JENKINS et al v. NATIONAL COLLEGIATE ATHLETIC ASSOCIATION et al

Filing 371

ORDER GRANTING IN PART AND DENYING IN PART CROSS-MOTIONS FOR SUMMARY JUDGMENT by Judge Claudia Wilken. Pretrial Conference set for 11/13/2018 at 2:30 pm. Bench Trial (10 days) set for 12/3/2018 at 8:30 am.(dtmS, COURT STAFF) (Filed on 3/28/2018)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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IN RE: NATIONAL COLLEGIATE
ATHLETIC ASSOCIATION ATHLETIC
GRANT-IN-AID CAP ANTITRUST
LITIGATION

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ORDER GRANTING IN PART AND
DENYING IN PART CROSS-MOTIONS
FOR SUMMARY JUDGMENT

THIS DOCUMENT RELATES TO:

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ALL ACTIONS

(Dkt. Nos. 657, 704, 797,
800)

United States District Court
Northern District of California

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Case Nos. 14-md-02541-CW
14-cv-02758-CW

In this multidistrict litigation, student-athlete Plaintiffs

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allege that Defendants National Collegiate Athletic Association

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(NCAA) and eleven of its member conferences fixed prices for the

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payments and benefits that the students may receive in return for

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their elite athletic services.

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summary judgment.1

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motions for summary judgment are granted in part and denied in

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part.2

Now pending are cross-motions for

For the reasons set forth below, the cross-

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BACKGROUND

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Plaintiffs are current and former student-athletes in the

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sports of men’s Division I Football Bowl Subdivision (FBS)

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football and men’s and women’s Division I basketball.

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are the NCAA and eleven conferences that participated, during the

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relevant period, in FBS football and in men’s and women’s

Defendants

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1

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The Court will rule by separate order on the pending
motions to seal and to exclude proposed expert testimony.
2
In the exercise of discretion, the Court denies Defendants’
Motion for Supplemental Briefing and Plaintiffs’ Motion to File
Supplemental Evidence for the Summary Judgment Record. See Civil
Local Rule 7-3(d). The Court does not, at this time, rule on
whether Plaintiffs’ proposed supplemental evidence will be
admissible at trial.

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Division I basketball.

Plaintiffs allege that Defendants

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violated federal antitrust law by conspiring to impose an

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artificial ceiling on the scholarships and benefits that student-

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athletes may receive as payment for their athletic services.

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I.

O’Bannon v. NCAA
In 2009, a group of college Division I student-athletes

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brought an antitrust class action against the NCAA to challenge

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the association’s rules preventing men’s football and basketball

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United States District Court
Northern District of California

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players from being paid, either by their school or by any outside

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source, for the sale of licenses to use the student-athletes’

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names, images, and/or likenesses (NIL) in videogames, live game

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telecasts, and other footage.

O’Bannon v. NCAA, 7 F. Supp. 3d

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955, 962-63 (N.D. Cal. 2014).

The rules challenged by the

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O’Bannon plaintiffs, which furthered the agreement of the NCAA

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and its members to fix the value of student-athletes’ NIL at

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zero, included the then-applicable maximum limit on financial

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aid.

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receiving “financial aid based on athletics ability” that

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exceeded the value of a full grant-in-aid.

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3d at 971.

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that consists of tuition and fees, room and board, and required

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course-related books.”

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attendance, such as supplies and transportation, were not

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included in the grant-in-aid limit, although they were calculated

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in a school-specific figure called “cost of attendance.”

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Under that limit, student-athletes were prohibited from

O’Bannon, 7 F. Supp.

The rules defined “grant-in-aid” as “financial aid

Id.

Other expenses related to school

Id.

The Court held a bench trial and ruled that the challenged

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NCAA rules violated Section 1 of the Sherman Act, 15 U.S.C. § 1.

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Id. at 963.

The Court found that the evidence presented at trial
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established that FBS football and Division I men’s basketball

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schools compete to recruit the best high school football and

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men’s basketball players in a relevant market for a college

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education combined with athletics.

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88.

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FBS and Division I schools compete “to sell unique bundles of

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goods and services to elite football and basketball recruits.”

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Id. at 965, 986.

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United States District Court
Northern District of California

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alternatively, could be understood as a monopsony, in which the

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NCAA member schools, acting collectively, are the only buyers of

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the athletic services and NIL licensing rights of elite student-

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athletes.

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7 F. Supp. 3d at 965-68, 986-

In exchange for educational and athletic opportunities, the

The Court found that this market,

Id. at 973, 993.

The Court found that the plaintiffs met their burden to show

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that the NCAA had fixed the price of the student-athletes’ NIL

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rights, which had significant anticompetitive effects in the

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relevant market.

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procompetitive justifications of the restraints, the Court found

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that the NCAA’s challenged restrictions on student-athlete

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compensation played “a limited role in driving consumer demand

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for FBS football and Division I basketball-related products.”

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Id. at 1001.

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“might facilitate the integration of academics and athletics

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. . . by preventing student-athletes from being cut off from the

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broader campus community.”

Id. at 971-73, 988-93.

On the question of

The Court also found that the challenged rules

Id. at 1003.

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The O’Bannon plaintiffs proposed three alternatives that

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they asserted were less restrictive than the NCAA rules that they

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challenged: (1) raising the grant-in-aid limit to allow schools

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to award stipends, derived from specified sources of licensing
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revenue, to student-athletes; (2) allowing schools to deposit a

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share of licensing revenue into a trust fund for student-athletes

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which could be paid after the student-athletes graduate or leave

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school for other reasons; and (3) permitting student-athletes to

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receive limited compensation for third-party endorsements

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approved by their schools.

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proposed less restrictive alternatives related specifically to

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the use of revenue derived from NIL licensing and endorsements.

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United States District Court
Northern District of California

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This Court found that the first two of these proposed

7 F. Supp. 3d at 982.

Each of these

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alternatives “would limit the anticompetitive effects of the

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NCAA’s current restraint without impeding the NCAA’s efforts to

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achieve its stated purposes.”

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Court rejected the plaintiffs’ third proposed alternative.

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at 984.

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any rules that would prohibit its member schools and conferences

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from offering their FBS football and men’s Division I basketball

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recruits a limited share of the revenues generated from the use

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of their NIL in addition to a full grant-in-aid, but permitted

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the NCAA to implement rules capping the amount of compensation

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that could be paid to student-athletes while they are enrolled in

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school at the cost of attendance.

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also prohibited the NCAA from enforcing rules to prevent member

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schools and conferences from offering to deposit a limited share

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of NIL licensing revenue in trust for their FBS football and

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Division I basketball recruits, payable when they leave school or

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their eligibility expires.

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28

Id.; see also id. at 983-84.

The
Id.

Accordingly, this Court enjoined the NCAA from enforcing

Id. at 1007-08.

The Court

Id. at 1008.

The Ninth Circuit largely affirmed this Court’s decision,
including the finding that allowing NCAA member schools to award
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grants-in-aid up to the student-athletes’ full cost of attendance

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would be a substantially less restrictive alternative to the

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existing compensation rules.

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1079 (9th Cir. 2015).

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relation whatsoever to the procompetitive purposes of the NCAA:

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by the NCAA’s own standards, student-athletes remain amateurs as

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long as any money paid to them goes to cover legitimate

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educational expenses.”

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United States District Court
Northern District of California

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judgment and injunction insofar as they required the NCAA to

O’Bannon v. NCAA, 802 F.3d 1049,

It held that “the grant-in-aid cap has no

Id. at 1075.

However, it vacated the

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allow its member schools to pay student-athletes limited deferred

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compensation in a trust account.

