Apr 12 2014
A federal court in California has declined to dismiss a lawsuit against the NCAA by current and former student athletes, who allege that the NCAA’s practice of commercially licensing their names and/or likenesses without their consent is in violation of federal antitrust laws. The antitrust claims, and several related right of publicity actions, will proceed to trial on June 9, 2014.
The NCAA Student-Athlete AntiTrust Litigation.
The Court’s April 11th Order is the latest development in consolidated litigation filed in 2009, styled In Re NCAA Student-Athlete Name & Likeness Licensing Litigation (N.D. Cal. Case No. 4:09-cv-01967-CW). The Plaintiffs are twenty-four current and former Division I-level NCAA football and basketball players. Of these, twenty of the Plaintiffs (the Antitrust Plaintiffs) allege that the NCAA violated federal antitrust laws by conspiring with videogame publisher Electronic Arts and the Collegiate Licensing Company to sell or license the names, images, and likeness of Division I men’s football and basketball players for use in television broadcasts and NCAA-branded videogames, without their consent. (The videogames feature player-avatars modeled after real student-athletes.)
Of particular note in this case, the Antitrust Plaintiffs (on behalf of themselves and a putative class) are requesting an order barring the NCAA from enforcing any of its rules or policies prohibiting student-athletes from seeking compensation themselves for such use of their names, images or likenesses. These rules–according to Plaintiffs–are part of a prevalent price-fixing conspiracy that works harm to the plaintiff-athletes, because they are thereby deprived of opportunity to participate in this market and revenue. The Court certified a class of “injunctive relief” plaintiffs on November 8, 2013.
The Court’s April 11th Ruling
Section 1 of the Sherman Act (15 U.S.C. section 1) makes it illegal to form any “contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States.” To prevail on a Sherman antitrust claim, a Plaintiff must show (1) that there was a contract, combination or conspiracy, (2) the agreement unreasonably restrained trade, and (3) the restraint affected interstate commerce.
The NCAA argued for judgment as a matter of law, claiming there was no unreasonable restraint on commerce. Among other arguments, the NCAA argued that the request for an injunction was obviated and moot because the NCAA had not renewed its licensing agreement with Electronic Arts. (EA had earlier settled out of the case.) The NCAA also argued that (1) the rules at issue actually increase the popularity of Division I sports and thereby serve commerce, by promoting “amateurism” –the amateur nature of college sports which purportedly heightens its allure to college sports fans; and (2) the NCAA’s broadcasts are Constitutionally protected.
The trial court declined to rule for NCAA as a matter of law, finding the evidence submitted by NCAA to be materially disputed. The pro- or anti-competitive effects of the NCAA’s rules and practices will therefore be decided by a jury.