By Charles Anzalone
Last week’s U.S. Supreme Court decision not to hear the appeal in the O’Bannon v. NCAA case concerning the treatment of college athletes is another sign the NCAA must abide by federal antitrust laws when implementing rules about the ability of athletes to earn compensation, a University at Buffalo School of Law expert said recently.
“The ultimate outcome of the battle remains in doubt,” said Nellie Drew, an adjunct professor who teaches sports law courses in UB’s School of Law and an expert on amateurism.
“However, for the first time it is clear that the NCAA’s regulation of amateur athletes is subject to antitrust scrutiny,” Drew said. “This means that the NCAA rules prohibiting college athletes from receiving compensation — which are at issue in two cases currently pending in the 9th Circuit, the same Circuit in which O’Bannon was decided — are now suspect as well.”
At issue is O’Bannon v. NCAA, a case that came to the U.S. Supreme Court from a 2009 lawsuit filed by former UCLA basketball star Ed O’Bannon, who sued to recover revenue received by the NCAA from the use of college athletes’ names, images and likenesses. Drew said the ruling issued by the 9th U.S. Circuit Court of Appeals included a ruling that was “unprecedented in NCAA litigation history.” That opinion is available here: http://www.scotusblog.com/wp-content/uploads/2016/04/ncaa-op-below.pdf
“The NCAA is not above the antitrust laws,” the judges from the 9th U.S. Circuit Court of Appeals wrote in the ruling. “And courts cannot and must not shy away from requiring the NCAA to play by the Sherman Act’s rules.”
The Supreme Court has so far upheld this important legal declaration.
“The case is one of a series challenging the validity of several NCAA rules as violations of the anti-trust laws,” Drew said, “each of which attempts to narrow a previous Supreme Court ruling which upheld an NCAA justification of certain of its rules as necessary to provide a unique consumer product — amateur collegiate sports.
“This justification has been the basis for the NCAA’s defense of its many regulations of collegiate athletics for over 30 years, founded on the increasingly dubious proposition that such regulations are essential for the promotion of amateur athletics, and the protection against insidious inroads of professionalism.”
The Supreme Court’s decision not to review O’Bannon leaves the 9th Circuit ruling intact, opening the door to further erosion of the NCAA’s ability to regulate collegiate athletics in the other two cases, Jenkins v. NCAA, and Allston v. NCAA, according to Drew.
“It remains to be seen how compelling the 9th Circuit will find the NCAA’s amateurism argument in those cases — and whether either of those ultimately will find its way to the Supreme Court,” she said. “The fundamental nature of the NCAA itself, long the bastion of amateur athletics, may hang in the balance.”
Anzalone is a senior editor of the University at Buffalo, Office of Communications.
Others Weigh In
Immediately after the ruling, Donald Remy, NCAA Chief Legal Officer, offered the following reaction:
“The U.S. Supreme Court denied both the plaintiffs’ and NCAA’s request to clarify key issues of law affecting the NCAA and other similar organizations. In asking for the review, we hoped the court would take the opportunity to affirm its own 30-year precedent in the Board of Regents antitrust decision and support the appellate court’s now final endorsement of amateur college sports.
“While we are disappointed with this decision not to review this case, we remain pleased that the Ninth Circuit agreed with us that amateurism is an essential component of college sports and that NCAA members should not be forced by the courts to provide benefits untethered to education, including providing any payments beyond the full cost of attendance.
“We continue to believe, and many other appellate courts have agreed, that the NCAA membership agreements to advance college sports are not violations of the antitrust laws. We will continue to strongly advance that legal position in other litigation. Further, the Court’s determination to not hear the case will not deter our members from continuing to provide students with academic opportunities, safeguarding their health and well-being and creating fair policies centered on the student-athlete experience.”
Jackson Lewis: NCAA Remains ‘Susceptible’
Amy L. Peck and Gregg E. Clifton of Jackson Lewis recently gave their perspective:
“The effect of the Supreme Court’s denial of review leaves the NCAA susceptible to other ongoing legal challenges, but it also gives the Association time to make changes to blunt such threats. A Supreme Court review of O’Bannon could have further clarified if and to what extent college athletes should be compensated for the commercial use of their names, images, and likenesses and provided guidance on how such compensation could affect Title IX and the federal mandate that male and female college athletes be treated equally. Without such Supreme Court clarification, the Ninth Circuit’s decision stands as favorable precedent for other legal challenges to NCAA amateurism rules, such as the case pending on behalf of former Clemson University football player Martin Jenkins.
“In 2014, Jenkins sued the NCAA, alleging the NCAA and its universities and conferences have violated federal antitrust law by conspiring to limit the value of athletic scholarships to tuition, room, board, books, and fees.
“The Jenkins action seeks a proposed remedy that would allow schools to compete for star athletes in a ‘free agent’ type system by bidding for the services of those athletes. Student athletes with superior athletic talent would be able to require schools vying for their enrollment to enter into a financial bidding war to convince them to attend their university.
“This would be more reflective of a free agency system at the professional sports level than the current amateur athlete recruiting process that provides athletic scholarships.
“The Jenkins case is being heard in the U.S. District Court for the Northern District of California, the same court that heard the O’Bannon case. In addition, the ruling federal district court judge in O’Bannon also is presiding over this litigation.
“While O’Bannon may have reached its ending after seven years of protracted litigation, other potential actions can still be brought by student-athletes outside of the Ninth Circuit. Different legal interpretations among the circuit courts could bring the issue to the Supreme Court once again.”
