The Big East Conference v. West Virginia University

• Decision Date: 27 December 2011
• Docket Number: C.A. PB 11-6391
• Parties: THE BIG EAST CONFERENCE, v. WEST VIRGINIA UNIVERSITY
• Court: Rhode Island Superior Court

THE BIG EAST CONFERENCE,
v.
WEST VIRGINIA UNIVERSITY

C.A. No. PB 11-6391

Superior Court of Rhode Island

December 27, 2011

DECISION

SILVERSTEIN, J.

Before this Court is Defendant West Virginia University's (Defendant or WVU) Motion to Dismiss pursuant to Super. R. Civ. P. 12(b)(2) and 12(b)(5). Defendant moves this Court to dismiss Plaintiff The Big East Conference's (Plaintiff or Big East) Complaint for lack of personal jurisdiction and insufficient service of process. Alternatively, Defendant moves the Court to dismiss or stay Plaintiff's Complaint under principles of comity or the doctrine of forum non conveniens.

I

Facts and Travel

WVU is a state university with a main campus located in Morgantown, West Virginia. (Compl. ¶ 9.) The university was created by West Virginia statute and is overseen by a Board of Governors. See W.Va. Code § 18-11-1; see also Def.'s Mem. of Law in Supp. of Mot. to Dismiss (Def.'s Mem.) 3. The WVU Board of Governors "shall be a corporation, and as such may contract and be contracted with, sue and be sued . . . ." W.Va. Code § 18-11-1.

The Big East is a District of Columbia not-for-profit corporation headquartered in Providence, Rhode Island with the purpose of sponsoring, supervising, and regulating men's and women's intercollegiate athletics in twenty-four sports, including football and basketball. (Pl.'s Resp. in Opp'n to Def.'s Mot. to Dismiss (Pl.'s Resp.) 2.) Members of the Big East include WVU, Providence College, and fifteen other schools across the eastern United States. (Compl. ¶ 13.) The Big East and its members collaborate to create schedules and negotiate and participate in marketing and broadcast arrangements for athletics. (Compl. ¶ 14.) Broadcast arrangements include lucrative contracts with ESPN and CBS to televise basketball and football games through the year 2013, earning the conference and its member schools millions of dollars in revenue. (Compl. ¶¶ 16-18.) However, both CBS and ESPN have the right to negotiate a reduction in fees paid pursuant to the contracts if a member school leaves the conference. (Compl. ¶ 16-18.)

The Big East is governed by Bylaws, with which WVU agreed to comply as a condition of membership in the Conference. (Compl. ¶¶ 19-20, 24; Compl. Ex. A (Bylaws).) WVU has been a member of the Big East conference since 1991. (Compl. ¶ 15.)

The Bylaws contain provisions through which a member school may withdraw from the conference. (Compl. ¶ 21; Bylaws Art. 11.02.) These provisions were adopted unanimously by the member schools, including WVU.^[1] (Compl. ¶ 25.) The Bylaws provide, in essence, that a member school may unilaterally withdraw from the Big East only by: (1) providing at least twenty-seven months' written notice of withdrawal to be effective on the following July 1; (2) paying a withdrawal fee of at least $5 million, with $2.5 million due on notice of withdrawal; and (3) participating in all athletic competitions in the conference schedule until the effective date of withdrawal. (Bylaws Art. 11.02(a); Compl. ¶ 21.) The withdrawing member loses all rights in the assets and revenues of the conference upon the effective date of withdrawal; but, immediately upon notice of withdrawal, revenue is credited towards any amounts owed by the member to the conference, and the member is automatically removed from committee membership and other positions within the conference. (Bylaws Art. 11.02(c).) In the event that a member school does not comply with the requirements for withdrawal, the Bylaws state that non-compliance would cause irreparable harm to the conference, and the Big East is entitled to seek and obtain injunctive relief as well as attorneys' fees and costs. (Bylaws Art. 11.02(b); Compl. ¶ 23.)

On October 28, 2011, WVU announced publicly that it planned to leave the Big East for the Big 12 conference. (Compl. ¶ 28.) WVU also sent notice to the commissioner of the Big East stating that WVU intended to withdraw from the conference effective June 30, 2012. (Compl. ¶ 29.)

On October 31, 2011, WVU^[2] filed an action (the West Virginia case) against the Big East in the Circuit Court of Monongalia County, West Virginia, seeking declaratory judgment and permanent injunctive relief and claiming breach of contract. (Pl.'s Resp. 3-4; Def.'s Mem. 3-4.) The very next day, WVU filed an Amended Complaint expounding upon its allegations. (Def.'s Mem. 4.) In the West Virginia case, WVU alleges that the Big East breached its contractual and fiduciary duties to WVU by allegedly failing to maintain the Big East as a viable collegiate football conference. (Def.'s Mem. 4.) WVU seeks, first and foremost, a declaration that the Bylaws are null and void between WVU and the Big East, that the Big East has accepted WVU's proposal to withdraw from the conference, or that the Big East has waived the withdrawal provisions of the Bylaws. (Def.'s Mem. 4.) Further, WVU seeks damages resulting from the Big East's alleged breaches of the Bylaws and an Order permanently enjoining the Big East from enforcing the withdrawal provisions in the Bylaws against WVU. Id.