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found that allowing “students to receive NIL cash payments

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untethered to their education expenses” would not promote the

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NCAA’s procompetitive purposes as effectively as a rule

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forbidding cash compensation, even if the payment was limited and

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took the form of a trust fund.

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II.

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Id. at 1079.

The circuit court

Id. at 1076.

This Litigation
Plaintiffs initiated these actions in 2014 and 2015,

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attacking the NCAA’s cap on their grant-in-aid itself, rather

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than merely the association’s restrictions on sharing NIL

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revenue.

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Litigation transferred actions filed in other districts to this

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Court pursuant to 28 U.S.C. § 1407 for coordinated or

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consolidated pretrial proceedings.

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were consolidated.

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action is Plaintiffs’ consolidated amended complaint, filed July

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11, 2014.

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orders incorporating additional allegations about named

The United States Judicial Panel on Multidistrict

All but one of the actions

The operative pleading in the consolidated

The consolidated amended complaint has been amended by

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1

Plaintiffs in subsequently-filed cases (Docket Nos. 86, 184,

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197).

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consolidated, but all pending motions were briefed together in

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the consolidated action and in Jenkins.3

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One case, Jenkins v. NCAA, No. 14-cv-02758, has not been

On December 4, 2015, the Court certified three injunctive
relief classes in the consolidated action, under Federal Rule of

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Civil Procedure 23(b)(2): a Division I FBS Men’s Football Class,

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a Division I Men’s Basketball Class, and a Division I Women’s

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United States District Court
Northern District of California

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Basketball Class, each consisting of student-athletes who

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received or will receive a written offer for a full grant-in-aid

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as defined by NCAA Bylaw 15.02.5 during the pendency of this

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action.

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football and basketball classes; the women’s basketball class was

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not sought in that case.

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proceedings, all Plaintiffs committed to seek to stay either the

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consolidated case or the Jenkins case prior to trial of the other

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in order to avoid duplicative trials on behalf of identical

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classes and a race to determine which judgment would be binding

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under principles of res judicata.

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In the Jenkins action, the Court certified the men’s

As part of the class certification

Defendants and the consolidated Plaintiffs reached a

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3

The Jenkins Plaintiffs raise one separate issue in a
footnote to Plaintiffs’ opposition to Defendants’ cross-motion
for summary judgment. They request that if the Court grants
Defendants’ summary judgment motion in the consolidated action,
the Court not apply the ruling to the Jenkins action, but instead
remand it back to the District of New Jersey, where the decisions
of the Ninth Circuit and this Court in O’Bannon would not control
under the doctrine of stare decisis. At the hearing on the
motion, the Jenkins Plaintiffs clarified that they do not seek
remand if the Court grants summary judgment only in part. See
Jan. 16, 2018 Tr. at 50. Because the Court grants summary
judgment in part and denies it in part, the Jenkins Plaintiffs’
request for remand prior to summary judgment is moot.
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settlement of all claims for damages, and the Court granted final

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approval of that settlement and entered a partial judgment under

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Federal Rule of Civil Procedure 54(b) on December 6, 2017.

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Jenkins Plaintiffs have not sought damages.

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claims for injunctive relief remain pending.

The

Therefore, only

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LEGAL STANDARD

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Summary judgment is properly granted when no genuine and
disputed issues of material fact remain, and when, viewing the

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United States District Court
Northern District of California

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evidence most favorably to the non-moving party, the movant is

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clearly entitled to prevail as a matter of law.

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56; Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986);

12

Eisenberg v. Ins. Co. of N. Am., 815 F.2d 1285, 1288-89 (9th Cir.

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1987).

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Fed. R. Civ. P.

The moving party bears the burden of showing that there is

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no material factual dispute.

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true the opposing party’s evidence, if supported by affidavits or

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other evidentiary material.

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815 F.2d at 1289.

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in favor of the party against whom summary judgment is sought.

20

Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,

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587 (1986); Intel Corp. v. Hartford Accident & Indem. Co.,

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952 F.2d 1551, 1558 (9th Cir. 1991).

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Therefore, the court must regard as

Celotex, 477 U.S. at 324; Eisenberg,

The court must draw all reasonable inferences

Material facts which would preclude entry of summary

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judgment are those which, under applicable substantive law, may

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affect the outcome of the case.

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identify which facts are material.

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Inc., 477 U.S. 242, 248 (1986).

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The substantive law will
Anderson v. Liberty Lobby,

Where the moving party does not bear the burden of proof on
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an issue at trial, the moving party may discharge its burden of

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production by either of two methods:
The moving party may produce evidence negating an
essential element of the nonmoving party’s case, or,
after suitable discovery, the moving party may show
that the nonmoving party does not have enough evidence
of an essential element of its claim or defense to
carry its ultimate burden of persuasion at trial.

3
4
5
6

Nissan Fire & Marine Ins. Co., Ltd., v. Fritz Cos., Inc.,

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210 F.3d 1099, 1106 (9th Cir. 2000).
If the moving party discharges its burden by showing an

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United States District Court
Northern District of California

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absence of evidence to support an essential element of a claim or

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defense, it is not required to produce evidence showing the

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absence of a material fact on such issues, or to support its

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motion with evidence negating the non-moving party’s claim.

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see also Lujan v. Nat’l Wildlife Fed’n, 497 U.S. 871, 885 (1990);

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Bhan v. NME Hosps., Inc., 929 F.2d 1404, 1409 (9th Cir. 1991).

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If the moving party shows an absence of evidence to support the

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non-moving party’s case, the burden then shifts to the non-moving

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party to produce “specific evidence, through affidavits or

18

admissible discovery material, to show that the dispute exists.”

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Bhan, 929 F.2d at 1409.

20

Id.;

If the moving party discharges its burden by negating an

21

essential element of the non-moving party’s claim or defense, it

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must produce affirmative evidence of such negation.

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210 F.3d at 1105.

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the burden then shifts to the non-moving party to produce

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specific evidence to show that a dispute of material fact exists.

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Id.

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Nissan,

If the moving party produces such evidence,

If the moving party does not meet its initial burden of

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8

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production by either method, the non-moving party is under no

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obligation to offer any evidence in support of its opposition.

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Id.

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ultimate burden of persuasion at trial.

This is true even though the non-moving party bears the

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6

Id. at 1107.

DISCUSSION
I.

Res Judicata and Collateral Estoppel
Defendants argue that all of Plaintiffs’ claims are

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foreclosed under the doctrines of res judicata, or claim

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United States District Court
Northern District of California

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preclusion, and collateral estoppel, or issue preclusion, by the

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decisions of the Ninth Circuit and this Court in O’Bannon.

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802 F.3d 1049; 7 F. Supp. 3d 955.

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is to “relieve parties of the cost and vexation of multiple

13

lawsuits, conserve judicial resources, and, by preventing

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inconsistent decisions, encourage reliance on adjudication.”

15

Allen v. McCurry, 449 U.S. 90, 94 (1980).

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the elements of either res judicata or collateral estoppel is on

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the party asserting it.

18

1042, 1050-51 (9th Cir. 2008) (collateral estoppel); Karim-Panahi

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v. Los Angeles Police Dep’t, 839 F.2d 621, 627 n.4 (9th Cir.

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1988) (res judicata).

21

The purpose of these doctrines

The burden of proving

Kendall v. Visa U.S.A., Inc., 518 F.3d

Res judicata prohibits the re-litigation of any claims that

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were raised or could have been raised in a prior action.

23

Sierra Pres. Council v. Tahoe Reg’l Planning Agency, 322 F.3d

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1064, 1077-78 (9th Cir. 2003).

25

order for res judicata to apply: (1) an identity of claims;

26

(2) a final judgment on the merits; and (3) the same parties or

27

their privies.

