A federal defamation and unjust enrichment lawsuit brought by former Penn State basketball captain Kayne Clary has been discontinued, according to a notice filed Friday in U.S. Middle District Court.
The filing said the case was ended by stipulation. Clary’s attorney, Michael S.
Katz, said he could not comment on whether the parties reached a settlement. The case was still in discovery.
Clary had sued Penn State, head coach Mike Rhoades, Happy Valley United, and Blueprint Sports and Entertainment of Las Vegas. Happy Valley United is the official NIL collective for Penn State and is based in Enola, while Blueprint is listed as an associate of Happy Valley.
In the suit, Clary said that beginning in December 2023 he was subjected to intimidation, retaliation, slander and illegal use of his name, image and likeness. He claimed he was suspended and eventually dismissed from the team on Feb. 19, 2024 as punishment for speaking out about what he described as injustices within the program.
Clary, a guard, said he had not run into problems at Penn State before Rhoades took over as head coach. He argued that, as captain, he had a responsibility to raise concerns about issues that hurt the team, including lax discipline for late arrivals, disrespect and a lack of accountability for certain players.
He said that once he complained about players getting preferential treatment, he began to be treated unfairly and targeted by coaches, including Rhoades. The suit also claimed Penn State and Happy Valley used his NIL without his permission to bring in donations.
According to the complaint, the situation worsened in January 2024 after Clary refused to sign a contract with Blueprint, acting as an agent for Happy Valley, that would have paid him less than he was owed. That offer, the suit said, came after Clary said his family reached out to Rhoades about the unauthorized use of his NIL in Penn State and Happy Valley social media and marketing materials.
The lawsuit also said Clary received a low level of care after suffering a concussion during a January 2024 game. He accused Rhoades of using that injury to punish him further by spreading rumors that he had stayed away from the team because he wanted more money.
Clary also alleged that Rhoades falsely told another person he had been dismissed for skipping class and failing. He said those claims led to cyber bullying, depression, ostracizing, damage to his reputation, financial loss and trouble finding a school of his liking.
Penn State and the other defendants denied the allegations and sought to have the case dismissed.
After leaving Penn State, Clary transferred to Mississippi State but saw limited action because of an injury in November 2024. He then transferred to Oklahoma State last year, where he averaged 10.6 points in 34 games. He graduated in May but remains listed on the roster for this season.
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