By Michael Sadowski
HARRISBURG, Pennsylvania (Reuters) - A federal judge on Thursday dismissed a lawsuit filed by the state of Pennsylvania against the National Collegiate Athletic Association that claimed the sports authority overstepped its bounds with its penalties against Penn State over the Jerry Sandusky scandal.
The antitrust lawsuit filed in January by Governor Tom Corbett sought to have all the NCAA sanctions thrown out. The ruling lets stand an unprecedented $60 million fine imposed on the university and upholds the NCAA's move to void all Penn State's football team victories over more than 14 seasons.
The lawsuit claimed the sanctions would cause economic fallout throughout the state and was filed on behalf of third parties such as stadium workers, shopkeepers, hoteliers and others whose businesses could be hit due to the penalties.
U.S. District Court Judge Yvette Kane said the lawsuit's arguments "fail to advance the ball."
The lawsuit "raises serious questions about the indirect economic impact of NCAA sanctions on innocent parties," she wrote in her ruling. "These are important questions deserving of public debate, but they are not antitrust questions."
Sandusky, Penn State's former defensive coordinator, was convicted last June of 45 counts of sexually abusing 10 boys over 15 years, some in the football team's showers. He was sentenced to 30 to 60 years in prison.
In July, the NCAA, the governing body of U.S. collegiate sports, filed its sanctions against Penn State for the school's failure to stop Sandusky's sexual abuse of children.
In a statement issued on Thursday, the NCAA said it hoped the decision would "serve as a beginning of the end of the divide among those who, like Penn State, want to move forward to put the horror of the Sandusky crimes behind the university and those who want to prolong the fight, and with it, the pain."
Corbett, in a statement issued by his office, said he was disappointed and believes the sanctions "have harmed the citizens, students, athletes, alumni and taxpayers of Pennsylvania."
"Countless individuals and small businesses throughout the state will continue to suffer because of the NCAA's actions," he said.
The governor said he would review the state's options with its legal team.
Legal analysts at the time it was filed called the lawsuit a longshot, saying it would be difficult to convert any harm done to local businesses into an antitrust violation. The state would have to show that the penalties harmed consumers and constituted a breakdown in the competitive marketplace, they said.
Penn State was not involved in the lawsuit.
Last week, the family of the late Penn State football coach Joe Paterno, along with a group of faculty and former college athletes, also sued the NCAA over its response to the sex abuse scandal.
Their lawsuit claims the NCAA was wrong to base its sanctions on what it called "flawed findings" in an independent investigation by former FBI Director Louis Freeh into how Penn State handled the Sandusky case.
The Freeh report found Paterno and other university officials covered up Sandusky's sexual abuse for years in an effort to protect the multimillion-dollar football program.
Paterno, one of college football's most revered coaches, was fired by Penn State's board days after Sandusky was arrested in November 2011. Paterno died of lung cancer in January 2012.
(Editing by Ellen Wulfhorst, Alden Bentley and Cynthia Osterman)