Bloom v. National Collegiate Athletic Ass'n

• Decision Date: 06 May 2004
• Docket Number: No. 02CA2302.,02CA2302.
• Citation: 93 P.3d 621
• Parties: Jeremy BLOOM, Plaintiff-Appellant, v. NATIONAL COLLEGIATE ATHLETIC ASSOCIATION, an unincorporated association; and Regents of the University of Colorado, a body corporate, Defendants-Appellees.
• Court: Colorado Court of Appeals

93 P.3d 621

Jeremy BLOOM, Plaintiff-Appellant, v. NATIONAL COLLEGIATE ATHLETIC ASSOCIATION, an unincorporated association; and Regents of the University of Colorado, a body corporate, Defendants-Appellees.

No. 02CA2302.

Colorado Court of Appeals, Div. V.

May 6, 2004.

Smittkamp & Walters, LLC, James C. Smittkamp, Peter J. Walters, Boulder, Colorado; Wilcox & Ogden, P.C., Ralph Ogden, Denver, Colorado; Bell, Boyd & Lloyd, LLC, Peter G. Rush, Chicago, Illinois, for Plaintiff-Appellant.

Holme Roberts & Owen, LLP, Colin G. Harris, Dennis J. Baarlaer, Boulder, Colorado; Spencer Fane Britt & Browne, LLP, Linda J. Salfrank, Jonathan F. Duncan, Kansas City, Missouri, for Defendant-Appellee National Collegiate Athletic Association.

Office of University Counsel, Joanne M. McDevitt, David P. Temple, Michael W. Schreiner, Jeremy R. Hueth, Denver, Colorado, for Defendant-Appellee Regents of the University of Colorado.

Opinion by Judge DAILEY.

In this dispute concerning eligibility to play college football, plaintiff, Jeremy Bloom, appeals the trial court's order denying his request for a preliminary injunction against defendants, the National Collegiate Athletic Association (NCAA) and the University of Colorado (CU). We affirm.

I. Background

The NCAA is a voluntary unincorporated association that regulates intercollegiate amateur athletics among its more than 1200 member colleges and universities. Its rules are established by representatives of member institutions and are carried out by its Council. Among other things, it maintains rules of eligibility for student participation in intercollegiate athletic events.

Bloom, a high school football and track star, was recruited to play football at CU. Before enrolling there, however, he competed in Olympic and professional World Cup skiing events, becoming the World Cup champion in freestyle moguls. During the Olympics, Bloom appeared on MTV, and thereafter was offered various paid entertainment opportunities, including a chance to host a show on Nickelodeon. Bloom also agreed to endorse commercially certain ski equipment, and he contracted to model clothing for Tommy Hilfiger.

Bloom became concerned that his endorsements and entertainment activities might interfere with his eligibility to compete in intercollegiate football. On Bloom's behalf, CU first requested waivers of NCAA rules restricting student-athlete endorsement and media activities and, then, a favorable interpretation of the NCAA rule restricting media activities.

The NCAA denied CU's requests, and Bloom discontinued his endorsement, modeling, and media activities to play football for CU during the 2002 fall season. However, Bloom instituted this action against the NCAA for declaratory and injunctive relief, asserting that his endorsement, modeling, and media activities were necessary to support his professional skiing career, something which the NCAA rules permitted.

In his complaint, Bloom alleged: (1) as a third-party beneficiary of the contract between the NCAA and its members, he was entitled to enforce NCAA bylaws permitting him to engage in and receive remuneration from a professional sport different from his amateur sport; (2) as applied to the facts of this case, the NCAA's restrictions on endorsements and media appearances were arbitrary and capricious; and (3) those restrictions constituted improper and unconscionable restraints of trade.

For these reasons, Bloom requested that the NCAA restrictions be declared inapplicable, and that the NCAA and CU be enjoined from applying them, to activities originating prior to his enrollment at CU or wholly unrelated to his prowess as a football player.

The trial court ordered CU joined as an indispensable party in the case, and CU aligned with the NCAA as an involuntary defendant. After an evidentiary hearing, the trial court determined that, although Bloom was a third-party beneficiary of NCAA bylaws, he was not entitled to preliminary injunctive relief under the six-part test of Rathke v. MacFarlane, 648 P.2d 648, 653-54 (Colo.1982). The trial court found that Bloom had satisfied three parts of the test: (1) there is a danger of real, immediate, and irreparable injury which may be prevented by injunctive relief; (2) no plain, speedy, and adequate remedy is available at law; and (3) the injunction would preserve the status quo pending trial on the merits. However, the trial court found that Bloom had not satisfied the other parts of the test: (4) there is a reasonable probability of success on the merits; (5) granting a preliminary injunction would not disserve the public interest; and (6) the balance of equities favors the injunction.

Bloom appeals the trial court's ruling under C.A.R. 1(a)(3).

