Court Finds NCAA Recruiting Rules Immune from Antitrust

Sep 1, 2004

A federal judge has granted the NCAA’s motion for summary judgment in a case, where several “non-institutional basketball” camps alleged that the NCAA violated antitrust laws by restricting the ability of NCAA coaches from scouting the players at the camp.
In ruling for the NCAA, the court pointed to case law that identified NCAA eligibility rules as being immune from antitrust laws, and that the same protection should extend to NCAA recruiting rules as they applied to the instant case.
The legal action commenced on November 9, 2000 when the Pocono Invitational Sports Camp, Inc., Eastern Invitational Basketball Clinic, Inc., Future Stars Basketball, LLC, Five-Star Basketball Camp, Inc. and Blue Star Productions, Inc. sued the NCAA for two violations under the Sherman Antitrust Act, 15 U.S.C. §§ 1 and 2, and one count of tortuous interference with contractual arrangements and prospective contractual arrangements.
Specifically, the plaintiffs alleged that three NCAA recruiting regulations are anticompetitive: (1) the NCAA requirement that Division I coaches can only evaluate prospects at non-institutional basketball camps if the camps are certified by the NCAA (Bylaw 13.13.3) and the requirements with which non-institutional camps must comply in order to be certified (Administrative Regulation § 30.16); (2) the reduced number of days coaches are permitted to visit plaintiffs’ camps; and (3) the prohibition of Division I men’s basketball coaches from accepting employment with non-institutional camps attended by prospects (former Bylaw, in effect from 1990 to 2001).
They further argued that the NCAA enacted the rules and regulations at issue in this case “in order to protect institutional basketball camps and to harm non-institutional basketball camps.” … (T)he “NCAA has threatened to destroy non-institutional basketball camps.” (
The NCAA countered that “its regulation of the recruiting of student-athletes is intended to protect the young prospects from being exploited, and that this regulation has been in place for decades. Defendant further states that the contested recruiting regulations were instituted in response to a growing concern that the summer evaluation period had become ‘cancerous’ and that the campers were subjected to too much pressure.”
Last year, the NCAA moved for summary judgment, arguing that (1) the claim under § 1 of the Sherman Act fails because: (a) the recruiting rules are noncommercial and therefore are not subject to Sherman Act scrutiny, (b) plaintiffs have not plead a relevant market and (c) the restrictions are reasonable; (2) plaintiffs cannot prove their essential facilities claim under § 2 of the Sherman Act; and (3) plaintiffs cannot show tortuous interference with any contract.
Addressing the first argument, the court noted that the Third Circuit has held that eligibility rules promulgated by the NCAA “are not within the meaning of ‘trade or commerce’ under § 1 of the Sherman Act. Smith v. NCAA, 139 F.3d 180, 185 (3d Cir. 1998), vacated on other grounds, NCAA v. Smith, 525 U.S. 459, 142 L. Ed. 2d 929, 119 S. Ct. 924 (1999)).”
The instant court went on to endorse the finding of other courts that “he NCAA could not be liable for an antitrust violation when it was acting in its paternalistic capacity of promoting education” by creating eligibility rules. Coll. Athletic Placement Serv., Inc. (CAPS)v. NCAA, No. Civ. A. 74-1144, 1974 WL 998, 1974 U.S. Dist. LEXIS 7050 (D.N.J. Aug. 22, 1974), aff’d without opinion, 506 F.2d 1050 (3d Cir. 1974). Id. at 158.
Comparing eligibility rules to recruiting rules, the court noted that the NCAA committee’s goal “was to increase the importance of scholastics and decrease the impact of non-scholastic external influences on the prospects’ lives.”
“The evidence further shows that these justifications are in keeping with the NCAA principles of amateurism and recruiting that aim to promote education and keep student athletics separate from professional sports,” wrote the court. “As the district court did in CAPS, a decision affirmed by the Third Circuit at the time and approved again twenty-four years later in Smith, I conclude that when the NCAA promulgated these rules it was acting in a paternalistic capacity to promote amateurism and education. Thus, for the same reasons the Third Circuit found eligibility rules immune from antitrust scrutiny, I find that these recruiting rules are also immune.”
The court also found that the found that the § 1 claim would have also failed because the plaintiffs failed to properly define the market. They did not allege “specific facts” or introduce “evidence establishing that the market for summer basketball camps is distinct from the market for other kinds of summer camps, or from camps run during the academic year.”
Reviewing the claim brought under § 2, the court wrote that plaintiffs must also plead a relevant market to prove that claim, which, as previously mentioned, they failed to do.
Finally, the court analyzed the claim that defendant “tortuously interfered with plaintiffs’ contractual arrangements and prospective contractual arrangements with parents/guardians of high school basketball players who wish to send their sons and daughters to summer basketball camps, and with locations where such camps are conducted each year.” The claim was because the introduced “no evidence supporting their claim for tortuous interference.”
Pocono Invitational Sports Camp, Inc. et al. v. NCAA, E.D. Pa., 00-CV-5708, 4/30/04
Attorneys of Record: (for plaintiffs) Darin J. McMullen, Louis J. Sinatra and Richard M. Meltzer of Pelino & Lentz PC in Philadelphia; Ira P. Tiger, Schnader Harrison Segal & Lewis in Philadelphia. (for defendant) David P. Bruton, Michael W. McTiegue and Paul H. Saint-Antoine of Drinker Biddle & Reath LLP in Philadelphia; Frederick R. Juckniess and Gregory J. Curtner of Miller Canfield Paddock & Stone; and Robert J. Wierenga of Sullivan & Cromwell in New York City.


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