Pocono Invitational v. National Collegiate

• Decision Date: 30 April 2004
• Docket Number: No. 00-CV-5708.,00-CV-5708.
• Citation: Pocono Invitational v. National Collegiate, 317 F.Supp.2d 569 (E.D. Pa. 2004)
• Parties: POCONO INVITATIONAL SPORTS CAMP, INC., and Eastern Invitational Basketball Clinic, Inc., and Future Stars Basketball, LLC., and Five-Star Basketball Camp, Inc. and Blue Star Productions, Inc., Plaintiffs v. NATIONAL COLLEGIATE ATHLETIC ASSOCIATION, Defendant.
• Court: U.S. District Court — Eastern District of Pennsylvania

317 F.Supp.2d 569

POCONO INVITATIONAL SPORTS CAMP, INC., and Eastern Invitational Basketball Clinic, Inc., and Future Stars Basketball, LLC., and Five-Star Basketball Camp, Inc. and Blue Star Productions, Inc., Plaintiffs v. NATIONAL COLLEGIATE ATHLETIC ASSOCIATION, Defendant.

No. 00-CV-5708.

United States District Court, E.D. Pennsylvania.

April 30, 2004.

COPYRIGHT MATERIAL OMITTED

Edward N. Cahn, Allentown, Pa, pro se.

Darin J. McMullen, Louis J. Sinatra, Pelino & Lentz PC, Ira P. Tiger, Schnader Harrison Segal & Lewis, Philadelphia, PA, for Plaintiffs.

David P. Bruton, Michael W. McTigue, Jr., Paul H. Saint-Antoine, Drinker Biddle & Reath LLP, Philadelphia, PA, Frederick R. Juckniess, Gregory L. Curtner, Miller Canfield Paddock & Stone PLC, Ann Arbor, MI, Robert J. Wierenga, Sullivan & Cromwell, LLP, New York, NY, for Defendant.

Richard M. Meltzer, Pelino & Lentz PC, Philadelphia, PA, for Movants.

MEMORANDUM AND ORDER

ANITA B. BRODY, District Judge.

On November 9, 2000, plaintiffs Pocono Invitational Sports Camp, Inc. ("Pocono"), Eastern Invitational Basketball Clinic, Inc. ("Eastern"), Future Stars Basketball, LLC ("Future Stars"), Five-Star Basketball Camp, Inc. ("Five-Star"), and Blue Star Productions, Inc. ("Blue Star") brought this action against defendant National Collegiate Athletic Association ("NCAA"). Plaintiffs alleged two antitrust violations under the Sherman Antitrust Act, 15 U.S.C. §§ 1 and 2, and one count of tortious interference with contractual arrangements and prospective contractual arrangements.¹ Jurisdiction is based on the existence of a federal question. Defendant has moved for summary judgment on all counts. For the reasons set forth below, I grant defendant's motion.

I. FACTS²

A. The Parties

Plaintiffs are operators of for-profit summer basketball camps for children and teenagers. (JSMF ¶ 26.) Plaintiffs also conduct a variety of other youth basketball events and activities, including shootouts, tournaments, travel teams, and leagues.³ (Id.) Defendant has acknowledged that the plaintiffs in this case operate some of the finest summer basketball camps in the United States. (Pl. SMF ¶ 4.)

Defendant NCAA, formed in 1905, is a non-profit, voluntary unincorporated association of approximately 1260 colleges, universities, athletic conferences and affiliated organizations. (JSMF ¶ 1, see also NCAA v. Bd. of Regents, 468 U.S. 85, 104 S.Ct. 2948, 82 L.Ed.2d 70 (1984).) According to the NCAA Constitution, the purposes of the NCAA are, among other things, "[t]o uphold the principle of institutional control of, and responsibility for, all intercollegiate sports in conformity with the constitution and bylaws of [the NCAA]," "[t]o formulate, copyright and publish rules of play governing intercollegiate athletics," and "[t]o legislate, through bylaws or by resolutions of a Convention, upon any subject of general concern to the members related to the administration of intercollegiate athletics." (NCAA Constitution, Article 1.2.) One of the NCAA's many responsibilities is the regulation of coaches' recruiting of prospective student-athletes ("prospects"). (Def. SMF ¶ 12.) The NCAA Constitution includes a statement of the "basic purpose" of amateurism, which guides the organization's regulation of recruiting:

The competitive athletics programs of member institutions are designed to be a vital part of the educational system. A basic purpose of this Association is to maintain intercollegiate athletics as an integral part of the educational program and the athlete as an integral part of the student body and, by so doing, retain a clear line of demarcation between intercollegiate athletics and professional sports.

(NCAA Constitution, Article 1.3.1.)

