Marshall University Wants Out but Conference USA Says "Not So Fast"

Updated: Jan 28

“For more than two months, Marshall University has attempted to reach a resolution with Conference USA regarding our decision not to participate in the league after this academic year; however, no progress has been made” stated Marshall University’s Athletic Department.[1] The University subsequently filed suit against Conference USA in the Cabell County Sixth Circuit Court in Huntington, West Virginia to “protect [their] rights, help [them] reach an agreement in a timely manner, and clear the way for [their] shift in conference affiliation”.[2]

The issue originated from Marshall’s initial acceptance into the Sun Belt Conference on October 30, 2021.[3] The University served Conference USA on November 1, 2021 with a withdrawal notice indicating its intention to leave.[4] In response, the Sun Belt stated Marshall would join its conference no later than July 1, 2023. However, with numerous universities announcing their departure from Conference USA, the conference’s upcoming season seemed increasingly uncertain as its member list quickly diminished. This sudden shift in conference membership prompted Marshall, along with Southern Mississippi University (“Southern Miss”) and Old Dominion University (“ODU”), to express plans to terminate their existing relationship with Conference USA earlier than the July 1, 2023 deadline.[5] Marshall notified Conference USA on three separate occasions regarding its intention to end its membership on July 1, 2022 instead of July 1, 2023, and requested not to be placed on any upcoming athletic schedules.[6] Despite Marshall’s notices, Conference USA released its 2022 football schedule which still included Marshall, Southern Miss, and ODU. Conference USA emphasized its plans on to move forward with the current institutions and expressed its willingness to “exhaust all necessary legal actions to make member schools abide by their contracts”.[7]

As Conference USA sees it, Marshall and the other schools are unable to withdraw due to the conference’s official bylaws. Section 3.06 states a withdrawal from the conference is only permitted with a 14-month notice.[8] Section 14.01 adds any disputes will be resolved via arbitration in Dallas, Texas.[9] Because Marshall desired to exit the conference on July 1, 2022 and the four notifications were delivered on November 1, January 12, January 20, and January 25, the school violated Section 3.06’s requirements.[10] Conversely, Marshall argues the arbitration provision in Section 14.01 should not apply for two major reasons: it violates the Eleventh Amendment of the United States Constitution, and the arbitration provision was not included in the Conference USA bylaws when Marshall signed its new member agreement in October of 2003.[11]

Regarding the first argument, the Eleventh Amendment of the U.S. Constitution bars federal courts from hearing any suit against any one state by citizens or subjects of another state.[12] Marshall claims that sovereign immunity and the Eleventh Amendment applies because it is a West Virginia state school.[13] Therefore, arbitration in Texas, where Conference USA headquarters is located, for the 14-month notice dispute would be prohibited because a federal court could not hear Conference USA’s claim against Marshall, a West Virginia entity.[14] Perry Oxley, an attorney representing Marshall, stated:

Arbitration in Texas is prejudicing Marshall University because we can’t participate in that venue for . . . we are constitutionally bound to only be made a defendant here [in West Virginia]. As a result of that fact, there is irreparable harm for that proceeding moving forward. [West Virginia] is a proper venue, and to preserve our sovereign immunity, we need to have the case here.

[15] However, despite a very strong argument made by Marshall, Conference USA could also have a valid counterclaim. Strikingly analogous to the dispute at hand, in Big East Conf. v. W. Va. Univ., West Virginia University (“WVU”) wanted to switch from the Big East Conference to the Big 12 Conference in 2011.[16] WVU sued in West Virginia state courts regarding similar notice requirements, but the Big East demanded the dispute be resolved through arbitration in Rhode Island because Big East headquarters are there.[17] The court placed a strong emphasis on language from Nevada v. Hall, which states, “no sovereign may be sued in its own courts without its consent, but it affords no support for a claim of immunity in another sovereign’s courts.”[18] Subsequently, the court concluded the dispute between West Virginia and the Big East could continue in Rhode Island.[19] Niall Paul, an attorney retained by Conference USA, seemed to rely on the holding in Nevada v. Hall by stating, “the courts are pretty clear in this idea that when you agree to arbitration, sovereign immunity doesn’t protect you from that. You have chosen your forum”.[20] Given the similarity in facts, it is reasonable to assume the court could potentially take a similar stance in determining the outcome of Marshall and Conference USA’s dispute.

Marshall’s second contention rests on the idea that Section 14.01’s arbitration provision was not included in Marshall’s original new member agreement from 2003. Perry Oxley stated, “at this point, we are not aware of the document that demonstrates mutual assent” regarding arbitration for disputes involving membership termination.[21] Despite conceding this point for lack of a signed document, Niall Paul remarked, “[by] continuing to participate in the league from that point forward, thus receiving millions of dollars in the process, Marshall accepted the implicit terms of those bylaws.”[22] Additionally, included in Conference USA’s new member agreement is the following:

The terms and conditions of Marshall’s participation in the Conference as a member shall be governed by the Conference Bylaws, as such Bylaws may be amended from time to time. As a condition of becoming and remaining a Conference Member, Marshall agrees fully and completely to abide by and comply with all provisions and conditions of the Bylaws, as such Bylaws may be amended from time to time.

[23] Given this clear language indicating the bylaws may be amended in addition to accepting those bylaws through continued participation in the conference, Marshall is bound by the amended Conference USA bylaws, including the arbitration provision found in Section 14.01.

Although I am an alumnus of Marshall University, the school faces a difficult battle because the case seems to give greater support towards Conference USA. Ultimately, Marshall will likely exit Conference USA before the start of the 2022 college football season, but its departure will not come without a cost. If the Court takes the perspective outlined in Big East Conf. v. W. Va. Univ., Marshall will be forced to abide by Section 14.01 which requires arbitration in Texas. A lack of jury, finality (no appeals), and the large expenses from Marshall’s pocket highlight a few of many reasons why Marshall wishes to avoid arbitration in Texas. Its only alternative would be settlement.

With two options at hand, it seems likely Marshall would favor settlement to avoid the out-of-pocket expenses associated with arbitration centered around a scenario in which success is unlikely. Arbitration or settlement alike, Marshall’s ticket to the Sun Belt in 2022 will likely include an early termination payment if provided for in the undisclosed contract between the parties. It’s a matter of whether Marshall is willing to accept arbitration burdens along with an early termination fee. Judge Christopher Chiles of the Cabell County Circuit Court recently granted Marshall’s request for a temporary arbitration restraining order.[24] This allows Marshall 10 additional days to review the case before the parties reconvene on March 16.[25] During this period, Marshall may reassess if arbitration could be worth it after all. Ultimately, Marshall must decide whether the benefits of potential success outweigh the cost of arbitrating halfway across the country.