NCAA Athletes Score On Injunctive Class Certification As Court Blocks Damage Claims

Former and current student athletes have achieved a major goal in their class action challenging National Collegiate Athletic Association (“NCAA”) rules permitting the use of their likenesses without compensation, convincing the U.S. District Court for the Northern District of California to certify a class for their claims for injunctive relief.

The NCAA also scored in In re: NCAA Student-Athlete Name & Likeness Licensing Litigation by convincing Judge Claudia Wilken to deny the part of plaintiffs’ class certification motion that sought certification of a damages subclass, blocking the athletes’ drive to obtain past damages in addition to revising the NCAA rules.

The court ruled that the plaintiffs met the requirement of being adequate representatives of the injunctive relief class because they seek an equal division of damages among all class members.  The plaintiffs seek to require the NCAA to place a portion of the fees it receives from entities such as video game producer EA Sports (“EA”) into a trust fund for student athletes.  The plaintiff’s proposed relief would also enable student athletes to negotiate separate deals for payments from game makers.

Judge Wilken denied certification of a damages subclass largely because of the complexities that would be involved in allocating past damages among the different past and current student athletes.  “Plaintiffs would have to cross-check thousands of team rosters against thousands of game summaries and compare dozens of game schedules to dozens of broadcast licenses simply to determine who belongs in the Damages Subclass,” Judge Wilken noted.

The student athletes’ partial victory on their class certification motion comes on the heels of their late-October victory in defeating the NCAA’s motion to dismiss their claims.  The NCAA had contended that the U.S. Supreme Court and other federal courts have upheld its rules prohibiting player compensation to preserve the amateur quality of college sports.  However, the court found that “the revered tradition of amateurism in college sports” doesn’t stand for the sweeping proposition that student athletes must be barred from profiting off their likenesses during, and after, their college years.

Edward O’Bannon, MVP of the NCAA 1995 men’s basketball tournaments, initially led this class action.  Other former and current college football players are now part of it.  Their antitrust claim alleges that the NCAA conspired with EA and the Collegiate Licensing Company (“CLC”) to restrain competition in the market.  The NCAA requires student athletes to sign various release forms as a condition of their eligibility to compete.   According to the plaintiffs, those forms “require[d] each of them to relinquish all rights in perpetuity to the commercial use of their images, including after they graduate and are no longer subject to NCAA regulations.”  The plaintiffs allege that this requirement restrains competition and lowers the student players’ compensation compared to what they would earn in a more competitive market.

The NCAA argues that this case is about professionalizing a few current student athletes to the detriment of all others.  The NCAA also claims that it does not license student-athlete likenesses for any commercial purpose.  According to the NCAA, it licenses its own copyrighted works, such as broadcasts, photos, marks, or logos.

EA and CLC settled out of court for a reported $40 million.  However, the NCAA asserts it is willing to take this case to the Supreme Court, if necessary.

Tagged in: Antitrust Litigation,