Guest Post: ACC vs. FSU - The ACC's Motion to Dismiss, Part 2

TwistNHook wraps up his analysis of the ACC's latest court filing

Ed Note: Twist is back with Part 2 to complete what he started on Monday. Will any Florida State fans show up in the comments to tell us about how FSU is surely going to win in court without providing any evidence or legal reasoning to back up their argument? Only time will tell!

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
Part 7: The ACC's Motion to Dismiss, Part 1

Last time, we were discussing the arguments put forward in the ACC Motion To Dismiss/Stay in FL Ct. We looked at the initial arguments about jurisdiction and venue.  Then, we looked at the first few counts and now we turn to the rest and the Motion To Stay.  

Count IV:  Breach Of Fiduciary Duty

Here, the motion argues that a party does not owe a fiduciary duty to another party of that contract.  They have contractual duties but not fiduciary duties.  The motion argues that NC law controls here and they cite to certain NC cases indicating that contract relationships do not create fiduciary relationships.  A fiduciary relationship is one where a person has a special duty to another.  

The motion argues that the relief requested in the County itself proves the ACC’s point.  FSU does not request damages (i.e. a remedy for a breach of fiduciary duty) but believing relieved of all duties under a contract.  This remedy would relate to a contractual breach, not a fiduciary breach.  This is a highly technical analysis and a complicated one.  

Finally, the motion argues that he alleged breaches of fiduciary duty do not actually constitute breaches of fiduciary duties.  For example, FSU argues that the AC should have better preserved “the position of its undefeated football conference champion.”  This is not a recognizable fiduciary obligation under any of the relevant relationships here.  It is a vague concept born of frustration over not making the playoff.  

Count V:  Frustration Of Contractual Purpose

Here, FSU argues that all the contracts have been frustrated and should be thrown out.  The motion argues that FSU’s argument is baseless.  FSU tries to argue that the ACC is on the brink of financial collapse and the motion states that this is simply incorrect.  The motion notes that only 2 conferences provide more money to its members than the ACC (although the problem here for FSU is that they want to get into one of those conferences!).  

FSU is basically frustrated that they aren’t getting the most amount of money possible for their media rights.  ACC’s response here is that they are not contractually required to maximize profit.  They are only contractually required to provide as much money as they can reasonably obtain.  This is a common dispute between the two warring legal parties here.  

The motion also argues applicable NC law to indicate that frustration of the contract requires a changed condition that basically renders the contract totally useless.  The motion argues that FSU fails to allege any facts regarding that type of analysis.  Thus, the Count should be dismissed.  

Count VI:  Unenforceable Grant Of Rights “For Several Other Reasons.”  

This is a catch all cause of action and there are a number of issues that the motion takes in turn.  

FSU argues that the contracts do not allow it to withdraw and the motion notes that the contracts do allow for withdrawal, just with a price.  

FSU also argued that there was no consideration.  The motion argues NC law requires a complete lack of consideration for the contract to fail.  Here, FSU has received millions and millions so there is clearly consideration.  

Functionally, FSU wants out of the contract, because they want more money.  The motion argues NC law that states that basically if the contract is at least reasonably decent, it doesn’t matter that one side is unhappy.  That is what is happening here.  An arms length deal with highly sophisticated parties occurred, but one is unhappy.  There is no get out of contract free card here.

Count VII:  Unconscionable Penalties

The motion calls this a hail mary.  Here, FSU is arguing that the withdrawal penalties are unconscionable.  The motion argues NC law to state that an unconscionable contract is one where the terms are so oppressive that no reasonable person would make them.  The motion argues that the question of unconscionability is constructed as of the date of execution of the contract, not some later date.  

So, even if the contract were so get bad for FSU now (as they argue) it does not matter.  The determination is as of the date of execution (when this contract was good for FSU). Additionally, the motion argues that nothing about this contract is even remotely oppressive and FSU has gotten millions and millions of dollars.  

