In re National Collegiate Athletic Association Athletic Grant-In-Aid Cap AntitrustLitigation, 051820 FED9, 19-15566
|Docket Nº:||19-15566, 19-15662|
|Opinion Judge:||THOMAS, Chief Judge.|
|Party Name:||In re National Collegiate Athletic Association Athletic Grant-in-Aid Cap AntitrustLitigation, v. National Collegiate Athletic Association, The NCAA; Pacific12 Conference; Conference USA; The Big Ten Conference, Inc.; Mid-American Conference; Southeastern Conference; Atlantic Coast Conference; Mountain West Conference; The Big Twelve Conference,...|
|Attorney:||Seth P. Waxman (argued), Leon B. Greenfield, Daniel S. Volchok, David M. Lehn, and Kevin M. Lamb, Wilmer Cutler Pickering Hale and Dorr LLP, Washington, D.C.; Bart H. Williams, Scott P. Cooper, Kyle A. Casazza, Jennifer L. Jones, and Shawn S. Ledingham Jr., Proskauer Rose LLP, Los Angeles, Califo...|
|Judge Panel:||Before: Sidney R. Thomas, Chief Judge, and Ronald M. Gould and Milan D. Smith, Jr., Circuit Judges. M. SMITH, Circuit Judge, concurring:|
|Case Date:||May 18, 2020|
|Court:||United States Courts of Appeals, Court of Appeals for the Ninth Circuit|
Argued and Submitted March 9, 2020 San Francisco, California.
Appeal from the United States District Court for the Northern District of California No. D.C. No. 4:14-md-02541-CW Claudia Wilken, District Judge, Presiding
Seth P. Waxman (argued), Leon B. Greenfield, Daniel S. Volchok, David M. Lehn, and Kevin M. Lamb, Wilmer Cutler Pickering Hale and Dorr LLP, Washington, D.C.; Bart H. Williams, Scott P. Cooper, Kyle A. Casazza, Jennifer L. Jones, and Shawn S. Ledingham Jr., Proskauer Rose LLP, Los Angeles, California; Leane K. Capps and Caitlin J. Morgan, Polsinelli PC, Dallas, Texas; Amy D. Fitts, Polsinelli PC, Kansas City, Missouri; Mark A. Cunningham, Jones Walker LLP, New Orleans, Louisiana; Beth A. Wilkinson and Brant W. Bishop, Wilkinson Walsh & Eskovitz LLP, Washington, D.C.; Sean Eskovitz, Wilkinson Walsh & Eskovitz LLP, Los Angeles, California; Jeffrey A. Mishkin and Karen Hoffman Lent, Skadden Arps Slate Meagher & Flom LLP, New York, New York; Robert W. Fuller III, Pearlynn G. Houck, and Lawrence C. Moore III, Robinson Bradshaw & Hinson P.A., Charlotte, North Carolina; Mark J. Seifert, Seifert Law Firm, San Francisco, California; Andrew J. Pincus, Charles A. Rothfeld, and Richard J. Favretto, Mayer Brown LLP, Washington, D.C.; Britt M. Miller and Andrew S. Rosenman, Mayer Brown LLP, Chicago, Illinois; Meryl Macklin, Bryan Cave Leighton Paisner LLP, San Francisco, California; Richard Young and Brent E. Rychner, Bryan Cave Leighton Paisner LLP, Colorado Springs, Colorado; Benjamin C. Block, Covington & Burling LLP, Washington, D.C.; R. Todd Hunt and Benjamin G. Chojnacki, Walter Haverfield LLP, Cleveland, Ohio; D. Erik Albright and Gregory G. Holland, Fox Rothschild LLP, Greensboro, North Carolina; Jonathan P. Heyl, Fox Rothschild LLP, Charlotte, North Carolina; Charles L. Coleman III, Holland & Knight LLP, San Francisco, California; for Defendants-Appellants.
Steve Berman (argued), Craigh R. Spiegel, and Emilee N. Sisco, Hagens Berman Sobol Shapiro LLP, Seattle, Washington; Jeffrey L. Kessler (argued), David G. Feher, and David L. Greenspan, Winston & Strawn LLP, New York, New York; Bruce L. Simon and Benjamin E. Shiftan, Pearson Simon & Warshaw LLP, San Francisco, California; Elizabeth C. Pritzker, Jonathan K. Levine, Bethany L. Caracuzzo, and Shiho Yamamoto, Pritzker Levine LLP, Oakland, California; Linda T. Coberly, Winston & Strawn LLP, Chicago, Illinois; Sean D. Meenan and Jeanifer E. Parsigian, Winston & Strawn LLP, San Francisco, California; for Plaintiffs-Appellees.
