A federal judge from the District of New Jersey dismissed the claim of several student athletes at Kean University, who claimed they were discriminated against on the basis of their gender when the NCAA punished them for violating an NCAA policy pertaining to financial aid.
Plaintiffs Shannon Pedersen, Jaclyn Janicky, and Emily Cristaldi are all current and former Kean University female athletes. Pedersen and Janicky play for the women’s soccer team, while Cristaldi is a former member of the women’s basketball team. They enrolled in September 2010, and all received the Dorsey Scholarship. As part of the requirement for being on their respective teams, the plaintiffs were supposed to maintain GPAs above 3.2, according to the court.
In 2011, Michele Sharp—the women’s basketball coach, assistant athletic director, and Senior Women’s Administrator—was charged with committing certain NCAA violations that impacted the plaintiffs’ scholarship status.
Ms. Sharp allegedly played these players “at the urging” of the university’s athletic director, and Ameen Najjar, an NCAA representative and co-defendant in the case.
In September 2011, the NCAA levied penalties against the players that resulted in, among other things, a choice between either giving up their scholarship or giving up their position on the teams. The players alleged that they were not given the opportunity to obtain representation or participate in any hearing. The penalty was imposed too late for plaintiffs to transfer to another school or otherwise attempt to remedy the issue, according to the complaint. As a result, Pedersen and Janicky forfeited their scholarships in order to continue playing, but Cristaldi chose to leave the team and the university.
The plaintiffs further alleged that the penalty was instituted even though other less severe alternatives existed. They also maintained that the decision was part of the NCAA and the university’s policy and practice of treating female athletes worse than male athletes. In comparison, they referenced “incidents at other universities involving men’s sports teams where players were not penalized.”
The plaintiffs sued in March 2015, asserting 11 causes of action: (1) Title IX violations; (2) federal Racketeer Influenced and Corrupt Organization Act (RICO) violations; (3) New Jersey RICO violations; (4) equal protection violations under 42 U.S.C. § 1983; (5) conspiracy under 42 U.S.C. § 1985; (6) New Jersey Law Against Discrimination (NJ LAD) violations; (7) interference with prospective contract advantage; (8) negligence; (9) breach of contract; (10) breach of the implied covenant of good faith and fair dealing; and (11) promissory estoppel.
The defendants countered with a motion to dismiss in April 2015, arguing that the claim should be dismissed on statute of limitations grounds and as inadequately pled.
Specifically, the plaintiffs argued that the two-year statute of limitations bars the plaintiffs’ claims under Title IX (Count 1), §§ 1983 and 1985 (Counts 4 and 5), NJ LAD (Count 6), and negligence (Count 8).
In assessing the argument, the court wrote that “with the exception of NJ LAD, the limitations period for these claims ‘begins to run when plaintiff knew or should have known of the injury upon which its action is based.’ Shine, 2015 U.S. App. LEXIS 16771, 2015 WL 5559842, at * 3 (quoting Kach v. Hose, 589 F.3d 626, 634 (3d Cir. 2009)). Under NJ LAD, however, where the alleged conduct is a discrete act of discrimination, the period begins to run ‘on the day [the act] happens.’ Alexander v. Seton Hall Univ., 204 N.J. 219, 228, 8 A.3d 198 (2010).
“Here, all five claims revolve around the defendants’ revocation of the plaintiffs’ scholarships in September 2011. Plaintiffs knew about the decision because they were asked that same month to decide whether to play or keep their scholarship. … These claims therefore accrued on or around September 30, 2011 (and) are time-barred (and) dismissed with prejudice.”
Turning to the novel claim that the defendants violated both federal and New Jersey RICO statutes, the court noted that the plaintiffs offered three theories.
