On Thursday afternoon, Prince George’s County Circuit Court Judge John P. Davey heard arguments from Maryland and the ACC concerning the school’s lawsuit against the conference. The ACC is seeking to get the lawsuit dismissed.
Davey declined to make a ruling, saying he will issue a written opinion soon.
Thursday’s hearing, which lasted less than three hours, represented a small sliver of the legal battle surrounding Maryland’s refusal to pay a roughly $52 million exit fee to the ACC once it decided to leave for the Big Ten last November.
In November, the ACC filed suit in a North Carolina court, asking the court to enforce the exit fee. Then, in January, Maryland Attorney General Douglas F. Gansler moved to dismiss the ACC’s lawsuit in Prince George’s County Circuit Court, saying “a North Carolina court has no jurisdiction over the sovereign state of Maryland and its public universities.”
Both sides have filed motions for dismissal; the ACC’s was considered Thursday in Upper Marlboro.
Lawyers Christopher R. Dunn and James D. Smeallie handled the ACC’s arguments. Dunn spoke first, alleging that the University of Maryland had not sufficiently alleged anti-trust injury, which is the basis of Maryland’s lawsuit against the conference.
The ACC also alleged that Maryland President Wallace D. Loh, who sat in the front row alongside Athletic Director Kevin Anderson and Chancellor William “Brit” Kirwan, was a leading proponent of an increased exit fee in September 2011, when the conference increased its departure penalty to roughly $21 million.
Maryland assistant attorney general John Kuchno, who was arguing Maryland’s case, challenged the validity of the ACC’s claim, saying he would “contest [that] as factual claim” if it went to trial.
Citing legal and philosophical grounds, Loh voted against another exit-fee hike last September, this time up to roughly $52 million. Nonetheless, the conference’s presidents approved the exit-fee increase (Florida State also objected).
Maryland claims the $52 million exit fee would prove punitive, hampering its already meager athletics budget, and that the ACC has already begun withholding revenue shares and forbidding school officials from attending conference meetings. Smeallie said “that’s not enough under anti-trust laws.”
“You have to allege that competition has been damaged,” Smeallie said.
This idea, that Maryland must prove that the exit fee damages competition, lingered throughout the hearing. Kuchno, a 1979 Maryland graduate and longtime Terrapin Club member, said the exit fee has “restrained [other] members of the ACC from leaving.”
“Yes, Maryland has suffered,” Kuchno said. “But just because we’re the first doesn’t mean we’re the only one.”
The ACC asked Davey to dismiss the lawsuit based on the law of comity. Basically, because the ACC had already filed suit in a North Carolina courthouse and because “all operative facts happened in North Carolina,” the Maryland court should defer until the North Carolina matter is settled.
Maryland’s motion for dismissal of the ACC’s lawsuit in North Carolina is currently in the appeals phase.
Kuchno opened his counter-arguments by invoking stories from his days as a Maryland fan at Cole Field House. When the Terrapins played schools located near the ACC’s home office in Greensboro, N.C., and calls went in favor of the North Carolinas or Dukes, Terrapins fans often alleged that the officials were “Carolina refs.”
“The ACC wants a Carolina ref here,” Kuchno said.
Kuchno alleged that the ACC has violated its own constitution by withholding revenue shares from Maryland because the university hasn’t yet formally informed the conference of its decision to leave for the Big Ten. Kuchno confirmed this to reporters outside the courthouse, saying that the school has until July 1, 2013 — exactly one year before it joins the Big Ten — to provide formal notice.
“While we are sitting here today, they have at least $3 million of our money,” Kuchno argued in court. “The athletics department cut seven sports, and that hurt Maryland. It tilts the playing field. Maryland has to deal with a self-sustaining budget, and [the ACC is] taking [money] out of our pockets.”
Kuchno also argued that the injury occurred in Maryland, not in Chapel Hill, N.C., where the presidents gathered to pass the newest exit fee last September. “The hole in Maryland’s budget, the distortion of the playing field happened in this state,” Kuchno said, saying the ACC immediately implemented the exit fee to “deliberately punish us” once conference officials began to hear rumors that Maryland was weighing a move to the Big Ten. He called the legal battle a matter of significant state interest, saying that every delay benefits the ACC, because the conference has already begun withholding revenue.
“The longer we wait, the longer we defer to the court of North Carolina, which might not have jurisdiction at all, the better for the ACC, because they get to keep our money,” Kuchno said.
Davey said he would deliver a written opinion “as soon as possible,” though several legal experts present said it would be highly unusual for that to come before the weekend.
Take a look at the legal documents filed for the case here.