All Counts:  Retroactive Withdrawal From the ACC

The Motion has a separate section to discuss that weird request that FSU makes to travel back in time.  Basically, once they get their judicial declaration that the GOR and withdrawal penalties are void, then FSU will go back to August 2023 and withdraw.  This is chronologically non sensical.  

The motion notes that FSU wants to be relieved from all contractual obligations but then is super careful to follow an appropriate contractual obligation.  FSU doesn’t want to be declared to have withdrawn too soon, because they do not want to deal with their contractual obligations (if so).  

Affirmative Defenses

Affirmative Defenses are where a party says that there are counter causes of action that they can use to win their case.  ACC raises three:

Affirmative Defense 1:  Waiver

Here, the motion argues that FSU waived any request to remedy contractual breaches.  The waiver is because FSU continued to receive the benefits of the contract.  How can one accept the benefits of the contract but then say that there are breaches.  The motion argues NC law to state that accepting performance of the contract is enough to create a waiver and that this is presumed.

Affirmative Defense 2:  Quasi-Estoppel

The ACC argued this in their own lawsuit that FSU is estopped from arguing breach.  Estoppel is similar to waiver insomuch as a party received the benefit of the contract and is stopped (or estopped) from saying that there is a problem with the contract.  Here, the motion argues, as above, that since FSU took the benefits, they cannot try to escape the contract

Affirmative Defense 3:  Statute Of Limitations

Here, the motion argues that the statute of limitations for a breach of contract is 3 years.  The motion argues that many of the alleged contractual breaches are more than 3 years old.  As such, FSU is specifically precluded from acting upon these alleged breaches.  

Motion To Stay

As I stated, this motion is set up in a cascading level of logic.  “The Court has no authority to hear this.”  “If the Court has authority, many, if not all, of the counts should be dismissed.”  “If the Court has authority and some counts are not to be dismissed, then the remaining amount should be stayed.”

A stay is just to stop the lawsuit from proceeding.  Theoretically, only one of these lawsuits should proceed.  Fans of FSU want the FL one to proceed.  Fans of the ACC staying together want the NC one to proceed.  

The main argument here is that the ACC filed first.  This is why they ambushed FSU with the NC filing.  

One thing that is kind of funny to me is that the motion states that “twenty-nine minutes after being served with the ACC’s complaint in the North Carolina action, FSU filed this action seeking a declaratory judgment as to the validity of the Grant Of Rights And Amended Grants Of Rights - the same dispute that the ACC had already raised in North Carolina.”

If you recall that day (12.22.23) correctly, the FSU Board had a big meeting to beat their chests and rend their clothes and say what should be done about this ACC?  At the climax of their meeting, they authorized the lawsuit which was filed later that day.  I chuckle at the concept of their big explosion of fury being ruined by getting served with the lawsuit.  According to the FSU Motion To Dismiss, there was a process server waiting at the FSU Board meeting to personally serve the FSU General Counsel as she left the meeting.  AWKWARD!  It seems as if the FSU lawyers were ambushed by this and it probably ruined their whole legal strategy.  

To find a stay, the Court basically has to say that there are the same parties, ACC filed first, and there are no exceptional reasons to stick in FL.  The first 2 are clear.  The motion argues that there are no exceptional reasons to stay with the FL suit and that the exceptional circumstances usually require “time-sensitive cases involving child custody, visitation, and support, or probate issues.”  

Conclusion

This motion is an exhaustive response to the FSU complaint, as amended.  It responds to pretty much every single point raised in the FSU complaint.  It provides clear reasons to the Court why the FL matter should be dismissed and/or not proceed.

If the FL matter were to be dismissed and/or stayed at this initial outset, it would be catastrophic to the FSU legal strategy.  FSU Board understood that they were filing this big lawsuit and if it immediately ran aground, then FSU would be in a bad position.  This is also a dry run for other schools.  If FSU has success with their lawsuit, other schools like Clemson may file their own law suits.  

So, if the ACC has success with this motion, it may end any “ACC gonna collapse” momentum until 2036.  FSU has also filed their own motion in NC and it is important to see how that one is going to go.  Thanks for reading, I hope you enjoyed it!