Sports Law Blog
All things legal relating
to the sports world...
Wednesday, June 25, 2008
 
Bad Duke Football Team Wins in Court



Being a bad football team paid off for Duke University, which won a breach of contract lawsuit because in large part because of its unsuccessful track record and a contract clause that required the plaintiff, the University of Louisville to find an adequate substitute school after Duke backed out of a obligation to pay the better school.

Duke's football team has amassed a record that few would envy. Six wins and 45 losses over the last five seasons puts the team in the category of as bad as it could get. As reported by the Louisville Courier-Journal, the University of Louisville sued Duke claiming breach after the Blue Devils opted out of the final three games of a four-game football series covering the 2002, 2007, 2008 and 2009 seasons after Louisville demolished the Duke Team 40-3 after the first game in 2002. Apparently, Duke waved the surrender flag to avoid more embarrassments.

The case, University of Louisville v. Duke University, No. 07-CI-1765, filed in Franklin (county) circuit court, sought $450,000 in damages. The amount was derived from a contractual cancellation penalty clause of $150,000 per game if the nonbreaching party is unable to schedule a replacement game with a “team of similar stature." According to the article, Duke asked Louisville to attempt a good faith effort to find a replacement opponent and promised to pay Louisville only if the school could not find one. Louisville claims it could not do so and therefore asked for the liquidated damages.

It is in interpreting "team of similar stature" where Duke's lack of success helped. Judge Phillip J. Shepherd agreed with Duke’s argument that it team was so bad that finding a replacement team of "similar stature" should have been a slam dunk (pardon the bad pun). As the opinion noted:


"To say that one thing is “of a similar stature” to another is to say that
the two are on the same level. Nothing in the language of the agreement
suggests that it is necessary or appropriate to conduct an in-depth
analysis of the relative strengths and weaknesses of the breaching team
and its potential replacements. Nor does the agreement specify that
replacement teams must be from a particular major athletic
conference or even a particular division of the National Collegiate Athletic
Association (NCAA). The term “team of similar stature” simply means any team
that competes at the same level of athletic performance as the Duke football
team. At oral argument, Duke (with a candor perhaps more attributable to
good legal strategy than to institutional modesty) persuasively asserted
that this is a threshold that could not be any lower. Duke's argument
on this point cannot be reasonably disputed by Louisville.


Louisville did find substitute teams and the court rejected the claim that the term "similar stature" was ambiguous. According to Shepherd, finding a suitable replacement literally meant that any NCAA Division I team would suffice – including those in the Football Championship Subdivision (formerly known as Division I-AA.) Therefore, the court granted summary judgment for Duke for the 2007 and 2008 season, but did not consider the 2009 season since the claim lacked ripeness.

Imagine, however, if Duke was a more competitive football team. Then the substitution clause would be more difficult to fulfill. Or, in a legal nightmare scenario, imagine that Duke's football team was as good as its men's basketball team! Needless to say, substation would be far more difficult.

[Note: I would like to thank reporter C.L. Brown and the Louisville Courier-Journal, who giving me access to the opinion.]






8 Comments:

Wow. Great story. Must be tough to be a Duke player and hear the school's attorney argue that there really aren't any teams worse than yours. That's what a 6-45 record gets I guess.

Anonymous Joe K -- 6/26/2008 2:23 PM  


The judge however misapplied any real legal standard to this case. In stating that any team would be equivalent to Duke, he looked only at Duke's record in 2007, which was admittedly poor, but the contract was entered into prior to 2003. Should not the contract be interpreted under the conditions in existence at the time the parties entered into the agreement?

It makes for good theater to say that any team would be comparable to Duke since no team could be worse, but the judge failed to permit Louisville to actually put any evidence in the record as to the meaning of the contract and just accepted without question the interpretation offered by Duke's lawyers. It's a wrongly reasoned decision and one likely to be overturned on appeal, if indeed Louisville appeals.

Full disclosure: I represented Louisville in early negotiations to settle the dispute but was not involved in the actual litigation.

Anonymous SportsBiz -- 6/26/2008 8:16 PM  


Hi Sportsbiz,

First, I read your Sportsbiz blog and find many of its contents interesting and I'll check out the other one in the near future.

You make some good points and since you were involved in the case, your insights are appreciated. However, I have a question. How good or bad was Duke in 2003? My guess is that they were not exactly championship calibre.

Blogger Mark Conrad -- 6/26/2008 9:45 PM  


FYI,

In 2003, Duke went 4-8 with a conference record of 2-6.

That year they beat Western Carolina, Rice, Georgia tech, and UNC...

Blogger Jimmy H -- 6/27/2008 6:57 AM  


Thanks for the information. With a 4-8 record, I still think that substitutes could be found with relative ease. I can't get inside the mind of the judge, but if I was in that position, I think that it would be relatively easy to find substitute teams.

From a philosophical standpoint, I see the points raised. Duke gets a free pass, despite the fact that it breached a contract with a specific liquidated damages clause. But the clause did provide what turned out to be a very big out.

Blogger Mark Conrad -- 6/27/2008 9:39 AM  


I think that there is a subtext getting missed here - "similar stature" does not necessarily mean "similar stature OR BETTER"

This was an early non-conference game, and it is not a stretch to think that Louisville wanted a BAD team. I suspect they would never admit it in court, but I suspect that what was going on was that Louisville had trouble filling its schedule with teams sufficiently BAD to pad its record, like most top Div. I schools do. "Your honor, we couldn't find a team with similar stature - they were all too good! The bad ones were all taken by other schools."

Anonymous Michael Risch -- 6/28/2008 7:57 AM  


Michael,

"This was an early non-conference game, and it is not a stretch to think that Louisville wanted a BAD team." I agree completely, but I find it hard to believe that a somewhat primetime institution such as Louisville would have that difficult of a time to find a school that would be willing to be humiliated in the early weeks of the season for a part of the gate revenue... There are plenty of lower tier schools outhere that could fill that spot, or they could even go with a higher tier Div II school if thats what they wanted to do.

To me, it comes down to a poorly drafted liquidated damages clause. From what I understand it did not define what a "team of similar stature" was... that left a big gaping loophole that Duke successfully took advantage of.

there is just too much left up to the interpretation of that sentence. I probobly would read ot to mean something in lines of " a high profile university...whith a baaaaaaad team", he he, but they would never admit to that...

Blogger Jimmy H -- 6/28/2008 2:16 PM  


Wonder how long it will be before someone inserts a clause that provides for no buyout if the replacement is from one of the BCS auto qualifier leagues, a buyout of X if it is a Division I FBS school not from those leagues and X+Y if it is a FCS school.

Blogger Mark -- 6/28/2008 7:52 PM  


Post a Comment