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  1. #1

    ACC files lawsuit against Maryland

    The ACC filed a lawsuit in a North Carolina court seeking a declaratory judgment, presumably of breach of contract, seeking payment of the exit fee (liquidated damages?).

    Link to news story: http://www.dukechronicle.com/article...aryland-monday

    I'm sure there's some finer legal minds here who know more contract law than I do, but this feels like it's a tough case. The general principle is that liquidated damages cannot be punitive, and there's good reason to question if the exit fee is punitive. Will be interesting to follow, that's for sure.

  2. #2
    It is pro forma for the conference to sue the school that is leaving the conference. Happens every time.
    ~rthomas

  3. #3
    Join Date
    Feb 2007
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    Deeetroit City
    Quote Originally Posted by PumpkinFunk View Post
    The ACC filed a lawsuit in a North Carolina court seeking a declaratory judgment, presumably of breach of contract, seeking payment of the exit fee (liquidated damages?).

    Link to news story: http://www.dukechronicle.com/article...aryland-monday

    I'm sure there's some finer legal minds here who know more contract law than I do, but this feels like it's a tough case. The general principle is that liquidated damages cannot be punitive, and there's good reason to question if the exit fee is punitive. Will be interesting to follow, that's for sure.
    Is Maryland collectible?

  4. #4
    Join Date
    Jan 2010
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    District of Columbia
    This ruling could make teams like FSU and Clemson stay put. I for one hope the fee holds firm or the ACC may go the way of the Big East.

  5. #5
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    Feb 2007
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    Quote Originally Posted by kingboozer View Post
    ... the ACC may go the way of the Big East.
    You mean to New Orleans?

    http://espn.go.com/college-sports/st...-just-football

  6. #6
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    Feb 2007
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    Orlando, FL
    Quote Originally Posted by BD80 View Post
    And Greenville. I think about the fuss that Jim Boeheim would put up if he had to travel to Greenville, NC for a basketball game and then I remember that he'll be in the ACC by then.
    Coach K on Kyle Singler - "What position does he play? ... He plays winner."

    "Duke is never the underdog" - Quinn Cook

  7. #7
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    Feb 2007
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    Raleigh, NC
    Quote Originally Posted by tbyers11 View Post
    And Greenville. I think about the fuss that Jim Boeheim would put up if he had to travel to Greenville, NC for a basketball game and then I remember that he'll be in the ACC by then.
    Well, hopefully someone would have reminded Boeheim that ECU was a football-only member of the BE and save him the trouble.

  8. #8
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    Feb 2007
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    Orlando, FL

    Red face Oops

    Quote Originally Posted by jimsumner View Post
    Well, hopefully someone would have reminded Boeheim that ECU was a football-only member of the BE and save him the trouble.
    Now if I had only read past the headline of the linked article...

    Thanks for pointing that out Jim
    Coach K on Kyle Singler - "What position does he play? ... He plays winner."

    "Duke is never the underdog" - Quinn Cook

  9. #9
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    Sep 2007
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    Undisclosed
    Quote Originally Posted by BD80 View Post
    Is Maryland collectible?
    The defense lawyer in me says: "bwahaha!"

    The plaintiff lawyer in me says: "hmmmmm..."


    The cynic in me says: "boy, it would be funny to have Alaska -- er, I mean Marland -- taxpayers subsidizing sports in the Triangle. "


    But mainly, I say: "screw the Twerps, don't let the door hit you in the rump!"

  10. #10
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    Dec 2007
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    Cary, NC
    Ok, I need someone to explain this to me. What grounds does Maryland have for NOT paying the exit fee, if it is something that was approved by the ACC by majority vote?

  11. #11
    Join Date
    Feb 2007
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    Washington, D.C.

    liquidated damages

    Quote Originally Posted by UrinalCake View Post
    Ok, I need someone to explain this to me. What grounds does Maryland have for NOT paying the exit fee, if it is something that was approved by the ACC by majority vote?
    It has been suggested that the exit fee is what is known at common law as a liquidated damages clause. At common law, the party seeking to collect liquidated damages must show that knowing the actual damages at the time of contract was difficult and also must show that the liquidated damage amount is a reasonable approximation of the actual damages.

