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Supreme Court will not consider the Ed O'Bannon antitrust case against NCAA
Steve Berkowitz, and A.J. Perez
The Supreme Court said on Monday it will not consider the Ed O'Bannon antitrust case against the NCAA, a move that effectively leaves previous rulings on what top-level football and men's basketball players can receive for playing college sports intact.
Both sides had asked the justices to hear the case, which also dealt with compensation for the use of college players' names, images and likenesses in live television broadcasts, rebroadcasts and video games.
The initially parallel appeals, an uncommon circumstance, were made even more unusual when the O'Bannon plaintiffs later agreed with the NCAA in saying the high court should consider whether the 9th U.S. Circuit Court of Appeals properly applied a 1984 Supreme Court ruling that the association historically has relied on in defending its amateurism system.
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Instead, Monday's decision leaves intact the 9th Circuit's dual rulings that:
The NCAA's regulations are subject to antitrust scrutiny, and rules limiting football and men's basketball players to receiving tuition, fees, room, board and books violate antitrust laws.
While antitrust law requires that schools be allowed to provide these athletes with scholarships that cover all of their costs of attending college, including travel and personal incidentals, "it does not require more," such as what it termed "cash sums untethered to educational expenses."
"While we would have liked the Supreme Court's review, we remain pleased with our trial victory and the Ninth Circuit's decision upholding the finding that the NCAA violated the antitrust laws and affirming a permanent injunction to remedy that violation, which enables NCAA member schools to offer college athletes significant additional funds toward the cost of attendance," Michael Hausfeld, the lead attorney for plaintiffs, said in a statement to USA TODAY Sports.
NCAA Chief Legal Officer Donald Remy said the NCAA "will continue to strongly advance that legal position in other litigation" despite the Supreme Courts' decision to pass on the petitions on Monday.
"While we are disappointed with this decision not to review this case, we remain pleased that the Ninth Circuit agree with us that amateurism is an essential component of college sports and that NCAA members should not be forced by the courts to provide benefits untethered to education, including providing any payments beyond the full cost of attendance," Remy said in statement. "We continue to believe, and many other appellate courts have agreed, that the NCAA membership agreements to advance college sports are not violations of the antitrust laws."
The odds were against the Supreme Court taking up the case. The Supreme Court receives as many as 10,000 requests each term to review lower court rulings. It grants about 80 petitions, knowns as writs of certiorari, per term. Four of the eight justices currently serving on the nation's highest court have to agree to hear the case.
Between Wilken's ruling in August 2014 and the 9th Circuit's ruling in September 2015, schools and athlete representatives from the NCAA's five wealthiest conferences voted to let athletes in any sport receive a scholarship that covers the cost of attendance. The rules change meant that any Division I school could make such awards, beginning in fall 2015, but none are required to do so.
Federal judge: NCAA must pay $42.3 million in O'Bannon anti-trust case
Wilken is now handling two cases that seek to lift this new NCAA compensation limit, not based on the schools' use of the athletes' names, images and likenesses but rather based primarily on the lack of economic competition for the services athletes provide the schools. Both cases are seeking an injunction against the NCAA. One is also seeking damages based on the difference in the value of a traditional athletic scholarship and that of a cost-of-attendance scholarship.
Meanwhile, Monday's decision also means the NCAA will have to continue its fight against the $42.3 million in attorney's fees and costs that Wilken has awarded to the O'Bannon plaintiffs' legal team. The association has appealed the award to the 9th Circuit.
"We will continue to contest plaintiffs' request for payment of their fees," Remy said in a statement. "They are not prevailing parties entitled to fees under the applicable definitions in the law as interpreted by the United States Supreme Court. Indeed, the plaintiffs attempt to obtain Supreme Court review of the case belies the notion that they won in the lower court. The fee dispute is before the Ninth Circuit and we believe it will agree with us and potentially direct a substantial reduction or elimination of the fee request."
Had the Supreme Court taken the O'Bannon case and reversed the finding of an antitrust violation, lead plaintiffs' attorney Michael Hausfeld acknowledged that the award would have been eliminated.
"While the Court's decision to decline the O'Bannon case means that the NCAA's fundamental financial structure and treatment of (name, likeness and image) rights has been upheld, the Knight Commission believes that the O'Bannon case has raised important concerns of college athletes that will continue to require the attention of higher education leaders," Knight Commission on Intercollegiate Athletics chair William E. "Brit" Kirwan said in a statement.
The case began in the summer of 2009 and went to trial in June 2014. Wilken ended up ruling that the NCAA's athlete compensation rules at the time "unreasonably restrain trade" in violation of antitrust law. She said the NCAA would be able to cap the amount of compensation that football and men's basketball players can receive while they are in school, but that cap would not be allowed to be an amount that is less than the athletes' cost of attendance. She also decided to let schools and conferences deposit money in trust for football and men's basketball players that would have become payable when they left school or their eligibility expired.
The 9th Circuit panel of Sidney R. Thomas, Jay S. Bybee and Gordon J. Quist unanimously upheld Wilken's antitrust finding and the cost-of-attendance scholarship remedy. But by a 2-1 vote, they threw out the deferred compensation remedy.
"The difference between offering student-athletes education-related compensation and offering them cash sums untethered to educational expenses is not minor; it is a quantum leap," Bybee wrote for the majority. "Once that line is crossed, we see no basis for returning to a rule of amateurism and no defined stopping point. … At that point the NCAA will have surrendered its amateurism principles entirely …"
In asking the Supreme Court to hear the case, the O'Bannon plaintiffs argued that reasoning was improper because it was circular.
"'Amateurism' is not 'effect' of the restraint at all," they wrote. " … It is simply another way of describing the restraint itself."
The NCAA's approach to the high court primarily was to invoke the 1984 Supreme Court ruling in NCAA v. Board of Regents, a case that was about control of college football TV rights but the opinion on which included the statement that "in order to preserve the character and quality of the (NCAA's) 'product,' athletes must not be paid, must be required to attend class and the like."
The NCAA has relied upon this — and other — language from the Board of Regents ruling in successfully defending its amateurism system in many other legal cases. It argued that case and other federal appeals court decisions obligated the 9th Circuit to operate under the principle that "rules that define the character of NCAA athletics, and are thus essential for the NCAA's distinct product to exist, are upheld without" detailed analysis.
Having incorrectly undertaken this analysis, the 9th Circuit panel then further erred, according to the NCAA, because its affirmation of the cost-of-attendance scholarship remedy constituted improper judicial "micromanagement" of the association. The 9th Circuit's approach "exposes a host of NCAA rules ... to litigation and improper judicial tinkering," the association argued.
The NCAA also argued that the 9th Circuit "badly misinterpreted" the First Amendment as allowing student-athletes named or portrayed in video games to be protected by state laws governing the use of their names, images and likenesses. Had the 9th Circuit correctly applied the First Amendment, the NCAA argued, it would have found that the athletes had no personal property rights here that could have been violated, and, thus, they had no case.