crg

December 22nd, 2023 at 11:04 AM ^

A few tidbits from the livestream:

  • FSU has not been allowed to see a final signed/executed copy of the GoR agreement.
  • Allegedly the GoR contract has a unilateral option for ESPN to extend/decline from 2027-2036.
  • Lawsuit will have seven claims, among them: 
  1. The GOR and its withdrawal penalty violates Florida law as it is an improper and excessive restraint on trade;

  2. The withdrawal penalty is unenforceable because it is only punitive, not a proper form of liquidated damages rationally related to the harm the ACC would suffer as a result of FSU's withdrawal;

  3. The ACC allegedly breached the contract/its fiduciary duties to FSU on various occasions;

  4. The GOR is unconscionable and against public policy.

highlow

December 22nd, 2023 at 11:34 AM ^

My sense as a lawyer:

  • The "can't see the contract except in person" is very weird.  I've never heard of that happening to contracts that you are party to.  I know that happens with all kinds of confidential documents, but that's wild.
  • The withdrawal penalty argument could be very strong.  Basically in the US the fee for breaking a contract is just the economic damages it causes the other person.  You can't have a "penalty" that goes above that.
  • Public policy is a weak argument.  That's just "don't enforce this very mean contract," which very rarely works.  FSU was a sophisticated party that signed the GoR of its own free will, which is usually all it takes to defeat this.
  • "Restraint on trade" sounds unusual, that's an antitrust-ish argument.  No idea how it comes out but it doesn't seem like the ACC holds a monopoly on football and used it to harm FSU.
  • The ACC shouldn't have a fiduciary duty to FSU - that's not how fiduciary duties work.  (A fiduciary duty is basically a duty of total loyalty - but it's essentially impossible to satisfy fiduciary duties to multiple parties with divergent interests, like FSU and all the other conference members.)
  • The contract breach claims may have merit, but the remedy for breach of a contract isn't always cancellation.

What's more interesting to me is that they're pressing seven claims.  That's a lot; usually people who are confident in their arguments pick the 2-3 strongest ones and hammer them; 7 arguments smells like "spaghetti at the wall."

There's a long timeline here if this case is litigated - maybe 18 months from filing to get a first decision (but it could be longer), another year for an appeal, and then again when they appeal to the Supreme Court (which may or may not accept, but it'll be 4-5 months while they decide, probably).  They could settle at any time during this process.

As the guy who said yesterday that FSU looked bad for constantly saying they'd do something about the ACC without doing anything, kudos to them for giving it a shot.

MGlobules

December 23rd, 2023 at 9:29 AM ^

Agree that the withdrawal penalty argument looks strongest at first sight. I don't think FSU DOES have a strong case. Throwing around what look like a lot of reasons at such a public gathering shouldn't surprise. What was really going on here was a throwing down of the gauntlet, and a public declaration that FSU will move heaven and earth. First steps toward a settlement, as it were. If they can save tens of millions on the way out--especially by tying up ACC lawyers--it may be worth it to them. Without a clear destination, though. . .

 

UM85

December 22nd, 2023 at 12:39 PM ^

Gosh, and here I thought FSU vetted the GoR in advance, sought full input from its lawyers, was provided full opportunity to offer alternative language / clauses,  and at the conclusion of this process, its Board of Trustees authorized its signature and execution.

Clarence Beeks

December 22nd, 2023 at 12:26 PM ^

I’m going to laugh my you know what off when that filing by the ACC is the thing that proves to be the ACC’s undoing in this whole matter. Who in their right mind approved the filing of that BEFORE FSU’s board met and filed what it did today? Furthermore, prior NC court rulings are in favor of FSU on the penalty arguments, specifically. This is going to be fun to watch play out.

MGlobules

December 23rd, 2023 at 9:33 AM ^

I would like FSU to join the B1G. But I don't think you're right. Innumerable hurdles, starting with the very weak legal case as presented. If and when FSU gets out (they have to have somewhere to go, right, an invitation?) they are going to get there limping, down a butt-load of money and with--quite possibly--a private equity firm owning part of their AD. Bad precedent.

Lots of analysis over the last several years, and conversation with friends here in Tallahassee, convinces me that FSU has little choice but try to bolt--as the president and AD have very frankly told everyone who will listen. But a slam dunk, or one that comes without serious scars, this is absolutely not.

highlow

December 23rd, 2023 at 8:42 AM ^

After reading the complaint - yikes.  This is not a serious legal document.  Not sure if FSU is high on its own supply, they think the lawsuit is going to fail and just want to get quotes for the newspapers, etc, but if I'm the ACC I feel better than I did a few days ago.    

