Daily Compliance Item- 9/5/14- Current Event

NCAA, conferences, seek dismissal of scholarship suits
The NCAA is appealing a federal district judge’s ruling in the bitterly fought EdO’Bannon antitrust case, which could increase what athletes receive while playing college sports.
However, on Thursday night, the association and a group of 11 major conferences cited that ruling as a primary reason the same judge should dismiss two other antitrust lawsuits, either of which could eliminate compensation limits in some sports and one of which seeks hundreds of millions of dollars in damages.
Both suits, which began in March, are seeking to become class actions. One of the cases originated in Northern California, the other in New Jersey. In June, a panel of judges that deals with similar federal lawsuits filed in different parts of the country assigned coordinated or consolidated pretrial matters in both cases to U.S. District Judge Claudia Wilken — the Oakland-based jurist who handled theO’Bannon case.
With the NCAA and the five power conferences named as defendants in both suits, Wilken then ordered the association and all of the conferences to file a single response to both cases.
On Thursday night, in that response, the NCAA and the conferences argued thatWilken’s ruling and injunction in the O’Bannon case provides the basis for dismissal of these two cases because she allowed compensation limits to stand.
In the O‘Bannon case, Wilken ruled that the NCAA’s limits on what Bowl Subdivision football players and Division I men’s basketball players can receive while playing their sports in college “unreasonably restrain trade” in violation of antitrust laws. She also imposed a complex injunction that, beginning in the 2016-17 school year will allow athletes in those two sports to receive not only scholarships covering their full cost of attending school but also what amounts to deferred compensation — all as a form of compensation for the schools’ use of their names, images and likenesses.
But she also wrote that the injunction “will not preclude the NCAA from implementing rules capping the amount of compensation that may be paid to student-athletes while they are enrolled in school.”
In Thursday night’s filing, the NCAA and the conferences wrote that a decision in either of these suits to eliminate the limits “would directly conflict with thisCourt’s decision and injunction” in the O’Bannon case — although the NCAA and the conferences noted that they “respectfully disagree” with Wilken’s ruling inO’Bannon, which the NCAA had appealed to the 9th U.S. Circuit Court of Appeals.
The NCAA last week gave a possible preview of what that appeal may look like when it filed a mediation questionnaire the 9th Circuit requires. It added to that look ahead Thursday night when it wrote that in addition to disagreeing withWilken’s finding of an antitrust violation, it also questioned her determinations of the appropriate cap on athlete compensation and “who — as between the Court and the NCAA — should be permitted to set that cap.”
Wilken is scheduled to hold a hearing on the motion for dismissal of the Alston and Jenkins cases on Oct. 9.
Following Thursday’s filing, the NCAA said in a statement: “While the NCAA and its co-defendants acknowledge Judge Wilken’s legal reasoning on the legitimacy of limiting the amount and nature of financial benefits to student-athletes, the NCAAwill continue to appeal the O’Bannon decision because it does not agree with thecourt’s finding in that case that the NCAA violated antitrust laws.”
Lawyers for the plaintiffs in the two cases will have until Sept. 18 to file papers opposing the request for dismissal. But late Thursday night, one of those lawyers said a more aggressive approach is forthcoming.
The bid for dismissal of the cases are “just more efforts to delay justice and fairness,” Jon King, a lawyer for one set of plaintiffs, said via text message. “We will seek an expedited trial.”
Although the NCAA is attempting to use Wilken’s ruling in the O’Bannon case to persuade her in these cases, it is important to note that while she has control of both cases now — and likely would oversee a potential trial in one of them – if the other case goes to trial, that proceeding would be held in New Jersey. That not only means a different federal court district from Wilken’s, but also a different appellate circuit.
The first of the new cases began on behalf of former West Virginia football player Shawne Alston and sought action for Football Bowl Subdivision players. It has since been consolidated with five other suits that were filed subsequently. The combined complaint now covers football, men’s basketball and men’s basketball players in the 10 FBS conferences and the Western Athletic Conference. It seeks an injunction and class-wide monetary damages. It is being led, in part, by lawyers from Hagens Berman Sobol Shapiro LLP, the same firm that is involved in an array of cases against the NCAA and represented former Arizona State and Nebraska football player Sam Keller in a suit before Wilken that also involved video game manufacturer Electronic Arts and eventually settled.
The second case is being pursued on behalf of four named plaintiffs headed byClemson football player Martin Jenkins. It covers football and men’s basketball players in the power conferences, and it is being directed by Jeffrey Kessler, who gained renown for his representation of professional sports players’ unions and involvement in a case that set the stage for NFL free agency.
The Jenkins case does not seek a class-wide monetary damages award. But it seeks a more broadly drawn judgment and injunction than the Alston case does, actions that would:
— Void NCAA and conference rules that “prohibit, cap or otherwise limit remuneration and benefits” to the covered athletes.
— Prevent the NCAA and the five conferences from having rules that prevent schools from “negotiating, offering, or providing remuneration” to the covered athletes “in compensation for their services as athletes.” The Alston case seeks:
— A judgment that would void NCAA rules “that operate to impose a cap on grants-in-aid” that schools can provide.
— An injunction that would prevent the NCAA and the 11 conferences from being able to “cap the amount of financial aid available” to the athletes.
— Monetary damages based on the difference between the value of an athletic scholarship as currently defined by the NCAA
– basically tuition, mandatory fees, room, board and books
– and the actual cost of attending college, a figure that includes out-of-pocket costs such as transportation to and from school.
Federal antitrust law allows class action suits to reach back and cover plaintiffs and alleged damages starting four years prior to a case’s filing date and running through the date of judgment. The law also provides for the tripling of such damages.
So, the Alston case seeks damages that would be applicable to every football,men’s basketball and men’s basketball player who was on scholarship at a school in any of the 11 conferences in any year since March 5, 2010 — more than 100 athletes per school each year.
In 2009-10, the difference between the value of a scholarship and the cost of attendance ranged from about $1,200 to more than $8,000 at schools in the conferences covered by the lawsuit, a 2011 USA TODAY Sports survey found. In 2012-13, the difference ranged from about $1,350 to nearly $6,300, according to data schools listed on annual athletic financial reports to the NCAA that USATODAY Sports obtained through open-records requests.
The combined membership of the 11 defendant conferences has varied during the period covered by the suit, but using $3,000 as the average difference between the value of a scholarship and the cost of attendance, the potential damages total at present could be more than $600 million.
There could be additional financial consequences for the Pacific-12 Conference and its four member schools in California because the suit alleges that the NCAA’scurrent rules violate “the policy and spirit of the California’s Student Athlete Bill of Rights, as well as the policy and spirit of federal and California antitrust law.”
The suits seeks, only from the Pac-12 and the NCAA, “all their profits obtained from” allegedly limiting athletes economic rights.
But the NCAA and the conferences say the California-based claims also should be dismissed.
This article was selected for educational purposes only.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s