## Facts

- The Atlantic Coast Conference (ACC) is headquartered in Greensboro, North Carolina; the University of Maryland (Maryland), a Maryland public university, was a founding ACC member (1953).
- In September 2012, ACC members approved a constitutional amendment requiring a withdrawing member to pay an amount calculated as three times the ACC’s annual operating budget (alleged to exceed $52 million).
- On November 19, 2012, Maryland announced it would leave the ACC to join another athletic conference.
- The ACC sued in North Carolina superior court seeking a declaratory judgment that the withdrawal payment was enforceable as liquidated damages rather than an unlawful penalty.
- Maryland moved to dismiss for lack of personal jurisdiction and asserted sovereign immunity, arguing North Carolina should recognize Maryland’s immunity as a matter of comity.
- The trial court denied dismissal; Maryland filed an interlocutory appeal.

## Issues

1. Whether denial of a motion to dismiss based on sovereign immunity affects a substantial right permitting immediate interlocutory appellate review.
2. Whether a North Carolina court should, as a matter of comity, apply Maryland’s sovereign immunity to bar a contract-based declaratory-judgment action against Maryland state entities.
3. Whether North Carolina courts had personal jurisdiction over Maryland based on Maryland’s ACC-related contacts with North Carolina.

## Decision

- The court held it had appellate jurisdiction because denial of sovereign immunity affects a substantial right and is immediately appealable.
- The court affirmed the trial court’s refusal to dismiss on sovereign-immunity/comity grounds.
- The court upheld personal jurisdiction, relying on Maryland’s long-term ACC membership, participation in ACC governance, and the North Carolina-centered administration of ACC operations and agreements.

## Legal Principles

- A denial of sovereign immunity is immediately appealable when it implicates a substantial right, because immunity protects against being sued, not merely against liability.
- Comity is discretionary; a forum state may decline to recognize a sister state’s sovereign immunity when doing so conflicts with the forum state’s public policy.
- North Carolina public policy treats a governmental entity’s entry into a valid contract as implicit consent to suit for breach; extending comity to broader sister-state immunity in a contract dispute may be rejected as inconsistent with that policy.
- Specific personal jurisdiction may be exercised when the defendant’s forum-related contacts connected to the dispute make suit consistent with due process.

## Conclusion

The North Carolina Court of Appeals permitted interlocutory review but affirmed the trial court, holding that North Carolina would not extend comity-based sovereign immunity to bar a contract-centered declaratory action and that Maryland’s ACC-related contacts supported personal jurisdiction in North Carolina.


Atl. Coast Conf. v. Univ. of Md., 751 S.E.2d 612 (N.C. Ct. App. 2013)