FSU goes very long on the ways the ACC did a bad job, true enough.  But FSU doesn't actually make any arguments for why the contract should be void - it just states a bunch of conclusions.  (The sole exception is the exit fee, where they at least do the basic work of explaining why it's more than the ACC's damages.)  

That's not to say that the case is done-and-dusted, ACC wins, etc.  But it is to say that this is not a document that inspires any confidence in FSU's underlying case or its lawyers.

1VaBlue1

December 22nd, 2023 at 11:06 AM ^

If FSU is anything like Michigan, they'll drop the entire lawsuit a couple days before it goes to court and jump through whatever hoops the ACC tells them to.

Clarence Beeks

December 22nd, 2023 at 11:35 AM ^

I believe it'll be the opposite.  FSU will pursue this, in a way that none of the other dissatisfied schools have, particularly because they are going to basically have unlimited funds to do so, and force the ACC into the position of whether, and to what extent, they are willing to defend this suit and what any settlement negotiations may bring.

highlow

December 22nd, 2023 at 11:57 AM ^

There's only so much you can spend on this kind of litigation.  Maybe $10, $15 mm?  You know, a lot of money, but hardly earthshattering for the ACC.

The helpful comparison here is LIV v. PGA, where LIV was going to sue PGA for everything, all the time - defamation, antitrust, unfair competition, etc, etc, etc, and had Saudi Arabian oil money behind it.  You can run an infinite-money litigation campaign to beat the other side to death, but a narrow contract dispute isn't the way to go.

Clarence Beeks

December 22nd, 2023 at 12:49 PM ^

I agree about the litigation costs, but the big unknown - that impacts the ACC way more - is the potential difference between a settlement and an outright loss in court (which is likely when it comes to the penalty, under NC law, if this makes it to judgment). The biggest thing the ACC can try to hang its hat on is an argument that the member schools cannot sue, thus their declaratory action yesterday, but if it makes it past that, the ACC is… screwed.

highlow

December 22nd, 2023 at 12:04 PM ^

I'm a lawyer too!  But I would be surprised if you're burning more than $15mm on a case that doesn't seem to have fact issues.*  Get your expert economists and handcuff the junior associates to their desks so they can spend all day on Westlaw.  It's not cheap, but it's not something where FSU can so outspend the ACC that the ACC is at a huge disadvantage.

*Surely both sides will try some discovery, etc.  But the issues raised here seem to sound purely legal, outside maybe the contract breach stuff.

bluesalt

December 22nd, 2023 at 12:40 PM ^

I don’t think you understand the going rate for economists.  I’ve been part of some cases where the Econ consulting firms were pulling in $1MM a month, nevermind the high-priced law firms.  Maybe Econ firms are cheaper in Florida than DC, but if this litigation goes any length they can burn through money in a hurry.

highlow

December 23rd, 2023 at 8:45 AM ^

I just don't think those cases are fair comps.  When I think of the economists running up the bills I think (a) lost business damages and (b) antitrust suits.  Here, it's just whether FSU leaving the ACC is > $120 mm in losses, which doesn't seem like it'll cause Charles River or CompassLexecon to break a sweat.

Anyways, from the complaint they hired Greenberg Traurig's Florida office, which isn't in the same $ tier as the firms we're discussing.  

Oregon Wolverine

December 23rd, 2023 at 12:39 PM ^

Top FL lawyers are $600/hr, which sounds like a lot, but pales in comparison to NYC, DC, Boston, etc.  Still, assuming two partners who are strategizing and doing light grinding ($500/hr ea), a Sr Associate who is grinding very hard trying to impress and make partner ($350/hr), two Jr Associates who are grinding very hard trying to impress and make it to Sr Associate and a chance at making partner ($200-250/hr ea), and a paralegal or two ($150-175/hr ea), the invoices on this project get out of hand very quickly.  Add in economists, consultants and PR, the budget is easily in the $10-15KK range, but if it goes to actual litigation, I bet the over.  
 

I’ve done big firm and small firm litigation, once the case gets close to court, the grinding goes to the next level — way above present levels — especially if clients are emotionally invested and the $$ stakes are this high.  

Hensons Mobile…

December 22nd, 2023 at 11:44 AM ^

Pardon me while I take this opening to rehash that fiasco.

Michigan caving is a tremendous disappointment and dissatisfying to the point that it's alarming. When UM and Harbaugh both dropped the lawsuit and accepted the suspension, there was an immediate rush here to explain it. First it was, "We just wanted to get rid of the distraction." That made no sense but I won't bother picking it apart because we quickly learned about Partridge and the accepted explanation became, "Oh, we had to drop it because of Partridge."

That also makes no sense. Partridge's compliance failures have no impact on the merits of the case, and we suffered the maximum punishment for Partridge anyway. Had to fire him, and took the PR hit.

