PENNSYLVANIA RECORD

In the continuation of a seemingly ongoing saga between an athletic agency and state

government, the NCAA turned around and filed suit this week against Pennsylvania Gov. Tom Corbett and other commonwealth officials over the recently passed law that requires Penn State University’s fine money to the National Collegiate Athletic Association to remain in the Keystone State.

Corbett this week signed into law a bill by state Sen. Jake Corman that is designed to prevent the NCAA from dispersing the millions of dollars in fines that arose out of the Jerry Sandusky child sex-abuse scandal to anyone or any organization outside of the commonwealth.

The NCAA entered into a consent decree with Penn State this past summer in which the university agreed to pay a $60 million fine over a five-year period that would be placed into an endowment for programs designed to prevent childhood sexual abuse.

The sanctions against Penn State also included the NCAA taking away many wins from the Nittany Lions football team.

Penn State has reportedly already paid about $12 million of the fine.

Earlier this month, the state Senate passed Bill 187, which had been introduced by Corman, a Republican who represents a district that includes State College, Pa., and provides that all of Penn State’s fine money be paid into Pennsylvania’s state treasury to be used toward in-state child molestation prevention programs.

Corbett subsequently signed the bill into law.

On Feb. 20, lawyers representing the NCAA filed suit in the U.S. District Court in Harrisburg over allegations that the recently passed state law violates the United States Constitution.

The complaint alleges that the new law disrupts interstate commerce by “attempting to legislate where private parties spend their money, and to confiscate funds intended for the victims of child sexual abuse nationwide to be used solely for the benefit of Pennsylvania residents.”

The law, titled the Pennsylvania Institution of Higher Education Consent Decree Endowment Act, is unconstitutional and cannot be enforced, the suit maintains.

The NCAA seeks declaratory and injunctive relief, in addition to attorneys’ fees and costs.

In its complaint, the NCAA claims that a memorandum circulated by Corman to fellow lawmakers late last year makes clear that the “obvious and explicit purpose of the Act was to seize the NCAA’s Fine and redirect it only to Pennsylvania causes.”

The legislation, the memo noted, will require that any higher education institution that receives state appropriated funds and has received a penalty of $10 million or more from an outside governing body must establish an endowment that will distribute the funds directly into the commonwealth, according to the complaint.

“The Act is not limited to monetary penalties paid with state funds, but rather it applies to all monetary penalties paid by an institution of higher education – whether the funds come from private donations, tuition, revenues generated by athletics, or other sources – as long as that institution receives any state-appropriated funds,” the lawsuit states.

The suit alleges that the state law violates the Takings Clause of the U.S. Constitution’s Fifth Amendment, as well as the federal constitution’s Contract Clause and Commerce Clause.

Corbett had earlier filed his own lawsuit against the NCAA at the federal court in Harrisburg over the hefty fine levied on Penn State in the wake of the Sandusky sex-abuse scandal.

That suit, which the NCAA is seeking to dismiss, alleges that the NCCA’s actions violate antitrust laws.

In its motion to dismiss that action, the NCAA argued that the governor is inappropriately attempting to drag the federal courts into an “intra-state political dispute.”

One of the NCAA’s lawyers wrote in the dismissal filing that the “remedial measures that Penn State agreed to were controversial, and have elicited strong feelings on all sides,” but that none of those feelings have anything to do with antitrust laws.

As for the latest litigation initiated by NCAA against Pennsylvania officials, the association’s chief legal officer, Donald Remy, said in a statement that “state governments can’t simply pass laws to rewrite private agreements and divert private money to their own coffers.

“This is an important principle of federal constitutional law that affects not just the NCAA, but also any party seeking to do business with a state-related or private entity,” Remy continued. “The state has attempted to grant itself the ability to do whatever it wants to whomever it wants. The United States Constitution does not permit this kind of legislative overreach.”

In his own statement, Mark Emmert, the NCAA’s president, said that if NCAA members or state lawmakers “take it upon themselves to decide what sanctions are appropriate, simply to protect their home team, then collegiate sports would be dramatically altered.”

The Philadelphia Inquirer quoted a Corbett spokesperson as saying that the governor supported the controversial bill, and signed it into law, “because he believes it is important to keep this money in Pennsylvania. He believes it makes sense and is the right thing to do.”

In addition to Corbett, the other defendants listed in the NCAA’s lawsuit are Pennsylvania Treasurer Rob McCord, state Auditor General Eugene DePasquale, and Mark R. Zimmer, the chairman of the Pennsylvania Commission on Crime and Delinquency.

The civil action was filed by Thomas W. Scott, an attorney with Harrisburg-based Killian & Gephart.

 

The federal case number is 1:13-cv-00457-YK.