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Tahoe-

Three elements must be present in

Id. at 1077.

Collateral estoppel “prevents a party from relitigating an
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issue decided in a previous action if four requirements are met:

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‘(1) there was a full and fair opportunity to litigate the issue

3

in the previous action; (2) the issue was actually litigated in

4

that action; (3) the issue was lost as a result of a final

5

judgment in that action; and (4) the person against whom

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collateral estoppel is asserted in the present action was a party

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or in privity with a party in the previous action.’”

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518 F.3d at 1050 (quoting United States Internal Revenue Serv. v.

9
United States District Court
Northern District of California

1

Palmer, 207 F.3d 566, 568 (9th Cir. 2000)).

Kendall,

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The application of either res judicata or collateral

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estoppel here would require that any Plaintiff not present in

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O’Bannon have been in privity with the parties in that case.

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primary categories of Plaintiffs here were not part of the

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O’Bannon class: male student-athletes who were recruited after

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O’Bannon and female student-athletes.4

Two

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Defendants contend that privity nonetheless exists here

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because, in O’Bannon, the interests of nonparty student-athletes

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were represented adequately by the plaintiffs there with the same

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interests and the Court took special care to protect the

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interests of future student-athletes.

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circumstances, a nonparty may be bound by a judgment because she

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was adequately represented by someone with the same interests who

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was a party to the suit.

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effect on nonparties include properly conducted class actions.”

In “certain limited

Representative suits with preclusive

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4

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27
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The parties have not briefed whether there are any class
members in this case who were not class members in O’Bannon
because their NIL have not been, and will not be, included in
game footage or in videogames after the conclusion of the
athlete’s participation in intercollegiate athletics. See
O’Bannon, 7 F. Supp. 3d at 965 (quoting class definition).
10

1

Taylor v. Sturgell, 553 U.S. 880, 894 (2008) (internal

2

alteration, citation and quotation marks omitted).

3

Court held,

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5
6
7
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United States District Court
Northern District of California

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The Supreme

A party’s representation of a nonparty is “adequate”
for preclusion purposes only if, at a minimum: (1) The
interests of the nonparty and her representative are
aligned, and (2) either the party understood herself to
be acting in a representative capacity or the original
court took care to protect the interests of the
nonparty. In addition, adequate representation
sometimes requires (3) notice of the original suit to
the persons alleged to have been represented.
Taylor, 553 U.S. at 900 (citations omitted).

The Supreme Court

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further explained that, in the federal class action context, the

11

limitations on nonparty representation “are implemented by the

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procedural safeguards contained in Federal Rule of Civil

13

Procedure 23.”

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the O’Bannon class under Rule 23 limits the persons who are

15

subject to the preclusive effect of the judgment.

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then, the effect of res judicata does not extend to individuals

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who were not part of the O’Bannon class.

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cannot satisfy the Taylor factors for individuals who were not

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class members in that case.

20

O’Bannon focused their analysis on the claims of class members,

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the named plaintiffs represented only class members, and only

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class members were on notice that they were represented.

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Id. at 900-01.

In other words, the definition of

Under Taylor,

Furthermore, Defendants

The Court and the parties in

None of the current Plaintiffs’ claims are precluded for an

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additional reason, regardless of whether those Plaintiffs were

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O’Bannon class members.

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continuation of conduct under attack in a prior antitrust suit’”

27

gives rise to a new action.

28

Harry Nace Co., 890 F.2d 181, 183 (9th Cir. 1989) (quoting

The general rule is that “‘the

Harkins Amusement Enters., Inc. v.

11

2 P. Areeda & D. Turner, Antitrust Laws § 323c (1978)) (“Failure

2

to gain relief for one period of time does not mean that the

3

plaintiffs will necessarily fail for a different period of

4

time.”); see also Frank v. United Airlines, Inc., 216 F.3d 845,

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851 (9th Cir. 2000) (“A claim arising after the date of an

6

earlier judgment is not barred, even if it arises out of a

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continuing course of conduct that provided the basis for the

8

earlier claim.”).

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United States District Court
Northern District of California

1

res judicata be applied to bar claims arising from a different

Only where no distinct conduct is alleged can

10

time period.

11

Antitrust Litig., 11 F.3d 1460, 1464 (9th Cir. 1993) (applying

12

res judicata where nothing new was “alleged--no new conspiracy,

13

no new kinds of monopolization, no new acts”).

14

See In re Dual-Deck Video Cassette Recorder

The Court must consider the “conduct of parties since the

15

first judgment” and other factual matters in the new cause of

16

action.

17

Corp., 872 F.2d 1410, 1415 (9th Cir. 1989)).

18

that “both suits involved essentially the same course of wrongful

19

conduct” or that injunctive relief was sought in the first

20

action, especially “in view of the public interest in vigilant

21

enforcement of the antitrust laws through the instrumentality of

22

the private treble-damage action.”

23

Corp., 349 U.S. 322, 327, 329 (1955) (internal quotation marks

24

omitted).

25

Harkins, 890 F.2d at 183 (quoting California v. Chevron
It is not enough

Lawlor v. Nat’l Screen Serv.

The NCAA Bylaws were changed after, and in part because of,

26

O’Bannon, and now permit student-athletes to receive financial

27

aid, based on athletics ability, up to their cost of attendance,

28

or more than that in the case of a Pell grant.
12

See Pls. Ex. 15

at 182 (Bylaws 15.1, 15.1.1).

2

challenge the bar on distributing NIL licensing revenue to

3

student-athletes or the former grant-in-aid limitation.

4

the challenged restraints are the current, interconnected set of

5

NCAA rules that generally limit financial aid to the cost of

6

attendance yet also fix the prices of numerous and varied

7

exceptions--additional benefits that have a financial value above

8

the cost of attendance.

9
United States District Court
Northern District of California

1

(Challenged Rules and Operative Language).

10

In this case, Plaintiffs do not

Rather,

See Pls. Opp. to Defs. MSJ, App’x A

Some of these rules regulate payment for additional benefits

11

that do appear to be tethered to education, such as the rule

12

limiting the availability of academic tutoring.

13

at 102 (Bylaw 13.2.1.1(k), prohibiting tutoring to assist in

14

initial eligibility, transfer eligibility, or waiver requests).

15

The rules also restrict schools’ ability to reimburse student-

16

athletes for computers, science equipment, musical instruments

17

and other items not currently included in the cost of attendance

18

calculation but nonetheless related to the pursuit of various

19

academic studies.

20

Plaintiffs also challenge various additional restrictions on

21

benefits related to educational expenses, such as providing

22

guaranteed post-eligibility scholarships.

23

Currently, schools may provide guaranteed post-eligibility

24

scholarships for undergraduate or graduate study and tutoring

25

costs only at their own institution, but not at other

26

institutions.

27
28

See Defs. Ex. 1

See NCAA (Kevin C. Lennon) Depo. at 212:11-19.

Id. at 195:5-199:17.

Id.

Defendants also allow, but fix the amount of, benefits that
a school may provide that are incidental to athletic
13

participation, such as travel expenses and prizes.

2

58:20-59:16 (“There are items that schools can provide outside of

3

educational expenses, which, again, are tethered to cost of

4

attendance, that I would kind of capture as incidental to

5

participation.”).

6

rules at issue in this case were provided to student-athletes at

7

the time of the O’Bannon trial, but neither this Court nor the

8

Court of Appeals addressed them in that case and their scope has

9
United States District Court
Northern District of California

1

See id. at

expanded since that time.

