NCAA Advances Claims That PA Snagged Funds

(CN) - Pennsylvania must face claims that it tried to steal $60 million from a fund created in the wake of the Jerry Sandusky child-abuse scandal, a federal judge ruled.

Penn State University had created the fund to help victims of child sex abuse amid claims that it had ignored actions of its assistant football coach for years.

Sandusky is serving 30 to 60 years in prison for 45 counts of sexual abuse of young boys.

After the National Collegiate Athletic Association imposed a $60 million sanction upon the university and barred its football team from postseason play for four years, Sen. Jake Corman announced in 2012 that he would introduce a law to filter funds drawn from penalized state colleges to the state treasury.

Corman, a Republican who chairs the appropriations committee, soon sued the NCAA for allegedly trying to snag Pennsylvania public funds without permission from elected officials.

Three days later, Corman moved to enjoin the NCAA from "disposing of, reducing, or otherwise dissipating outside of Pennsylvania" any of Penn State's first payment of $12 million.

Gov. Tom Corbett, also a Republican, signed the Institution of Higher Education Monetary Penalty Endowment Act into law on Feb. 20, 2013, about a month after he sued the NCAA under the Sherman Antitrust Act for imposing "crippling" sanctions on Penn State.

The same day the new law was codified, the NCAA sued Corbett and three other state officials: Mark Zimmer, chairman of the Commission on Crime and Delinquency; treasurer Rob McCord; and auditor general Eugene DePasquale.

The NCAA says the act is meant "to legislate where private parties spend their money, and to confiscate funds intended for the victims of child sexual abuse nationwide to be used solely for the benefit of Pennsylvania residents."

Corman amended his complaint that same day to add that the Penn State consent decree violated the new law, and treasurer McCord later joined as a plaintiff.

Chief U.S. District Judge Yvette Kane dismissed the governor's suit in June 2013, and refused to let Corman intervene in the NCAA's federal action in October.

Corbett, Zimmer, McCord and DePasquale in turn moved to dismiss or stay the NCAA's suit, but Kane denied the motions June 12.

The court declined to dismiss the suit based on Younger v. Harris, a 1971 federal decision that counsels against federal-court interference with pending state judicial proceedings.

"Although the economic implications of the Act may undermine plaintiff's ability to fully effect the consent decree by controlling the disbursement of the monetary sanctions, on the facts alleged here, the court cannot find that the adverse impact of the act is 'the equivalent of sanctions found in criminal or quasi-criminal proceedings,'" Kane wrote. "Moreover, there is no indication that the Act bears any similarity to a Commonwealth criminal law, or that the state actors who initiated the state civil action could have initiated a criminal action against plaintiff."

Kane also refused to dismiss the case under the 1941 ruling in Railroad Commission of Texas v. Pullman Co., finding that "the language of the Endowment Act is 'clear and unmistakable,' and defendants therefore have not established the first 'special circumstance' warranting Pullman abstention."

The court additionally rejected claims that the 1976 doctrine of Colorado River Water Conservation District v. United States warrants dismissal of the federal case because of a "parallel" state court case.

"Because the state and federal lawsuits include different parties, as well as identical parties in different procedural postures, the court finds that the cases are not parallel," Kane wrote.

Indeed, Corman's suit has persevered in state court, where a judge found on April 17, that the Endowment Act did not violate the equal-protection clause.

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