Friday, September 29, 2023
Courthouse News Service
Friday, September 29, 2023 | Back issues
Courthouse News Service Courthouse News Service

Student-athletes hit NCAA with antitrust suit over academic awards

A new class of student-athletes say the NCAA and the five wealthiest college athletic conferences owe them millions in withheld academic awards.

SAN FRANCISCO (CN) — The attorneys who beat the NCAA in the Supreme Court have hit the association with a new antitrust class action seeking millions in damages for thousands of athletes.

Plaintiffs, including former Oklahoma State running back Chuba Hubbard and former Auburn track athlete Keira McCarrell, seek treble damages for all current and former Division I athletes as far back as 2018.

In their 30-page complaint filed Tuesday, they say the NCAA — an unincorporated association of more than 1,200 colleges, universities — and the Atlantic Coast, Big Ten, Big 12, Pacific-12 and Southeastern conferences owe them millions in these damages. 

A federal judge overseeing prior antitrust litigation against the NCAA in the Northern District of California found in 2019 that NCAA rules prohibiting member schools from offering education-related compensation including payments of up to $5,980 in “academic or graduation awards or incentives” violated antitrust laws. The court ruled the NCAA’s restraints on education-related compensation inflicted “significant anticompetitive effects” with no procompetitive justification. 

The NCAA eventually took the case to the Supreme Court, which in 2021 ruled unanimously against the NCAA. The association then revised its bylaw to allow all Division I college athletes to receive academic achievement awards each academic year. 

The 2019 injunction “unlocked life-changing benefits” for NCAA Division I athletes, but the new plaintiffs and members of the class they seek to represent were not members of the prior damages settlement classes. They include current and former Division I college athletes whose damages claims were not litigated in the 2019 case, despite having attended schools which chose to compete for athletes by offering academic achievement awards, missing out on them due to the NCAA’s restrictions. 

Hubbard says he was deprived of receiving the $5,980 awards that he would have earned each year at college, and McCarrell was deprived of receiving the awards that she would have earned each year in Oregon and Texas. 

“While the injunction striking down the NCAA’s restrictions on education-related compensation, which was unanimously affirmed by the Supreme Court in Alston, unlocked life-changing benefits for NCAA Division I athletes moving forward, it did not rectify the harm suffered by thousands of Division I athletes who were unlawfully prevented from receiving education-related compensation before the injunction was issued,” attorney Jeffrey Kessler said in a statement. 

The student-athletes say that by the time of the 2019 grant-in-aid cap settlement, the demand for collegiate athletes’ services was greater than ever. Power Five Conference schools were locked in an “arms race” to appeal to recruits with lavish spending including on coaches — while prohibiting athletes from receiving academic achievement awards beyond their NCAA-capped “scholarships.” 

“As monopsony buyers in these labor markets, the NCAA and its members had (and still have) the ability to control price and exclude competition. Nor are equivalent labor market opportunities offered by the professional leagues,” the plaintiffs say in their lawsuit. 

“Should the court permit defendants to relitigate these issues, and it should not, any argument that banning academic achievement awards preserved consumer demand for college sports fails as a matter of law," the plaintiffs continue. "Any arguable procompetitive benefit from banning such compensation would only be felt in any product markets for college sports, not the relevant labor markets at issue here.”

The student-athletes demand a jury trial, along with orders barring the NCAA under the doctrine of offensive collateral estoppel from relitigating the question of whether their rules prohibiting paying awards cause anticompetitive effects, and that the rules and agreements to restrict athletes from receiving awards violated Section 1 of the Sherman Act. They also seek to recover damages for economic injury. 

One alternative they suggest is for a judge to find that the NCAA's prohibition on awards is unlawful or constituted an unreasonable restraint of trade under the “quick look” rule of reason. They also suggest a judge could find the defendants’ concerted conduct constituted an "unreasonable restraint of trade" with respect to all class members.

The NCAA did not respond to a request for comment by press time.

The same lawyers have another open case against the NCAA seeking to recoup damages dating back to 2016, for college athletes who could not earn money from their names, images or likenesses under NCAA rules. It also says that athletes should get a cut from the billions of dollars some conferences make from media rights deals.

The NCAA has lost two previous lawsuits filed in the Northern District of California that have gone to trial before U.S. District Judge Claudia Wilken. It also faces a separate threat in Pennsylvania, where a federal lawsuit seeks to have college athletes deemed employees of their schools.

Follow @@nhanson_reports
Categories / Business, Education, Sports

Read the Top 8

Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.