corman v ncaa final (mckenna and armagost)

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The statements and representations made in this presentation do not constitute legal advice.

ELA Annual ConferenceNovember 5-7, 2015

Corman v. NCAAKevin M. McKenna, Esq.Shareholder, Latsha Davis and McKenna

Jacqueline A. StefkovichProfessor of Education Law and Ethics, Penn State University

Andrew L. ArmagostDoctoral Student, Penn State University

Legislative and Research Assistant, Senate of Pennsylvania


Introduction

• On November 5, 2011, the National Collegiate Athletic Association (“NCAA”) learned of allegations of child sexual abuse occurring in athletic facilities of Pennsylvania State University, perpetrated by former assistant football coach Gerald A. Sandusky.

• “Member institutions shall be obligated to apply and enforce this legislation, and the enforcement procedures of the Association shall be applied to an institution when it fails to fulfill this obligation.” NCAA Constitution, Operating Division One Bylaws, Administrative Bylaws, Effective August 1, 2011. Article 1.3.2.

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Background

• Report released 7/11/12

• Consent Decree signed 7/23/12

• Penn State waived rights to “any appeal under NCAA rules, and any judicial process.”

Freeh Report

• 1/4/2013 – Sen. Corman files Complaint (Commonwealth Court)

• 2/20/2013 - Endowment Act signed into law

• 9/4/2013 - Endowment Act ruled constitutional (I)

• 4/9/2014 – Endowment Act ruled constitutional (II)

Endowment Act • Over 500+ emails

submitted as evidence related to Consent Decree and Freeh Report

• Ended in Agreement between parties to dismiss case

Corman v. NCAA


Freeh Report

• Internal report initiated by University Board of Trustees that hired Louis Freeh, former FBI Director, to conduct full investigation.

• Final Report released publicly on July 12, 2012.

• Criticized Penn State for its handling of the Sandusky situation and made certain recommendations.

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Consent Decree

• Penn State football program sanctions:• $60 million fine

• Four-year postseason ban

• Four-year reduction of grants-in-aid

• Five years of probation

• Vacation of wins since 1998


Act 1 of 2013 (Endowment Act)

Senate Bill 187 sponsored by Senator Corman became law February 20, 2013 as Act 1.

Section 3. Monetary penalty endowments.

(a) General rule.--If an institution of higher education pays a monetary penalty pursuant to an agreement entered into with a governing body and:

(1) the monetary penalty is at least $10,000,000 in installments over a time period in excess of one year; and

(2) the agreement provides that the monetary penalty will be used for a specific purpose, then the monetary penalty shall be deposited into an endowment that complies with the provisions of subsection (b).

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(b) Requirements of endowment. -- An endowment under subsection (a) shall satisfy the following requirements:

(1) The endowment shall be established as a separate trust fund in the State Treasury and the State Treasurer shall be custodian thereof. The State Treasurer shall invest the money in the endowment subject to the prudent investor provisions of 20 Pa.C.S. § 7203 (relating to prudent investor rule). The moneys of the separate trust fund are appropriated to the commission on a continuing basis to carry out then provisions of this act.

(3) The commission shall expend the money of the endowment in accordance with the purposes enumerated in the agreement between the institution of higher education and the governing body and subject to the provisions of paragraph (4).



(4) Unless otherwise expressly stated in the agreement, the funds may only be used within this Commonwealth for the benefit of the residents of this Commonwealth and on any of the following:

(i) Programs or projects preventing child sexual abuse and/or assisting the victims of child sexual abuse.(ii) Multidisciplinary investigative teams established under 23 Pa.C.S. (relating to domestic relations).(iii) Child advocacy centers.(iv) Victim service organizations that provide services to children subjected to sexual abuse.(v) Training of persons who are mandated by law to report child sexual abuse or to treat victims of child sexual abuse.

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Corman v. NCAACommonwealth Court of Pennsylvania

No. 1 MD 2013


Why Bring Suit?

According to Senator Jacob Corman at his deposition, lawsuit was brought over “concern of the sanctions that were implemented on Penn State specifically as it dealt with the $[60] million [fine] and how that money was going to be disbursed nationally out of the State of Pennsylvania.” (Corman 5:14-5:19)

While NCAA may have violated the due process it ensures its members in case of Penn State, Senator Corman asks that the Court follow due process on behalf of the Commonwealth of Pennsylvania (Corman 7:10-7:15)

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Joint Pre-Trial Statement

• “NCAA’s Constitution and Bylaws govern the legal relationship between the NCAA and Penn State. The Bylaws, in essence, operate as a contract between the NCAA and its member institutions, including Penn State. In the instant case, the NCAA’s failure to act in conformity with its limited authority under the Bylaws operates as a breach of this agreement and renders the Consent Decree invalid.”(Joint Pre-Trial Statement at 8) [Plaintiffs’ Brief Statement Of The Facts]


