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Court Says State Law Requiring NCAA Fines Stay in Pa. is Constitutional

by on April 09, 2014 3:23 PM

The Commonwealth Court of Pennsylvania hands the NCAA a legal setback, ruling that a state law known as the Endowment Act is constitutional.

That law targets the $60 million fine the NCAA slapped on Penn State and says that money must remain in Pennsylvania.

The NCAA fine was part of those sweeping sanctions imposed on Penn State in the wake of the Jerry Sandusky scandal.

In a 6-1 opinion written by Judge Anne Covey, the court ruled Wednesday that the Endowment Act is not considered special legislation and does not violate the rights of the NCAA.

State Sen. Jake Corman spearheaded the legislation and filed a lawsuit against the NCAA as a means keep the money in Pennsylvania. The NCAA challenged the legality of the Endowment Act itself and Corman sued to keep the NCAA from spending the money.

The NCAA argued in court the Endowment Act was special legislation and unconstitutional, saying the law violated the 14th Amendment of the U.S. Constitution by solely focusing on one party or entity and likely not applying to other parties in the future.

The opinion notes that the Endowment Act applies to all state-funded colleges and universities and the state legislature is responsible for appropriations to those intuitions. Additionally, the opinion points out that the majority of students at the schools are Pennsylvania residents who pay in-state tuition rates subsidized by the state legislature.

"Where a non-governmental organization determines that a monetary penalty of at least $10 million is to be imposed on one of these Commonwealth institutions of higher education, the Commonwealth has an interest in the specific purpose for which that fine will be used," the opinion states.

The court also says the funds can only be used as outlined in the agreement between Penn State and the NCAA, which is for prevention of child sexual abuse and to assist child sexual abuse victims. The court says the funds will not simply be funneled back to Penn State.

"The commonwealth has a strong interest in preventing child sexual abuse and assisting the victims of abuse. This governmental interest to protect the safety, health and welfare of children was further pronounced as a result of Jerry Sandusky's horrific criminal acts committed against other children on the premises of a state-related institution of higher education," the court says.

Additionally, the court notes the funds paid to the NCAA reduces funds available for the Penn State and would burden the university as a whole.

"It is reasonable to conclude that the General Assembly was concerned with the burden on the Commonwealth's taxpayers resulting from such fines and thus drafted the Endowment Act to apply the monetary penalties paid by an institution of higher education regardless of the source," the order states.

The $60 million fine was only part of a series of sanctions imposed on Penn State after the Jerry Sandusky child sex abuse case. The sanctions also included a loss of football scholarships and a four-year ban on post-season games as part of a consent decree Penn State entered into with the NCAA.

Corman says Wednesday's ruling challenges the consent decree as a whole.

"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."

The court also ruled that Penn State must join the lawsuit. Corman says that decision indicates the court's intention to review the NCAA's authority to impose the sanctions and whether the NCAA acted in accordance with its own constitution and bylaws.

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Jennifer Miller is a reporter for StateCollege.com. She has worked in journalism since 2005. She's covered news at the local, state and national level with an emphasis on crime and local government.
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