Smith v. National Collegiate Athletic Ass'n

Citation139 F.3d 180,1998 WL 111526
Decision Date16 March 1998
Docket NumberNos. 97-3346,97-3347,s. 97-3346
Parties1998-1 Trade Cases P 72,084, 40 Fed.R.Serv.3d 489, 125 Ed. Law Rep. 32 R.M. SMITH v. NATIONAL COLLEGIATE ATHLETIC ASSOCIATION Renee M. Smith, Appellant.
CourtUnited States Courts of Appeals. United States Court of Appeals (3rd Circuit)

Renee M. Smith (argued), Pittsburgh, PA, Pro Se, Larry A. Silverman, Christine A. Ward, Dickie, McCamey & Chilocote, Pittsburgh, PA, John J. Kitchin (argued), Robert W. McKinley, Swanson, Midgeley, Gagwere, Kitchin & McLarney, Kansas City, MO, for Appellee.

Marcia D. Greenberger, Deborah L. Brake (argued), National Women's Law Center, Washington, DC, for Amici Curiae National Women's Law Center, American Association for Active Lifestyles & Fitness, American Association of University Women, AAUW Legal Advocacy Fund, American Civil Liberties Union, Center for Women Policy Studies, The Connecticut Women's Legal Fund, Equal Rights Advocates, Inc., National Association for Girls and Women In Sport, National Coalition for Sex Equity in Education, National Education Association, NOW Legal Defense and Education Fund, Trial Lawyers for Public Justice, Wider Opportunities for Women, Women Employed, Women's Law Project, Women's Legal Defense Fund, Women's Sports Foundation, and The Young The YWCA of the USA.

Before: GREENBERG, NYGAARD and McKEE, Circuit Judges.

OPINION OF THE COURT

GREENBERG, Circuit Judge.

I. INTRODUCTION

Renee M. Smith, a pro se litigant, appeals from the district court's order of May 21, 1997, dismissing her complaint for failure to state a claim, and from the district court's order of June 5, 1997, denying her motion for leave to amend her complaint. Smith's complaint alleges violations of section 1 of the Sherman Act, 15 U.S.C. § 1, and Title IX of the Educational Amendments of 1972, 20 U.S.C. § 1681, as well as a state law breach of contract claim against the National Collegiate Athletic Association ("NCAA"). Smith's allegations arise from the NCAA's promulgation and enforcement of a bylaw prohibiting a student-athlete from participating in intercollegiate athletics while enrolled in a graduate program at an institution other than the student-athlete's undergraduate institution.

The district court had jurisdiction over the federal claims in this matter pursuant to 28 U.S.C. §§ 1331 and 1337 and 15 U.S.C. § 15, and over the state law claim pursuant to 28 U.S.C. § 1367. This court has jurisdiction to review the final orders of the district court pursuant to 28 U.S.C. § 1291. 1 We exercise plenary review over the district court's dismissal of Smith's complaint for failure to state a claim. See Lake v. Arnold, 112 F.3d 682, 684 (3d Cir.1997). We accept all of her allegations as true, view them in the light most favorable to her, and will affirm the dismissal only if she can prove no set of facts entitling her to relief. See Nami v. Fauver, 82 F.3d 63, 65 (3d Cir.1996); ALA, Inc. v. CCAIR, Inc., 29 F.3d 855, 859 (3d Cir.1994). We review the district court's denial of her motion for leave to amend her complaint for abuse of discretion. See In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1434 (3d Cir.1997).

II. FACTS AND PROCEDURAL HISTORY

Smith graduated from high school in the spring of 1991 and enrolled in St. Bonaventure University the following fall, where she participated in Division I athletics. Smith played intercollegiate volleyball for St. Bonaventure during the 1991-92 and 1992-93 athletic seasons. By her choice, Smith did not participate in intercollegiate volleyball for St. Bonaventure during the 1993-94 season.

Smith graduated from St. Bonaventure in two and one half years. Thereafter, she enrolled in a postbaccalaureate program at Hofstra University, and then in 1995 she enrolled in a second postbaccalaureate program at the University of Pittsburgh. St. Bonaventure did not offer either of these postbaccalaureate programs.

The NCAA is an unincorporated association comprised of public and private colleges and universities and is responsible for promulgating rules governing all aspects of intercollegiate athletics, including recruiting, eligibility of student-athletes, and academic standards. The member institutions agree to abide by and enforce these rules. The NCAA denied Smith eligibility to compete for Hofstra and the University of Pittsburgh in the 1994-95 and 1995-96 athletic seasons, respectively, based upon Bylaw 14.1.8.2 in the NCAA Manual (the "Postbaccalaureate Bylaw"). The Postbaccalaureate Bylaw provides that a student-athlete may not participate in intercollegiate athletics at a postgraduate institution other than the institution from which the student earned her undergraduate degree. 2 Both Hofstra and the University of Pittsburgh applied to the NCAA for a waiver of the bylaw with respect to Smith, but the NCAA denied both requests. Smith was, however, in good academic standing and in compliance with all other NCAA eligibility requirements for the 1994-95 and 1995-96 athletic seasons.

