A North Carolina state appeals court has affirmed a lower court’s ruling that dismissed a lawsuit brought by members and coaches of a high school basketball team, who sued the North Carolina High School Athletic Association, Inc., in an attempt to regain a championship that had been stripped from the school.
Specifically, the court found that the plaintiffs lacked standing, since the championship had been taken from the school, not the coaches.
The plaintiffs in the instant case were members and coaches of the 2008-2009 men’s basketball team at Northern Guilford High School (NGHS). In 2009, the squad won the Men’s Basketball State Championship for 3A schools.
Prior to that victory, Guilford County Schools (GCS) conducted an investigation into residency issues of student-athletes at NGHS. The investigation revealed that at least two players on the championship team, James Gant and Asad Lamot, did not reside in the NGHS residential district during the time they participated on the team. A student’s residency determines their eligibility to participate in interscholastic athletics for a public high school. According to the handbook, the student must be a “resident” of the administrative district in which the school is located. In addition, the handbook states “any high school which allows an ineligible student to participate by dressing for and/or participating in an athletic contest shall forfeit all contests in which the student dressed or participated.”
In May 2009, after the investigation, GCS informed the defendant that ineligible players had participated on the team and forwarded the defendant the supporting documentation. After reviewing the documentation, the defendant concluded that GCS had sufficient competent evidence to determine at least two NGHS student athletes who participated on the 2008-2009 Championship team were ineligible because they did not live in the Northern Guilford residential district as required. Pursuant to the rules, each student was declared ineligible for participation in interscholastic athletics for 365 days and defendant vacated the Championship.
The plaintiffs filed a complaint on July 6, 2010, alleging negligence and seeking, inter alia, a declaratory judgment reinstating the Championship. The defendant moved to dismiss. After a hearing on October 6, 2010, the trial court ruled that the plaintiffs lacked standing and granted the defendant’s motion to dismiss. The plaintiffs appealed.
The appeals court noted that North Carolina follows the well-established rule “that courts will not interfere with the internal affairs of voluntary associations.” Wilson Realty & Constr., Inc. v. Asheboro-Randolph Bd. of Realtors, 134 N.C. App. 468, 470, 518 S.E.2d 28, 30 (1999).
There are exceptions, like “when a member’s property or civil rights were invaded by the voluntary association. See Van Valkenburg v. Liberty Lodge No. 300, 9 Neb. Ct. App. 782, 619 N.W.2d 604, 607 (Neb. Ct.App. 2000); Taite v. Bradley, 151 So.2d 474, 475 (Fla. Dist. Ct. App. 1963); Tucker v. Jefferson Cty. Truck Growers’ Ass’n, 487 So.2d 240, 242 (Ala. 1986). Some courts have also recognized that interference is appropriate if the voluntary association failed to adhere to its own rules. See State Ex. Rel. National Jr. Col. Ath. Ass’n v. Luten, 492 S.W.2d 404, 407 (Mo. Ct. App. 1973); Van Valkenburg, 619 N.W.2d at 607. While the judiciary typically only protects member’s rights, some courts will also intervene when the rights of a non-member, i.e. a student, have been affected by a voluntary athletic association. See Ind. High School Ath. Ass’n v. Carlberg, 694 N.E.2d 222, 230 (Ind. 1997); Revesz v. PA. Interscholastic Athletic, 798 A.2d 830 (Pa. Commw. Ct. 2002).
“In the instant case, there is no justification for judicial intervention on behalf of the plaintiffs. The plaintiffs have neither a legally protected interest nor a right in the Championship awarded by the defendant. The Championship was granted to NGHS by the defendant’s association. Therefore, when the Championship was revoked, it was the school that sustained the loss, not the players. NGHS is a member of the defendant’s association, but plaintiffs are not. Consequently, the plaintiffs do not have a legally protected interest in any award granted by the defendant’s association to one of its members. As the defendant’s association Handbook outlined, the school, as a member of the defendant’s association, could have challenged the defendant’s ruling. However, NGHS did not appeal the decision. Since the school is the only party with a property interest in the Championship, the plaintiffs’ only recourse was to implore NGHS to act on their behalf to achieve relief from the defendant’s ruling.
“The plaintiffs further contend that the defendant failed to comply with its own rules in revoking the Championship, alleging the defendant’s actions were arbitrary and capricious. Courts in other jurisdictions that have reviewed challenges to an association’s alleged arbitrary and capricious decision have done so on a limited basis. The party seeking review in such cases has been the party actually harmed by the association’s decision. See Ala. High School Athletic Ass’n v. Medders, 456 So.2d 284, 287 (Ala. 1984) (court found association rule declaring student ineligible to participate was not arbitrary); Brown ex rel. Brown v. Ass’n, 2005 OK 88, 125 P.3d 1219, 1225-26 (Okla. 2005) (when student was ejected from a game and suspended from further games, court found the associations’ actions were not arbitrary and capricious).
“In the instant case, the plaintiffs allege as a result of defendant’s actions they sustained damages for loss of reputation. However, there is nothing in the record actually demonstrating how the revocation of the Championship resulted in a loss of reputation. Forfeiture of the Championship may constitute harm; however, plaintiffs fail to include any particularized and actual injury that has occurred. In North Carolina, the injury in fact must be particularized and actual, not hypothetical or conjectural. Coker v. DaimlerChrysler Corp., 172 N.C. App. 386, 391, 617 S.E.2d 306, 310 (2005). Plaintiffs speculated that the forfeiture of the Championship could cause possible harm in the form of lost scholarships, lost job opportunities, and lost college prospects. However, these possibilities were all hypothetical. If a party suffered a particularized, actual loss from the revocation of the Championship, it was the school, NGHS. Therefore, the only party capable of challenging the defendant’s decision to revoke the Championship is the school. Even if plaintiffs’ contention that the defendant failed to follow its rules is correct, since the plaintiffs did not suffer a particularized actual loss, they do not have standing to challenge the defendant’s decision on this basis.”
David Arendas, JR., et al. v. North Carolina High School Athletic Association, INC.; Ct.App.N.C.; NO. COA11-359, 2011 N.C. App. LEXIS 2333; 11/15/11.
Attorneys of Record: (for plaintiff-appellants) Pinto Coates Kyre & Brown, PLLC by David L. Brown and Jon Ward. (for defendant-appellee) Maxwell, Freeman & Bowman, P.A., by James B. Maxwell.
