By Jason Kurtyka*

The Ninth Circuit Court of Appeals recently handed down its opinion in O’Bannon v. Nat’l Collegiate Athletic Ass’n, one that narrowed the scope of District Court Judge Claudia Wilken’s initial ruling and allowed both sides to claim partial victory. As detailed by Associate Director of the Moorad Center Vince Nicastro, the limited ruling left amateurism in tact, but considerably battered, meaning challenges to the NCAA’s amateurism bylaws are far from finished.

O’Bannon has already taken the next step in its litigation process by filing an en banc appeal, which petitions for a review by 11 of the 29 Ninth Circuit judges. However, the chances of this appeal being granted are highly unlikely, because only about .14% of Ninth Circuit cases result in an en banc review.[1] If this avenue proves fruitless, O’Bannon can file a petition with the Supreme Court, but again, the Supreme Court grants certiorari in an extremely limited number of cases.[2]

But with one fight winding down, a bigger one is just warming up.

On October 8th, Jeffrey Kessler, the lead attorney in Jenkins v. NCAA, filed a brief with the Northern District of California proposing a consolidation with the plaintiffs in Alston v. NCAA, whose lead attorney is Steve Berman.[3] Under the plan, Kessler, famed for his role in securing free agency rights for NFL players and more recently for representing Tom Brady in federal court, would serve as lead co-counsel with Berman, who has previously been an advocate for student-athletes in a concussion suit against the NCAA.[4]

Both complaints attack the NCAA bylaws on capping athletic scholarships at a full grant in aid (now cost of attendance) alleging violations of antitrust laws. The wake of O’Bannon will play a large part for both side’s arguments. First, the Ninth Circuit established that NCAA rules are subject to antitrust scrutiny, dispelling the myth stemming from NCAA v. University of Oklahoma Board of Regents that its rules are valid as a matter of law. Second, it identified providing scholarship student-athletes cost of attendance as a “less restrictive alternative” to capping scholarships at a full grant in aid.[5]

To their credit, the “Power 5”[6] institutions anticipated this move and enacted cost of attendance autonomy legislation this past January, which took effect at the beginning of this academic year.[7] It now means student-athletes on full scholarship now receive a stipend equal to the difference between tuition, books, fees, etc. and the school’s reported full cost of attendance. Each athletic department is at liberty to choose an amount that falls within the disparity. For example, a full-scholarship athlete at the University of Tennessee could receive up to $5,666, while a similarly situated student-athlete may receive $2,595 at UCLA.[8]

The NCAA will certainly point to this new policy by saying, “Look, we answered the bell and complied with the recommendations of O’Bannon, so for full scholarship student-athletes there is no longer a inconsistency between financial aid and what it actually costs to attend the university.” As Nicastro explained, athletic departments were already preparing to pay each athlete $5,000 to comply with the District Court holding, which would have greatly impacted athletic department budgets. Beyond cost of attendance, the NCAA may argue, providing larger scholarships, especially at a free-market value, may be untenable for athletic departments.

Cost of Attendance (COA) will also change Kessler and Berman’s argument because their original complaints were filed before COA legislation was passed. The duo will look to footnote 18 in the 63-page O’Bannon opinion, which notes that while the NCAA now permits COA, its member schools could reverse it through an override vote or at any legislative session.[9]

Back in 2011 a similar scenario played out. Legislation was passed allowing schools to offer multi-year scholarships to incoming student-athletes, as opposed to a renewal of a one-year agreement after every academic year. In October of the same year the NCAA Board of Directors enacted proposed legislation, which allowed schools to offer a $2,000 stipend to student-athletes they were offering full-grant-in-aid scholarships to just weeks before the November signing period. Confusion over how this new rule worked and reluctance to allocate athletic department budgets pay for the stipends resulted in an override vote by 125 Division I schools to suspend the legislation by December.[10] The brief existence of this rule allowed some full-ride student-athletes to accept a multi-year scholarship with the stipend.

Jenkins may first seek to permanently prevent the NCAA from ever lowering scholarship compensation below COA by pointing to the inequity of the override that briefly allowed some student-athletes who graduated high school in 2012 to receive an extra $2,000 per year, while their teammates who graduated high school in 2013 received nothing above a full-grant-in-aid.

