NCAA suit by Corbett was mulled for months
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HARRISBURG -- A private law firm began work on Gov. Tom Corbett's challenge to the National Collegiate Athletic Association's sanctions against Penn State University in mid-September, 3 1/2 months before the lawsuit was announced, the governor's top attorney said in an interview.
Attorneys in the Corbett administration began reviewing the possibility of a lawsuit in late July after the NCAA issued its sanctions, James Schultz, general counsel for Mr. Corbett, said Wednesday in an interview conducted by phone and email with the Pittsburgh Post-Gazette.
Mr. Corbett, a Republican, announced Jan. 2 he would ask a federal judge to throw out the sanctions issued more than five months earlier in response to the Jerry Sandusky child sexual abuse scandal. Although he had initially advocated acceptance of the penalties, the governor said in announcing the lawsuit that the NCAA had acted illegally and that its penalties would cause irreparable damage to the Pennsylvania economy. He asked that all the sanctions, which include a $60 million fine and a four-year ban on postseason play, be thrown out.
After the administration's review in July, Mr. Schultz said, he asked the Philadelphia-based firm Cozen O'Connor, where he worked before joining the administration, to look into the potential for an antitrust lawsuit against the NCAA. Attorneys there began working on the case Sept. 19, he said.
The state was not yet on the hook for legal fees, Mr. Schultz said, because he asked -- and the firm agreed -- that it would not charge for any work until Mr. Corbett decided to pursue the case. After the governor gave his authorization, attorneys with the firm, along with administration lawyers, began the process of drafting the complaint on Oct. 23, Mr. Schultz said.
While the administration has not yet received final bills, Mr. Schultz said he estimates that Cozen O'Connor provided $60,000 worth of legal services, for which it will not bill the state, in its preliminary work. From the time of the governor's decision through Dec. 31, he said, the firm has provided an estimated $85,000 to $90,000 of legal services.
The administration has not released the Cozen O'Connor contract because it is still awaiting a signature by the comptroller, a spokeswoman for the governor said. But Mr. Schultz said the document follows a standard agreement in which outside law firms are asked to discount their normal rates between 10 and 20 percent. The contract caps the total cost at $200,000, but Mr. Schultz said that limit likely would be amended.
"It's very tough to say an exact number for the legal fees," he said, adding, as he has previously, that legal fees in the case would be much smaller than the economic harm caused by the NCAA sanctions. The administration has not presented an estimate of economic damages from the penalties, which it says will result from a decline in the success of the football team and the team's ability to generate revenue for the university.
Cozen O'Connor has at least a dozen contracts with the state listed on a database, hosted by the Pennsylvania Treasury, of contracts dating to 2008. The firm has been hired to represent the Department of Community and Economic Development in case of a federal bankruptcy filing by the city of Harrisburg, to provide financial services to the Pennsylvania Higher Education Assistance Agency and to provide litigation services to the Insurance Department.
At least four of the contracts listed on the database for Cozen O'Connor were executed since Mr. Corbett took office, while at least eight date to the administration of former Gov. Ed Rendell, a Democrat.
In the 2010 gubernatorial race, employees of Cozen O'Connor donated slightly more than $42,600 to Mr. Corbett's campaign and $22,500 to that of his Democratic rival, Dan Onorato, according to campaign finance records kept by the Department of State.
Mr. Schultz said he asked Cozen O'Connor to work with the administration because of the expertise of Melissa Maxman, the co-chair of its antitrust practice group.
"We didn't have the expertise in antitrust law, and we had to get outside counsel," he said. "She's one of the best in the country, so, hands-down, it was an easy decision in that regard."
A representative of the law firm directed inquiries to the governor's office.
To minimize legal fees, Mr. Schultz said, two or three attorneys from the Office of General Counsel will work on the lawsuit, as well as their other cases, alongside lawyers from Cozen O'Connor.
"Our goal has been to handle as much in-house as we possible can with the attorneys we have," he said. "We've been able to significantly reduce legal costs."
The governor's attorneys were authorized to pursue the lawsuit by former Attorney General Linda Kelly, who said the criminal cases pending against three Penn State administrators would present a likely conflict of interest if her office handled the NCAA lawsuit. The new attorney general, Kathleen Kane, took office Tuesday.
An internal review into the possibility of a lawsuit in late July would have come not long after a written statement by Mr. Corbett, released when the sanctions were announced July 23, that "part of" the "corrective process is to accept the serious penalties imposed today by the NCAA on Penn State University and its football program."
But Mr. Corbett had expressed reservations almost immediately. During an appearance at Point State Park on July 25, he told reporters the penalties "go well beyond those who were responsible or should have been responsible."
First Published January 17, 2013 12:10 am