A federal judge from the Northern District of California had denied a motion to dismiss filed by the NCAA and 11 major conferences, which were named in a class-action antitrust lawsuit.
The lawsuit seeks to represent former NCAA Division I Football Bowl Subdivision (FBS) scholarship players who have played from February 2010 to the present.
The plaintiffs claim that the defendants colluded in violation of federal antitrust laws to cap the value of athletic scholarships — known as Grants-in-Aid — despite the fact that the NCAA’s valuation of athletic scholarships remains thousands of dollars below the actual cost of attending school, and far below what the free market would bear, according to the complaint. Specifically, they allege that the defendants “colluded to disrupt the free market and deprive FBS football players of the full economic benefits of their labor. … NCAA rules artificially depress the value of athletic scholarships to typically several thousand dollars less per year, per player, than the actual cost to attend an NCAA school.”
The complaint requests past damages to compensate class members for the difference between the value of scholarships and the actual cost of attending school, and also requests an injunction to enjoin defendants from continuing to enforce their anticompetitive rules. Additionally, the complaint requests the appointment of an External Antitrust Compliance Monitor to ensure that defendants conduct themselves in compliance with the antitrust law, and to provide a mechanism for future judicial oversight of defendants’ operations.
The two central plaintiffs in the case are Shawne Alston and Martin Jenkins. Alston is represented by lead attorney Steve Berman of Hagens Berman, while Jenkins is represented by lead attorney Jeffrey Kessler of Winston & Strawn.
In their motion to dismiss, the defendants tried to use Federal Judge Claudia Wilken’s previous decision this summer in the O’Bannon case — in which she restricted how much money a player could make — against the plaintiffs.
“The filing outlines the flaws and implausibility of the plaintiffs’ case,” said Donald Remy, the NCAA’s Chief Legal Officer. “Under the plaintiffs’ theory, the court’s own injunction in the O’Bannon decision is an antitrust violation. The O’Bannon and other federal court decisions, however, confirm what the NCAA and its members have said all along — agreeing to appropriate limits on financial aid to student-athletes does not violate antitrust laws.”
The court was unpersuaded, noting several significant differences between the Alston, Jenkins, and O’Bannon cases. Central to her reasoning was the inclusion of female basketball players in the current cases. The O’Bannon order did not issue an injunction that covered female basketball players, and the court appeared adamant that the plaintiffs have their opportunity to argue on their behalf. In addition, the judge noted that the O’Bannon case involved payment solely for the use of players’ names, images, and likenesses. The instant cases are broader in scope, according to the court.
The judge also ordered the parties to enter settlement talks.
