Sports Litigation Alert
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SPORTS LITIGATION ALERT July 16, 2021 Vol. 18, Iss. 13 Case Summaries NCAA V. Alston: Student-Athletes On June 21, 2021, the U.S. Supreme Court con- Trounce NCAA, 9-0, in Supreme firmed those allegations. In a landmark 9-0 ruling in NCAA v. Alston, 594 U.S. Antitrust Battle ___ (2021), the Court held that the NCAA’s scheme to By Gary J. Chester, Senior Writer limit compensation to student-athletes in the name of or decades, some sports law scholars and econo- amateurism violates section 1 of the Sherman Act. The Fmists have characterized the NCAA as an illegal opinion, written by Justice Neil Gorsuch, praised both cartel engaging in anticompetitive conduct that is un- the Ninth Circuit and the trial court that had ruled in fair to student-athletes. favor of the student-athletes. Table of Contents Here’s the latest issue of Sports Litigation Alert, the nation’s • As Legal Controversy Brews Over Sexual-Assault only subscription-based periodical reporting on the intersection Allegations, Chicago Blackhawks Hire a Law Firm of sports and the law. We also publish 11 other sports law peri- to Investigate .................................16 odicals. Visit www.hackneypublications.com to learn more. • Texas Judge Grants Joint Motion to Dismiss Case Summaries Paramedic’s Concussion Lawsuit against Houston Astros .......................................16 • NCAA V. Alston: Student-Athletes Trounce NCAA, 9-0, in Supreme Antitrust Battle ...................1 • Washington State’s Lystedt Law – an Update ........17 • Sports Law Experts Weigh in on the Import of the • Esports Included in Recent Flurry of States’ Sports Landmark Supreme Court Ruling in Alston ...........4 Betting Legalization Bills .......................20 • High School Football Players Tossed from Summer • CCHA Announces Hire of Todd Shumaker to Camp, Then from Court ..........................5 Sports Law Group .............................21 • Court Grants Summary Judgment to College in • NFL Announces Outcome of Washington Football Case Involving Contract Dispute with Coach .........7 Team Workplace Review ........................22 • The Hits Keep Coming: NCAA Loses Another Name, Image, and Likeness Court Decision .........10 News Briefs • Federal Appeals Court Affirms Ruling that Insurance • Insightful Concussion Webinars Set for July 28 and Companies Are Not Liable to Defend Joint Venture August 12. .25 that Built Levi’s Stadium in ADA Lawsuit ............11 • Sports Law Professor Introduces Law for Fitness Managers and Exercise Professionals ..............25 Articles • Bond, Shoeneck & King Brings on Former NCAA • Trends in Sports Investment ......................12 Attorney Michael Sheridan as Senior Counsel .......26 • Adding As Many Women’s Sports Programs as It Takes: La Salle Settles with Women Volleyball Players 13 • Did the Supreme Court Just Clear the Way for Student Athletes to Promote Sports Betting? .........15 Copyright © 2021 Hackney Publications. All rights reserved. Page 2 Sports Litigation Alert Volume 18, Issue 13 July 16, 2021 Procedural History The appeals court found that only the NCAA’s rules Student-athletes won a huge victory in O’Bannon v. restricting non-educational benefits and certain aca- NCAA, 802 F.3d 1049 (9th Cir. 2015), where the Ninth demic or graduation awards were reasonably related to Circuit affirmed in large part a district court’s ruling that the procompetitive goal of improving consumer choice the NCAA illegally restrained trade, in violation of sec- by maintaining a distinction between college and pro- tion 1 of the Sherman Act, by preventing FBS football fessional sports. (In other words, the NCAA can pro- and Division I men’s basketball players from receiving hibit payments to athletes that are unrelated to their compensation for the use of their names, images, and education, but it cannot restrict colleges from offering likenesses (NILs). The court also affirmed the district private tutoring, computers, post-graduate scholar- court’s injunction which required the NCAA to permit ships, and other education-based benefits as part of an athletic scholarship.) athletic scholarships covering the full cost of attendance. The NCAA appealed to the Supreme Court, assert- Alston is a consolidation of multiple actions brought ing that it is immune from the normal operation of by current and former student-athletes in men’s Di- antitrust law and that, in any event, the district court vision I FBS football and men’s and women’s Divi- should have approved each of the NCAA’s restraints sion I basketball. The case was decided after a bench on student-athlete compensation. trial before Judge Claudia Wilken (who also decided O’Bannon). The district court ruled that NCAA limits The Opinion on education-related benefits such as private tutoring The Supreme Court’s 36-page opinion essentially be- and laptop computers were unreasonable restraints of gins with a brief history of the intersection of com- trade and that the athletic conferences could set differ- mercialism and college sports. It