Nat'l Collegiate Athletic Ass'n v. Alston

• Citation: 141 S.Ct. 2141,210 L.Ed.2d 314
• Decision Date: 21 June 2021
• Docket Number: 20–520,Nos. 20–512,s. 20–512
• Parties: NATIONAL COLLEGIATE ATHLETIC ASSOCIATION, Petitioner v. Shawne ALSTON, et al.; American Athletic Conference, et al., Petitioners v. Shawne Alston, et al.
• Court: United States Supreme Court

141 S.Ct. 2141

210 L.Ed.2d 314

NATIONAL COLLEGIATE ATHLETIC ASSOCIATION, Petitioner

v.Shawne ALSTON, et al.;

American Athletic Conference, et al., Petitioners

v.Shawne Alston, et al.

Nos. 20–512

20–520

Supreme Court of the United States.

Argued March 31, 2021

Decided June 21, 2021¹

Donald M. Remy, Scott Bearby, National Collegiate, Athletic Association, Indianapolis, IN, Jeffrey A. Mishkin, Karen Hoffman Lent, Skadden, Arps, Slate, Meagher & Flom LLP, New York, N.Y., Beth A. Wilkinson, Rakesh N. Kilaru, Wilkinson Stekloff LLP, Washington, D.C., Seth P. Waxman, Counsel of Record, Leon B. Greenfield, Daniel S. Volchok, David M. Lehn, Ruth E. Vinson, Spencer L. Todd, Wilmer Cutler Pickering, Hale and Dorr LLP, Washington, D.C., for Petitioner.

Steve W. Berman, Emilee N. Sisco, Hagens Berman Sobol, Shapiro LLP, Seattle, WA, Bruce L. Simon, Benjamin E. Shiftan, Pearson, Simon & Warshaw, LLP, San Francisco, CA, Jeffrey L. Kessler, David G. Feher, David L. Greenspan, Winston & Strawn LLP, New York, NY, Linda T. Coberly, Counsel of Record, Winston & Strawn LLP, Chicago, IL, Benjamin J. Siegel, Hagens Berman Sobol, Shapiro LLP, Berkeley, CA, Elizabeth C. Pritzker, Jonathan K. Levine, Bethany L. Caracuzzo, Pritzker Levine LLP, Emeryville, CA, Jeanifer E. Parsigian, Winston & Strawn LLP, San Francisco, CA, for Respondents.

Justice GORSUCH delivered the opinion of the Court.

In the Sherman Act, Congress tasked courts with enforcing a policy of competition on the belief that market forces "yield the best allocation" of the Nation's resources. National Collegiate Athletic Assn. v. Board of Regents of Univ. of Okla., 468 U.S. 85, 104, n. 27, 104 S.Ct. 2948, 82 L.Ed.2d 70 (1984). The plaintiffs before us brought this lawsuit alleging that the National Collegiate Athletic Association (NCAA) and certain of its member institutions violated this policy by agreeing to restrict the compensation colleges and universities may offer the student-athletes who play for their teams. After amassing a vast record and conducting an exhaustive trial, the district court issued a 50-page opinion that cut both ways. The court refused to disturb the NCAA's rules limiting undergraduate athletic scholarships and other compensation related to athletic performance. At the same time, the court struck down NCAA rules limiting the education-related benefits schools may offer student-athletes—such as rules that prohibit schools from offering graduate or vocational school scholarships. Before us, the student-athletes do not challenge the district court's judgment. But the NCAA does. In essence, it seeks immunity from the normal operation of the antitrust laws and argues, in any event, that the district court should have approved all of its existing restraints. We took this case to consider those objections.

I

A

From the start, American colleges and universities have had a complicated relationship with sports and money. In 1852, students from Harvard and Yale participated in what many regard as the Nation's first intercollegiate competition—a boat race at Lake Winnipesaukee, New Hampshire. But this was no pickup match. A railroad executive sponsored the event to promote train travel to the picturesque lake. T. Mendenhall, The Harvard-Yale Boat Race 1852–1924, pp. 15–16 (1993). He offered the competitors an all-expenses-paid vacation with lavish prizes—along with unlimited alcohol. See A. Zimbalist, Unpaid Professionals 6–7 (1999) (Zimbalist); Rushin, Inside the Moat, Sports Illustrated, Mar. 3, 1997. The event filled the resort with "life and excitement," N. Y. Herald, Aug. 10, 1852, p. 2, col. 2, and one student-athlete described the " ‘junket’ " as an experience " ‘as unique and irreproducible as the Rhodian colossus,’ " Mendenhall, Harvard-Yale Boat Race, at 20.

Life might be no "less than a boat race," Holmes, On Receiving the Degree of Doctor of Laws, Yale University Commencement, June 30, 1886, in Speeches by Oliver Wendell Holmes, p. 27 (1918), but it was football that really caused college sports to take off. "By the late 1880s the traditional rivalry between Princeton and Yale was attracting 40,000 spectators and generating in excess of $25,000 ... in gate revenues." Zimbalist 7. Schools regularly had "graduate students and paid ringers" on their teams. Ibid.

