Court Nixes NCAA-PSU’s Attempt to Dismiss Lawsuit over $60M Fine

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A Pennsylvania Commonwealth Court denied the NCAA’s motion to dismiss a lawsuit filed by state Senator Jake Corman and Treasurer Rob McCord.  The suit is seeking to enforce the 2012 Higher Education Monetary Penalty Endowment Act (the “Act”) on the $60 million fine imposed on Penn State (“PSU”).  In the wake of the Jerry Sandusky child molestation scandal, the NCAA in 2012 imposed the penalty as part of a consent decree.  Under the Act, the NCAA fine must be used to prevent child sexual abuse and care for the survivors in Pennsylvania.  However, the NCAA initially intended to distribute the funds nationally.

After it agreed to keep the fund in Pennsylvania, the NCAA filed a motion to dismiss the suit arguing that since the NCAA and Penn State agreed to follow the terms of the Act, the lawsuit essentially became moot.

In a ruling issued by Judge Anne E. Covey on October 3, the court disagreed, stating the NCAA and PSU were attempting to “usurp the court’s authority by declaring the consent decree valid.”  Because the validity of the consent decree has broad implications, Judge Covey said that the validity issue “w[ould] not be decided until after a hearing on the disputed factual issues.”  Therefore, “[t]he NCAA and PSU cannot dismiss themselves from litigation by declaring the consent decree valid and simply agreeing to do that which the law already requires.”

In a statement, Donald Remy, the NCAA’s chief legal officer, said he was surprised by the decision because the league decided to follow the Act even though it believes the Act is unconstitutional.  Remy said the court’s order would

“indefinitely delay[] distribution of those funds.”

On a related note, the NCAA filed a motion to expedite its federal court case challenging the constitutionality of the Act.  The filing submitted today is in response to Judge Covey’s decision.  According to the court document, the NCAA expects the federal court to find that the Act is unconstitutional and that the decision “should moot the controversy.”

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