OSU pays players legal fees to tune of $142k

Submitted by Wolverrrrrrroudy on October 13th, 2011 at 4:54 AM

I find this absolutely unbelievable.  So the NCAA will go after a few hundred extra dollars in unearned pay, but paying the legal fees involved is somehow ok.  Even if you work for a Company that is paying you a salary, legal fees generally don't get covered if you were doing something corrupt.

http://espn.go.com/college-football/story/_/id/7090283/ohio-state-buckeyes-pay-players-lawyer-142000

Comments

bacon

October 13th, 2011 at 5:31 AM ^

It's more amazing that the legal fees over a few hundred dollars are going to cost the school $142k.  Who are they hiring to defend the players?

 

MGlobules

October 13th, 2011 at 10:12 AM ^

for decades to come, way they're going. . . Kids can consult before they flout.

"'The letter, not the spirit' is our motto! O, hellz, screw all those pesky letters, too!!!" Sincerely, OSU.

exmtroj

October 13th, 2011 at 7:06 AM ^

Money well-spent. They're most likely going to get off scot free from the ball-less NCAA, and the lack of probation/scholarship loss/stigma to shoo off a big name coach will save them a boatload in the future and allow them to re-stock their player payroll while laughing at us and the NCAA the whole time

James Burrill Angell

October 13th, 2011 at 7:07 AM ^

Ethically it's questionable whether an entity with possible adverse interests should be paying the legal fees of an individual. I don't know whether it violates NCAA rules about extra benefits.

profitgoblue

October 13th, 2011 at 9:23 AM ^

The whole thing is mind-boggling.  I'd love to see the joint-defense agreement or retention agreement (whatever was signed by the player) that provided that OSU will pay the players' legal fees.  I've seen them, but only where the payor is directing the defense.  If that is the case, then OSU would have been the one directing the lawyer's actions in the players' cases. 

Not to mention the fact that the players are essentially having personal expenses paid by the university.  How is this any different from a player's housing or food expenses?  I don't suppose that the NCAA would allow the university to reimburse those!  Essentially, the fear of legal fees will not serve as a deterrent to the players who violate NCAA rules because they now know that the university will pay them.  Crazy.

michgoblue

October 13th, 2011 at 9:52 AM ^

Not just mind-boggling, but mind-bottling, as well.

On a serious note, there are two ways to look at this:

1.  The way that says it is no big deal

The current investigation is against the university, and not the individuals.  There have been notices of allegation propounded upon OSU, but none directly upon players (except possibly TP).  The players are cooperating with the NCAA, despite having no LEGAL obligation to do so. 

Let me explain why I bolded LEGAL (I did it again):  The NCAA is a governing body that can say to the players, "if you do not cooperate, you cannot play in NCAA-sanctioned games" - i.e. you are off the team.  This is the NCAA's right, but it still is not a legal obligation - the players can simply say, "fine, we won't play anymore" and there would be nothing that the NCAA can do to force them to testify or cooperate.  The NCAA does not have subpoena power.

Now, if the players do not cooperate, that could lead to a negative inference against OSU - basically, the NCAA could say that while the players didn't testify, from their silence, we can assume that what they would have said would have been bad for OSU.  In a court of law, this is often difficult to obtain, but the NCAA is not a court of law and is not subject to the rules of procedure or evidence.  So, by cooperating, the players are actually assisting OSU with its cooperation with the NCAA, but doing so without counsel would expose them to personal problems (potentially), so the NCAA, in recognition of their cooperation, is providing counsel.

This is the positive spin.

Now, reality:

2.  This is entirely legally and ethically improper

There are situations, as profit mentioned, where you can have a joint defense agreement.  This is not one of those situations.  It is certainly possible, if not likely, that OSU and the players have diverging interests.  A lawyer owes 100% loyalty to his/her clients - here, a lawyer who is representing the players but being paid by OSU might be put in a situation where he/she has to choose between the players and the university. 

IF, for example, the players have info on OSU, they may be able to cut a deal with the NCAA that would allow them to retain some eligibility in exchange for full testimony about OSU's misdeads.  Having a lawyer who is on LSU's payroll representing these players reduces the likelihood that the lawyer would seek to cut such a deal on behalf of the players, because it exposes his employer (OSU) to liability. 

By having OSU pay the lawyers, it creates the possibility that OSU is in some way influencing this representation, which is not only improper for OSU but unethical for the lawyer.

This stinks to holy hell.

74polSKA

October 13th, 2011 at 10:04 AM ^

Your detailed explanation makes complete sense.  I'm sure this conflicted legal situation has been played out repeatedly since the NCAA came into existence.  Why has this not been addressed by now?  How many players have "taken one for the team"?  Is there anything about the way the NCAA operates that doesn't stink to holy hell?

93Grad

October 13th, 2011 at 1:19 PM ^

does not create an inherent conflict at all.   Nor does having a joint defense agreement.  The lawyer's duty of confidentiality, loyalty, etc. is always to the client- regardless of who pays the bills.   