Some of the additional benefits limited by the

For example, student-athletes could

10

previously receive meals incidental to participation in

11

athletics, see O’Bannon Ex. 2340-233 (then-applicable Bylaws),

12

but may now receive unlimited meals and snacks, see Pls. Ex. 15

13

at 183 (Bylaw 15.2.2.1.6 regarding meals incidental to

14

participation); Mishkin Reply Decl. Ex. 1 at 207 (Bylaw

15

16.5.2(d), (e) regarding meals and snacks).

16

O’Bannon testified that the Student Assistance Fund (SAF)5 could

17

then be used to purchase a “special insurance policy” or

18

“catastrophic injury insurance,”

19

2152:7-17, but student-athletes now may borrow against future

20

earnings to purchase loss-of-value insurance, Pls. Ex. 15 at 58

21

(Bylaw 12.1.2.4.4).

22

performance bonuses from international organizations related to

23

Olympic participation.

24

12.1.2.1.5.2, adopted January 17, 2015 and effective August 1,

Witnesses in

O’Bannon Tr. 2147:14-23,

Student-athletes now may receive athletic

See Pls. Ex. 15 at 57 (Bylaw

25
26
27
28

5

The SAF is a fund that the NCAA provides to member schools
to distribute to student-athletes for a variety of uses, some of
which are in addition to full cost-of-attendance financial aid.
See NCAA (Lennon) Depo. at 152:19-153:19; Pls. Ex. 24 at
NCAAGIA03316052 (reporting on SAF uses).
14

1

2015).

There has been an increase in permissible reimbursement

2

for family travel expenses, which permits schools to pay limited

3

expenses of a student-athlete’s spouse and children to attend

4

games, although still not those of parents or siblings.

5

DuBuis Smith Depo. at 51:24-57:18; see also NCAA (Lennon) Depo.

6

at 71:7-73:2, 186:1-16 (discussing Bylaw 16.6.1.1); Mishkin Reply

7

Decl. Ex. 1 at 303 (Bylaw 18.7.5).

Eugene

Because Plaintiffs raise new antitrust challenges to

9
United States District Court
Northern District of California

8

conduct, in a different time period, relating to rules that are

10

not the same as those challenged in O’Bannon, res judicata and

11

collateral estoppel do not preclude the claims even of those

12

Plaintiffs who were O’Bannon class members.

13

II.

Section 1 of the Sherman Act
The Court next turns to the remaining issues in the parties’

14
15

cross-motions.

Plaintiffs move for summary judgment of their

16

claims under Section 1 of the Sherman Act.

17

order to establish a Section 1 claim, Plaintiffs must

18

demonstrate: “(1) that there was a contract, combination, or

19

conspiracy; (2) that the agreement unreasonably restrained trade

20

under either a per se rule of illegality or a rule of reason

21

analysis; and (3) that the restraint affected interstate

22

commerce.”

23

(9th Cir. 2001) (internal quotation marks omitted).

24

existence of a contract, combination or conspiracy that affects

25

interstate commerce is undisputed in this case.

26

are subject to antitrust scrutiny under the Sherman Act and must

27

be tested using a rule-of-reason analysis.

28

1079.

15 U.S.C. § 1.

In

Tanaka v. Univ. of S. California, 252 F.3d 1059, 1062
The

NCAA regulations

O’Bannon, 802 F.3d at

Under that analysis, Plaintiffs bear the initial burden of
15

1

showing that the challenged restraints produce significant

2

anticompetitive effects within a relevant market.

3

meet this burden, Defendants must come forward with evidence of

4

the restraints’ procompetitive effects.

5

show that any legitimate objectives can be achieved in a

6

substantially less restrictive manner.

7

If Plaintiffs

Plaintiffs must then

Tanaka, 252 F.3d at 1063.

Plaintiffs contend that the undisputed evidence supports
their claim that the challenged restraints cause anticompetitive

9
United States District Court
Northern District of California

8

effects in the relevant market, and that Defendants cannot meet

10

their burden to prove that the restraints have procompetitive

11

benefits.

12

this basis, obviating the need to reach the question of whether

13

there are any less restrictive alternatives to any legitimate

14

objectives.

15

existence of less restrictive alternatives.

They request that the Court grant summary judgment on

Plaintiffs do not seek summary judgment on the

16

Defendants cross-move for summary judgment on the basis that

17

the decisions of this Court and the Ninth Circuit in O’Bannon bar

18

all of Plaintiffs’ claims, under the doctrine of stare decisis.

19

“If a court must decide an issue governed by a prior opinion that

20

constitutes binding authority, the later court is bound to reach

21

the same result, even if it considers the rule unwise or

22

incorrect.

23

overruled by a body competent to do so.”

24

266 F.3d 1155, 1170 (9th Cir. 2001).

25

“there are neither new factual circumstances nor a new legal

26

landscape.”

27

550 F.3d 778, 786 (9th Cir. 2008).

28

the same legal consequence from the same “detailed set of facts.”

Binding authority must be followed unless and until
Hart v. Massanari,

Stare decisis applies when

Ore. Natural Desert Ass’n v. U.S. Forest Serv.,

16

A court is required to reach

In re Osborne, 76 F.3d 306, 309 (9th Cir. 1996).

2

there may be factual differences between the current case and the

3

earlier one, the court must determine whether those differences

4

are material to the application of the rule or allow the

5

precedent to be distinguished on a principled basis.”

6

266 F.3d at 1172; see also Miranda v. Selig, 860 F.3d 1237, 1242

7

(9th Cir. 2017) (stare decisis required where circumstances of

8

new case are not “separate and distinct in a meaningful way for

9
United States District Court
Northern District of California

1

“Insofar as

the purposes of the Sherman Act”).

Hart,

The doctrine encompasses

10

issues actually decided in a prior case even if those issues were

11

not, in a technical sense, necessary, but only if they were

12

germane to the eventual resolution of the case and expressly

13

resolved after reasoned consideration.

14

Power Admin., 698 F.3d 774, 804 n.4 (9th Cir. 2012); Barapind v.

15

Enomoto, 400 F.3d 744, 751 (9th Cir. 2005) (en banc).

16

Alcoa, Inc. v. Bonneville

In the area of antitrust law, however, another interest

17

competes with the doctrine of stare decisis.

That is an interest

18

“in recognizing and adapting to changed circumstances and the

19

lessons of accumulated experience.”

20

522 U.S. 3, 20 (1997).

21

circumstances and new wisdom.”

22

Corp. v. Sharp Elecs. Corp., 485 U.S. 717, 731-32 (1988)).

23

rule of reason requires an evaluation of each challenged

24

restraint in light of the special circumstances involved.

25

the analysis will differ from case to case is the essence of the

26

rule.”

27

Cir. 1988) (citation omitted).

State Oil Co. v. Khan,

Rule-of-reason analysis “evolves with new
Id. at 21 (quoting Bus. Elecs.
“The

That

Oltz v. St. Peter’s Cmty. Hosp., 861 F.2d 1440, 1449 (9th

28
17

1
2
3
4
5
6
7
8
United States District Court
Northern District of California

9
10
11
12
13
14
15
16
17
18
19
20

A.

Anticompetitive Effects in the Relevant Market
1.

Market Definition

In a rule-of-reason analysis, the Court must first define
the relevant market within which the challenged restraint may
produce significant anticompetitive effects.

Both sides here

request that the Court adopt the market definition applied in
O’Bannon, which was not challenged in the appeal of that case.
802 F.3d at 1070.

Plaintiffs argue that the evidence supports

the same education or labor market for student-athletes in FBS
football and Division I basketball.

Defendants contend that

stare decisis controls the outcome of this case, including the
market definition.6

Defendants also agreed at the January 21,

2018 hearing that the market definition, as well as other rulings
in O’Bannon, would apply equally to the women’s basketball
Plaintiffs in this action.

Tr. at 7-8.

