By Sean Burke
For reportedly the first time ever, the federal government has sued the NCAA as a co-plaintiff in a massive multi-state lawsuit that could end NCAA restrictions on athlete movement (Sisco, 2024).
On January 18, 2024 the United States Department of Justice’s (DOJ) antitrust division, joined a multi-state lawsuit in the United States District Court in West Virginia against the NCAA.[1] Before the DOJ surprise entrance, the initial lawsuit was filed by the state attorney generals of Ohio, Colorado, Illinois, New York, North Carolina, Tennessee, West Virginia on December 7, 2023. The motivation behind the lawsuit from the states revolved around the rules and regulations of the NCAA’s transfer policy (State of Ohio et al v. NCAA, 2023). More specifically, the lawsuit challenges the rule requiring athletes to apply for a waiver to play the next season if they are a multi-time transfer (State of Ohio et al v. NCAA, 2023). The plaintiffs allege the NCAA violated Section 1 of the Sherman Antitrust Act (State of Ohio et al v. NCAA, 2023) by restraining the athlete’s ability to participate in the free labor market in Division 1 NCAA college athletics (State of Ohio et al v. NCAA, 2023).
Within the lawsuit, the transfer eligibility status of collegiate basketball player RaeQuan Battle and collegiate football players Jarrett Hensley and Noah Fenske are called into question. The plaintiffs contend the NCAA is limiting Battle, Fenske and Hensley’s capacity not only to compete but also to produce income from potential name, image and likeness (NIL) deals, given their respective association in two of the highest revenue generating collegiate sports.[2] Moreover, the plaintiffs claim the NCAA participates in anticompetitive ethics through the restriction of economic opportunity via the multi-time transfer rule, making horizontal agreements with their respective member institutions (who compete for collegiate athletes’ labor), and the NCAA’s claim of collegiate sports being ‘amateur’.[3] Within those claims, the plaintiffs note the transfer eligibility rule is violates the Sherman Act’s “rule of reason”,[4] enables horizontal competition,[5] and the athletes suffer from “injury”[6] associated with the restriction of movement through the transfer portal.
The lodged complaint by the states and DOJ illustrates how significant the recent player empowerment trend has become within collegiate athletics. Machinations such as NIL and the transfer portal finally allow collegiate athletes a say in determining where they will go in the collegiate labor market. This lawsuit brought forth by the states and joined by the antitrust division of the DOJ demonstrates the lengths legal experts will go to strive for a free and fair labor market for collegiate athletes. Furthermore, the states and DOJ not only cite the consequences the transfer rule has on the athletes, but the impact it has on the consumers of collegiate athletics; in the complaint the plaintiffs note “consumers who attend NCAA athletic events in-person and for consumers who watch the events on television or listen on the radio”[7] as justification for their claim. Within this justification, the plaintiffs argue the mechanism of the multi-time transfer rule works, through the NCAA’s other bylaws; they contend bylaws regarding the prevention of in-season transfers and minimum academic standards result in the objective of the transfer eligibility rule.[8] From this lawsuit, once could see where the plaintiffs are pushing for legal change within the collegiate athletics labor market.
Within the context of State of Ohio et al v NCAA (2024), potential antitrust issues plaguing the NCAA could be brought forth and finally solved after years of ignoring them. The inclusion of the DOJ as a plaintiff in this lawsuit additionally encapsulates how collegiate athletics (the NCAA in this case) is big business and why a bylaw such as the transfer eligibility rule can cause a legal headache. Issues abounding the transfer portal and NIL laws will continue to grow as collegiate sports progress through the ‘post-amateur’ era. Determining if federal legislation is needed to curtail NIL deals or if more legal remedies are needed regarding the transfer portal will be of large consequence in the coming years.
Currently, the case is in the early stages of pending litigation between the plaintiffs and defendant. A response to the amended complaint by the defendants, should be expected relatively soon. Furthermore, a potential settlement could occur between the plaintiffs and defendants to avoid sending the lawsuit into additional litigation.
Sean Burke is a doctoral student at Florida State University.
References
Complaint, State of Ohio et al v. National Collegiate Athletic Association, U.S. District Court for the Northern District of West Virginia, (N.D. West V. 2023) https://www.naag.org/wp-content/uploads/2023/12/Ohio-et-al-v-NCAA-complaint.pdf
Amended Complaint, State of Ohio et al v. National Collegiate Athletic Association, U.S. District Court for the Northern District of West Virginia, No. 1:23-cv-00100-JPB, (N.D. West V. 2024) https://www.naag.org/wp-content/uploads/2023/12/OH-v.-NCAA-amended-complaint.pdf
Sisco, J. [@joshua_sisco]. (2024, January 18). New: @JusticeATR joins state AG antitrust case challenging NCAA’s transfer eligibility rule. The rule was already paused pending the outcome of the case, first filed Dec. 7. First time DOJ has signed onto a state AG antitrust case. Its usually the reverse [Tweet]. Twitter. https://twitter.com/joshua_sisco/status/1748076506054799432
[1] State of Ohio et al v. National Collegiate Athletic Association, U.S. District Court for the Northern District of West Virginia, No. 1:23-cv-00100-JPB, 2024: Amended Complaint of State of Ohio et al v. NCAA, 2023.
[2] Id. at 48.
[3] Id. at 26.
[4] Id. at 89.
[5] Id. at 91.
[6] Id. at 95.
[7] Id. at 68.
[8] Id. at 82-87.
