Trustees of Boston College v. Big East Conference

18 Mass. L. Rptr. 177
CourtMassachusetts Superior Court
DecidedAugust 18, 2004
DocketNo. 034818BLS
StatusPublished

This text of 18 Mass. L. Rptr. 177 (Trustees of Boston College v. Big East Conference) is published on Counsel Stack Legal Research, covering Massachusetts Superior Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Trustees of Boston College v. Big East Conference, 18 Mass. L. Rptr. 177 (Mass. Ct. App. 2004).

Opinion

van Gestel, J.

This matter comes before the Court on cross motions for summary judgment. Both the plaintiff, The Trustees of Boston College (“Boston College”), and the defendant, The Big East Conference (“Big East”), assert that there are no material facts in dispute and that what is basically involved is the interpretation of the Amended and Restated Constitution of The Big East Conference (the “Constitution”).

The situation that underlies this case is a poster child for the dilemma faced by America’s colleges and universities in maintaining the proper balance between their primary mission of academic excellence and the operation of big-time intercollegiate athletic programs.1 Boston College has chosen to leave the Big East Conference, in which it is one of the Football Schools, and join the Atlantic Coast Conference. At issue is the validity of efforts by the Big East to quintuple the economic penalty and more than double the pre-withdrawal notice period, all designed to discourage Conference members from leaving the Conference and punishing them if they do so. In the litigation process spawned,2 respected college and university presidents charge each other with bad faith, with breaches of fiduciary duties, with misrepresentations and with worse. And any penalty, particularly one of $5 million, must be paid from funds that otherwise would be available for the academic program or scholarship aid.

While not presented before this Court, it must be observed that there are serious legal questions surrounding the enforceability of the penalties involved. It is not at all apparent that the withdrawal payment of $ 1 millionto say nothing of $5 millioncan be characterized as liquidated damages. In his deposition, the Commissioner of the Big East gave the following testimony.

Q. You intended this amendment to make it more difficult for Boston College to join the ACC, is that correct?
A. Yes.
Q. And you were going to make it more difficult for Boston College by requiring them to pay more money and wait longer before they could leave, is that right?
A. Yes.

Earlier in the deposition, the Commissioner said:

Q. Why was [the language dealing with downgraded programs] not included in the faxed amendment?
A. There was no urgency on this particular issue.
[178]*178Q. So it would have been considered in the ordinary course on November 4th?
A. Yes.
Q. The urgency was the amount of the penalty and the notice period?
A. Yes.
Q. And that was related to BC possibly leaving?
A. Yes.

For the withdrawal fee to be acceptable as liquidated damages, the amount should provide no more than the protection needed, must approximate the actual loss suffered, and cannot be insufficiently related to the harm involved. If the exit payment is otherwise, it would constitute an unreasonable penalty which would be void and legally unenforceable. See, e.g., Wilson v. Clarke, 470 F.2d 1218, 1222 (1st Cir. 1972); Perfect Solutions, Inc. v. Jereod, Inc., 974 F.Sup. 77, 82-83 (D.Mass. 1997); Security Safety Corp. v. Kuzniki, 350 Mass. 157, 158 (1966); A-Z Servicenter, Inc. v. Segall, 334 Mass. 672, 675 (1956).

BACKGROUND

The Big East is a non-profit corporation formed under the laws of the District of Columbia. It is an athletic conference whose members are colleges and universities who participate in intercollegiate athletics in the National Collegiate Athletic Association (“NCAA”).

The Big East was formed in 1979. In 1991, several existing Big East members, along with certain “affiliate members,” formed the Big East Football Conference (individually, the “Football Schools,” and collectively, the “Football Conference”). Although the Big East and the Football Conference originally operated as separate entities, the two eventually merged and adopted a single Constitution to govern the surviving corporation. This Constitution is dated April 24, 2000, and is entitled the Amended and Restated Constitution of the Big East Conference. Boston College is included as a Charter Member. This post-merger Constitution and amendments are at issue in this litigation.

In addition to the Football Schools, there also is a group of colleges and universities in the Big East referred to as the “Basketball Schools.”

The Constitution was amended on April 16, 2001. The amendments involved seven substantive changes, including eliminating reference to Temple University, which had been a member of the Football Conference, changes in the entitlement to vote on any waiver of certain member responsibilities and covenants, and the suspension, expulsion or probation of a member. These amendments were accomplished by the execution of a “Joint Consent” mailed by the Big East Commissioner to the Presidents/Chancellors of the constituent colleges and universities. There was no separate meeting regarding these amendments.3

Because of overtures in the spring, summer and early fall of 2003, by the Atlantic Coast Conference (“ACC”) to, and the consequent withdrawals of certain of the Football Schoolsparticularly the University of Miami and Virginia Polytechnic Institute and State Universityconcerns were expressed by many Big East members about “stabilizing” the conference. One proposal being considered was the adoption of a constitutional amendment calling for a $5 million penally, 27-month withdrawal provision. The penalty/withdrawal provision then in place called for a $1 million penally and a 12-month withdrawal notice period.

Boston College, at least until shortly after an October 1, 2003 meeting4 of the subcommittees from the Football Schools and the Basketball Schools, had consistently expressed its agreement with the $5 million penally, 27-month withdrawal provision. Indeed, by July 9, 2003, nine of the twelve Presidents/Chancellors of the Big East had expressed their favorable response to this proposition. However, no action to amend the Constitution to effectuate this change was attempted until October 2003.

At the October 1, 2003 subcommittees meeting, William P. Leahy, S.J. (“Father Leahy”), the President of Boston College, is recorded in the minutes as having spoken “to the potential of a possible marriage between Boston College and the ACC.” Father Leahy is further recorded as explaining “that because of recent media reportsand at his board’s urginghe must determine how genuine the ACC’s reported interest in Boston College as a potential 12th member is before he is willing to commit BC to an exit penally larger than the already agreed to $5M.”5 Shortly before that time, the University of Notre Dame had suggested imposing an even larger withdrawal penalty, but no action on that suggestion was taken at the October 1, 2003 subcommittees meeting.

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Bluebook (online)
18 Mass. L. Rptr. 177, Counsel Stack Legal Research, https://law.counselstack.com/opinion/trustees-of-boston-college-v-big-east-conference-masssuperct-2004.