The NCAA already has one court victory over Pennsylvania, and a lawyer for college sports’ governing body argued Wednesday that the lawsuit brought by a local senator has too many flaws and should be tossed out.
Lawyers for the NCAA and state Sen. Jake Corman went before the judges from the state’s Commonwealth Court for oral arguments on the lawsuit that seeks to keep in Pennsylvania the whole $60 million fine Penn State is paying for the Jerry Sandusky scandal.
But Penn State finds itself caught between two warring factions. According to the NCAA’s consent decree, the money will be put in an endowment to spend on child abuse programs and prevention with no more than a quarter of the money staying in the state. But Corman sponsored a law earlier this year that would require sizable fines against universities be deposited into the state treasury.
The panel of judges, which played devil’s advocate when questioning both the lawyers for the NCAA and Corman about their arguments, did not immediately rule. It was not clear which way they were leaning, although one judge, Dan Pellegrini, seemed to think that the lawsuit targeted the wrong defendant and should have been filed against Penn State.
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Penn State is not a party in the lawsuit.
NCAA lawyer Everett Johnson told the judges that Corman and fellow state Treasurer Rob McCord, who joined the lawsuit, do not have the legal standing to sue and take control of the $60 million. Penn State moved in December to make the first of five annual $12 million payments toward paying off the fine by putting the money in a separate account, but the two lawyers on Wednesday argued different interpretations of which organization had control of the money.
Johnson said the state treasurer cannot sue because that office does not have the authority to collect a debt, such as the $60 million fine. Instead, that would be the realm of the state attorney general, he said.
Johnson described the Corman law as one that essentially allows the state to jump in and grab fine money if there is no specific direction on what is to be done with it. It’s “an expansive intrusion into the historical autonomy of Penn State,” but he said the university still has not technically made the first payment and therefore had not triggered the law.
Johnson also railed against the law, telling the judges that it violates the Commerce Clause of the U.S. Constitution and was the result of “home team legislation.”
The lawyer for Corman, Matt Haverstick, fought back and said the consent decree was silent on whose money the fine would be. He said it didn’t belong to the NCAA because the consent decree does not specify the owner of the endowment.
Haverstick said the money was in effect being expropriated from Penn State and could be sent anywhere. As a result, state officials took it upon themselves to regulate it.
Pellegrini, the president judge of the court, and Judge Bonnie Leadbetter questioned Haverstick why the suit didn’t take aim at Penn State instead of the NCAA.
“You’re making the perfect arguments why Penn State is an indispensable party,” said Pellegrini, using a legal term that refers to a group not in a lawsuit that is essential in the litigation. “Isn’t your complaint really with Penn State?”
Haverstick said suing Penn State was not necessary because all the parties concede that when the money is released it will be controlled by the NCAA.
Pellegrini told Haverstick he had a problem with the notion that the state treasurer would be the custodian of the money, saying that would make the treasurer “to be almost an attorney general.”
Last week, Corman and McCord asked for court-ordered mediation, but the NCAA opposed the request. Johnson, the NCAA lawyer, dismissed the idea of mediation as a settlement, and he said the only settlement here is the consent decree that Penn State signed.
Pellegrini said the sides will be given another chance at mediation 48 hours before the ruling is made.
One of the seven justices who heard the arguments was Renee Cohn Jubelirer, the wife of former state Sen. Bob Jubelirer, and they both live in Boalsburg. Her husband ran for a seat on Penn State’s board of trustees earlier this year.
In addition to Pellegrini, Leadbetter and Renee Cohn Jubelirer, the other justices were Anne Covey, Patricia McCullough, Bernard McGinley and Robert Simpson.
After the hearing, Johnson declined to comment, but Haverstick seemed optimistic.
Haverstick said if the judges uphold the lawsuit, the case will move to the discovery phase and likely would include a deposition of NCAA President Mark Emmert.
Emmert and the NCAA were the target of a lawsuit by Gov. Tom Corbett, who sued to reverse the stiff sanctions against Penn State. Corbett accused the NCAA of violating federal antitrust laws with the sanctions, but a federal judge in Harrisburg threw out the lawsuit.
The NCAA countersued Corbett and other state officials after the Corman law was enacted. That suit is in federal court, and the state officials named in the suit have filed motions opposing it.