FSU vs the ACC: is there any progress?

This is the best of the Adam Gold Show Podcast brought to you by Coach Pete at Capital Financial Advisory Group.

Visit us at capitalfinancialusa.com. David McKenzie, who's an intellectual property and constitutional law attorney, is joining us now on the Adam Gold Show. And you have written extensively, and I follow you on Twitter, at McKenzie Law. And I lived vicariously through your timeline yesterday because I was unable to really pay attention to what was going on. I think they were live streaming the audio of the hearing, so I was just following along at McKenzie Law. This is a fascinating issue for me because it speaks about the future of the Atlantic Coast Conference.

So the way I want to start, like, go back a little bit before we go forward. What is Florida State's biggest or maybe strongest argument for why the grant of rights, which grants their media rights, their IP rights, actually, to the ACC, what's their strongest argument against the ACC at this point? That they aren't getting enough money, essentially.

Okay. Yeah, there's been a change in contract, pardon me, but there's been a change in market conditions by way of the example of the ACC and the Big Ten, scoring bigger deals, and that they are simply, the market conditions have changed. And therefore, as being Florida State, and that they're just simply, they're in a bad deal, the market conditions have changed, and therefore, they should be able to rescind the contract.

So any of your listeners, and you, Adam, will easily recognize that this is kind of a non sequitur, some might say ridiculous argument. Right. But that is essentially, if you look at their complaint, they filed to, the first one was pretty bad, the second one was arguably worse than the first. And both are basically premised on the idea that a bad deal was signed, and that should somehow justify the rescission or an undoing of the grant of rights agreement. In the second, in the second complaint, they did go a little bit further and really start getting into a basically a Raycon Swafford conspiracy theory.

Right. And trying to argue that the ACC misrepresented and the fraud of Florida State and its administration back in 2013 and 2016, when it signed these agreements, voluntarily, twice, and that that really is the core of their argument. They are more recently invoking the concept of sovereign immunity, which is a very deep legal concept to basically also break the grant of rights agreement or alternatively to maybe renegotiate its terms. Now, interestingly, they're not offering to give the hundreds of millions of dollars that Florida State University received as a result of the grant of rights agreement. They're just basically saying, hey, this is a bad deal.

Other conferences, including U.S., is making astronomically more money. And so, therefore, we should be able to rescind this contract. And I get that they're in a hard position, as all ACC schools are, but a change in market conditions has never been a ground to rescind or defense to a contract.

David McKenzie, intellectual property lawyer, also constitutional law. And I know both of those things applied to what happened yesterday as the state of Florida seems to get involved. I don't want to go down in the weeds because my head starts to throb when we get too deep into the legalese of all of this. What is the ACC's strongest legal argument to why Florida State is out of bounds? Well, for one, Florida State signed this agreement. Again, there are two agreements, the first grant of rights agreement in 2013 and then the subsequent amendment in 2016. You know, Florida State, while their best allegation of trying to get out of the contract is that somehow there were misrepresentations involved. But they signed this agreement. And you've got to keep in mind, Adam, that we're talking about some of the most sophisticated individuals who were operating on behalf of Florida State at the time of these signings.

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Adam Golan is a paid spokesman, investment advisory services offered by Capital Financial Advisory Group, a North Carolina registered investment advisor. With a Ph.D. with a noted scientific career surrounded by a general counsel's office that was full of licensed Florida lawyers who were advising him, signed the original agreement. Then again, in 2016, John Thrasher, a politician and a lawyer with a noted business career, signed the amendment.

So it kind of strained credulity past its breaking point to suggest that these were uninformed individuals who didn't know what they were getting into. Now, notably, no other school might have maybe Clemson, which has been far less, I would say, vociferous or basically more simple in its approach. No other school has come forward to say we were duped into signing this. As a matter of fact, I think Holden Thorpe is on record, former chancellor at UNC, suggesting that everybody in the room was aware. Everybody knew what was going on. Everybody was well aware. So the idea for the ACC's best argument to answer your principal question is that, you know, far to say, and Clemson included, and hey, I'm a Tiger fan.

I was raised in Clemson, South Carolina. You know, they signed this agreement. Their second best argument is that these two schools have gained millions from this deal, hundreds of millions of this deal, and then sat silent on it for over a decade. And when you do that, certain equitable principles in the law, contract law, will operate to bar your claim.

