By Jeff Birren, Senior Writer
The NCAA was back in federal court in Oakland California on Tuesday, January 16, 2018 arguing its own motion for summary judgment while seeking to fend off the plaintiffs’ motion. There are currently two such cases. One is entitled In Re: National Collegiate Athletic Grant-in-Aid Antitrust Litigation. The other is a subset of those plaintiffs in the case entitled Martin Jenkins et al v NCAA et al. That case, filed by Jeffrey Kessler from Winston & Strawn in New Jersey Federal Court and transferred to Oakland for pretrial matters, does not include women’s basketball players.
The plaintiffs filed their motion for summary judgment in August 2017. (For a discussion of those filings, see ”College Athletes Seeking Relief From NCAA’s Cap on Athlete Compensation,” Ellen Staurowsky, Sports Litigation Alert, September 15, 2017.” The NCAA opposed that motion and filed their own summary judgment motion. (Ellen J, Staurowsky, “NCAA Opposes College Athletes” Motion for Summary Judgment in Athlete Compensation Cap Case & Files Its Own Motion For Summary Judgment” Sports Litigation Alert, October 13, 2017.)
For the parties in the two cases, fundamental issue in the case now pending before Judge Wilken is what did the decision in the prior O’Bannon case foreclose and what issues did it leave open? (O’Bannon v. NCAA, 802 F. 3d 1049 (Ninth Circuit, 2015)). Judge Wilken issued her opinion following a bench trial in 2014. The Ninth Circuit affirmed in part and reversed in part Judge Wilken’s decision. After a very lengthy discussion affirming much of the decision, the Circuit determined that college athletes were not entitled to receive “cash payments untethered to their education expenses.”
The United States Supreme Court subsequently declined both sides’ petitions for a writ of certiorari. Thereafter, the NCAA filed a motion to dismiss the Jenkins case. Judge Wilken denied that motion in August 2016. (“What to Make of Martin Jenkins et al v. NCAA in Light of O’Bannon,” Sports Litigation Alert December 9, 2016.). As Judge Wilken noted at the time, O’Bannon “is binding on this Court” but the Jenkins plaintiffs also sought “other benefits” and “in-kind compensation as well as cash compensation.” That ruling set the stage for Tuesday’s summary judgment motions.
Judge Wilken took the bench at 2:30 PM and announced that she had an appointment at 4 PM so the hearing would end at that time, and it did, using all ninety minutes. Jeffrey Kessler argued for the plaintiffs and Beth Wilkinson of Wilkinson Walsh + Eskovitz from Washington, D.C. argued for the NCAA and the other defendants. However, they were far from alone as at least twenty-four other attorneys were present in the courtroom and still more appeared by teleconference. One side also brought at least nine bankers’ boxes worth of documents, that all remained in the box, yet somehow this vast cast is considered “reasonable” when billing clients or setting statutory attorneys’ fees.
Judge Wilken also stated that she had questions for counsel and her questions controlled the hearing, so that neither side was allowed to simply make their prepared oral argument. She immediately noted that the O’Bannon decision foreclosed arguments on both sides. As to the NCAA, they cannot claim that there is no restraint of trade in a relevant market. As to the plaintiffs, they cannot seek compensation “untethered” to educational expenses. Kessler claimed that the plaintiffs can challenge the “pro competitive: justifications offered by the NCAA. Wilkinson in turn responded that the O’Bannon decision “covers this case.” Judge Wilken then asked if that also applied to the women’s basketball players are they were not part of the O’Bannon case. Wilkinson responded affirmatively because they are “similarly situated.”
Judge Wilkins then asked Kessler if there were any NCAA-justifications for the restraints that he would like to contest. He said yes, adding that the facts are different than were before the court in O’Bannon. Wilkinson responded by stating that they should not be back in in court “every time something changes a little.” Calling this the “Whack-a-mole” game, as the Supreme Court had stated in NCAA v. Board of Regents, 468 U.S. 85 (1983) that the NCAA needed “ample latitude” to supervise college athletics, 468 U.S. at 120.
These three themes were constantly repeated whether in the form of questions by Judge Wilkins or in answers given by counsel. What did O’Bannon allow, or not allow; what new material facts exist; and when are new the claimed new facts merely small changes that should not open the door to antitrust courts?
Kessler continued to assert his claim that there were “new facts” and was consequently questioned on this issue by Judge Wilkins. He also stated that the plaintiffs were claiming that over eighty separate NCAA or conference rules violated antitrust law. All such rules were attached to their motion for summary judgment as Appendix A. Twenty-three of those challenged rules are redacted from the file that is available to the public. Of the remaining challenged rules, some apply to the NCAA members and not their athletes. Some twenty-six related to what the athlete may receive. Those specific challenged rules are found in NCAA Bylaw 5, Bylaw12, Bylaw 15 and Bylaw16, and deal with such topics as “Permissible Grant-in-Aid,” (Bylaw 12.01.4), “Pay,” (Bylaw 12.02.9), “Amateur Status” (Bylaw 12.1.2), “Prohibited Forms of Pay” (Bylaw 12.1.2.1), “Specific Prohibitions” (Bylaw 13.2.1), “Improper Financial Aid” (Bylaw 15.01.2), and “Excessive Expense” (Bylaw 16.02.3) among the challenged restraints.
