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NCAA Wins Yet Another Financial Aid Antitrust Case

If you are going to fight the NCAA in court, you have to be smart about it. The NCAA has had some impressive winning streaks, punctuated by a few significant losses and a conservative strategy with settlements. As much as the association looks to be getting battered in court right now, the NCAA is still very good at winning lawsuits.

So if you are going to challenge an NCAA rule based on antitrust grounds, there are two things you should keep in mind. First, you must be exceedingly careful with how you plead the case. And second, if at all possible, do not challenge the NCAA on its home field, in the Southern District of Indiana and Seventh Circuit Court of Appeals.

The plaintiffs in Rock v. NCAA made both those mistakes. Rock involved three student-athletes. One was an FCS football player who lost his scholarship after a coaching change. Another was a basketball player at Division III Kean University who lost his scholarship as part of Kean’s major violations of Division III financial aid rules. And a third was a Canadian hockey player who received a “diversity” scholarship in violation of DIII proportionality rules.

The plaintiffs challenged the NCAA’s limit that scholarships be awarded for one year (now gone), the NCAA’s limit on the total number or amount of scholarships awarded to a team, and Division III’s ban on athletically related financial aid.

The hockey player failed to even establish standing to make an antitrust claim. He transferred after sitting out to keep his scholarship, which meant he could not draw a clear enough connection between the alleged antitrust violation (the NCAA’s financial aid rules) and his injury (having to pay tuition).

The other two plaintiffs failed to establish a relevant market. Their alleged market was the market for student-athlete labor across the entire NCAA. The court found that market was at the same time both too narrow and too broad. The plaintiffs did not explain, even in broad contours, why NAIA schools were not part of the market. And the plaintiffs also did not explain why different sports and different levels of competition were adequate substitutes for others.

This is an example of poor pleading, but if it sounds like double talk, that’s because it kind of its. That is part of home court advantage. A court that had not just dismissed an almost identical case for the same problem with market identification might have been less demanding when it comes to pleadings.

One of the reasons the O’Bannon case has continued on is good lawyering and picking a good venue. If you’re going to argue about publicity rights, California is a good place to do it, not to mention that it is not the NCAA’s backyard.

Are you ready for the NEXT STEP!