A federal judge on Friday granted class-action status to a pair of lawsuits challenging the NCAA’s current limits on the compensation athletes can receive while playing college sports.
U.S. District Judge Claudia Wilken’s action sets the stage for the advance of cases filed on behalf of Football Bowl Subdivision football players and Division I men’s and women’s basketball players against the NCAA and 11 major conferences.
Wilken is the same judge who handled the O’Bannon lawsuit and found that the NCAA’s limits on what major-college football and men’s basketball players can receive for playing sports “unreasonably restrain trade” in violation of antitrust laws.
That finding has been upheld by a three-judge panel of the 9th U.S. Circuit of Appeals, although the panel — by a 2-1 margin — threw out Wilken’s plan that would have allowed schools to provide athletes deferred compensation of as much as $5,000 per year. The panel’s majority ruled that the law “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 O’Bannon plaintiffs are seeking to have the three judges’ ruling reconsidered by a wider panel of 9th Circuit judges.
Since the beginning of the 2015-16 school year, colleges have been allowed to award athletic scholarships that cover tuition, room, board, books, fees and other incidental expenses up to the full cost of attending college. Prior to this year, schools could not cover those incidentals — part of what was at issue in the O’Bannon case. While the NCAA pursued an appeal of Wilken’s verdict in the case to the 9th Circuit, the association’s wealthiest conferences enacted a rules change that put the new scholarship model in place before Wilken’s ruling would have required it.
The two cases at issue in Wilken’s ruling Friday seek a result that would allow schools to offer even more.
The NCAA and the conferences had argued that the cases should not be allowed to proceed as class actions, in part, because a change in the current limits would benefit certain athletes to the detriment of others. For cases to be certified by a judge as class actions, the plaintiffs must demonstrate, among other things, that the case involves questions of law or fact that are common to the prospective wider class. (The NCAA also contends that the three-judge appellate panel’s ruling, as it stands now, effectively provides legal justification for athlete compensation to be limited to what is covered under the new scholarship model.)
Wilken wrote that the NCAA’s argument against class-certification depends “on the assumption that schools could not afford to spend more money compensating all student-athletes rather than cutting payments to some. That assumption … is not supported.”
She rejected what she described as the NCAA’s and the conferences’ prediction that an injunction “would increase the costs to schools of participating in FBS and Division I athletics and, in turn, schools would stop participating in FBS and Division I athletics or take steps to lower their costs, such as offering fewer” scholarships.
Wilken wrote that the NCAA and its experts for the case assume “that any increase in student-athlete compensation resulting from an injunction would force schools to offset such cost by disadvantaging some members of the proposed classes. The Court finds insufficient basis for such an assumption, because of schools’ past behavior and alternative available sources of funds.”
Citing one of the plaintiffs’ experts, Wilken noted that other sources of funds could include additional money from universities’ general funds, money from universities’ endowments, increased alumni donations “specifically made to cover athlete salaries” and “reductions in spending on other factors that are complements with players, such as spending on coach’s (sic) salaries or on facilities” for athletics and/or other purposes.
She added that the plaintiffs and their experts “persuasively demonstrate that (the NCAA’s) bases for predicting that schools would be forced by budgetary constraints to make decisions leading to” conflicting outcomes for athletes “are flawed.”
One of the cases began on behalf of former West Virginia football player Shawne Alston, who is no longer involved as named plaintiff. It was consolidated with other suits and now covers football, men’s basketball and women’s basketball players in the 10 FBS conferences and the Western Athletic Conference. It also seeks unspecified monetary damages based on the difference between the value of an athletic scholarship as currently defined by the NCAA and the value of a scholarship as previously defined by the NCAA, although class certification of the damages aspect of the case has not yet been filed.
This case is being led, in part, by lawyers from Hagens Berman Sobol Shapiro LLP, the same firm that is involved in an array of cases against the NCAA and represented former Arizona State and Nebraska football player Sam Keller in a suit before Wilken that also involved video game manufacturer Electronic Arts and eventually settled.
The other case is being pursued on behalf of plaintiffs led by former Clemson football player Martin Jenkins and two current Wisconsin athletes — basketball player Nigel Hayes and football player Alec James. It covers football and men’s basketball players in the power conferences, and it is being directed by Jeffrey Kessler, who gained renown for his representation of professional sports players’ unions and involvement in a case that set the stage for NFL free agency.
If the cases had not been certified as class actions, they would have been limited to the named plaintiffs only.
“We are pleased the court shot down all of the parade of horrible(s)” that the NCAA’s and the conferences’ experts “had conjured up if we are allowed to proceed,” plaintiffs’ attorney Steve Berman said via e-mail.
NCAA chief legal officer Donald Remy said in a statement: “The NCAA and its members award $2.7 billion in athletics scholarships every year to more than 150,000 student-athletes. The plaintiffs continue to misconstrue and inaccurately portray these scholarships. As other federal court decisions have consistently stated, agreeing to appropriate limits on financial aid does not violate antitrust laws.”