WINSTON-SALEM, North Carolina (Reuters) - The Atlantic Coast Conference can proceed with a lawsuit seeking a $52 million payment from the University of Maryland over the school’s decision to leave for the Big Ten Conference, a North Carolina appeals court ruled on Tuesday.
The school, an original member of the 60-year-old ACC, has refused to pay the exit penalty, which it considers excessive.
The university sought to have the ACC’s legal challenge dismissed, arguing the North Carolina courts did not have jurisdiction to require the payment, which amounts to three times the conference’s total operating budget.
A state Court of Appeals panel rejected the university’s request and agreed with a trial court that the case filed in Greensboro, North Carolina, home of the conference’s headquarters, could move forward.
The ruling on Tuesday did not address the merits of the ACC’s lawsuit, which was filed in November 2012.
The ACC, University of Maryland and attorneys for each organization did not immediately return calls for comment.
The conference voted to increase the withdrawal penalty for member schools in September 2012, two months before Maryland announced its plan to switch conferences. The school had voted against the higher fee.
In a separate complaint filed in Maryland in January, the university said the withdrawal payment was invalid and unenforceable. That suit is on hold until the ACC’s lawsuit is resolved.
The University of Maryland is scheduled to begin competing in the Big Ten in all sports in the 2014-15 school year.
Reporting by Colleen Jenkins; Editing by Leslie Adler