NCAA athletes win 9-Zero on instructional perks as Kavanaugh requires a ban on direct funds
By Amy Howe
on June 21, 2021
at 8:23 pm
The Supreme Court on Monday redesigned the relationship between universities and athletes who practice college sports. In a statement from Judge Neil Gorsuch, the judges unanimously ruled that the National Collegiate Athletic Association cannot prohibit its member schools from providing athletes with certain forms of educational benefits such as paid postgraduate internships, graduate school grants, or free laptops or musical instruments.
While the decision didn’t include cash payments to college athletes, it could pave the way for a future Supreme Court ruling on whether college athletes should make money for the sport – either directly from their universities or through lucrative advertising deals. In a concurring statement, Judge Brett Kavanaugh wrote that the NCAA’s policies prohibiting these types of compensation “raise serious questions under the antitrust laws.”
Monday’s NCAA ruling against Alston ended a dispute that began seven years ago as a class action lawsuit against the NCAA and the major college sports conferences of athletes who played Division I football and basketball. Under the rules of the NCAA, universities are generally allowed to provide scholarships to athletes for tuition fees as long as they are NCAA-eligible, and they can cover basic expenses such as textbooks and room and board. But most other forms of compensation are prohibited.
The athletes alleged in their lawsuit that the NCAA’s restrictions violated federal antitrust laws by preventing athletes from receiving fair market compensation for their work. A federal district court in California partially agreed, ruling that the NCAA could limit non-educational benefits (such as cash salaries) but prohibited the NCAA from limiting educational benefits. After the U.S. 9th District Court of Appeals upheld the ruling, the NCAA and sports conferences went to the Supreme Court, which agreed to open the case late last year.
In a 35-page decision, Gorsuch first addressed which legal test should apply to the rules of the NCAA that limit the compensation of athletes. The district court applied the most common test in antitrust law, the so-called “Rule of Reason”. The NCAA argued that a less stringent test should be used as the association and its members must act as a “joint venture” and work together “to give consumers the benefit of peer-to-peer athletic competition.” However, Gorsuch noted that less stringent testing only applies in extreme cases, when it is easy to determine what impact an agreement will have on competition. This is not the case here, Gorsuch emphasized, as the NCAA and its members control the market for the services of college athletes. The potential anticompetitive effects of the NCAA’s restrictions, he concluded, warrant a search.
Gorsuch also denied efforts by the NCAA to rely on the 1984 Supreme Court ruling in the NCAA v Board of Regents of the University of Oklahoma, an antitrust challenge to the NCAA’s plan to televise college football games , included. The NCAA referred to language in that decision indicating that it “plays a vital role in maintaining a revered tradition of amateurism in college sports” and “needs a lot of leeway to play that role” as evidence that the measures of the NCAA to maintain amateurism “entirely in accordance” with the Federal Cartel Act. However, Gorsuch noted that the Board of Regents’ case was not about compensation restrictions. And while that ruling “may suggest that courts should be cautious in assessing the NCAA’s limitations on student and athlete compensation,” Gorsuch noted, it certainly does not mean that courts “must reflexively reject all challenges to the NCAA’s compensation limitations “.
In any case, Gorsuch continued, the realities of college sport have changed significantly since 1984. Division I football and basketball programs now gross billions of dollars each year, and the NCAA has set up funds for college athletes that distribute more than $ 100 million a year.
Likewise, Gorsuch dismissed the NCAA’s argument that the restrictions on compensation would be less scrutinized because their work to maintain amateurism in college sports effectively means that the NCAA and its members are not commercial enterprises. He suggested that the association appears to be seeking “some kind of court-ordered immunity” from federal antitrust law simply because its restrictions include “the intersection of higher education, sport and money.” The NCAA, Gorsuch said, is free to make that argument to Congress, which is currently considering legislation that would allow college athletes (among other things) to enter into advertising deals. Efforts to create a federal standard are in response to state laws scheduled to go into effect July 1 that allow for promotional deals for college athletes in Alabama, Florida, Georgia, Mississippi, New Mexico, and Texas.
Gorsuch also dismissed the NCAA’s argument that the district court’s ruling would “micro-manage” the organization’s affairs. The district court, Gorsuch said, merely prevented the NCAA from imposing restrictions on education-related benefits. And he did so only after concluding that “easing these restrictions would not blur the distinction between college and professional sports and thus undermine the demand for college sports” – a cornerstone of the NCAA’s argument. In addition, according to Gorsuch, the district court leaves the NCAA “considerable leeway” in deciding how an educational achievement should be defined.
In his last paragraph, Gorsuch outlined the dilemma in court. Some people may think the district court should have gone further, he suggested, while “others will think that the district court has gone too far in underestimating the welfare benefits associated with amateur sports.” But in the end, Gorsuch emphasized, the Supreme Court agreed with the 9th District that although “[t]he national debate on amateurism in college sports is important. ”It is not the job of the Supreme Court to resolve it. Instead, according to Gorsuch, the court had to examine whether the district court had correctly applied the principles of antitrust law to this dispute – which Gorsuch came to the conclusion.
Kavanaugh wholeheartedly endorsed the court’s opinion, but also drafted a separate consensus opinion in which he questioned the legality of the remaining performance restrictions for college athletes. He made it clear that while these restrictions were not in court in this case, Monday’s ruling provided a framework for future challenges to the restrictions – and, he wrote, there are “serious questions” as to whether these rules “can exist “. Frame. Kavanaugh, an avid sports fan who coached his daughters’ basketball teams and tried unsuccessfully for the college basketball team while studying at Yale, acknowledged that college track and field “includes important traditions that have become part of the fabric of America.” But he warned the “NCAA is not above the law”.
This article was originally published by Howe on the Court.