Shawne Alston et al v. NCAA – Let the Games Begin

Mar 17, 2017

By Jeff Birren
For years, the plaintiffs in Ed O’Bannon v. NCAA and the related case involving Electronic Arts toiled on, defeating motions to dismiss, summary judgment motions and interlocutory review. Three months before trial, other plaintiffs and their counsel jumped on the bandwagon. One of those was Shawne Alston, who filed his case against the NCAA on March 4, 2014. Alston was soon combined with other cases and had its name changed to National Collegiate Athletic Association Grant-In-Aid Cap Antitrust Litigation. As the name implies, a major thrust of the complaint was the gap between the Grant-In-Aid and the actual cost of full attendance as calculated by the schools. That gap led to a deficiency averaging between $2,500 and $5,000 per student, per year, according to the evidence presented at the O’Bannon trial. Thus, thousands of college athletes were left impoverished by their time at school.
Another bandwagon case was Martin Jenkins v. NCAA. Winston & Strawn filed this class action on March 17, 2014; 12 days after the initial Alston case was filed. The Jenkins case dispenses with the issue of the grant-in-aid cap. It seeks to remove any NCAA caps on what the college athletes can be given by their respective schools. In antitrust terms, it seeks nothing less than the establishment of a free market for college athletes and seeks to create a labor market for high school students who are being recruited to play major college sports. (For a full description of that case, see “Martin Jenkins v. NCAA et al” Sports Litigation Alert Volume 12, Issue 1, 1-23-15 or Legal Issues in Collegiate Sports, Volume #6, Issue 4, February 2015).
The consolidated case complaint was refilled on July 7, 2014, after the O’Bannon trial was over, but prior to the court’s decision. The four named plaintiffs are Shawne Alston, Nicholas Kindler, Afure Jemerigbe, and D. J. Stephens. In addition to seeking redress for men’s Division 1 football and basketball players, it also includes women’s Division 1 basketball players. It has five claims for relief, including a per se violation Section 1 of the Sherman Act, 15 U.S.C. § 1, a “Quick Look” violation of that statute, a Rule of Reason violation of that statute, a violation of California Business and Professions Code §17200§ against the NCAA and Pacific 12 Conference, and a group boycott under Sherman Act § 1. The plaintiffs defeated a Motion to Dismiss and it was off the discovery races. (For a more complete view of the case, see Sports Litigation Alert October 17, 2014, “Judge Denies Motion to Dismiss Antitrust Case Challenging NCAA Student-Athlete Scholarship Limits.”).
According to the proposed settlement agreement, more than 60 witnesses were deposed, the defendants produced approximately 595,000 documents, 340 third parties were subpoenaed, and the plaintiffs had access to tens of thousands of documents in other NCAA litigation.
The consolidated case, like O’Bannon and Jenkins, was assigned to U.S. District Court Judge Claudia Wilken. At the time, she was the Chief Judge of Northern District of California. She now has Senior Judge status. Judge Wilken ruled for O’Bannon, but not all of that victory was to last.
The Ninth Circuit issued its opinion in the O’Bannon case on September 30, 2015, and ruled for and against all the parties. It affirmed the District Court’s ruling that the cap on the grant-in-aid had been proven to be an illegal restraint under Section 1 of the Sherman Act. However, it struck down the portion of the ruling that allowed deferred payments to college athletes. It did so in bright line wording that suggests the Ninth Circuit is not currently interested in turning college athletes into professional athletes while playing for schools.
Judge Wilken realized that the O’Bannon ruling meant there are limits to what the plaintiffs could gain from any of the cases against the NCAA.
At some point following the ruling, the parties in the consolidated case sought the mediation expertise of Professor Eric Green; a co-founder of Resolutions LLC that specializes in resolving major disputes. The proposed settlement agreement states that as of February 3, 2017 Green had been involved in settlement discussions for over a year, including sessions in person and over the telephone. Eventually, the parties agreed to settle the consolidated case.
