Athletic director Kevin Anderson
The university’s attempt to dismiss a lawsuit filed by the ACC to ensure a more than $52 million exit fee is paid in full proved unsuccessful Monday after a North Carolina judge denied the motion.
After university President Wallace Loh announced in November the university would be leaving the ACC for the Big Ten in 2014, the ACC quickly filed a lawsuit to enforce the exit fee, which was instituted in September. Last month, the state filed a motion arguing that as a public institution, the university is an entity of the state, meaning it has sovereign immunity and cannot be sued in a North Carolina court.
The ACC, whose headquarters are in North Carolina, said the university is not protected under sovereign immunity in contractual claims.
The state’s attorneys have 30 days to appeal the ruling. The state is now “considering its options,” said David Paulson, a spokesman for state Attorney General Doug Gansler.
Loh and Florida State President Eric Barron were the only two dissenting votes when the ACC voted to hike its exit fee from $20 million to more than $52 million in September, the same time at which the conference’s council of presidents unanimously voted to admit Notre Dame as its 15th member in all sports except football. Loh, who said he was not thinking of joining the Big Ten at the time, said he opposed the fee for “philosophical and legal reasons.”
Loh declined to comment on the lawsuit, as the case is ongoing. The university is directing all calls for comment to the state attorney general’s office.
In November, Loh said he was confident university officials would be able to negotiate a lower exit fee with the ACC. However, the possibility of paying the full fee was taken into consideration when considering the move, Loh said, noting the university will benefit financially from the conference switch either way.
“We will sit down and have private conversations with the ACC about the exit fee, and whatever the eventual exit fee is, my statement still stands. We will be ensuring the financial health of athletics,” Loh said in November.
The state is also suing the ACC for violating antitrust laws.
“Our lawsuit calls the ACC’s ‘exit fee’ what it really is — an antitrust violation and an illegal penalty,” Gansler said in a January statement following the lawsuit’s announcement.
ACC Commissioner John Swofford said he expects the university to uphold its obligations to the conference.
“We continue to extend our best wishes to the University of Maryland,” Swofford said in a statement in November following the ACC’s lawsuit announcement. “However, there is the expectation that Maryland will fulfill its exit fee obligation.”