And one of those is waiver and estoppel, and that certainly is applicable here as well. But also just as critical, and for you, Adam, and all your listeners to know, is these deals were signed in 2013 and 2016. Man, it's 2024. And in any real world scenario, and I don't care if you're talking about Florida, South Carolina, or here in the Triangle, the statute of limitations is not going to extend that long. I mean, we're well past the statute of limitations here in North Carolina.

It will be three years. And the grant of rights agreement will be interpreted under North Carolina law. And all this, for the ACC, Florida State and Clemson complaints have failed. Okay, let me just ask you this, because I know yesterday's hearing in some way, maybe primarily, is about, you know, venue. To me, this is not a political issue. This is a simple issue of IP law and just the legality of it. So why should home court advantage, to use that phrase, why should home court advantage really matter here?

Well, Adam, Lord have mercy, you are right. It is a pretty simple matter. I mean, we're talking about contracts where people have signed voluntarily into and that they got paid under. However, Florida State is making it as complicated as it possibly can be. Clemson is doing it a lot less so, but essentially, in answer to your question on home field advantage, that has been in part decided and in part not decided. It's a little bit chaotic right now. In any typical situation where you have the same parties and the same fact pattern, which is exactly the case that's going on in Tallahassee, as well as what's going on in the North Carolina business court in Charlotte, you have one court stays the proceedings. So because what you don't want to do is have chaos going on in parallel. This is a parallel proceeding that could result in different rulings on the same fact pattern. That's just simply a a comity, as we call it in the law norm. And one judge simply defers to the other until the outcome of that case that happened in the University of Maryland case. If you may recall back in 2012 and then 2013, the ACC filed suit in Greensboro subsequent to that shortly thereafter, the University of Maryland filed a lawsuit against the ACC in the state of Maryland. Well, because the heart of everything happened in the state of North Carolina, including the negotiations, the meetings and everything that would arrive in the ACC Constitution, and at that time it was just talking about a liquidated damages penalty. But the court in Maryland stayed that action. This time what we had is a little bizarre because even though we have all the core what we call nucleus facts, if you will, happened in North Carolina, including the signings and negotiations, the meeting regarding the grant of rights agreement, that would, before you even get to something called priority, that would militate in favor of North Carolina having venue in this in this in this matter. For reasons I really can't understand, the Florida court didn't agree with it and wants to proceed on a parallel track. Yeah, none of that matters, but let's just say it does go to a Florida court. Won't any appeal go up and we get it ultimately into U.S. District Court, no? Yeah, the chances gone the federal court has failed and there's for a number of reasons.

I won't get into the minutia of that. But for one, this is fundamentally an IP, the IP dispute, the copyright dispute. And when you have a copyright agreement, those are interpreted under traditional contract principles. And that's a question of state law.

They like what their duress, what their fraud in the copyright license agreement, that kind of thing. And those are going to be interpreted under state law. So there's not really until somebody alleges an explicit federal question, that's really no ground to go to federal court. In addition, there's not what's called diversity jurisdiction because of the ACC being a voluntary association.

And then finally, it doesn't matter. You only have 30 days from the date of service to remove the federal court. Neither the ACC did that in Tallahassee and Florida State than it did in Charlotte.

So that shit failed. And so what we have here are two parallel cases that, yeah, may go up on appeal. And I should remind you, Adam, that one's already on appeal. I haven't seen it docketed in Raleigh yet, but the Florida State did, you know, to remind everybody that Judge Blexo, who's a long term jurist on the North Carolina Business Court, has been on there for a couple of decades by now.

He has already listened. He's already heard the bulk of actually all of the pending motions by Florida State. And he has already issued a 76 page decision teaming with legal reasoning that is adverse to Florida State. Florida State has appealed that to the North Carolina Supreme Court. Just so everybody is aware, the business court is probably the most powerful trial court in the nation because you don't stop in Raleigh at the court of appeals. You go directly to the North Carolina Supreme. So that's already on its way. And it does appear that the court in Charlotte is going to retain some jurisdiction and proceed on those issues that are not really all that appealable. And that includes the interpretation of the grant of rights agreement. All right. So what we. Sure, go ahead.