In the absence of any material factual dispute, the Court
will grant both parties’ summary judgment motions on the issue of
market definition and adopt the market definition from O’Bannon,
the market for a college education combined with athletics or
alternatively the market for the student-athletes’ athletic
services.

21
2.

22
23
24

The Challenged Restraints and Significant
Anticompetitive Effects

The next element of the rule-of-reason analysis is whether
the challenged restraints produce significant anticompetitive

25
26
27
28

6

Defendants’ expert Dr. Kenneth G. Elzinga posits that the
market should be viewed more broadly as a multi-sided one for the
educational services of colleges and universities, but
Defendants, having taken the position that O’Bannon is
controlling, do not rely on this theory.
18

effects within the relevant market.

2

undisputed evidence that greater compensation and benefits would

3

be offered in the recruitment of student-athletes absent the

4

challenged rules, meeting their burden for summary adjudication

5

on this question.

6

binding on this point under the doctrine of stare decisis.

7

802 F.3d at 1070-72; 7 F. Supp. 3d at 971-73, 988-93.

8

not meaningfully disputed Plaintiffs’ showing that the challenged

9
United States District Court
Northern District of California

1

Plaintiffs have produced

restraints produce significant anticompetitive effects within the

Defendants’ position is that O’Bannon is
See

They have

10

relevant market.

Because Plaintiffs have met their burden and

11

Defendants have not created a factual dispute, the Court will

12

grant the parties’ cross-motions for summary adjudication of this

13

element and find that the challenged restraints produce

14

significant anticompetitive effects in the relevant market.

15

B.

16

The next factor is whether Defendants have come forward with

Procompetitive Benefits of the Restraints

17

evidence of procompetitive effects of the challenged restraints.

18

Defendants claim that O’Bannon established as a matter of law

19

that the NCAA’s rules serve the procompetitive purposes of

20

“integrating academics with athletics, and ‘preserving the

21

popularity of the NCAA’s product by promoting its current

22

understanding of amateurism.’”

23

Supp. 3d at 1005).

24

case contains ample evidence of these procompetitive

25

justifications as well as of other possible procompetitive

26

justifications not found in O’Bannon.

27

O’Bannon does not require the Court to uphold Defendants’

28

procompetitive justifications in this case because Plaintiffs

802 F.3d at 1073 (quoting 7 F.

They further argue that the record in this

19

Plaintiffs respond that

1

have developed a record of factual circumstances that have

2

changed after the close of the record in O’Bannon.

3

Plaintiffs first point to the change caused by O’Bannon:
student-athletes now may receive scholarships above the former

5

grant-in-aid limit, up to the cost of attendance.

6

however, does not distinguish the present case from O’Bannon

7

because it was the very issue adjudicated in that case.

8

change that was made was required and approved by the Court.

9
United States District Court
Northern District of California

4

802 F.3d at 1075-76.

10

This change,

The

Next, Plaintiffs identify the NCAA rule changes discussed

11

above, which have generally increased but continue to fix various

12

benefits related to athletic participation that a member school

13

may provide for its student-athletes or permit them to receive

14

from outside sources.

15

new concessions by Defendants that benefits and gifts that are

16

related to athletic participation but are above the cost of

17

attendance are connected neither to education nor to their

18

understanding of amateurism.

19

Bowlsby, II) Depo. at 162:10-14 (not sure how valuable gifts

20

could be tethered to education); Michael Slive Depo. at 218:4-10

21

(gift card “not really” connected to educational experience);

22

NCAA (Lennon) Depo. at

23

related to amateurism).

24

Defendants permit student-athletes to be paid money that does not

25

go “to cover legitimate educational expenses,” they are not

26

amateurs.

27

a number of expenses that they contend are tethered to education

28

but are still disallowed.

See Section I above.

They also identify

See, e.g., Big 12 (Robert A.

119:20-122:22, 287:6-19 (gifts not
Plaintiffs contend that because

O’Bannon, 802 F.3d at 1075.

Plaintiffs also identify

See Pls. MSJ, App’x B (citing NCAA
20

1
2

(Lennon) Depo. at 195:5-215:14); see also Section I above.
While the restraints challenged in this case overlap with
those in O’Bannon, the specific rules at issue are not the same.

4

Challenges to the NCAA’s rules must be assessed on a case-by-case

5

basis under the rule of reason, and O’Bannon’s holding that there

6

were procompetitive justifications for the rules challenged in

7

that case would not necessarily require the Court to find that

8

different rules, challenged in this case, also have the same

9
United States District Court
Northern District of California

3

procompetitive effects.

802 F.3d at 1063 (citing NCAA v. Bd. of

10

Regents of the Univ. of Okla., 468 U.S. 85 (1984)) (“we are not

11

bound by Board of Regents to conclude that every NCAA rule that

12

somehow relates to amateurism is automatically valid”).

13

Court rejects Defendants’ contention that merely because all of

14

the then-existing NCAA Bylaws were part of the record in

15

O’Bannon, the Court necessarily adjudicated in Defendants’ favor

16

all possible challenges to any of those rules.

17

O’Bannon will be very relevant in assessing whether the rules in

18

this case have procompetitive effects.

19

rules in O’Bannon, the validity of the specific rules challenged

20

in this case “must be proved, not presumed.”

21

The

The reasoning of

However, like the NIL

Id. at 1064.

Plaintiffs further contend that Defendants have failed to

22

provide material evidence that their current rules create

23

procompetitive effects.

24

should enter summary judgment against Defendants without

25

balancing the competitive effects of the restraints or reaching

26

the question of less restrictive alternatives.

27

Defendants have presented sufficient evidence in support of the

28

two procompetitive effects found in O’Bannon to create a factual

Therefore, Plaintiffs argue, the Court

21

However,

issue for trial.

2

which led Defendants’ expert Dr. Bruce Isaacson to conclude that

3

fans are drawn to college football and basketball in part due to

4

their perception of amateurism.

5

Isaacson Rep. ¶¶ 151 & Table 7, 155.

6

defects in Defendants’ survey evidence, including the fact that

7

it reflects consumers’ stated preferences rather than how

8

consumers would actually behave if the NCAA’s restrictions on

9
United States District Court
Northern District of California

1

This includes a survey of consumer preferences,

student-athlete compensation were modified or lifted.

See Isaacson Depo. at 48:4-17;
Plaintiffs identify various

However,

10

the weight of Dr. Isaacson’s testimony is a question for trial

11

rather than summary judgment.

12

Defendants also present evidence that paying student-

13

athletes would detract from the integration of academics and

14

athletics in the campus community.

15

T. Heckman testified that paying student-athletes would likely

16

lead them to dedicate even more effort and possibly more time to

17

their sports, potentially diverting them “away from actually

18

being students and towards just being athletes.”

19

at 315:5-316:18.

20

For example, Professor James

Heckman Depo.

Accordingly, the Court will deny the parties’ cross-motions

21

for summary adjudication of the question of whether the

22

challenged NCAA rules serve Defendants’ asserted procompetitive

23

purposes of integrating academics with athletics and preserving

24

the popularity of the NCAA’s product by promoting its current

25

understanding of amateurism.

26

Supp. 3d at 1005).

27
28

See 802 F.3d at 1073 (quoting 7 F.

Plaintiffs also move for summary judgment that Defendants
have abandoned seven additional procompetitive justifications
22

1

that they identified in response to an interrogatory.

2

Ex. 8 (NCAA Amended Responses to Pls. Second Set of

3

Interrogatories) at 9-14.

4

developed no record to support any of them.

5

See Defs.

Plaintiffs contend that Defendants

Defendants first respond to this argument by contending that
Plaintiffs’ summary judgment motion inadequately demonstrates an

7

absence of evidence on these procompetitive justifications, and

8

should be denied due to Plaintiffs’ failure to meet their burden

9
United States District Court
Northern District of California

6

as the moving party.

