FSU challenge to ACC hits snag

By Dara Kam
News Service of Florida

A Leon County circuit judge put a hold on Florida State University’s lawsuit against the Atlantic Coast Conference, saying the school needed to amend its legal challenge before the high-profile case can move forward.

Legal issues in the battle between the conference and FSU center on media rights and could end with the school leaving the conference. The issues are being closely watched in college athletics, which is undergoing major conference realignments.

FSU filed its lawsuit Dec. 22 in Leon County challenging what it describes as more than $500 million in penalties if it wants to exit the conference. But the day before the Leon County case was filed, the conference filed a lawsuit in North Carolina against FSU about many of the same issues.

Much of Monday’s arguments centered on the issue of “personal jurisdiction,” or whether the lawsuit could be brought against the conference in Florida. The ACC argued that FSU failed to flesh out the issue in its legal complaint.

Judge John Cooper on Monday agreed, but said FSU could have more time to address the issue.

“I’m not ruling against FSU. I’m not ruling they have no case. I’m not ruling against the ACC. I’m not ruling in favor of the ACC. I’m not ruling that its case is better than FSU’s case. What I am ruling is that in a case that’s worth, I’m told, up to half a billion dollars, on personal jurisdiction, we need a more specific and clearly stated statement of personal jurisdiction,” Cooper said.

The judge gave FSU 10 days to file an amended complaint.

Lawyers for the ACC had asked Cooper to dismiss the case, arguing that the lawsuit amounted to a “contract dispute” between the school and the conference.

“Those contracts were a good deal when they signed them, in their minds. They remained a good deal in their minds for many years. It wasn’t until Florida State read that other contracts may be getting more money for media rights agreements, that were negotiated by those conferences after the agreement that the ACC negotiated with ESPN, that they started complaining,” Amber Stoner Nunnally, an attorney who represents the ACC, said.

But Peter Rush, who represents FSU, accused the ACC of breaching its contract with FSU, thereby giving the school an out.

“These material breaches relieve the FSU board from any and all obligations to comply with any part of the withdrawal provision penalty in that contract,” Rush said. “A material breach of a contract relieves the offended party from performing any further duties under that contract.”

In a motion to dismiss the lawsuit filed in February, lawyers for the ACC argued that FSU “fumbled the jurisdictional ball” because it “failed to allege any cognizable basis for personal jurisdiction” against the conference.

Cooper said he needed more information before he could decide whether the lawsuit can proceed.

“I think it’s a close call, but in a case that’s this important to both sides, I don’t believe that we should just proceed on, with our eyes closed, thinking no one’s gonna ever be concerned about this, when in fact FSU can plead this with more specificity and directness,” the judge said.

Cooper emphasized that, while he was granting the ACC’s motion to dismiss, he was also allowing the university to make changes to its lawsuit.

“The case is still going on. It’s not over. A dismissal with leave to amend is a common order in civil litigation. It’s not an unusual order in civil litigation. And once the complaint is amended, we’ll look at that in a separate hearing and we’ll make a decision on what to do and then we’ll go forward depending on the ruling,” he said.

Lawyers for the ACC also argued that the lawsuit should be rejected because it was premature. Nunnally noted Monday that FSU has “not made a decision about whether or not they’re withdrawing from the ACC.”

“That alone, full stop, shows that their claims are not ripe,” she added.

But Rush said the ACC violated parts of its agreement with the school.

“We seek a declaratory judgment today that these material breaches relieve the FSU board of any and all obligations to comply with any part of the withdrawal penalty in that contract. That’s ripe. That’s today. The breaches are historical,” Rush said.

Cooper rejected the request for dismissal on the ripeness issue.

Rush on Monday also suggested that FSU and the conference could negotiate a settlement on the exit-penalty fees.

Florida State essentially contends the ACC has shortchanged its members through television contracts, with FSU widely viewed as wanting to move to a more-lucrative conference such as the Big Ten or the Southeastern Conference.

If Florida State leaves the ACC, it would have to pay a $130 million to $140 million withdrawal fee, Jim Cooney, an attorney for the conference, said during a hearing earlier this month.

Meanwhile, Louis Bledsoe, chief business court judge in Mecklenburg County, denied Florida State’s motion to stay the lawsuit filed by the ACC.

Bledsoe on April 4 ruled earlier that the “ACC did not engage in improper conduct or ‘procedural fencing’ in filing this action in North Carolina. Accordingly, considering all of the facts and circumstances surrounding the filing of this action and the Florida action, the court concludes, in the exercise of its discretion, that the ACC’s choice of forum is entitled to deference on this record.”

Florida State on April 9 filed a notice of appealing Bledsoe’s decision.