lennie exert: Unprecedented: Penn State Admits Culpability, Leading To Legal ...

By Bobby B. Wheel - Legal and Political Contributor

In order to see the NCAA deliver a quick death, Penn State 'fessed up to the entire scandal as documented in the Freeh report. What's this mean for the coming wave of civil lawsuits and other legal matters?

Jul 24, 2012 - Lawyers hate the word "unprecedented," moreso than any word other than "billable." That's because we are taught through precedent; past cases are supposed to instruct future cases. Griswold v. Connecticut leads to Roe v. Wade and so forth. This case law method means lawyers are adept at learning a system as it is, but less so in predicting the future.

So when something unprecedented happens we groan because nobody taught us how to deal with it. Look at any bankruptcy case; all of the contracts involved couldn't anticipate something "unprecedented" like, say, Lehman Brothers losing all its money. So you can bet Penn State's lawyers were pretty angry that they had to agree to an unprecedented consent decree.

But it's not just the lawyers who should be angry here. The unprecedented consent decree will have reverberations that will rattle people even tangentially involved in the cases. Let's take a look at all the upheaval that it will sow:

Penn State admitting culpability: Penn State's lawyers did an admirable job shifting blame to Graham Spanier in the consent decree, but ultimately the concept of respondeat superior (you're responsible for your employees) will mean that they will bear some liability in forthcoming lawsuits from Sandusky victims. An admission of guilt in a consent decree is usually not admissible as evidence in civil lawsuits because, as a matter of public policy, we want people to settle disputes out of court. This is codified in Rule 408 of the Federal Rules of Evidence. Normally, that would mean that Sandusky's victims could not use the consent decree as proof that Penn State was guilty of a cover up. But one of the reasons why this consent decree is unprecedented is that there was no underlying dispute between Penn State and the NCAA. Usually there has to be some remote possibility of litigation for a party to invoke FRE 408, but does anyone believe the NCAA would have actually sued Penn State? Sandusky's victims could very well use Penn State's statements against them in court because Penn State signed a consent decree that does not resolve a potential dispute.
Athletic Department Budget: The indefatigable Sara Ganim has already reported that Penn State will tap into the athletic budget's capital accounts and borrow against the football program's future earnings to pay down the unprecedented $60 million fine. While Mark Emmert had the best of intentions, this means the people stung hardest by the fine will be the non-revenue sports, like Penn State's emerging wrestling program. And borrowing against future earnings of a soon-to-be strapped football program is a great way to pay a ton of interest. Just ask SMU how easy it is to rebuild after a major NCAA penalty. Borrowing against Penn State's future football earnings is a speculative scheme and the interest payments could cripple the athletic department for years to come. Or they could pay them off on time. But nobody knows what will happen with their budget.
Bill O'Brien: Don't cry for Bill O'Brien; look at his contract instead. Poor guy only makes about a million or so a year. Of course, if he quits he has to pay the university back any salary that he would have earned during the term of the contract, so he's more or less locked into his job. It was a very one-sided contract, but Penn State needed to find someone who would agree to such terms as they knew that they could face unprecedented sanctions. Yet you have to wonder if Bill O'Brien has trouble sleeping tonight as he wonders what, exactly, he got himself into for the next five years. Like everyone else, he did not see this unprecedented penalty coming.
Economic Impact: Beaver Stadium reminds me of the real estate boom. Nobody ever thought of a scenario where Penn State would not sell 100,000-plus tickets to every home game, much like how financial analysts never thought the price of land would go down. Congratulations, Nittany Lions fans, your season tickets are mini-subprime mortgages. And that says nothing of all the vendors in State College who depended on the continued viability of the Penn State football program to stir up enough visitors to break even. Who knows what this could do to the economy of Central Pennsylvania? Don't bother asking Darren Rovell's graphing calculator. It's unprecedented, so we don't know.

All of the effects of an unprecedented event just show how awful we are at predicting the future. People are good at evaluating what is happening right now, and we can even do some decent predictions in environments where we can control variables. But trying to predict the future is mostly folly. Just look at the track record of CIA analysts, the music industry, weathermen or the framers of the Constitution, among others. The contingencies you try to prepare for are rarely the ones that you face in the future. Constructing a system based on precedent leaves you vulnerable to the unanticipated. The universe cares not for your artificial constructs, and will march about as it pleases.

And that's what's so troubling about the NCAA's actions. It's not that they don't know what effect that the consent decree will have. It's that they don't know that they don't know what effect the consent decree will have. Look at Emmert's statement; he thinks that it will actually help "eradicate the 'sports are king' mindset that can so dramatically cloud the judgment of educators." No, this consent decree won't help eradicate anything, except for certainty.

So I'm not going to bother weighing in on the debate of my colleagues Spencer Hall and Andrew Sharp. Neither one of them is right; we don't know if the consent decree will be good or bad. The NCAA and Mark Emmert, by acting in an unprecedented fashion, have injected a massive dose of uncertainty into the Sandusky cover-up scandal. The fact that the NCAA was willing to do so, of course, shows just how little they know that they don't know. The least we can do is admit that we don't know either.

For more on Nittany Lions football, visit Penn State blog Black Shoe Diaries, plus Big Ten blog Off Tackle Empire, SB Nation Pittsburgh and SB Nation Philly.

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