By Jeff Birren, Senior Writer
These pages have followed the consolidated cases that include Shawne Alston v. NCAA et al, and In re National Collegiate Athletic Grant-in-Aid Cap Antitrust Litigation (“Alston”). The NCAA lost in the District Court and the Ninth Circuit affirmed. (See, Sports Litigation Alert, Christian Dennie, “Ninth Circuit Affirmed the Decision of the District Court,” Volume 1 7, Issue #11 (June 5, 2020). The decision, issued on May 18, 2020, held that the NCAA’s rules that limited “education-related benefits” was a violation of federal antitrust law and affirmed the District Court’s injunction (Alston, 958 F.3d 1239 (9th Cir. 2020)).
This is the NCAA’s second recent defeat in the Ninth Circuit, and just as in O’Bannon v. NCAA, 802 F.3d 1049 (9th Cir. 2015), the NCAA has announced that it intends “to ask the Supreme Court to take up the case” (Alston, Defendant-Appellants Motion to Stay Issuance of the Mandate, Case No. 19-15566, Docket Entry 137 (7-6-20) at 1). The NCAA’s certiorari petition in O’Bannon was denied, as was O’Bannon’s (O’Bannon, Case No. 15-1388, Case No. 15-1167, Supreme Court Orders List for Monday, October 3, 2016, at 9).
The Alston defendants recently filed a motion “to stay the issuance of the mandate pending” their cert petition, (Alston, Ninth Circuit Case: 19-15566, 07/06/2020, Docket Entry: 137). Naturally the plaintiffs “do not consent to this motion” (Alston at 1). The NCAA and the eleven conference defendants also let the Circuit know that they “have not sought rehearing and thus the mandate is scheduled to issue on July 8, 2020” (Id.).
The injunction applies to all D1 men’s football players and all D1 men’s and women’s basketball players. The injunction can be found at 375 F. Supp. 3d 1058 (N.D. Cal. 2019). A possible college football season of some kind is approaching though the Covid-19 crisis is doing its very best to upend it. To date at least various conferences and schools seem determined to go forward, and the NCAA seeks to continue behavior that was found to be illegal by the Ninth Circuit, unencumbered by the injunction.
The Motion for a Stay
The 15-page motion claims that it complies fulfills all three tests for such a stay. That is, that the decision by the Ninth Circuit conflicts with a decision of the Supreme Court, that it conflicts with a decision of another court of appeals or a state court of last resort, or that it resolves an important question of federal law. “This Court’s decision implicates all three circumstances” (Id. at 2).
The first issue the defendants address is their claim that Alston conflicts with the Supreme Court’s decision in NCAA v. Board of Regents, 468 U.S. 85 (1984). In Board of Regents the Supreme Court ruled that the NCAA was subject to the antitrust laws. In dicta the Court added that the NCAA rules were designed to create the product that it could market that is different from professional sports. This included the eligibility rules. The NCAA has claimed ever since that dicta means that the eligibility rules were exempt from antitrust review. However, that dicta precedes O’Bannon by 30 years. In O’Bannon the NCAA filed a petition for a writ of certiorari based on that dicta, and this plea for insulation from judicial review was rebuffed by the Supreme Court in October 2016. In an undoubted oversight, the defendants failed to mention this in their brief.
The NCAA then argues that Alston conflicts with the Seventh Circuit’s decision in Agnew v. NCAA, 683 F.3d 328 (7th Cir. 2012). Agnew involved an antitrust challenge to NCAA football scholarships, but the Seventh Circuit determined that the plaintiffs had not pled a commercial market and rejected the appeal. But Agnew was also decided prior to O’Bannon and the NCAA made the same arguments on appeal in O’Bannon and when it sought certiorari. The organization did cite a post-O’Bannon case from the Seventh Circuit, Deppe v. NCAA, 893 F.3d 498 (7th Cir. 2018). Deppe did not involve the payment of education expenses but rather with NCAA rules that apply when a student transfers from one school to another.
It next stated that O’Bannon and Alston are in conflict with McCormack v. NCAA, 845 F.2d 1338 (5th Cir. 1988). The NCAA had punished SMU for recruiting violations, and suspended SMU’s football operations. SMU did not sue. McCormack was an SMU student who attended its football games, and the cheerleaders lost their ability to cheer at games. Consequently, McCormack and school cheerleaders filed an antitrust case against the NCAA. It was thrown out based for lack of standing. Finally, the NCAA cited Smith v. NCAA,139 F.3d 180 (3rd Cir. 1998), vacated on other grounds, 525 459 (1999). Smith, like Deppe, challenged NCAA transfer rules, but it dealt with the rules that apply to graduate students. Smith got into the Supreme Court, but only on the issue of whether the NCAA was subject to Title IX rules. The Supreme Court said no because it was not a governmental entity. As a private actor it is subject to the antitrust laws.
Furthermore, left out is that this was also true when the defendants appealed the O’Bannon decision to the Ninth Circuit, and after they lost there and went to the Supreme Court this argument was a major part of the certiorari petition that was rejected, as only Deppe was decided after O’Bannon.
The NCAA Claims that Alston Will Lead to Paying their Athletes
The NCAA then argues that paying the increased educational expenses allowed by Alston conflicts with the NCAA rule that athletes should not be paid, and that this was upheld by the Supreme Court in Board of Regents. As previously stated, that language was dicta since Board of Regents dealt not with the rules regarding students but rather with NCAA rules that severely limited television broadcasts in violation of the antitrust laws. It also cited Law v. NCAA, 134 F.3d 1010 (10th Cir. 1998). Law is yet another case that has nothing to do with students but rather was a successful antitrust challenge to NCAA rules that attempted to impose salary restraints on the lowest level of assistant basketball coach.
