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Documents from the ongoing lawsuits between the EKU and the OVC

EDITOR'S NOTE: This story is part of a publishing partnership between the Richmond Register and the Eastern Progress.

The contentious legal battle between Eastern Kentucky University and the Ohio Valley Conference continues to evolve and expand — almost a year after the original lawsuit was filed.

The parties are set to make oral arguments on June 30 in the Franklin Circuit Court in Frankfort. At this hearing, the OVC is seeking to dismiss EKU's countersuit while also compelling the court to force the school to provide further evidence and/or disclosure.

A ruling on these specific issues at that time could move the case forward, but likely will not bring closure to a situation which has turned former allies into adversaries.

 

"While EKU does not comment on on-going litigation," a statement from the university received on Tuesday stated, "we're working to bring the case to an efficient conclusion for the benefit of our student-athletes and the university community as a whole."

The biggest issue between the league and one of its founding members is — not surprisingly — financial.

EKU was a member of the OVC for more than seven decades before announcing it was leaving — along with another OVC member, Jacksonville State — in 2021 to join the ASUN.

On Aug. 3, 2021, the OVC filed a lawsuit against EKU in Franklin County Circuit Court seeking a $1 million exit fee, which is specifically designated in the athletic league's constitution. The OVC also sued Jacksonville State. 

"This is a straight-forward case about contractual provisions that the school agreed to but is now unwilling to honor," the OVC stated in the initial complaint.

Section 4.5.3 of the OVC Constitution includes the following statement: "A member institution failing to provide the minimum two years required written notice shall pay the Conference a sum of $1,000,000 in addition to forfeiting both its Conference year-end and OVC Basketball Pool distributions during the final year of OVC membership."

The OVC Constitution has contained an exit free provision since at least 1967. The OVC Board of Regents voted unanimous to increase the penalty in 1999, 2011, 2013 and 2015.

“Eastern Kentucky University joined all the OVC schools in voting for an exit fee for departing members, including itself," OVC Commissioner Beth DeBauche said in a statement provided to The Register on Wednesday. "To date, EKU has refused to pay that agreed-upon fee, a position that is detrimental to all the other schools in the conference and their student-athletes. The OVC had no choice but to file its lawsuit against EKU."

EKU officials, however, believe the issue is much more complex.

"A case that one party claims is 'straight-forward' rarely is. Such is the case here," EKU stated in a motion to dismiss the original lawsuit.

EKU not only claims it should not be compelled to pay the exit fee — because of breach of contract by the OVC — but it should be entitled to the school's share of the OVC Basketball Pool for the 2020-21 season, which the institution claims in its countersuit.

Motion to dismiss

Just more than a month after the OVC filed suit in attempt to collect the $1 million exit fee, EKU put forth a motion to dismiss the case without prejudice, "because the (OVC) fails to state a claim for which relief can be granted."

The school relied on a wide variety of legal arguments in the filing.

Most importantly, EKU officials state, "the OVC offers nothing in its complaint to show that EKU approved the OVC Constitution or agreed to be bound by it."

EKU's lawyers also claimed the OVC could not sue the school as it is shielded by government immunity — as a public university.

They also claimed the OVC, as a non-profit organization which is not incorporated in Kentucky, can't file a suit in the Commonwealth.

On Nov. 9, 2021, the motion to dismiss the original lawsuit was denied by the judge.

In the ruling, a judge ruled the OVC has associational standing, shot down the notion of EKU's governmental immunity, noted the Kentucky Supreme Court has upheld the right of non-profit organizations to sue on behalf of its members, and firmly declared the OVC Constitution "a lawfully authorized written contract."

Orders to compel

On Nov. 18, 2021, EKU filed a Notice of Appeal to the Kentucky Court of Appeals, once again claiming "governmental immunity."

After that filing, the school claimed the Franklin Circuit Court no longer had jurisdiction over the case and could not compel EKU to provide evidence in the original case, which had repeatedly been requested by the OVC.

"Eastern Kentucky University, respectfully requests that this Court deny OVC’s Motion to Compel and allow EKU’s interlocutory appeal to be resolved by the Court of Appeals prior to any discovery," EKU said in a response to an order to compel.

 

Just four days later, the judge ruled the case must move forward, even with a pending appeal.

