ACC media-rights legal fight raises issues beyond sports, money

Legal battles pitting the Atlantic Coast Conference against two member schools have attracted attention primarily on the sports page. But the disputes raise questions extending beyond stadiums and arenas.

A dozen state attorneys general and North Carolina’s leading business lobbying group have added arguments to the court record. The cases’ outcomes could affect business operations in North Carolina for years to come.

The ACC’s conflicts with Florida State and Clemson universities focus primarily on sports and money. Both schools challenge a conference deal that ties up their athletic media rights through 2036. A court filing in the FSU case describes a “$700 million” dispute.

Florida State filed suit over the issue in the Sunshine State, while Clemson went to court in South Carolina. The ACC, headquartered in Charlotte, filed lawsuits in North Carolina.

Both schools object to legal action playing out in Tar Heel State courtrooms. But a now-retired state Business Court judge rejected the universities’ arguments to have ACC lawsuits dismissed. Now Florida State and Clemson are asking North Carolina’s Supreme Court to reconsider.

The attorneys general of Florida and South Carolina back their home-state schools in efforts to avoid litigation in the ACC’s home court. They’ve gathered support from 10 other AGs. The list features fellow southeastern states Alabama, Arkansas, Kentucky, Louisiana, and Mississippi. It also includes Idaho, Ohio, Oklahoma, South Dakota, and Utah.

A Nov. 21 amicus, or friend-of-the-court, brief explained why top government lawyers in 12 states are taking part in the media-rights battle. “The amici states have an interest in preserving the rights secured to them and their constituent institutions by the U.S. Constitution, including the immunity of their public universities from suit in other states’ courts without the amici states’ clear and unequivocal consent.

“The question in this case is whether the FSU Board ‘unequivocally expressed’ its consent to be sued in North Carolina’s courts, simply because North Carolina (not Florida) enacted a statute” called the Uniform Unincorporated Nonprofit Association Act in 2006.

At the time, a 1979 US Supreme Court precedent, Nevada v. Hall, “already permitted a state entity, like the FSU Board, to be sued in another state’s courts,” the state AGs wrote.

“The U.S. Supreme Court has since overruled Nevada v. Hall and restored the sovereign immunity of states from suits in other states’ courts,” the brief continued. “As part of this doctrine, the U.S. Supreme Court has ‘insisted’ that a state’s consent to be sued be ‘unequivocally expressed.’”

Neither Florida nor South Carolina has granted the ACC express permission for its North Carolina suits, the AGs argued.

Meanwhile, the ACC has attracted support from the NC Chamber, the state’s “leading business advocacy organization.”

“The issue before the Court is one that significantly affects the state’s legal climate, namely, whether an out-of-state governmental entity that conducts business in North Carolina — including by entering into private contracts in North Carolina and joining a North Carolina unincorporated association — can be held accountable in North Carolina courts for breaching its North Carolina contracts,” wrote the NC Chamber Legal Institute’s lawyers.

FSU and Clemson “attack the economic viability of the ACC — with wider ramifications for every athletic conference in the United States.”

University of North Carolina system sports produce a $1.13 billion economic impact for the state, chamber lawyers argued. ACC members Duke and Wake Forest, along with other private schools, add to that total.

“It is therefore extraordinarily important to the North Carolina business community that the contracts governing these schools’ athletic competition are honored and enforced, and that North Carolina businesses (such as the ACC) are not forced to chase governmental entities into foreign courts when those same governmental entities deliberately reached into North Carolina to join the very corporate organizations and contracts they now disavow,” the chamber brief explained.

Upcoming ACC championship events “could have an economic impact in North Carolina of more than $400 million,” chamber lawyers wrote.

“More broadly, the Court’s decision in this case will affect every North Carolina business that works with state-affiliated entities,” the brief warned. “This could include a North Carolina technology company providing software for an out-of-state college, a North Carolina engineering firm designing bridges for an out-of-state department of transportation, or a North Carolina manufacturer producing security equipment for an out-of-state prison.”

If FSU and Clemson succeed, businesses “would have no remedy” in North Carolina courts “if they are wronged by state-government entities” from other states, the Chamber argued.

Thus the ACC’s clash with Florida State and Clemson deserves attention beyond the world of college sports.

Mitch Kokai is senior political analyst for the John Locke Foundation.