The University of Maryland (defendant) was a member of the Atlantic Coast Conference (the conference) (plaintiff). Maryland sought to leave the conference to join the Big Ten Conference. The conference’s constitution, to which all members were bound, imposed a steep penalty on members who left the conference. The conference, which was based in North Carolina, filed a lawsuit in North Carolina court seeking a declaration that its imposition of this penalty on Maryland was legally valid. Maryland claimed it was protected from enforcement of the penalty based upon its sovereign immunity. Maryland claimed that precedent limited the court’s ability to deny sovereign immunity claims. The trial court denied Maryland’s motion to dismiss. Maryland appealed.