recounts the first in- ent standards. But the court found that the NCAA lim- tercollegiate competition: an 1852 boat race at Lake its on compensation unrelated to education are lawful. Winnipesaukee, New Hampshire between students On appeal, the Ninth Circuit in 2020 held that the from Harvard and Yale. The event was sponsored by a circuit court properly applied the rule of reason in de- railroad executive who sought to promote train travel termining that the NCAA’s limits on education-related to the picturesque lake. compensation constituted unlawful restraints of trade Justice Gorsuch discusses the 1929 Carnegie Foun- under section 1. In re NCAA Athletic Grant-in-Aid Cap dation report that found college athletics to be overrid- Antitrust Litig., 958 F. 3d 1239 (CA9 2020). [The rule den with commercial interests. He recounts the NCAA of reason is one of three ways to analyze alleged anti- Sanity Code adopted in 1948 to authorize universities competitive conduct; it is a fact-specific assessment of to pay athletes’ tuition while simultaneously enabling market power and market structure to determine if a member institutions to limit the amount of compensa- restraint restricts competition.] tion granted to student-athletes. The history concludes with the observation that the NCAA in 2014 first per- mitted conferences to allow “member schools to in- crease scholarships up to the full cost of attendance.” The Court notes that the NCAA accepted that its Sports Litigation Alert (SLA) is a narrowly focused members enjoy a monopsony (a buyer’s monopoly) newsletter that monitors case law and legal develop- in the market for student-athlete services and that its ments in the sports law industry. Every two weeks, restraints harm competition. It was uncontested that SLA provides summaries of court opinions, analysis “student-athletes have nowhere else to sell their labor.” of legal issues, and relevant articles. The newsletter A primary NCAA position was that its objective of is published 24 times a year. preserving amateurism in college sports called for a standard of antitrust scrutiny that was less restrictive To subscribe, please visit our website at than the customary “rule of reason.” The NCAA relied http://www.sportslitigationalert.com on dicta in National Collegiate Athletic Assn. v. Board of Regents of Univ. of Oklahoma, 468 U.S. 85 (1984) Copyright © 2021 Hackney Publications. All rights reserved. Page 3 Sports Litigation Alert Volume 18, Issue 13 July 16, 2021 (NCAA’s television contracts with two networks held in college sports is important. But our task as appellate anticompetitive), wherein the Court recognized that judges is not to resolve it. Nor could we. Our task is the NCAA is given latitude to promote amateurism in simply to review the district court judgment through college sports. But the Court rejected the notion that it the appropriate lens of antitrust law.’” should use a “quick look” standard to summarily de- clare the NCAA’s limits on athletic scholarships to be The Concurrence lawful. Justice Brett Kavanaugh’s five-page concurring opin- Justice Gorsuch proceeds to address three main ob- ion fires an uncustomary warning shot at the NCAA. jections that the NCAA raised. He observes that “the NCAA has long shielded its The first is that member institutions will abuse the compensation rules from ordinary antitrust scrutiny. district court’s inclusion of paid post eligibility intern- Today, however, the Court holds that the NCAA has ships as an approved education-related benefit that col- violated the antitrust laws. The Court’s decision marks leges can offer as part of a scholarship package. The an important and overdue course correction, and I join NCAA imagines that boosters will promise internships the Court’s excellent opinion in full.” “at a sneaker company or auto dealership with extrava- Kavanaugh discusses the compensation rules re- gant salaries.” The Court states that the NCAA’s reading stricting student-athletes from profiting from their of the district court’s ruling was too broad, as it did not NILs, writing that those rules “also raise serious ques- preclude “NCAA rules prohibiting its members from tions under antitrust law…Under the rule of reason, the providing compensation or benefits unrelated to le- NCAA must supply a legally valid procompetitive jus- gitimate educational activities─thus leaving the league tification for its remaining compensation rules. As I see [conferences] room to police phony internships.” it, however, the NCAA may lack such a justification.” Second, the NCAA asserted that the trial court’s rul- ing that it may fix academic awards at a level no lower SPORTS LAW EXPERT than the limit on athletic awards (currently $5,980 per year) is the equivalent of a professional salary. The fear Sports Litigation Alert is proud to offer a directory is that colleges will pay players thousands of dollars of Expert attorneys and witnesses at our Sports each year for minimal achievements such as a passing Law Expert website. GPA. The Court stated: “The basis for this critique is Here is this issue’s featured expert.