Judges consider tossing $60M Penn State fund lawsuit

June 19, 2013

A panel of Pennsylvania judges will soon decide whether to side with the NCAA and throw out a lawsuit filed by a state senator and the state treasurer over the massive fine imposed on Penn State for its handling of the Jerry Sandusky scandal.

The legal issue before Commonwealth Court is the NCAA's "preliminary objections" to the lawsuit, which seeks to force Penn State to pay the $60 million into a state government account.

The lawsuit by state Sen. Jake Corman and Treasurer Rob McCord is part of an effort by many of Pennsylvania's top elected officials to ensure the money will be spent within the state rather than throughout the country, although in either case it will be spent on child abuse prevention and for its victims.

The consent agreement made last summer between the NCAA and Penn State directs that a task force will distribute the money, while a Corman-sponsored law enacted early this year would keep it in Pennsylvania and have it distributed by the Pennsylvania Commission on Crime and Delinquency.

The first of five $12 million payments has been set aside by Penn State but not paid to the NCAA.

NCAA lawyer Everett Johnson argued Wednesday that McCord and Corman lack legal standing, that the new law that Corman sponsored is unconstitutional and that Penn State's relevance to the case makes the university such an indispensable party that the case can't proceed without it.

Johnson said the new law, formally known as the Institution of Higher Education Monetary Penalty Endowment Act, "represents an expansive intrusion into the historical autonomy of Penn State," and argued it was "a self-evidently protectionist law" that violates the Commerce Clause of the U.S. Constitution.

Corman's lawyer Matt Haverstick told the court the General Assembly "gave itself the obligation and the burden" to put some rules in place for the money, which he said could be traced to taxpayers. Penn State is considered a state-related university but is not a state agency, even though it gets hundreds of millions of dollars in state support every year.

"It's not the NCAA's money," Haverstick said. "The consent decree says nothing about whose money it is."

The judges pressed Haverstick on why the plaintiffs did not also sue Penn State.

"No one ever sues Penn State in any of this litigation that's floating around," said Judge Dan Pellegrini. "Isn't your complaint with Penn State?"

Haverstick said both Penn State and the NCAA control where the money will go.

Haverstick said the case raised questions that will require more time to establish all the facts, and that courts must grant considerable deference to the General Assembly when the issue is whether one of its laws is constitutional.

Pellegrini told the lawyers the court would not rule for at least 48 hours so the parties could consider whether to participate in mediation.

Sandusky the school's former assistant football coach, was convicted a year ago of 45 counts of child abuse involving 10 boys. The 69-year-old is serving a 30-to-60-year state prison sentence but maintains his innocence and is pursuing appeals.


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