President Hargis at Oklahoma State on Expansion of the Big 12

27 Sep

If you do not think that the issue of tortious interference is a big deal in conference realignment, you just are not paying attention.

During the halftime show on Oklahoma State’s radio network during the A&M game (it definitely appears Oklahoma State is ready for the SEC, A&M, not so much) the president of Oklahoma State was interviewed.  He spoke like a man that has been terrorized by the Big 12′s lawyers on the issue of tortious interference. And why not? Everyone in college football has to be wondering if the SEC’s cavalier approach to recruiting Texas A&M is going to be a legal nightmare for them. (Disclosure: I really hope it is a legal nightmare for the SEC, mainly for my own entertainment. I think the pleadings would be great fun to read. Not because I care whether A&M moves.).

Pay close attention to the words said by President Hargis from OSU, because I can assure you he paid very close attention to those words:

When asked about potential expansion targets for the Big 12:

“They may have contractual things that they have to deal with. We are not going to talk to anybody, try to talk anybody into breaking their contracts. They have to work all that out.”

Translation: We aren’t going to make the same mistakes the Big Southern Dummies in the SEC made. No need to induce someone to break their contract here.

When asked about “soliciting” new schools to the Big 12:

“We won’t solicit them. They will have to solicit us.”

I laughed out loud at that statement and wondered if Hargis actually had a Big 12 lawyer with him for the interview. He could not have been more emphatic about that statement. No one was going to play this interview in a courtroom one day. He made a very clear record on the topic of “solicitation”.

Again, if you don’t think the law governing tortious interference with business relations isn’t hanging over conference realignment like a dark cloud, you are probably not paying attention.

Why hasn’t Baylor just filed suit already?

21 Sep

“Good Lord, what are those Baptists waiting on? Let’s get it on.” Anonymous Yahoo to me at a local establishment.

A few reasons why I wouldn’t file suit too soon if I were Baylor:

1. Sometimes it is more fun and useful to threaten a lawsuit than to actually file it. You might recall that the SEC backed away from A&M very quickly when Baylor just mentioned that suing people might be in their best interest. Suddenly, the SEC realized that they might have crossed a line in wooing A&M and just when the President’s of their gang were to vote on accepting A&M the vote turned into “not really accepting, more like we wish you weren’t married”. Didn’t you ask yourself if anyone was calling Ken Starr and making him an offer he couldn’t refuse to withdraw his threat to file suit? An offer that might include sufficient money to simmer down and just go away?

2. Well, there is nothing to sue anybody over just yet. Nothing has changed in the Big 12. Not yet. By “nothing” I mean that there is no change in contract status of any of the schools and no one has canceled a game and the TV people aren’t rumbling about changing the deal. At least not publicly.  So Baylor’s lawyers won’t file anything until they have some event that triggers Baylor’s right to recover.

3. Who wants a bunch of litigious baptists in their conference anyway? I think this might be a big part of the deliberations going on at Baylor. Suppose you are a member of the Big East and you think that Baylor and the other little sisters left over from the Big 12 are a good fit going forward. But Baylor has been threatening legal action, or has actually sued other conferences or schools. Do you want them in your conference? A few weeks ago a potential client met with me and casually mentioned that they had sued their prior lawyer. No offense Mr. Potential Client, but since you clearly are just fine suing lawyers, I think I will pass on the opportunity to be the next lawyer you sue. I see the same analysis point for the Big East or Mountain West or whomever is on Baylor’s radar. If Baylor has shown a propensity to sue other schools when they don’t like how things are going in the past, why would you want to get in bed with them now? This thing is going to end and when it does Baylor wants to be part of a conference. Preferably one that has an Automatic Qualifier into the BCS. So suing people like the SEC and A&M might not be appetizing to other institutions.

Did you see the remarks made by T. Boone Pickens saying that Baylor is serious about a lawsuit? Of course, he also said Oklahoma State was heading to the PAC 12, so maybe his prognostication skills in this arena are a bit suspect.

Finally, the events of yesterday where the PAC 12 told Texas, et al that they weren’t going to expand is some evidence of the kind of traction you can gain by simple acts related to litigation. Like, say, not signing a waiver.

Hopefully, this becomes more interesting.

Reviewing the “Contract” of the Big 12. Such as it is.

20 Sep

One of the most amazing things to me in all of this is the fact that the Big 12 operates on an agreement that was apparently put in place in 1996. That surprised me, but I was more surprised by the fact that the Big 12 operates without a document that is signed by the member institutions. I couldn’t believe it, so I asked one of my favorite Sports Bloggers, Kristi Dosh. She had checked with the conference and they confirmed that no other documents existed. I should point out that I have formed exactly zero conferences in my life. So you might want to take these notes with a grain of salt.

