On June 15, 2020, the NCAA and Power Five Conferences were hit with a class action complaint in the U.S. District Court for the Northern District of California. The complaint, filed on behalf of plaintiffs Grant House (a member of Arizona State University’s men’s swimming and diving team) and Sedona Prince (a member of the University of Oregon’s women’s basketball team), seeks certification of nationwide classes of current and former student-athletes who seek damages and equitable relief related to the use of their names, images and likenesses (NILs). The complaint takes aim at the NCAA’s prohibition on Division I athletes receiving compensation for the commercial use of their NILs and asserts antitrust and unjust enrichment claims against the NCAA and Power Five Conferences.
The complaint marks the latest development in the nationwide effort to rethink the rules governing the commercial use of student-athletes’ NILs. More than thirty states have introduced legislation permitting student-athletes to receive compensation for use of their NILs, while efforts are underway to design federal legislation that would establish national standards. The NCAA recently changed its official policy on student-athlete NIL compensation and endorsed an internal working group report recommending rule changes to permit student-athletes to receive compensation for third-party endorsements and personal appearances, among other things. (Click here for previous coverage about the working group report.) And some colleges and universities are designing programs to help student-athletes build and promote their personal brands in the event of a change in NCAA rules.
Draft NIL legislative proposals from the NCAA’s three divisions are not due until later this year, however, and the complaint claims that judicial intervention is necessary to enjoin the current restraints on NILs and provide adequate relief to thousands of current and former student-athletes who have been damaged by them. The complaint broadly takes aim at the restraints prohibiting student-athletes from receiving anything of value in exchange for the commercial use of their NILs, and identifies a series of NCAA Bylaws that govern student-athletes’ conduct with respect to advertisements and promotions, the use of their names, pictures, and athletics reputations, and sales of athletics equipment as prime examples of the offending regime.
The complaint seeks relief on behalf of the plaintiffs and putative classes in the form of: (1) a permanent injunction prohibiting enforcement of agreements to restrict the amount of NIL compensation available to class members; (2) a declaratory judgment declaring void the NCAA’s Bylaws that operate to impose a restriction on the compensation student-athletes can receive in exchange for the commercial use of their NILs; (3) social media earnings that members of a Social Media Damages Sub-Class would have received absent defendants’ purported unlawful conduct; (4) the share of game telecast group licensing revenue members of a Group Licensing Damages Sub-Class would have received absent defendants’ purported unlawful conduct; and (5) treble damages for antitrust violations. Needless to say, the financial stakes could run well into the hundreds of millions. Dollars aside, there is little doubt that colleges, universities, student-athletes and fans alike will continue to pay close attention to the multi-pronged effort to reform the rules governing use of NILs through litigation, rule changes and legislation (state and federal).
- The Atlantic Coast Conference, Big Ten, Big 12, Pac-12, and Southeastern Conference.