Attorney General Douglas Gansler files suit against ACC
BALTIMORE (AP) - The Maryland Attorney General filed a lawsuit against the Atlantic Coast Conference on Friday, saying its approximately $53 million exit fee for the University of Maryland's departure to the Big Ten is invalid and unenforceable.
Attorney General Douglas F. Gansler filed the suit on behalf of the school and its board of regents in Prince George's County Circuit Court.
The ACC sued Maryland in November in a North Carolina court to make the school pay the exit fee. Gansler also filed a motion Friday to dismiss that lawsuit, saying a court in that state has no jurisdiction over Maryland.
ACC spokeswoman Amy Yakola declined comment because the league's legal team has not yet received a copy of the lawsuit.
The league says the school must pay $52,266,342 - three times the league's annual operating budget for 2012-13 - after its member schools voted in September to increase the fee.
The attorney general's lawsuit seeks, among other remedies, nearly $157 million in damages.
Gansler said in an interview with The Associated Press that he hoped a settlement would be reached, and that the lawsuit was prompted by the ACC's withholding of more than $3 million in December, money paid to ACC teams each month for television rights. The lawsuit seeks to prevent the ACC from continuing to withhold those funds.
"This is not like a bad divorce from the University of Maryland standpoint," Gansler said in the interview. "We hope that this can be resolved in an amicable manner."
He added, "Maryland has a deep respect for the ACC and its members, and there's no reason not to settle."
The suit, filed in Upper Marlboro, Md., says the ACC's decision to increase the exit fee in September 2012 "is lacking any legitimate economic justification" and "failed to comply with the notice and procedural requirements of the ACC Constitution and is therefore null and void."
Maryland was one of two schools that voted against the increased exit fee. Florida State also voted against the increase.
The ACC twice increased its exit fee in the span of a year. The fee was around $12 million to $14 million before the league announced in September 2011 it would add Pittsburgh and Syracuse from the Big East, which led the league to up the fee to $20 million. The latest increase came with the addition of Notre Dame in all sports the league sponsors except football.
Gansler's suit alleges that the ACC violated Maryland antitrust laws, breached contractual obligations and interfered with the prospective economic advantage of the flagship campus of the University of Maryland System.
The lawsuit says the $156,799,026 - which is three times the amount of the exit fee - is for treble damages as outlined in the state's antitrust laws. It also seeks an injunction against enforcement of the exit fee, a declaratory judgment finding the fee unlawful, and other relief.
Maryland, a founding member of the ACC since 1953, formally announced its decision to move to the Big Ten on Nov. 19, with the move to occur in 2014.
Within a week, the ACC filed suit for its exit fee.
The suit filed Friday says, "The Withdrawal Penalty bears no relation to actual damages (if any) to the ACC from Maryland's withdrawal."
Further, it notes, "The ACC has also ignored and breached the ACC Constitution in its urgency to punish Maryland and deter further withdrawals from the Conference." According to the suit, the ACC Constitution deems that amendments do not take effect until the beginning of the next fiscal year following their adoption, meaning that the exit fee could not be implemented until July 2013.