NCAA Obtains A Vital Win On Antitrust Challenge Of Athletic Aid Rules

In a recent federal court decision, the NCAA obtained dismissal of a claim that certain rules governing athletic grants-in-aid violated the antitrust laws. The case, Rock v. NCAA, was led by three former student-athletes and challenged a series of NCAA bylaws restricting or prohibiting the grant of athletics-based financial aid. A federal judge in Indiana granted the NCAA's motion to dismiss, primarily on the basis that plaintiffs failed to identify a relevant market in which to analyze the alleged unreasonable restraint of trade.

The NCAA's ultimate success in this case is important to the institution given the host of recent legal challenges to the scope and use of its authority. A class action lawsuit in California federal court led by former UCLA basketball star Ed O'Bannon is set for trial next year over the NCAA's use of names and likenesses of student-athletes. On the opposite side of the country, a case brought by Governor Corbett of Pennsylvania alleges antitrust violations by the NCAA on the grounds arising from its enforcement of sanctions against Penn State University. Meanwhile, a federal court in Illinois is considering claims that the NCAA was negligent in safeguarding student-athletes from the risk of concussions.

These actions notwithstanding, one of the largest challenges facing the NCAA may be the result of its own alleged misconduct in an investigation of the University of Miami. The NCAA has admitted that it improperly accessed documents and testimony in a bankruptcy proceeding through counsel to an informant in an investigation. This conduct led the NCAA to terminate the head of its enforcement division, and has cast a shadow over the entire investigation. With the resulting lack of faith in its investigatory practices, it is expected that institutions and athletics personnel will be more assertive in challenging NCAA sanctions in the future. In this environment, it is essential for the NCAA to show that its processes and rules are proper and reasonable in light of the Association's mission.

The plaintiffs' claims in the recently dismissed Rock case involved three NCAA Bylaws: (1) a prohibition of multi-year athletics-based scholarships (a prohibition which was subsequently rescinded by the NCAA); (2) limits on the number and amounts of athletics-based scholarships; and (3) with respect to Division III institutions, the general prohibition against athletics-based scholarships. The three named plaintiffs consisted of a...