IP Law Daily, PUBLICITY RIGHTS—M.D. Tenn.: Star quarterback granted injunction against enforcement of NCAA eligibility on antitrust grounds, (Dec 20, 2024)

By Kenneth H. Ryesky, M.B.A., J.D.

NCAA eligibility rules induce aspiring professional athletes to attend NCAA affiliate schools even when junior colleges and other educational alternative might be more in their best interests.

The federal district court in Nashville has granted a preliminary injunction barring the NCAA from enforcing its eligibility rules against a student athlete, and barring the NCAA from taking punitive measures under its so-called "Rule of Restitution against the athlete or any educational institution if the injunction is subsequently found to have been granted in error. The student-athlete, Diego Pavia, aspires to play professional football, and has sued the NCAA alleging that its eligibility rules violate the Sherman Act by diminishing his career earning power in restricting him from playing college football (Pavia v. National Collegiate Athletic Association, No. 3:24-cv-01336 (M.D. Tenn. Dec. 17, 2024)).

Background. College athletics has become an entrée into the potentially lucrative livelihoods of many professional athletes; for many sports, including football and basketball, it is the predominate pathway into the career. The National College Athletic Association (NCAA) is an organization that promulgates rules that pertain to college athletics in the United States. The NCAA rules now permit student-athletes to receive compensation from others for the use of their names, images, and likenesses (NIL); this rule was promulgated following a 2021 U.S. Supreme Court decision [NCAA v. Alston, 594 U.S. 69 (2021)].

Teams in the National Football League (NFL) recruit most of their players from NCAA Division I schools. Diego Pavia (Pavia) is an accomplished athlete. Following his 2020 high school graduation, he had no Division I offers to play football, so he enrolled in a junior college for two years and obtained an associate degree. He then transferred to Division I school New Mexico State University, where he played football for two years as he earned his bachelor's degree. Pavia then enrolled in Vanderbilt University, where he was a star quarterback during the 2024-2025 season.

Pavia now wishes to play football for Vanderbilt during the 2025-2026 season, but the NCAA Division I rules, which restrict college athletes to playing four seasons during the five-year period beginning with their initial fulltime enrollment at a "collegiate institution" (the Five-Year Rule) make him ineligible to play football for Vanderbilt. Had Pavia enrolled in a preparatory school such as the U.S. Air Force Academy Preparatory School, any football activity there would not count towards exhausting his eligibility under the Five-Year Rule; similarly, had he managed to go directly to a NFL team after graduating high school and played professionally for a few years before enrolling in college, he would start college with complete eligibility to play football during the next four years (and be a competitive adversary to younger and less-experienced aspiring football players).

The NCAA Division I also has a so-called "Redshirt Rule" that allows football player athletes to play a maximum of four games in a season without losing a year of eligibility.

Pavia estimates that if he is able to play football at Vanderbilt during the 2025-2026 season, the public visibility he would gain from playing would increase his potential lifetime NIL earnings by millions of dollars. He seeks to negotiate NIL opportunities with schools other than Vanderbilt, but the NCAA has a 20-day "Transfer Portal" time window, which this year is from December 9, 2024, to December 28, 2024.

Pavia sued the NCAA on November 8, 2024, claiming that enforcement of its eligibility rules violates the Sherman Act. Pavia has moved for a preliminary injunction to enjoin the NCAA from enforcing its eligibility rules that would bar him from playing during the 2025-2026 season.

Preliminary injunction-success on the merits. The court found that Pavia had shown a likelihood of success on the merits. The court first disposed of the NCAA's argument that its rules are not commercial in nature and therefore not subject to the Sherman Act. All of the cases cited by the NCAA were decided before the Supreme Court's Alston decision. Although the NCAA itself is not commercial in nature, its eligibility rules have a strong commercial character because they impact the NIL income a college athlete can earn.

The court found that the college football labor market in general and the NCAA Division I football labor market was a relevant market for Sherman Act purposes, upon which a substantial anticompetitive effect can be exerted by restricting student-athletes from competing in it. The agreements NCAA has with its member colleges and organizations are relationships of horizontal privity. Being in control of how the member colleges conduct their recruitments, the NCAA collectively holds monopsony power in the markets, and therefore has the requisite market power to sustain a Sherman Act claim.

The NCAA's arguments that its eligibility rules are procompetitive were rejected by the courts. Here, the NCAA argued that its eligibility rules necessarily "preserve a space for collegiate competition." The court found that "military service, religious obligations, professional careers in other sports, or even independent athletic or academic work" are valid reasons for students to depart from the "traditional trajectory," and the NCAA's own rules treat such student athletes disparately from the mainstream track athletes.

Moreover, Pavia has proposed less restrictive alternatives to the NCAA's scheme to achieve its touted objectives, including changes to the eligibility clock and other NCAA eligibility rules.

Preliminary injunction-irreparable harm. The court found that Pavia demonstrated that he would likely incur irreparable harm if the sought injunction was not granted. There is no question that denying athletes the ability to play in their sports constitutes irreparable harm. Moreover, the NCAA's "Transfer Portal" time window is currently open, and slated to close in less than two weeks. The NCAA had argued that Pavia's delay in challenging the eligibility rules should give the court cause to deny imposing it; the court found Pavia's delay to be reasonable in light of the NCAA's public statements and actual changes to the eligibility rules in the wake of the Supreme Court's Alston decision.

Preliminary injunction-balance of the equities. The court found that the public interest and the equities balance weighed in favor of granting the injunction. The scope of the injunction narrowly pertains to Pavia himself and not any other athletes as it would in a class action situation. The NCAA agrees that the case will not be resolved on the merits for many months to come; the injunction allows Pavia "to play next season while this case plays out" and to play the next season under the "Redshirt Rule" in the event that the litigation continues. No substantial harm to the NCAA or others is likely from the injunction if granted. The injunction will likely promote free competition in the relevant labor markets.

The Case is No. 3:24-cv-01336.

Judge: Campbell, W.

Attorneys: Salvador M. Hernandez (Riley & Jacobson PLC) for Diego Pavia. Calanthe Arat (Wilkinson Stekloff LLP) for National Collegiate Athletic Association.

Companies: National Collegiate Athletic Association

Cases: PublicityRights TennesseeNews