Corman v. NCAADepositions

Date of Deposition Individual Being Deposed Location11/4/2014 Kevin Lennon Washington, D.C.11/5/2014 Bob Williams Washington, D.C.11/11/2014 Julie Roe Lach Indianapolis, Indiana11/12/2014 David Berst Indianapolis, Indiana11/13/2014 Shepard Cooper Indianapolis, Indiana11/18/2014 Gene Marsh Birmingham, Alabama11/20/2014 Donald Remy Washington, D.C.11/21/2014 Stephen Dunham Philadelphia, Pennsylvania11/24/2014 Frank Guadagnino Harrisburg, Pennsylvania11/24/2014 Keith Masser Harrisburg, Pennsylvania12/2/2014 Mark Emmert Indianapolis, Indiana12/2/2014 Rodney Erickson State College, Pennsylvania12/8/2014 Edward Ray Corvallis, Oregon12/15/2014 Kenneth Frazier Philadelphia, Pennsylvania12/16/2014 Jacob Corman Harrisburg, Pennsylvania

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Breach of Contract: Good Faith

• “As evident from the facts set-forth above, the Consent Decree was a product of an abbreviated, eleven day process where Penn State, though involved with discussions, was deprived of a meaningful choice in the matter and was ultimately the recipient of a ‘cram down’” (Joint Pre-Trial Statement at 11) [Plaintiffs’ Brief Statement Of The Facts].

• NCAA Constitution Section 2.8.2:• The Association shall assist the institution in its efforts to

achieve full compliance with all rules and regulations and shall afford the institution, its staff and students-athletes fair procedures in the consideration of an identified or alleged failure in compliance.


Unenforceable and Unconscionable

• Where a party to a contract lacks a 'meaningful choice’ and enters into a contract 'with contract terms which are unreasonably favorable to the other party,’ the contract is unconscionable and unenforceable.

• Did Penn State lack a meaningful choice regarding the terms and imposition of the Consent Decree, and did the terms of the Decree unreasonably favor the NCAA? Consequently, is the Consent Decree unenforceable?

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Table of Attorneys

• Cynthia Baldwin (Counsel for Penn State)• Jonathan Barrett (Counsel for Big Ten)• Stephen Dunham (Counsel for Penn State)• Frank Guadagnino (Counsel for Penn State)• Gene Marsh (Counsel for Penn State)• Omar McNeill (Counsel for Freeh)• Donald Remy (Counsel for NCAA)


Non-Attorneys

• Vice President of NCAA Division I David Berst• President of the NCAA Mark Emmert• Former Penn State President Rodney Erickson• Penn State Board of Trustees Chairman

Keith Masser• Oregon State University President and Former

Chairman of the NCAA Executive Committee Ed Ray

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Exhibits A – FNov. 24, 2014 – Plaintiff ’s Motion To Determine The Propriety

Of NCAA's Invocation Of Privilege In Communicationshttp://www.pacourts.us/news-and-statistics/cases-of-public-interest/corman-and-mccord-v-ncaa-v-psu

Donald Remy

(NCAA)

Omar McNeill (Freeh Group)

Gene MarshFrank Guadagnino Stephen Dunham Cynthia Baldwin

(Penn State Counsel)

Jonathan Barrett (Big Ten)

Mark Emmert (NCAA)

Keith Masser (Penn State

Board)


Pre Decree Discussion

• “We only make ourselves look worse and unrepentant in the eyes of the nation.” – Erickson

• “Does PSU want to invite all the criticisms that would follow for continuing to fight?” – Marsh

• “But (Marsh) thinks Emmert is manipulating presidents and he is basically furious about the process – upping demand, no opportunity to be heard, rush and deadlines for no reason.” - Dunham

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Ethics and ProfessionalismModel Code of Professional Conduct and the Ethics

of Profession


Ethic of Profession

• In Shapiro & Stefkovich (2011), the ethic of profession is integral to the establishment of a moral and ethical decision making environment.

• Ethics of a profession should establish expectations of that profession.

• Some argue these ethics should be flexible enough to relate to the everyday decisions that are needed to be made by individual leaders.

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Rule 1.6: Confidentiality of Information (Client-Lawyer Relationship)

• (a) A lawyer shall not reveal information relating to the representation of a client unless the client gives informed consent, the disclosure is impliedly authorized in order to carry out the representation

• (c) A lawyer shall make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to the representation of a client.


Rule 1.7: Conflict of Interest (Current Clients)

• (a) Except as provided in paragraph (b), a lawyer shall not represent a client if the representation involves a concurrent conflict of interest. A concurrent conflict of interest exists if:

• (1) The representation of one client will be directly adverse to another client

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Conflict of Interest?

• witnesses

• questions to ask

• proposed search terms for document collection

• presentation on 64 NCAA enforcement staff procedures

• “extremely image conscious” NCAA considered how it could capitalize on Penn State’s precarious position to impose sanctions

NCAA suggested to Freeh Group:


Rule 4.2: Communication(Current Clients)

• “in representing a client, a lawyer shall not communicate about the subject of the representation with a person the lawyer knows to be represented by another lawyer in the matter, unless the lawyer has the consent of the other lawyer or is authorized to do so by law or a court order.”

• NCAA communicated with Cynthia Baldwin, a former Pennsylvania Supreme Court Justice as well as Vice President and General Counsel of Penn State

• Penn State had special independent counsel

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Questions

• Did lawyers’ communication between those representing Penn State, Freeh Group, and NCAA violate Rule 1.6 of the Model Code of Conduct?

• If so, do these actions violate an ethics of profession that leaders should have?

• How should have Penn State and the NCAA handled the discussions after the release of the Freeh Report?

corman v ncaa final (mckenna and armagost)

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