Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Cal.: O’Bannon decision did not preclude student-athletes’ suit against NCAA, (Aug 8, 2016)

By Jody Coultas, J.D.

The National Collegiate Athletic Association (NCAA) was denied dismissal of federal antitrust law claims filed by former student-athletes alleging that the NCAA and its members conspired to impose a cap on the amount of money schools could provide to student-athletes, according to the federal district court in San Francisco. The Ninth Circuit decision in O’Bannon v. NCAA did not bar the present claims (In re: National Collegiate Athletics Association Athletic Grant-In-Aid Cap Antitrust Litigation, August 5, 2016, Wilken, C.).

Student-athletes who played NCAA Division I Football Bowl Subdivision football and men’s and women’s basketball challenged the NCAA’s restrictions on the compensation of student-athletes for their athletic performance. At the time the complaint was filed, the grant-in-aid (GIA) was capped at the value of tuition, fees, room and board, and required course books. Plaintiffs alleged that the NCAA and a group of Division I conferences violated federal antitrust law by conspiring to impose the cap on the amount of monetary and in-kind compensation a school may provide. The complaint sought an injunction and damages for the difference between the GIAs awarded and the cost of attendance.

The motion for judgment on the pleadings was denied by the court. The NCAA and DI conferences argued that the Ninth Circuit’s decision in O’Bannon v. NCAA, 802 F.3d 1049, 1079 (9th Cir. 2015) foreclosed the challenge to the NCAA’s current rules because the Ninth Circuit held that "offering [student athletes] cash sums untethered to educational expenses" was not a less restrictive alternative to the NCAA’s current rules. The court noted that after the claims were filed, the NCAA permitted conferences to allow schools to compensate student-athletes with GIAs for up to their cost of attendance. Plaintiffs argued, and the court agreed, that the Ninth Circuit’s decision in O’Bannon only foreclosed cash compensation untethered to educational expenses. That decision did not provide a basis on which a judgment on the merits can be rendered.

The cases are Nos. 14-md-2541 CW and C 14-2758 CW.

Attorneys: James S. Richter (Winston & Strawn LLP) for Martin Jenkins. Anthony Joseph Dreyer (Skadden Arps Slate Meagher Flom LLP) for National Collegiate Athletic Association. David Erik Albright (Smith Moore Leatherwood LLP) and Duvol Thompson (Holland and Knight LLP) for Atlantic Coast Conference. Leane K. Capps (Polsinelli PC) and Matthew P. O'Malley (Tompkins McGuire Wachenfeld & Barry LLP) for Big 12 Conference.

Companies: National Collegiate Athletic Association

Cases: Antitrust CaliforniaNews