Judge allows challenge of NCAA amateurism rules

Steve Berkowitz, USA TODAY Sports | USATODAY

A federal judge on Friday partially granted class action status in a lawsuit concerning the use of college athletes' names and likenesses.

U.S. District Judge Claudia Wilken ruled the plaintiffs, including former and current Division I men's basketball players and Football Bowl Subdivision players, will be allowed to challenge the NCAA's current restrictions on what athletes might receive in exchange for playing sports. The ruling sets up the prospect of a fundamental change in scholarship rules and the concept of amateurism.

However, Wilken denied the plaintiffs' bid to certify a class that was seeking potentially billions of dollars in damages from the NCAA for improper use of athletes' names and likenesses in a variety of forms, including live television broadcasts.

The NCAA claimed victory regarding the judge's refusal to certify a class that would be entitled to damages, but it did not address the class that was certified – one that still could cause major issues for the association and its member schools and conferences.

"We have long maintained that the plaintiffs in this matter are wrong on the facts and wrong on the law. This ruling is one step closer to validating that position," the NCAA's chief legal officer, Donald Remy, said in a statement. "We are pleased that the court correctly found that conducting a class-wide trial for claimed damages for student-athletes who played college football and men's basketball going back nearly a decade would be completely unmanageable and unprecedented. The plaintiffs in this case were seeking substantial damages based on erroneous theories for maintaining a class. The court correctly removed these claims from this case."

Lawyers for the plaintiffs were extremely pleased with the ruling. The firm of one of the lead plaintiffs' attorneys, Michael Hausfeld, issued a news release headlined, "Judge Permits Historic Case Against the NCAA to Proceed as a Class Action."

In the release, Hausfeld said: "The court's decision is a victory for all current and former student-athletes who are seeking compensation on a going forward basis. While we are disappointed that the court did not permit the athletes to seek past damages as a group, we are nevertheless hopeful that the court's decision will cause the NCAA to reconsider its business practices."

Another member of the Hausfeld firm, Hilary Scherrer, said: "There is a growing public recognition that the NCAA's business practices are unfair and must be changed. The court's ruling is a giant leap in the effort to end these unfair practices."

Up to this point, the case involved only a group of roughly 20 former and current athletes, led by former UCLA basketball player Ed O'Bannon. In her 24-page ruling, Wilken wrote that the plaintiffs' request to build a much larger group of plaintiffs for the purpose of challenging the NCAA's amateurism rules met the class-certification criteria that are set under the federal rules of civil legal procedure. The criteria basically require that there be questions of law or fact that are common to the prospective wider class of plaintiffs and that those questions are greater in number than any questions that affect individual members of the prospective wider class.

Wilken wrote: "Plaintiffs seek certification to pursue an injunction barring the NCAA from prohibiting current and former student-athletes from entering into group licensing deals for the use of their names, images, and likenesses in videogames and game broadcasts. Their request for this injunction is not merely ancillary to their demand for damages. Rather, it is deemed necessary to eliminate the restraints that the NCAA has allegedly imposed on competition in the relevant markets. Without the requested injunctive relief, all class members -- including both current and former student-athletes -- would potentially be subject to ongoing antitrust harms resulting from the continued unauthorized use of their names, images, and likenesses. Because an injunction would offer all class members 'uniform relief' from this harm … class certification is appropriate."

In denying the plaintiffs' bid for a class that could seek monetary damages from the NCAA, Wilken said that the plaintiffs could not identify a feasible way of determining which current and former athletes were "actually harmed" by the NCAA's limits on what athletes can receive for playing sports.

One of the problems she cited was an ironic turn on the plaintiffs' case. It also gave insight into her thinking about what the major-college athletics landscape would look like if the NCAA's current limits on athlete compensation were lifted.

"One of Plaintiffs' central contentions in this case is that, without the ban on student-athlete pay, competition among Division I schools for student-athletes would increase substantially," she wrote. "That increased competition for student-athletes, combined with the potentially higher costs of recruiting and retaining those student-athletes, would have likely driven some schools into less competitive divisions thereby insulating entire teams from the specific harms that Plaintiffs allege in this suit."

The judge also pointed out the difficulty "in determining which student-athletes were actually depicted in videogames." Noting that major-college football rosters have as many as 105 players, the judge said that the videogames' inclusion of 68 players per team and that NCAA football teams allow multiple players to wear the same jersey number, "makes it impossible to determine" which athletes suffered harm from being in the game "without conducting thousands of individualized comparisons between real-life college football players and their potential videogame counterparts."

This finding comes after video game manufacturer Electronic Arts became a participant in a proposed $40 million settlement of claims against it in this case and several others. In addition, EA has announced it will not produce a college football game in 2014 and is "evaluating our plan for the future of the franchise."

In addition to her finding on class certification, Wilken gave a separate but significant victory to the plaintiffs relative to the work of two of their key economic experts -- Roger Noll, an economics professor emeritus at Stanford, and Larry Gerbrandt, a media rights valuation consultant. The NCAA had raised objections about their testimony in the case, but Wilken overruled those objections, saying: "Each of these witnesses offered relevant testimony regarding whether the question of antitrust liability can be resolved through class-wide proof and analysis and each witness based his opinions on a sufficiently reliable methodology." She did add that the NCAA "may question the strength of their analyses."