By Jeff Birren, Senior Writer
In 2023, two 19-year-old twin brothers sued the NCAA after it decided they were ineligible to participate in collegiate athletics because the two had previously signed written contracts to play basketball and received compensation over and above the value of name, image, and likeness rights (“NIL”). They sought a temporary restraining order (“TRO”) and a preliminary injunction to allow them to immediately play basketball at Chicago State. The Court rejected the TRO request. The plaintiffs then filed a motion for reconsideration and a preliminary injunction reply brief. The District Court denied both motions (Bewley v. NCAA, 2024 U.S. Dist. LEXIS 5131 (1-10-2024)).
Background
The NCAA’s webpage declares that among its “Priorities” the first is to: “Coordinate and deliver safe, fair and inclusive competition directly and by Association members” including, “Set rules and guidelines and provide enforcement.” Another priority is money: “Deliver sustainable funding for the NCAA mission.” This means to “Grow media, sponsorship and ticketing revenue” while seeking to “Innovate new revenue streams.” Simply put, the NCAA creates rules for all and generates money for some, but historically not for the athletes the fans pay to see. Those walls have been tumbling down, though changes have come in spurts and starts, and yesterday’s rules are often obsolete. One rule has not changed: An athlete cannot turn professional, and then return to play that sport in the NCAA.
The Facts as Alleged
Mathew and Ryan Bewley are twin brothers from Ft. Lauderdale. As “top basketball recruits,” they attended “an elite basketball academy, Overtime Elite Academy” in Atlanta. After graduating, they accepted athletic scholarships at Chicago State, and “applied for eligibility” “through a process know as Amateurism Certification,” which was denied. Two former Elite classmates were granted that status, Rob Dillingham at Kentucky, and Kanaan Carlyle at Stanford.
The Complaint admits that the plaintiffs had “contracts” with OTE. This included “compensation” from OTE, in exchange for the use of their name, image and likeness. The the contracts were filed with the Court under seal, as “required” by “the confidentiality clause in the contracts.”
Unable to play, the Bewleys sued the NCAA on November 1, 2023, in Chicago federal court. Chicago State is not a defendant. Two days later the NCAA, through counsel waived service of summons. The Complaint is 19 pages, including eight pages of factual allegations. The Complaint asserts that the denial of amateur status is “in conflict” with prior NCAA decisions, “its own interim policy on NIL,” and an Illinois Statute.
The first cause of action is for a violation of the Illinois statute. According to the Complaint, “Plaintiffs maintain an implied right of action to enforce 110 ILCS 190/15 pursuant to Illinois common law.” The statute states, in relevant part, that colleges “shall not uphold any contract, rule, regulation, standard, or other requirement that prevents a student-athlete of that institution from earning compensation as a result of the use of the student-athlete’s name, image, likeness, or voice. Any such contract, rule, regulation, standard, or other requirement shall be void and unenforceable against the postsecondary educational institution or the student-athlete. Compensation from the use of a student-athlete’s name, image, likeness, or voice may not affect the student-athlete’s scholarship eligibility, grant-in-aid, or other financial aid, awards or benefits, or the student-athlete’s intercollegiate athletic eligibility.”
The second cause of action is a purported antitrust violation, 15 U.S.C § 1, as an unreasonable restriction of trade. The third is also brought under that statute as a “Group Boycott/Refusal to Deal.” The Complaint seeks the usual Sherman Act remedies. The plaintiffs also sought immediate injunctive relief.
The Court’s Decision, Part 1: TRO Reconsideration
On the day the Complaint was filed, the plaintiffs sought a temporary restraining order “and a preliminary injunction against defendant’s enforcement … of its determination that plaintiffs are ineligible to participate in collegiate athletics.” The Court held a hearing on the TRO request on November 14, 2023. The TRO was denied that same day. Undeterred, on December 11, 2023, the Bewleys filed a motion for reconsideration and a Reply on the motion for a preliminary injunction. This time, the Court did not hold a hearing. It combined its ruling on the motion for reconsideration with its ruling on the motion for a preliminary hearing.
The Court began by quoting from the contract the plaintiffs signed with OTE. It found the contracts were clear. By signing, the plaintiffs “risked ‘immediately los(ing) any and all eligibility to participate in … collegiate athletics of any form, nature, or variety … including … the (NCAA) which is an amateur intercollegiate athletics program.” The Bewleys argued that the NCAA treated Dillingham in a different manner. However, the NCAA changed its NIL rules in 2022, and thus Dillingham was eligible to participate, but the Bewleys were not. Furthermore, the contracts signed with OTE included a “negotiated market value compensation package” and not merely the ability receive compensation from the sale of their NIL rights.
