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

Last Updated: March 15 2016
Article by Bruce D. Sokler and Farrah Short

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.

Bruce D. Sokler
In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
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
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions