State officials can pursue their bid to steer Penn State's $60 million fine over the Jerry Sandusky scandal to advocacy efforts in Pennsylvania, a state court has ruled in a setback for the NCAA.
The NCAA calls the state effort a violation of the school's 2012 consent decree, and therefore a breach of federal contract law. However, the Commonwealth Court judges rejected the NCAA's motion to dismiss the case.
The court ruled that a February state law known as the Endowment Act, which creates a state trust fund to hold the money, did not interfere with Penn State's earlier settlement with the NCAA.
"The consent decree is silent as to who is to control or administer the endowment and is also silent on geographic limitations on the use of the funds," Judge Anne E. Covey wrote for the panel, which split 6-1 on the issue.
The July 2012 settlement orders that the money be spent on child sexual-abuse programs, and the NCAA wants the money available for programs nationwide. State Sen. Jake Corman, R-Centre, and Treasurer Rob McCord filed suit to ensure the money is spent within the state.
"This decision brings us one major step closer to resolving the matter and having worthy child protection and sexual abuse advocacy programs in Pennsylvania begin receiving the funds," Corman said Wednesday in a statement.
Donald Remy, the NCAA's chief legal officer, said the case presents important issues of state versus federal law.
"We are reviewing the court's opinion in detail and will decide next steps after we have had an opportunity to consider all of the options available," Remy said.
Penn State agreed to the NCAA penalties a year ago, along with a temporary loss of football scholarships and a four-year ban on post-season play. The first of five $12 million payments has been set aside but, amid the litigation, not paid out to anyone.
Penn State has remained on the sidelines of the dispute and previously asked the two sides to try to negotiate a resolution.
The dissenting judge Wednesday, President Judge Dan Pelligrini, agreed with the NCAA that the suit should not move forward unless the university signs on as a plaintiff.
Sandusky, the school's former assistant football coach, was convicted a year ago of 45 counts of child abuse involving 10 boys. The 69-year-old is serving a 30-to-60-year state prison sentence but maintains his innocence and is pursuing appeals.
The NCAA consent agreement was imposed to penalize the school for how top administrators handled complaints about Sandusky's involvement with children. Longtime head coach Joe Paterno died early last year, but three others currently face criminal charges for an alleged cover-up of Sandusky complaints: former president Graham Spanier, former athletic director Tim Curley and former vice president Gary Schultz. They deny the allegations.