Guest Post: Another ACC Motion to Dismiss

Please judge, can you finally just throw out Florida State's frivolous lawsuit?

Ed note: TwistNHook has been writing furiously to catch up on everything ahead of a hearing scheduled for this Tuesday. Will Florida State’s lawsuit be killed before it gets off the ground? Or will there be further delays, handing a victory to all of the lawyers and their billable hours? Stay tuned!

Hi, today, we are in the gorgeous state of Florida!  We’ve got beaches, we’ve got everglades, we’ve got Motions To Dismiss.  And today, that is what we are talking about, not the beaches, not the everglades, but the motions to dismiss.  We’ve had so many motions to dismiss in 3 separate states.  Tough to keep it all straight, I’m doing the best job I can.  

Motion To Dismiss

Today, we are talking about the ACC’s Motion To Dismiss Florida State’s 2nd Amended Complaint.  The ACC was successful in getting the 1st Amended Complaint dismissed and now they are trying again.  If they are successful again, then FSU’s case could be over before it really even began.  

The ACC spends significant time talking about the various types of jurisdiction a Florida Court could have over a NC entity and why none of them are applicable.  If FSU does not have the ability to sue the ACC in FL, then the Motion To Dismiss would be successful.  

Citizenship

The first type is “diversity citizenship.”  Here, FSU was arguing that the ACC is a citizen of FL, because it has two members (FSU/Miami). Thus, the lawsuit is appropriate.  This appears to be federal law, which is inapplicable in a state court context.  The ACC does not spend a lot of time analyzing this outside of just saying it is inapplicable.  

General Jurisdiction

Next, the ACC argues that FL lacks “general personal jurisdiction” over the ACC.  This is a way for a FL plaintiff to bring a non FL citizen defendant into a FL court.  The ACC argues that FSU must show that the ACC engaged in “substantial and not isolated activity” within Florida.  This requires “continuous and systematic general business contact.”  

I personally believe that the ACC engaged in substantial business contact with FL, through their two members that are there.  Also, bowls and their winter meetings, etc.  The ACC disagrees with me.  The ACC argues that they do not own or lease any real property in FL, file a FL tax return, have any phone or mailing information in FL, have any bank accounts in FL, and that any revenue from FL activities is minimal.  I am not sure I agree with some of these items.  

For example, it says that the ACC “does not regularly market products for sale in Florida.”  If running commercials in the state of FL to convince people to watch ACC events consists of “market products for sale,” then I think the ACC does do that.  I get that the ACC lawyers are doing what they can here and maybe the FL judge will buy it.  I was surprised that he dismissed the first complaint, maybe he will do something similar here.  

Specific Jurisdiction

The next issue that the ACC raises is “specific jurisdiction.”  If the ACC is not a citizen of FL and FL lacks “general” jurisdiction over ACC, does it have “specific jurisdiction.”  Specific jurisdiction is a two part analysis: first the Court has to determine if the facts support FL having jurisdiction and then, secondly, if there are sufficient minimum contacts by the ACC.

The ACC argues that there are not sufficient facts here, because it does not carry on any business in FL.  You know my thoughts on that above.  What the ACC does argue, which could have legs, is that FSU failed to properly allege the business the ACC performs in FL.  These types of motions are less about what the reality is and more what the complaint alleges.  If the complaint does not properly allege the true facts then the motion can be successful even if reality is different than the motion.  Usually the Court will give a plaintiff an opportunity to amend its complaint.  However, FSU already got that.  Would they get another?

Tortious Act

Next, the ACC discusses the argument that the ACC committed a tortious act within FL.  Not clear what the tortious act is.  According to the motion, the sole tortious act alleged to have occurred within the state of FL is service of the ACC lawsuit on FSU’s general counsel.  This does not strike me as a tortious act.  