As part of their opposition, the players also submitted “Appendix B” which is a listing of various benefits disallowed by the NCAA. The players claim that all of the seventeen benefits listed are “tethered to education. So, to a great extent the two antitrust cases come down to that list. As result, the entire list will be quoted here.
“A guaranteed post-eligibility scholarship to complete a bachelor’s degree at any time after eligibility expires.
Subsidized tutoring costs associated with completing a bachelor’s degree at any time after eligibility expires.
Expanded opportunities to participate in study-abroad programs.
A guaranteed post-eligibility scholarship or grant for a graduate degree.
Subsidized vocational training.
Subsidized professional certifications or licensure programs and fees.
A health savings account funded by schools with a maximum contribution for each year of academic progress and an additional contribution upon graduation.
A cell phone and call/texting/data plan subsidized by the member school.
A local/campus travel stipend.
A clothing stipend.
Subsidized travel costs for family to attend regular season and post-season games.
Money placed in trust by the Conference Defendants and schools that could then be used by the trustee to pay in cash for in-kind benefits for fundamental living expenses—that achieve specified benchmarks that are tethered to educational objectives, such as making academic progress toward a degree, earning academic all-conference recognition, graduating, or pursuing postgraduate education.
Incentive payment of up to $10,000, made in installments, for each school year in which a class member completes at least 1/5th of the units required to earn a degree and also has a GPA at or above the NCAA eligibility minimum.
A one-time incentive f up to $10,000 for a class member who earns an undergraduate degree, with the payment made available for those class members who earn their degree after their eligibility expires.
Cash payments for computers, science equipment, musical instruments, and other items not currently included in the cost of attendance amounts permitted by current NCAA rules but nonetheless related to the pursuit of various academic studies.
Cash compensation to pay for study abroad during he summer or a semester abroad.
Supplemental compensation to replace the lost income that Class Members cannot earn due to the long hours devoted to basketball or football while also completing schoolwork.”
Judge Wilken continued to ask questions. She asked both sides to explain if what O’Bannon presented the court was stare decisis, claim preclusion or res adjutica. No final answer to that question was forth coming by the time the hearing ended.
Judge Wilken asked Kessler if he meant attack the prior finding concerning integration of the athlete into the academic community. The NCAA had maintained that providing more support to the athletes would diminish support for the athletic programs. Kessler responded in the affirmative, pointing out that since the O’Bannon trial, support for the schools’ athletes had risen but so had overall support for college athletics.
Judge Wilken asked Kessler about the form of injunction that the plaintiffs were seeking. He stated that they wanted the court to enjoin the current rules, then stay the injunction for sixty days so that the athletic conferences can adopt whatever rules they wish, or, alternatively, the NCAA could step in and rewrite the rules. When pressed by the Court, Kessler continued to insist that the conferences could adopt rules as they saw fit.
Judge Wilken then asked Kessler about the trial site for his Jenkins case. Kessler ducked, by stating that a decision on whether to transfer it back to federal court in New Jersey could come before or after the rulings on summary judgment. Wilkinson stated that it could not be remanded until after the summary judgment rulings. Moreover, the Jenkins case is a subset of the entire class action, In Re: National Collegiate Athletic Grant-in-Aid Antitrust Litigation, that will remain with Judge Wilkins, as Jenkins does not include women’s basketball players.
Wilkinson continued to argue that the NCAA must be given “ample latitude” to determine benefits to be given to college athletes. There was also interchange between Court and counsel about the possible need for more briefing on various questions, especially including the “less restrictive alternatives.” Wilkinson also stated that what they were arguing about was included in the O’Bannon case, as “benefits incidental to education is not materially new” to the dispute between the NCAA and their athletes. What was decided in O’Bannon “precludes these clams” and the Ninth Circuit decision stated that the NCAA needs “ample latitude” to make and enforce their rules.
As to a possible injunction, she stated that the court needed “to give the NCAA guidance” as to what would be permissible. Kessler responded by pointing out in a case he had participated in against the NCAA, that court enjoined the NFL’s “Plan B” and left it up to the NFL to come up with “Plan C.”
Wilkinson also pressed the court stating that all of the challenged rules “could have been brought forward” at the last case and thus should now be barred.
Judge Wilkin next asked questions about the expert challenges and then asked the parties about mediation. Kessler stated that they had used Professor Eric Green for those discussions and that they had an agreement as to damages, but were not close to an agreement on liability issues. Judge Wilkins asked counsel to resume those discussions.
The hearing was included a status conference, and Judge Wilkins finally turned to a trial date. The case is to be tried to the court, (as was O’Bannon). She then stated that it was set for three weeks but it would likely not take that long as it is heavily based on expert testimony. She asked about December. Wilkinson stated that she had a trial in October and would need time to prepare for this trial, but Judge Wilkins ended the hearing by telling counsel to “think about December.”
She left the bench at 4 PM. She did not give any hint of when she might rule on the pending motions, but it was clear that she might send counsel specific questions to answer. She might also ask counsel if there were specific issues that they wished to further brief, including less restrictive alternative and “integration” (of the athlete into the academic community.) So, there is no current timetable, except a schedule that would be consistent with a December trial. With that, Judge Wilkin left the bench and the hordes of counsel began to huddle. The next day they began to order the transcript of the hearing. That will not be immediately forth coming, as there was no court reporter present at the hearing. It was recorded, so somewhere someone will have to transcribe the audio record, a less than envious task.
The author would like to thank Steve Berkowitz for the extremely timely assistance that he provided.
