NC Appeals Court Upholds Maryland Exit Fee $52M

[ponyinNC]

http://bigstory.ap.org/article/nc-appea ... e-continue

I've been paying attention to this case, as it will have an effect on future exit fee suits, should there be any. Louisville did things the right way. RU and UMd on the other hand...

Excerpt:
The university sued the ACC in Maryland in January, calling the amount an illegal penalty. A Maryland judge has put the school's lawsuit on hold until North Carolina courts issue a final judgment. Maryland's ACC departure is scheduled for July.

Maryland's attorneys argued in the North Carolina lawsuit that the ACC's lawsuit should be dismissed because the school is an arm of the state, and Maryland and other states enjoy sovereign immunity that protects them from lawsuits. North Carolina's Court of Appeals rejected that argument.

[StallionsModelT]

That is a huge blow to Maryland.

[ponyinNC]

The real question in my mind will be how does the ACC collect the difference between what it is garnishing and the final exit fee total?

The ACC should be holding about $30 million in June of 2014, and according to the exit fee rules, MD will owe about $60-62 million. This part will be the real game. I'm not sure how an NC court can force Maryland to pay anything.

If Maryland is owed ACC monies and those monies flow through ACC offices in NC, then the ACC can withhold those payments to Maryland, but if those withheld payments fall short of the $52m, how can the NC judicial system enforce its order that the state of Maryland pay anything else?

[East Coast Mustang]

The real question in my mind will be how does the ACC collect the difference between what it is garnishing and the final exit fee total?

The ACC should be holding about $30 million in June of 2014, and according to the exit fee rules, MD will owe about $60-62 million. This part will be the real game. I'm not sure how an NC court can force Maryland to pay anything.

If Maryland is owed ACC monies and those monies flow through ACC offices in NC, then the ACC can withhold those payments to Maryland, but if those withheld payments fall short of the $52m, how can the NC judicial system enforce its order that the state of Maryland pay anything else?

If any MD athletic team came to the state to compete, could they garnish their equipment and supplies until paid the full amount? I have no idea, I'm not a lawyer, but I remember a story awhile back that the President of Argentina flew commercial to other nations because if he took the state-owned plane it would be garnished because the country had so much outstanding debt. That would be pretty embarrassing for Maryland if they couldn't compete in an entire state...other states with ACC member schools could get it on the act as well.

[Stallion]

Who knows how this plays out. Is the ACC going to levy on Maryland assets that might find its way into North Carolina? what would happen if North Carolina tried to domesticate its judgment under fair, faith and credit clause in Maryland to levy on Maryland assets. Maryland court might refuse to recognize such a judgment because it is illegal under Maryland' sovereign immunity law. Really don't know but I bet Maryland ends up paying less-probably by settlement

[birddogger]

This will be fun to watch. Perhaps the conference can obtain a judgment from a MD court enforcing the NC judgment. That way, the conference can garnish/attach all UMD property. Won't that be a hoot!

[ponyinNC]

This will be fun to watch. Perhaps the conference can obtain a judgment from a MD court enforcing the NC judgment. That way, the conference can garnish/attach all UMD property. Won't that be a hoot!

Don't think it is very likely that an MD court rules in opposition to UMD - unless someone wants to commit political suicide!

[Stallion]

its been awhile but under the Uniform Enforcement Foreign Judgments Act I still think that you can raise an illegality based on public policy defense. The policy in this case being sovereign immunity. For example, you could reference the slavery, mixed race marriage, gay marriage and bigamy cases from the past and present where a state chooses not to recognize what it considers illegal. Now those could become constitutional issues on appeal.

[East Coast Mustang]

its been awhile but under the Uniform Enforcement Foreign Judgments Act I still think that you can raise an illegality based on public policy defense. The policy in this case being sovereign immunity. For example, you could reference the slavery, mixed race marriage, gay marriage cases from the past and present where a state chooses not to recognize what it considers illegal. Now those could become constitutional issues on appeal.

Stallion- could other states with ACC member schools (VA, GA, SC, FL, etc) also impose a levy on Maryland assets because of the NC court ruling? And would they? It seems there would be a financial incentive for their state schools to do so

[Stallion]

If they were Plaintiffs they could try-they probably are. But they can't do it in another jurisdiction until they try to domesticate the foreign judgment in the state of enforcement

[Stallion]

btw this was just an appeal of a preliminary motion to dismiss not a final judgment. Even if this is not appealed there is likely to be more discovery, depositions, litigation and perhaps a trial concerning whether the exit fee constitutes a fair or unreasonable penalty clause. So there can be no levy or execution yet because there is no judgment yet

[gostangs]

I think this means the settlement dollars just went up to the benefit of the ACC. Not sure by how much - but better to win this if you are the ACC then to lose it.

[Charleston Pony]

Maryland is moving on to a bigger payday; eventually someone in a position of authority will look up and realize it's time to stop the billable hours....and this thing will get settled. Bottom line is that Maryland is moving on and it will probably be years before they play any ACC teams again...at least not in a regular season scheduled event.

[birddogger]

its been awhile but under the Uniform Enforcement Foreign Judgments Act I still think that you can raise an illegality based on public policy defense. The policy in this case being sovereign immunity. For example, you could reference the slavery, mixed race marriage, gay marriage and bigamy cases from the past and present where a state chooses not to recognize what it considers illegal. Now those could become constitutional issues on appeal.

I see your point, but this is a matter of contract, isn't it? I'd hate to believe that a governmental entity could willfully breach a contract and thereafter rely on sovereign immunity defense to avoid the consequences. Slavery, marriage, etc. are different IMO because they raise constitutional issues.

In any event, I believe this one is headed into the federal system, as it should.

[Stallion]

I don't think the public realizes how often sovereign immunity modifies the law of contracts-ask Mike Leach who also had a contract and got nothing.