Louisiana Case Illustrates that Athletic Scholarships Are Not Guaranteed Contracts

Aug 27, 2021

By Gary J. Chester

At a time when courts, state legislatures and even the NCAA are conferring more rights upon student-athletes, Holden v. Perkins, E.D. La. (Civil Action No. 20-2143, April 30, 2021), reminds us that an athletic scholarship is a precarious benefit.

The Facts

The plaintiff, Chloee Holden, received an athletic scholarship to play volleyball at Southeastern Louisiana University (SLU) for the academic year starting August 2016 and running through May 2017. The scholarship was renewed for August 2017 through May 2018.

Holden and some of her teammates allegedly scheduled a meeting in Fall 2017 with the Athletic Director, Jay Artigues, to discuss Coach James Smoot’s alleged “emotionally abusive conduct.” Afterwards, Artigues notified Holden that she was being removed from the team and that her volleyball scholarship would not be renewed for the following academic year.

The plaintiff requested an appeal, but the assistant director of compliance, Justin Bice, denied her request.

The Litigation

Holden filed a complaint naming SLU and five individuals as defendants, alleging violation of due process, denial of equal protection, negligent infliction of emotional distress, abuse of rights, negligence, and breach of contract. The individual defendants were: Alejandros Perkins, Chair of the Board of Supervisors for the Louisiana System; SLU President John Crain; Smoot; Artigues; and Bice.

The court in 2020 granted the individual defendants’ motion to dismiss the plaintiff’s due process, equal protection, emotional distress, and abuse of rights claims. Holden v. Perkins, 2020 U.S. Dist. LEXIS 207954, 2020 WL 6544174 (E.D. La., Nov. 6, 2020).

The individual defendants subsequently filed a motion for judgment on the pleadings as to the remaining claims of breach of contract and negligence.

The Legal Standard

Rule 12 (c) of the Federal Rules of Civil Procedure provides that “[a]fter the pleadings are closed – but early enough not to delay trial – a party may move for judgment on the pleadings.” The purpose of the motion is to dispose of cases where the material facts are not in dispute and judgment can be rendered based on the pleadings and any judicially noticed facts.

The plaintiff argued that the defendants’ introduction of her scholarship agreement, her renewal agreement, and the NCAA bylaws was improper because the motion was not one for summary judgment.

The court rejected the argument because the complaint alleged that the defendants breached the “Grant-In-Aid Offer” and violated NCAA Bylaws 15.37 and by deciding not to renew her scholarship without holding a hearing and giving her a chance to appear. The court noted that documents that a defendant attaches to a motion to dismiss are considered part of the pleadings “if they are referred to in the plaintiff’s complaint and are central to her claim.”

Breach of Contract Claim Dismissed

The court dismissed the breach of contract claim because none of the individual defendants were allegedly obligors under the scholarship agreement. The plaintiff alleged that she “accepted a ‘Grant-In-Aid Offer’ from Southeastern Louisiana University.” She asserted that “SLU promised,” in exchange for her participation in the women’s volleyball program, to abide by the NCAA Bylaws.

The plaintiff argued that two of the individual defendants acted as agents for SLU; however, the complaint did not state that they were obligors under the scholarship agreement or the renewal. The court found that the language of the agreements “confirms that SLU is the only obligor…and does not mention any of the named Defendants.”

Was There a Duty to Enforce NCAA Bylaws?

The court turned to the negligence claim, noting that the plaintiff alleged that the defendants breached a duty “to enforce the NCAA bylaws.” The court found this to be a contractual, rather than a delictual (common law) duty, stating: “The nature of the breached duty determines whether the claim sounds in tort or contract…The duty to enforce the NCAA bylaws is not a general duty imposed by the law on all persons, but a special obligation assumed by SLU under the scholarship agreement and renewal.”

Since the individual defendants were not obligors under the scholarship agreement or renewal, they had no contractual duty to enforce the NCAA bylaws. Therefore, the individual defendants could not be found liable for breaching a duty undertaken only by SLU.

The Takeaway

  • The decision does not report the details of Holden’s meeting with the athletic director, which raises the issue of whether the plaintiff’s scholarship was not renewed because she disrupted the team or because SLU retaliated against her for making serious allegations against her coach.
  • What sort of conduct did the plaintiff consider as abusive? Were there prior complaints against Coach Smoot? Full discovery could prove interesting.
  • SLU’s alleged failure to conduct any form of hearing before removing Holden from the team is a red flag reflecting the one-sided nature of the athletic scholarship agreement.
  • SLU did not seek dismissal, so the litigation continues.

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