The Big East filed its action on November 4, just four days after WVU filed the West Virginia case and within a week of WVU's announcement it would be withdrawing from the conference. (Pl.'s Resp. 4.) In the case at bar, the Big East is claiming breach of contract against WVU and is seeking specific performance, an injunction prohibiting WVU from withdrawing without complying with the Bylaws, damages, and attorneys' fees and costs. (Compl.) On or about November 15, 2011 a summons and a copy of the Complaint in this matter were delivered by certified mail, return receipt requested, to the president of WVU, James P. Clements. (Aff. of Thomas F. Holt, Jr. Ex. F.)

The West Virginia court has recently entered a scheduling order, with a trial date initially set for June 25, 2012, five days prior to WVU's intended departure from the Big East. (Def.'s Reply 1.)

II

Discussion

WVU asks this Court to dismiss or stay further proceedings herein on a number of grounds. First, WVU argues this Court lacks personal jurisdiction to hear the matter, and thus it should be dismissed pursuant to Super. R. Civ. P. 12(b)(2). WVU also argues there was insufficient service of process, and the Court should dismiss the Complaint under Super. R. Civ. P. 12(b)(5). WVU next asserts that WVU is subject to sovereign immunity in West Virginia, and therefore, under principles of comity, this Court should dismiss the action in recognition of WVU's purported sovereign immunity in West Virginia. Additionally, WVU argues the Court should dismiss Plaintiff's Complaint under principles of comity in favor of the first-filed West Virginia case. Finally, WVU moves for dismissal on the basis of the doctrine of forum non conveniens. The Court will address WVU's arguments in seriatim.

A

Personal Jurisdiction

To survive a motion to dismiss for lack of personal jurisdiction, the plaintiff must allege "sufficient facts to make out a prima facie case of jurisdiction." Cassidy v. Lonquist Mgmt. Co., 920 A.2d 228, 231 (R.I. 2007). The trial justice must determine whether the court has personal jurisdiction under the Rhode Island Long Arm statute, G.L. 1956 § 9-5-33 (Long Arm). Id. at 232. Next, the justice must determine whether the exercise of jurisdiction "comports with the requirements of constitutional due process." Rose v. Firstar Bank, 819 A.2d 1247, 1250 (R.I. 2003).

The Long Arm provides, in pertinent part:

Every foreign corporation, every individual not a resident of this state or his or her executor or administrator, and every partnership or association, composed of any person or persons not such residents, that shall have the necessary minimum contacts with the state of Rhode Island, shall be subject to the jurisdiction of the state of Rhode Island, and amenable to suit in Rhode Island in every case not contrary to the provisions of the constitution or the laws of the United States. Sec. 9-5-33

The legislature intended the Long Arm to empower the state's courts to exercise personal jurisdiction over non-resident defendants "subject only to whatever limitations may be imposed by the constitution or laws of the United States." Conn v. ITT Aetna Fin. Co., 105 R.I. 397, 402, 252 A.2d 184, 186 (1969). In fact, the Long Arm was enacted in 1960 at the request of the governor, who recommended the legislation "to direct that the Rhode Island Courts hold non- residents amenable to suit in every case except those where the due process clause of the Federal constitution interferes." Conn, 105 R.I. at 402 n.3, 252 A.2d at 186 n.3. "From the plain language of this statute it will be seen that the legislature of Rhode Island has chosen to exercise jurisdiction over foreign corporations up to the constitutional limitation." Del Sesto v. Trans World Airlines, Inc., 201 F.Supp. 879, 882 (D. R.I. 1962).

Accordingly, the Long Arm statute itself "permits the exercise of jurisdiction over nonresident defendants to the fullest extent allowed by the United States Constitution." Cerberus Partners, L.P. v. Gadsby & Hannah, LLP, 836 A.2d 1113, 1118 (R.I. 2003); Rose v. Firstar Bank, 819 A.2d 1247, 1250 (R.I. 2003); McKenney v. Kenyon Piece Dye Works, Inc., 582 A.2d 107, 108 (R.I. 1990); see KVH Indus., Inc. v. Moore, 789 F.Supp. 69, 70 (D. R.I. 1992) ("The Rhode Island longarm statute, R.I.G.L. § 9-5-33, permits jurisdiction to the fullest extent permitted by the federal constitution.") (citations omitted). Public corporations also fall within Rhode Island's Long Arm. Cf. Wendt v. County of Osceola, Iowa, 289 N.W.2d 67, 69 (Minn. 1979) (applying similar long arm statute listing "foreign corporation" to include public corporations); R.I. Super. Ct. R. Civ. P. 4(e)(5) (subjecting public corporations to service of process). A number of states' courts, including Rhode Island's, have determined that...