For the NCAA, the Bleeding Stops (at Least for Now)

On Thursday, February 20, a critical hearing took place in the college student-athletes’ class action antitrust lawsuit against the National Collegiate Athletic Association (NCAA). Both the plaintiffs and the NCAA had filed motions with the United States District Court basically seeking a judgment in the case without a trial. Although Hon. Claudia Wilken, the District Court judge presiding over the case, has not yet issued a formal written ruling on the motions, she advised the parties that the case was not going to be decided on their motions, and that trial will be going forward on June 9.

One of several lawsuits in the consolidated action entitled In Re NCAA Student-Athlete Name & Likeness Licensing Litigation, the plaintiffs in this “Antitrust Case” are former Division I college football and basketball players. Led by former University of California Los Angeles basketball star Ed O’Bannon, they accuse the NCAA of conspiring with co-defendants EA Sports and Collegiate Licensing Company (CLC) to restrain competition in the market for the commercial use of players’ names, images, and likenesses in violation of federal antitrust laws. The hearing on February 20 addressed the former players’ and the NCAA’s respective requests that the Court decide the case on the evidence without going to trial.

Although Judge Wilken gave every indication that she is not going to grant the NCAA’s motion to dismiss the antitrust plaintiffs’ claims before trial, the hearing at least marked a respite for the NCAA from a recent series of notable setbacks commencing in the summer of last year. The first of the setbacks pertained to one of the companion cases to this antitrust action, the “right­-of-publicity case” led by former University of Nebraska and Arizona State University quarterback Sam Keller. The right­-of-publicity plaintiffs assert that the defendants misappropriated the players’ images and likenesses in violation of their statutory and common law rights of publicity. On July 31, 2013, the Ninth Circuit Court of Appeals affirmed Judge Wilken’s previous ruling against defendant EA Sports that the First Amendment did not bar the plaintiffs’ claims. Defendant EA Sports, who had filed the appeal, thereafter requested on September 23 that the United States Supreme Court (USSC) review the decision.

However, three days later, the NCAA suffered its second major setback when EA Sports and CLC announced that they had reached a settlement with all the consolidated plaintiffs for $40 million. In order to keep EA Sports’ pending appeal relevant, the NCAA filed a motion with the USSC on October 25 requesting leave to intervene in the appeal. The NCAA reasoned that intervention was warranted because its rights were implicated by the Ninth Circuit’s decision because First Amendment rights were at stake, and also because there was “severe doctrinal disarray” in the lower courts regarding the application of the First Amendment to right-of-publicity cases.

That same day, the NCAA suffered its third setback when Judge Wilken issued an order denying the NCAA’s motion to dismiss the antitrust lawsuit on the ground that the plaintiffs’ complaint was inadequately pled. Two weeks later, on November 8, the NCAA suffered yet another major setback — its fourth in as many months — when the Court certified the class of former college athletes, thus paving the way for the case to be tried before a jury on the merits. Notwithstanding, the next week, the antitrust plaintiffs filed a motion for summary judgment against the NCAA, and the NCAA followed suit in December. Each party asked the Court to decide the case on the evidence they presented in their motions.

Recently, on January 13, 2014, the NCAA suffered its last in the series of major setbacks as the Supreme Court denied its attempt to intervene in EA Sports’ appeal.

Fortunately for the NCAA, this troubling string of defeats came at least to a temporary halt. While the Supreme Court’s January ruling did not bear on the merits of the NCAA’s defenses, a ruling against the NCAA at the February 20 hearing could have crippled its ability to rebuff the student-athletes’ claims. Now, however, assuming Judge Wilken holds her course, the NCAA will have a chance to makes its defense at trial. Of course, even if the trial goes against the NCAA, the story is sure to not end there, as the NCAA has publicly vowed to fight this matter all the way to the USSC. With potentially billions of dollars on the line, as some have speculated, one can hardly be surprised that the NCAA would adopt such a position. In any event, this historical case is rapidly approaching the critical event — trial — and, despite the recent reprieve, the NCAA finds itself on a perilous path and heading towards a future that is anything but certain.