Court Grants Historic Trial Win to College-Athletes in NCAA Scholarships Antitrust Class-Action Lawsuit
Attorney says ruling will “change college sports as we know it, forever”
SAN FRANCISCO –Today, U.S. District Judge Claudia Wilken ruled in favor of a nationwide class of college-athletes challenging NCAA-imposed caps on college-athlete scholarships and granted their requested injunction, according to Hagens Berman.
The injunction will prohibit the NCAA from enforcing any rules that fix or limit compensation provided to college-athletes by schools or conferences in consideration for their athletic services other than cash compensation untethered to education-related expenses. According to the Court, the NCAA is “permanently restrained and enjoined from agreeing to fix or limit compensation or benefits related to education” that conferences may make available.
The monumental ruling follows a September bench trial and clears the way for individual Division I athletic conferences to independently set the rules for education-related compensation or benefits that their member institutions may provide to college-athletes, free from NCAA rules that the court found violate the antitrust laws.
“We have proven to the court that the NCAA’s weak justifications for this unfair system are based on a self-serving mythology that does not match the facts,” said Steve Berman, managing partner of Hagens Berman, and attorney representing the class. “Today’s ruling will change college sports as we know it, forever.”
“Now, college-athletes will finally be able to receive some additional benefits of competition for their services,” Berman added. “We believe the NCAA’s system allowed a seemingly limitless budget to attract top coaches and trainers, to construct lavish stadiums and facilities, and to secure the most lucrative broadcast and sponsorship agreements, but left college-athletes – the ones making it all possible – constrained behind the sham of amateurism.” Berman added, “although the Court did not allow a complete ban on any rules limiting cash compensation, this ruling should result in conferences competing for athletes by offering educational scholarships and incentive awards.”
The plaintiffs are represented by Steve Berman of Hagens Berman, Jeffrey Kessler of Winston & Strawn, and Bruce Simon of Pearson Simon.
The court’s decision followed a 10-day bench trial before Judge Wilken of the U.S. District Court for the Northern District of California, which pitted the plaintiffs against the NCAA and the most powerful athletic conferences, including the Pac-12, Big Ten, Big 12, SEC and ACC. The court previously granted partial summary judgment for plaintiffs, finding that the NCAA’s rules inflict significant anticompetitive harm, causing college-athletes to be compensated less than they would have been absent the challenged rules. The question for the trial was whether these anticompetitive rules could withstand scrutiny under antitrust laws.
After presentation of evidence by plaintiffs and the NCAA and Conference defendants, the court determined that defendants’ alleged procompetitive justifications only supported national rules limiting cash compensation untethered to education-related expenses. The court also found that the alleged justifications – maintaining consumer demand for college sports and the integration of college-athletes into their campus or academic communities – could be achieved without extinguishing all competition for student athletes’ services on the basis of educational compensation and benefits.
The court’s injunction will permit individual conferences to set their own rules concerning compensation and benefits tethered to education, as long as the conferences do not collude with one another. The conferences and their member institutions will be able to make decisions about what is in their own best interests, while competing with one another for the attendance of talented college-athletes. The court’s injunction will take effect in 90 days unless the defendants appeal.
In late 2017, Judge Wilken also granted final approval of a $208 million settlement on behalf of tens of thousands of current and former NCAA Division 1 college-athletes impacted by a prior NCAA cap on grant-in-aid scholarships. Affected college-athletes can visit the settlement website for an estimated calculation of their individual recovery and eligibility. Currently, distribution of the settlement proceeds is being held up pending resolution of the Ninth Circuit appeal of Darrin Duncan, the only person out of 53,748 class members to object to the deal.
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