Finally, the NCAA asserts that the Ninth Circuit improperly insisted that the NCAA rule had to be the least restrictive alternative available. However, the Ninth Circuit merely required that the NCAA prove that each restraint was strictly necessary to achieve its procompetitive goal of differentiating college and professional sports.
The Supposed “Important Questions Of Federal Law”
The next section claims that the ability of the NCAA to self-regulate is actually important. Accordingly, this private organization requires “leeway for defendants to decide what rules to preserve” (Id. at 9). It cites a case involving professional motor racing to the effect that it should be free to “determine for themselves the set of rules that they believe best advance their respective sport (and therefor their own business interests” (Id.), as if there was no difference between professional motor racing and the treatment of college students.
The motion claims that it is important “because it will almost certainly engender perpetual litigation over the NCAA’s amateurism rules” (Id.). This is the refrain of business defendants since the antitrust laws were first enforced so it is not a new argument. The section ends by again mentioning how Alston diverges from the earlier opinions from other circuits, once more without mentioning that this was also true when its certiorari petition in O’Bannon was rejected.
The Defendants Claim That There Is Good Cause for a Stay
This final section begins by asserting that but for a stay, the injunction “will have lasting harmful effects on intercollegiate athletics” (Id. at 11). The defendants admit that the Ninth Circuit read the injunction “as ‘envisioning’ only ‘non-cash education-related benefits for legitimate education related costs’” (Id. at 12), (emphasis in the original). However, it maintains that the injunction will open “the door to massive cash payments to all student-athletes” (Id.). This Parade of Horribles supposedly includes post-eligibility internships for all student-athletes and includes “academic and graduation awards up to the aggregate limit on athletic participation awards” though ignoring that it is the NCAA that sets this limit.
The motion insists that the injunction “creates enormous uncertainty about the permissible scope of NCAA rules” (Id. at 13), which is another refrain by antitrust defendants. This could happen because the member institutions might make promises to prospective students and some high school students “will select a school” on this basis” (Id.). The fact that students might be entitled to such education-related expenses to be paid for supposedly “will undoubtedly diminish some student-athletes college experience” (Id. at 14). Apparently, the NCAA president and its coaches can make millions of dollars a year, but the actual performers are not entitled to paid internships or academic achievement awards, unless it is the NCAA that benignly grants that award. It is ironic that the NCAA is thus seeking an injunction to restrain the anticipated academic enhancement efforts of its members who are also members of the conference-defendants in the case.
The final claim is that this could lead to reductions in athletic department spending “for other sports programs” or even the elimination of such sports. But that has already been going on for decades, and college football and basketball that typically generate the funds that pay the athletic department bills and it can supposedly only continue to do so by not paying these educational expenses.
Moreover, the defendants’ assertions and claims are undercut by what they already allow. As the Ninth Circuit noted, the rules already provide that:
“Without losing their eligibility, student-athletes may receive, for instance: (i) awards valued at several hundred dollars for athletic performance (‘athletic participation awards’), which may take the form of Visa gift cards; (ii) disbursements—sometimes thousands of dollars—from the NCAA’s Student Assistance Fund (‘SAF’ and Academic Enhancement Fund (‘AEF’) for a variety of purposes, such as academic achievement or graduation awards, school supplies, tutoring, study-abroad expenses, post-eligibility financial aid, health and safety expenses, clothing, travel, ‘personal or family expenses,’ loss-of-value insurance policies, car repair, personal legal services, parking tickets, and magazine subscriptions; (iii) cash stipends of several thousands of dollars calculated to cover costs of attendance beyond the fixed costs of tuition, room and board, and books, but used wholly at the student-athlete’s discretion; (iv) mandatory medical care (available for at least two years after the athlete graduates) for an athletics-related injury; (v) unlimited meals and snacks; (vi) reimbursements for expenses incurred by student-athletes’ significant others and children to attend certain athletic competitions; and (vii) a $30 per diem for ‘unitemized incidental expenses during travel and practice’ for championship events” (Alston at 12/13).
Moreover, the University of Nebraska already has a program “that permits student-athletes to receive up to $7,500 in post-eligibility aid (for study-abroad expenses, scholarships, and internships), the University’s former chancellor conceded that such benefits ‘relate to the educational enterprise’ and, thus, do not erode (consumer) demand” (Id. at 46).
Furthermore, the injunction was actually limited. It only “enjoined the NCAA from limiting enumerated “compensation and benefits related to education” (Id. at 51). Although one would never know it from the NCAA’s motion, the Ninth Circuit rejected the plaintiffs’ appeal that would have expanded the injunction and allowed for greater benefits.
Conclusion
As of this writing the Ninth Circuit has not ruled on the request to stay the injunction. The last entry in the District Court’s file is an Order directing the parties to meet and confer regarding the attorneys’ fees from the appeal and to establish a proposed briefing schedule (4:14-md-02541-CW, Docket #1290 (7-10-20)). To the extent that the defendants complain about added confusion, some of that was their own doing since they sought and received a 30-day extension to either file a petition for rehearing or rehearing en banc (Alston, Ninth Circuit Order, Docket Entry 132 (6-2-20)) and they did neither. The defendants face an uncertain season due to Covid-19 and the injunction adds another ingredient. The Ivy League recently announced that it will not engage in fall athletic contests, the Big 10, the Pacific 12 and the Patriot League announced that they have cancelled non-conference games and other schools and conferences may take similar measures. Either way, schools that normally play D-1 football and basketball may now cover the full educational costs of their students-athletes unless the NCAA receives it requested injunction.
