Antitrust Law Daily Wrap Up, ANTITRUST NEWS: High Court asked to review finding that NCAA rules violate Sherman Act, (May 17, 2016)

By Linda O’Brien, J.D., LL.M.

The National Collegiate Athletic Association (NCAA) has asked the U.S. Supreme Court to review a decision entered by the U.S. Court of Appeals in San Francisco, which affirmed that NCAA rules prohibiting student-athletes from being paid for the use of their names, images, and likenesses were unreasonable restraints of trade. The petition for certiorariwas filed on May 13, 2016 (National Collegiate Athletic Association v. O’Bannon, Dkt. 15-1388).

The NCAA is a non-profit association composed of over 1,200 member schools and conferences. A group of current and former student-athletes, who played on men’s football and basketball teams at Division I member schools and conferences, filed suit, alleging that the NCAA violated federal antitrust law by conspiring with Electronic Arts Inc. and Collegiate Licensing Company to restrain competition for the commercial use of the student-athletes’ names, images, and likenesses in television broadcasts and NCAA brand video games. In particular, the student-athletes challenged NCAA rules that bar student-athletes from receiving a share of the revenue the NCAA and member schools earn from the sale of those licenses.

In September 2015, the Ninth Circuit affirmed that NCAA rules prohibiting student-athletes from being paid for the use of their names, images, and likenesses violated the Sherman Act, but overturned the district court’s remedy of prohibiting the NCAA from barring colleges from providing deferred compensation to student-athletes.

In its petition for review, the NCAA argues that the appellate court erred by failing to follow the decisions of the Court in American Needle, Inc. v. NFL, 560 U.S. 183 (2010) and other circuits under which rules that define the character of NCAA athletics were upheld without a detailed analysis. The Ninth Circuit found the NCAA liable because it had previously allowed student-athletes to be reimbursed for most, but not all, college expenses deemed appropriate by the court. The NCAA also contends that it was not proper for the court to decide what expenses should be reimbursed and such a ruling jeopardizes the vitality of the NCAA and other amateur sports leagues.

The NCAA presents two questions: (1) Whether the Ninth Circuit erred in holding that NCAA rules defining "the eligibility of participants" in NCAA-sponsored athletic contexts violated the Sherman Act? (2) Whether the First Amendment protects a speaker against a state-law right-of-publicity claim based on the realistic portrayal of a person in an expressive work (here, a student-athlete in a college-sports videogame)?

Attorneys: Glenn D. Pomerantz (Munger, Tolles & Olson LLP), Gregory L. Curtner (Schiff Hardin LLP), and Seth P. Waxman (Wilmer Cutler Pickering Hale and Dorr LLP) for National Collegiate Athletic Association.

Companies: National Collegiate Athletic Association

News: Antitrust