Maryland-ACC lawsuit: Terps and conference in midst of ugly divorce

If you've been following the news coverage of the case between Maryland and the ACC, you'll notice that virtually every recent article on this subject uses a divorce analogy. It's certainly appropriate. This case has moved far past a negotiation, and has a tone that is far beyond the pale of a standard commercial dispute. In a typical commercial dispute, each party's actions are based on logic, with the principle factor being the bottom line. While that is still the main concern, the case has grown a life of its own.

The rhetoric of an ugly, public divorce (a game of fire if you will) really kicked into high gear, when at the end of March, Maryland subpoenaed ACC schools North Carolina, Wake Forest, Georgia Tech, Duke, North Carolina State, Clemson, Notre Dame, Syracuse, Virginia Tech and Virginia, as well as media giant ESPN. While this is salacious and downright fun to think about the possibilities, (Coach K in a deposition? Boeheim answering interrogatories), it is important to note that this is not just headline fodder. Maryland is trying to win. The plan all along has been to show that the exit fee is an illegal penalty. The intention of the subpoenas is to gather information in an attempt to prove that the ACC exit fee violated the ACC's own rules and procedures. According to reports, ACC rules call for a pre-vote review and a notice period for the proposed change to take effect. Additionally, the timing of the exit fee and the ensuing suit remains an issue. Maryland hasn't actually left the conference yet, and isn't slated to officially depart until July 1, 2014, meaning the demand for payment and suit are pre-mature.

As you can imagine, UMD's ACC rivals are certainly not doing UMD any favors in responding, as it appears that none have to date (a game of ice if you will). Following the money, whatever the ACC recoups from Maryland will be split by the ACC members, meaning the higher the exit fee, the more for each remaining member school. Therefore the subpoenaed ACC schools aren't true third parties, as they have financial interests in the outcome. Responses - true, full answers - will be tough to come by and likely require court intervention through motions and orders to compel.

Keep in mind that the ACC has been setting off against the exit fee by withholding UMD's rightfully earned share of conference revenue, which estimates have pegged around $20 million. Such action amounts to the ACC pre-judging the case, declaring itself the winner, and proceeding to collection activity, none of which are rooted in law. Maryland's counterclaim addresses this impermissible "self-help" and claims the legal rate of interest on such amounts.

While the headlines and the notions garner interest, Maryland's tactics are important in their overall strategy of showing that the exit fee is an unreasonable penalty demanded at the wrong time. And in the process, if they inflict as much damage as possible to the ACC's reputation, wallet, and future, that's an added bonus. From Maryland's side, why not? Once the move was announced there was no going back.