On May 18, the U.S. Court of Appeals for the Ninth Circuit handed down its decision in Alston v. NCAA, the so-called “pay for play” case in which student-athletes challenged certain “amateurism” rules of the National Collegiate Athletic Association (NCAA) as violating the antitrust laws. The Court of Appeals affirmed the district court’s opinion in all respects, disappointing both the NCAA (which wanted the district court’s injunction dissolved) and the student-athlete plaintiffs (who wanted the NCAA’s rules enjoined to an even greater degree).
The bottom line is that the district court’s injunction (which was stayed during the appeal) may take effect after the decision becomes final. That injunction provides as follows, as to student-athletes in Division I in football and men’s and women’s basketball:
The Court of Appeals affirmed the district court based on the following conclusions:
Judge Smith wrote a concurring opinion, calling the NCAA a cartel and expressing concern that the current state of antitrust law “unwittingly” expands the Rule of Reason in a way that “deprives” the student-athletes of the “fundamental protections” that the antitrust laws were meant to provide them. While Judge Smith agreed that this expansion of the Rule of Reason (whether a party at step two of the Rule of Reason may use a procompetitive effect in a different market to justify anti-competitive conduct in the market at issue) was not raised as an issue by the parties in Alston, he flagged it so that the Ninth Circuit may address it in an appropriate case.
We expect to provide further thoughts on the interplay of this decision with the report issued last month of the NCAA Federal and State Legislation Working Group in the wake of the proposed pay for play legislation coming out of many states. But keep in mind that when the Ninth Circuit issued its decision in O’Bannon, the NCAA filed a petition for rehearing en banc (which was denied) and then both sides filed unsuccessful petitions for a writ of certiorari in the Supreme Court before the decision became final.