Conversation With a Lawyer: Does Corbett's Lawsuit Stand a Chance?

On Wednesday January 2nd, Pennsylvania Governor Tom Corbett filed a suit against the NCAA. While most of us just rolled our eyes at what is basically perceived as a mix of sour grapes and dead horse beating, it was at least worth noting that this might have some merit, right? Even though Tark the Shark got beaten to death by the Supreme Court lo these many years ago in his case versus the NCAA, the more I looked into this thing, the more I thought that, "Yeah, this Corbett guy might actually make some sense." Of course, that also assumes I have even a modicum of understanding of a) law and b) law filings. I have neither and so I brought in one of the experts we have on staff because, you know, we got a ton of lawyers. Hilary agreed to try and explain law to a very much so non-lawyer like me and the following is what transpired.

Jesse:

Alright Hilary... let me get this straight. Governor Corbett is basically asserting that the previous designation of what the NCAA can levy against a school and/or person are moot in the Penn State case because the punishment affects more than athletics, right? This seems like a pretty big deal outside of the obvious monetary issues in that it can actually screw with who or what the NCAA is, right? Moreover, that's a pretty big freaking deal that we should all maybe pay attention to. Is there more to it? Also, why must all law filings be double spaced and nearly impossible to read?

Hilary:

First off, a caveat. I'm a relatively new lawyer, so I can't claim decades of federal court litigation experience to back up my answers. But, I did work at the Antitrust Division of the U.S. Department of Justice for six months while in law school, so I like to think that I at least understand antitrust law a little bit. Also, while in school, I wrote a lengthy article on the NCAA and antitrust law, so I'm familiar with past antitrust cases in the collegiate sports context.

So your first question is really a three parter. First you seem to be asking how the governor of Pennsylvania is able to file this suit with the University completely uninvolved, what is the suit saying the NCAA did, and why should the rest of us care? I'll take these each one at a time.

We'll start with how the governor is able to bring this suit without the involvement of the University. One of the basic parts of any lawsuit is that the person bringing the suit has to have standing -- they have to be the appropriate person (or entity, technically) to sue, otherwise we'd have all sorts of crazy lawsuits clogging up the system by people who have no business suing. There are many ways to get standing, but by far the most common is that the person suing is the person who has suffered an injury that needs to be righted. In this case, that would very obviously be Penn State, since they're the one who is being fined and banned from post-season play. However, the governor here is bringing the suit parens patriae, which is a fancy latin way of saying on behalf of the people of the state of Pennsylvania. One of the antitrust laws in the U.S., the Clayton Act, allows the attorneys general of the states to bring antitrust suits in federal court on behalf of their citizens. In this case, the attorney general of Pennsylvania has apparently delegated his authority over to the governor. To make this all work out, the governor is basically saying that the penalties levied by the NCAA against Penn State affect more than just the university -- they also affect the local economy of Pennsylvania, and therefore, the residents of the state.

As to what the governor is saying the NCAA did.... the suit is less about the NCAA acting as its own entity, and rather about the other universities that make up Division I (and especially the board of directors of Division I and the executive committee). Basically, the governor is saying that these other universities got together and decided to impose penalties on Penn State not because they believed that something at Penn State needed to be corrected, as indicated by the Sandusky events, but because they wanted to weaken a University that they competed against -- for athletes, for students, and for money in the form of merchandise and the like. It's a little bit more complicated than that, but I'll delve deeper into that later.

But, even with all of this, there's still the question of why we should all care. Well, it's not entirely clear what losing (or settling) this suit would mean for the NCAA. The procedures used to levy penalties on Penn State were unique to the situation, and god willing, won't ever be used again, unless we go through something similar with another University. But, even so, if the NCAA loses, this could make them more reluctant to enforce violations of other types in the future. Whether or not that's a good thing is debatable.

And you can blame courts for the way legal fillings look. They all have to comply with specific rules on type size and formatting and the like.