“First, (the athletic director) conspired with a group of subordinates, the NCAA, and Najjar to ensure that the plaintiffs suffered a maximum penalty,” according to the complaint. “Second, the University, through its agents, took inconsistent legal positions about Coach Sharp during an NCAA investigation and a state court case involving (the athletic director). They allege that university knew their statements were inconsistent and amounted to perjury in the state court case, and therefore constituted a RICO violation. Third, the NCAA’s marketing materials emphasize ‘student first, athlete second,’ however, their Division III policy that students applying for financial aid are prohibited from disclosing their athletic interest or past activity directly negates that assertion.”
The court analyzed the claims concurrently, finding that each of the plaintiffs’ three theories fail to meet several elements.
“Establishing liability under § 1962(c) of the RICO statute requires (1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity, plus an injury to business or property,” wrote the court, citing Reyes v. Netdeposit, LLC, 802 F.3d 469, 483 (3d Cir. 2015).
Further, to prove a violation under the state’s RICO statute (c), the plaintiffs must show “(1) the existence of an enterprise; (2) that the enterprise engaged in or its activities affected trade or commerce; (3) that defendant was employed by, or associated with the enterprise; (4) that he or she participated in the conduct of the affairs of the enterprise; and (5) that he or she participated through a pattern of racketeering activity.” See N.J.S.A. § 2C:41-2; State v. Ball, 141 N.J. 142, 181, 661 A.2d 251 (1995); Marina Dist. Dev. Co., LLC v. Ivey, 93 F. Supp. 3d 327, 340 (D.N.J. 2015).
The plaintiffs’ “second and third theories plainly do not allege an enterprise. The second theory merely alleges that the University ‘and its actors’ made certain statements. Under the federal statute, this does not reference two distinct parties. Under the state statute, the threadbare allegation that ‘actors’ were involved is not a plausible allegation of an enterprise. The third theory, which points to the NCAA’s marketing material, suffers from the same flaws.
“Second, under all three theories, the plaintiffs do not allege a pattern of racketeering activity.
“Third, under all three theories, the plaintiffs have not pled that the conduct ‘affected trade or commerce.’ Under the New Jersey statute, a plaintiff must allege that the ‘defendant was employed by or associated with a racketeering enterprise which engaged in trade or commerce in New Jersey or affected trade or commerce in New Jersey.’ State v. Casilla, 362 N.J. Super. 554, 565, 829 A.2d 1095 (App. Div. 2003).
“Finally, under all three theories, the plaintiffs did not allege (the requisite) injury to business or property proximately caused by the defendants’ conduct.”
The court elaborated, noting that the plaintiffs have “not shown that either the university’s statements at Coach Sharp’s trial or the NCAA’s marketing material are in any way causally related to Plaintiffs’ loss of financial aid. And while the allegation that certain the defendants colluded to impose severe penalties on the plaintiffs may satisfy the causation question, the plaintiffs’ failure to meet the above-mentioned elements under this theory renders the question purely academic.”
The court dismissed all three claims with prejudice “because further amendment would be futile. Allstate New Jersey Ins. Co. v. Summit Pharmacy, Inc., No. 13-5809, 2014 U.S. Dist. LEXIS 61132, 2014 WL 1767528, at *12 (D.N.J. May 2, 2014). As made plain above, the plaintiffs’ state and federal RICO allegations are woefully inadequate. Most of the allegations consist only of threadbare recitals of RICO elements and conclusory statements. Those that do assert genuine factual allegations are either largely irrelevant to these the plaintiffs or indecipherable. Finally, the plaintiffs have decided not to defend most of these allegations in the brief.”
Shannon Pedersen, et al. v. National Collegiate Athletics Association, et al.; D. N. J.; Civil Action No. 14-2544; 2015 U.S. Dist. LEXIS 159067; 11/24/15
Attorneys of Record: (for plaintiffs) Timothy J. McIlwain, LEAD ATTORNEY, McIlwain, LLC, Linwood, NJ. (for defendants) Kathryn E. Deal, Michael W. McTigue, Jr., LEAD ATTORNEYS, Jennifer Burke Dempsey, Drinker Biddle & Reath LLP, Philadelphia, PA. Angela Lee Velez, LEAD ATTORNEY, State of New Jersey.
