Guest Post: ACC vs. FSU - The ACC's Motion to Dismiss, Part 1

TwistNHook is back with a major update in the FSU vs. ACC legal wranglings

Ed Note: Write For California’s Chief North Carolina/Florida Media Contracts Legal Correspondent, TwistNHook, is back to break down the latest documents filed by the conference that Cal fans have loved and cherished for oh these many months. Go ACC!

Part 1: ACC Stability
Part 2: FSU vs. ACC Part 1
Part 3: FSU vs. ACC Part 2
Part 4: The ACC Strikes Back Part 1
Part 5: The ACC Strikes Back Part 2
Part 6: Florida State's Amended Complaint

My friends, we are back in business.  Although the lawsuits have been filed for about 2 months now, not a lot has actually happened.  The two sides amended their lawsuits and then squabbled over sealing some ESPN media deal contracts.  We’ve been on the edge of our seat to see when somebody would “Do A Thing.”  

Now, both sides have Done A Thing.  FSU actually did theirs first, filing a Motion To Stay And/Or Stay the North Carolina case.  That was filed in North Carolina.  The ACC matched them by filing a similar motion in Leon County, FL (where the FSU lawsuit is housed).  In this post, I wanted to discuss that Motion.  Will be interesting to see how this plays out.  

If the FSU lawsuit gets dismissed and/or stayed for the NC lawsuit to take priority, then FSU is starting off in a bad step.  They need their lawsuit to go well to maximize leverage in any settlement negotiation.  It somewhat started off poorly with the ACC beating them to the punch and filing in NC a day prior to the FSU filing.  If the ACC can use that to basically stop the FSU lawsuit in its tracks, then it may be over before it began for Florida State.

So, what does the ACC Motion say.  It basically consists of three parts:

1. Why Florida is not the right venue for this lawsuit

2. Why the lawsuit should be dismissed

3. Why the lawsuit should be stayed

There is sort of a cascading “even if” reality to these arguments that is commonly used in the legal field.  Think:  “The lawsuit shouldn’t be in Florida.  Even if it is should be in Florida, it should be dismissed for being terrible.  Even if it shouldn’t dismissed for being terrible, it should be stayed for NC to take priority.”  The ACC really only needs to win on one of these three points to be successful here.  

Jurisdiction

The first point they make is dismissal based on jurisdiction.  This was something that I flagged in looking at both sides’ lawsuits.  The ACC spent pages telling the NC Court why NC was the appropriate venue.  The FSU suit (even as amended) had a limp attempt with a few bland citations as to why FL was the right venue.  Knowing that this was coming, if I repped FSU, I would have larded up the lawsuit with everything possible to keep it in FL.  

This section is highly technical.  Additionally, as I am not a FL attorney or a NC attorney or a federal attorney, I am not an expert in this.  I will try to distill it down to the best of my abilities.  

The first argument that the ACC puts forward is that FL lacks personal jurisdiction over the ACC per Florida Rules Of Civil Procedure 1.140b2 and Florida Statute 48.193.  The ACC argues that there is a difference between “subject matter jurisdiction” and “personal jurisdiction.”  The ACC argues that FL needs personal jurisdiction over the ACC for the lawsuit to proceed.  The quote from the FSU complaint the ACC uses does refer to “personal jurisdiction.”

(Ed. note: ‘jx’ is a legal abbreviation for ‘jurisdiction’)

The ACC argues that FSU tries to use a federal statute regarding subject matter jx that is not relevant.  They argue that since this is a state case, federal statutes are not relevant.  The ACC states that they cannot use the law supporting subject matter jx to prove personal jx. 

Putting aside the complexity of this, the ACC is basically arguing that FSU used the wrong law to support its case here.  They allege that the FL law that is relevant supports their position because it does not provide for FL to be the applicable location.  This is an incredibly dense legal section, so I will not get into the cases cited etc., but just to note that the ACC basically says FSU is not even close to being accurate here and it should be dismissed for lack of appropriate jx.  

