NCAA Sued (Again) Over Scholarship Value

Eric Olson for the Associated Press:

A former West Virginia football player sued the NCAA and five major conferences Wednesday, saying they have violated antitrust laws by agreeing to cap the value of an athletic scholarship at less than the actual cost of attending school.

The class being sought in this case are scholarship football players who have played in one of the five major conferences (Big Ten, ACC, Big 12, Pac–12, SEC) since February 2010. The lawsuit is seeking both monetary and injunctive damages.

After two attempts by two different named plaintiffs, a lawsuit alleging that both the cap on the number of scholarship and the NCAA’s (now eliminated) one-year limit on the number of scholarships violate antitrust law was allowed to continue last summer. In 2006 a lawsuit against the limit of 85 football scholarships died when class certification was denied.

The most successful lawsuit against the NCAA’s financial aid rules was on this exact issue, the gap between the value of the full grant-in-aid and cost-of-attendance. That case ended in a settlement which created a $10 million fund for former football and basketball players in 16 conferences, combined the NCAA’s Special Assistance and Student-Athlete Opportunity Funds into one Student Assistance Fund, and forced passage a bylaw which allowed schools to buy health insurance (not just injury insurance) for athletes.

The legal obligations of the White case ran out after the 2012–13 academic year. That included $4.365 million from the settlement fund, which was given to low-resource institutions participating in a pilot grant program. Given that the settlement between the White class and the NCAA is effectively over, it is not surprising another class action is arising to the challenge the rule.

At first glance, a quick settlement in the case seems likely since the plaintiffs already had a similar class certified in the White case and the NCAA is poised to increase athletic scholarships to the cost-of-attendance in the five power conferences as soon as the new governance structure is sorted out. But Steve Berkowitz of USA Today notes a wrinkle which may mean more a fight than anticipated:

The stakes could be greater for the Pac–12 than for the other four conferences because the suit alleges that the NCAA’s current rules violate “the policy and spirit of the California’s Student Athlete Bill of Rights, as well as the policy and spirit of federal and California antitrust law.”

The suits seeks, only from the Pac–12 and the NCAA, unspecified profits from their alleged conduct.

Bringing state law into the case makes certification of the class less than a slam dunk. Not even all Pac–12 schools are covered by California law, much less all power conference schools. There is not a named plaintiff from a California school at the moment either. That may create some additional legal wrangling over the California law before a class is certified and a settlement negotiated for the federal antitrust claims.

Posted on by John Infante
This entry was posted in Bylaw Blog, Headlines. Bookmark the permalink.

Leave a Comment