However, “the Celotex ‘showing’ can be made

10

by ‘pointing out through argument’” the “‘absence of evidence to

11

support plaintiff’s claim.’”

12

1076 (9th Cir. 2001) (quoting Fairbank v. Wunderman Cato Johnson,

13

212 F.3d 528, 532 (9th Cir. 2000)).

14

Plaintiffs’ argument that Defendants have not developed evidence

15

to support additional procompetitive justifications, identified

16

in their interrogatory responses, is sufficient to shift the

17

burden to Defendants to produce “specific evidence, through

18

affidavits or admissible discovery material, to show that the

19

dispute exists.”

20

asserted procompetitive justifications, Defendants have not

21

attempted to meet this burden at all, only quoting their

22

interrogatory response identifying those justifications in a

23

footnote but producing no evidence to support them.7

Devereaux v. Abbey, 263 F.3d 1070,

Although not lengthy,

Bhan, 929 F.2d at 1409.

For six of their

See Defs.

24
7

25
26
27
28

Except to the extent that they are included in the
interrogatory response, Defendants do not request that the Court
reconsider the procompetitive justifications of increased output
and competitive balance rejected in O’Bannon. See 7 F. Supp. 3d
at 978-79, 981-82. The O’Bannon defendants did not substantively
defend the rejected procompetitive justifications on appeal,
802 F.3d at 1072, and Defendants here do not proffer any evidence
to support them.
23

1

Opp. to Pls. MSJ at 50 n.27.

2

summary judgment on these six procompetitive justifications.

3

Defendants do attempt to meet their burden on one

4

procompetitive justification, specifically, their contention

5

that:

6
7
8
United States District Court
Northern District of California

9
10
11

Accordingly, the Court will grant

The challenged rules serve the procompetitive goals of
expanding output in the college education market and
improving the quality of the collegiate experience for
student-athletes, other students, and alumni by
maintaining the unique heritage and traditions of
college athletics and preserving amateurism as a
foundational principle, thereby distinguishing amateur
college athletics from professional sports, allowing
the former to exist as a distinct form of athletic
rivalry and as an essential component of a
comprehensive college education.

12

Defs. Ex. 8 (NCAA Amended Responses to Pls. Second Set of

13

Interrogatories) at 11.

14

coincide with the justification relating to expanding output that

15

the Court rejected in O’Bannon.

16

argued that the NCAA’s rules enable it to increase the number of

17

opportunities available for participation in FBS football and

18

Division I basketball, increasing the number of games that can be

19

played.

20

justification seems largely to overlap with Defendants’ two

21

remaining O’Bannon justifications of integrating academics with

22

athletics (“improving the quality of the collegiate experience

23

for student-athletes”) and preserving the popularity of college

24

sports (“distinguishing amateur college athletics from

25

professional sports”).

26

Pls. Second Set of Interrogatories) at 11.

27
28

This proffered justification does not

7 F. Supp. 3d at 981.

In that case, the defendants

Rather, this purportedly new

Defs. Ex. 8 (NCAA Amended Responses to

In advancing this purportedly new and separate
procompetitive justification, Defendants rely solely on the
24

testimony of two expert witnesses, their expert Dr. Elzinga and

2

Plaintiffs’ expert Dr. Edward P. Lazear.

3

focuses on issues relating to the relevant market.

4

at 4-10.

5

the relevant market is properly viewed as a multi-sided market

6

for higher education, colleges must price participation in

7

activities, including athletics, to provide an “optimal balance”

8

for different constituents.

9
United States District Court
Northern District of California

1

32-33.

Dr. Elzinga’s report
Elzinga Rep.

In that context, he explains his theory that, because

Id. at 35; see also id. at 9, 27-29,

Defendants contend that this view is supported by Dr.

10

Lazear’s testimony that the demand in the relevant college

11

education market is derived from “some higher-level market, which

12

might include alums, it might include viewers, it might include

13

other students,” who are direct participants in the market.

14

Lazear Depo. at 217:19-218:24.

15

these experts’ testimony, taking it as true and drawing all

16

reasonable inferences in favor of Defendants, however, it does

17

not constitute evidence of a new or different procompetitive

18

justification.

19

impact of the challenged restraints on output or examine data

20

that might support any such opinion.

21

30:18.

22

opinions as supporting a procompetitive justification he did not

23

directly consider is insufficient to raise a genuine issue of

24

material fact, and the Court will grant summary judgment on this

25

proposed procompetitive justification as well.

Assuming the admissibility of

Dr. Elzinga did not purport to opine on the

Elzinga Depo. at 29:14-

Defendants’ attempt to characterize Dr. Elzinga’s

26

C.

27

The final step in the rule-of-reason analysis is whether

28

Less Restrictive Alternatives

Plaintiffs can “make a strong evidentiary showing” that any
25

legitimate objectives can be achieved in a substantially less

2

restrictive manner.

3

not move for summary judgment on this issue, but seek to prove at

4

trial their contention that the NCAA’s rules are “patently and

5

inexplicably stricter than is necessary to accomplish” the NCAA’s

6

procompetitive objectives.

7

Defendants, on the other hand, move for summary judgment that all

8

less restrictive alternatives proposed in this case are

9
United States District Court
Northern District of California

1

foreclosed by O’Bannon.

O’Bannon, 802 F.3d at 1074.

Plaintiffs do

O’Bannon, 802 F.3d at 1075.

The Court finds that because Plaintiffs

10

challenge different rules and propose different alternatives from

11

those considered in O’Bannon, the Court is not precluded from

12

considering this factor.

13

To be viable, an alternative “must be ‘virtually as

14

effective’ in serving the procompetitive purposes of the NCAA’s

15

current rules, and ‘without significantly increased cost.’”

16

at 1074 (quoting Cnty. Of Tuolumne v. Sonora Cmty. Hosp.,

17

236 F.3d 1148, 1159 (9th Cir. 2001)).

18

restrictive alternatives “should either be based on actual

19

experience in analogous situations elsewhere or else be fairly

20

obvious.”

21

¶ 1913b (3d ed. 2006).

22

Court will afford the NCAA “ample latitude” to superintend

23

college athletics.

24

Regents, 468 U.S. at 120).

25

to make marginal adjustments to broadly reasonable market

26

restraints.”

27
28

Id.

In addition, any less

Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law
In considering Plaintiffs’ showing, the

O’Bannon, 802 F.3d at 1074 (quoting Bd. of
The Court will not “use antitrust law

Id. at 1075.

As discussed, Plaintiffs in this case do not challenge
restrictions on distribution of licensing revenue derived from
26

NILs, as was the case in O’Bannon.

2

rules relating to the benefits that schools may offer student-

3

athletes to compete for their recruitment.

4

alternatives that they propose in this case are different from

5

those reviewed in O’Bannon.

6

“say that the NCAA’s amateurism rules are procompetitive, as

7

Board of Regents did, is not to say that they are automatically

8

lawful; a restraint that serves a procompetitive purpose can

9
United States District Court
Northern District of California

1

still be invalid under the Rule of Reason if a substantially less

10

restrictive rule would further the same objectives equally well.”

11

O’Bannon, 802 F.3d at 1063-64 (citing Bd. of Regents, 468 U.S. at

12

101 n.23); see also id. at 1063 (“we are not bound by Board of

13

Regents to conclude that every NCAA rule that somehow relates to

14

amateurism is automatically valid”).

15

Rather, they challenge NCAA

The less restrictive

As the Ninth Circuit explained, to

The first less restrictive alternative that Plaintiffs

16

propose is allowing the Division I conferences, rather than the

17

NCAA, to set the rules regulating education and athletic

18

participation expenses that the member institutions may provide.