Solicited business

Next, the ACC discusses whether the complaint properly alleged that the ACC “solicited” business or “marketed” to the people of Florida.  As you saw above, I believe that the ACC does do this on a consistent basis.  THE GOOD PEOPLE ON FLORIDA MUST SEE CAL FOOTBALL!!!  I thank the ACC for its upcoming solicitation and marketing to FL people!  The strength of ACC’s argument here is less that they don’t do this and more that the complaint didn’t properly connect these allegations to the causes of action.  

Contractual Breach

The last issue the ACC raises is whether the ACC breached a contract in the state of FL.  These are all different ways that a non-citizen can be hauled into FL court.  The ACC alleges that none of the contractual requirements in the various contracts here are required to be performed in FL.  These contracts we are discussing here are generally related to broadcasting events in FL.  I have to imagine that some of the contractual items are required to be done in FL.  I am not sure if those are the ones that FSU alleges the ACC breached, though.  Did FSU tie those to the causes of action?  We shall see.  

Due Process

Next, if the Court finds that there are sufficient facts to justify specific jurisdiction, the Court still has to move to step two of its analysis.  Per the motion, the Court next has to look at whether there are sufficient minimum contacts such that exercising jurisdiction over the ACC would not violate due process.  The motion, obviously, disagrees, stating that there are insufficient minimum contacts and it would violate due process to haul the ACC into FL Court.  Again, not sure I agree with that.  

The ACC argues that FSU home games are not required to be played in FL.  Technically, this is true as sometimes the games are held at neutral sites (like Ireland etc).  However, that is extremely rare.  The ACC argues that all money made from FSU home games goes solely to FSU, while the national broadcast rights money goes to the ACC first.  Then the motion argues that the portion distributable to FSU from those broadcast rights is not enough to confer jurisdiction.  Not sure I agree with that.

Ripe Challenge

Next, the ACC argues that there is no ripe challenge.  All sides argue that there isn’t really a dispute and the other side has filed prematurely.  Here, the ACC argues that FSU hasn’t actually tried to withdraw.  They just want to get confirmation that if they withdraw, it will not cost them 500+ mil.  Since, they haven’t actually tried to withdraw, the argument goes that the whole lawsuit is unripe.  The FL Judge didn’t seem to buy this one.  Let’s see if he buys it this time and finds that there is no jurisdiction because the situation is not ripe.  

Causes Of Action

If the Court does find that there is jurisdiction, the ACC moves on to the next sets of arguments.  Here, the ACC is arguing that individual causes of action should be dismissed, independent of having or not having jurisdiction.  

Count II: Unenforceable Withdrawal Penalty.    

The ACC argues that Count II must be dismissed, because the withdrawal cost is not a withdrawal penalty at all.  It is just a contractually agreed upon method to leave the conference.  A penalty is triggered by a breach.  FSU (or any other team) leaving the ACC is not a breach.  It just causes the leaving team to have to pay an exit fee of a certain amount.  The breach would not be the withdrawal, but the failure to pay the exit fee.  

Additionally, the ACC argues that the 2AC doesn’t actually allege what an enforceable withdrawal penalty would look like.  FSU complains a lot about this specific exit fee being an unenforceable withdrawal penalty, but allegedly doesn’t provide sufficient facts to confirm that it truly is inappropriate.  If the complaint fails to allege sufficient facts to support its claims, the Court can dismiss it.  

Count III:  Breach Of Contract.  

Here, FSU argued 12 separate breaches of contract that will completely discharge FSU from having to follow the terms of the contract.  The motion goes through these alleges breaches and discussed how they either do not have sufficient facts alleged to support them or, alternatively, are not breaches even assuming all facts pled are true.  

In alleging a breach, the plaintiff has to allege sufficient facts to prove that a) an enforceable contractual provision exist and b) the actions of the defendant breached said provision.  The ACC argues that some of these breaches are not based on enforceable contract provisions. For example, one of the alleged breaches relates to the “General Purpose” that starts the ACC Constitution.  It has some bland discussion on how great the ACC is.  This is not an enforceable contractual provision.  I did think in reading the specific breaches alleged that there is not a lot of meat there.  Many of the alleged breaches are from actions taken since the lawsuits started, which may be protected by litigation privilege anyway.

