Although this isn't in the mainstream of the business litigation decisions that I write about on this blog, I'm writing today about a contract case that's important to the jurisprudence of North Carolina. It's the judicial determination made last week about the quality of Duke University football.
The case is University of Louisville v. Duke University, pending in Franklin County, Kentucky. Louisville filed its Complaint against Duke when Duke backed out of a contract to play four games against the Cardinals. Duke had lost the first game in 2002 by a score of 40-3, and decided for some reason that it didn't want to play the remaining three games in the series, due to be played in 2007-2009.
Louisville didn't appreciate losing a record-padding opponent of the quality of Duke. It sued, based on a provision in the Athletic Competition Agreement which called for a $150,000 payment for each game not played. Duke's defense was a provision in the contract which stated that it had to pay only if Louisville was unable to find a replacement opponent of "similar stature" to Duke. The Agreement didn't define the term.
Louisville, in discovery, asked Duke what NCAA football teams were of "similar stature." Duke's response was that every single team in former Division I-A and a lot of teams in former Division I-AA were. The only teams that weren't, to Duke, were junior varsity teams. Here is Duke's response from Interrogatory No. 1:
Duke states that any and all college varsity teams in the Football Bowl Subdivision (formerly Division I-A) are teams of a 'similar stature' to Duke. . . . Additionally, Duke states that any and all college varsity football teams in the Football Championship Subdivision (formerly Division I-AA) that would be considered as good or better than Duke in football. . . are teams of a 'similar stature' to Duke. . . . [J]unior varsity programs of any of the aforementioned teams would not be teams of a 'similar stature' to Duke's varsity college football team.
Louisville's definition of "similar stature" was narrower, but maybe not narrow enough. It said the term should be defined as "any school that is a member of a Bowl Championship Series conference whose champion automatically qualifies for a BCS bowl game," plus Notre Dame. Louisville had been unable to find such a substitute opponent.
Duke moved for judgment on the pleadings, and won. Its argued at the hearing that the standard for "similar stature" was very low because the quality of Duke football was as low as it gets. As Judge Phillip J. Shepherd of the Franklin Circuit Court described the argument in his June 19th Opinion:
The term 'team of similar stature' simply means any team that competes at the same level of athletic performance as the Duke football team. At oral argument, Duke . . . persuasively asserted that this is a threshold that could not be any lower. Duke's argument on this point cannot be reasonably disputed by Louisville. Duke won only one football game, and lost eleven, during the 2007 football season.
Jim Chen, who's the Dean of the Law School at the University of Louisville, has a good point about Judge Shepherd's opinion. The issue wasn't whether Louisville could find a replacement opponent better than Duke. That would be easy.
The real issue was whether there was a team as bad as Duke to line up across from the Cardinals. As Dean Chen put it on the Cardinal Lawyer Blog:
Strictly as a football fan, albeit one who is a Louisville Cardinals partisan, I respectfully disagree with Judge Shepherd. There is no adequate substitute for Duke football, a patsy nonpareil in college football. There simply is no other (1) Division I-A team (2) that plays such appallingly bad football (3) so consistently and persistently (4) all while maintaining its membership in a Bowl Championship Series conference.
[W]hat I really want is a series of virtually guaranteed wins against the worst major college football team. And that team, despite its university's immense wealth and its city's sports tradition (think of Bull Durham and the 1942 Rose Bowl), is the Duke Blue Devils.
Echoing that analysis, if Duke football were real estate, this case would cry out for specific performance. There is no substitute for having a near lock on a win against a BCS conference team, and that's the benefit of the bargain that Louisville lost.