Frankly, the agreement (look at it here) does not look like anyone had a lawyer.  Things that I think are missing from the “agreement” (note that this list is partial, the agreement is short on lots of things beyond this):

  1. Signatures. There are no signatures. As in, no one signed the document. It’s just a handbook. Does your office have an employee manual?  It’s like that. Just a policy manual, really. One that lays out a scheme for all sorts of situations, including a scheme in case someone wants out. But I was surprised that no one signed it. If you have an employee manual at the office,  I bet the employer required you to sign it. I mean, if you are going to sue the SEC for interfering with your contract, wouldn’t you want a signed contract? If you are Baylor’s lawyer, the answer is yes. Oh yes.
  2.  Arbitration. This is the clause I was looking for when I first read the agreement. I just figured there would be an arbitration clause. Why would the conference want litigation among its members to be in the courts and therefore very public? I don’t understand.  Seems like you would want arbitration to be mandatory to at least allow the dispute to go on in private.
  3. Choice of Law. Most agreements that govern complex relationships choose the state law that will govern that relationship. When this agreement was drafted there were teams in Texas, Oklahoma, Missouri, Kansas, Colorado, Nebraska and Iowa. I suppose they couldn’t agree on a state law to apply to the disputes, but I wonder how anyone knows which state law applies to anything. Suppose Baylor wants to sue Missouri for the something. Just seems like there should be something addressing this issue.
  4. Forum/Venue Selection Clause. If you are not going to have an arbitration clause, at least it seems you should come to an agreement about where your lawsuits are going to be filed.
  5. Attorney’s Fees. I have advised clients in the past not to include a provision for attorney’s fees, but only rarely. In those circumstances the client and I felt that if there was a dispute under the agreement that the client would probably be the plaintiff (and under Texas law entitled to attorney’s fees) and not the defendant (therefore not able to recover attorney’s fees). So it makes sense to not negotiate an attorney’s fee clause. But you would think this situation would be a classic case that would require an attorney fee clause. Not sure what the thinking was here.
  6. Others. There are other oddities. Like there is no integration clause. But while I think those missing clauses are important, I don’t think they make the agreement “interesting”, like the items listed above do. At least, for me the items above make this document very interesting.

Where would I file suit?

10 Sep

Assuming a lawsuit is going to be filed, then Baylor’s lawyers will have a number of decisions to make regarding where to file the lawsuit. They first have to decide whether or not to file this case in federal court. Frankly, if suit is filed I will be very surprised to see it in federal court because I don’t think a federal court has jurisdiction to hear the case.  There are two avenues by which a federal court can obtain jurisdiction:

1. If the subject matter of the lawsuit as pled by Baylor is that the SEC violated a law of the United States or the Constitution then the federal court has jurisdiction because the case involves a “federal question”; or

2. If the amount in controversy exceeds $75,000 and there is “diversity” between the parties. If so, then there is “diversity jurisdiction” and the federal court can hear the matter. In order for diversity jurisdiction to apply, complete diversity is required, where none of the plaintiffs can be from the same state as any of the defendants.

Based on my review of the situation right now I do not see any jurisdiction for a federal court. First, there is no “federal question” to be decided as the claims that will be filed by Baylor arise under the laws of the state of Texas and I don’t see any federal laws that will be the subject of the lawsuit that I anticipate will be filed by Baylor. Second, there does not appear to be any diversity jurisdiction as it is a certainty that TAMU will be a party to this lawsuit for its breach of contract, probably the same contract that Baylor will allege was the subject of unlawful interference by the SEC.

Caveat: The SEC will hire some smart lawyers who are skilled at “removing” cases from state court to federal court. So don’t be surprised if the lawyers for the SEC see a “federal question” where I do not. After the matter has actually been filed the gaps in my understanding will be filled and we should have a much better understanding of the venue choices available to both parties.

So if not in federal court, then where? Certainly state court, but which state and which county?

The matter could be brought all over the Southeast, but why? If you are Baylor you want to play a home game here and there is no need to travel to your opponent. Can you imagine letting a judge in Tuscaloosa settle the matter? So it will be filed in Texas.

There are three counties that definitely are appropriate venue: Dallas County (where the Big 12 office is located), McClennan County (Waco, where Baylor is located) and Brazos County (College Station, where TAMU is located). When I first started looking into this I assumed that there would be a provision in the handbook that said where suit had to be filed. To my astonishment there were no provisions for litigation. So Baylor will be free to choose any of at least those three counties. If I were them it is a no brainer: McClennan County. Talk about a home game. So I expect that Baylor’s lawyers will be inviting the good people from TAMU and the SEC to saddle up and ride to McClennan County to defend themselves from the claims of the hometown baptist college. You can bet that thought has crossed the minds of the SEC folks a few times.

So there you have it. If suit is filed I suspect it will be filed in state district court in McClennan County.

What is “Tortious Interference with Business Relations?”

9 Sep

Suppose Baylor wants to sue the SEC for the hateful and pernicious act of soliciting TAMU to join them in their athletic endeavors, what does that look like? What kind of lawsuit is that?

