On March 8, 2019, Judge Wilken, a California District Court judge, ruled for the second time that the NCAA is unlawfully conspiring to suppress compensation of student athletes who play at the highest level of college football and basketball. ((Jonathan S. Massey & Paul Berks, March Sanity: Can Courts Finesse a Legal Remedy to NCAA’s Fantasy of Amateurism?, Recorder (Mar. 28, 2019, 3:06 PM), https://www.law.com/therecorder/2019/03/28/march-sanity-can-courts-finesse-a-legal-remedy-to-ncaas-fantasy-of-amateurism/.)) This case, Alston v. NCAA, featured former and current Division I athletes seeking an injunction against the NCAA’s system of capping athletic scholarship to grants-in-aid and the full cost of attendance. Judge Wilken ordered an injunction in favor of the plaintiffs, finding that the NCAA’s rules violate Section 1 of the Sherman Antitrust Act, while stating skepticism about the NCAA’s “amateurism” claims. ((Id.))
Judge Wilken set the precedence for the finding of a violation of Section 1 of the Sherman Antitrust Act in O’Bannon v. NCAA. In O’Bannon v. NCAA, Judge Wilken found that NCAA rules prohibiting student athletes from being paid for the use of their names, images, and likeness constituted an unlawful restraint of trade in violation of the Sherman Antitrust Act. On appeal, the 9th Circuit upheld the part of Judge Wilken’s decision that required a “Rule of Reason” analysis to invalidate NCAA rules. ((The Legal Blitz, NCAA Defeated by ‘Rule of Reason’ in O’Bannon Lawsuit, Above the Law, (Sept. 30, 2015), https://abovethelaw.com/2018/03/ncaa-loses-summary-judgment-must-now-defend-amateurism-scam-at-trial-in-monumental-antitrust-case/?rf=1.)) The “Rule of Reason” analysis was critical in determining if the NCAA rules unreasonably restrained trade for Alston v. NCAA, as it is second part of the three-part test needed to establish a claim under Section 1 of the Sherman Antitrust Act. ((Id.)) Both part 1, requiring that there was a contract, combination, or conspiracy, and part 3, requiring that the restraint affected interstate commerce, were undisputed in Alston. ((Id.)) This meant that the “Rule of Reason” analysis, part 2 of the three-part test, would be the crux of the case.
Judge Wilken explained that under the Rule of Reason analysis, the “Plaintiffs bear the initial burden of showing that the challenged restraints produce significant anti-competitive effects within a relevant market. If Plaintiffs meet this burden, Defendants must come forward with evidence of the restraints’ procompetitive effects. Plaintiffs must then show any legitimate objectives can be achieved in a substantially less restrictive manner.” ((Id.)) In Alston v. NCAA, the plaintiffs met their original burden by showing that greater compensation and benefits would be offered in the recruitment of student athletes if the challenged NCAA rules were not in place. The NCAA discussed various procompetitive purposes for their rules at trial in order to shift the burden back to the plaintiffs. The NCAA argued that the rules were necessary to protect and promote “amateurism” and keep consumer interest in college athletics. ((Kassandra Ramsey, Alston v. NCAA: Judge Rules for Plaintiffs But NCAA Keeps Amateurism, Unafraid Show (Mar. 14, 2019), https://unafraidshow.com/alston-ncaa-ruling-amateur-college-sports/.)) Judge Wilken swiftly and firmly shut this argument down by citing the lack of evidence to support the claim that paying players would affect consumer demand, as well as citing that the NCAA provided no evidence that NCAA bylaws limiting compensation are enacted based on analysis of consumer demand. ((Massey & Berks, supra note 1.)) The NCAA’s other procompetitive argument, that regular student would harbor resentment toward student athletes and become jealous if student athletes were paid above a cost-of-attendance scholarship, was neutralized by alternatives provided by the plaintiffs. ((Id.)) Judge Wilken determined through this Rule of Reason analysis that the NCAA can no longer limit compensation benefits related to education. He also mandated that the NCAA allow conferences to create their own rules for scholarships. ((Ramsey, supra note 7.))
Judge Wilken’s decision to grant the plaintiffs’ injunction in Alston v. NCAA, as well as her criticism of the NCAA’s testimonials of “amateurism,” provide support for the claim that the NCAA has a monopoly on the college athletic market and has misused it. ((Carl W. Hittinger & Jeanne-Michele Mariani, The NCAA, Which is Tied to Education, May Be a Necessary Monopoly, Legal Intelligencer (Mar. 29, 2019, 11:11 AM), https://www.law.com/thelegalintelligencer/2019/03/29/the-ncaa-which-is-tied-to-education-may-be-a-necessary-monopoly/?slreturn=20190229125509. )) While the court did find the NCAA was in violation of Antitrust law and expressed criticism over the NCAA’s claims about “amateurism in college sports, the court allowed the NCAA to maintain its ability to restrict non-education related benefits for student athletes.” ((Ramsey, supra note 7.)) Both the limited remedy provided to the plaintiffs and the direct challenges by Judge Wilken of the legitimacy of “amateurism” in college sports provides plenty of room for future court conflicts. Following the Alston decision on March 8, the NCAA filed a notice of appeal, meaning that the Ninth Circuit may resolve the future of the NCAA’s system of capping benefits for student athletes. ((Id.))
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