Ellis & Winters

We wrote last month about the lawsuit filed against the University of North Carolina and the NCAA by former UNC student-athletes Rashanda McCants and Devon Ramsey. They filed the case in state court, but it has since been removed to federal court.

The claims in the McCants case, we noted, differ in a key respect from the claims in the related McAdoo and Arnold cases: the McCants case, unlike McAdoo and Arnold, does not include a claim under N.C. Gen. Stat. § 75-1.1. Indeed, the lead claim in the McAdoo complaint is an alleged violation of section 75-1.1.

The University and the NCAA have now moved to dismiss the McCants complaint. These motions have the distinct likelihood—like Dean Smith’s famed Four Corners offense—to slow things down.

Our question for today, though, is whether the arguments in these motions foretell Rule 12 motions in McAdoo and Arnold as well.

In McCants, the University argues in its brief that a three-year limitations period bars the plaintiffs’ contract-based claims. The University says that the latest alleged breach for any proposed class member occurred in 2011, but the plaintiffs filed their claim in January 2015. Perhaps this is why the McAdoo and Arnold complaints make a 75-1.1 claim—a claim that has a four-year limitations period.

The University also argues that the plaintiffs have not alleged any contract with definite terms. If this argument arises in the McAdoo and Arnold cases as well, it will underscore the importance of identifying which type of 75-1.1 claim the McAdoo and Arnold plaintiffs are pursuing. This argument would undercut an “aggravated breach” claim, but it might be less potent against a direct-unfairness claim.

The McCants plaintiffs’ claims against the NCAA (as opposed to UNC) were not contract-based, but were claims for negligence and breach of fiduciary duty. The NCAA’s lead argument in its brief is that the NCAA did not owe the plaintiffs any duty to prevent academic fraud. If these arguments arise in McAdoo and Arnold, the plaintiffs in those cases might be asked whether their 75-1.1 claims are per se claims based on a breach of fiduciary duty and, if not, how and why their 75-1.1 claim differs from that type of breach.

The University and the NCAA raise other arguments, too, including Eleventh-Amendment immunity (raised by the University) and lack of standing (raised by the NCAA). These arguments might give Judge Biggs the chance to dismiss large parts of the case without parsing any state-law issues.

The responsive pleading deadline in McAdoo is next Friday. We will continue to monitor these cases, which will test of the reach of section 75-1.1 and the differences between 75-1.1 claims and common-law claims.

Author: Stephen Feldman