Deppe v. NCAA: Seventh Circuit Finds the Transfer Year-in-Resident Requirement is an Eligibility Rule

Peter Deppe (hereinafter “Plaintiff”) filed suit against the National Collegiate Athletic Association (hereinafter “NCAA” or “Defendant”) under Section 1 of the Sherman. The suit was filed on March 8, 2016 in the United States District Court, Southern District of Indiana, Indianapolis Division (“Trial Court”). The facts as presented in the Class Action Compliant (hereinafter “Complaint”) are as follows. Plaintiff was a punter who was recruited by several Division I FBS institutions. Plaintiff was offered scholarships by some institutions and was invited as a walk-on by others. He decided to enroll at the Northern Illinois University (“NIU”). During his freshman year he was red-shirted and expected to receive a scholarship in following years based on assertions of a then NIU assistant football coach. According to the Complaint, NIU recruited another punter and Plaintiff realized he was unlikely to receive adequate playing time. As a result, he looked into the possibility of transferring to another institution. Plaintiff came in contact with the football coaching staff at the University of Iowa (“Iowa”). According to the Complaint, Iowa invited the Plaintiff to walk-on to the football team as long as he would be immediately eligible to compete. Per NCAA rules pertaining to football transfers, Plaintiff would not be immediately eligible to compete without a waiver of NCAA rules. Because Plaintiff was not immediately eligible to compete, Iowa located another punter and, thus, there was not room for Plaintiff on the Iowa football team. Plaintiff attempted to seek a waiver from the NCAA, but did so without the support of a member institution. Accordingly, the NCAA indicated it could not grant waiver without the waiver being presented by a member institution. As a result, Plaintiff requested that the Trial Court find that the transfer year-in-residence requirement violates antitrust law. The Trial Court dismissed the claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure.

Plaintiff appealed the dismissal to the United States Court of Appeals for the Seventh Circuit (“7th Circuit”). The 7th Circuit relied heavily on Board of Regents and Agnew in affirming the Trial Court’s decision to dismiss the claim and stated “[t]he year-in-residence requirement is an eligibility rule clearly meant to preserve the amateur character of college athletics and is therefore presumptively procompetitive….” The 7th Circuit followed language from Board of Regents that states: [i]t is reasonable to assume that most of the regulatory controls of the NCAA are justifiable means of fostering competition among amateur athletic teams and therefore procompetitive because they enhance public interest in intercollegiate athletics.” As a result, and following Agnew, the 7th Circuit framed the issues as “the first—and possibly only—question to be answered when NCAA bylaws are challenged is whether the NCAA regulations at issue are of the type that have been blessed by the Supreme Court, making them presumptively procompetitive.”

The 7th Circuit indicated that “most—if not all—eligibility rules…fall within the presumption of procompetitiveness.” The 7th Circuit further stated that the year-in-residence legislation is “plainly an eligibility rule” and, thus, the year-in-residence legislation is found in the eligibility section (NCAA Bylaw 14) of the NCAA manual. Additionally, the bylaw at issue references specifically a student-athlete’s eligibility by suspending his/her eligibility until the student-athlete has spent one full academic year in residence at his/her new institution. The 7th Circuit noted that “most NCAA eligibility rules” are entitled to a procompetitive presumption because the rules “define what it means to be a student-athlete and thus preserve the tradition and amateur character of college athletics.” In conclusion, the 7th Circuit stated “the year-in-residence rule is, on its face, a presumptively procompetitive eligibility rule under Agnew and Board of Regents.” Accordingly, the Plaintiff’s challenge to the NCAA’s year-in-residence bylaw failed on its pleadings.

For any questions, feel free to contact Christian Dennie at cdennie@bgsfirm.com