State and congressional lawmakers have objected to use of the NCAA fine to finance child abuse prevention efforts in other states.
The complaint asks a federal judge to throw out the Pennsylvania Institution of Higher Education Monetary Penalty Endowment Act, saying it violates provisions of the U.S. Constitution. It also asks for an injunction to prevent the law from being enforced.
Defendants in the lawsuit are Corbett and three state officials who would be involved in handling or monitoring the money: the auditor general, treasurer and chairman of the Pennsylvania Commission on Crime and Delinquency.
Corbett believes the bill "makes sense and is the right thing to do," spokeswoman Janet Kelley said. The lawsuit is under review, she said.
Penn State signed a consent decree last summer in which it agreed to the fine, a four-year football bowl ban and other penalties shortly after a scathing report into how school officials handled reports that Sandusky, a former assistant football coach, was behaving inappropriately with children. He was convicted of sexually abusing 10 boys and is serving a 30- to 60-year prison sentence.
"By seizing the funds and restricting eligibility to benefit from the funds only to Pennsylvania programs benefiting only Pennsylvania residents, the act will defeat the consent decree's plain terms and frustrate the parties' intended purpose," the NCAA's lawyers wrote.
The lawsuit claims the new legislation is unconstitutional because it directs state officials to collect money to which the state is not entitled. It argues the state has no legal right to abridge the contract between the NCAA and Penn State and says the new law tries to regulate transactions by out-of-state entities in violation of the Commerce Clause.
NCAA President Mark Emmert released a statement saying that it was important that the organization's members abide by its rules and that college sports would be "dramatically altered" if others are responsible for deciding what penalties are appropriate.
NCAA lawyer Donald Remy said the lawsuit concerned legal issues of importance to anyone who does business with state-related or private entities.
"The state has attempted to grant itself the ability to do whatever it wants to whomever it wants," Remy said. "The United States Constitution does not permit this kind of legislative overreach."
Joe Metz, a Harrisburg lawyer with federal litigation experience, said the NCAA's lawsuit had promise, particularly because the law was passed after the consent agreement was signed.
"It's impossible to predict how something like this will go, but it's definitely something I'd read carefully and think about, that's for sure," said Metz, who is not involved in the case.
Penn State, which has made the first of five $12 million payments, is not a party to the litigation. An NCAA task force will determine how the money is spent.
Auditor General Eugene DePasquale, a defendant in the case, issued a statement that said people should "remember that this should all be about the kids."
"I take very seriously my role of ensuring that money is spent in accordance with Pennsylvania law and the distribution of that funding is now dictated by (the bill) which was enacted into law today," DePasquale said.
In January, Corbett filed his own federal lawsuit in the matter, accusing the NCAA of antitrust violations and seeking to have all of the consent decree's penalties thrown out. A request by the NCAA to have that case dismissed is pending.
Also Wednesday, the NCAA told two Pennsylvania congressmen it disagrees with their argument that taking some football scholarships away from Penn State unfairly punished innocent student-athletes.
Reps. Charlie Dent and Glenn Thompson released a letter from Emmert that said no Penn State athletes lost scholarships and that each athlete remains eligible for a scholarship at Penn State or another school.