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Maryland vs ACC lawsuit able to proceed

DeacKillsaDevil

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@sunjeffbarker: Maryland lawsuit vs. ACC isn't dismissed but is stayed until outcome of case in North Carolina.

@sunjeffbarker: Maryland's suit vs. ACC -- alleging exit fee is anti-competitive and should not be enforced -- has been stayed pending outcome of NC case..


@sunjeffbarker: ACC attorneys had argued that issues in Maryland lawsuit were too similar to those already raised in by the conference in NC court. #Terps
 
they're just going to have to fight on our home turf. Great move by the ACC's lawyers in striking first to get home field advantage and get the ACC on the plaintiff's side of the lawsuit.
 
I believe the chances of them upholding the initial lawsuit are better if its heard in NC. Also, the MD court is less likely to try and overturn the result if its already been established in NC. At least I think that is what I remember from the lawyertalk before. (In the interest of full disclosure, I'm probably the farthest thing from a lawyer ever, if you didnt know.)
 
Why? Can you explain for non-lawyers? Stayed seems neutral to me.

ACC sued Maryland on our home turf in NC courts (ACC HQ is in Greensboro as you know). Maryland responded by suing ACC to get out of the exit fees in Maryland courts. Maryland courts stayed the Maryland case pending outcome of NC case. That means the case will get tried in the ACC home turf and most of the issues will be resolved in the NC courts instead of the Maryland courts, who for the most part will have to respect what the NC courts determine.

Justice is supposed to be the same everywhere but everybody knows that there is some element of home field advantage in litigation.
 
Good result for the ACC.

Arlington, how can MD get out of this payment when they willfully signed a contract agreeing to it? No one held a gun to their head to make them sign the contract. The amount was agreed to in good faith and they had the option of not joining.

I can't understand why they have any legitimate argument.
 
Arlington, how can MD get out of this payment when they willfully signed a contract agreeing to it? No one held a gun to their head to make them sign the contract. The amount was agreed to in good faith and they had the option of not joining.

I can't understand why they have any legitimate argument.
Arent they claiming because they and FSU voted against the amount that they shouldnt be held to the contract?
 
I think their first argument is some sovereign immunity theory about how they can't be sued in NC because they're a Maryland state agency. After that, I'm not sure what their theory is.
 
Arent they claiming because they and FSU voted against the amount that they shouldnt be held to the contract?

They are arguing that amendments to the bylaws do not go into effect immediately (they voted on it in September 2012), but commence at the beginning of the next fiscal year (July 1st I believe). Therefore, by submitting paperwork before that date, the previous withdraw penalty of approximately $20 million should still be in place.
 
I thought the Maryland was one of the dissenters to raising the exit fee, but were outvoted. I assumed that's what their argument is based upon.
 
I think the sovereign immunity claim is just to try to get it dismissed at the beginning on a procedural issue. I don't think it's likely that the jurisdiction question goes anywhere for Maryland since the ACC filed first and North Carolina definitely has jurisdiction over Maryland given their membership in the ACC over a 50 year period.

If I recall correctly the major claim on the merits is that the exit fee was actually a penalty couched as a liquidated damages clause. Under North Carolina statute (since the ACC is incorporated in North Carolina) and in most states there is a distinction between the two. Liquidated damages are a remedy built into a contract for when someone breaches the terms of the contract or wishes to terminate the deal. In this case Maryland leaving the conference was going to leave a speculative amount of damages which are difficult to ascertain. The damages in the clause are supposed to be an amount reached in good-faith to be a reasonable estimation of what the breach is costing the party to the contract who did not back out.

In contrast a penalty is a sum meant to be a deterrent for someone to breach the contract. So basically Maryland is claiming that the 50 million dollar fee was a penalty rather than an actual good faith estimate for a liquidated damages clause. If it was in fact a penalty then Maryland would not have to pay the large fee. They may have an argument, especially given the fact that Swofford has opened his big mouth saying something to the effect of "we wanted the buyout to be so much that nobody left."

