Guest Post: Legal Analysis of FSU's Reply to Opposition Motion

With hearing scheduled for this Friday, where are we in the ACC's ongoing battle with Florida State?

Ed Note: More legal analysis fromTwistNHook ahead of what might be a big week in the court of law for both the ACC and Florida State, with Actual Court Proceedings scheduled for Friday. As always, here’s all of Twist’s recent posts if you want to start from the beginning:

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
Part 8: The ACC’s Motion to Dismiss, Part 2
Part 9: Florida State’s Motion to Dismiss, Part 1
Part 10: Florida State’s Motion to Dismiss, Part 2
Part 11: ACC Opposition Motion

The saga is continuing to continue!  There are so many moving parts, it can be difficult to remember where we are with today’s piece of the puzzle.  Here is where we are:

1. ACC files lawsuit in NC

2. FSU files Motion To Dismiss/Stay

3. ACC files Opposition

4. FSU files Reply to Opposition

Today, we are focused on #4, which is the Reply to the Opposition to the Motion To Dismiss/Stay the Amended Complaint.  And you wonder why people hate lawyers!  So much digital ink spilled here (also real ink because I am printing these out so I can carefully review them).  

So, the hearing is on 3.22.24 in North Carolina.  This is to see whether the NC Court will dismiss or stay the NC matter.  If the ACC wins, FSU’s legal challenges are over before they began pretty much.  If FSU wins, their legal challenges may still have problems, but they hurdled the first barrier.  

What is a reply brief?  Well, it is fairly straight forward, it is just an opportunity for the movant (i.e. the entity that filed the motion) to respond to the opposition to said motion.  Generally, there are no more filings after the reply brief.  North Carolina Business Court may be different, though.  

In a well-drafted reply brief, the lawyers take the arguments in the opposition one by one and show why they are wrong.  I have been somewhat critical of the lawyers for FSU and their drafting, but I thought this was better drafted by them.  

The main focus for FSU in this pleading is to argue that the ACC’s initial complaint is so flawed that it cannot be maintained.  In that case, the Court would look to the Amended Complaint solely.  Since that is after FSU filed their initial complaint, then the NC Court may wish to dismiss or stay the ACC Complaint.  

The arguments that FSU deals with are as follows:

1. ACC failed to attain the member vote and lacks standing

2. ACC filing did not constitute an actual controversy when filed

3. FSU Board is not subject to jurisdiction in NC

4. The actual party to the GOR is not named

5. ACC’s extra contractual claims lack merit

Standing

The first argument that FSU raises is whether the ACC has standing.  FSU argues that the ACC confirms that it lacks standing.  This stems from whether or not the ACC had the 2/3rd vote to initial “material litigation.”  This is FSU’s strongest argument and they hammer this note over and over and over again.  

FSU cites to some cases indicating that a requisite prior approval pursuant to internal governance procedures must be followed by the Court.  This means that since ACC didn’t get the 2/3rds vote, the Court must throw the case out.  You may recall that the ACC argued that the Court should not get involved in the internal affairs of an organization and cited to some cases relevant to that.

The ACC argued that the lawsuit was not material and FSU basically says “In what world is this not material???”  The ACC argued that the later vote in January 2024 can confer retroactive standing, while FSU has some cites stating that that is not the case.  

Premature

Next, FSU takes up the issue of whether the Complaint was premature.  They mean that basically there is no dispute that existed.  This is a less strong argument insomuch as FSU had been beating their chests and rending their clothes for a year almost prior to filing.  Additionally, a draft lawsuit had been leaked prior to the December FSU Board meeting.  

They argue that if the Florida Action had not been filed, then the ACC lawsuit would have not been relevant at all.  I am not sure if this is the case given that the beating of the chests and rending of the clothes could be a breach of the duty to defend the GOR.  Also, FSU did file the next day.  

FSU tries to downplay all that stating that all FSU had done was set a meeting.  That is not really historically accurate.  The FSU litigation was not “speculative and avoidable” as FSU argues, in my view.  We will see what the NC Judges’ view is on 3.22.24

Sovereign Immunity

The next issue the reply raises is sovereign immunity.  They explicitly state that the FSU Board is not subject to jurisdiction in North Carolina.  This one confuses me.  The actual FL Amended Complaint never raises this issue anywhere.  

Also, if I was dealing with a FL entity and I could only sue them in FL, I would be extremely hesitant to deal with them again.  FSU clearly wants to leave to go to the Big10.  If the Big10 was of the belief that they could only sue FSU in FL would the Big10 want to deal with FSU?  

What is weird to me is that they keep citing to Florida Statute 1001.72(1), which states:

(1) Each board of trustees shall be a public body corporate by the name of “The (name of university) Board of Trustees,” with all the powers of a body corporate, including the power to adopt a corporate seal, to contract and be contracted with, to sue and be sued, to plead and be impleaded in all courts of law or equity, and to give and receive donations.

My read of this is that it means FSU could be sued in all courts.  FSU tries to argue that this means all Florida Courts, but the plain language does not say that.  We will see what the NC Court thinks of it.  

The ACC had argued that when FSU made an appearance in the motion to seal, it agreed to NC jurisdiction.  However, FSU argues that they stipulated to protect all jurisdictional defenses in a January 12, 2024 stipulation.  FSU may have the lead in that argument there. 

Curious to see if there is a Judge in North Carolina who says that they lack the ability to deal with FL parties because all FL parties must be sued in FL.  Will a Judge limit their authority in such a way?  That is what FSU is asking of this Judge here.  

