Maryland Attorney General Douglas F. Gansler has alleged in two legal actions that “the Atlantic Coast Conference (ACC) violated antitrust laws and other obligations by seeking to impose an excessive $53 million withdrawal penalty for Maryland’s pending departure to the Big Ten Conference.”
First, Gansler charged that the so-called “exit fee” is an illegal restraint of trade in violation of antitrust laws. Second, he moved to dismiss the ACC’s “hastily filed” state court action in North Carolina, arguing that a North Carolina court “has no jurisdiction over the sovereign state of Maryland and its public universities.”
Gansler said in a statement: “Our lawsuit calls the ACC’s ‘exit fee’ what it really is – an antitrust violation and an illegal penalty. Our motion in North Carolina will ensure that a Maryland court will rule on the case.”
On November 19, 2012, the University of Maryland announced that it would join the Big Ten Conference, beginning in 2014. As the lawsuit claims, the move “will not only provide financial security for Maryland’s athletic programs and will also enhance the University’s educational and research opportunities through membership in the Committee on Institutional Cooperation, a premier academic consortium of the Big Ten universities and the University of Chicago.”
Shortly after the announcement, the ACC sued in North Carolina state court to enforce a withdrawal penalty of $52.26 million, “supposedly provided for in the ACC Constitution. Maryland has moved to dismiss that action because a court of a sister state cannot compel another sovereign state to submit to that court’s jurisdiction.”
The Attorney General’s lawsuit in Prince George’s County Circuit Court alleges that “the ACC violated Maryland antitrust laws, breached contractual obligations and tortiously interfered with the prospective economic advantage of the flagship campus of the University of Maryland System. The lawsuit seeks an injunction against enforcement of the exit fee, a declaratory judgment finding the fee unlawful and treble damages under the antitrust laws, along with other relief.”