I just want to kick this forward a little bit and I'm going to get you to kind of project if you could. David McKenzie, intellectual property attorney here on the Adam Gold Show. If the North Carolina Supreme Court says ultimately to Florida State, look, it's a contract you signed. If if you want to negotiate with the Atlantic Coast Conference to get out, that's up to you. But there but this is a contract that you entered into willingly, knowingly, two different times.

So this contract applies. What's the path forward for Florida State other than trying to negotiate their way out? Well, the North Carolina Supreme Court is only going to ask to answer the question on sovereign immunity. And that's the only real viable issue on appeal. The trial court, I think, is going to retain jurisdiction and have those things. Well, this is a binding contract that you can pay to get out.

Now, what that number is, is subject to a lot of interpretation. So I think that you may have actually within the state of North Carolina to parallel proceedings. One is resolving the appellate issue and then the other resolving the issues that remain before the trial court. Specifically, the phone at the court at the Supreme Sovereign immunity at the business court.

The validity of the grant of rights. Unfortunately, you're going to also have something going on down in Florida. Now, there, that's moving much slower than we are here in North Carolina. Right.

I just know that from reading your timeline. You were like, I thought we were just going to be here for a couple of hours. Now, now we're taking a lunch break and now we're coming back or we're spending too much time on other stuff.

Would you advise the ACC to negotiate? Welcome to another round of Boardroom or Miro board. Today, we talk retrospectives with agile coach Maria.

Let's go. First question. You spent two hours in a team retro, but the only input you've heard is Dave's. Boardroom or Miro board? Boardroom. In Miro, Dave can't hog the space because everyone can add thoughts anonymously.

Online at the same time. Correct. Next, you need the team to act on feedback fast. So you turn all those retro notes into Jira tasks instantly.

Miro all the way. And I can assign those tasks to teammates. You're nailing this. Now, you see hundreds of sticky notes from the retro.

A real mess. But you organize them into five themes in just seconds. Miro, I basically get back an entire hour when I use its AI tools for clustering. And she's done it. Join over 60 million people running actually enjoyable and actionable retros in Miro. Get your first three boards free at Miro.com.

That's M-I-R-O dot com. Absolutely not. I know that's a pretty strong stretch statement, but absolutely not. There is this is a situation where and I'm not trying to I wish I could be confident about all my my cases. But but the the ACC is honestly sitting on a case that is so strong that that folding right now would be like folding with a royal flush.

As I said, it has it has incredibly strong it has incredibly strong case based on IP and contract law. Florida State is throwing anything at the wall to see if it will stick. So I think my advice to the ACC, obviously, I'm not representing them as absolutely not.

Don't settle. And by the way, do you not think that their constituent members like Wake or Duke or BC or even Carolina and NC State here in the triangle? Do you not think that they have their interests deeply connected to this?

Because the Florida State where the somehow Yankee is being around or devalued about the value of their own right. I just think that the ACC is in a position of strength. It's unlikely their constituent members want any folding. I from the very beginning, I thought my position was if the ACC negotiates a number, then they are negotiating the end of the league. The league might end anyway. Who knows what's going to happen in the future? I think college sports is going to look drastically different five years from now anyway. So but I wouldn't I agree.

I would not negotiate with anybody. And I think everybody is just going to have to make do with just your forty five million dollars in shared media rights revenue. David McKenzie, intellectual property attorney, constitutional law expert as well at McKenzie Law on Twitter. I hope you'll come back. I thank you very much.

Thanks, Adam. Welcome to another round of drawing board or Miro board. Today, we talk brainstorms with UX designer Brian. Let's go.

First question. You thought you'd see everyone's idea in the team brainstorm, but you've got a grand total of one. Drawing board or Miro board?

Drawing board. Right. Because in Miro, the team can add ideas now or later.

And with privacy mode, we can keep them anonymous until they're good to share. Correct. Next, you need the best way to explain your idea, but all you have is a few sticky notes. Drawing board or Miro board? Drawing board.

Because, you know, in Miro, I could record videos at text, images, links and digital sticky notes, of course, present my thoughts the way I want. Right again. Now, you're looking for a past idea you thought was just genius.

Only you could find. Oh, there it is. Drawing board or Miro. Our finished and unfinished work lives in one place.

And he's won. Join over 60 million people getting ideas noticed in Miro Brainstorms. Get your first three boards for free at Miro.com. That's M-I-R-O.com.