Antitrust Law Daily High Court to consider circuit split over NCAA limits on education-related benefits
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Wednesday, December 16, 2020

High Court to consider circuit split over NCAA limits on education-related benefits

By Linda O’Brien, J.D., LL.M.

Two petitions for review were granted which ask the High Court to consider circuit split on antitrust challenges to the NCAA’s amateurism rules.

The U.S. Supreme Court has granted the petitions by the National Collegiate Athletic Association (NCAA) and college athletic conferences to review a decision of the U.S. Court of Appeals in San Francisco that the NCAA’s eligibility rules regarding compensation of student-athletes violate federal antitrust law. The cases were consolidated for briefing and oral argument (American Athletic Conference v. Alston Dkt. 20-520; National Collegiate Athletic Association v. Alston, Dkt. No. 20-512).

In 2014, current and former student-athletes who played Division 1 football and basketball filed a class action suit against the NCAA and 11 college conferences, alleging that NCAA rules limiting college athletes to cost-of-attendance scholarships violated the Sherman Act. In May 2020, the Ninth Circuit affirmed the district court ruling that the NCAA’s limits on non-cash, education-related benefits were unreasonable restraints of trade, had no demand-preserving effect and, therefore, lacked a procompetitive justification.

In the petitions for review, the NCAA contended that the Supreme Court should take up the case because the Ninth Circuit’s ruling created a circuit split. The Third, Fifth, and Seventh Circuits have rejected antitrust challenges to NCAA amateurism rules, but the Ninth Circuit departed from this logic by finding that virtually all NCAA rules limiting education-related benefits are invalid. In addition, the NCAA argued that the Ninth Circuit’s rule of reason analysis was flawed since it redefined the distinction between amateurs and professionals. The court held that the distinction is not that only professionals are paid to play, but that only professionals receive "unlimited payments unrelated to education." The new definition of the amateur-professional distinction was patently false and unsupported by anything in the record, according to the NCAA petition.

The NCAA also argued that the Court should agree to hear the case because the question presented was recurring and important. The NCAA has faced many antitrust challenges to its eligibility and other rules over the years, and under the Ninth Circuit decision, virtually any change in the NCAA’s compensation rules opens the door to a new antitrust lawsuit. Further, the Ninth Circuit did not consider the obvious, good-faith connection between the challenged NCAA rules and the maintenance of an essential distinction between college and professional athletes, subjected its rules to detailed, fact-intensive rule-of-reason analysis, redefined the basic character of NCAA athletics, and required the NCAA to obtain judicial approval anytime it wants to modify its rules.

New petition for review. In a price fixing suit against several financial institutions, a class representative has filed a petition for certiorari, asking the Supreme Court to decide the applicable burden on a moving party seeking to quash the subpoena of a non-party witness. The petition seeks review of a May 2020 decision by the U.S. Court of Appeals for the Ninth Circuit which affirmed a district court order to deny a subpoena of a former Wells Fargo executive who had filed a wrongful termination and retaliation suit. The class representative subpoenaed the former executive in order to obtain information for use in his suit against the banks for alleged price fixing. The appeals court concluded that the antitrust class representative failed to show that the former executive had relevant information and it was reasonable to deny the class representative such broad access to all communications between Wells Fargo and a former employee (Nypl v. JPMorgan Chase & Co., Dkt. 20-770).

For details about these and other petitions and cases pending before the Supreme Court, please consult the Antitrust Law Daily Supreme Court Docket chart.

Attorneys: Britt M. Miller (Mayer Brown LLP) for The Big Ten Conference, Inc. Robert W. Fuller, III (Robinson, Bradshaw & Hinson, P.A.) for Southeastern Conference. Benjamin C. Block (Covington & Burling LLP) for American Athletic Conference. Leane K. Capps (Polsinelli PC) for The Big 12 Conference, Inc. & Conference USA. Bart H. Williams (Proskauer Rose LLP) for Pac-12 Conference. R. Todd Hunt (Walter Haverfield LLP) for Mid-American Conference. Meryl Macklin (Bryan Cave Leighton Paisner LLP) for Mountain West Conference. Jon Bradley (Bradley Devitt Haas & Watkins, P.C.) for Western Athletic Conference. Mark A. Cunningham (Jones Walker LLP) for Sun Belt Conference. D. Erik Albright (Fox Rothschild LLP) for Atlantic Coast Conference. Joseph M. Alioto (Alioto Law Firm) for John Nypl.

Companies: The Big Ten Conference, Inc.; Southeastern Conference; American Athletic Conference; The Big 12 Conference, Inc. & Conference USA; Pac-12 Conference; Mid-American Conference; Mountain West Conference; Western Athletic Conference; Sun Belt Conference; Atlantic Coast Conference; JPMorgan Chase & Co.

MainStory: TopStory Antitrust GCNNews

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