United States: New Class Action Filed Challenging NCAA'S Scholarship Caps And Transfer Rules

In the latest chapter in the litigation wars against college athletics, on March 8, 2016, another antitrust class action was filed against the NCAA in its "home court," the United States Southern District of Indiana. This latest suit, Deppe v. NCAA, Case No. 1:16-cv-00528, gathers in one complaint NCAA rules already put into issue in previous suits in this court that have been the subject of considerable procedural wrangling. Deppe targets the NCAA's current rules capping the number of football scholarships a Division I football team may award, as well as the NCAA's rules that prevent Division I football players from transferring to other NCAA Division I schools without losing athletic eligibility for a year.

According to the Complaint, the scholarship caps are horizontal restraints intended to reduce the cost of essential inputs in the production of high quality Division I football games. The Complaint alleges by doing so, "the NCAA and its member institutions have ensured that student-athletes in the Class receive tens of millions less for their labor for member institutions than they would receive—and the member institutions would pay—in a competitive market."

The Complaint charges that the transfer rules are "patently unlawful." The plaintiff contrasts them with the unfettered mobility of the players' coaches where the "ability to better their own situation has allowed coaches to reap enormous financial benefits."

The plaintiff, and punitive class representative, Peter Deppe has a story that illustrates the claimed pernicious effects of the transfer rule. Deppe was an award-winning high school kicker, with a high grade point average, and other application-enhancing activities. After taking an official visit to Northern Illinois University ("NIU"), thus making him subject to the NCAA's transfer rules, Deppe ultimately chose to attend NIU as a preferred walk-on student athlete. He had expected to receive an athletic scholarship after his freshman year, but allegedly because of a change in the football coaching staff, was informed he would not be receiving such a scholarship.

Deppe then took a recruiting visit to the University of Iowa, which was interested in him if he would be eligible to play the following season. Deppe unsuccessfully sought relief from the one-year transfer rule from the NCAA; the NCAA told him that his prospective school had to initiate the request for a waiver. Deppe was ultimately admitted to Iowa academically, but the athletic scholarship was offered to another player who had the ability to play immediately.

Anticipating the justification that the NCAA will likely proffer to defend the restraints, the Complaint alleges that the scholarship caps cannot be justified by amateurism concerns or to maintain competitive balance. The Complaint alleges that lifting the scholarship cap "would have absolutely no effect on amateurism because student-athletes would continue to receive no wages for their playing" and a competitive balance justification is belied by the fact that the "rules actually permit the most competitive schools to have more scholarships."

The transfer rules have been criticized as complex and Byzantine. As the Complaint recounts, the NCAA publishes a 30-page, single-spaced document to guide players through the process. As one sports commentator wrote about it, "if you can read past the third page without help from prescription ADHD medication, well, I'd love to shake your hand. This stuff is brutal."

Again attempting to anticipate the NCAA's justifications for the rules, the Complaint alleges that the year-in-residence rule also cannot be defended by academic purposes. The Complaint points out that a similarly justified ban on freshmen eligibility was repealed years ago. The Complaint further alleges that the restraint "preserves the hegemony of the top 'Power 5' conferences" by locking-in players, even when those players are unable to obtain the playing time promised in the recruiting process.

The Deppe case joins others also filed in the Southern District of Indiana on similar claims. In 2012 a former college quarterback filed suit on behalf of a putative class against the NCAA, alleging that the NCAA's former ban on multiyear scholarships and the cap on scholarships constituted a concerted effort to thwart competition. Rock v. NCAA, case no 1:12-cv-01019 (S.D. Ind.). The court denied the NCAA's motion to dismiss the second amended complaint in Rock in 2013. In 2015, plaintiff Rock filed a third amended complaint. Briefing on the class certification is complete, but no decision on class has been issued. The jury trial date is set for February 2017. This past November, another former football player sued the NCAA over the scholarship caps, the former scholarship limits, and the one-year residence requirement. Pugh v. NCAA, case no. 1:15-cv-01747 (S.D. Ind.). However, since Pugh is no longer eligible, there may be flaws in his ability to be a class representative. Also, in January, the NCAA filed a motion in Pugh for dismissal of the one-year residence claims. (The NCAA acknowledged that in Rock, the court already decided that the scholarship caps and limits claims were sufficiently pled.) One could surmise that Peter Deppe is being sent on the playing field to ensure that the proposed class (and their counsel) have all their necessary bases touched.

It has now been over 30 years since the Supreme Court, in NCAA v. Board of Regents of the Univ. of Okla., 468.U.S. 85 (1984), began to subject various aspects of the college athletic regime to antitrust scrutiny when it struck down the NCAA's restrictions on televised college football as an unreasonable output-reducing restraint. In recent years, the trickle of such litigation has grown to a cascade as the money and stakes surrounding the major college sports have grown. These new cases challenging the NCAA's scholarship caps and one-year residence requirements are ones to watch.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Bruce D. Sokler
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.