North Carolina judge denies Clemson’s motions in case vs. ACC. What we know

A North Carolina judge has released his ruling on Clemson’s motions to stay and dismiss a lawsuit the ACC filed against the school during their ongoing legal battle related to exit fees and potential college athletics realignment.

At this point, he’s siding with the conference.

And while it’s a legal “win” for the ACC, it doesn’t spell immediate doom for Clemson, which will have its lawyers in a South Carolina courtroom on Friday in another hearing — this one for Clemson vs. ACC, the original lawsuit in the battle.

In the case of ACC vs. Clemson — filed in Charlotte one day after Clemson sued its own conference on March 19 in South Carolina in an attempt to get out of the ACC’s grant of rights and exit fee — North Carolina Business Court chief Judge Louis A. Bledsoe III wrote in an opinion released Wednesday that he had denied the school’s motion to dismiss the case on sovereign immunity grounds.

He also denied the school’s motion to stay (or pause) the case.

The school promptly appealed the decision to the North Carolina Supreme Court.

Bledsoe’s ruling on Wednesday afternoon came eight days after a three-hour hearing last week in Charlotte, in which lawyers for both parties spent an hour arguing their cases (in revealing and often colorful fashion).

“The only court that has jurisdiction over FSU, Clemson, and the ACC — and thus the only court that can assure a consistent, uniform interpretation of the Grant of Rights Agreements and the ACC’s Constitution and Bylaws, the determinations at the core of the Pending Actions — is a North Carolina court,” Bledsoe wrote in a 53-page ruling.

The ACC released a statement later Wednesday celebrating the decision.

“We are pleased with today’s ruling as it confirms that only a North Carolina court can render a decision that would apply to both Clemson and Florida State,” the conference wrote. “The opinion also reinforces what the ACC has clearly articulated from day one — the North Carolina courts are the proper place to enforce and interpret the ACC’s agreements.”

Less than 24 hours after Bledsoe released his decision, Clemson’s lawyers filed a “notice of appeal” on Thursday morning, online court records show. The school wrote that it would appeal Wednesday’s decision to the North Carolina Supreme Court and that process would trigger an “automatic stay” (or pause in the proceedings) of ACC vs. Clemson until the NC Supreme Court makes a ruling.

Although Bledsoe sided with the ACC on most critical points, he did find some merit in other Clemson arguments and granted the school’s motion to dismiss a number of claims made by the ACC in its lawsuit, which was filed March 20.

Bledsoe granted Clemson’s motions to dismiss five claims, including:

• An ACC claim seeking for a court to declare that its grant of rights agreements are “valid and binding contracts, supported by good and adequate consideration”

• A claim for a court to find “breach of contract” by Clemson

• A claim for a court to find Clemson’s breach of “the implied covenant of good faith and fair dealing in the ACC’s Constitution and Bylaws”

The three claims above, plus one more, were “dismissed without prejudice,” Bledsoe wrote, which means those claims have been dismissed but can still be re-filed at a later point, according to Shouse Law Group.

A fifth claim, the ACC’s claim for relief “for breach of fiduciary duty” by Clemson, was dismissed with prejudice. That means the claim has been permanently dismissed and can’t be brought back to court.

Breaking down latest opinion

Overall, the ruling wasn’t a particular surprise, as Bledsoe had made a similar ruling in an ACC-Florida State case earlier this year, denying FSU’s motions to stay and dismiss the case and allowing the conference’s lawsuit to continue in Charlotte.

Following that decision, a similar scene played out: The ACC released a statement celebrating the move, and Florida State appealed the decision to the NC Supreme Court. FSU has filed a full appeal in that court and the ACC has issued a response, but there haven’t been any developments since.

Bledsoe wrote in Wednesday’s ruling that a number of factors “decisively outweigh Clemson’s choice of the South Carolina forum for the determination of the scope of the rights Clemson granted the ACC in the Grant of Rights Agreements, Clemson’s related, and later added, claim for slander of title, and Clemson’s challenge to the enforceability of the withdrawal payment in the ACC’s Constitution.”

Bledsoe found that Clemson’s “conference-related activities” in the state of North Carolina (games, conference meetings and so on) were “commercial in nature,” rather than governmental. That, Bledsoe wrote, means the university has legally waived its right to sovereign immunity (a legal concept that a state or state “arm” cannot be sued outside its own state without its consent).

Bledsoe also wrote that “no actual controversy exists” regarding the validity and enforceability of the ACC grant of rights, which member schools including Clemson signed (and re-signed) to keep the conference together amid earlier realignment.

From the start of its lawsuit, Clemson has argued it’s not challenging the grant of rights in full but is “merely (seeking) a declaratory judgment regarding the scope of the rights granted.” The school has argued if it were to leave the ACC for another conference, it would not owe the ACC the revenue generated from its home game TV broadcasts through 2036 (only the games it played as an ACC member).

Bledsoe granted Clemson’s motion to dismiss one of the ACC’s claims, asking a court to declare the GOR as valid and enforceable.

But the judge denied the school’s motion to dismiss another ACC claim, which asked a court to confirm that the ACC owns Clemson’s media rights through 2036 regardless of which conference the school plays sports in.

That argument, Bledsoe wrote, is the crux of the legal battle and can’t be dismissed:

“This claim, together with the ACC’s third claim for relief for a declaratory judgment that the withdrawal payment provision of the ACC’s Constitution is a valid and enforceable contractual provision, shall proceed forward in this litigation.”

The ACC, in its statement, specifically highlighted this part of the ruling.

“This recognizes the ACC’s consistent position that the 2013 and 2016 Grant of Rights are valid and enforceable agreements that each of our members entered into voluntarily, with full knowledge of their terms,” the conference said Wednesday.

SC hearing on deck

Next up: The school and the ACC are set to meet in Pickens County court at 10 a.m. on Friday, when a judge there will hear similar arguments from the ACC. The conference has filed motions to dismiss and stay the Clemson vs. ACC case in SC (just like Clemson did for the NC case before being denied Wednesday).

The ultimate decisions made after that case by Judge Perry H. Gravely will loom large in the Clemson-ACC legal battle. If Gravely rules against the ACC and says that Clemson vs. ACC can continue in South Carolina court, there could be four cases running simultaneously between the ACC and member schools.

As of Thursday, FSU vs. ACC is an active case in Florida, Clemson vs. ACC is an active case in South Carolina and ACC vs. FSU and ACC vs. Clemson are active cases in North Carolina (both with pending appeals to the state supreme court). Florida’s attorney general has also sued the ACC over a public records dispute.