By Gary Chester, Senior Writer
The Sports Litigation Alert recently summarized the lawsuit of Vanderbilt quarterback Diego Pavia, who obtained a preliminary injunction to prevent the NCAA from enforcing its rule stating that a year of junior college sports participation counts as one year of eligibility at NCAA institutions. Three months later, the NCAA ruled that a similarly situated baseball player was ineligible to play for the University of Tennessee in the 2024-2025 season.
The player sued the NCAA in a case that raised this question: Would one small difference in the facts lead to a different result? The United States District Court for the Eastern District of Tennessee confronted the issue in Sanchez v. NCAA, No. 3:25-cv-62 (E.D. Tenn. March 3, 2025).
A Ballplayer Wants to Keep Playing
Alberto Osuna Sanchez is a designated hitter who can go yard. In three seasons at the University of North Carolina, he hit 45 home runs—good for fifth all-time at the school. Before joining the Tar Heels, Sanchez played two seasons at Walters State, a junior college in Morristown, Tennessee. His first season was shortened due to COVID-19, but he earned player of the year honors in his second season before transferring to UNC. Sanchez sought to play one more season in Division I, but his full season at Walters State was counted as a season of NCAA eligibility under NCAA Bylaw 12.02.6. According to NCAA rules, Sanchez had played four full seasons and is no longer eligible to play in Division I.
Sanchez wanted to continue playing, so he enrolled at the University of Tampa, a Division II institution, in the Fall of 2024. Before Osuna ever took the field in Tampa, however, Pavia filed a lawsuit against the NCAA alleging that his one full season playing JUCO football should not count against his NCAA eligibility. In Pavia v. NCAA, 2024 U.S. Dist. LEXIS 228736 (M.D. Tenn. Dec. 18, 2024), Pavia claimed that the NCAA rule violates the Sherman Antitrust Act.
The court issued a preliminary injunction in Pavia’s favor, which indicated that Pavia’s challenge to NCAA Bylaw 12.02.6 would likely succeed after it was fully litigated. In response, the NCAA issued a blanket waiver allowing former JUCO athletes like Pavia to compete for a fourth year in Division I.
Osuna could seemingly leave Tampa and play one more year at a Division I school, but there was a rub: the waiver only covers athletes who will use their one year of eligibility in the 2025-2026 academic year. It did not apply to Osuna because he sought to play during the 2024-2025 season.
Rather than play at Tampa, Osuna decided to request a waiver to play in Division I. He entered the transfer portal on January 13, 2025, and committed to the University of Tennessee later that month. Osuna sued the NCAA after Tennessee filed a waiver request with the NCAA on his behalf and did not receive a response.
Osuna Seeks a Restraining Order
Osuna moved for a temporary restraining order on February 12, 2025. With the Tennessee baseball season set to start on February 14, 2025, the court held a hearing on February 13, 2025, and denied the application. The plaintiff moved for a preliminary injunction and Judge Charles Atchley, Jr. conducted a hearing on February 26, 2025. The court recognized that preliminary injunctions are “extraordinary remedies” and recounted the four determining factors: likelihood of success on the merits; likely irreparable harm without the injunction; whether the injunction would cause substantial harm to others; and whether the injunction would serve a public interest.
Osuna’s primary claim is that NCAA Bylaw 12.02.6 (the “JUCO Rule”) violates Section 1 of the Sherman Antitrust Act. To establish that the JUCO Rule is an “unreasonable restraint of trade” under the Act, the plaintiff must show that the NCAA participated in an agreement which has “unreasonably restrained trade in the relevant market.”
Under the Supreme Court’s landmark decision in NCAA v. Alston, 594 U.S. 69, 96-97 (2021), the NCAA’s restraints on trade are reviewed under the rule of reason. The plaintiff must prove that the challenged restraint has a “substantial anticompetitive effect” and, if so, the defendant must show a “procompetitive rationale for the restraint.” Then the burden shifts back to the plaintiff, who must demonstrate that the procompetitive efficiencies “could be reasonably achieved through less anticompetitive means.”
The court first asked whether the JUCO Rule was commercial in nature because Section 1 of the Sherman Act only applies to commercial rules. Osuna argued that after Alston opened the door for NIL compensation, all NCAA eligibility rules became commercial. The rationale is that because athletes can earn NIL compensation, rules that affect their eligibility and their access to NIL money are commercial in nature.
