N.C. Judge rules to dismiss part — but not all — of ACC's case against Clemson (2024)

CLEMSON — The Atlantic Coast Conference’s lawsuit against Clemson will continue on in North Carolina.

But not in full.

Judge Louis A. Bledsoe III, in a 53-page opinion released July 10, denied Clemson’s motions to dismiss and stay the case in Mecklenburg County based on a “sovereign immunity” grounds. The university can be sued in another state, Bledsoe said, because its conference-related activities in North Carolina are commercial and not governmental.

The ACC can continue to seek a “declaration” from Bledsoe interpreting the league’s ESPN agreements, including whether Clemson’s broadcast rights are owned by the ACC for the entirety of conference’s deal with ESPN, regardless of whether the Tigers remain in the league. The ACC can also continue to argue its $140 million withdrawal penalty is enforceable.

However, Bledsoe put on hold the ACC’s effort to seek a declaration from the court about whether the conference’s grant of rights agreements are “valid and binding contracts.” He also dismissed the ACC’s claims of breach of fiduciary duty against Clemson for bringing a lawsuit in Pickens County.

Bledsoe’s decision to allow part of the ACC’s case against Clemson to continue isn’t surprising because he allowed the conference’s lawsuit against Florida State to proceed in North Carolina despite FSU’s case against the ACC in Florida.

He argues that North Carolina is the best venue for Clemson and FSU’s cases.

“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.

He noted a South Carolina court can’t bind FSU and a Florida court’s ruling won’t apply to Clemson. Four cases in three states could create ”procedural chaos,” according to Bledsoe.

Clemson might not reside in North Carolina, but the Tigers are a founding member of a conference that includes North Carolina, Duke, Wake Forest and N.C. State. Plus, Clemson president Jim Clements headed up the ACC’s board when the current ESPN agreements were approved.

“Clemson has attended numerous meetings, served in conference leadership positions, and participated in hundreds of athletic contests in North Carolina since it joined the ACC,” Bledsoe added.

But the university hasn’t breached its fiduciary duty to the ACC, Bledsoe said, because Clemson isn’t challenging the “enforceability” of the ESPN agreements but merely the “scope” of what was granted.

Clemson sued the ACC in Pickens County on March 19, hoping a South Carolina judge would side with the university’s interpretation of the conference’s grant of rights — which is the ACC might “irrevocably” own member institutions’ broadcast rights through the length of its deal with ESPN, but only for games the Tigers play in the conference.

In the university’s view, the ACC has the right to air replays of Clemson games until 2036, but the conference shouldn’t own the rights to future games when the Tigers play in another league.

“Thus, Clemson’s initiation of the South Carolina action — which sought only to determine the meaning of a disputed term — did not constitute a breach of the Grant of Rights Agreements’ warranty provision,” Bledsoe wrote.

The question is how long ACC v. Clemson and Clemson v. ACC continue on parallel tracks, like the FSU-ACC cases, and whom it will ultimately benefit.

In Pickens County, the ACC and Clemson are set for a July 12 hearing before Judge Perry H. Gravely, which will feature arguments from the conference that the South Carolina case should be dismissed in deference to Bledsoe’s court.

“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 ACC said in a statement. “The opinion also reinforces what the ACC has clearly articulated from Day 1 — the North Carolina courts are the proper place to enforce and interpret the ACC’s agreements.”

But if the goings-on of the FSU-ACC case are any indication, it’s unlikely Gravely will kill Clemson’s lawsuit against the league in South Carolina.

The conference, headquartered in Charlotte, preemptively sued FSU in Mecklenburg County in December when it became apparent the school was set to initiate a legal challenge of the ACC’s grant of rights and exit penalty. But Judge John C. Cooper in Leon County determined the conference conducts “significant business” in Florida and is therefore under his jurisdiction as well.

Clemson will argue it filed first in Pickens County, which should give that case priority — and Gravely could make the same determination as Cooper in Florida, that the ACC conducts significant business in South Carolina.

In its complaint, Clemson has laid out the ways the ACC and ESPN exert influence on the university. Clemson outed the ACC’s attempt to move its rivalry game with South Carolina to Black Friday in a recent legal filing.

Whichever court hears Clemson and the ACC’s arguments, both lawsuits drive toward the same goal. One court or another will rule on the league’s grant of rights and exit penalty, offering negotiating power to one side or the other.

The concern is Bledsoe, Cooper and Gravely could allow all four cases to go forward, issuing conflicting opinions on the contracts, which could require appellate courts — maybe even the U.S. Supreme Court — to sort it all out.

What could result is a very long, and very expensive, legal battle for both sides.

Clemson and FSU are hoping court victories ply open a door to another conference. Both schools are both displeased with the widening revenue gap between the ACC and the “Power 2” of the SEC and Big Ten.

In the 2022-23 fiscal year, ACC schools received an average distribution of around $45 million from the conference, while the SEC distributed about $50 million apiece and the Big Ten handed out around $60 million. It’s believed, however, the SEC and Big Ten’s distributions will increase by tens of millions of dollars over the length of their new TV deals.

The SEC and Big Ten are also expected to command larger shares of revenue from the college football playoff.