The NCAA Constitution also provides a Principle of Recruiting:

The recruiting process involves a balancing of the interests of prospective student-athletes, their educational institutions and the Association's member institutions. Recruiting regulations shall be designed to promote equity among member institutions in their recruiting of prospects and to shield them from undue pressures that may interfere with the scholastic or athletics interests of the prospects or their educational institutions.

(NCAA Constitution, Article 2.11.)

Although the NCAA does not own, sponsor, or operate any youth basketball camps, some of the NCAA member institutions do own and operate camps ("institutional camps"). These institutional camps compete with plaintiffs' camps ("non-institutional camps") for campers. (Pl. SMF ¶ 9.) One notable difference between institutional and non-institutional camps is that institutional camps are subject to NCAA rules, including the entirety of the NCAA's amateurism and recruiting bylaws. (Def. SMF ¶ 55, NCAA Bylaw 13.13.) Among other things, these guidelines require that institutional camps be open to any and all entrants. Plaintiffs' non-institutional camps, on the other hand, are free to be selective. Non-institutional camps are not subject to the NCAA's direct control, although they are indirectly affected by many NCAA recruiting rules.

B. NCAA Regulating Activity and the Challenged Regulations

Under its constitution, the NCAA membership adopts and amends its various bylaws and regulations to advance the organization's principles. (NCAA Constitution, Article 2.01.) Plaintiffs challenge certain regulations affecting the recruiting of Division I basketball players at their summer basketball camps.⁴ Specifically, plaintiffs challenge three of these NCAA recruiting regulations as anticompetitive: (1) the NCAA requirement that Division I coaches can only evaluate prospects at non-institutional basketball camps if the camps are certified by the NCAA (Bylaw 13.13.3) and the requirements with which non-institutional camps must comply in order to be certified (Administrative Regulation § 30.16); (2) the reduced number of days coaches are permitted to visit plaintiffs' camps; and (3) the prohibition of Division I men's basketball coaches from accepting employment with non-institutional camps attended by prospects (former Bylaw 13.13.2.3.2, in effect from 1990 to 2001).

I will describe each of the challenged recruiting regulations in turn.

The Certification Requirement and Process

Plaintiffs object to both the existence of the certification requirement, and the certification process. Since 1993, Division I basketball coaches are only permitted by the NCAA to attend (1) institutional camps and (2) non-institutional camps certified by the NCAA. (JSMF ¶ 71.) In order for a summer basketball event in men's basketball to be certified, an application form must be submitted to the NCAA forty-five days before the camp begins. The following criteria must be met:⁵

• A comprehensive financial disclosure of information related to the operation of the event (and any team participating in the event) [must be submitted];

• Admissions fees charged to all event participants must be similar;

• No air or ground transportation or other gifts or inducements shall be provided to the event participants or their coaches or relatives;

• A prospective student-athlete who attends an NCAA certified event shall not retain any athletics equipment or apparel provided for his use at the event other than an event T-shirt. All other apparel (e.g. shoes or shorts) may be retained only if the prospect is charged the normal retail value of such items (as opposed to the event's cost in purchasing the items);

• Compensation provided to event personnel shall be commensurate with the going rate for event personnel of like teaching ability and event experience;

• The event or tour shall include a comprehensive educational session presented in-person or in a video format that includes a review of regulations related to initial-eligibility standards, gambling, agents and drug use (Revised January 13, 2003);

• An event operator, staff member of a league or member of any team may not participate if the individual has been found guilty or pleaded guilty in a court of law for having been involved in sports bribery, point shaving or game fixing;

• The event shall not be conducted in a venue where sports wagering on intercollegiate athletics is permitted, or on property sponsored by an establishment that permits sports wagering on intercollegiate athletics or branded with signage for such an establishment;

• The event (and any team participating in the event) shall not be operated or managed by any individual or agency involved in the marketing of any individual's athletics reputation or ability;

• The event (and any team participating in the event) may not receive financial support from any individual or agency involved in marketing any individual's athletics reputation or ability or any representatives of an NCAA member institution's athletics interests that is assisting or has assisted in the recruiting process;

• Individuals involved in coaching activities must have been approved in accordance with guidelines established by the NCAA basketball certification staff (Revised January 13, 2003);

• Participants on nonscholastic teams must be legal residents of the state in which the team is located or a geographically adjoining state and not more than a total of three prospects from adjoining states may participate on any one nonscholastic team (Revised January 13, 2003); and

• A participant may receive an award, provided the cost of the award is included in the participant's entry fee (Adopted January 13, 2003).

(NCAA Bylaw 30.17, adopted 11/1/01, effective April 1, 2002 (except those requirements noted as having been adopted or revised on January 13, 2003).)

The institutional camps are not subject to the certification requirements, but are required to abide by all NCAA amateurism and recruiting bylaws. These bylaws require that institutional camps, among other things:

• must be open to any and all entrants (Bylaw 13.13.1.2),

• are not permitted to pay a...