Pa. files federal antitrust suit against NCAA over Penn State sanctions stemming from Sandusky scandal

By Jon Campisi | Jan 3, 2013

The Commonwealth of Pennsylvania is suing the NCAA over allegations that the college

The Commonwealth of Pennsylvania is suing the NCAA over allegations that the college

sports association’s sanctions against Penn State University arising out of the Jerry Sandusky child sex-abuse scandal violate federal antitrust laws.

Gov. Tom Corbett announced during a news conference in the state’s capitol on Wednesday that his administration would be filing a federal lawsuit in the U.S. District Court in Harrisburg seeking to overturn the sanctions against Penn State by the National Collegiate Athletic Association.

The governor, on behalf of Pennsylvania citizens, is asking a federal judge to throw out all of the NCAA’s sanctions against the university, including the $60 million fine, and asked that the court declare a consent agreement between the NCAA and the college illegal.

“These punishments threaten to have a devastating, long-lasting and irreparable effect on the state, its citizens and its economy,” Corbett said in a prepared statement at the news conference.

The contents of his address were included in a press release put out by his office announcing the lawsuit.

A copy of the actual complaint showed up on the federal courts’ website late Wednesday afternoon.

In the news release, Corbett was quoted as calling the NCAA’s sanctions against Penn State “unprecedented, overreaching and unlawful.”

“The only logical conclusion is that the NCAA did it because they benefitted from the penalties and because the leadership of the NCAA believed they could,” Corbett said. “And that’s wrong.

“These sanctions are an attack on past, present and future students of Penn State, the citizens of our commonwealth and our economy,” the governor continued. “As governor of this commonwealth, I cannot and will not stand by and let it happen without a fight.”

Sandusky, the former defensive coordinator for the Nittany Lions football team, was convicted in June of sexually abusing 10 underage boys over the course of 15 years.

He was sentenced in October to between 30 and 60 years in state prison.

Sandusky’s lawyers have since appealed their client’s conviction.

The sex-abuse scandal, which gained worldwide media attention, led to the subsequent firing of longtime football coach Joe Paterno, who died soon after his termination.

Three former Penn State administrators have since been charged criminally in relation to the scandal and currently await trial.

They are former President Graham Spanier, former vice president Gary Schultz and former athletic director Tim Curley.

In his statement, Corbett called the NCAA’s application of enforcement “arbitrary and capricious” with the goal of crippling Penn State’s football program and harming Pennsylvania citizens who benefit from a successful Penn State football program, such as university students who serve tables at a State College, Pa. restaurant and local business owners who operate in the area.

Corbett said that the NCAA is a trade association whose sole purpose is to set the rules for competition in intercollegiate athletics and exists by mutual consent of its members.

“However, the NCAA leadership can’t make up its own rules,” Corbett said, noting that in this particular case, a “handful of top NCAA officials simply inserted themselves into an issue they had no authority to police and one that was clearly being handled by the justice system.”

Corbett and his administration have taken issue with the fact that while no NCAA rules had been violated through Sandusky’s actions, the association nevertheless decided to punish the school’s football program.

“The fact that the alleged actions of those involved in the tragic events at Penn State were criminal, and that no violation of NCAA rules had been identified, would not dissuade Mark Emmert, NCAA president, from seizing upon the international publicity to make a show of unprecedented and aggressive discipline,” reads the press notice from the governor’s office. “The NCAA simply informed Penn State what the punishments would be, threatening that if Penn State did not waive its right to due process and accept the sanctions offered, the NCAA would impose the ‘death penalty’ for four years, which would forbid the football team from all competition.”

Corbett said Penn State really had no choice but to accept the sanctions, which, in addition to the hefty fine, would include releasing players from their commitment to play in State College, and abiding by a four-year ban on bowl games, something that the governor said would result in a drastic reduction in scholarships for football players who had nothing to do with Sandusky’s illegal activities.

“They wiped out the wins for football alumni – who proudly wore the Penn State uniform and represented the university well during their time in school,” Corbett said.

The lawsuit states that while antitrust laws permit an association such as the NCAA to impose and enforce rules or standards to promote certain precompetitive purposes, such rules must be reasonably related to the those purposes, and must be enforced through procedures designed to prevent their “arbitrary application.”

“The NCAA’s sanctions against Penn State fail to meet these requirements,” the complaint states. “The NCAA has punished Penn State without citing a single concrete NCAA rule that Penn State has broken, for conduct that in no way compromised the NCAA’s mission of fair competition, and with a complete disregard for the NCAA’s own enforcement procedures.”

In arguing that the NCAA violated antitrust laws, the plaintiffs claim that the association and its “co-conspirators’ anticompetitive acts were intentionally directed at the United States market and had a substantial and foreseeable effect on interstate commerce, including but not limited to hospitality revenues, the flow of scholarship funds, and the allocation of revenues and profits in the relevant markets.

Legal observers have said that the commonwealth and the governor have standing to sue because Penn State receives state funding.

According to the governor’s office, Penn State was the second most profitable collegiate athletic program in the country for the years of 2010 and 2011, earning more than $50 million in total.

Corbett said Penn State is an “economic engine,” creating jobs both inside and outside of the university.

The NCAA’s sanctions didn’t punish Sandusky for his “despicable and criminal actions,” the governor stated, nor did they punish the others who are being charged criminally.

What the sanctions did do, Corbett announced, was punish the school’s students, athletes, faculty members, businesses and state citizens who have “come to cherish this great university.”

Meanwhile, Penn State issued its own statement regarding the lawsuit.

On its website, the university emphasized that it is not a party to the litigation and had not been involved in the suit’s preparation or filing.

“The University is committed to full compliance with the Consent Decree, the Athletics Integrity Agreement and, as appropriate, the implementation of the Freeh report recommendations,” the school stated, referring, in part, to the report prepared by former FBI director and former federal judge Louis Freeh, who had conducted an independent investigation into what university officials knew about the sex-abuse scandal, and also what steps could be taken to ensure such a tragedy would never happen again.

In the statement, Penn State said it continues to move forward with an “unwavering commitment to excellence and integrity in all aspects of our University.”

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