COA will likely be only a subset of Kessler and Berman’s overall argument, however. In the past, Kessler has been an outspoken critic of the cap on scholarship compensation and will likely argue that even COA is an artificial restriction in violation of antitrust law.[11] As recently as October 1st, Kessler commented to Bloomberg Business that he will seek damages for student-athletes who were not awarded COA from 2010-2015, which he values between $283 – $378 million.[12]

Jenkins has already distinguished itself from O’Bannon by directly going after the bylaws capping scholarships at COA. Expect the plaintiff’s to build on the economic argument made by O’Bannon by presenting a direct linkage between student-athlete’s on the field performances with the spike in television revenue that came with the introduction of the College Football Playoff and new deals struck with conference realignment. Jenkins has a built-in advantage because the Court of Appeals held that NCAA rules are subject to anti-trust scrutiny, but the plaintiff’s face an uphill battle in proving to the Court that the “less restrictive” policy it endorsed (COA) is still a violation of antitrust law, which places an unfair economic restraint on student-athletes.


 

*Staff Writer, Villanova University Sports and Entertainment Law Society Blog; J.D. Candidate, May 2018, Villanova University School of Law.

[1]See Michael McCann, What the Appeals Court Ruling Means for O’Bannon’s Ongoing NCAA Lawsuit, Sports Illustrated (Oct. 2, 2015), http://www.si.com/college-basketball/2015/09/30/ed-obannon-ncaa-lawsuit-appeals-court-ruling.

[2] See Stephen Wermiel, SCOTUS for Law Students: Scoring the Circuits, SCOTUS Blog (June 22, 2014), http://www.scotusblog.com/2014/06/scotus-for-law-students-sponsored-by-bloomberg-law-scoring-the-circuits/.

[3] Jenkins et al v. National Collegiate Athletic Association et al, Bloomberg (October 26, 2015 10:00 AM).

[4] See Hagans Berman, NCAA – Concussions Cases (Sept. 28, 2011), http://www.hbsslaw.com/cases-and-investigations/cases/NCAA-Concussion-Cases.

[5] O’Bannon v. Nat’l Collegiate Athletic Ass’n, 7 F. Supp. 3d. 955, 971-73 (N.D. Cal. 2014).

[6] Consisting of members of the BIG Ten, ACC, Pac-12, Big 12, and SEC.

[7] See Mitch Sherman, Full Cost of Attendance Passes 79-1, ESPN (Jan. 18, 2015), http://espn.go.com/college-sports/story/_/id/12185230/power-5-conferences-pass-cost-attendance-measure-ncaa-autonomy-begins.

[8] See Brad Wolverton and Sandhya Kambhampati, At Least 15 Athletics Programs to Offer More than $4,000 in Extra Aid to Athletes, Chronicle of Higher Education (April 9, 2015), http://chronicle.com/article/At-Least-15-Athletics-Programs/229229/.

[9] O’Bannon, 7 F. Supp. 3d. at 973.

[10] See Steve Yanda, NCAA Deciding Whether to Give Stipends to Student-Athletes, Washington Post (Feb. 21, 2012), https://www.washingtonpost.com/sports/colleges/ncaa-deciding-whether-to-give-stipends-to-student-athletes/2012/02/21/gIQAfTqASR_story.html.

[11] See Jon Solomon, Meet Jeffrey Kessler, Lawyer Who Strikes Fear in the NCAA’s Heart, CBS Sports (Nov. 4, 2014), http://www.cbssports.com/collegefootball/writer/jon-solomon/24783680/meet-jeffrey-kessler-lawyer-whose-suit-strikes-fear-in-ncaas-heart.

[12] See Pamela A. Maclean and Eben Novy-Williams, NCAA Athletes May Face Long Next Year in Bid for Free Market Pay, Bloomberg News (Sept. 30, 2015), http://www.bloomberg.com/news/articles/2015-10-01/ncaa-athletes-may-face-long-next-yard-in-bid-for-free-market-pay.

 

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