II. Standard of Review

Preliminary injunctive relief is designed to protect a plaintiff from sustaining irreparable injury and to preserve the power of the district court to render a meaningful decision following a trial on the merits. The power to grant a preliminary injunction "should be exercised sparingly and cautiously and with a full conviction on the part of the trial court of its urgent necessity." Rathke v. MacFarlane, supra, 648 P.2d at 653.

A preliminary injunction is not warranted unless the trial court finds that the moving party has demonstrated each of the Rathke factors. Rathke v. MacFarlane, supra, 648 P.2d at 654 ("If each criterion cannot be met, injunctive relief is not available."); see also Atmel Corp. v. Vitesse Semiconductor Corp., 30 P.3d 789, 796 (Colo.App.2001)

("since all the necessary criteria were not established, entry of the preliminary injunction ... was error").

We review the trial court's preliminary injunction decision under an abuse of discretion standard. Rathke v. MacFarlane, supra, 648 P.2d at 653. Under that standard, we examine the court's ruling to determine whether it is based on an erroneous application of the law, Atmel Corp. v. Vitesse Semiconductor Corp., supra, 30 P.3d at 795-96, or is otherwise manifestly arbitrary, unreasonable, or unfair. Bd. of County Comm'rs v. Fixed Base Operators, Inc., 939 P.2d 464, 467 (Colo.App.1997).

III. Claims on Appeal

Initially, we limit our consideration on appeal to Bloom's claims of breach of contract and arbitrary and capricious action by the NCAA. Although Bloom refers to his restraint of trade claim in a footnote in the opening brief, this reference is insufficient to warrant review of that claim. See United States v. Dunkel, 927 F.2d 955, 956 (7th Cir.1991)

("A skeletal `argument,' really nothing more than an assertion, does not preserve a claim."); see also People in Interest of D.B-J., 89 P.3d 530, 2004 WL 439551 (Colo.App. No. 03CA0893, Mar. 11, 2004)(declining to address contention lacking references to supporting facts, specific arguments, or authorities).

IV. Standing

We reject the NCAA's assertion that Bloom lacked standing to pursue claims for breach of contract or arbitrary and capricious action on the part of the NCAA.

A party has standing to seek relief when he or she has suffered actual injury to a legally protected interest. Turkey Creek, LLC v. Rosania, 953 P.2d 1306, 1314 (Colo.App.1998).

A person not a party to an express contract may bring an action on the contract if the parties to the agreement intended to benefit the nonparty, provided that the benefit claimed is a direct and not merely incidental benefit of the contract. While the intent to benefit the nonparty need not be expressly recited in the contract, the intent must be apparent from the terms of the agreement, the surrounding circumstances, or both. Parrish Chiropractic Ctrs., P.C. v. Progressive Cas. Ins. Co., 874 P.2d 1049, 1056 (Colo.1994).

Here, the trial court found, and we agree, that the NCAA's constitution, bylaws, and regulations evidence a clear intent to benefit student-athletes. And because each student-athlete's eligibility to compete is determined by the NCAA, we conclude that Bloom had standing in a preliminary injunction hearing to contest the meaning or applicability of NCAA eligibility restrictions. See Hall v. NCAA, 985 F.Supp. 782, 796-97 (N.D.Ill.1997)

(given importance of NCAA's function to benefit student-athletes, and NCAA's role in determining eligibility of student-athletes, court assumed student-athlete was likely to succeed in proving third-party beneficiary standing vis-a-vis the contract between the NCAA and its members); see also NCAA v. Brinkworth, 680 So.2d 1081, 1083 (Fla.Dist.Ct.App.1996).

With respect to a claim of arbitrary and capricious action, the Kentucky Supreme Court observed that "relief from our judicial system should be available if voluntary athletic associations act arbitrarily and capriciously toward student-athletes." NCAA v. Lasege, 53 S.W.3d 77, 83 (Ky.2001). The basis upon which the court made that observation, however, is not altogether clear.

There is some suggestion in Lasege that judicial review was justified because the NCAA occupied the role of a quasi-state actor with respect to individual student-athletes. See NCAA v. Lasege, supra, 53 S.W.3d at 83 n. 9

(analogizing the NCAA and a state high school athletic association). However, in an analogous circumstance, the United States Supreme Court concluded that the NCAA is not a state actor and that a state university's adherence to NCAA rules does not implicate the "state action" necessary to trigger a civil rights claim. See NCAA v. Tarkanian, 488 U.S. 179, 195, 109 S.Ct. 454, 463-64, 102 L.Ed.2d 469 (1988)(concerning coach, not student-athlete); see also Matthews v. NCAA, 79 F.Supp.2d 1199, 1207 (E.D.Wash.1999)(NCAA not a state actor, for purposes of assessing student-athlete's due process claim contesting NCAA's eligibility determination).

Courts are reluctant to intervene, except on the most limited grounds, in the internal affairs of voluntary associations. See, e.g., Jorgensen Realty, Inc. v. Box, 701 P.2d 1256, 1258 (Colo.App.1985)

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