NCAA Returns Favor, Files Lawsuit Against Pennsylvania Over Bill 187 Targeting Penn State Fines

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In the continuing soap opera that has emerged from the Penn State child sex abuse scandal, the National Collegiate Athletic Association (NCAA) filed its own lawsuit in late February against Pennsylvania Governor Tom Corbett and state treasurer Rob McCord; auditor general Eugene DePasquale; and the chairman of the Pennsylvania Commission on Crime and Delinquency, Mark R. Zimmer. This suit comes just over one month after the Governor’s own lawsuit against the NCAA for the crippling sanctions-including a $60 million fine-the NCAA imposed on Penn State as a result of criminal acts involving minors committed by former assistant football coach Jerry Sandusky. The NCAA’s lawsuit stems from a newly enacted bill which requires the fine money which Penn State will be required to pay to the NCAA to remain in Pennsylvania and be spent only within the Commonwealth.

The Governor’s Bill “187” was designed to prevent the NCAA from disbursing the millions in fines that arose out of the Jerry Sandusky scandal to any individual or organization outside of Pennsylvania. As has been well documented, the NCAA entered into a consent decree with Penn State this past summer detailing various sanctions imposed against the University. As a result of that decree, Penn State agreed to pay $60 million in fines over a five year period. The NCAA ordered Penn State to pay the penalty funds into an endowment for external programs preventing child sexual abuse or assisting victims.

Though Penn State has reportedly already paid about $12 million to the NCAA, the Pennsylvania Senate recently passed Bill 187 which requires that all of the aforementioned fines should be paid into the Commonwealth’s State treasury (although this money would still be used for in-state child molestation prevention programs). The legislation effectively applies to Penn State and any other institution of higher education that, in accordance to an agreement with a governing body, pays a penalty of at least $10 million in installments over more than a year and uses those funds for a specific purpose. Bill 187 would require these funds to be deposited into an endowment. The endowment would be established as a separate trust fund in Pennsylvania’s treasury.

In response, the NCAA filed a lawsuit in the United States District Court for the Middle District of Pennsylvania on February 20 alleging that the new law violates the United States Constitution. The complaint asks the federal court to rule that Bill 187 is unconstitutional and seeks an injunction to prevent its enforcement. The lawsuit claims that the new legislation is unconstitutional because it disrupts interstate commerce by regulating transactions of out-of-state entities and violates the 5th amendment by diverting funds intended to be spent on victims of child sexual abuse nationwide

A month after calling the Governor’s lawsuit an “affront” to the victims of Sandusky’s crimes, the NCAA has now entrenched itself in an entirely new sideshow. However, the NCAA’s lawsuit may well be meritorious. Certainly, the NCAA’s argument that the consent decree was a binding contract between two parties and that Pennsylvania cannot interfere with that agreement certainly has merit. Moreover, Penn State is a voluntary member of the NCAA. As such, it must follow the rules and obligations of the NCAA’s bylaws. If Penn State agreed it violated those bylaws in light of the Sandusky revelations, it certainly had legitimate authority to enter into the consent agreement without consulting with any third-party. How Pennsylvania may justifiably invalidate that agreement and effectively confiscate the millions in fines remains to be seen.

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