    It's not my area of law, so I haven't thought about this for many years.

    Frankly, if the ACC and its members want to agree to an exit fee, I don't understand why a court should second guess the amount of the fee.

  12. #12
    Quote Originally Posted by MChambers View Post
    It has been suggested that the exit fee is what is known at common law as a liquidated damages clause. At common law, the party seeking to collect liquidated damages must show that knowing the actual damages at the time of contract was difficult and also must show that the liquidated damage amount is a reasonable approximation of the actual damages.

    It's not my area of law, so I haven't thought about this for many years.

    Frankly, if the ACC and its members want to agree to an exit fee, I don't understand why a court should second guess the amount of the fee.
    Are you sure that you are a lawyer? They are not known for the "common sense" in my area! In either case, I agree with you --- a deal is a deal.

  13. #13
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    Feb 2007
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    Quote Originally Posted by dukeofcalabash View Post
    Are you sure that you are a lawyer? They are not known for the "common sense" in my area! In either case, I agree with you --- a deal is a deal.
    Maryland never "agreed" to the "deal."

    At issue is the $50 mil just voted in (with ND) that Md voted against. It is a battle worth fighting. Md can justifiably argue that the bump in the exit fee was punitive, designed to discourage leaving.

  14. #14
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    Feb 2008
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    Raleigh, NC
    Quote Originally Posted by BD80 View Post
    Maryland never "agreed" to the "deal."

    At issue is the $50 mil just voted in (with ND) that Md voted against. It is a battle worth fighting. Md can justifiably argue that the bump in the exit fee was punitive, designed to discourage leaving.
    Well yes, they could. But they were also a member of a conference that voted a majority to institute the fee. Maryland didn't likely vote for it because they've had designs on leaving for a while now.

    Being a part of a conference means you don't always get what you want.

  15. #15
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    Quote Originally Posted by FerryFor50 View Post
    Well yes, they could. But they were also a member of a conference that voted a majority to institute the fee. Maryland didn't likely vote for it because they've had designs on leaving for a while now.

    Being a part of a conference means you don't always get what you want.
    Agreed. For those teams that voted against the initial expansion, when the teams were admitted anyway, could they say "No, we're not playing them"? Nope. Being part of a conference doesn't mean that when rule changes don't go your way you don't have to abide by them.
    Check out the Duke Basketball Roundup!

    2003-2004 HLM
    Duke | Mirecourt | Detroit| The U | USA

  16. #16
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    Feb 2007
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    An interesting article on Md's financial situation:

    http://sportsillustrated.cnn.com/201..._a14&eref=sihp

  17. #17
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    Quote Originally Posted by BD80 View Post
    An interesting article on Md's financial situation:

    http://sportsillustrated.cnn.com/201..._a14&eref=sihp
    From that article, NCSU should be very concerned...

  18. #18
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    Durham
    Quote Originally Posted by BD80 View Post
    An interesting article on Md's financial situation:

    http://sportsillustrated.cnn.com/201..._a14&eref=sihp
    Pretty Damning of Yow...does she rub everyone the wrong way?
    1200. DDMF.

  19. #19
    Join Date
    Dec 2007
    Location
    Cary, NC
    Thanks for all who responded to my question. Unfortunately, to this software engineer with zero knowledge of law, none of them make any sense to me. The exit fee must be equal to liquidated damages? Why? I thought it was just a fee. Like the fee my cell phone carrier charges if I decide to break my contract and go to a different carrier. Maryland is arguing that the fee is "punitive and intended to discourage leaving"? Of course it is! That's exactly what the fee is intended to be. How does that constitute an argument for why they shouldn't have to pay it?

    Again, I think I'm missing something. Because most of the people that I read seem to assume that Maryland is going to win this suit, or that a settlement will be reached in which they pay a substantially reduced fee.

  20. #20
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    Do not know NC law, but the test of validity is usually whether the amount is a reasonable pre-estimate of damages. I would want to look at the discussion around its implementation to raise a good defense if I was so inclined.

    Louisville joining may help mitigate damages as well. Depends on NC law.

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