Daily Compliance Item- 5.17.16- Current Event

NCAA asks for dismissal of “Kessler,” Alston cases


Lawyers for the NCAA and a group of conferences that are facing two lawsuits challenging the association’s compensation limits for athletes on Monday asked a federal judge to dismiss the cases.

The NCAA and the conferences argue that the 9th U.S. Circuit Court of Appeals’ ruling in the Ed O’Bannon antitrust case — which allowed a compensation cap to stand at athletes’ full cost of attending school — requires that the cases be decided in their favor without further action.

The O’Bannon case has been appealed to the Supreme Court by both the NCAA and the plaintiffs, but it remains to be seen whether the high court will agree to hear it.

However, in a footnote that was part of Monday’s filing with U.S. District Judge Claudia Wilken, the NCAA and the conference’s contend that that 9th Circuit’s decision “is now final and binding” for the purpose of precluding these cases “even if one or more parties seek review by the Supreme Court.”

One of the cases at issue here is being directed primarily by Jeffrey Kessler. It is being pursued on behalf of plaintiffs led by former Clemson football player Martin Jenkins and two current Wisconsin athletes: basketball player Nigel Hayes and football player Alec James. It covers football and men’s basketball players in the power conferences and seeks an injunction against the NCAA’s current limits on the compensation athletes can receive while playing college sports.

The other case involves the injunctive-relief portion of a case being led primarily by lawyers from Hagens Berman Sobol Shapiro LLP. It began on behalf of former West Virginia football player Shawne Alston. Alston remains a named plaintiff, but the initial case was consolidated with other suits involving athletes in other sports. According to a revised filing of the suit in July 2014, it now seeks to cover Bowl Subdivision football players, Division I men’s basketball players and Division I women’s basketball players who received athletic scholarships. Although the NCAA and 11 conferences are named as defendants, other Division I schools and conferences are alleged to have been co-conspirators.

(Another portion of the Alston case involves a monetary damages claim based on the difference between the value of a traditional athletic scholarship — tuition, room, board, books and fees — and that of a new, cost-of-attendance-based version.)

In early December, Wilken decided to allow the injunctive-relief cases to proceed as class actions. In February, her ruling was upheld without comment by two 9th Circuit judges.

However, the NCAA and the conferences argued Monday that the 9th Circuit’s ruling in the O’Bannon should be binding.

In the O’Bannon case, which also was handled by Wilken at the district court level, Wilken ruled in August 2014 that the NCAA’s compensation rules at the time “unreasonably restrain trade” in violation of antitrust laws.

As one remedy, she said that while the NCAA could cap the amount of new compensation that athletes could receive while they are in school, that cap could not be an amount that is less than the athletes’ full cost of attending school. (Following action at the its annual convention in January 2015, the NCAA now allows such cost-of-attendance-based scholarships.) As an additional remedy, she said that schools would be allowed to provide athletes deferred compensation of as much as $5,000 per year, payable.when they leave school or their eligibility expires.

In September 2015, A three-judge panel from the 9th Circuit unanimously upheld Wilken’s finding of the antitrust violation and the remedy related to schools covering athletes’ cost of attendance. However, by a 2-1 vote the panel threw out Wilken’s remedy involving the prospect of deferred compensation

Writing for the majority, Judge Jay S. Bybee wrote that antitrust law “requires that the NCAA permit its schools to provide up to the cost of attendance to their student athletes. It does not require more.”

Bybee also wrote: “The difference between offering student-athletes education-related compensation and offering them cash sums untethered to educational expenses is not minor; it is a quantum leap. Once that line is crossed, we see no basis for returning to a rule of amateurism and no defined stopping point. … At that point the NCAA will have surrendered its amateurism principles entirely and transitioned from its ‘particular brand of football’ to minor league status.”

This article was selected for educational purposes only.

Jennifer M. Condaras
Associate Commissioner
BIG EAST Conference

The opinions expressed in the Daily Compliance Item are the author’s and the author’s alone, and are not endorsed by The BIG EAST Conference or JumpForward. The Daily Compliance Item is not a substitute for a compliance office, case specific research, or the NCAA Bylaws. Do some homework, ask around, and get it right.

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