As the title suggests it is a lawsuit seeking damages for “tortious interference with business relations” Essentially, they are suing the SEC for alienating TAMU’s affection for the Big 12 and its puny TV contracts and thereby damaging Baylor.

If there is a lawsuit then Baylor must prove the following in order to prevail:

  1. There is a valid, existing contract in place;
  2. The SEC willfully and intentionally interfered with that valid, existing contract;
  3. The willful and interference of the SEC proximately caused Baylor some sort of injury; and
  4. Baylor suffered actual damage or loss.

Let’s take those one at a time:

1. There is a valid, existing contract in place.

The question I keep asking myself is this: Which contract is the SEC interfering with? I think it is the contract that Baylor entered into with the rest of the member schools to form the Big 12. I have read the document that I think is the “contract” between the member schools of the Big 12 (see it here) and after doing so am a little queasy opining about the exact contract that could be the subject of the litigation. There are likely many contracts that are part of the “Big 12 relationships” entered into by Baylor. For example, is there a separate agreement between TAMU and Baylor regarding football games?  I don’t know.  But I am certain there is a valid, existing contract and this element won’t be the sticking point at trial.

2. The SEC willfully and intentionally interfered with that valid, existing contract.

This one is pretty interesting to me. At least at trial. Take a look at this letter:

Big 12 Letter

How can the SEC be willful and intentional after that letter? Isn’t that the granting of permission? Doesn’t Commissioner Beebe have the apparent authority to speak on behalf of Baylor and the other member institutions of the Big 12?  Great questions. Right now, I don’t know. But I will post later about a concept in the law known as “agency” and what that means in this context. For now, I am sure Baylor has a lawyer or two that has thought about this and apparently has an answer. Hopefully they will file suit very soon and we can examine their arguments in some detail.

I do have this thought: The news of TAMU to the SEC broke on August 26 or 27, I think. That was way before this letter, way before any league-wide conversation about letting TAMU bolt to the SEC. That conduct by the SEC, which occurred before it was blessed by the Big 12,  might be the basis of litigation. At least, I hope so.

3. The willful and interference of the SEC proximately caused Baylor some sort of injury.

4. Baylor suffered actual damage or loss.

I am going to take the last two elements together as I think it would be repetitive otherwise. These elements seem to be the sticking points for other authors that I have read.  They don’t think there is an injury. That baffles me as I see a big injury. For instance, a very good article was written by Clay Travis here and he says,”What are Baylor’s damages from Texas A&M’s departure? There are none.”

I don’t like it when smart people say things that I disagree with.  Someone is wrong and frankly, often that someone is me.

But I see damages that are foreseeable to the SEC at the time they engaged in this conduct. In no particular order:

1. The loss of the right to compete with TAMU. This game is a sellout every year it is played in Waco. Any chance that the replacement game, likely to be someone as attractive as Texas State, will also sell out? Doubtful. And though I don’t know, I bet Baylor charges a premium for the TAMU tickets. So there is some lost revenue that a decent expert can testify is “proximately caused” by the SEC luring TAMU to their bed.

2. If the Big 12 stays together and there are changes to the TV contract and the revenue earned by Baylor, that decline in TV revenue shared by Baylor seems like it is proximately caused by TAMU’s exit.

3. What if the Big 12 falls apart? What will David Boren’s testimony be regarding OU’s departure from the Big 12? He will probably say in his deposition (how I wish I could be there for his sworn testimony) that OU was fine with the Big 12 while TAMU was there, but their exit forced OU (and therefore OSU) to change direction. Namely, go west. So then Baylor loses $18 million or so because their share of the WAC TV money amounts to a used Cadillac or two. Personally, as a trial lawyer who has hired experts before, I feel like I could probably find an expert or ten to say Baylor was damaged.

Even a bad trial lawyer can probably have evidence like this admitted at trial. So I think there might be damages and I suspect the SEC is worried about those damages.

So there is the basic outline of the lawsuit, if it comes down. Hope it was helpful.

In the beginning…

8 Sep

Baylor hates the SEC and if there is a God then there will be litigation to prove it. If for no other reason than to pleasure me and my endless fascination with litigation.  I make my living in the courtroom (shameless plug of my firm here) representing clients that are involved in cases where someone, somewhere broke a promise. To me, the work is an endless study of the human condition and I never, ever tire of it.  And this business between Baylor, the Big 12, the SEC and Texas A&M is right in my wheelhouse.

This blog will attempt to keep up with the legal aspects of the dispute between Baylor and the world and sometimes offer analysis or commentary. I hope you enjoy it.

First, some disclosure:

1. I graduated from Oklahoma State (1982 Accounting) and SMU Law (1993).

2. I attend a church affiliated with the Southern Baptist Convention and am a Sunday School teacher there.

3. I don’t think any of the above matters, but thought you might think it worthwhile to mention.

Check back periodically as I hope to keep up with the saga. You can follow me on twitter as I will probably announce updates there: @BaylorHatesSEC.

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