Likewise, a joint defense agreement simply means that while the two parties's (i.e. OSU and the player) interests are aligned, their respective counsels will share information amongst themselves and those communications are considered privileged just as if they were discussions between an attorney and their client.  Any breach of that agreement would be like breaching your own client's confidentiality.  

Having said all that, is it possible that an unethical attorney could put the best interests of the payor over the interests of the client?  Sure, but that could happen in any case regardless of whether someone else is paying the legal fees.  Indemnification happens all the time and it rarely results in an ethical breach.

profitgoblue

October 13th, 2011 at 2:55 PM ^

What you write is all correct.  However, in practice (as I'm sure you probably know), the lines always get blurred.  There's an old saying about lawyers never meeting a conflict that they could not get waived . . .

For example, both parties to a joint defense arrangement are not always represented.  I've regularly seen an interested party "tender" the defense of an action in which they have direct financial liability to a co-defendant (or even an unnamed party!) through a joint defense arrangment where the tendering party agrees to share in the legal fees/expenses and eventual settlement amount.  In fact, these kind of agreements I see give the "tenderee" the absolute right to direct the defense as it sees fit, even thought it is not paying 100% of the legal costs.

I suspect that is what happened here.  I suspect that the players did not have separate counsel but instead agreed to be responsible for their pro rata share of the legal fees/expenses attributed to their portion of the defense.  It is a way for OSU to handle all aspects of the defense (to be in complete control and to protect their interests first and foremost) and for the player to have quasi-legal representation.  And in this case, it appears as though the agreement provided that OSU would cover all costs so its simply a "tender the defense" arrangement.  A win-win for the player as long as the representation is good.

 

Picktown GoBlue

October 13th, 2011 at 2:42 PM ^

as a tax-paying Ohioan.  Sure they can shuffle money around, but bottom line as a public institution, this money, Tressel's extra month of pay, Tressel's retirement benefit, and Tressel not having to pay a fine, are all money from the people of Ohio that OSU had no right to be giving away.

Two Hearted Ale

October 13th, 2011 at 7:32 AM ^

It seems to me that OSU paying legal fees to represent players creates a conflict of interest for the law firm since the interest of the player and the interest of the school may not align and the law firm has a duty to represent it's client (OSU).

Maybe one of our MgoLawyers can speak to the ethics of this situation.

What could possibly be the reasoning behind justifying paying legal fees for players so it wouldn't be construed as impermissible compensation? Does the NCAA have a rule that allows legal fees to be paid? How much legal representaion does a college football player need?

So many questions, so much schadenfreude...

Wolverrrrrrroudy

October 13th, 2011 at 8:08 AM ^

I have worked on a lot of investigation cases, most primarily for bribery and corruption.  In general the Company has its own counsel and that is made very clear to the employees.  The employees are free to hire their own counsel if they want their own representation.  It is rare that a Company will pay for personal defense unless it is required by their employment contract, in any case if it is involving breach of company policy, illegal activity, etc. the Company would not pay.

74polSKA

October 13th, 2011 at 9:33 AM ^

Student Legal Services provides court representation to students in cases involving Franklin County Municipal Court, Franklin County Common Pleas Court, 10th District Court of Appeals, and the Supreme Court of Ohio, according to its website.

I think a player's DUI would fall under Student Legal Services.  The athletic department is paying their legal fees as athletes.  If you think about it, if these players weren't "student athletes", they would have commited no violations because nothing they have done is illegal.  Since their playing sports for a university puts them under the authority of the NCAA, it sort of makes sense that the university athletic department would pay for their defense against the NCAA.

profitgoblue

October 13th, 2011 at 9:26 AM ^

It is definitely rare in the corporate world but I presume that it is handled differently when "student-athletes" are concerned.  In addition, the retention agreement can provide whatever the parties want.  The problem that arises in these arrangements is who directs the defense?  Its true that the lawyer's responsibility is to the client and not the payor, but everyone who has been in these kinds of situations knows that there is always pressure to perform up to the payor's standards.  Its an area that I would avoid at all costs if I was in this line of legal work.

michgoblue

October 13th, 2011 at 9:55 AM ^

Look at what the example that you gave - "employees."  It is ok to pay employees.  It is not ok to pay NCAA student athletes.  So, there is an issue of improper benefits.  Put that aside, for a moment, though.

In your example, the lawyer representing the employee has a complete duty to the employee and not to the employer.  In fact, the employer is not even entitled to privileged information - the employer is essentially an outsider, despite writing the checks.  Do we really believe that OSU is not dealing directly with the lawyers here?

 

bronxblue

October 13th, 2011 at 9:49 AM ^

I was going to say the same thing.  I'm not that bothered that a school paid the legal fees for an athlete who is being charged with a violation of rules associated with a school-sponsored activity.  And as others have noted, regular students do receive free legal aid at the university for various crimes (same I believe at most big colleges), so it really isn't a shock.  I'm more bothered by the fact that the NCAA apparently won't find a LOIC against OSU for the various transgressions perpetrated by these students and those before them.

