Steve Berkowitz

USA TODAY Sports

State of Maryland says ACC improperly inflated exit fee against school for Big Ten move

Maryland also claims ACC is now withholding money from school with no authority to do so

Lawsuits and counter-claims filed in North Carolina%2C though Maryland disputes its jurisdiction

The state of Maryland has filed a $156.8 million counter-claim against the Atlantic Coast Conference, alleging the conference broke its own rules in an effort to inflate the exit fee it says the University of Maryland must pay for leaving to join the Big Ten Conference.

The Maryland Attorney General's Office also alleges that after Maryland announced its planned move, representatives of Wake Forest and the University of Pittsburgh "each contacted a Big Ten university in an attempt by the ACC to recruit at least two Big Ten schools to leave the Big Ten and join the ACC." The prospective Big Ten targets were not identified.

These actions, according to Maryland, are among a series of moves by the ACC that constitute "illegal, retaliatory, and anti-competitive conduct (that) threatens irreparable harm to Maryland and Maryland's student-athletes, student and alumni fan base, faculty, athletic competitiveness and reputation."

The Maryland AG also is seeking punitive damages against the ACC in an amount to be specified by the court.

The claim was filed late Monday in a North Carolina state court and stems from a lawsuit the ACC filed in November 2012, shortly after Maryland announced its intent to leave the ACC for the Big Ten in 2014.

The ACC claims that under an agreement made by the ACC's member schools in September 2012 – an agreement Maryland voted against – Maryland owes a $52.2 million exit fee. Maryland says the ACC's effort to apply the new provision immediately is in violation of ACC rules and was intended to both punish the school and deter other conference members from leaving.

Thus, Maryland says, the ACC is violating North Carolina state law that bars unfair competition and unfair or deceptive trade practices.

The school also claims the conference's decision to withhold more than $19 million in conference revenue-sharing funds as a hedge against Maryland's anticipated refusal to pay the higher exit fee constitutes fraud because a portion of that money comes from the NCAA and belongs to Maryland through its membership in the association.

ACC spokeswoman Amy Yakola said Tuesday the conference is standing by the statement commissioner John Swofford made in November 2012 when the conference filed the lawsuit: "We continue to extend our best wishes to the University of Maryland; however, there is the expectation that Maryland will fulfill its withdrawal payment obligation. . . . the ACC Council of Presidents made the unanimous decision to file legal action to ensure the enforcement of this obligation."

Wake Forest spokesman Steve Shutt said the school had no comment. Pittsburgh spokesman E.J. Borghetti also said the school had no comment.

Maryland alleges that when the ACC schools voted in September 2012 to increase the exit fee to an amount equal to three times the ACC's operating budget at the time a school provides official notice of withdrawal, the ACC did so without the conference and Swofford adhering to conference rules regarding pre-vote review and notice of the proposed change. Maryland says the September 2012 vote is "null, void, and without effect."

Even if the vote were proper, Maryland says, under ACC rules it should not have become effective until July 1, 2013.

The school also says that although it announced in 2012 it intended to leave for the Big Ten in 2014, it did not provide its "official notice of withdrawal," as described by ACC rules, until June 27, 2013. Therefore, Maryland claims, the ACC should not have retained Maryland's $3.1 million share of ACC revenues that were distributed in December 2012 and should not have retained "in excess of $16 million" from distributions to member schools that occurred from January 2013 through the June 27, 2013 – the date of the official notice of withdrawal.

Maryland claims the withholdings were "retaliatory, tortious and anticompetitive" and caused financial problems for Maryland's athletics department that weakened the school's ability to compete in the ACC and in the Big Ten.

Further, Maryland alleges, after the school announced its intention to join the Big Ten, the ACC attempted to strike back by trying to recruit Big Ten schools to leave that conference and join the ACC. Maryland claims that the ACC pursued its overall strategy toward expansion "based in large part on counsel and direction that the Conference" receives from ESPN.

Maryland's filing does not claim that ESPN had anything to do with the alleged recruitment efforts of Big Ten schools by representatives from Wake Forest and Pitt. ESPN also has a television rights contract with the Big Ten.

Maryland says the exit fee being sought by the ACC has "no economic basis or justification and is not reasonably related to any actual damages which could be suffered or incurred by the ACC … the ACC will not suffer damages (if it suffers any damages at all) in an amount remotely approaching" $52.2 million.

Maryland is also alleging the inflated exit fee violates anti-trust laws.

"The anticompetitive impact of the Withdrawal Penalty is illustrated by assuming that every intercollegiate conference adopted an exit fee as draconian as the challenged Withdrawal Penalty," Maryland's lawyers wrote. Conferences' current memberships "would be largely frozen" because schools wouldn't be able to afford a move "even if a move by the university to another conference would improve the product and service offering of that university and conference and would result in an overall increase in consumer welfare."

Maryland initially counter-sued the ACC in a Maryland state court in January 2013, but in June a judge dismissed a portion of Maryland's case relating to state anti-trust law and ruled that rest of the suit should be stayed pending the outcome of the North Carolina proceeding.

Maryland attempted to have the North Carolina case dismissed, but in November a North Carolina state appellate court unanimously denied that motion. In its counter-claim filed Monday, the state of Maryland continues to maintain that the North Carolina court has no jurisdiction in the case.