The Bewleys also claimed that the NCAA rule violated both the Illinois statute and the antitrust laws. The Court ruled that the OTE contracts “confirmed that plaintiffs received performance bonuses, apparel royalties, and group licensing payments, in addition to their base salary, which defendants determined were impermissible.”
The request for reconsideration was theoretically “based on additional evidence and authority.” Perhaps, but “plaintiffs have not pointed to any change in the facts, or to the court’s misunderstanding of any legal or factual argument in denying” the request for a TRO. Yes, the plaintiffs attached a grant of a TRO in case from Ohio” but “that case is not “binding upon this court and the case is readily distinguishable.” The court’s “Discussion” section took six sentences.
Part Two: Preliminary Injunction Request—State Law Claim
The Court analyzed the plaintiffs likelihood of success, that is, “whether plaintiffs were deemed ineligible due to their compensation from OTE, and whether plaintiffs received such compensation for the use of their NIL.” “[A]s the court determined in its hearing on plaintiffs’ TRO motion, plaintiffs’ contracts with OTE” were “clearly an employment contract with a professional league.” The compensation “included compensation for NIL,” but “were so much more than just an NIL contract.” Whatever Dillingham signed “does not change the contract that the plaintiffs signed here.” This conclusion was supported by the NCAA Eligibility Center’s findings. Consequently, the plaintiffs “have not clearly demonstrated that they were compensated only for the use of their NIL” and therefore, did not demonstrate a likelihood of success on the state law claim.
Part Three: Preliminary Injunction Request—Sherman Act Claim
This next argument was based on Alston v. NCAA and O’Bannon v. NCAA. Both cases have been extensively covered in these pages. Suffice to say, NCAA NIL rules were found to violate the Sherman Act. True, allowed the Court, but those cases were brought by current or former athletes, while “this case is distinguishable because it is brought by prospective college student-athletes, who may accept ‘fair compensate[ion]’ during high school by choosing not to risk potential eligibility to compete in intercollegiate athletics.”
The Court credited the NCAA’s argument that the “Supreme Court has determined that amateurism is a procompetitive justification that protects the distinction between college and professional sports. See Nat’l Collegiate Athletic Ass’ v. Bd. of Regents of Univ. of Oklahoma, 468 U. S. 104 … (1984)).” Furthermore, the plaintiffs failed to explain why the “compensation limitation at issue” is “similar to the “transfer eligibility rule at issue in Ohio v. NCAA” (U. S. Dist. LEXIS 221953 (Dec. 13, 2023)). “Unlike the transfer rule,” the rule at issue here “directly promote defendant’s ‘unique product’ of amateur sports.” The motion was denied.
Two days after the ruling, counsel filed a Reply Brief. That Reply included a cite to the Ohio v. NCAA case. The Court took a dim view. “If plaintiffs intended their ‘response’ (Doc. 32) to be simply a citation of additional authority,” then “they should have filed an appropriate motion, which would have given defendant a chance to respond. Additionally, plaintiffs could have cited Ohio v. NCAA in their ‘Reply’ Brief without the confusion caused by their improper filing of their ‘Response’” (Doc. #36).
Next Steps?
Chicago State’s season ends on February 19, 2024. This is prior to March 2 when the NCAA must respond to the Complaint. The plaintiffs should expect a motion to dismiss, and subsequent full-scale litigation. Whatever the merits of the case, and its result, the Bewleys will miss the entire season.
Opinion
Gaining access to the contracts signed by OTE players through discovery could provide aid, though Judge Gettleman does not seem to be kindly disposed to their claims. Summary judgment may be beyond their reach. That means either settlement or years of expense to get to a jury. For the NCAA, these litigation costs are relatively small by their standards, and the Seventh Circuit may provide relief that they have not found in Ninth Circuit NIL litigation.
The Court’s distinction between current or former athletes versus “perspective” athletes is a thin reed post Alston, as is reliance on NCAA v. Bd. of Regents. Some of that was put to bed by the unanimous Alston decision. What does “amateurism” even mean if it is sport-specific, or if athletes can earn significant sums from NIL rights as amateur?
The Bewleys know the rules on the court. They, along with their counsel, should use the proper rules in court. The plaintiffs would have been well-served to remember the old maxim: Look before you leap, that is, read the contract before going to the hoop. Young athletes need proper guidance. A few small edits could have changed the result.
