The rebuilt Pac-12 secured a significant victory in its legal fight with the Mountain West on Tuesday when a federal judge denied the Mountain West’s motion to dismiss the so-called “poaching penalty” lawsuit.
Magistrate Judge Susan van Keulen of the Northern District of California denied all four causes of action in the motion and set a case management conference for Nov. 18.
But she did more than that: van Keulen’s ruling legitimized the Pac-12’s claims and seemingly signaled a long road ahead for the Mountain West, which is counting on $55 million in poaching penalty fees that could be in jeopardy.
On a key piece of the Pac-12’s lawsuit — that the poaching penalties violated antitrust law by restraining trade — van Keulen wrote:
“The MWC’s arguments do not provide a basis for the Court to disregard the Complaint’s allegations of antitrust injury. Although the Pac-12 agreed to the terms of the Scheduling Agreement, it has alleged that it was “desperate” and “had little leverage” at the time it entered into the agreement. “To hold that a contract is exempt from antitrust scrutiny simply because one party ‘reluctant[ly]’ accepted its terms” would be to misread section 1 of the Sherman Act, which reaches “every contract” that unreasonably restrains trade.
The scheduling agreement between the conferences was signed in 2023, when Washington State and Oregon State were adrift following the demise of the Pac-12 and desperate to fill out their 2024 schedules.
The Mountain West included the poaching penalty clause in the agreement. After five schools announced in the fall of 2024 that they were leaving the Mountain West for the Pac-12 (in the summer of 2026), the Mountain West demanded $55 million in fees.
The Pac-12 responded by filing a lawsuit against Mountain West, claiming the penalties were illegal.
The Mountain West countered with a motion to dismiss the case.
The conferences tried mediation over the summer but failed to reach a resolution.
Van Keulen declined to rule from the bench during a Sept. 9 hearing and spent three weeks assessing the motion.
She denied all four causes of action: antitrust standing; sufficiency of pleading; violation of California’s unfair competition law; and invalid contract for unenforceable penalties.
Legal sources familiar with the case believe the mediation attempt was too early — that neither side had reason to negotiate.
But the dynamics could change following van Keulen’s ruling, which propels the case closer to the discovery process and a potential trial.
The Pac-12 issued the following statement following van Keulen’s ruling:
“The Pac-12 Conference (Pac-12) is pleased that the U.S. District Court for the Northern District of California denied the Mountain West Conference’s motion to dismiss. We will move forward with our case. The ruling allows our antitrust and related claims to proceed. We remain confident in our position and focused on advancing academic excellence, athletic achievement, and the tradition that has defined the Pac-12 for more than a century.”
This article originally appeared on Pac-12 Hotline.
— Jon Wilner: jwilner@bayareanewsgroup.com. Wilner has been covering college sports for decades and is an AP top-25 football and basketball voter as well as a Heisman Trophy voter. He was named Beat Writer of the Year in 2013 by the Football Writers Association of America for his coverage of the Pac-12, won first place for feature writing in 2016 in the Associated Press Sports Editors writing contest and is a five-time APSE honoree.