In August 1996, Smith instituted this suit challenging the NCAA's enforcement of the bylaw as well as the NCAA's refusal to waive the bylaw in her case. More particularly, Smith alleged that the Postbaccalaureate Bylaw is an unreasonable restraint of trade in violation of section 1 of the Sherman Act and the NCAA's refusal to waive the bylaw excluded her from intercollegiate competition based upon her sex in violation of Title IX. Smith also asserted a state law breach of contract claim based upon the NCAA's denial of eligibility. On May 21, 1997, the district court dismissed Smith's federal claims for failure to state a claim upon which relief could be granted. The court held that the NCAA's refusal to waive the bylaw was not the type of action to which the Sherman Act applied. It also held that Smith's complaint did not allege adequately that the NCAA was a recipient of federal funding so as to be subject to Title IX. By the same order, the district court exercised its discretion to dismiss Smith's state law contract claim pursuant to 28 U.S.C. § 1367(c). See Smith v. National Collegiate Athletic Ass'n, 978 F.Supp. 213 (W.D.Pa.1997).

Thereafter, Smith submitted a proposed amended complaint and moved the district court for leave to amend her complaint, which the district court denied "as moot" on June 5, 1997. Smith filed timely appeals from these orders, which we have consolidated.

III. DISCUSSION
A. SHERMAN ACT CLAIM

Count I of Smith's complaint alleges that the NCAA, in promulgating and enforcing the Postbaccalaureate Bylaw, violated section 1 of the Sherman Act because the bylaw unreasonably restrains trade and has an adverse anticompetitive effect. As we have indicated, the district court dismissed this claim for failure to state a claim upon which relief could be granted, holding that "the actions of the NCAA in refusing to waive the Postbaccalaureate Bylaw and allow the Plaintiff to participate in intercollegiate athletics is not the type of action to which the Sherman Act was meant to be applied." See Smith, 978 F.Supp. at 218. Smith argues that the district court erred in limiting the application of the Sherman Act to the NCAA's commercial and business activities. We disagree.

Section 1 of the Sherman Act provides, in relevant part, that "[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal." 15 U.S.C. § 1. Although the section literally prohibits "every" contract, section 1 does not preclude all restraints on trade, but only those that are unreasonable. See National Collegiate Athletic Ass'n v. Board of Regents of the Univ. of Okla., 468 U.S. 85, 98 & n.17, 104 S.Ct. 2948, 2959 & n. 17, 82 L.Ed.2d 70 (1984); Arizona v. Maricopa County Med. Soc'y, 457 U.S. 332, 342-44, 102 S.Ct. 2466, 2472-73, 73 L.Ed.2d 48 (1982). The Clayton Act, 15 U.S.C. §§ 15, 26, grants a private right of action to, inter alia, a person "injured in his business or property" by a violation of section 1 of the Sherman Act. 3

Smith misconstrues the law in arguing that the Supreme Court has refused to limit antitrust remedies to commercial interests. The cases she cites address whether the plaintiffs alleged injuries within the meaning of the Clayton Act; in that context, the Court held that the statute was not limited to redressing injuries to commercial interests. See Reiter v. Sonotone Corp., 442 U.S. 330, 338-39, 99 S.Ct. 2326, 2330-31, 60 L.Ed.2d 931 (1979) (holding that "injury to business or property" was not limited to commercial interests); Blue Shield of Va. v. McCready, 457 U.S 465, 473, 102 S.Ct. 2540, 2545, 73 L.Ed.2d 149 (1982) (holding that a subscriber to a health plan who had employed the services of a psychologist alleged a redressable antitrust injury); see also McNulty v. Borden, Inc., 474 F.Supp. 1111, 1115-18 (E.D.Pa.1979) (holding that an employee of an alleged antitrust violator was injured in his business or property). The question which we now face is different; it is whether antitrust laws apply only to the alleged infringer's commercial activities. Thus, rather than focus on Smith's alleged injuries, we consider the character of the NCAA's activities.

In this regard, we recognize that the Supreme Court has suggested that antitrust laws are limited in their application to commercial and business endeavors. Thus, the Court has explained that

[the Sherman Act] was enacted in the era of 'trusts' and of 'combinations' of businesses and of capital organized and directed to control of the market by suppression of competition in the marketing of goods and services, the monopolistic tendency of which had become a matter of public concern. The end sought (by these laws) was the prevention of the restraints to the competition in business and commercial transactions which tended to restrict production, raise prices or otherwise control the...

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