Tater

October 13th, 2011 at 7:52 AM ^

Starters at THE Ohio State University make more than that every year.  They should pay for the lawyers from their own "athletic fund."  They wont, though, becuase the NCAA would want to know where they got the money.

74polSKA

October 13th, 2011 at 7:56 AM ^

if you look at the article I posted ^^^^, the money was not out of the general fund.

 

OSU's athletics department paid the fees out of its general operations fund, which student fees do not go toward, said Dan Wallenberg, associate athletics director for communications.

 

I'm not defending Ohio, I'm just trying to give credit to the original article.  I know that MGoBloggers want to have informed opinions whenever possible.

 

jblaze

October 13th, 2011 at 9:02 AM ^

like to claim they have a general fund... it's all 1 large pot at the end of the day, and now the OSU athletics general operation fund is short $142K in unplanned expenses. If they ever need more money, how do they actually get it? It's 1 big pool.

74polSKA

October 13th, 2011 at 9:11 AM ^

I work for a municipality and we are not supposed to be able to transfer money into the general fund from enterprise departments but there are always loopholes.  I know we are reviewed by state auditors though.  I wonder if that applies to public universities. 

Either way, I'm sure Ohio would have no problem replenishing the money in their athletic fund.  I seem to remember the band getting one large donation to enable them to attend a road game a few years ago.  There are a lot of buckeye fans with big $$.

Section 1

October 13th, 2011 at 10:09 AM ^

It seems completely normal in my general experience.  I think most of the comments by non-lawyers in this thread are kind of hysterical and overwrought.

I think (although I am not certain) that we paid the legal fees of Alex Herron in our own NCAA investigation, and while not a player, Herron was essentially 'found guilty' of having been untruthful in statements to investigators, and he was discharged.  That is sort of the closest corollary to Pryor that I can think of.

It is very frequent in litigation practice, that attorneys are paid by sources who aren't litigants, or who are other parties in the caption.  One such example is insurance practice, wherein the attorney is paid by the insurer, and the insured merely has the option to retain counsel for any uninsured interest or exposure.  A more basic example that might be helpful to laymen is when a family court judge orders an employed husband to bear the legal expenses of his wife, in a divorce action.  And as noted above, there are uncountable numbers of situations in which corporate defendants pay the legal fees and expenses of employee- or agent-co-defendants.

Here's one interesting thing; as I understand it from the new Bacon book Three and Out, Rich Rodriguez actually wrote his own checks to pay for his (Colorado-based) attorney in our investigation.  That was much more surprising to me, than this news with OSU players.

Section 1

October 13th, 2011 at 10:50 AM ^

I don't have the book memorized or outlined (I'm not bein' snarky with you), and so I don't even recall if anything was said about that.  There may be more to that story.  And I really did not want to sidetrack the discussion to Tressel and Rodriguez. 

Just that on its face, this sort of arrangement is pretty common and wouldn't raise an eyebrow among most litigation attorneys, especially employment lawyers (NCAA mandarins might be different) whom I know.  And teh amount of fees seems pretty modest, if we are talking about interviewing 10 or 12 players and leading them through NCAA interviews.

74polSKA

October 13th, 2011 at 10:59 AM ^

What do you mean you don't have it memorized!  I'm not trying to rip RR or detract from the conversation either.  My brother-in-law was a GA at WVU when RR was there and said he's a really genuine guy so I really wouldn't be that surprised if he did it on his own.  I would be curious how many head coaches do pay their own fees in those cases though. 

BTW, I hope I'm in the minority in the ". . . most of the comments by non-lawyers in this thread are kind of hysterical and overwrought" comment.  I try to be anyway.

Section 1

October 13th, 2011 at 11:35 AM ^

No problem.  (The tenor of the OP might have gotten me to overreact.)  Most of the (apparent) MGoLawyers seem to share my view, judging by the comments: That retained counsel for the players is not an unusual notion; That the details (Joint Defense Agreements, contracts for representation, NCAA bylaws on student-athlete legal services, etc.) are more nuanced and also probably very interesting; That if there are any conflicts, they'd be technical matters, etc.

justingoblue

October 13th, 2011 at 11:11 AM ^

I actually don't think it's surprising that RR paid himself. IIRC the fees were around $300k for his defense. It can basically be boiled down to an expected utility model measuring that $300k against the possibility of losing his (guaranteed with a sliding scale buyout) $2.5m for the next three years, plus his diminished capacity to earn after that.

Unless my economics are really out of shape (or someone is applying vastly different probabilities on winning/losing the case), that's a good gamble.

tbeindit

October 13th, 2011 at 12:19 PM ^

Just to let everyone know...ALL universities do this.  When you are enrolled you pay a small fee so you will be covered.  There is NOTHING unusual about this, Michigan does this as well