19

Plaintiffs argue that this alternative would be substantially

20

less restrictive because it would allow conferences to compete to

21

implement rules that attract student-athletes while still

22

maintaining the popularity of college sports and balancing the

23

integration of academics and athletics.

24

of the conferences has market power and, thus, their rule-making

25

would not be subject to an antitrust challenge.8

They contend that none

26
8

27
28

Defendants argue that Plaintiffs’ proposed less restrictive
alternative of conference autonomy is inconsistent with
Plaintiffs’ challenge to conference-specific rules. See Pls.
MSJ, App’x A (listing challenged rules). However, Plaintiffs
27

1

Plaintiffs contend that their proposed conference-autonomy
system is based on actual experience in a closely analogous

3

context.

4

during the first half of the 20th Century, when each conference

5

had its own compensation rules.”

6

support their argument that such autonomy is viable as a less

7

restrictive alternative to NCAA regulations, Plaintiffs have

8

identified new NCAA Bylaws, adopted on August 7, 2014 (after the

9
United States District Court
Northern District of California

2

O’Bannon trial), that grant the Power Five Conferences autonomy

It could “operate like the college athletic system

Roger Noll Rep. at 30.

To

10

to adopt or amend rules on a variety of topics.

See Defs. Ex. 1

11

at 27-28 (Bylaw 5.3.2.1).

12

Power Five Conferences to legislate, for example, regarding “a

13

student-athlete’s individual limit on athletically related

14

financial aid, terms and conditions of awarding institutional

15

financial aid, and the eligibility of former student-athletes to

16

receive undergraduate financial aid”; pre-enrollment expenses and

17

support; student-athletes securing loans to purchase loss-of-

18

value and disability insurance; and awards, benefits and expenses

19

for student-athletes and their family and friends.

20

Daniel A. Rascher Rep. at 12-13 & n.21, 172-182 (discussing

21

proposed less restrictive alternatives).

22

exceptions for the Power Five Conferences constitutes evidence

23

sufficient to raise a factual question that allowing relevant

24

areas of autonomy for all Division I conferences would be a less

25

restrictive alternative to current NCAA rules.

The Bylaws now grant autonomy to the

Id.; see also

The existence of these

26
27
28

challenge only the portions of the conference rules that require
compliance with challenged NCAA rules. See Pls. Reply, App’x A
(listing challenged language of each rule).
28

Defendants argue that this proposal was considered and

1

rejected in O’Bannon.

3

support their contention.

4

witnesses, Dr. Noll, testified briefly in O’Bannon about the

5

alternative of allowing the individual conferences to set the

6

rules.

7

was discussion of whether an injunction should allow conference-

8

level decision-making on the topics of the challenged NCAA

9
United States District Court
Northern District of California

2

The record in O’Bannon, however, does not

restraints.

One of the plaintiffs’ expert

O’Bannon Tr. at 445:11-451:5.

Id. at 3382:19-3383:2.

In closing argument, there

Ultimately, however, the

10

plaintiffs proposed to the Court only the three less restrictive

11

alternatives, listed above, that were addressed in the Court’s

12

August 8, 2014 Findings of Fact and Conclusions of Law.

13

O’Bannon Plaintiffs’ Opening Post-Trial Brief at 25 (No. 09-cv-

14

03329-CW, Dkt. No. 275); O’Bannon Plaintiffs’ Post-Trial Reply

15

Brief at 14-15 (No. 09-cv-03329-CW, Dkt. No. 281).

16

plaintiffs proposed language for an injunction, asking the Court

17

to enjoin the member institutions and conferences along with the

18

NCAA.

19

Relief (No. 09-cv-03329-CW, Dkt. No. 193-1); O’Bannon Plaintiffs’

20

Alternative Proposed Form of Injunction (No. 09-cv-03329-CW, Dkt.

21

No. 252).

22

the NCAA’s member schools and conferences as well as the NCAA

23

itself.

24

No. 292).

25

restrictive alternative of conference autonomy.

26

established in that case, or any other, precludes the Court from

27

considering conference autonomy as a less restrictive alternative

28

in this case.

See

The O’Bannon

O’Bannon Plaintiffs’ Proposed Order Granting Injunctive

The permanent injunction entered by the Court enjoined

O’Bannon Permanent Injunction (No. 09-cv-03329-CW, Dkt.
In O’Bannon, this Court did not rule on the less
No rule of law

“A hypothetical that is unnecessary in any sense
29

1

to the resolution of the case, and is determined only tentatively

2

. . . does not make precedential law.”

3

n.4; see also Osborne, 76 F.3d at 309 (“the doctrine of stare

4

decisis concerns the holdings of previous cases, not the

5

rationales”).

6

as the question of conference autonomy in O’Bannon, is not

7

binding under the doctrine of stare decisis.

United States District Court
Northern District of California

A hypothetical that is not determined at all, such

Plaintiffs propose a second less restrictive alternative,

8
9

Alcoa, 698 F.3d at 804

requesting that the Court enjoin all national rules that prohibit

10

or limit any payments or non-cash benefits that are tethered to

11

educational expenses, or any payments or benefits that are

12

incidental to athletic participation.

13

177.

14

some payments and benefits in these two categories above the cost

15

of attendance, it would be virtually as effective in serving the

16

NCAA’s procompetitive purposes to require the NCAA to allow all

17

benefits in either category.

18

alternative could be applied with or without conference autonomy

19

because abolishing the NCAA restraints would be a less

20

restrictive alternative to the current system regardless of

21

whether conference rules were permitted as a replacement.

22

See Rascher Rep. at 173-

Their position is that because Defendants already permit

Plaintiffs contend that this

In support of this contention, Plaintiffs first identify

23

evidence that Defendants already allow schools to offer some

24

benefits above the cost of attendance that are related to

25

athletic participation but not tethered to education.

26

Noll Rep. at 17-18 (discussing categories of benefits); NCAA

27

(Lennon) Depo. at 58:20-59:16 (same).

28

pay the expenses for an athlete’s spouse and children to attend a
30

See, e.g.,

For example, schools can

1

playoff game, because such expenses are incidental to athletic

2

participation, but not the expenses of parents, grandparents, or

3

siblings.

4

86:17-87:13 (schools may reimburse students’ national

5

championship, Olympic trials and national team tryout costs).

6

NCAA (Lennon) Depo. at 186:1-16; see also id. at

Plaintiffs contend that Defendants have conceded that the
payment of currently-allowed benefits above the cost of

8

attendance but tethered to education or incidental to athletic

9
United States District Court
Northern District of California

7

participation does not undermine their procompetitive purposes.

10

The NCAA’s Rule 30(b)(6) witness Kevin C. Lennon testified

11

extensively on this topic.

12

incidental to athletic participation can be paid for athletes

13

without offending collegiate model); 71:23-73:2 (NCAA

14

membership’s decision to pay expenses incidental to athletic

15

participation does not violate principle of amateurism); 85:5-23

16

(per diem during trips does not violate principle of amateurism);

17

93:4-10 (“If the--the benefit provided is permitted within the

18

legislation as either related to educational expenses or--or

19

incidental to participation, then it would be not considered pay,

20

and it would be permitted to be received.”); 186:1-16 (schools’

21

payment of costs for athlete’s spouse and children to attend

22

playoff game does not implicate principle of amateurism); 287:6-

23

19 (NCAA membership is comfortable with “two buckets” of

24

expenses, those tethered to education and those incidental to

25

athletics participation).

