Maryland attorney general moves to dismiss ACC lawsuit; ACC withholding revenue from U-Md.

January 18, 2013

UPDATE (2:05 p.m.): In a telephone interview, Maryland Attorney General Douglas F. Gansler said the ACC has notified the University of Maryland that it has begun withholding shared revenue payments as “collateral against the [exit fee].”

So far, the ACC has withheld $3,067,255.27 in Maryland’s “respective share of the initial distribution of gross television revenues for 2012-13,” according to a letter from ACC associate commissioner Jeff Elliot to Athletics Director Kevin Anderson dated Dec. 14, 2012.

“They sent us a letter saying they are withholding royalties, the amount of money [the University of Maryland is] entitled to,” Gansler said. “They’re doing this because the University of Maryland owes them $53 million.

“When they sent us the letter, that triggered the ability for us to bring a lawsuit in court, saying you owe us this money. That’s what we filed. We filed it for the money and for the antitrust implications.”

ORIGINAL POST (1:57 p.m.)

Maryland Attorney General Douglas F. Gansler has moved to dismiss the ACC’s lawsuit against the University of Maryland, saying “a North Carolina court has no jurisdiction over the sovereign state of Maryland and its public universities” according to a news release.

Gansler also announced Friday that he has filed a complaint against the ACC on behalf of the Maryland Board of Regents and the university at large, calling the exit fee the conference wishes to impose on Maryland an “illegal restraint of trade in violation and antitrust laws.”

“Our lawsuit calls the ACC’s ‘exit fee’ what it really is — an antitrust violation and an illegal penalty,” Gansler said in the release. “Our motion in North Carolina will ensure that a Maryland court will rule on the case.

“Maryland has moved to dismiss that action because a court of a sister state cannot compel another sovereign state to submit to that court’s jurisdiction.”

Shortly after Maryland announced its impending move to the Big Ten, the ACC filed suit against Maryland in Guilford County (N.C.) Superior Court,  saying the school is bound by the conference’s bylaws to pay an exit fee in order to leave the conference. The ACC’s lawsuit points to Maryland President Wallace D. Loh’s suspicions that the exit fee wasn’t legal.

The ACC was pursuing a decision from the North Carolina court to enforce the exit fee, which was voted upon by the conference’s Council of Presidents. Loh was one of the two dissenting votes this September, insisting at the time that the exit fee was punitive and wouldn’t hold up in court.

In its lawsuit, the ACC claims Maryland will have to pay $52,266,342 to leave for the Big Ten, and that “Dr. Loh has distanced Maryland publicly from any commitment to pay the withdrawal payment.”

Gansler’s lawsuit, which was filed in Prince George’s County Circuit Court, alleges that the ACC violated Maryland antitrust lawsuits, “breached contractual obligations and tortiously interfered with the prospective economic advantage of the flagship campus of the University of Maryland System.”

The attorney general is seeking an injunction against the exit fee’s enforcement, “a declaratory judgement finding the feel unlawful and treble damages under the antitrust laws, along with other relief.”

Gansler’s lawsuit, which runs 59 pages and includes the ACC constitution, also says the ACC has excluded Maryland from conference meetings and barred coaches from meetings about competition, scheduling and planning. It also claims the ACC has breached the ACC constitution by applying September 2012 amendment regarding an increased exit fee and withholding Maryland’s revenue share.

Alex Prewitt covers the Washington Capitals. Follow him on Twitter @alex_prewitt or email him at alex.prewitt@washpost.com.
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Alex Prewitt · January 18, 2013