Guest Post: The ACC vs. Clemson

Last time, we looked at Clemson vs. the ACC, this time the reverse. Yes, these are two distinct lawsuits. Fun!

Ed note: TwistNHook is continuing on with his legal analysis of lawsuits between Clemson and the ACC that started with his breakdown of early filings in Clemson’s lawsuit against the ACC. Meanwhile, here’s a link to all of his prior analysis of FSU vs. ACC posts.

Can you keep track of all the lawsuits?  We have FSU v. ACC.  Then, we have ACC v. FSU (which technically came first).  Then, we got Clemson v. ACC.  Now, we have ACC v. Clemson!  

Today, I want to talk about the last one.  This is filed in Mecklenburg County in North Carolina.  We have one lawsuit in Leon County, FL, one in Pickens County, SC, and now two in Mecklenburg County, NC.  M-Burg leads the league in college football realignment lawsuits.  But will they maintain that lead??  Clemson will most assuredly file a motion to dismiss/stay for this lawsuit.  

Before we get to the substance of the lawsuit, it is important to note that it appears the ACC filed second.  This could have big ramifications here.  The ACC was able to minimize FSU’s legal success by beating them to the punch.  Clemson filed first here.  They will file the motion to dismiss/stay this case and we will see what the Judge does.  Given how he has approached the FSU case so far, I wouldn’t be surprised if he denies the motion to dismiss/stay.  He seems very focused on pushing this matter forward in the FSU case and he may do the same in the Clemson case.  It does make sense to have these matters heard in one venue and not strewn throughout the South.  

The lawsuit opens with a quote from the Clemson president from 2016 when he signed the ESPN contracts and Amended Grant of Rights.  He says how amazing the ACC is etc etc.  Not sure how legally relevant this is, but they open with it to drive their point home.

Then, they summarize their causes of action.  These are:

1. Declaratory Judgment that Grant Of Rights is valid

2. Declaratory Judgment that GOR is irrevocable,even if Clemson leaves

3. Confirmation that Clemson is equitably estopped from suing over the GOR

4. Confirmation that Clemson owes fiduciary duties to the ACC

5. Damages for breach of the GOR

6. Damages for the breach of covenant of good faith and fair dealing

It is a lot of the same stuff you saw in the FSU case, just in a slightly different context.  This came out a day after the Clemson suit, so they just hit that C+P, changed the names, and filed it!  

The lawsuit emphasizes that Clemson waived its sovereign immunity to be sued in NC.  FSU made a big deal out of this and lost.  Not sure if Clemson will.  Clemson seemed to have learned from FSU’s keystone cops escapades in their lawsuit, so maybe they’ll litigate better here.  

Jurisdiction

Next, the lawsuit focuses on the jurisdiction.  This again is important issue here, because the ACC is trying to avoid getting booted out of court.  They need to prove that the Court should maintain the case in NC.  They argue repeatedly about how Clemson does so much in NC.  Committee meetings, sports events, etc etc.  They even note that Clemson accepts benefits from NC taxpayers.  They spend pages on this.

Venue

Next, they turn to venue.  Venue is very similar to jurisdiction.  Jurisdiction is the authority for the NC Court to make decisions over Clemson.  Venue is the location where those decisions should be made.  Since the ACC HQ is in M-burg County, the ACC argues that M-Burg is the place to be.  The lawsuit has a lengthy history of the ACC and how its NC focused etc.  

Statement Of Facts

Next, the lawsuit provides a statement of acts about the various contracts.  We’ve gone over this a bunch so I am not sure I need to do a lot here.  They have the ESPN TV contracts, the Grant Of Rights, and Amended Grant Of Rights.  This includes discussion of the “withdrawal payment and alternative performance.”  This is the ACC’s new spin. The “withdrawal penalty” is the “withdrawal payment.”  “Alternative performance” means leaving the ACC (Ie paying 9 digits to get out).  They are trying to frame it less as an improper penalty and more of “perform under the terms of the contract by paying money to leave.”  

There are a lot of redactions here about the ESPN deals etc.  The ACC is trying to protect the ESPN deals.  Honestly, I think the ACC would be happy for the ESPN contracts to leak because it would show how much money FSU/Clemson get.  However, the ACC argues that it legally has to protect ESPN and the ESPN deals.  I remain confused as to why Clemson/FSU are so focused on antagonizing ESPN.  

The basic gist is that Clemson knowingly signed these deals, made a lot of money, and is ungrateful now.  They discuss how other teams like USC/UCLA left with more dignity than Clemson ambushing them with the lawsuit.  They discussed how the ACC tried to work with Clemson to resolve their concerns but Clemson ambushed them with a lawsuit.  

Valid Contract

Then, they start going through the claims.  As noted above, their first is that the GOR is a valid contract.  They basically argue that Clemson signed these documents.  It is a fairly straight forward argument.  

Equitable Estoppel

Next is equitable estoppel.  This means that Clemson received all that money from the contracts and now cannot complain about the contract itself.  The lawsuit argues that Clemson waived any ability to challenge the contract.  

Enforceable Contract

The third cause of action is that the withdrawal payment (not penalty!) is an enforceable contract.  The Clemson lawsuit in SC tries to argue otherwise, so the ACC focuses on this issue.  They basically argue that this is a contracted to portion of the GOR.  As such, Clemson would have to pay it to get out of the ACC.  They note that the withdrawal payment (which they view as 3x the ACC budget) is less than 1 year of the revenue at Clemson athletics.  

Breach Of Contract

The fourth cause of action is for breach of contract.  Here, the ACC argues that Clemson has responsibility under the contract, such as not suing to get out of the contract.  The ACC argues that in filing its lawsuit in SC, Clemson has breached the GOR contract.  The ACC is seeking damages against Clemson for breaching the contract itself.  They filed the same against FSU.  

Fiduciary Duties

Next is the claim that Clemson owes fiduciary duties to the ACC.  The ACC argued the same in the FSU case and the Judge in NC kicked that claim out of court.  So, this one may go poorly for the ACC.

Breach Of Obligation Of Good Faith And Fair Dealing

The last cause of action is the alleged breach of obligation of good faith and fair dealing.  This is not about breach of the GOR but breach of the ACC bylaws.  The ACC argues that Clemson has to treat the ACC and other ACC schools fairly and the lawsuit is the opposite of that.  IIRC, this claim survived in the FSU suit so it could survive here.  It is a short discussion of a few paragraphs.  So, the ACC may not be putting a lot of eggs in this basket.

Conclusion

If you have been following these cases closely, this is a lot of the same from the ACC that we have seen before.  However, the ACC has been having success with these arguments already, so why fix it if it isn’t broken?  The main difference here is that Clemson filed first.  That may trip the ACC up.  I understand that Clemson has indicated that they will file a motion to dismiss/stay.  Expect that to come down the pike sooner than later.  Would be interesting to see what happens if Clemson has more legal success than FSU does and how that may affect the ACC’s ability to stay together.