Federal Appeals Court Upholds Ruling NCAA Violates Antitrust Laws

The 9th U.S. Circuit Court of Appeals on Wednesday upheld a lower court ruling that NCAA rules limiting what athletes can receive while playing sports violate antitrust laws, but the three­ judge panel also threw out a plan that would have allowed schools to provide deferred athletes compensation of as much as $5,000 per year.

“The NCAA is not above the antitrust laws, and courts cannot and must not shy away from requiring the NCAA to play by the Sherman Act’s rules,” the panel wrote. “In this case, the NCAA’s rules have been more restrictive than necessary to maintain its tradition of amateurism in support of the college sports market. The Rule of Reason requires that the NCAA permit its schools to provide up to the cost of attendance to their student athletes. It does not require more.”

The three ­judge appellate panel of Sidney R. Thomas, Jay S. Bybee and Gordon J. Quist was unanimous in its finding that the NCAA’s rules violate antitrust laws.

Thomas added in a partial concurrence and partial dissent that he would have concurred with U.S. District Judge Claudia Wilken “in all respects,” including allowing the $5,000 per year above the cost of attendance.

MORE: Read the entire ruling by the appeal panel (http://www.gannett­cdn.com/experiments/usatoday/Sports/2015­09­30­ncaa­federal­appeal­rulingobannon.pdf)

While the NCAA emerges victorious in avoiding the prospect of schools being able to offer additional money to athletes, the appellate panel’s finding relative to the antitrust laws pleased lawyers for the plaintiffs. It sets the stage for the association to attempt to seek a re­hearing of the case from a wider panel of 9th Circuit judges or to try to take the case to the Supreme Court.

Ed O’Bannon – The former UCLA basketball star sued the NCAA after he realized his likeness was used in a video game.

During a conference call Monday, the NCAA’s chief legal officer Donald Remy said it was too soon for the association to determine whether it will pursue either of those options, which also are available to the plaintiffs.

“We will make those judgments in short order,” Remy said. The sides basically have 14 days to pursue 9th Circuit rehearing and 90 days to seek review from the Supreme Court. Sathya Gosselin, an attorney for the plaintiffs, told USA TODAY Sports his side is reviewing its options about further action.

In addition to the NCAA facing other legal challenges ­­ including one that returns to court Thursday ­­ the appellate panel ruled that language from a 1984 Supreme Court ruling that the NCAA has relied upon to preserve its amateurism system is “dicta” ­­ essentially related commentary, but not part of the case’s value as precedent.

That case, NCAA v. Board of Regents, was about control of college football TV rights but the Supreme Court’s opinion 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 prior legal cases.

But the appellate panel wrote, in part “even if the language in Board of Regents addressing amateurism were not dicta, it would not support the tremendous weight that the NCAA seeks to place upon it.”

Gosselin said the importance of that portion of the opinion “cannot be overstated. For decades, the NCAA has brandished the Board of Regents decision and claimed limitless antitrust immunity as to its amateurism rules.”

The NCAA is facing further legal challenges about its athlete­ compensation rules, and Wednesday’s ruling comes one day before Wilken is scheduled to hold a hearing on whether to grant class ­action status to a pair of lawsuits seeking to basically prevent the association from having any limit on what schools can offer athletes in football, men’s basketball and women’s basketball.

The appellate panel appeared to take that case into consideration on a number of levels.

The opinion, written by Bybee, states, in part, “we have little doubt that plaintiffs will continue to challenge the arbitrary limit imposed by the district court until they have captured the full value of their” names, images and likenesses.

Bybee’s opinion also says: “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. 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 and transitioned from its ‘particular brand of football’ to minor league status.”

But Bybee’s opinion also stated in its conclusion that “we wish to emphasize the limited scope of the decision we have reached” – that Wilken’s intended plan to require the NCAA to allow schools to pay athletes pay up to $5,000 is invalid.

During a conference call Monday afternoon NCAA President Mark Emmert said: “I think the ruling does provide greater clarity on a number of fronts … The fundamental notion of pay for play, as it’s often referred to, is at odds with the notion of amateurism and at odds with the fundamental underpinnings of collegiate athletics. The ruling has those statements in there in pretty direct language. I hope that will, in some ways limit some of the legal arguments that are being made.”

The case began in the summer of 2009 with a suit filed on behalf of Ed O’Bannon, a former UCLA basketball player. It eventually boiled down to the plaintiffs seeking an injunction that would heavily overhaul the NCAA’s limits on what Bowl Subdivision football and Division I men’s basketball players can receive for playing sports and for the use of the names, images and likenesses in in live television broadcasts, rebroadcasts of games and video games.

A trial was held in June 2014 and Wilken ruled in August. She found that the NCAA’s rules at the time – which basically limited athletes to tuition, room, board, books and fees ­­ “unreasonably restrain trade” in violation of antitrust laws.

In her ruling, injunction and a subsequent interpretation of the injunction, she said the NCAA would be able to cap the amount of new compensation that the 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 attending school.

In addition, Wilken decided to let schools and conferences deposit money in trust for football and men’s basketball players that will become payable when they leave school or their eligibility expires. Under this setup, the NCAA would be allowed to set a cap on the amount of money that may be held in trust, but that cap cannot be less than $5,000 in 2014 dollars ­­ now about $5,040 ­­ for every year the athletes remain academically eligible.

The new benefits were set to be put in place for both incoming and returning athletes, beginning with the 2016­17 school year.

In January 2015 ­­ taking advantage of a new NCAA governance setup that allows them greater autonomy in rules making ­­ schools and athlete representatives from the NCAA’s five wealthiest conferences voted to let athletes in any sport receive scholarships that cover the cost of attendance. The rules change means any Division I school can make such awards, beginning with the upcoming fall semester, but none are required to do so.