Of course this is all from a 2L so I may have some, a lot, or all of the facts wrong. An actual attorney can probably answer the question better. Edited to add a few facts on the preliminary questions.
 
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I think the sovereign immunity claim was just to try to get it dismissed at the beginning. If I recall correctly the major claim is that the exit fee was actually a penalty couched as a liquidated damages clause. Under North Carolina statute (since the ACC is incorporated in North Carolina) and in most states there is a distinction between the two. Liquidated damages are a remedy built into a contract for when someone breaches the terms of the contract or wishes to terminate the deal. In this case Maryland leaving the conference was going to leave a speculative amount of damages which are difficult to ascertain. The damages in the clause are supposed to be an amount reached in good-faith to be a reasonable estimation of what the breach is costing the party to the contract who did not back out.

In contrast a penalty is a sum meant to be a deterrent for someone to breach the contract. So basically Maryland is claiming that the 50 million dollar fee was a penalty rather than an actual good faith estimate for a liquidated damages clause. If it was in fact a penalty then Maryland would not have to pay the large fee. They may have an argument, especially given the fact that Swofford as opened his big mouth saying something to the effect of "we wanted the buyout to be so much that nobody left."

Of course this is all from a 2L so I may have some, a lot, or all of the facts wrong. An actual attorney can probably answer the question better.

Not bad. All you left out was that the clause is presumed valid and MD will bear the burden of proving that it is invalid.
 
Also I'm guessing that the sovereign immunity claim fails since most of the time when states enter into a contract it implicitly consents to be sued for damages if it breaches that contract. North Carolina law may be different though.
 
The only issue before the Court of Appeals today is whether the trial court erred when it denied Maryland's motion to dismiss on the grounds of sovereign immunity. If the Court affirms the lower court, that doesn't mean that the ACC wins. It means that the case can move forward.
 
I think the sovereign immunity claim is just to try to get it dismissed at the beginning on a procedural issue. I don't think it's likely that the jurisdiction question goes anywhere for Maryland since the ACC filed first and North Carolina definitely has jurisdiction over Maryland given their membership in the ACC over a 50 year period.

If I recall correctly the major claim on the merits is that the exit fee was actually a penalty couched as a liquidated damages clause. Under North Carolina statute (since the ACC is incorporated in North Carolina) and in most states there is a distinction between the two. Liquidated damages are a remedy built into a contract for when someone breaches the terms of the contract or wishes to terminate the deal. In this case Maryland leaving the conference was going to leave a speculative amount of damages which are difficult to ascertain. The damages in the clause are supposed to be an amount reached in good-faith to be a reasonable estimation of what the breach is costing the party to the contract who did not back out.

In contrast a penalty is a sum meant to be a deterrent for someone to breach the contract. So basically Maryland is claiming that the 50 million dollar fee was a penalty rather than an actual good faith estimate for a liquidated damages clause. If it was in fact a penalty then Maryland would not have to pay the large fee. They may have an argument, especially given the fact that Swofford has opened his big mouth saying something to the effect of "we wanted the buyout to be so much that nobody left."

Of course this is all from a 2L so I may have some, a lot, or all of the facts wrong. An actual attorney can probably answer the question better. Edited to add a few facts on the preliminary questions.

The ACC is not incorporated in North Carolina. The ACC is not incorporated anywhere. The ACC is an unincorporated association of universities. The ACC does have its principal place of business in North Carolina, however, and that may mean that NC law applies.
 
I thought the Maryland was one of the dissenters to raising the exit fee, but were outvoted. I assumed that's what their argument is based upon.

If you vote against a payment policy when you own stock or if you are partners in other businesses and get outvoted, you don't get to get your way.

If they so opposed the exit fee that they would refuse to pay it, then they had the option of not being in the ACC.

It sounds like a high stakes version of "If I'm not on the good team my ball and go home."
 
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