Jesse:

Well, your experience is greater than the absolute zero law knowledge I have so I will continue to refer to you as an expert. Also, I will be writing a letter to the "courts," on their stupid legal filings look. It's more annoying than APA style papers, but let's move on... Basically you boiled this down to Governor Corbett being Mr. Pennsylvania and suing because, "Hey, screw you guys [i.e. the rest of the NCAA]. You're just trying to make us less competitive in a competitive market." If that's the case, then this does sound really dumb, but at the same time, maybe he isn't so far off from reality, right? The thing is, didn't Emmert specifically cite all sorts of legal jargon in his punishment that refuted this claim? The goal of the punishment was to do what all punishments do -- scare the crap out of anybody else thinking about doing something stupid. I mean, we have been taught (almost instinctively so) that we should not mess up lest we go through the same punishments the bad people go through. In fact, I'm pretty sure the threat of getting my name written on the chalkboard in third grade was the one thing keeping me from being a complete anarchist... You know, that and being deathly afraid of people, but that's a different story.

Anyway, so as a layperson I guess what I am asking is how this actually holds up. I know enough about the legal system to know that precedence is a huge part of making decisions in court, but there was really no precedent set here. In fact, just arguing that there was some collusion by member NCAA schools to screw over Penn State competitively seems like a stretch. Even more questionable, is this really the argument Gov. Corbett wants to take to the bank considering he is 'representing' the people of Pennsylvania? It seems to me that if he were to win something like this, the Governor of states in Texas and Florida might start prepping for some really easy cases against the NCAA as well because obviously the NCAA member schools are just trying to screw over the schools that are winning. I can't believe that is how the courts want to proceed (much less the potential cases in other major sporting or private bodies). Of course, maybe I am way off here, but this seems like politicking on Corbett's part at best. He doesn't really stand a chance, does he?

Hilary:

Well, I'd say, crazier things have happened, but no, I don't think that this suit stands much of a chance. At least, not as currently laid out. Despite being a non-lawyer you're on to one of the biggest problems with the current form of the complaint. It doesn't have a whole lot of precedent going for it. [Eds Note: This section has been changed in response to a comment by another one of our lawyer contributors, Chad. Please see the comments for further discussion of this point]. The precedent in this area just isn't all that favorable to the governor's case.

One of the biggest hurdles that the governor is going to face in this complaint is establishing the relevant market. In any antitrust suit, you have to both establish a relevant market and then the harm to competition in that market. Sometimes, establishing a market is pretty simple -- for example, if a bunch of cement companies get together and collude on the price of cement, then the market in question is the market for that type of cement in the area where the cement companies operate.

Establishing a relevant market has always been tricky in NCAA antitrust cases. The governor here tries three different markets, a sort of, throw spaghetti at the wall and hope something sticks approach. The problem is, all of the relevant markets they name have serious precedent problems.

Previous federal court cases have rejected at least two out of three of the markets alleged in this case. In Agnew v. NCAA, a federal district court rejected the contention of a "market" for bachelor's degrees affected by NCAA regulation (with institutions selling and students buying) (it's worth noting that I think that the district court got that one wrong, but, it's still out there, and you can bet the NCAA will be citing to it when they file their motion to dismiss this case). The court in Agnew was actually following precent set by the Seventh Circuit in a different case called Banks which rejected the notion of a market for student athletes (with athletes selling and institutions buying). Again, I think that case is wrong, but that precedent is still there until the Supreme Court decides otherwise.

The third alleged market, the one for merchandise and other tangible products, also faces hurdles. While I'm not aware of any adverse precedent in this area that harms the governor's case, I'm not sure that they'll be able to prove that the fines, by hurting the competitiveness of Penn State football, hurt apparel and merchandise sales. Perhaps, but it's an uphill climb.

Now, it's true that because of the location of the suit in Pennsylvania, none of the adverse precedent I've mentioned will be binding upon the district judge that has to decide this case.... but unless the governor comes up with some good case law in response to the NCAA, I'll bet that this suit gets bounced on a motion to dismiss, with the court referencing at least Banks and possibly Agnew too.

The thing is, I have to believe that the lawyers working for the governor aren't stupid. Most likely, they realize how deficient their brief is and how unlikely it is that they'll win. Therefore, I think this is entirely a PR move. While I personally find it a bit... squicky... for the state to be objecting to the NCAA penalties (much as I felt about the conduct of the Paterno family in recent months), it's possible that the governor's staff feels that the people of Pennsylvania feel differently about the punishments levied on PSU, and that the governor should attempt to look like he's standing up for Pennsylvanians against the bully of the NCAA. Or something like that.

