Florida State asks top NC court to step into ACC dispute

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  • Florida State University is asking North Carolina's highest court to block a lower court ruling favoring the Atlantic Coast Conference in a multimillion-dollar dispute.
  • FSU wants the North Carolina Supreme Court to block proceedings in a North Carolina case while a similar dispute with the ACC plays out in a Florida court.
  • A court filing describes the case as a "nearly $700 million" dispute over the penalty Florida State could face if it leaves the ACC.

Florida State University is asking the North Carolina Supreme Court to enter the “$700 million” legal dispute between FSU and the Atlantic Coast Conference. The money is tied to penalties the university could face if it leaves the ACC.

In a court filing Friday, Charlotte- and Tallahassee-based lawyers representing FSU asked North Carolina’s high court to consider an April ruling from the state’s Business Court. The Florida school wants Judge Louis Bledsoe’s ruling blocked while a separate lawsuit plays out in a Florida courtroom.

The document cites Bledsoe’s “erroneous denial of the FSU Board’s request for a stay of this action” as the competing case moves forward in the Sunshine State.

“This underlying dispute involves competing actions in separate states concerning the rights and obligations of FSU and the ACC under the 2013 Grant of Rights and the 2016 Amended Grant of Rights agreements (collectively, the ‘Grants of Rights’), though the Florida Action also encompasses causes of action involving the ACC Constitution and Bylaws, and other laws, with hundreds of millions of dollars at issue,” FSU’s lawyers wrote.

“The Grants of Rights are purported contracts whereby the ACC members allegedly aggregated their media rights for their respective ‘home games’ to the ACC so that it could allegedly market those rights and negotiate long-term media deals with third-party broadcasters, like ESPN, on the members’ behalf and for their benefit,” the court filing continued. “But the ACC had been doing much the same thing under its Constitution and Bylaws for decades.”

“Indeed, the ACC actually ‘entered into its first Multi-Media Agreement with ESPN … grant[ing] ESPN’ these aggregated media rights in 2010 (three years before the first ‘Grant of Rights’ was even executed) and then established the template for the still-controlling media rights agreements and payments in a 2012 amendment thereof (one year before the first ‘Grant of Rights’ was even executed). FSU contends the Grants of Rights add nothing to this pre-existing mechanism and were unnecessary for the ACC to negotiate and enter contracts with ESPN,” FSU lawyers wrote.

Florida State questioned a timeline of the ACC’s “preemptive” North Carolina suit. “On the morning of 21 December 2023, the FSU Board noticed a special emergency meeting for 10:00 am on 22 December 2023,” according to the court filing. “Just a few hours after this announcement, the ACC initiated the underlying litigation by e-filing its 33-page, 146-paragraph Complaint for Declaratory Judgment (‘Initial Complaint’) at 5:18 p.m. in Superior Court, Mecklenburg County, without providing any notice to its members or taking the ‘Required Vote’ mandated by its Constitution.”

The state Supreme Court document contrasted the ACC’s treatment of Florida State with two other legal disputes. “Unlike the ACC-Maryland and ACC-Clemson cases, the ACC neither pleaded that it complied with the ACC Constitution, nor that it had sought and obtained member approval prior to initiating the action against the FSU Board,” according to the court filing.

FSU filed its lawsuit against the ACC in a Florida court on the same day as the special trustees meeting. It challenges a “withdrawal payment” the university would face if it leaves the conference.

“In the Florida Action, the FSU Board seeks a declaration from the Florida Courts addressing among other things (i) whether the Grant of Rights transferred to the ACC media rights that are not necessary for the ACC to fulfill its obligations under the ESPN Agreements, (ii) whether the withdrawal payment called for by Article 1.4.5 is an unenforceable penalty, (iii) whether the ACC has committed multiple material breaches of the ACC Constitution and Bylaws just with respect to FSU, and (iv) whether under Fla. Stat. § 542.18, the ACC’s penalty apparatus amounts to an unenforceable restraint on trade under Florida law.”

Lawyers argued that the Florida lawsuit covers the same ground as the ACC’s case in North Carolina, along with other claims FSU makes against the conference. Those claims include “almost a dozen alleged breaches of contract by the ACC under the ACC Constitution and Bylaws with respect to FSU; as well as several claims that the ACC – as fiduciary of FSU – abjectly failed to manage the conference, including by not exploiting and maximizing the media rights of its members (years before the ACC first conceived the Grant of Rights), misrepresenting the terms of those media agreements as well as the scope of the Grant of Rights, and cloaking in secrecy and distorting not just its dealings with ESPN but the actual legal and monetary terms of the ACC agreements with ESPN.”

“Moreover, the Florida Action challenges the entire penalty structure of the ACC (not just the Grants of Rights), a multitude of ACC breaches of the ACC Bylaws and Constitution with respect to FSU, and reaches into matters of restraint of trade, public policy, breach of contract, and whether the ACC has fulfilled its contractual duties to FSU expressly set forth in the ACC Constitution and Bylaws,” the court filing added.

A Florida court already has issued a May 6 order denying the ACC’s request to block the Florida case from moving forward.

The conference will have a chance to respond to Florida State’s state Supreme Court filing. There is no deadline for the high court to decide whether to take action.