Judge Atchley noted that the Pavia decision reflected this logic in holding that the JUCO Rule is commercial in nature. However, the court here considered both Justice Kavanaugh’s concurrence in Alston and the court’s opinion in Goldstein v. NCAA, No. 3:25-cv-27 (M.D. Ga. Feb. 28, 2025), which indicated that there is a distinction between NCAA eligibility rules and NCAA compensation rules. Judge Atchley stated: “The Court is left with an uncertain and clearly evolving legal landscape. No binding precedent categorizes all NCAA eligibility rules as commercial in nature. Yet the NIL era, in many ways, blurs the lines…”
The Court Sidesteps the “Commercial Rule” Issue
Rather than decide the matter on an unsettled question of law, the court proceeded to analyze issues beyond whether the JUCO Rule was commercial in nature. It focused instead on whether the restraint has a substantial anticompetitive effect. Osuna’s economic expert, Dr. Joel Maxcy, Department Head of Sport Business at Drexel University, posited that the JUCO Rule dissuades athletes from attending junior colleges, creates disadvantages for junior colleges in recruitment, and creates downstream effects that harm consumers. He emphasized that about 20% of Division I baseball players in 2023—representing 1,500 athletes—had transferred from a junior college.
The court said that it was equally possible that 20% of Division I baseball players attending junior colleges before transferring to Division I schools meant that they were not dissuaded from initially attending junior colleges, notwithstanding the JUCO Rule’s effect on eligibility. The court also noted that NIL opportunities and other factors—and not the JUCO Rule—may explain the competitive advantages of Division I schools over junior colleges.
Finally, the court also cast doubt on the plaintiff’s argument that the JUCO Rule harms consumers because a former JUCO athlete who cannot play in Division I may be replaced by a less skilled athlete. The court stated: “Junior colleges are not indisputably the only source of talented athletes. Some incoming freshmen, or even Division I athletes in the transfer portal, may be more skilled than the junior college athlete whose eligibility expires due to the JUCO Rule.”
Judge Atchley considered the position of the NCAA’s economic expert, Dr. Charles Murry, Associate Professor at the University of Michigan, who stated that the JUCO Rule does not result in substantial anticompetitive effects. Dr. Murry opined that the JUCO Rule restricts the pool of available athletes, which “increases competition among institutions—Division I and junior college alike—and drives up compensation for athletes.”
The court found that Osuna had alleged sufficient facts to create an issue for the jury. However, the facts did not reflect the “strong likelihood of success on the merits” that is required to obtain a preliminary injunction. The court stated: “Plaintiff’s arguments and his economist certainly paint a picture casting the JUCO Rule as anticompetitive, but Defendant’s arguments and economist tell a different story…it would be inappropriate to invalidate the JUCO Rule after just a ‘quick look,’ which is what Plaintiff requests.”
Everyone Has an Opinion on College Sports
Observers of intercollegiate athletics have long criticized the NCAA and its member institutions for commercializing college sports to their benefit while severely restricting the benefits available to student-athletes. As early as the 1970s, some economists characterized the NCAA as an illegal cartel that would ultimately collapse. In O’Bannon v. NCAA, 7 F. Supp. 3d 955 (N.D. Cal. 2014), which established the right of student-athletes to profit from the use of their names, images, and likenesses, Roger Noll, an emeritus economics professor at Stanford, testified that the NCAA and its member schools collectively restricted student-athletes from obtaining NIL compensation.
The NCAA historically denied that it was unlawfully restraining trade, even when it imposed patently anticompetitive rules such as restricting the salaries paid to assistant coaches. Despite successful antitrust challenges by student-athletes and others, the NCAA doubled down on its efforts to wield total control over intercollegiate athletics. During the O’Bannon trial, NCAA chief legal officer Donald Remy told the media that the term “cartel” is “highly politicized and highly charged,” and that it conjures images of oil barons or drug lords.
The NCAA, of course, has lost critical antitrust lawsuits before and after O’Bannon. Bylaw 12.02.6 has survived, at least for the moment, but the court could not resist weighing in on the state of the organization that regulates college sports. Judge Atchley concluded his opinion with the following: “The Court is sympathetic to Plaintiff’s position. For an organization that professes to prioritize the well-being of its student-athletes, the NCAA’s conduct has in many ways been questionable at best and self-interested at worst.”