Venue

Next, the ACC argues that the venue is improper.  Jurisdiction and venue are technically separate concepts although often confused together.  Jurisdiction is the Court’s authority over a person or business.  Venue is the location where they are sued.  These arguments are similar, but somewhat different.  

Here, the ACC notes that the Amended Complaint merely cites to Florida Statutes 47.011.  However, that section explicitly states it is not relevant to “actions against nonresidents.”  Next, the ACC argues that the FSU lawsuit explicitly states that the defense (the ACC) is a non-resident.  To the ACC, this is case closed.  Where the plaintiff is does not matter to the Florida analysis.  

Next, the motion argues that FSU’s complaint fails to argue a single event that occurred in Leon County, FL, that would justify its filing there.  Presumably, FSU could argue that they signed their contracts in Leon County.  So, this may not be the strongest argument, but the best case scenario here for FSU is that their lawsuit gets dismissed but they get an opportunity to amend and fix their problem.  This is if the other arguments go their way.  

Personally, I think that this is a fairly strong argument.  The Florida Statute seems relevant here given that the defendant is explicitly not a Florida resident.  This is an argument to look for.

Premature

Next, the motion argues that the case is not ripe and thus should be dismissed.  FSU actually argued this in their motion in NC.  I find it odd that both sides filed their own lawsuit and then argued that the case isn’t ripe when discussing the other lawsuit.  I am not seeing that 100%.  

What the Motion argues is that the issue is not ripe as FSU has not technically withdrawn.  The Motion argues that FSU is using the Court to obtain an “advisory opinion.”  This is technically accurate (although the ACC is kinda doing the same in NC).  FSU wants a Judge to say that the withdrawal penalty is not valid so they can leave without paying 500+ mil.  If a Court does say that, then they will withdraw.  

I will note (and this is raised later in the motion), FSU says that if they get a favorable opinion then they want to go back in time to August 2023 and give their withdrawal notice.  So, FSU is trying to have it both ways.  “WE ARE NOT WITHDRAWING....UNLESS SOMEBODY IN A ROBE SAYS WE CAN DO SO FOR FREE IN WHICH WE WITHDREW IN 2023!”  

The Motion basically says that FSU is using its lawsuit to complain about decades old problems with the old commissioner and his son (true!) and that the Courts cannot provide advisory opinions.  The motion argues that the lawsuit must be dismissed until FSU actually tries to withdraw and an actual legal controversy exists.  

This would put FSU in a catch-22 i.e. it cannot withdraw until it knows how expensive that will be but it cannot find out how expensive that would be until it withdraws.  So, that would be a problem for them.

Failure To State A Cause Of Action

Those are the sections discussing why the Court should dismiss this lawsuit outright.  Next, the ACC goes through what CA attorneys would call a demurrer analysis.  What this means is that the ACC goes through every single cause of action by FSU and argues to the Court why that cause of action fails.  A cause of action generally fails if the plaintiff fails to include all of the required elements.  Theoretically, the Court could dismiss individual causes of action but keep others.  

For example, if FSU sued the ACC alleging that the ACC stole money from FSU but did not allege a single penny that the ACC actually took from FSU, then FSU would not have pled facts to support every element of their cause of action.  This can be long and tedious, because the ACC has to go through every single cause of action.  The FSU lawsuit has 7 counts.  Let’s dive in!

Count I:  Unreasonable Restraint Of Trade

This is an Anti-trust argument made by FSU.  FSU argues that the withdrawal payment precludes FSU from “competing in the marketplace to obtain the best economic terms for its athletic media rights.”  Here, the motion has a few arguments:

It first argues that FSU had to argue that the ACC’s actions completely restrains FSU’s trade/commerce.  The motion argues that FSU’s argument, at best, is that FSU’s trade/commerce is somewhat limited by the ACC’s actions.  Basically, the anti-trust damage has to be to the concept of competition, not for the individual market actors.  Since FSU is still committing some trade/commerce and has not been completely restrained and since other actors in the market are similarly able to ply their trade, then FSU fails to state a cause of action for anti-trust.  