The Settlement
The settlement was signed on February 3, 2017. The settling defendants are the NCAA, The Pac-12 Conference, the Big Ten Conference, Inc. The Big 12 Conference, Inc., Southeastern Conference, Atlantic Coast Conference, American Athletic Conference, Conference USAA, Mid-American Athletic Conference, Inc., Mountain West Conference, Sun Belt Conference, and the Western Athletic Conference.
The settlement will resolve all damages claims by the class, except for claims included in the excluded claims paragraph of the settlement, discussed below in Section C. The defendants agreed to pay the plaintiffs and their counsel a total of $208,664,445.00. The payment will be made in two equal payments. The first will take place within thirty days of the Court’s entry of the Preliminary Approval Order. The second payment will be made thirty days after the Court’s entry of the Final Approval Order. The highlights of the rest of the settlement are as follows:
The defendants get a release from the class;
Up to $4M may be used to administer the fund;
The administrator will set up “a case-dedicated website” to provide accurate information to the class;
Plaintiff’s counsel will be paid from the fund once approved by the Court. Those fees may not exceed 25% of the fund;
The administrator shall make the payments directly to the class members;
If there is anything left over in the fund it shall be paid to the class, and not to counsel nor returned to the defendants;
No member of the class will forfeit any eligibility as a result of receiving a payment from the fund;
Class members will have the right to “opt out” of the settlement; and
The NCAA has the money set aside so it will not have to go to the conferences and schools for contribution.
For his part, Shawne Alston seems somewhat satisfied. He told the New York Times that “College sports are like a fraternity. A lot of people are going to get a couple of dollars, so I feel like I helped my brothers. … We weren’t taken care of” (Ben Strauss, N.Y. Times, “Ex-Athlete’s Battle for Scholarship Upgrades: I Feel Like I Helped My brothers” February 12, 2017). 
What is Not Included in the Settlement
Seven pending cases are not to be impacted by the settlement. Six cases are specifically carved out in Paragraph 12 of the proposed settlement. Those cases include Pugh v. NCAA, Case No. 1:15-cv-01747 (S.D. Ind.), Deppe v. NCAA, Case No. 1:16-cv-00528 (S.D. Ind.), Vassar v. NCAA et al, Case No. 1:16-cv-10590 (N.D. Ill.) In Re NCAA Student-Athlete Concussion Litigation, Case No. 1:13-cv-0587, Dawson v. NCAA 16-cv-05487 (N.D. Cal.) and the O’Bannon case. Two of the excluded cases bear mention.
The first of those filed cases is the Martin Jenkins case. The proposed settlement agreement, attached to the Motion for Preliminary Approval as Exhibit A. On the caption page, it states that: “This Document Relates to: ALL ACTIONS Except Jenkins v. Nat’l Collegiate Athletic Ass’n Case No. 14-cv-0278-CW”. However, that case took a massive hit in the appellate ruling in the O’Bannon case, and the very nature of its allegations may have boxed itself into an untenable corner (see “What to Make of Jenkins et all v. NCAA in Light of O’Bannon,” SLA Volume 13, Issue 23, 12-9-16 and LICA, Volume 18, Issue 4, February, 2017). Wherever that case may go, it is excluded from the settlement. Undoubtedly, Winston & Strawn is trying to figure out how to get the case transferred back to New Jersey, where it began, and away from the Ninth’s Circuit ruling in O’Bannon.
The other case is Dawson. It was filed on September 26, 2016 in the San Francisco U.S. District Court. The sole defendants are the NCAA and Pacific 12 Conference. The complaint seeks redress for purported labor law violations and unfair business practice, as it claims that the plaintiffs were in fact employees who worked more than forty hours a week, and are thus entitled to receive wages, overtime wages, interest and other non-stated damages. It seeks to declare the NCAA and Pacific 12 Conference “joint employers” of the athletes. The individual schools are not named. The defendants have a pending motion to dismiss that will be heard in April 2017.