Colleges offered all manner of compensation to talented athletes. Yale reportedly lured a tackle named James Hogan with free meals and tuition, a trip to Cuba, the exclusive right to sell scorecards from his games—and a job as a cigarette agent for the American Tobacco Company. Ibid. ; see also Needham, The College Athlete, McClure's Magazine, June 1905, p. 124. The absence of academic residency requirements gave rise to " ‘tramp athletes’ " who "roamed the country making cameo athletic appearances, moving on whenever and wherever the money was better." F. Dealy, Win at Any Cost 71 (1990). One famous example was a law student at West Virginia University—Fielding H. Yost—"who, in 1896, transferred to Lafayette as a freshman just in time to lead his new teammates to victory against its arch-rival, Penn." Ibid. The next week, he "was back at West Virginia's law school." Ibid. College sports became such a big business that Woodrow Wilson, then President of Princeton University, quipped to alumni in 1890 that " ‘Princeton is noted in this wide world for three things: football, baseball, and collegiate instruction.’ " Zimbalist 7.

By 1905, though, a crisis emerged. While college football was hugely popular, it was extremely violent. Plays like the flying wedge and the players’ light protective gear led to 7 football fatalities in 1893, 12 deaths the next year, and 18 in 1905. Id. , at 8. President Theodore Roosevelt responded by convening a meeting between Harvard, Princeton, and Yale to review the rules of the game, a gathering that ultimately led to the creation of what we now know as the NCAA. Ibid. Organized primarily as a standard-setting body, the association also expressed a view at its founding about compensating college athletes—admonishing that "[n]o student shall represent a College or University in any intercollegiate game or contest who is paid or receives, directly or indirectly, any money, or financial concession." Intercollegiate Athletic Association of the United States Constitution By-Laws, Art. VII, § 3 (1906); see also Proceedings of the Eleventh Annual Convention of the National Collegiate Athletic Association, Dec. 28, 1916, p. 34.

Reality did not always match aspiration. More than two decades later, the Carnegie Foundation produced a report on college athletics that found them still "sodden with the commercial and the material and the vested interests that these forces have created." H. Savage, The Carnegie Foundation for the Advancement of Teaching, American College Athletics Bull. 23, p. 310 (1929). Schools across the country sought to leverage sports to bring in revenue, attract attention, boost enrollment, and raise money from alumni. The University of California's athletic revenue was over $480,000, while Harvard's football revenue alone came in at $429,000. Id. , at 87. College football was "not a student's game"; it was an "organized commercial enterprise" featuring athletes with "years of training," "professional coaches," and competitions that were "highly profitable." Id. , at viii.

The commercialism extended to the market for student-athletes. Seeking the best players, many schools actively participated in a system "under which boys are offered pecuniary and other inducements to enter a particular college." Id. , at xiv–xv. One coach estimated that a rival team "spent over $200,000 a year on players." Zimbalist 9. In 1939, freshmen at the University of Pittsburgh went on strike because upperclassmen were reportedly earning more money. Crabb, The Amateurism Myth: A Case for a New Tradition, 28 Stan. L. & Pol'y Rev. 181, 190 (2017). In the 1940s, Hugh McElhenny, a halfback at the University of Washington, "became known as the first college player ‘ever to take a cut in salary to play pro football.’ " Zimbalist 22–23. He reportedly said: " ‘[A] wealthy guy puts big bucks under my pillow every time I score a touchdown. Hell, I can't afford to graduate.’ " Id., at 211, n. 17. In 1946, a commentator offered this view: "[W]hen it comes to chicanery, double-dealing, and general undercover work behind the scenes, big-time college football is in a class by itself." Woodward, Is College Football on the Level?, Sport, Nov. 1946, Vol. 1, No. 3, p. 35.

In 1948, the NCAA sought to do more than admonish. It adopted the "Sanity Code." Colleges Adopt the ‘Sanity Code’ To Govern Sports, N. Y. Times, Jan. 11, 1948, p. 1, col. 1. The code reiterated the NCAA's opposition to "promised pay in any form." Hearings before the Subcommittee on Oversight and Investigations of the House Committee on Interstate and Foreign Commerce, 95th Congress, 2d Sess., pt. 2, p. 1094 (1978). But for the first time the code also authorized colleges and universities to pay athletes’ tuition. Ibid . And it created a new enforcement mechanism—providing for the "suspension or expulsion" of "proven offenders." Colleges Adopt ‘Sanity Code,’ N. Y. Times, p. 1, col. 1. To some, these changes sought to substitute a consistent, above-board compensation system for the varying under-the-table schemes that had long proliferated. To others, the code marked "the beginning of the NCAA behaving as an effective cartel," by enabling its member schools to set and enforce "rules that limit the price they have to pay for their inputs (mainly the ‘student-athletes’)." Zimbalist 10.

The rules regarding student-athlete compensation have evolved ever since. In 1956, the NCAA expanded the scope of allowable payments to include room, board, books, fees, and "cash for incidental expenses such as laundry." In re National Collegiate Athletic Assn. Athletic Grant-in-Aid Cap Antitrust Litig. , 375 F.Supp.3d 1058, 1063 (ND Cal. 2019) (hereinafter D....