CLARKSBURG – A federal judge has ruled a former member of a West Virginia-based NCAA athletic conference must pay the league its full exit fee of $150,000.
On March 8, U.S. District Judge Thomas Kleeh issued his Memorandum Opinion and Order granting the Mountain East Conference’s Motion For Summary Judgment. In 2021, the league filed a complaint against Franklin University and Franklin University-Urbana, together doing business as Franklin University. The MEC is based in Bridgeport, and the school is based in Columbus, Ohio.
Kleeh ruled the MEC Constitution and Bylaws constitute a valid, enforceable contract between the league and the defendants. By refusing to pay the exit fee, he says Urbana breached that contract.
Garrison
| Courtesy photo
“While we strongly believe this issue should not have required legal action, this is the appropriate and just outcome we have hoped for since 2020,” MEC Commissioner Reid Amos said of Kleeh’s ruling. “I greatly appreciate our member presidents who serve on our MEC Board of Directors and their consistent support regarding our commitment to achieving this result.”
According to the complaint, Urbana University closed its campus and ceased all operations in May 2020, including its Blue Knights athletic programs. In 2012, Urbana became a charter member of the MEC, which is based in Bridgeport.
In 2014, Franklin University purchased Urbana University. The MEC says it played a key role in helping Franklin/Urbana to maintain NCAA Division II membership. Eventually, Franklin/Urbana became a wholly owned subsidiary of Franklin University. Franklin contributed more than $15 million into Franklin/Urbana’s athletic facilities.
In the spring of 2020, Franklin closed Urbana’s physical campus, moved all classes online, stopped enrolling new students and ceased offering sports and on-site administrative roles.
On May 8, 2020, Urbana’s Executive Vice President and CEO Christopher L. Washington told the MEC it was closing the campus and ceasing all operations and provided formal notice of its intention to withdraw from the conference immediately.
Based on the conference by-laws requiring more than three years notice, the exit date was established as June 30, 2023, and the exit fee was set at $150,000. That’s also based on conference by-laws setting it at six times the annual fees of $25,000.
Attorney Michael Garrison said the ruling not only is this an important victory for the MEC, but he said it has broader implications for college and university athletics.
“This ruling reinforces the notion that the constitutions and bylaws of athletic conferences that include an exit fee are enforceable contractual agreements between the conference and its member institutions,” said Garrison, who is a former president of West Virginia University. “This is a significant win for the MEC and its member institutions. It is also an important and well-reasoned decision in the era of continued conference realignment.”
Garrison said this decision represents the first ruling by a court that upholds the validity of a liquidated damages clause or “exit fee” in the context of a member school refusing to pay the same upon leaving a conference.
The conference accused the defendants of breach of contract and wanted the $150,000 as well as post-judgment interest, attorney fees, court costs and other relief.
The MEC was represented by Garrison and Jordan Sengewalt of Spilman Thomas & Battle’s Morgantown office, and the defendants were represented by Denise Pentino and John Michael Prascik of Dinsmore & Shohl’s Wheeling office.
The MEC includes 12 NCAA Division II member colleges and universities located in three states, many of which were members of the now-defunct West Virginia Conference. The MEC sponsors 23 NCAA championship sports, and MEC teams have won six NCAA team national championships, have played in 12 NCAA Championship games and won 37 regional championships.
U.S. District Court for the Northern District of West Virginia case number 1:21-cv-104