U.S. Supreme Court Upholds Trial Victory for College Athletes in NCAA Scholarship Antitrust Class-Action Lawsuit
WASHINGTON, DC – Today, the U.S. Supreme Court upheld a ruling in favor of a nationwide class of college athletes challenging NCAA-imposed caps on college athlete scholarships, represented by attorneys at Hagens Berman as co-lead counsel.
“It is our hope that this victory in the battle for college athletes’ rights will carry on a wave of justice uplifting further aspects of athlete compensation. This is the fair treatment college athletes deserve,” said Steve Berman, managing partner of Hagens Berman.
The plaintiffs are represented by co-lead counsel Steve Berman of Hagens Berman, Jeffrey Kessler of Winston & Strawn. In fall 2018, Berman and Kessler led the case during a 10-day bench trial before District Judge Wilken, 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 ordered the NCAA and its conferences to abrogate rules that prohibited athletes from receiving more compensation so long as that compensation was related to education. Afterward NCAA president Mark Emmert admitted that providing more educational benefits was “a good thing” but the NCAA appealed to the Supreme Court anyway.
In late 2017, the district court in the Alston matter granted final approval of a $208 million settlement on behalf of tens of thousands of current and former NCAA Division 1 college athletes represented by Hagens Berman, who were impacted by a prior NCAA cap on grant-in-aid scholarships.
From the Bench
The ruling cements the findings in 2020 by the 9th U.S. Circuit Court of Appeals that the NCAA’s regulations concerning athletic scholarships were overly restrictive and violated federal antitrust laws. The ruling also allows for an injunction upheld by the federal appeals court which 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.
Under SCOTUS’ ruling, individual Division I athletic conferences may now 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. According to the injunction, 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 appeal, which was argued in March 2020 before circuit judges Sidney R. Thomas, Ronald M. Gould and Milan D. Smith, Jr. states, “[T]he district court properly applied the Rule of Reason in determining that the enjoined rules are unlawful restraints of trade under section 1 of the Sherman Act.” The court’s findings that, “the NCAA’s rules have ‘significant anticompetitive effects in the relevant market’ for Student-Athletes’ labor on the gridiron and the court... ‘have substantial support in the record.’”
“[W]e hold that the district court properly concluded that the NCAA limits on education-related benefits do not ‘play by the Sherman Act’s rules,’” Judge Smith said in the opinion. “Accordingly, we affirm its liability determination and injunction in all respects.”
Hagens Berman continues to represent college athletes in important cases, including another antitrust matter involving compensation for college athletes’ names, images and likenesses (NIL). Under the current regulations of the NCAA, college athletes are restricted from being able to monetize their NILs. This stands in stark contrast to the lucrative sponsorship, endorsement, and other NIL-related deals held by the NCAA and its members, which generate massive revenues that pay for elaborate stadiums and exorbitant coach salaries. Read more about this continuing case and other sports litigation cases.
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