26

their survey expert Hal Poret that there would be no negative

27

impact on consumer demand for college football and basketball if

28

various forms of additional benefits were provided to student-

Id. at 63:21-64:1 (expenses

Plaintiffs also cite the conclusion of

31

1

athletes.

Poret Rep. at 19-21.

Defendants respond that Plaintiffs’ suggestion cannot be

2

squared with O’Bannon’s holding that limiting payments to

4

Plaintiffs’ legitimate costs to attend school is consistent with

5

antitrust law.

6

amateurs as long as any money paid to them goes to cover

7

legitimate educational expenses.”).

8

Circuit concluded, “The Rule of Reason requires that the NCAA

9
United States District Court
Northern District of California

3

permit its schools to provide up to the cost of attendance to

See 802 F.3d at 1075 (“student-athletes remain

In O’Bannon, the Ninth

10

their student-athletes.

11

1079.

12

limits the less restrictive alternatives that the Court may

13

consider in this case to the relief that was provided in

14

O’Bannon.

15

alternatives are no more than new arguments in support of the

16

same challenge already adjudicated in O’Bannon.

17

district court case, they argue that stare decisis “would be

18

largely meaningless if a lower court could change an appellate

19

court’s interpretation of the law based only on a new argument.”

20

Rambus Inc. v. Hynix Semiconductor Inc., 569 F. Supp. 2d 946, 972

21

(N.D. Cal. 2008).

22

It does not require more.”

802 F.3d at

Defendants’ position is that this means that stare decisis

They argue that Plaintiffs’ proposed less restrictive

Relying on a

In Rambus, however, the district court held that the

23

doctrine of stare decisis bound it to follow the Federal

24

Circuit’s previous construction of the same term at issue,

25

“integrated circuit device.”

26

v. Infineon Techs. AG, 318 F.3d 1081, 1089–95 (Fed. Cir. 2003).

27

The question for the court to decide was the same; only the

28

arguments in support of the issue had changed.

Id. at 963, 972 (citing Rambus Inc.

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Here, in

1

contrast, the Court is presented with the new and unresolved

2

issue of whether Plaintiffs have identified different less

3

restrictive alternatives to all of the NCAA’s rules that prohibit

4

schools from competing to recruit student-athletes with offers of

5

cash or various benefits tethered to educational expenses or

6

incidental to athletic participation, including rules that have

7

changed after O’Bannon.

8
United States District Court
Northern District of California

9

As the Ninth Circuit explained in O’Bannon, “NCAA
regulations are subject to antitrust scrutiny and must be tested

10

in the crucible of the Rule of Reason.”

Id. at 1079.

A ruling

11

on less restrictive alternatives to certain NCAA rules in one

12

case does not bar consideration of different less restrictive

13

alternatives to a different, if overlapping, set of rules

14

challenged in a different case.

15

Board of Regents that the NCAA’s purpose of marketing “a

16

particular band of football--college football” could be a

17

procompetitive justification for rules designed to preserve the

18

“character and quality” of this product, including compensation

19

limitations.

20

that the rules challenged in O’Bannon were exempt from antitrust

21

scrutiny, because “a restraint that serves a procompetitive

22

purpose can still be invalid under the Rule of Reason if a

23

substantially less restrictive rule would further the same

24

objectives equally well.”

25

also Nat’l Basketball Ass’n v. SDC Basketball Club, Inc.,

26

815 F.2d 562, 564, 567-68 (9th Cir. 1987) (prior decisions on

27

similar franchise relocation rule in football context did not bar

28

fact-specific rule-of-reason analysis in subsequent challenge in

The Supreme Court suggested in

468 U.S. at 101-02.

This did not mean, however,

O’Bannon, 802 F.3d at 1063-64; see

33

1

basketball context).

Likewise, here, the NCAA’s revised rules

2

and Plaintiffs’ proposed less restrictive alternatives to those

3

rules are “separate and distinct in a meaningful way for the

4

purposes of the Sherman Act” from those presented in O’Bannon.

5

Miranda, 860 F.3d at 1242.
To be clear, if Defendants prevail in demonstrating the same

6

procompetitive justifications that the Court found in O’Bannon,

8

the NCAA will still be able to prohibit its member schools from

9
United States District Court
Northern District of California

7

paying their student-athletes cash sums unrelated to educational

10

expenses or athletic participation.

11

79.

12

proposed less restrictive alternative by which Plaintiffs seek

13

payment untethered to one of these two categories.

14

O’Bannon, 802 F.3d at 1078-

Under such circumstances, the Court will not consider any

Plaintiffs have proffered evidence supporting two possible

15

less restrictive alternatives not previously presented for

16

decision or ruled upon, raising a genuine issue of material fact

17

as to whether they can meet their evidentiary burden to show that

18

such alternatives would be virtually as effective as the

19

challenged restraints in advancing Defendants’ procompetitive

20

objectives.

21

this factor.

22

less restrictive alternatives are foreclosed by O’Bannon.

23

Accordingly, the Court will deny summary judgment on the question

24

of less restrictive alternatives.

25

They do not seek summary judgment in their favor on
Defendants have failed to show that these proposed

CONCLUSION

26

For the reasons set forth above, Plaintiffs’ motion for

27

summary judgment (Docket No. 657 in Case No. 14-md-02541 and

28

Docket No. 301 in Case No. 14-cv-02758) is GRANTED IN PART AND
34

1

DENIED IN PART.

2

(Docket No. 704 in Case No. 14-md-02541 and Docket No. 327 in

3

Case No. 14-cv-02758) is GRANTED IN PART AND DENIED IN PART.
1.

4

Defendants’ cross-motion for summary judgment

The Court holds that neither res judicata nor

5

collateral estoppel bars Plaintiffs’ claims, and denies

6

Defendants’ summary judgment motion on this point.
2.

7

The Court grants both parties’ summary judgment motions

to find that Plaintiffs have met their initial burden of showing

9
United States District Court
Northern District of California

8

that Defendants’ challenged restraints are agreements that

10

produce significant anticompetitive effects, affecting interstate

11

commerce, within the same relevant market as that in O’Bannon.
3.

12

The Court denies Defendants’ summary judgment motion,

13

under the doctrine of stare decisis, to hold that the same two

14

procompetitive benefits of Defendants’ restraints found in

15

O’Bannon apply in this case as a matter of law.

16

Plaintiffs’ motion for summary adjudication that the

17

procompetitive justifications found in O’Bannon do not apply, but

18

grants Plaintiffs’ motion for summary judgment regarding

19

Defendants’ other proffered procompetitive justifications.
4.

20

The Court denies

The Court denies Defendants’ motion for summary

21

judgment that O’Bannon precludes consideration of the two less

22

restrictive alternatives that Plaintiffs propose in this case.

23

The Court DENIES Defendants’ Motion for Supplemental

24

Briefing (Docket No. 797) and Plaintiffs’ Motion to File

25

Supplemental Evidence for the Summary Judgment Record (Docket No.

26

800).

27

supplemental evidence will be admissible at trial.

28

The Court does not rule on whether Plaintiffs’ proposed

A final pretrial conference will be held at 2:30 p.m. on
35

Tuesday, November 13, 2018 and a bench trial of no longer than

2

ten days will commence at 8:30 a.m. on Monday, December 3, 2018.

3

The parties shall comply with the Court’s standing order for

4

pretrial preparation.

5

in writing, with cross-examination and re-direct to take place in

6

Court.

7

that which is essential, attempt to reach stipulations regarding

8

potentially cumulative evidence and focus their cases only on the

9
United States District Court
Northern District of California

1

issues remaining for trial.

10

IT IS SO ORDERED.

Direct expert testimony shall be presented

The parties shall limit percipient witness testimony to

11
12

Dated: March 28, 2018
CLAUDIA WILKEN
United States District Judge

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