penn state
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Analysis

A Commonwealth Court decision questioning the consent decree between Penn State and the NCAA that imposed $60 million in monetary sanctions over the Jerry Sandusky child sex-abuse scandal exemplifies the broad discretion of judges in determining what issues should be considered, attorneys and court watchers told Pennsylvania Law Weekly.

Commonwealth Court Judge Anne E. Covey, writing for the majority, included a detailed explanation of why the court had to address the issue in the first place. The main dissenter in the case argued it was not properly before the court.

The en banc panel of the court had been specifically asked by defendants in the case to rule on the constitutionality of the Institution of Higher Education Monetary Penalty Endowment Act, which mandates that fines of $10 million or more paid by colleges and universities be deposited into a trust fund of the Pennsylvania Treasury.

But in the April 9 decision captioned Corman v. National Collegiate Athletic Association, Covey said the very validity of the NCAA sanction had to be assessed. She explained that when the NCAA, in its answer and new matter, alleged that the consent decree was a valid binding contract that was entered into in good faith, the court had to examine the claim.

“Plaintiffs did not file preliminary objections or otherwise attempt to strike the NCAA’s answer and new matter,” Covey said. “Accordingly, these factual disputes must be addressed.”

President Judge Dan Pellegrini, however, disagreed, and said that “none of the parties to this case have disputed that the contract—the consent decree—is valid. Essentially, the majority spontaneously came up with that new cause of action, inferred from paragraphs in various defenses pled by the NCAA, that the consent decree is invalid and none of the sanctions could be enforced.”

In a statement emailed after the ruling, Donald Remy, the chief legal officer for the NCAA, said the majority’s decision was “entirely without basis.”

“We are even more surprised the court determined the consent decree itself is something at issue, although the validity of the agreement has not been questioned by the plaintiff,” Remy said, promising to continue defending the consent decree’s validity. A request for comment to the NCAA press office was not returned.

State Treasurer Rob McCord, along with state Sen. Jake Corman, R-Centre, initiated the sanctions challenge in January 2013.

Christopher Craig, chief counsel to McCord, said that because the NCAA pointed to the consent decree multiple times, the issue was properly before the court.

“People say the court was jumping to conclusions, but I would argue that the court didn’t come to any conclusions,” Craig said. “The court’s decision opens the door to an inquiry that could be very far ranging.”

According to John J. Hare of Marshall Dennehey Warner Coleman & Goggin, while it may appear to be a close question, the NCAA’s filings arguably created a triable issue.

“While the court’s decision primarily involved the constitutionality of the Endowment Act, the real news is the apparently unanimous feeling among the judges, dissent included, that the consent decree exceeded the NCAA’s jurisdiction and should not have been approved by Penn State’s board. Against that backdrop, it’s not surprising that the majority felt that the validity of the consent decree is properly at issue,” Hare said, referring to passages in Pellegrini’s dissent where Pellegrini said he was “bewildered” and “concerned” about how the consent agreement was entered into. “This is a good example of a seeming side issue clearly overshadowing the main issue in the case.”

Attorneys who spoke with the Law Weekly agreed that when courts raise issues not directly contested by either party, they typically deal with legal technicalities, such as venue and preservation. Raising more factual issues is rare, attorneys agreed.

According to Mark C. Rahdert, a law professor at Temple University Beasley School of Law, while courts typically confine their decisions to issues raised directly by litigants, one exception is when courts believe that an underlying issue is too fundamental to be ignored.

“There are circumstances in which a court, in its judgment, decides that this issue is so basic and so fundamental that it must address the issue,” Rahdert said.

Outside of legal technicalities, courts more frequently raise undisputed issues in cases involving consent decrees, Rahdert said. Because consent decrees are enforced by courts, judges often look into whether the agreement was legally entered into before deciding whether to enforce it.

However, in the Corman case, Rahdert said, the majority said that the NCAA, and not the court itself, had put the contract’s validity clearly at issue, particularly when the NCAA argued that the Endowment Act was an unconstitutional impairment of contracts.

“If it’s an impairment of the contract, then that contract has got to be valid,” Rahdert said.

Regardless of how an issue is raised, once a court has decided it wants the parties to litigate an issue, there isn’t much that either side can do to change the court’s focus, Rahdert said.

“I don’t think they can prevent the courts from deciding it,” Rahdert said. “If the court thinks the issue is proper and controlling … then that’s going to be a controlling issue in the case, and they better litigate it.”

Charles L. Becker of Kline & Specter said the unique procedural posture of the case added to its complexity. He said a trial court typically examines the record in the light most favorable to plaintiffs when deciding a defendant’s dispositive motion. But in the challenge to the sanctions, the majority was looking at a motion to grant judgment for the plaintiffs. That reversed the typical inquiry, making the court look at the record in the light most favorable to defendants.

Becker also stressed that the Commonwealth Court is hearing Corman v. NCAA as a trial court, under its original jurisdiction.

“A trial court has some latitude in terms of saying what’s before it, especially where it can base its conclusion in the parties’ own pleadings,” Becker said.

James C. Sargent of Lamb McErlane agreed that if both parties ignore something that’s fundamental to the case, the issue may still be fair game for the court. This is not an unusual application of judicial discretion, Sargent explained, and it provides a reminder for attorneys that nearly any relevant matter can become an issue.

“I do think it is an important lesson in considering how every legal issue can impact your arguments, even ones that may not have been articulated by the pleadings or the court below. You have to be a little wary that you haven’t ignored an obvious point,” Sargent said. “Whenever we get involved in litigation, we put blinders on and get into the issues we’ve already latched onto. It’s helpful to have someone come from outside the box.”

Max Mitchell can be contacted at 215-557-2354 or mmitchell@alm.com. Follow him on Twitter @MMitchellTLI.