Expanded Class-Action Lawsuit Against the NCAA Seeks Broader Damages for College Athletes ‘Denied’ NIL Rights

Aug 13, 2021

Attorneys representing college athletes against the NCAA and Power Five Conferences in a class-action lawsuit regarding compensation rights for their names, images and likeness (NIL) have filed an amended lawsuit broadening damages sought and adding new information since the NCAA temporarily suspended many of its NIL rules.

The amended complaint, filed by the law firm of Hagens Berman, was filed July 26, 2021. It combines the firm’s House v. NCAA case and an additional case into one consolidated action titled In re College Athlete NIL Litigation. The filing also adds new admissions from the NCAA and other defendant representatives that allowing NIL is good – “a drastic change from their past statements that allowing NIL would ruin college sports,” according to the firm.

“We’re using the same playbook implemented by any successful team: re-strategize based on what you learn from studying your opponent, and coordinate your offense,” said Steve Berman, managing partner of Hagens Berman and attorney for the proposed class. “We think it’s important for the court to be aware that the NCAA has abruptly changed its public stance on NIL rights. NCAA athletes are already reaping the benefits, which only makes our case stronger.”

“We also wanted to make sure that any college athletes receiving the current NIL deal benefit while the NCAA has temporarily suspended many of its rules regarding NIL compensation, are also securely part of this suit,” Berman added. “The NCAA has changed its tactics after college athletes won in Alston, and only then was the NCAA forced to make concessions.”

In June 2021, the court upheld all of the claims brought in the firm’s House case amid the NCAA’s motions to dismiss.

The antitrust lawsuit was filed June 15, 2020, in the U.S. District Court for the Northern District of California, and accuses the NCAA and conferences of illegally conspiring to limit the compensation that Division I college athletes may receive for the use of their NILs and athletic reputations. The complaint says the entities violated federal antitrust laws in abiding by a particular subset of NCAA rules that prohibit college athletes from receiving anything of value in exchange for the commercial use of their NIL.

“Only under the most intense public and legal pressure has the NCAA adopted a non-permanent, ‘interim’ policy change that has, at long last, permitted many forms of third-party NIL compensation to student-athletes to take place,” the complaint states.

“The NCAA was hoping the Supreme Court would adopt its and the Conferences’ arguments that NCAA compensation restraints—including NIL restraints—should be immunized from ordinary rule of reason scrutiny whenever the restraints are ostensibly justified on the basis of amateurism,” according to the lawsuit. “While waiting for the Supreme Court’s decision in Alston, the NCAA simultaneously continued its efforts to lobby Congress for a ‘safe harbor’ from antitrust lawsuits challenging NCAA NIL rules (including this case). It also continued to keep on hold any changes in its NIL restraints, even though a number of state NIL laws were due to go into effect on July 1.”

Head-to-Head with the NCAA

In the amended filing, in addition to the expanded damages classes, the lawsuit highlights numerous examples of what types of NIL deals student-athletes have been doing since many of the NCAA’s NIL rules were temporarily suspended on July 1, 2021.

The suit states that “thousands of student-athletes have already taken advantage of the NIL opportunities available to them since July 1,” in partnerships with clothing brands, beverage companies, restaurants, cell phone companies, video game platforms, and other national and local retailers, according to the firm. Unilever, for example, plans to spend $5 million over the next five years in partnerships with college athletes promoting the deodorant brand Degree, and Alabama’s presumptive starting quarterback has already earned close to $1 million, according to the team’s coach.

The suit also draws attention to “new admissions from the NCAA and other defendant representatives of the benefits of allowing compensation for athletes’ NILs.” Despite these admissions, the lawsuit says that the NCAA has kept in place, even under its “interim” policy, some of the most restrictive aspects of its NIL rules.

The lawsuit seeks to hold the NCAA “accountable” to college athletes via injunction and damages for the NCAA’s antitrust violations regulating the profits gained from the use of college athletes’ names, images and likenesses, specifically:

  • An injunction voiding rules prohibiting compensation to college athletes for use of their name, image and likeness.
  • Damages based on payments college athletes would have received if not for the NCAA’s restraints. These revenues include social media earnings and revenues from group licenses.
  • A newly expanded class of damages: a class that will encompass all student-athletes who get any kind of NIL deal while many of the NCAA’s NIL rules have been temporarily suspended.

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