I think we still don't know the real reason we dropped the lawsuit, and that's upsetting. Even more upsetting would be if we do know the real reason, because that just means we're chickenshit.

highlow

December 22nd, 2023 at 12:02 PM ^

So I think you're right and you're wrong.  True, Partridge (and the booster funding Conor - I don't get why that matters, but people talk about it like it does) had nothing to do with Michigan's TRO case, which just asked if Harbaugh's suspension right then complied with the bylaws.  Probably not.  But settlements aren't just about the case in court, they're about the whole deal you get.

Those things may have convinced M that a B1G investigation, whenever it finished, might lead to a bigger penalty, so resolving it all for three games was worth it.  Also, and not for nothing, getting investigators out of your hair is maybe goal #1 as a criminal defense attorney (which I'm not, FWIW).  People do stupid shit when they know they're investigated (Partridge) and dealing with an investigation takes real people (not lawyers) a lot of time and effort.

Hensons Mobile…

December 22nd, 2023 at 12:21 PM ^

Your point about getting investigators out of your hair may be the reason. And when UM learned about Partridge, maybe that is what made them second guess the whole thing and ask, gee, is this really worth it? That may be the whole truth.

That goes to my chickenshit comment. It could be the pragmatic and practical decision. But we could have decided that when Petitti asked us to suspend Harbaugh for two games. We could have even decided that when Petitti handed down a three game suspension.

But we didn't. We decided we wanted this fight. All those risks exist as soon as you make that call. We made that call, then at the first sign of trouble tucked our tail.

Boo, I say. Boo.

tybert

December 22nd, 2023 at 12:50 PM ^

I don't think, when we decided to drop the lawsuit, that we full knowledge of just how far SO MANY SCHOOLS (B1G, SEC) hated us, probably because of our awesome coach JH. But I think we saw they probably had more cards in their deck that they would play, including threat of more punishment. 

Behind the scenes, I trust that our attorneys and other investigators continue to quietly dig up more of the sordid details about just who conspired against us, how they got the info (CS's plans), how they coordinated the meticulous timing of "releases" to certain media, exactly who ratted on us internally (Dudek, a few Benedict Arnold's in the vast nation).

What happened to us was a program and coach "assassination" attempt. Ironically, I compare this to what happened to Julius Caesar in Rome. In each case, a Brutus was involved who thought they were "saving" the empire (Rome, NCAA football, etc.) by killing the Caesar (Julius, Jim). In the Roman world, the empire plunged into a dark period of civil wars and Brutus was a failed military leader who later committed suicide. Ohio and their Brutus were definitely the ringleaders but they missed killing our team and our coach. And only succeeded in exiling their QB to Syracuse. 

I still think JH stays with a record deal. His pride alone at making those who attempted this BS to pay for years to come is enough fuel for his fire. If we didn't have Ono (and instead had the doofus Schlissel) then I'd agree that JH would probably leave. 

GO BLUE!

highlow

December 23rd, 2023 at 8:49 AM ^

I agree that it doesn't inspire confidence.  What really surprises me is that Michigan was surprised by Partridge and Uncle T.  The #1 reason you hire a big-gun investigations firm like Williams & Connolly is so you know what's going on.  W&C's first job was to figure out exactly what had happened so M's leadership could know the stakes before making a play.  For this to come out of left field is really disappointing.  

tybert

December 22nd, 2023 at 12:32 PM ^

I truly believe the distraction issue for the players started to have a real impact when the Partridge issue came up and the Uncle T (which has been debunked, otherwise Thamel would still be beating the drum) payola scheme for CS happened the week of the Maryland game. It's normal to look a bit off the week after a big game (at PSU) and a week before The Game. 

I can recall some distractions at work, along with rumors and fear of what's next, started having an impact on attitudes, how people acted toward each other, workplace safety (a lot of near misses in a manufacturing plant) - we had to basically put some issues and concerns that people wanted to elevate to leadership on the backburner for another day. I think the same thing happened with our program.

What is amazing is that this effort to smear the program, coach, players, etc. was so carefully planned and launched to near-perfection. A lot of "evidence" (Connor's budget and travel schedule of the vast nation, etc.) was ready to be released at the desired moment. First, the MSU game week and the threat to skip the game for "safety" reasons. At the same time, rumors of JH signing an extension. Then later, the SEC chimes in with CS's purchase of SEC title game tickets. Then the publicity from the PU coach bogus handshake. While the Partridge thing was likely timed based on his actual "transgressions" the Uncle T thing was clearly planned for a launch IF UM filed a lawsuit.

All of this conspiracy and we STILL WON every game. The loser from this whole story was Kyle McCord (scapegoat for the Ohio loss to UM) and Ryan Day who is in win-or-die mode next year. 38 and 0 vs all B1G but 1-3 vs. UM.