Count IV:  Sovereign Immunity.  

The motion argues that this should be dismissed, because a FL Court cannot determine the authority of a NC Judge.  They cite to a 107 year old case on this to show it is a bedrock principal.  Additionally, they note that FSU raised this issue in NC and the FL Court should respect the results of the NC Courts (which have been pro ACC to date).  

Count V:  Restraint Of Trade.  

Here, FSU argued that the withdrawal penalty etc restrained FSU’s trade (ie selling their TV rights on the open market).  The motion argues that this matter should be dismissed, because restraint on trade relates to the market altogether, not an individual actor in the market.  This is to say that if the ACC took action to overall depress the TV rights market, then they may be restraining trade.  

Many of the ACC schools are overtly benefitted by bundling their rights with the other ACC schools and letting the ACC sell their rights together.  It may be that Clemson or FSU are not.  However, the ACC’s actions overall do not negatively affect the market for TV rights even if they individually affect Clemson/FSU’s rights for TV rights (allegedly).  

The motion argues that a restraint of trade cause of action requires allegations about the negative impact on the overall market.  Since there are none here, it means that the Court must dismiss this cause of action.  The motion actually uses Cal here, because it notes that 3 schools (including Cal) decided to join the ACC.  That shows that the ACC has not negatively impacted the overall rights market.  If they had, CalfordMU wouldn’t have wanted to join.  

Count VI:  Unenforceable GOR “For Several Other Reasons”

This is a potpourri of random reasons why the Court should let FSU out of the GOR for free.  In the 2AC, FSU doesn’t provide a lot of analysis.  The Motion goes through them in short order.  

The first one is that the GOR precludes FSU from withdrawing.  However, there are no facts alleged showing that FSU cannot withdraw.  They just have to pay too much.  

The next is that the FSU Board never signed the relevant contracts here.  The motion notes that FSU bylaws allow for the President to sign contracts in lieu of the Board.  Also, the motion notes that FSU accepted millions of dollars of benefits so they can’t say that the contract is invalid now.  

The next one is that the GOR is not supported by consideration.  Consideration is receiving something for signing a contract.  The lack of consideration must be total.  This is to say that if you receive anything, there is consideration.  Here, FSU received millions and millions so they received consideration.  

The motion spends multiples more times discussing these arguments than the 2AC actually did.

Count VIII:  Unconscionable Penalties.  

Unconscionable means that the contract is so harsh and unfair, sympathy forces the contract to be deleted.  A contract that gives FSU millions and millions is not harsh and unfair.  

Count IX:  Frustration Of Contractual Purpose.  

This portion of the motion argues that the relevant contracts have been frustrated by the ACC’s actions.  The purpose of the relevant contracts is to give IP rights to the ACC in exchange for money.  That is what occurred here.  Could FSU get more money outside of the contract?  Apparently.  But it doesn’t mean that the overall purpose of the contract has been frustrated.  

Estoppel:  This relates to Counts II, VI, VII, and IX.  Estoppel means that you accepted the benefits of the deal, so you cannot fight the deal later.  Here, the motion argues that FSU received millions and millions of dollars from these deals.  So, they cannot show up now and say that the contracts suck and they should be able to get out.  The estoppel defense is what is called an affirmative defense (ie they use a defense to delete a plaintiff claim).  This seems like a pretty straight forward argument.

Conclusion

Of the 9 claims, this motion doesn’t actually discuss 1 and 7.  So, if the Court finds that there is jurisdiction and the matter is not stayed BUT all the requested counts are dismissed, the case would still continue. It would just have 1 and 7.  

Now, the ACC has filed an appeal of an earlier Motion To Stay and then filed a Motion to Stay the underlying case pending the appeal.  So, this Motion To Dismiss may be stayed pending this appeal.  The hearing is on June 18, 2024 so everything may come to a head then.  

Thanks for reading!  I will keep monitoring to see how this affects Cal and we can go from there.