The 92-page memorandum explained why they think the judge should not throw out their claims against college sports' governing body over the punishment handed down in the wake of a child sex abuse scandal involving a longtime Paterno assistant, Jerry Sandusky.
A courtroom proceeding is scheduled for late next month as the NCAA seeks dismissal of the breach-of-contract, defamation and civil conspiracy claim.
The plaintiffs said the market has been diminished for items linked to Paterno, once the winningest coach in Division I football. A consent decree between Penn State and the NCAA a few months after Paterno's 2012 death stripped the coach of the last 111 wins of his career.
"That Paterno is deceased ... does not mean that college football fans cannot still purchase footballs that were signed by him," they wrote. "But they are less likely to do so after the NCAA defendants' publication of the disparaging and baseless statements made in the consent decree."
The consent decree also imposes a $60 million fine on the university, temporarily reduced its scholarships and banned it from post-season play for four years. The agreement followed the release of Penn State's scathing internal review, led by former FBI director Louis Freeh, into how school officials handled complaints about Sandusky's behaviour with boys in 1998 and 2001.
Freeh's report said high-ranking school officials, including Paterno, "concealed critical facts" about Sandusky because they feared bad publicity. Paterno was never charged with wrongdoing but three former school officials are facing charges in an alleged cover up.
The plaintiffs wrote that labeling Paterno as a concealer of child abuse caused "concrete harms to the commercial interests of his estate."
Along with Paterno's family, the plaintiffs also include three faculty members, nine former Penn State football players, former coaches Jay Paterno and Bill Kenney, and five members of the Penn State Board of Trustees, although one is dropping out.
NCAA chief legal officer Donald Remy issued a statement in response on Friday, calling the lawsuit "fundamentally flawed" and saying it should be dismissed.
"Although (the) plaintiffs may be unhappy with Penn State University's acceptance of the Freeh Report and its decision to enter the consent decree, the plaintiffs have no legal basis to sue the association," Remy said.
The new filing criticized the NCAA as trying to deflect attention from criticism and shore up its reputation while broadening its authority and imposing "enormous monetary sanctions" for its own benefit.
The filing said Kenney, an offensive line coach, and Jay Paterno, the coach's son and a quarterbacks coach, are examples of how the NCAA allegedly has "negatively and dramatically" affected opportunities and business relationships.
"The NCAA defendants minimize the seriousness of accusing all Penn State football coaches of being part of a culture that supposedly allowed child abuse, and ignore the obvious repercussions of stitching a scarlet letter on coaches they labeled complicit in jettisoning the 'values of human decency,'" the plaintiffs' lawyers wrote.
The NCAA has until Sept. 20 to respond to the new filing, and oral argument in the matter is scheduled for Oct. 29 in the courthouse where Sandusky was convicted last year of 45 counts of child sexual abuse.
Paul Kelly, a lawyer for the plaintiffs, said any trial in the lawsuit is at least 18 months to two years away.
Sandusky, 69, is serving a 30- to 60-year prison sentence and maintains his innocence. A state appeals court will hear argument in his challenge to the conviction on Sept. 17.