"Kentucky law is crystal clear that public universities are not immune from contract claims brought under KRS 45A.245," the judge stated in the order to compel. "There are legitimate questions in this case as to whether the OVC Constitution constitutes a written contract enforceable under KRS 45A.245, and whether the OVC is entitled to any form of declaratory, injunctive or equitable relief on its other claims. But, EKU’s attempt to put every aspect of the litigation on hold while it attempts to appeal the Court’s provisional ruling on immunity, is not well founded in fact or in law in these circumstances."

After previously being granted at least two extensions — amounting to more than 60 days — EKU finally provided some disclosure to the OVC on Jan, 20, 2022.

Countersuit

On April 15, 2022, the entire situation took a dramatic shift.

EKU issued an answer to the OVC's claims, then launched a countersuit against its former conference.

The school's legal team made seven counts against the OVC — some of which were in contrast to previous claims.

EKU claimed the OVC breached its contract with the school — after claiming in the original motion to dismiss that there was no legally binding contact — by postponing/cancelling fall sports in 2020. This breach, "caused damages to EKU and entitles EKU to be relieved from any further obligations under any alleged contract and judgment from the OVC in an amount in excess of the jurisdictional limits of this Court."

In fall 2020, the OVC announced it would postpone conference football competition until spring 2021 as a reaction to the COVID-19 pandemic.

The Colonels played a nine-game, non-conference schedule in the fall, anyways, while every other OVC school played the majority of its schedule in 2021.

EKU claims in the countersuit the OVC refused to provide "reasonable assurances" the school would not be penalized for proceeding with fall sports outside of the OVC.

"EKU clearly indicated that a failure to provide said assurances would be construed as termination of EKU’s membership in OVC," EKU's countersuit states. "No exit fee is due from an OVC member when its membership is terminated by OVC. The OVC constructively terminated and/or breached any alleged contract by terminating EKU’s membership in OVC."

That termination, EKU claims, relieves the school of its duty to pay the exit fee, and also requires the conference to provide the school with owed distributions, including the OVC Basketball Funds.

EKU's counterclaims also sheds light on a previously unknown effort by EKU to broker a deal to merge the OVC and the ASUN.

According to court documents, EKU accuses the OVC of anti-competitive practices under the Kentucky Consumer Protection Act.

"OVC’s actions in withholding the Owed Distributions and any equity stake in the Conference Fund Balance, while also refusing to respond to EKU’s proposal to merge conferences, is a restraint on trade and commence in this Commonwealth, results in an attempt to monopolize trade in this Commonwealth, and is an unfair, false, misleading, or deceptive act and restraint on free trade and commerce and business relationships," EKU's attorneys argued.

The counterclaim calls for the judge to "dismiss all claims by the OVC without prejudice and enter judgement against the league for compensatory damages in an amount to be determined at trial."

The OVC issued its response to the countersuit on May 18 — and asked the court to dismiss EKU's action.

The memorandum attempted to rebuke EKU's claims and sheds even more light on the EKU's attempt to broker a merger between its old league and its new one.

The response states there wasn't any need to promise EKU immunity from punishment for the school playing football in fall 2020.

"The counterclaim does not allege any penalties resulting from EKU’s decision to schedule non-conference athletic competitions, contrary to OVC rules. Nor could it, since the OVC did not penalize EKU," the response states.

The motion to dismiss denied the claim the OVC violated the Kentucky Consumer Protection Act, and reiterates the legal-binding measures in the OVC Constitution, including the exit fee and withholding of year-end funds. It also takes aim at EKU's claim of monopolization.

"It is factually senseless and lacks any legal foundation," the response states. "The ASUN is a competing athletic conference. “[T]he main purpose of the antitrust laws is to preserve and promote competition. Competition is threatened when competitors merge —not when they decline to merge and continue competing as independent entities."

EKU, apparently, tried — on multiple occasions — to serve as mediator to get the ASUN and OVC to combine in some form or fashion.

"As a threshold matter, EKU fails to allege that it even had authority to solicit a merger on behalf of the ASUN," OVC's response states. "This, by itself, is fatal to EKU’s attempted monopolization claim since the OVC can not face liability for declining a merger invitation extended without authority."

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