Bringing Down the House: The NCAA and the Power 5 Conferences Response in NIL Litigation
On Wednesday, September 22, 2021, the NCAA and each of the Power 5 Conferences filed an answer in In Re College Athlete NIL Litigation (a.k.a. House v. NCAA). September 22 had previously been set as the deadline for the NCAA and the Conferences to answer the Consolidated Amended Complaint filed by Plaintiffs Grant House, Sedona Prince, and Tymir Oliver. I previously wrote on the background of the case and the allegations made by Plaintiffs House, Prince, and Oliver here. In short, the Plaintiffs challenge the NCAA’s prohibition against student athletes receiving compensation for their name, image, and likeness (NIL), arguing that the prohibition violates antitrust laws because it constitutes a conspiracy to fix the amount student athletes may be paid for licensing and selling their NIL at $0, and because it prevents student athletes from accessing the market for the licensing and/or sale of their NIL.
In federal court, defendants answering a lawsuit generally must admit or deny the allegations made against them by an opposing party. This usually takes the form of the defendant responding to every paragraph written by the plaintiffs, whether by admitting, denying, or stating that they do not have sufficient information to respond to the allegation. Here, the answers from the NCAA and the Conferences are generally very similar, suggesting that the lawyers for each of the defendants collaborated and used the same form in drafting their answers. While most of the admissions and denials made by the NCAA and the conferences were not particularly notable, there are several that stood out:
The NCAA admits that it has established limitations on compensating student-athletes for the use of their NIL.
The NCAA does not specifically admit or deny that the changes made in the Interim NIL Policy issued on July 1, 2021 are not intended to be permanent. Instead, the NCAA (and the Conferences) only admit that the NCAA issued the Interim NIL Policy, “with the result that certain activities relating to name, image, and likeness would not be impacted by the application of certain NCAA bylaws.”
The NCAA and the Conferences deny that they have engaged in unlawful or anticompetitive conduct.
The NCAA and the Conferences specifically deny that they engage in price-fixing activity by collectively requiring institutions to withhold from competition all athletes who do not comply with NCAA rules and bylaws.
The NCAA and the Conferences admit that one of their arguments in prior antitrust litigation has been that the NCAA’s amateurism model and restrictions on payments to student athletes promote consumer demand for collegiate sports.
The NCAA and the Conferences admit it has knowledge that some student athletes—such as tennis players, Olympic athletes, and football players playing in bowl games—are permitted to receive certain limited monetary and non-monetary awards for their athletic participation, and that some schools have used Student Assistance Funds to purchase loss-of-value insurance policies to allow athletes to remain in college athletics.
The NCAA denies that NCAA President Mark Emmert’s request before the Senate Commerce Committee for a “safe harbor” against antitrust lawsuits on June 9, 2021 means that the NCAA wishes to operate without antitrust scrutiny.
The NCAA admits that Mark Emmert made $2.9 million in 2019 for serving as NCAA President, and that three other NCAA employees made over $1 million and ten others made over $550,000.
The NCAA and the Conferences did not address the Plaintiffs’ allegations that the NCAA lobbied against state NIL laws and executive orders and threatened legal actions against California’s Fair Pay to Play Act, passed in Fall 2019.
The NCAA and the Conferences admit that the NCAA studied NIL issues and drafted proposed rules changes and legislation related to NIL.
The NCAA denies that it issued the Interim NIL Policy on July 1, 2021 because of the decision in NCAA v. Alston or the changing state laws.
The NCAA admits that its former Executive Vice President of Regulatory Affairs Oliver Luck made a statement in which he indicated that a person’s NIL is a “fundamental right”, and that he a doesn’t believe a student athlete who accepts a grant-in-aid waives their NIL rights.
The NCAA contends that the Plaintiffs have not properly defined classes of people for which they seek recovery, including some former athletes. The NCAA also contends that the Plaintiffs are not entitled to an injunction against NIL rules that are no longer in place.
The NCAA and the Conferences contend that the Plaintiffs claims are barred by settlements and agreements related to the prior litigation that led to the Supreme Court’s decision in NCAA v. Alston.
The SEC says it lacks sufficient knowledge to admit or deny whether Nick Saban was correct in stating that Alabama’s starting quarterback, Bryce Young, had already earned $1 million in NIL deals.
The NCAA admits that it denied Plaintiff Sedona Prince’s request for a hardship waiver to allow her to play basketball in the 2019-20 season after transferring from the University of Texas to the University of Oregon.
The answer deadline in this case was the first in-court opportunity for the NCAA and the Power Five Conferences to take a position on the NIL debate and the general anti-trust arguments against the NCAA’s amateurism model in the post-Alston era. However, the NCAA and the Conferences did not take any strong positions or make any unexpected arguments, instead simply denying most of Plaintiffs’ allegations and avoiding the question of how Alston affects this case by simply denying that the Supreme Court’s decision in Alston is applicable here.
Trial in this case is not until 2024. The next significant development will be the deadline for the court to determine whether to certify the classes requested by the Plaintiffs, a decision which would determine whether certain former student athletes could be entitled to NIL benefits they were prevented from obtaining during their days as student athletes.