A federal judge from the Northern District of California has denied a bid by the NCAA and Collegiate Licensing Company (CLC) to dismiss the claim of legendary basketball player Bill Russell and other former athletes, who have alleged that the above defendants, as well as Electronic Arts, Inc., engaged in anti-competitive conduct in violation of the Sherman Act.
The instant case is “almost identical” to the one brought by the antitrust plaintiffs in the related consolidated case currently pending before the court — In re NCAA Student- Athlete Name & Likeness Licensing Litigation, Case No. 09-1967 (N.D. Cal.).
Russell, who competed as a student-athlete on the University of San Francisco (USF) men’s basketball team from 1953 to 1956, maintains that he signed one or more release forms “that the NCAA has interpreted as a release of the student-athlete’s rights with respect to his image, likeness and/or name in connection with merchandise sold by the NCAA, its members and/or its licensees.”
He further alleged that the NCAA’s rules and regulations constitute anti-competitive conduct. The NCAA requires student-athletes to sign NCAA Form 08-3a, or a form similar to it, each year prior to participating in intercollegiate athletics events, according to the plaintiff. By signing Form 08-3a or a form like it, student-athletes agree to the following:
“You authorize the NCAA [or a third party acting on behalf of the NCAA (e.g., host institution, conference, local organizing committee)] to use your name or picture to generally promote NCAA championships or other NCAA events, activities or programs.”
Further, NCAA Bylaw Article 12.5.1.1.1 provides that the NCAA, or a third party acting on behalf of the NCAA (e.g., host institution, conference, local organizing committee), may use the name or picture of an enrolled student-athlete to generally promote NCAA championships or other NCAA events, activities or programs. Form 08-3a states that a student-athlete’s release “shall remain in effect until a subsequent Division I Student- Athlete Statement/Drug-Testing Consent form is executed,” which the plaintiff alleges that the defendants have interpreted as having the effect of allowing the release to exist in perpetuity.
Russell claimed that, among other things, Form 08-3a and Article 12.5.1.1 enable NCAA and CLC to enter into licensing agreements with companies, such as EA, that distribute products containing student-athletes’ images, likenesses and names, even after the student-athletes have ended their collegiate athletic careers. He alleged “that neither he nor other student-athletes consent to these agreements, and that they do not receive compensation for the use of their images.”
These actions constitute a violation of the Sherman Act, according to the plaintiff.
“First, he contends that the defendants conspired to ‘limit and depress the compensation of former student-athletes for continued use of their images to zero.’ Second, he asserts that the defendants engaged in a ‘group boycott / refusal to deal’ scheme, in which (they) required ‘all current-student athletes to sign forms each year that purport to require each of them to relinquish all rights in perpetuity for use of their images, likenesses and/or names’ and denied class members ‘compensation in the form of royalties for the continued use of their images, likenesses, and/or names for profit.’”
Specifically, the plaintiff alleged the following claims against all defendants: “(1) violation of § 1 of the Sherman Act for an unreasonable restraint of trade; (2) violation of § 1 of the Sherman Act for a group boycott and refusal to deal; (3) unjust enrichment; and (4) an accounting.”
The NCAA and CLC countered recently with a motion to dismiss “on the grounds that (the claims) are barred by the statute of limitations and that the plaintiff has not adequately alleged an agreement between the NCAA and any third party.”
The first element centered on the fact that Russell played in the 1950’s.
The plaintiff countered that “the continuing violation doctrine applies,” citing the same court’s rationale in a related case – O’Bannon v. National Collegiate Athletic Association, Case No. 09-3329. “Because Plaintiff has alleged continuing violations that took place before that date, within the applicable statute of limitations, his claims predicated on the overall conspiracy are not time-barred,” wrote the court.
“To argue against the application of this doctrine, NCAA and CLC cite Newman v. Universal Pictures, 813 F.2d 1519 (9th Cir. 1987). However, Newman is inapplicable to the facts in this case and does not discuss the continuing violations doctrine. In Newman, the complaint alleged a conspiracy that began years after the plaintiffs had signed certain contracts, when the defendants subsequently agreed to adopt an interpretation of the contracts that minimized payment to the plaintiffs. Id. at 1522. The Ninth Circuit held that the alleged conspiracy could not have restrained trade in the form of competition for film contracts, because the plaintiffs entered into the contracts before the conspiracy arose. Id. Here, the plaintiff alleges that there was a conspiracy already underway at the time that he was forced to sign a document like Form 08-3a and that it has been ongoing since that time.” Accordingly, the court agreed that claims are not barred by the statute of limitations.
NCAA and CLC also argued that the plaintiff “has not sufficiently pled an agreement between them and their alleged co-conspirators. In support, NCAA and CLC first contend that the court should construe that the plaintiff’s allegations as two separate and distinct conspiracies and therefore should disregard the NCAA forms and bylaws. The Court finds this argument unpersuasive for the reasons previously stated.”
William F. Russell, on behalf of himself and all others similarly situated v. National Collegiate Athletic Association, also known as NCAA; Collegiate Licensing Company, also known as CLC; and Electronic Arts, INC.; N.D. Calif.; No. C 11-4938 CW, 2012 U.S. Dist. LEXIS 68684; 2012-1 Trade Cas. (CCH) P77,904; 5/16/12
Attorneys of Record: (for plaintiff) Arthur Nash Bailey, Jr., LEAD ATTORNEY, Jon T. King, Michael P. Lehmann, HAUSFELD LLP, San Francisco, CA; Michael D. Hausfeld, PRO HAC VICE, HAUSFELD LLP, Washington, DC. (for defendants) Gregory L. Curtner, Robert James Wierenga, LEAD ATTORNEYS, Schiff Hardin LLP, Ann Arbor, MI; Jason Alex Geller, Meckler Bulger Tilson Marick & Pearson LLP, San Francisco, CA.; Gregory S. Gilchrist, Kilpatrick Townsend and Stockton LLP, San Francisco, CA; Jason Alex Geller, Meckler Bulger Tilson Marick & Pearson LLP, San Francisco, CA; Peter M. Boyle, Kilpatrick Townsend & Stockton LP, Atlanta, GA; R. Charles Henn, Jr., Kilpatrick Townsend & Stockton LLP, Atlanta, GA.; Robert James Slaughter, LEAD ATTORNEY, Keker & Van Nest LLP, San Francisco, CA.