Steve Berkowitz, USA TODAY Sports, September 30, 2015

National Labor Relations Board Rejects Northwestern Football Players’ Union Bid

The National Labor Relations Board on Monday dismissed a petition by Northwestern football players who were seeking to unionize, effectively denying their claim that they are university employees and should be allowed to collectively bargain. In a unanimous decision that was a clear victory for the college sports establishment, the five-member board declined to exert its jurisdiction in the case and preserved, for now, one of the N.C.A.A.’s core principles: that college athletes are primarily students.

The board did not rule directly on the central question in the case — whether the players, who spend long hours on football and help generate millions of dollars for Northwestern, are university employees. Instead, it found that the novelty of the petition and its potentially wide-ranging impacts on college sports would not have promoted “stability in labor relations.” Citing competitive balance and the potential impact on N.C.A.A. rules, the board made it clear that it harbored many reservations about the ramifications of granting college athletes, much less a single team, collective bargaining rights.

“The board has never before been asked to assert jurisdiction in a case involving college football players, or college athletes of any kind,” the seven-page decision read, adding, “Even if scholarship players were regarded as analogous to players for professional sports teams who are considered employees for purposes of collective bargaining, such bargaining has never involved a bargaining unit consisting of a single team’s players.”

Northwestern University, which strongly urged its players to vote down the union ahead of last year’s secret ballot election, released a statement from Alan Cubbage, a spokesman. “We believe strongly that unionization and collective bargaining are not the appropriate methods to address the concerns raised by student-athletes,” it read. “We are pleased that the N.L.R.B. has agreed with the university’s position.”

Across college sports, many others praised the ruling. The commissioners of 31 of the largest conferences issued a statement calling the N.L.R.B. decision “the right call,” and Donald Remy, the N.C.A.A.’s chief legal officer, said it would allow the association “to continue to make progress for the college athlete without risking the instability to college sports that the N.L.R.B. recognized might occur under the labor petition.”

The decision is a blow to the union movement in college sports, which was led by the former Northwestern quarterback Kain Colter and backed by the College Athletes Players Association, a United Steelworkers-supported group that sought to represent the players. The group could sue to force the N.L.R.B. to exert jurisdiction in the case, but the little-used option would be akin to a Hail Mary pass.

Ramogi Huma, president of the College Athletes Players Association, said he was disappointed by the decision but would not rule out future unionization attempts at other colleges.

“It’s notable they didn’t rule that players aren’t employees,” he said. “The door is still open.”

The board wrote that its decision applied only to the Northwestern case — there was no precedent established for graduate teaching assistants or student janitors — and left open the possibility it could re-examine the issue if college athletes brought a similar case in the future.

“This decision is politically smart,” said Joe Ambash, a lawyer who represented Brown University in front of the N.L.R.B. when its graduate teaching students sought to unionize. “The board would have faced a firestorm of protest if they made college football players employees.”

In announcing the union push last year, Colter had hoped to reset the balance of power between players, their universities and the N.C.A.A. He argued that with all the time demands on players and the ever-increasing money flowing through college sports, players deserved a greater say in issues like safety and long-term health care.

Peter Ohr, a regional director of the N.L.R.B. in Chicago, ruled last year that players on scholarship were employees based on the hours they spent each week on football, the strict rules set by coaches and the financial aid they received as compensation. Northwestern players — 76 were eligible — voted whether to certify the union last April, but the votes were impounded pending a ruling by the full N.L.R.B. Now that the board has ruled in favor of Northwestern, the ballots will not be counted.

“There may have been some sympathy for the players’ argument,” said Wilma Liebman, a former chairwoman of the N.L.R.B. “But siding with the players may have seemed like too great a leap, so this is a compromise.”

Chief among the board’s reasons for declining to consider the case were the complexities of an N.C.A.A. in which one team might be unionized while others were not, and whether a union would negotiate terms that conflicted with the association’s rules. The N.L.R.B., which has jurisdiction only over the private sector, was also reluctant to wade into territory that could have raised implications for public universities. A vast majority of top-level college football programs are at public colleges, and Northwestern is the only private institution in the 14-member Big Ten Conference.

In the aftermath of Ohr’s ruling, two states — Michigan and Ohio — pushed laws that banned college athletes from unionizing.

Still, much has changed in college sports since Colter and Huma announced the union petition. The N.C.A.A. changed its governance structure to allow its wealthiest conferences to make some of their own rules, and those leagues, in turn, increased the value of a scholarship by a few thousand dollars and now guarantee them for four years. A number of conferences and individual colleges have pledged to offer more comprehensive health care. And last summer a federal judge found that the N.C.A.A. had violated antitrust laws by not allowing players to profit from their names (the ruling was stayed last month by an appellate court).

“The Northwestern players’ courage has done a lot to change the game,” Huma said. “They showed how much power the players have when they assert their rights under the law.”

August 17, 2015

Associated Press: NFLPA Releases Brady Appeal Testimony In CT Filing

NEW YORK — The public now has more information to decide whether New England quarterback Tom Brady was truthful about deflated footballs.

The NFL Players Association released the 457-page transcript of his June testimony in the deflated balls controversy in a filing Tuesday in Manhattan federal court. In it, Brady denies tampering with footballs in the AFC championship game, or telling anyone to.

His testimony occurred in an arbitration hearing before NFL Commissioner Roger Goodell. Goodell last week decided to uphold a four-game suspension of Brady issued by a subordinate.

The league asked federal Judge Richard Berman last week to find that the NFL acted properly. Berman has ordered Brady and Goodell to appear before him next week. He has strongly urged they settle.

Brady was suspended after it was found that the Patriots had used deflated footballs in the AFC title game.

Click here to read the full transcript of the June testimony.