Dawson filed the only objection to the proposed settlement. The settling parties filed a joint response and Dawson fired back. His counsel insists that the specific carve out in Paragraph 12 of the proposed settlement is not good enough for them, and that it should be modified to state that no labor claims are being released. They do this out of an “open possibility that the Settling Parties may take the position that some Labor Claims are being released” (Reply to Joint Response to Lamar Dawson’s Objection to Proposed Settlement.) Dawson seeks both to amend the settlement and to require the settling parties to include a more specific explanation of the scope of the release. It should be noted that no labor claims were ever asserted in the NCAA Grant-In-Aid Antitrust Litigation. Perhaps even more telling, the Ninth Circuit upheld the NCAA’s defense based on amateurism in the O’Bannon case. Dawson’s counsel will have to overcome that high hurdle to get anywhere in their case. After the Ninth Circuit issued the O’Bannon decision, O’Bannon filed a petition for hearing en banc. The only vote he received was from the dissenting member of the panel, and the Supreme Court rejected the petition for a writ of certiorari, so the task ahead of Dawson may be Herculean.
It must be noted that “the settlement does not release or bar in any way the claims solely for prospective injunctive relief from going forward—and Plaintiffs will continue to vigorously pursue them.”
D. The Hearing for Preliminary Approval of the Consolidated Class Action Settlement
The hearing was held on March 7, 2017 in the Oakland federal building. A single objection, by Dawson as noted above, had been filed. Eleven lawyers appeared in person and at least eleven more appeared telephonically. Steve Berman spoke for the plaintiffs. Scott Cooper and Jeffrey Mishkin did so for the defendants and Betsy Manifold spoke handled Dawson’s objections.
Judge Wilken immediately stated that the settlement is “generally a good one.” However, she did raise certain concerns that will have to be addressed before she approves the settlement. Her first and largest concern was that there was no mechanism for a settling player to know if he or she is on the list to receive benefits in the first place. Her second and related concern was there is no current way for any member of the class to know how the specific benefits were calculated and thus raise a protest if he or she believes that it is incorrect. Berman stated that the list of participating schools would be on the class action administrator’s web site. Cooper mentioned that there are privacy issues that would prevent putting the specific information about payments on the web site.
Judge Wilken said they could send the checks and then deal with potential differences in amounts or entitlements, but this mechanism should go in the proposed settlement. She also wants to put the actual cost of attendance on for each school on the web site. Cooper said that was publicly available but Judge Wilken did not want to put the burden on the class member. She then said that since the calculation would have to be made for each person that could go in a letter to each member of the class.
She stated that the settlement agreement has to be modified to include notice of how to bring a timely claim. She asked if the fund would be adjusted if there were more claims than anticipated and Cooper said it was a finite fund. It is based on plaintiff expert Dr. Dan Rascher’s analysis of the single damages. In his expert declaration submitted with the proposed settlement he had estimated the single damages to be between $210M and $220M so the fund is above 95% of that total (Expert Declaration of Daniel A. Rascher, 12, 2-2-17). Cooper stated that the number of class participants “is one of the numbers we are very sure of.”
Judge Wilken asked why the amount of fees to be sought is not in the agreement. Berman responded that it is in the Notice and that he was now saying it in open court so they are bound and the percentage cap is 25% of the fund. He is also seeking up to $20,000 for each of the four class representatives and that is in the Notice.
Judge Wilken then asked about the list of excluded cases. Berman said that it is all of the potentially related cases that he is aware of, and he is counsel in all of them except for Dawson. Mishkin added that the other, non-listed cases were “not related in any way.” That portion ended with Judge Wilken and counsel targeting November 17, 2017 as the date for final approval.
The only issue was Dawson’s objection. Manifold tried to argue that their case was only a labor case and thus potential labor claims should be excluded from the settlement. She said the case was “new” (it was filed in September 2016), and that it was their hope to add other conferences. Since the settling case was an antitrust case it should be clear that future labor claims were not settled. That logic, if taken to its full limit, would mean that a settling defendant would get very little peace from any settlement agreement.
The hearing concluded with Judge Wilken’s statements that she “is inclined to deny the objections and to approve the settlement as we discussed.” Counsel then huddled in the hallway undoubtedly to begin discussing the issues raised by Judge Wilken. The settlement was modified once prior to the court hearing so at least one more amendment will be soon entered.
Birren is the former general counsel of the Oakland Raiders and long-time contributor to Hackney Publications.


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