Thursday, October 28, 2010

Antitrust Lawsuit Filed Against the NCAA

As noted by a commenter to an earlier post, a class action antitrust lawsuit was filed against the NCAA on Monday in United States District Court in San Francisco by former Rice University football player Joseph Agnew. Specifically, the suit alleges that NCAA rules prohibiting universities from offering guaranteed multi-year athletic scholarships, as well as rules limiting the number of scholarships a university can offer in a particular sport, violate federal antitrust law.

Agnew started at defensive back for the Owls as a freshman in 2006, before seeing reduced playing time as a sophomore due to shoulder and ankle injuries. Rice then elected not to renew his scholarship for either his junior or senior years. Agnew asserts that but for the NCAA rules, he would have received multi-year scholarship offers when he was recruited out of high school. The suit seeks to represent a class of athletes who, like Agnew, had their one-year scholarships reduced or non-renewed. In its defense, the NCAA immediately noted that one-year renewable scholarships are the norm in higher education not only for athletic scholarships, but also talent-based and academic scholarships in general.

Agnew's lawsuit comes on the heels of news this summer that the United States Justice Department was itself investigating potential antitrust concerns arising from the NCAA's prohibition of multi-year scholarships (previously discussed by Michael McCann here and here). Moreover, as notes, although courts have historically granted the NCAA some leniency when it comes to rules deemed necessary to preserve amateurism, the NCAA settled a case in 2008 brought by former student-athletes alleging that NCAA rules prohibiting colleges from offering to cover the full cost of attendance violated antitrust law.

One interesting tidbit reported by the New York Times is that Agnew is being represented by Steve Berman of the Hagens Berman Sobol Shapiro firm. Berman's firm also represents former Nebraska and Arizona State quarterback Sam Keller in his class action lawsuit against the NCAA and E.A. Sports, alleging that the two entities illegally use college athletes’ likenesses without their permission in video games.