Attorneys for NCAA, Corbett debate merits of governor’s lawsuit over Penn State sanctions

mdawson@centredaily.comMay 21, 2013 

— Fans pinning their hopes on the governor’s lawsuit to reverse the crippling sanctions against the Penn State football team will learn soon whether it survived a motion to dismiss from the NCAA.

That question is now in the hands of Judge Yvette Kane, the chief justice for the Middle District of Pennsylvania, who on Monday heard the lawyers for the NCAA and Gov. Tom Corbett make their cases about whether the governor has the standing to bring the claim and whether his lawsuit showed enough to support an antitrust claim.

Kane did not rule from the bench Monday and said she will have her decision in a couple of weeks. During the hearing, she offered few, if any, clues about which way she will lean, although as she adjourned court, she used a play on words to describe the contrasting arguments from the two-hour proceeding: “We’re not in the same stadium,” she told them.

Corbett filed the lawsuit in January on the grounds the NCAA’s sanctions — the $60 million fine, scholarship reductions and a bowl ban, among others — violated the federal antitrust law. Corbett said the administrators at the NCAA conspired to weaken Penn State on the field.

In turn, a weaker football team would result in a weaker local economy as well as affect the nationwide markets for recruits and merchandise, the lawsuit said.

“Penn State is an economic power source for the commonwealth,” state general counsel James Schultz told the judge. “When the cord no longer exists, it has impacts across the grid.”

That is one of main the points of contention between the NCAA and the governor at this stage of the lawsuit.

NCAA lawyer J. Scott Ballenger said the effects of the sanctions on the local economy, such as hoteliers losing business, are not covered under antitrust law, and he called it “absurd and speculative” that the sanctions would shatter the market for college football licensed apparel such as hoodies and T-shirts.

Furthermore, he said the governor’s claims are about damages to Penn State, which is one competitor, and not college football competition itself.

“Harm to Penn State is not harm to competition,” Ballenger said, “because Gov. Corbett lacks authority to represent Penn State in this action.”

But Schultz told the judge the state is the only entity with the authority to file a lawsuit to protect the interests of those hoteliers. Schultz cited numbers from 2009 to show the effect Penn State football has: $90 million went into the Centre County economy, $165 million to local economies across the state and $5 million to state coffers from tax revenues, he said.

“It’s just more than wins and losses,” Schultz said. “It’s about celebrating what Penn State means to the economy.”

Another lawyer on Corbett’s legal team, Melissa Maxman, told the judge that the way the NCAA handed down the consent decree, through its executive committee, was a “complete departure” from past approaches. Maxman said the real motive was to pile on against Penn State and make the NCAA look tough.

Maxman even said the NCAA bypassed its infractions committee, which is made up mostly of people who are lawyers and law professors, because people with legal backgrounds would have said there was no violation.

Maxman said the sanctions hurt Penn State’s ability to compete for top-notch high school recruits because the university will have 20 fewer scholarships each year.

She said a recruit who could have played at Penn State, but did not have a scholarship available, would turn to a competitor.

Ballenger said there would be little effect on 20 fewer scholarships when there are 10,000 offered already.

Ballenger said Penn State violated the NCAA bylaws pertaining to sportsmanship and honesty, and that university President Rodney Erickson signed the consent decree and accepted responsibility for violating the NCAA’s rules.

The hints from Kane on where the lawsuit is headed were few.

Perhaps she was playing devil’s advocate when she asked Ballenger if it was too soon to dismiss, but Ballenger said the legal failures were already apparent.

Kane also told Maxman that the lawsuit resembled a breach of contract complaint that would be filed by Penn State, and the claims would have to be refitted to apply to the antitrust law.

The NCAA leveled the sanctions after the release of the Freeh report, which concluded that senior Penn State officials concealed abuse allegations against Jerry Sandusky more than a decade ago.

Penn State is not a party to the lawsuit, though a handful of trustees took in the proceeding Monday: Anthony Lubrano, Alvin Clemens, Ira Lubert and trustees-elect Edward Brown and William Oldsey.

Mike Dawson can be reached at 231-4616. Follow him on Twitter @MikeDawsonCDT.

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