Fails To Name Proper Party

This is an interesting argument, because all it would do would require a quick amendment by ACC.  FSU argues that ACC named the FSU Board and not FSU.  This may seem like stupid hair splitting to non lawyers but it can matter.  If the Court were to agree with FSU here, ACC would simply re-file with the corrected name.  However, it may be enough to get the initial Complaint booted and give FSU a chance to move forward in FL since the ACC may no longer be the first filer.  

The argument is basically that the Grant Of Rights never mentions the FSU Board and only mentions FSU.  I am not sure how relevant that is.  I will note that FSU makes a big deal in other locations with the FSU Board being the only party able to bind FSU.  The FSU President signed the GOR and FSU has argued that solely the Board could be the one to sign it so it is invalid.  Putting aside the idiocy of that argument, FSU argues in one location that solely the FSU Board could execute the GOR but then also that the ACC was wrong to sue the FSU Board.  

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Claims 4-6

In the ACC Motion to Dismiss/Stay in FL, they went through each and every FSU claim and argued why it should be dismissed.  Here, FSU lumped 3 of them together under “extra-contractual requirements.”  The ACC tried to argue that FSU had certain requirements to the ACC above the specific language in the contracts and that FSU breached those requirements.

FSU argues that no such requirement exists.  They state that to have those requirements, the following two elements must be met:

1. An agreement to engage in a single business venture with the joint sharing of profits

2. Each party to the joint venture having the right in some measure to direct the conduct of the other through a necessary fiduciary relationship.

The reply focuses on two since one seems straight forward.  The argument is basically that ACC could direct FSU but FSU cannot direct ACC.  I have no idea how the Judge will approach this.  This is a specialized business Court so the Judge is more focused on business relationships.  That means that this Judge may be better suited for the job here.  

It strikes me that FSU can “in some measure direct the conduct” of the ACC.  They can call for meetings, they can vote in meetings, they can make requests of the ACC etc.  So, the Judge could find the fiduciary relationships here and then potentially find a breach.  

The Matter Should Be Stayed

Dismissal is, obviously, FSU’s main focus here.  However, they do argue why the matter should be stayed if not dismissed.

The first argument is that obviously the race to the Courthouse should have never happened.  They refer to FSU as the “true plaintiff” and that the “true plaintiff” should be able to litigate in its chosen venue.  Both of these parties are plaintiffs in their preferred location, so I am not sure there is a “true plaintiff” here.  

They complain about how the ACC had a secret no notice meeting to vote to approve the Amended Complaint.  FSU’s argument is interesting here, because obviously FSU wants out.  They would leave in the past if the FL Court allowed it.  But here they have to argue how catastrophic it was to not include FSU in ACC business that was directly contradictory to what FSU wants.  They call it “suspect litigation conduct.”  To me, including FSU in the meeting would be “suspect litigation conduct,” because then the ACC would be letting the opposing party in the meeting about the lawsuit.  

FSU argues that it defies “all bounds of logic” to believe that the ACC prepared its complaint the day before the FSU Board meeting.  That is probably true.  However, that is because FSU made it 100% clear what it was doing going back months and months and months and months.  So, FSU is trying to downplay its own actions that caused the ACC to act, while discussing why the ACC may have prepared its complaint.  

In its opposition, ACC argued that the key factor to consider is “substantial injustice” that would occur due to the ACC’s improper filing.  The reply brief spends one paragraph discussing this apparently key analysis.  It states that they already analyzed this, although it does not state where.  It states that the arguments are:

1. FSU Board is the true plaintiff (although it argued above that the FSU Board should not have been sued here and that FSU should have been sued)

2. The Florida action is broader in scope

3. The case involves important jurisdictional issues of sovereign immunity waiver that should be resolved by a FL court more familiar with the intent and application of these statutes

4. The case involves the issue of a FL agency’s capacity to contract under Florida law

5. The FSU Board (which cannot be sued apparently) asserts that the ACC’s misconduct with 3rd parties violates FL public policy and FL statutes and amounts of an unenforceable penalty under FL law.

This appears to be a combination of certain arguments in the motion itself and certain arguments in the FL complaint.  #5 is in the FL complaint.  #3 and #4 are in the motion, but not in the complaint.  I am not sure what #2 means and #1 is directly contradicted by FSU’s own language earlier in the document.

CONCLUSION

We will see what happens on 3.22.24 in the NC Court.  As I indicated above, if the Judge denies this motion, FSU is in a bad place legally.  Even if the Judge approves it, FSU may have to wait out a lengthy appeal.  This is before even dealing with the merits of their case.

Whenever looking at a lawsuit, look to see who the status quo benefits.  Here, the status quo benefits the ACC and not FSU.  FSU wants to do a deal and fast, but the ACC refuses to discuss negotiation.  Every day that goes by is another day that ACC gets the value of FSU being in the ACC.  Every day that goes by is another day that FSU has to be in the ACC.  

So, FSU wants to get down to the merits, show that it has a strong case (whether in NC or FL), and then freak the ACC out into settling.  However, they have immediately been hit with a wall of non-merit issues (jurisdiction, motion to seal etc).  They have to fight through these to get to the merits and convince ACC to do a deal.  If NC appeals are anything like CA appeals, the ACC could delay “getting to the merits” for a long time even if they lose on 3.22.24.  

I will continue to monitor and provide analysis and my insight (to the extent that matters).  Thanks for reading!