OT - Washington Post Article on Maryland/ACC legal situation

There'll be a settlement by the Spring.

Generally, a penalty clause in a contract is unenforceable.  But a "liquidated damages" provision usually is enforceable, so long as two things are true: (i) the damages it is meant to compensate for are difficult to predict or quantify, and (ii) the amount is reasonable in proportion to what those actual damages would be.

I don't really know the numbers on these things, but $50 million doesn't sound all that unreasonable in terms of the damage Maryland's departure would cause the ACC.  

So, here's the ACC's initial lawsuit - (LINK)

I'm not a lawyer, but in the original suit, the ACC asks for a declaratory judgment on the rights and liabilities of the University Of Maryland as the pertain to certain portions of the ACC's constiution, or more succinctly, if they can get the money (the declaratory relief, I assume).

It seems to me that if the conference is withholding royalties because Maryland won't pay the fee (and has a letter to confirm that this is the intent, as another  Post piece indicates), then isn't the ACC sort of ignoring its own official complaint by doing this? Technically, they might be able to do such a thing (as many conferences provide for means to financially penalize their members for wrongdoing), but it seems obvious that this is sparked by bad will on the part of the ACC.

Here's the Washington Post's Terrapins blog, which has some information on Maryland's lawsuit.  The entire  entry is an interesting read,but here's what appears to be the meat of it:

"Gansler’s lawsuit, which was filed in Prince George’s County Circuit Court, alleges that the ACC violated Maryland antitrust lawsuits, “breached contractual obligations and tortiously interfered with the prospective economic advantage of the flagship campus of the University of Maryland System.”

Part of me thinks that they eventually settle on something,  because in the event the ACC found itself on the losing side of a ruling, it would mean that teams could just, well, leave, and I doubt they want this. 

Never underestimate the power of the jurisdictional battle that will take place before the merits of the case are reached. A settlement might be reached based on that outcome alone.

The ACC will have to show irreparable harm in order to enjoin Maryland's move to the B1G. They'll never be able to do that, since they also have to argue that the the 52 million exit fee is in fact reasonable compensation. There is ample precedent that money damages do not constitute irreparable harm. They can't walk away from that issue without walking away from the entire case.

So Maryland will be a B1G member in 2014 come hell or high water. There will be no injunction.

By the time the case reaches trial, there will be numbers on the ACC's actual damages, because Maryland will be gone by then. The conference would have to show that its exit fee is reasonable based on those numbers and projections based on the numbers. It won't be able to do that, all the schools will be making more money under the 2012 extension of TV rights. 52 million will be very hard to justify and will appear to be a penalty.

If it is clear from those numbers that the ACC will suffer no loss at all, then Maryland wins or gets out on the cheap.

This might be dangerous precedent for the ACC. I wouldn't bet on the ACC in this one, and that's why it'll be settled.

It would be very interesting to see the projections that were given to Louisville to encourage their ACC membership.