November Antitrust Bulletin - 2013

Court Denies NCAA's Motion to Dismiss Student Athletes' Antitrust Suit

On Oct. 25, 2013, in In re NCAA Student-Athlete Name & Likeness Licensing Litigation, No. C 09-1967 CW (N.D. Ca.) the U.S. District Court for the Northern District of California denied a motion filed by the National Collegiate Athletic Association (NCAA) to dismiss antitrust claims asserted against it by a group of 21 former Division I players. The players contend that the NCAA along with defendants Collegiate Licensing Company (CLC) and Electronic Arts, Inc. (EA) conspired to restrain competition in the market for the commercial use of their names, images and likenesses by requiring plaintiffs, as student athletes, to relinquish all rights in their images, which the defendants then used in NCAA-branded video games. CLC and EA settled with the plaintiffs, leaving only the claims against the NCAA remaining.

The NCAA argued that the plaintiffs' claims were barred by NCAA v. Board of Regents, 468 U.S. 85, (1984), which recognized that intercollegiate athletics is "an industry in which horizontal restraints on competition are essential if the product is to be available at all." The NCAA relied on the Supreme Court's observation that "in order to preserve the character and quality of the [NCAA's] 'product,' athletes must not be paid, must be required to attend class, and the like."

The district court, however, disagreed, explaining that "while Board of Regents gives the NCAA 'ample latitude' to adopt rules preserving 'the revered tradition of amateurism in college sports,' it does not stand for the sweeping proposition that student-athletes must be barred, both during their college years and forever thereafter, from receiving any monetary compensation for the commercial use of their names, images and likenesses." The court also rejected the NCAA's arguments that the First Amendment and federal copyright law preclude the plaintiffs' claims.

Ninth Circuit Hears Argument in Price-Fixing Case

On Oct. 18, 2013, in United States of America v. AU Optronics Corp. et al., case numbers 12-10492, 12-10493, 12-10500 and 12-10514, the U.S. Court of Appeals for the Ninth Circuit heard argument from Taiwanese LCD manufacturer AU Optronics Corp. (AUO) and two of its executives urging it to overturn their price-fixing convictions in a case of great importance in the prosecution of foreign antitrust violations in the United States. The defendants were found guilty in a 2012 jury trial for...