Hagens Berman: Another NCAA Football Player Challenges NCAA Rules Limiting Financial Aid and Compensation

SEATTLE – A former college football player today filed an antitrust class-action lawsuit against the National Collegiate Athletic Association (NCAA) and the NCAA’s most powerful conference members the Pac-12, Big Ten, Big-12, SEC and ACC, claiming that these entities have agreed in violation of national antitrust laws to unlawfully cap the value of athletic scholarships, Hagens Berman announced today. The plaintiff, former West Virginia University offensive lineman Nick Kindler, and his attorneys at Hagens Berman, contend that the NCAA’s valuation of athletic scholarships is far below the actual cost of attending school, and far below what the free market would bear.

The class-action case seeks to represent former NCAA Division I Football Bowl Subdivision (FBS) scholarship players who have played from Feb. 2010 to the present within those conferences.

This is the second such case filed by Hagens Berman and Pearson Simon. On March 5, 2014, Hagens Berman filed a similar case on behalf of Plaintiff Kindler’s teammate at West Virginia, Shawne Alston, and expects that these cases soon will be combined so that Mr. Kindler and Mr. Alston may fight together for the rights of all football players in the major conferences.

“The NCAA appears utterly incapable of doing the right thing on its own,” said Steve Berman, managing partner of Hagens Berman Sobol Shapiro LLC and lead attorney on the case. “College football players should not have to worry about paying for the basic necessities of life, while their efforts generate billions of dollars in annual revenue for the overseers of the college sports entertainment industry.”

Berman continued that, “Mr. Kindler’s complaint provides updates on events since we filed Mr. Alston’s case. The NCAA and its Power Conferences continue to make statements seeking to convince the public that they are serious this time about reform, after decades of similar debate. We’ll believe it when we see it. This week, the Associated Press reported that all of the presidents of the Pac-12’s member schools wrote a letter urging their colleagues in the other Power Conferences to support proposed NCAA reforms, including allowing schools to make scholarship awards up to the full cost of attendance. We are extremely pleased to see that Pac-12 agrees that our claim for past damages is correct. But we will have really made progress once they understand that, going forward, they legally cannot agree with their competitors in other conferences to artificially depress the compensation of their extremely skilled labor force, the players. That is a basic rule that all other businesses in America must follow.”

The new suit filed in U.S. District Court in San Francisco alleges that the NCAA and these five Power Conferences have systematically colluded to disrupt the free market and deprive FBS football players of the full economic benefits of their labor. According to the complaint, NCAA rules artificially depress the value of athletic scholarships – known as Grants-in-Aid or GIAs – to typically several thousand dollars less per year, per player, than the actual cost to attend an NCAA school.

The suit’s plaintiff – Nick Kindler – played on the West Virginia football team from 2009 to 2013. He played in dozens of games there, including as a starter in numerous games during his senior season, having overcome injuries including a torn labrum in his left shoulder during his freshman year, requiring surgery and ongoing rehabilitation. Kindler is now recovering from a second shoulder surgery due to an injury in his final season. While at West Virginia, plaintiff was named to the Big 12 Commissioner’s Honor Roll, the Academic All-Big 12 Football First Team, the Garrett Ford Academic Honor Roll and the Dean’s List.

Plaintiff Kindler received yearly grant-in-aid scholarships from WVU that were intended to cover all tuition and registration fees, required course-related fees, room, meals and required textbooks, but was significantly lower than the roughly $40,000 annual cost of attendance. The complaint alleges that the aggregate amount of the shortfall experienced by Plaintiff Kindler, made up through the use of loans and personal funds, is estimated to be at least $15,000.

The complaint alleges that in a market unrestricted by NCAA and member restrictions on GIAs, schools would compete for heavily recruited athletes like Kindler and pay at least the full cost of attendance. The lawsuit seeks an injunction to prohibit any agreement on capping GIAs below the cost of attendance and past damages for players who had to pay the difference between their scholarship and the cost of attendance as a result of the illegal agreement.

