.d...ID=1514844


The Big 12 exit fee would be approximately $40 million.

Section 3 in the bylaw section in the above link regarding Big12 exit.

And also see SEC GOR and B1G GOR.

Also please produce the B1G exiting bylaws (I am curious to see those since this is the contract Maryland will be entering into and, by admission, will proclaim valid and binding)!



I would like a response from both you and TerryD (since you are in lock step) regarding the difference between the ACC bylaws regarding exit, the Big 12 bylaws regarding exit as well as a team exiting the SEC or B1G. Specifically, if any random team from each conference were to notice an exit, what rules are they held accountable to?


****. I'm sorry but I had to edit my post somewhat. There are so many "ifs" in the post I am responding to that it has become a hypothetical. No need for TerryD or Lurker to respond. Sorry and I might have missed a couple!

Lol, you have highlighted all of the "attorney speak". That is how most lawyers talk.

Any lawyer who speaks with any certain, absolute conviction on just about any legal topic is going to be wrong, often.

Any lawyer who speak in absolutes about what a judge or jury might do in a particular case is setting himself up for any angry client, at least.

The truth is, as I learned in first year law school back in 1983, many legal questions can be accurately answered with:

"It all depends."

We can all think we know how things will turn out, we can give educated guesses, that is the best we can do.

It is more art than science.

I have left many appellate court oral arguments thinking "That went well" only to have the panel rule against me.

Conversely, I have often left thinking "Man, they kicked my ass, the didn't like our position at all" and have the panel rule in my client's favor.

To take a high profile case, many "legal experts" thought the United States Supreme Court would strike down the Affordable Care Act.

Remember all of the backtracking and crawfishing of legal analysts who were certain of the outcome?

Most jury trials are crap shoots. I have seen many juries decide cases on things other than the evidence, sometimes in my favor. :)

Sometimes not.

That is why most cases settle. Nobody is really that anxious to let twelve strangers decide their fate.

Thanks for the response TerryD. I am curious as to your opinion of the ACC's exit bylaws as they are reflected in this essay from Chicago-Kent law review titled "Optimal Penalties in Contracts" by Aaron S. Edlin and Alan Schwartz:

http://scholarship.kentlaw.iit.edu/cklaw...78/iss1/4/

(04-01-2014 04:03 PM)bullet Wrote:  

(04-01-2014 03:50 PM)Dasville Wrote:  

(04-01-2014 08:14 AM)bullet Wrote:  

(04-01-2014 12:10 AM)Dasville Wrote:  One question I will ask..... did the Big Ten have a contingency on Maryland's admission? Did the Big Ten have an admission criteria or are they accepting Maryland into membership (paying them) no matter what? Anybody know and supply proof?

Everybody knows. This lawsuit is about money. Its irrelevant to Maryland joining the Big 10.

My question is prompted by the way the SEC handled expansion.

http://sportsillustrated.cnn.com/2011/fo...index.html


excerpt:

SEC presidents voted to accept Texas A&M last week, but the invitation was contingent on Texas A&M being free of legal issues regarding its departure from the Big 12.





Has any University switched conferences and still had legal issues unsettled before joining their new conference?

Baylor was threatening tampering lawsuits. That is very different from a lawsuit over exit fees. The first put the SEC at risk. The 2nd just puts the leaving school at risk. The SEC formally invited A&M once the tampering issue was put to bed and long before A&M settled their exit fee.

Baylor did not threaten anything. The SEC wanted Baylor and everyone else to waive any claims they might have regarding tampering. Baylor simply refused to sign since they had no obligation to do so and were not being offered anything in return. The SEC was being overly cautious. I agree, though, that the dispute and its resolution did not relate to the value of the exit fee.

West Virginia's move to the Big 12, though, was done with ongoing lawsuits. Of course, the suits were all settled before WVU started play. In that case, though, the Big East was seeking an injunction, so the suit needed to be resolved, or at least the question of whether an injunction would be granted. The ACC is not seeking an injunction, so there is no reason the suit could not continue past July.