Maurice M. Suh, Gibson Dunn & Crutcher LLP, Los Angeles, California; Andrew S. Tulumello and Nick Harper, Gibson Dunn & Crutcher LLP, Washington, D.C.; for Amici Curiae National Football League Players Association and National Basketball Players Association.
Bradley S. Pauley, Horvitz & Levy LLP, Burbank, California, for Amicus Curiae National Federation of State High School Associations.
Emma Rebhorn, Change to Win, New York, New York; Sandeep Vaheesan, Open Markets Institute, Washington, D.C.; Najah A. Farley, National Employment Law Project, New York, New York; for Amici Curiae Open Markets Institute, Change to Win, National Employment Law Project, and Economics and Law Professors.
Before: Sidney R. Thomas, Chief Judge, and Ronald M. Gould and Milan D. Smith, Jr., Circuit Judges.
The panel affirmed the district court's order in an antitrust action, enjoining the National Collegiate Athletic Association from enforcing rules that restrict the education-related benefits that its member institutions may offer students who play Football Bowl Subdivision football and Division I basketball.
In O'Bannon v. NCAA (O'Bannon II), 802 F.3d 1049 (9th Cir. 2015), the court affirmed in large part the district court's ruling that the NCAA illegally restrained trade, in violation of section 1 of the Sherman Act, by preventing FBS football and D1 men's basketball players from receiving compensation for the use of their names, images, and likenesses, and the district court's injunction insofar as it required the NCAA to implement the less restrictive alternative of permitting athletic scholarships for the full cost of attendance.
Subsequent antitrust actions by student-athletes were consolidated in the district court. After a bench trial, the district court entered judgment for the student-athletes in part, concluding that NCAA limits on education-related benefits were unreasonable restraints of trade, and accordingly enjoining those limits, but declining to hold that NCAA limits on compensation unrelated to education likewise violated section 1.
The panel affirmed the district court's conclusion that O'Bannon II did not foreclose this litigation as a matter of stare decisis or res judicata.
The panel held that the district court properly applied the Rule of Reason in determining that the enjoined rules were unlawful restraints of trade under section 1 of the Sherman Act. The panel concluded that the student-athletes carried their burden at the first step of the Rule of Reason analysis by showing that the restraints produced significant anticompetitive effects within the relevant market for student-athletes' labor on the gridiron and the court.
At the second step of the Rule of Reason analysis, the NCAA was required to come forward with evidence of the restraints' procompetitive effects. The district court properly concluded that only some of the challenged NCAA rules served the procompetitive purpose of preserving amateurism and thus improving consumer choice by maintaining a distinction between college and professional sports. Those rules were limits on above-cost-of-attendance payments unrelated to education, the cost-of-attendance cap on athletic scholarships, and certain restrictions on cash academic or graduation awards and incentives. The panel affirmed the district court's conclusion that the remaining rules, restricting non-cash education-related benefits, did nothing to foster or preserve consumer demand. The panel held that the record amply supported the findings of the district court, which reasonably relied on demand analysis, survey evidence, and NCAA testimony.
The panel affirmed the district court's conclusion that, at the third step of the Rule of Reason analysis, the student-athletes showed that any legitimate objectives could be achieved in a substantially less restrictive manner. The district court identified a less restrictive alternative of prohibiting the NCAA from capping certain education-related benefits and limiting academic or graduation awards or incentives below the maximum amount that an individual athlete may receive in athletic participation awards, while permitting individual conferences to set limits on education-related benefits. The panel held that the district court did not clearly err in determining that this alternative would be virtually as effective in serving the procompetitive purposes of the NCAA's current rules, and could be implemented without significantly increased cost.
Finally, the panel held that the district court's injunction was not impermissibly vague and did not usurp the NCAA's role as the superintendent of college sports. The panel also declined to broaden the injunction to include all NCAA compensation limits, including those on payments untethered to education. The panel concluded that the district court struck the right balance in crafting a remedy that both prevented anticompetitive harm to student-athletes while serving the procompetitive purpose of preserving the popularity of college sports.
Concurring, Judge M. Smith wrote that because he was bound by O'Bannon II, he joined the panel opinion in full. He wrote separately to express concern that the current state of antitrust law reflects an...
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