ACC rebuts arguments from Clemson, FSU for dismissing NC legal action

The Atlantic Coast Conference asked North Carolina’s highest court Friday to reject attempts from Clemson and Florida State universities to end court fights in this state involving the league and the two schools.

Clemson seeks to pursue legal action against the ACC only in a South Carolina courtroom. Florida State hopes to confine its case to a courtroom in the Sunshine State. The disputes focus on hundreds of millions of dollars the schools could lose if they leave the conference.

“Clemson argues that it should not be subject to the jurisdiction of North Carolina’s courts,” the ACC’s lawyers wrote in a brief filed at the North Carolina Supreme Court. “To avoid jurisdiction Clemson urges that this Court should abandon its decision in Farmer v. Troy, [a 2022 precedent], or, failing that, restrict Farmer’s holding so that it does not apply here. The Court should do neither.”

“Clemson came to Greensboro, North Carolina, more than 70 years ago to form the ACC, a North Carolina unincorporated association,” the conference’s brief continued. “For the past 70 years, Clemson actively participated in the management and governance of the Conference and collected hundreds of millions of dollars in distributions from the Conference.”

“Since at least 2006, North Carolina law has provided that an unincorporated association ‘may assert a claim against a member or a person referred to as a “member.”’ The [Uniform Unincorporated Nonprofit Association Act] specifically applies to ‘governmental subdivisions’ such as Clemson. And Clemson understood this liability under North Carolina law because, in 2012, it authorized the ACC to sue the University of Maryland, a sovereign entity, in the courts of North Carolina (and to oppose Maryland’s claim that as a sovereign it could not be sued in North Carolina courts),” ACC lawyers wrote.

Clemson’s president signed a contract in April 2013 granting its media rights to the ACC, according to the brief. “Since signing the Grant of Rights in 2013, Clemson has received more than $372 Million from the ACC, and its representatives have served on 17 committees that manage the ACC, including the Executive Committee. In 2016, Clemson’s President served as the President of the ACC and oversaw (and approved) a 20-year extension of the Term of the Grant of Rights ‘regardless of whether [it] withdraws from the Conference during the Term.’”

In 2023 Clemson voted to allow the ACC to accept $15 million in North Carolina taxpayer funding to keep the conference headquarters in the Tar Heel State, the ACC brief explained.

“But despite its leadership in entering these agreements, more than a decade of ‘making money’ through media contracts made possible by the Grant of Rights, and consistently ‘conducting business’ through its management of the Conference, Clemson became dissatisfied when other athletic conferences negotiated even more lucrative media contracts,” conference lawyers wrote.

After fellow ACC member Florida State University engaged the conference in a legal battle, Clemson filed its own lawsuit in March 2024 in its home state of South Carolina.

“In that lawsuit, Clemson asserted for the first time that it had not transferred its media rights ‘regardless’ of whether it remained a Member of the ACC and that it would retain its media rights even if it ceased to be a Member of the ACC,” the conference’s brief continued. “And when the Conference, which has been a North Carolina unincorporated nonprofit association for more than 70 years, attempted to enforce the meaning of this North Carolina contract in the courts of North Carolina, Clemson objected, claiming that as a sovereign it could not be sued in these courts.”

Clemson filed its own North Carolina Supreme Court brief in November.

“Clemson University took its claims regarding its media rights contract with the Atlantic Coast Conference to its home forum, state court in Pickens County, South Carolina,” the university’s lawyers wrote. “Despite being able to fully defend the case there and even bring counterclaims, the ACC responded by suing Clemson in North Carolina state court — arguing that Clemson waived its status as a sovereign South Carolina entity by simply being a member of the ACC, an unincorporated nonprofit association based in North Carolina.”

“But the South Carolina General Assembly has not said that Clemson can be sued in North Carolina or anywhere else outside South Carolina, and Clemson has not, by its litigation conduct, expressly waived its sovereign immunity,” the Clemson court filing continued.

Relying on the North Carolina Supreme Court’s Farmer precedent from 2022, “the Business Court opined that it does not matter what the law is in South Carolina, and that Clemson’s actions — not in litigation, but by simply remaining a member of the ACC — waived its immunity from suit here. The Business Court’s decision rejecting Clemson’s sovereign immunity defense is fundamentally inconsistent with the United States Supreme Court’s decision in Franchise Tax Board of California v. Hyatt [a 2019 case], as well as longstanding precedent in this State.”

Clemson asks the North Carolina Supreme Court to overrule its 2022 ruling in Farmer v. Troy University or distinguish that precedent from the current dispute, “conforming North Carolina law to federal constitutional requirements.”

The ACC’s new brief in the Florida State case raised similar issues. “FSU’s argument permits any Florida agency to enter into any other state, conduct commercial activity, and be immune from enforcement in the courts of that state regardless of the law of that state,” ACC lawyers wrote. “Requiring an arm of Florida to comply with North Carolina law in North Carolina courts when it operates a commercial enterprise in North Carolina does not violate any principle of federalism. Rather, it strikes the proper balance between co-equal sovereigns.”

The ACC is battling both Clemson and Florida State over media rights. Competing lawsuits are playing out in North Carolina, South Carolina, and Florida courts.

The conference has asked North Carolina’s highest court to link the schedules for hearing its lawsuits against both member schools. Paperwork filed in September suggested a hearing could take place after mid-January 2025.

Both lawsuits address the multimillion-dollar price tag associated with leaving the athletic conference. One court filing labeled the FSU case a “$700 million” dispute. The legal battle with FSU started in December 2023. The lawsuit against Clemson began in March.

Lower courts rejected both universities’ requests to have the ACC’s lawsuits thrown out of North Carolina courts. Appeals in both suits sit now with the North Carolina Supreme Court.

North Carolina Business Court Judge Louis Bledsoe issued a 53-page order in July granting part of Clemson’s request to dismiss the ACC’s legal claims. But Bledsoe refused to dismiss the lawsuit in its entirety. He also rejected Clemson’s motion to stay the proceedings in the North Carolina case.

Bledsoe also issued an earlier ruling rejecting Florida State’s request to throw out the ACC’s suit in North Carolina.

“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.

“The Florida court in the Florida Action cannot bind Clemson in South Carolina. The South Carolina court in the South Carolina Action cannot bind FSU in Florida. Each of these courts and this Court could reach conflicting conclusions about the same terms of the same North Carolina contracts upon which the Pending Actions rest — and in so doing create procedural chaos and tremendous confusion at a time when the ACC, FSU, and Clemson need binding clarity concerning their rights under the ACC’s most important contracts with its Members,” the judge continued.

“Only a North Carolina court, most likely in a single consolidated action in North Carolina, can render consistent, uniform determinations binding the ACC, FSU, and Clemson concerning the documents that are at issue in all four Pending Actions,” Bledsoe added.

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