Supreme Court Issues Highly Anticipated Decision in NCAA Antitrust Suit

Summary

On June 21, 2021, the U.S. Supreme Court issued a ruling in favor of student-athletes in the highly anticipated antitrust suit, NCAA v. Alston, et.al., No. 20-512 (June 21, 2021). The Court unanimously ruled that the National Collegiate Athletic Association (NCAA) rules restricting student-athletes’ educational benefits are not entitled to deference under the antitrust laws and are subject to antitrust scrutiny under a “rule-of-reason” analysis. The Court upheld the trial court injunction against NCAA rules limiting the education-related benefits schools may offer student-athletes—such as rules that prohibit schools from offering graduate or vocational school scholarships. Justice Brett Kavanaugh’s concurrence cautioned that while the decision only considered NCAA restrictions on educational benefits, under its reasoning there are “serious questions” regarding whether the NCAA’s remaining restrictions on non-educational compensation are permissible under antitrust laws. Perhaps in an effort to avoid litigation utilizing the reasoning in NCAA v. Alston and following a wave of state statutes that disallow NCAA’s bar on student-athlete compensation, on June 30 the NCAA issued an interim policy permitting student-athletes to be paid for the use of their name, image, and likeness.

The Upshot

  • Courts are likely to clarify what does and does not constitute educational benefits under this ruling, so schools should look for future updates to NCAA rules regarding what benefits they can and cannot offer student-athletes. The trial court order, affirmed by the Supreme Court, permits the NCAA to develop its own definition of educational benefits and to seek modification of the court’s injunction to reflect that definition.
  • The Court’s ruling is likely to encourage other student-athletes to challenge the NCAA’s rules, especially the current limits on student-athlete compensation. Justice Kavanaugh’s concurring opinion emphasized that “serious questions” exist regarding whether the NCAA’s remaining compensation rules are lawful, remarking that the NCAA’s business model would be “flatly illegal in almost any other industry in America.”
  • The NCAA, other collegiate athletic conferences, and individual schools also may see lawsuits seeking damages (which are trebled under the antitrust laws), attorneys’ fees, and/or injunctions for adopting and complying with the enjoined education benefits rules or any other compensation limitation later found to be unlawful under the antitrust laws.

Takeaways

Immediately, the Supreme Court’s decision means that the challenged NCAA rules limiting educational benefits for student-athletes remain enjoined. If the NCAA chooses to take advantage of the district court’s order allowing it to submit a proposed definition of what benefits are and are not education related, we could see further guidance on the kinds of benefits schools may or may not provide their student athletes.

More broadly, the decision is likely to encourage further challenges to NCAA rules and rules imposed by collegiate athletic conferences regarding limits on both educational and non-educational benefits and compensation for student-athletes. The lawsuits, which are likely to be against both collegiate athletic conferences and individual schools that agree to and enforce conference rules, could seek damages (which are trebled under the antitrust laws), attorneys’ fees, and/or injunctions for adopting and complying with the enjoined education benefits rules or any other compensation limitation later found to be unlawful under the antitrust laws.

The full article in its original form can be found here.

Marcel Pratt (LAW ’09) is a partner at Ballard Spahr, where he represents clients in high-stakes litigation and investigations. Marcel’s practice includes complex commercial litigation, antitrust and competition law, products liability, internal and government investigations, class actions, and First Amendment law.

Elizabeth (Lizzy) Wingfield (LAW ‘17) is an associate at Ballard Spahr’s litigation department, where she focuses her practice on Title IX cases and eminent domain.

Stephen Kastenberg is a partner at Ballard Spahr and a seasoned litigator with nearly 30 years’ experience. His practice focuses on complex business litigation with an emphasis on antitrust and competition, securities, and corporate governance litigation.

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