Judge releases ruling on O'Bannon case: NCAA loses

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by Steve Berkowitz, USA TODAY Sports

WHAS11.com

Posted on August 8, 2014 at 7:59 PM

Updated Sunday, Aug 10 at 8:41 AM

 (USA Today)-- A federal judge ruled Friday that the NCAA's limits on what major college football and men's basketball players can receive for playing sports "unreasonably restrain trade" in violation of antitrust laws.

 
U.S. District Judge Claudia Wilken, in a 99-page ruling in favor of a group of plaintiffs led by former UCLA basketball player Ed O'Bannon, issued an injunction that will prevent the NCAA the "from enforcing any rules or bylaws that would prohibit its member schools and conferences from offering their FBS football or Division I basketball recruits a limited share of the revenues generated from the use of their names, images, and likenesses in addition to a full grant-in-aid."
 
Wilken said the injunction will not be stayed pending any appeal of her ruling, but it will not take effect until the start of the next FBS football and Division I basketball recruiting cycle
 
"We disagree with the Court's decision that NCAA rules violate antitrust laws," NCAA Chief Legal Officer Donald Remy said in a statement. "We note that the Court's decision sets limits on compensation, but are reviewing the full decision and will provide further comment later. As evidenced by yesterday's Board of Directors action, the NCAA is committed to fully supporting student-athletes."
 
Michael A. Carrier, a Rutgers-Camden law school professor and antitrust expert, told USA TODAY Sports: "I think for the NCAA, this is a huge loss because for the first time you have a court looking at its prized defenses, things like amateurism and competitive balance, and saying this is not persuasive.
 
"This has to be viewed as a significant win for the plaintiffs and significant loss for NCAA."
 
The NCAA is almost certain to appeal Wilken's ruling, which may have an impact on another set of antitrust cases that are before her.
 
In those cases, two sets of plaintiffs are challenging the NCAA's limits on what athletes can receive under and athletic scholarship. One of those cases — which is against the NCAA and 12 Division I conferences — seeks monetary damages based on the difference between the value of an athletic scholarship as currently defined by the NCAA — tuition, mandatory fees, room, board and books — and the actual cost of attending college, a figure that includes out-of-pocket costs such as transportation to and from school. The damages in that case, which would be tripled under antitrust law, could run into the hundreds of millions of dollars if the plaintiffs prevail.
 
The NCAA and the conferences must give Wilken their responses or motions to dismiss the suits by Aug. 20.
 
"I think it's a fantastic win for the student-athletes, and it's rare that you have victories against the NCAA and victories in this type of antitrust case but I think it shows the facts were clear that there was an unfairness here," said Robert Carey, the attorney for Arizona State and Nebraska quarterback Sam Keller, who sued in a separate case focusing on college sports-themed video games.
 
"I think there are more fights that are going to occur here, but this is a very important victory for the student athletes. You can't say otherwise. You just can't.
 
"She found that it was unfair and that the student-athletes were entitled to have some of the restrictions the NCAA was imposing struck."
 
Michael Hausfeld, the lead attorney for the O'Bannon plaintiffs, could not be reached for immediate comment.
 
However, in the wake of Thursday NCAA vote granting autonomy to the power 5 conferences, he said: "The movement toward autonomy establishes a number of essential elements that were addressed at trial. It shows the association restrains members in a cartel-like fashion to act to a bottom line" when schools that have the financial resources are interested in spending more "to the benefit of athletes"
 
"It's a big step in helping out with basically student-athlete rights," said former Arizona linebacker Jake Fischer, one of the O'Bannon plaintiffs. "It's getting things moving in the right direction."
 
Fischer, who works for Primerica Financial Services in Tucson with plans to become an investment adviser, praised the NCAA's recent decision to provide unlimited meals to athletes.
 
"The food they're now feeding athletes is a huge step forward," he said. "I was a huge advocate of that."
 
Wilken's ruling said the NCAA will not be prevented from implementing rules capping the amount of compensation that may be paid athletes while they are in school. However, she ruled, "the NCAA will not be permitted to set this cap below the cost of attendance, as the term is defined in its current bylaws."
 
She wrote that the injunction also will prohibit the NCAA from enforcing any rules that would prevent schools and conferences from "offering to deposit a limited share of licensing revenue in trust for their FBS football and Division I basketball recruits, payable when they leave school or their eligibility expires."
 
The injunction will allow the NCAA to set a cap on the amount of money that may be held in trust, but it will not be allowed the set that cap at less than $5,000 in 2014 dollars for every year an athlete remains academically eligible to compete.
 
"A lot of this lawsuit seemed to be about fairness," Carrier said. "It didn't seem right that the players' images were used and they were not able to be paid for it at the same time that coaches are making millions of dollars, there are brand new facilities. … Those athletes today will feel like justice is done."
 

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