Jesse:

Okay, so what it comes down to is that the courts have pretty much ruled in favor of the NCAA to this point and will probably continue to do so. Got it. But like you also said, there is no way that Corbett doesn't understand that as well. These are not stupid people, at least in the sense of intelligence, and they have got to know they are going to get smoted by the big bad NCAA legal team. So then why even go forward? Politics, I suppose. Super lame.

You do allude to pretty much the last question I have, though. Isn't there at least minimal merit to the notion that the citizens of Pennsylvania shouldn't be ponying up the cash to the larger body that is the NCAA? I mean, I totally get the politics behind this and this is mostly worthless, but the thing I keep coming back to is the idea that it is unreasonable to suggest that a large organization such as the NCAA could levy a coerced penalty without defense that affects not just the member but also citizens legitimately not involved. Since Corbett is representing the state of Pennsylvania, could there maybe be at least a glimmer of hope for the citizens forced to reckon with a fine that isn't even being levied by the courts? Moreover, shouldn't that be how this works? I can totally get behind scholarship reductions and bowl bans, but this whole fine thing seems to be a bit ridiculous to me. Maybe it's totally legal, but I am having trouble even thinking of another private organization that could pull this off. Are sports this out there? Am I missing something painfully obvious?

Hilary:

Well, the NCAA hasn't won every single antitrust suit they've been involved in.... they've lost quite a few, including a Supreme Court case called NCAA v. Board of Regents of the University of Oklahoma, but, by and large they've won more than they've lost. They also have a habit of sweeping cases they might lose under the rug by settling before a court can hand down a decision that creates adverse precedent against them. The end result, though, is that it's very hard to sue the NCAA on antitrust grounds. You need a good argument and good precedent, and the governor here has neither.

There is merit to it. Both to the argument that the fine has the effect of catching blameless citizens of Pennsylvania in its net, as well as the idea that the NCAA should follow its own procedures when investigating rule breaking rather than imposing fines by fiat of the president or the executive committee / board of directors. However, the reason the NCAA imposed a large monetary fine in addition to scholarship reductions and bowl bans. Collegiate athletics has become a huge moneymaking business for universities. Hitting them in the pocketbook, so to speak, is sometimes the only way to get their attention. And though it's true that ordinary citizens of Pennsylvania and fans of Penn State weren't involved in covering up Sandusky's actions (and, i'm almost certain, were by and large appalled by the coverup), they were complicit in forming the football culture that perhaps led to the coverup. Just as we are all complicit with our own fandom of the universities that we follow. We've all had a hand in turning college football into what it is today... and just as we can share in the benefits that can be derived from that, sometimes, we have to share in the consequences.

As to the argument concerning the procedure that the NCAA followed.... yes, there's argument that they should be required to use the committee on infractions. However, Penn State consented to the procedure. Maybe their arm was twisted into doing so, but they still did it. It's rather like a criminal defendant accepting a plea deal instead of going to trial. Yes, they give up some due process in doing so, but they do it because they think the alternative could end up much worse for them. That's in a nutshell what happened with Penn State. I'm not a huge fan of the committee of infractions, either. They have a tendency to punish first and investigate later, as with ruling players ineligible based on tenuous assertions and sometimes outright fabrication, only to later go back on their decision after the infractions committee comes up short. But even though I believe that, and even though I believe that the NCAA needs a serious whuppin' when it comes to antitrust infractions with respect to certain rules governing student athletes (transfer waiting periods, the ability of coaches to control the transfer options of former players, lack of compensation for the use of players' likenesses in video games, and until recently scholarship restrictions), I don't think that this particular issue is one that is appropriately solved in an antitrust suit. It's more appropriately fixed by reforming internal NCAA process.

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I pretty much ran out of questions at this point, and since I know most of you get antsy around the 250 word mark (and this is probably well over 2500 words), I'll just kind of let things be here. I want to thank Hilary again for putting up with my terrible line of questioning. Considering I have zero law knowledge outside of Law & Order SVU, I am not at all qualified to talk on this subject, but it's definitely worth getting more info on. If anyone else has more questions, offer them up in the comments. I'm sure Hilary or anyone else on staff or in the peanut gallery with more credentials than me can help shed some light on the matter. Needless to say, it will be interesting to see where this thing goes.