In 2014, a group of plaintiffs filed an antitrust suit against the NCAA relating to the limitations placed on athletics aid. This group is represented by famed antitrust/labor lawyer Jeffrey Kessler who is commonly known for representing the NFLPA and NBPA. The Jenkins plaintiffs (also known as In re National Collegiate Athletic Association Athletic Grant-in-Aid Cap Antitrust Litigation) claim they are entitled to compensation and, thus, the athletics scholarship model is a price fixing restraint on athlete compensation. The court has previously denied the NCAA’s (and the conference defendants) attempt to dismiss the litigation by and through a motion to dismiss. The Parties filed competing motions for summary judgment that were granted in part and denied in part.
The Defendants argue that all of the claims of the class are foreclosed under the doctrines of res judicata and collateral estoppel by the Ninth Circuit’s decision in O’Bannon v. NCAA. The purpose of these doctrines is to relieve parties of the cost and vexation of multiple lawsuits, conserve judicial resources, and, by preventing inconsistent decisions, encourage reliance on adjudication. The court stated that res judicata does not extend to individuals who were not part of the O’Bannon class and Defendants cannot satisfy the legal factors for individuals who were not class members in that case. The court also noted that the NCAA bylaws changed after O’Bannon was filed and now permit student-athletes to receive financial aid, based on athletics ability, up to their cost of attendance. The case is different than O’Bannon in that the Plaintiffs are not seeking revenue based on their names, images, and likenesses, but are seeking additional benefits that are tethered to education. Ultimately, the court concluded that Plaintiffs have raised new antitrust challenges to conduct, in a different time period, relating to rules that are not the same as those challenged in O’Bannon. Accordingly, res judicata and collateral estoppel do not preclude the claims of the Plaintiffs who were O’Bannon class members. Therefore, the Defendants motion was denied.
The Plaintiffs argue that undisputed evidence supports their claim that the challenged restraints cause anticompetitive effects in the relevant market, and that Defendants cannot meet their burden to prove that the restraints have procompetitive benefits. The court concluded that Defendants did not meaningfully dispute Plaintiffs’ showing that the challenged restraints produce significant anticompetitive effects within the relevant market. Because Plaintiffs have met their burden and Defendants have not created a factual dispute, the Court granted the parties’ cross-motions for summary adjudication of this element and found that the challenged restraints produce significant anticompetitive effects in the relevant market.
The Plaintiffs further argue that Defendants have failed to provide material evidence that their current rules create procompetitive effects. Therefore, Plaintiffs argued that the court should enter summary judgment against Defendants without balancing the competitive effects of the restrains or reaching the question of less restrictive alternatives. However, the court explained that Defendants have presented sufficient evidence in support of the two procompetitive effects found in O’Bannon to create a factual issue for trial. This includes a survey of consumer preferences, which led Defendants’ expert to conclude that fans are drawn to college football and basketball due to their perception of amateurism. Defendants also presented evidence that paying student-athletes would detract from the integration of academics and athletics in the campus community. Accordingly, the court denied the parties’ cross-motions for summary adjudication on the question of whether the challenged NCAA rules serve Defendants’ asserted procompetitive purposes of integrating academics with athletics and preserving the popularity of the NCAA’s product by promoting its current understanding of amateurism.
Accordingly, the court ruled and concluded as follows:
1. The court held that neither res judicata nor collateral estoppel bars Plaintiffs’ claims and denies Defendants’ summary judgment motion on this point.
2. The court granted both parties’ summary judgment motions and found that Plaintiffs have met their initial burden of showing that Defendants’ challenged restraints are agreements that produce significant anticompetitive effects, affect interstate commerce, with the same relevant market as that in O’Bannon.
3. The court denied Defendants’ motion for summary judgment under the doctrine of stare decisis.
4. The court denied Plaintiffs’ motion for summary judgment that the procompetitive justifications found in O’Bannon do not apply, but granted Plaintiffs’ motion for summary judgment regarding Defendants’ other proffered procompetitive justifications.
5. The court denied Defendants’ motion for summary judgment that O’Bannon precludes consideration of the two less restrictive alternatives that Plaintiffs propose in this case.
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