Corbett's lawsuit aims to protect Penn State merchants

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Announcing his federal lawsuit over NCAA sanctions Wednesday, Gov. Tom Corbett was flanked not by officials representing Penn State University but mostly by local business owners.

Mr. Corbett and his general counsel, James Schultz, both pointed to those business owners as the aggrieved parties they'll be fighting for in court, arguing that penalties against Penn State have and will continue to hurt the community and the state's economy.

They didn't offer statistics on how much the economic engine has slowed in Happy Valley, which just two years ago was home to the second most-profitable college football program in the nation. But the Corbett administration and business leaders in attendance said the football industry's ties run deep.

"This is big business," Mr. Schultz said. "You have the hospitality industry and all the folks associated with it. You have the small mom-and-pop businesses. You have the folks that work for the university associated with the football program. You have a number of people that have jobs related to the industry of football here in State College and around the commonwealth."

The Corbett administration's lawsuit pegs the related business impacts from Penn State football in 2009 at $161.5 million and says the program is responsible for creating 2,200 direct and indirect jobs.

State Sen. Jake Corman, R-Centre, said signs of lessened activity could be seen this season in empty seats at football games, which translate into "less people coming in and getting gas at local gas stations, less people staying at hotels, less people coming in buying things downtown, at restaurants, on and on and on. Remember, this is just year one."

Penn State agreed in July to a set of National Collegiate Athletic Association sanctions in the wake of the child sex abuse case against the university's former assistant football coach, Jerry Sandusky.

Legal experts said in interviews Thursday that showing economic harm will be part but not all of the burden that the administration must prove.

Beth Farmer, a professor at Penn State's Dickinson School of Law, noted that the suit is a "parens patriae" case, meaning the governor is filing on behalf of the residents of the state. That type of case can seek injunctive relief only, which would halt the sanctions but not seek damages.

In its arguments, there are "some significant legal and factual hurdles that the state has to meet," said Matt Mitten, director of the National Sports Law Institute at Marquette Law School.

The first hurdle will be proving that the university's agreement to the NCAA sanctions does not preclude Pennsylvania officials from bringing suit, he said.

The NCAA sanctions included paying $60 million into an endowment for child-abuse programs, a four-year ban on post-season play, sharp cuts in football scholarships and forfeiture of 111 football wins going back to 1998.

The Corbett lawsuit argues that the university was forced to accept those penalties under threat of having its football program suspended.

A related issue will be whether the state has standing to bring an antitrust claim if the university is not a party, Mr. Mitten added. If the state can meet those hurdles, it will need to show that various adverse effects are attributable to the sanctions.

Pat Daugherty, owner of The Tavern restaurant in downtown State College, said after Wednesday's news conference that he has seen a decline in his revenues on football weekends, although he acknowledged that it's difficult to separate the impact of sanctions from the Sandusky case generally.

"People go out to eat when they feel good, and if they don't feel good," he said, his voice trailing off before adding, "I'm here to support because I think somebody should push back."

Others in the area recounted mixed views of the local economic impacts being witnessed. Betsey Howell, executive director of the Centre County Convention and Visitors Bureau, said she has heard anecdotal reports that are "all over the board -- some up, some down, some about the same. Is that because of the sanctions or is that because of the economy? We haven't quite been able to put our fingers on it."

As for assessing and proving future impacts, Ms. Farmer and Mr. Mitten said courts would allow for economists to come in as expert witnesses, pointing to the impacts that other schools have seen from smaller past sanctions.

Some business leaders are looking forward hesitantly, wondering how they'll be impacted if Penn State's enrollment declines or other related outcomes bring fewer students and parents.

"This is a crystal ball to a degree," said Vern Squier, president of Chamber of Business and Industry of Centre County. "What we do know is that life will not be as it was, and our ranking of No. 2 [in football profits] probably will not remain at that level. With that comes an impact."

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Harrisburg bureau chief Laura Olson: or 1-717-787-4254.


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