“I’m very grateful for the chance to join with my former teammate, Shawne Alston, and to stand up for the rights of college football players,” Kindler said. “The changes that we are seeking for players are long overdue. I felt obligated to support Shawne and to try to be a positive part of the solution in any way that I can.”

Kindler continued that, “From early on in my college playing career, I noticed that players very often got the short end of the stick on a number of basic issues. The only answer I could get as to why was, ‘That’s how the system is.’ I hope that now I can help change that NCAA system for the better. It’s the right thing to do.”

The complaint alleges that each of the five Power Conference Defendants has stated that they would implement an increase in GIAs, and that every FBS player would likely receive additional compensation above the cost of attendance, if they were not bound by collusive agreements with other Division I schools. Additionally, the complaint alleges that the defendants, “repeatedly claim powerlessness, year after year, to change their lucrative status quo, because smaller NCAA members won’t agree to the change. Were the Defendant Conferences to act unilaterally, each would raise the GIA cap above the current levels.”

The suit was filed on behalf of FBS football players by lead attorneys Steve Berman and Bruce Simon. Berman is the managing partner of Hagens Berman and the lead attorney in related cases Owens v. NCAA in which football players are challenging the NCAA’s neglects to protect student-athletes from concussions, and Keller v. NCAA, in which student-athletes are challenging the NCAA's ability to sell their likeness to video-game publishers.

Simon is a lead partner at Pearson Simon, and one of the plaintiffs’ attorneys in O’Bannon v. NCAA, where student-athletes are challenging the NCAA’s restraints on players sharing in the licensing of their images in products such as live broadcasts.

 “Our case contains a proposal that is designed to provide economic fairness,” Berman said. “Numerous reasonable, less restrictive alternatives are available to Defendants’ current anti-competitive practices, including allowing incremental competition between Power Conference Defendants and against their co-conspirator conferences within FBS as to the financial aid terms that conference members will make available to college football players.”

“We expect the NCAA to defend this case with their standard playbook, based on their version of ‘amateurism’ which is the same defense the NCAA has deployed in most cases of this type,” said lead attorney on the case, Bruce Simon. “In this new case, we look forward to continuing to demonstrate that the NCAA’s defense does not apply. FBS football cannot continue to thrive without the dedication of the student athletes, but the NCAA and Power Conferences should abide by the antitrust laws that all other businesses must follow.”

The complaint requests past damages to compensate class members for the difference between the value of scholarships and the actual cost of attending school, and also requests an injunction to enjoin defendants from continuing to enforce their anticompetitive rules. Additionally, the complaint requests the appointment of an External Antitrust Compliance Monitor to ensure that defendants conduct themselves in compliance with the antitrust law, and to provide a mechanism for future judicial oversight of defendants’ operations, as was recently approved in the antitrust litigation captioned United States v. Apple, Inc., case number 1:12-CV-2826, filed in U.S. District Court in the Southern District of New York.

Current or former NCAA athletes seeking more information about the case can contact Hagens Berman at 206-623-7292 or Pearson Simon at 415-433-9000. They can also email NCAAscholarships@hbsslaw.com.

More information about these issues is available at http://hbsslaw.com/cases/ncaa---scholarships-class-action? and www.pswlaw.com.

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About Hagens Berman
Hagens Berman Sobol Shapiro LLP is a consumer-rights class-action law firm with offices in nine cities. The firm has been named to the National Law Journal’s Plaintiffs’ Hot List seven times. More about the law firm and its successes can be found at www.hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw.

About Pearson Simon
Pearson, Simon & Warshaw, LLP (PSW) has emerged as a nationally recognized force in class action lawsuits and complex litigation, with offices in Los Angeles and San Francisco. PSW’s attorneys' skill and experience have enabled clients to press for justice against major companies. The firm’s veteran trial lawyers have obtained more than $1 billion in settlements and verdicts on behalf of plaintiffs in a wide range of cases. More about the law firm can be found at www.pswlaw.com.

Ashley Klann

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