NCAA Fails to Dodge Student Athlete Pay Cap Class Action

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Following a federal judge’s decision, the NCAA will continue to face an antitrust class action lawsuit – one of many related actions consolidated into a single multidistrict litigation.

In a recent court order, U.S. District Judge Claudia Wilken denied a motion for judgment on the pleadings submitted by the NCAA and other defendants.

The judge rejected the NCAA’s argument that a related appeals court decision foreclosed Jenkins from bringing his own claims.

The NCAA argued that an appeals court’s decision in a related action, O’Bannon v. NCAA, foreclosed Jenkins’ challenge to the current NCAA restrictions on compensation for student athletes.

Judge Wilken found otherwise. She stated that in O’Bannon, the Ninth Circuit only foreclosed one type of relief the plaintiff was seeking – namely, cash compensation unconnected to educational expenses.

This decision may restrict remedies, but it does not give her court a basis on which to issue judgment on the merits, the judge said.

Jenkins and other plaintiffs are challenging a pay cap that the NCAA imposes on players’ grant-in-aid, an amount of money that student athletes can receive.

When these NCAA class action lawsuits were filed, the GIA was capped at the value of tuition, fees, books, as well as room and board.

Since the litigation started, the NCAA has allowed GIAs that cover up to the athletes’ cost of attendance.

Jenkins and other plaintiffs continue to challenge the NCAA’s restrictions on other types of compensation in the form of benefits, cash and in-kind compensation.

Jenkins alleges the NCAA and its member conferences have conspired to impose this cap on student athlete compensation, allegedly in violation of federal antitrust laws.

He and other plaintiffs seek damages to cover the difference between the allowed GIA and the actual cost of attendance as well as an injunction prohibiting the NCAA’s allegedly anti-competitive behavior.

Jenkins began his NCAA class action lawsuit in March 2014. Unlike the related claims in the O’Bannon case, which sought a specific percentage of revenue for TV deals and athletes’ likenesses used in video games, Jenkins sought only to lift the cap on compensation for Division I players.

In June 2014, the federal Judicial Panel on Multidistrict Litigation consolidated Jenkins’ claim with other, similar actions into a single multidistrict litigation.

The panel assigned the MDL to Judge Wilkins based on the fact that she was already overseeing an NCAA class action lawsuit over related issues.

Jenkins and other plaintiffs are represented by Steve W. Berman, Ashley Bede, Jeff D. Friedman and Jon T. King of Hagens Berman Sobol Shapiro LLP; Bruce L. Simon, Aaron M. Sheanin and Benjamin E. Shiftan of Pearson Simon Warshaw & Penny LLP; Jeffrey L. Kessler, David G. Feher, David L. Greenspan, Timothy M. Nevius, Joseph A. Litman, Sean D. Meenan and Jeanifer E. Parsigian of Winston & Strawn LLP; and Elizabeth C. Pritzker, Jonathan K. Levine, Bethany L. Caracuzzo and Shiho Yamamoto of Pritzker Levine LLP.

The NCAA Student Athlete Pay Cap Antitrust MDL is In re: National Collegiate Athletic Association Athletic Grant-in-Aid Antitrust Litigation, Case No. 4:14-md-02541, in the U.S. District Court for the Northern District of California.

UPDATE: On Feb. 3, 2017, the National Collegiate Athletic Association and 11 conferences agreed to pay $208.7 million to resolve multidistrict litigation alleging an antitrust conspiracy to cap the scholarships of student athletes.