It next argues that FSU has failed to define a market.  What is the market that has been harmed? The harm has to be to the overall market, not individual actors in the market.  The motion uses Cal as evidence that the market has not been harmed.  Cal took a massive haircut to join the ACC, showing how strong the college football market is.  In fact, the motion argues that FSU argues the ACC is pathetic in the market.  How could a pathetic actor in the market control the market in an anti-trust way such that the market suffers?  

Thus, per the motion, FSU fails to state a cause of action in any way and this count must be dismissed.  

Count II:  Unenforceable Penalties

Next, FSU argues that the withdrawal penalty is an unenforceable and punitive penalty, but the motion argues that the lawsuit fails to state a cause of action here.  The motion firstly argues that NC law controls here, because the last action to complete the contract (i.e. the ACC Commish signing the contract) happened in NC.  

Next, the ACC argues that the withdrawal penalty is not a payment for breach, but a legally cognizable approach to meeting the terms of the contract.  I.e. if FSU wants out, all they have to do is pay 572 mil.  One problem the ACC has here is that the withdrawal penalty is described as a “liquidated damage” in the ACC constitution.  A liquidated damage is generally a mutually agreed upon payment for a breach that is negotiated into a contract.  

The ACC has to argue around this terminology issue by saying that the withdrawal payment is not triggered by a breach, but instead a process of leaving the conference.  I actually agree with the ACC here.  The withdrawal penalty is a payment made for leaving the conference per the terms of the relevant contracts here.  

This would mean that the penalty is not an actual penalty.  The ACC hamstrung itself a bit with the terminology in its legal documents, but a deeper analysis shows that the ACC may be correct.  The motion also argues that to the extent that it is a penalty, the FSU lawsuit fails to show why it is disproportionate to the actual damage to the ACC.  I also find this to be true, because the FSU lawsuit just has vague comments about how the withdrawal penalty is super bad and not relevant to anything.  

Count III:  Breach of Contract

Next, the motion discusses the breach of contract count.  I thought this was potentially FSU’s strongest county.  The motion first argues that this count lacks specificity.  The count shows some alleged breaches by the ACC, but does not tie them to specific language in any of the relevant contracts.  Thus, the FSU lawsuit raises some issues, but doesn’t show how they are specific breaches of any contract.  

It then goes through each of the alleged breaches in Count III.  There are many, so I will try to summarize the motion’s comments here.  One main argument made by the motion is that the alleged breaches are very general.  They are breaches of the concept of encouraging responsible fiscal management and fiscal stability.  These are not material terms that can be breached in a contract.  

Next, the motion raises the issue of the ESPN option deadline.  Basically, the ACC gave ESPN an unilateral option to extend their media rights deal until 2036.  FSU argues that this is improper because a board vote was required for a material media rights agreement.  

The motion argues that this extension contract does not meet the terms of a material media agreement.  I personally think that it is a material media agreement, but the citation to the ACC bylaws in the motion do make it seem like it may not be.  

Next, the motion argues that NC law says that the Court should not interfere with internal affairs of non profit associations.  The motion is arguing here that even if there are some breaches, unless they are due to fraud or collusion, the Courts should stay out of ACC business.  

Next, the motion takes up one of FSU’s best arguments (that the ACC needed 2/3rds vote to file their lawsuit which they did not have).  The motion does not really touch on this specifically but just says it is hypocritical of FSU to say that ACC cannot file to enforce the GOR when FSU filed to repudiate the GOR.  I would like more of an argument from the ACC here on why the 2/3rds vote is not necessary.  

There is so much going on here that we split this post into 2 parts to make it easier for everybody to follow.  Hope you enjoyed this one and be on the look out for the other one soon!