[Post by Nathan Webb]

It seems every day the sports media reports the alleged wrongdoing by players and coaches in big time college athletics. In the old days, university presidents worried about wins being vacated, recruiting sanctions, and probation. The NCAA enforcement committee was the usual cause for worry for college presidents.

But now, university presidents need to be worried about bitter fans and plaintiffs’ lawyers. We all know what that means: litigation.

Case in point, the University of Memphis recently settled a potential lawsuit where season ticket holders asserted that they bought season tickets, not knowing that the team they support (the Memphis basketball team) would be embroiled in scandal due to alleged misconduct of its coach (John Calipari) and players (Derrick Rose). John Calipari eventually resigned and took another job (head coach of the Kentucky college basketball team) and Derrick Rose left for the NBA. Due to the high profile defections, Memphis, a former powerhouse in college basketball, became a far less attractive team.

The season ticket holders did not file a lawsuit, but they threatened to sue the university, Calipari, and Rose. Media reports suggest the season ticket holders felt they bought tickets under “false pretenses,” and had they known about the eventual scandal and defections, the fans would not have bought the season tickets. It is an interesting and colorable theory. Often, sports fans are spurred to support their team based on the hope that the team will be successful. But teams that aren’t successful have a difficult time selling tickets. Did the University of Memphis pull a bait-and-switch on prospective ticket buyers by suggesting that all was well in-house?

It isn’t outside the realm of possibility that a university, while investigating misconduct of its players and coaches, would still continue to advertise and market such players and coaches during the ticket solicitation process (e.g., team programs, marketing materials). In order to prove fraudulent inducement in the State of Washington, a plaintiff must establish the following nine elements by “clear, cogent, and convincing evidence”: (1) representation of an existing fact; (2) materiality; (3) falsity; (4) the speaker’s knowledge of its falsity; (5) intent of the speaker that it should be acted upon by the plaintiff; (6) plaintiff’s ignorance of its falsity; (7) plaintiff’s reliance on the truth of the representation; (8) plaintiff’s right to rely upon it; and (9) damages suffered by the plaintiff.  Stiley v. Block, 130 Wn.2d 486, 505, 925 P.2d 194 (1996).

Consequently, if a university continues to market bad apple coaches and players, and (i) such coaches and players are ultimately dismissed from the team or (ii) the team is put on probation by the NCAA, e.g., a post season ban or reduction in scholarships (and the university knows that this is a possibility during the ticket solicitation process), legal exposure will increase. Bitter season ticket holders may now argue that they bought tickets under the implied promise that the coaches and players were expected to be on the court for the season in question. A difficult argument to make, but colorable.

The term “fans” is short for “fanatic,” therefore universities may want to exercise some caution in the solicitation of season ticket sales (which generate millions of dollars for universities), as such fanatics may become litigious. Hopefully, this doesn’t require ticket holders to sign off on legalese document saying that “the season ticket purchasers have not relied on any representations or warranties regarding the caliber of the team or individual players, or their status” before purchasing their tickets. The University of Memphis dispute could open the door to more lawsuits of this nature. The hasty settlement (likely spurred by the defendants wanting to avoiding embarrassing discovery) could open the floodgates for these types of claims.