Judge Rules NCAA Fine Should Stay in Pennsylvania, Blasts NCAA Sanctions

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A Pennsylvania Commonwealth Court judge ruled today in a 6-1 decision that the $60 million NCAA fine against Penn State should remain in the state, while also editorializing a bit about the validity of the consent decree and the merit of the sanctions in their entirety. The court upheld the Endowment Act, which plaintiffs say prevents universities from giving away state appropriations.

Judge Anne Covey ruled on the lawsuit brought forward in January 2013 by State Sen. Jake Corman and Treasurer Rob McCord to use the fine money for initiatives within Pennsylvania. However, what resulted today was an even bigger blow to the NCAA, as the court questioned the entire consent decree and whether it was entered into legally or not by Penn State.

“High school athletes who had no involvement in the criminal acts were prevented from obtaining a free college education,” Covey wrote. “Student-athletes, trainers, coaches, administrators, and support personnel who had excelled in their job through hard work, practice, commitment, team work, sportsmanship, excellence and perseverance were told none of that mattered.”

Covey wrote that there are “many discrepancies” between the NCAA’s constitution and the Penn State consent decree, and upheld the state law that ensures penalty funds go to Pennsylvania programs and initiatives. Even the lone dissenting judge, Dan Pellegrini, agreed with the ridiculousness of the sanctions, and accused Penn State of mishandling the situation.

“The majority appears to arrive at this outcome because it is bewildered, as I am, by how the Board of Trustees of PSU could have approved or allowed to be executed a ‘Consent Decree’ involving the expenditure of $60 million of PSU funds when the Consent Decree specifically states that the matter would ‘ordinarily not be actionable by the NCAA,’ ” Pellegrini wrote. “If, as the majority suggests, the NCAA did not have jurisdiction over conduct because it did not involve the regulation of athletics, then the expenditure of those funds is problematic, given that PSU is a non-profit corporation as well as being tax-exempt as a charitable organization, and that the Boards of Directors of non-profit charitable corporations have a fiduciary duty to ensure that funds are only used for matters related to its charitable purpose — in this case, the students of PSU.”

The case will now likely head to a discovery phase, where documents could come to light about Penn State’s decision to enter into the consent decree. Few documents of this nature have been made public since President Rodney Erickson signed the consent decree on behalf of the university in July 2012.

“It appears the Court, in reviewing the NCAA challenge, has called into question the validity of the consent decree itself,” Corman said in a statement. “This is an important development in the case and coincides with many calls for more scrutiny on the matter.  We are reviewing the Court’s opinion and looking at what are the best steps moving forward.  We are very pleased that the court has once again ruled in our favor on the legality of the legislation.”

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About Author

Kevin Horne was the editor of Onward State from 2012-2014, and currently holds the position of Managing Editor Emeritus. He graduated from Penn State with degrees journalism and political science in 2014 and is currently seeking his J.D. at the Penn State Dickinson School of Law. A third generation Penn Stater from Williamsport, Pa., Kevin is a director of the Nittany Valley Society 501(c)(3) and is involved in student government.

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