By Mark Conrad
John Calipari, the former coach of the University of Memphis men’s basketball team, and Derek Rose, a former star player with that team, settled an unusual ticketholders lawsuit, by agreeing to pay $100,000 to three season ticket holders. The settlement, which dated from May 2010, was only revealed after it was reported by the Memphis Commercial Appeal in October.
This settlement agreement, obtained by the newspaper under Tennessee’s public records law, also coincided with Calipari agreeing to in five payments to repay a bonus Calipari received after the 2008 season. Another condition of the settlement is that Rose will donate a considerable undisclosed sum to the Memphis scholarship program over the next five years.
The source of the underlying lawsuit involved apparent NCAA infractions committed by Rose involving an invalidated SAT score and several grade boosts from his Chicago based high school. Because of these infractions, the NCAA ruled that the Memphis Tigers must vacate their 2008 season.
The claim presented by plaintiffs Martin Zummach, Frank L. Watson III and William Burns (all attorneys) on behalf of other ticketholders against Calipari, Derek and Memphis Athletic Director R.C. Johnson, claimed that they were mislead into donating and buying season tickets. These tickets now have inferior value following the sanction, as the Tigers have not lived up to their pre-2008 success. Season tickets purchased during the 2008 season cost in the lower levels up to $3,000.00.
Following their loss to Kansas in the 2008 March Madness tournament Calipari left Memphis only four days later for Kentucky in the midst of a brewing NCAA scandal.
This settlement reflects the unique circumstances of this case – with the departure of Calipari, and the subsequent order by the NCAA’s Committee on Infractions to vacate the U of M’s wins and Final Four appearance during the 2008 season. The Committee also found Rose retroactively ineligible to compete in the 2007-08 season due to questions over his SAT score.
The agreement, where the parties do not admit to any liability, is unlikely to affect neither Calipari’s nor Rose’s achievements nor reputations in their new venues, the University of Kentucky and the Chicago Bulls, respectively. However, an interesting sidelight is that is the settlement occurred in a private institution, there would have not been a obligation to reveal the agreement. For parties settling cases with public scholastics institutions – whether they be a state university or a public school district – it is possible that such a settlement may reach the public domain under the mandatory disclosure requirements of a state public records law. That may be the most important lesson from this case.
(Mark Conrad is Associate Professor, Law and Ethics at Fordham University’s Schools of Business. He also has taught at Columbia University’s sports management program and at New York Law School. He wishes to thank Johnathon Ferry for his assistance in preparing this article)
