NCAA Loses Major Ruling on Scholarships Class-Action Lawsuit

08/19/2013

Court rules that suit alleging antitrust violations may move forward

SEATTLE – U.S. District Court Judge Jane Magnus-Stinson of the Southern District of Indiana issued a ruling last Friday flatly rejecting the National Collegiate Athletic Association’s bid to dismiss a lawsuit alleging that NCAA scholarship rules violate federal antitrust laws.

The suit, filed July 25, 2012, claims that the NCAA’s prohibition of multi-year guaranteed scholarships and limits on the number and amount of scholarships at NCAA institutions is an illegal restraint of the labor market, in violation of the Sherman Antitrust Act.

The Court had twice dismissed cases with similar claims, ruling that the plaintiffs failed to identify a relevant market, a requirement for claims under the antitrust laws. In each case, the judge pointed out technical issues with the plaintiffs’ complaint.

The attorneys have now fixed those issues and the judge has rejected the NCAA’s third bid to dismiss the suit.

“We were confident that once we addressed the Court’s specific issues with our complaint, it would affirm that the case should move forward,” said Steve Berman, attorney for the plaintiffs and managing partner of Hagens Berman.

“We contend that the NCAA’s limits on scholarships artificially decrease the supply of scholarships and therefore artificially increases the relative demand for them by student-athletes,” Berman continued. “As a result, student-athletes who in a free market would command a high price from top institutions receive no scholarships or vastly reduced ones.”

The lawsuit asks for the Court to award damages resulting from the NCAA’s alleged violations, including trebled, or tripled damages for claims under the antitrust laws. It also asks the court to enjoin the NCAA from artificially reducing the supply of scholarships available in the future.

To contact an attorney regarding this case, call (206) 623-7292 or email ncaa_antitrust@hbsslwa.com.

You can learn more about this case by visiting www.hbsslaw.com/cases/ncaa---antitrust.

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