JENKINS et al v. NATIONAL COLLEGIATE ATHLETIC ASSOCIATION et al

Filing 378

ORDER ON MOTIONS TO EXCLUDE PROPOSED EXPERT TESTIMONY. Signed by Judge Claudia Wilken on 4/25/18. (dtmS, COURT STAFF) (Filed on 4/25/2018)

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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

Case Nos. 14-md-02541-CW
14-cv-02758-CW
ORDER ON MOTIONS TO EXCLUDE
PROPOSED EXPERT TESTIMONY

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THIS DOCUMENT RELATES TO:

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ALL ACTIONS

(Dkt. Nos. 704, 807, 809-52)

United States District Court
Northern District of California

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Now pending are Plaintiffs’ motions to exclude the proposed

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testimony of Dr. James J. Heckman and Dr. Kenneth G. Elzinga, and

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Defendants’ motions to exclude portions of the proposed testimony

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of Dr. Daniel A. Rascher, Dr. Roger G. Noll and Dr. Edward P.

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Lazear.

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motion to exclude the opinions of Dr. Elzinga.

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in part and denies in part Plaintiffs’ motion to exclude the

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opinions of Dr. Heckman.

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Defendants’ motion to exclude portions of the opinions of

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Drs. Rascher, Noll and Lazear.

For the following reasons, the Court grants Plaintiffs’
The Court grants

The Court denies without prejudice

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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

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Division I basketball.

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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-

Defendants

Plaintiffs allege that Defendants

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athletes may receive in return for their elite athletic services.

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See 15 U.S.C. § 1.

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claims for injunctive relief remain in this multidistrict

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litigation.

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All claims for damages having settled, only

On March 28, 2018, this Court granted in part and denied in
part the parties’ cross-motions for summary judgment, in an order

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that provided additional background.

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in-Aid Cap Antitrust Litig., Nos. 14-md-02541-CW, 14-cv-02758-CW,

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United States District Court
Northern District of California

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2018 WL 1524005 (N.D. Cal. Mar. 28, 2018).

In re: NCAA Athletic Grant-

The Court held that

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Plaintiffs had met their initial burden under a rule of reason

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analysis to show that Defendants’ challenged restraints are

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agreements that produce significant anticompetitive effects

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affecting interstate commerce, within the same relevant market

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defined by this Court in O’Bannon v. NCAA, 7 F. Supp. 3d 955,

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962-63 (N.D. Cal. 2014), and affirmed by the Ninth Circuit in

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O’Bannon v. NCAA, 802 F.3d 1049, 1079 (9th Cir. 2015).

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The Court denied the parties’ summary judgment motions as to

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whether Defendants had met their burden to prove that the

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challenged restraints serve the asserted procompetitive purposes

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of integrating academics with athletics and preserving the

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popularity of the NCAA’s product by promoting its current

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understanding of amateurism, as they did in O’Bannon.

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at 1073 (quoting 7 F. Supp. 3d at 1005).

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Plaintiffs’ motion for summary judgment on Defendants’ other

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proffered procompetitive justifications.

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Defendants’ motion for summary judgment on whether two proposed

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less restrictive alternatives advanced by Plaintiffs would

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achieve any of Defendants’ legitimate objectives in a
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802 F.3d

The Court granted

The Court denied

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substantially less restrictive manner.

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bench trial on the questions of procompetitive justifications and

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less restrictive alternatives.

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The Court scheduled a

LEGAL STANDARD
Under the Federal Rules of Evidence, “the trial judge must

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ensure that any and all scientific testimony or evidence admitted

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is not only relevant, but reliable.”

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Pharm., Inc., 509 U.S. 579, 589 (1993).

United States District Court
Northern District of California

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Daubert v. Merrell Dow

Rule 702 permits an expert to offer opinion testimony on a
subject if:
(a) the expert’s scientific, technical, or other
specialized knowledge will help the trier of fact to
understand the evidence or to determine a fact in
issue;
(b) the testimony is based on sufficient facts or data;
(c) the testimony is the product of reliable principles
and methods; and
(d) the expert has reliably applied the principles and
methods to the facts of the case.
Fed. R. Evid. 702.

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In evaluating whether an expert’s opinion testimony will
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help the trier of fact to understand the evidence or determine a
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fact in issue, the Court considers whether the testimony fits the
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facts of the case and is “relevant to the task at hand.”

See

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Daubert, 509 U.S. at 591, 597.

In assessing the relevance or

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“fit” of expert testimony, “scientific validity for one purpose
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is not necessarily scientific validity for other, unrelated
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purposes.”

Id. at 591.

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To evaluate the reliability of expert opinion testimony, a
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court must consider the factors set out in Daubert, which include
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“whether the theory or technique in question can be (and has

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been) tested, whether it has been subjected to peer review and

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publication, its known or potential error rate and the existence

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and maintenance of standards controlling its operation, and

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whether it has attracted widespread acceptance within a relevant

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scientific community.”

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significant fact to be considered is whether the experts are

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proposing to testify about matters growing naturally and directly

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United States District Court
Northern District of California

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out of research they have conducted independent of the

509 U.S. at 593–94.

“One very

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litigation, or whether they have developed their opinions

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expressly for purposes of testifying.”

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Pharm., Inc., 43 F.3d 1311, 1317 (9th Cir. 1995) (on remand).

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The “test of reliability is ‘flexible,’ and Daubert’s list of

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specific factors neither necessarily nor exclusively applies to

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all experts or in every case.”

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Carmichael, 526 U.S. 137, 141 (1999).

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on principles and methodology, not on the conclusions that they

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generate.”

Kumho Tire Co., Ltd. v.
The focus “must be solely

Daubert, 509 U.S. at 595.

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Daubert v. Merrell Dow

DISCUSSION
I.

Dr. Elzinga

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Plaintiffs move to exclude the opinions of Dr. Elzinga

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regarding the definition of the relevant antitrust market in this

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matter and Defendants’ power within that market.

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Court’s March 28, 2018 summary judgment ruling, the only

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remaining questions for trial are: (1) whether Defendants have

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come forward with evidence supporting the two claimed

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procompetitive effects of the challenged restraints, and

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(2) whether Plaintiffs can show that any legitimate objectives
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Following this

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could be achieved in a substantially less restrictive manner.

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Defendants do not contend that Dr. Elzinga’s testimony is

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relevant to the availability of less restrictive alternatives.

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Dr. Elzinga was asked by defense counsel “to assess whether
the economic evidence is consistent with Plaintiffs’ monopsony-

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cartel hypothesis or whether the economic evidence is consistent

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with an efficient market explanation.”

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Rpt. at 5.

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United States District Court
Northern District of California

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is a multi-sided market for college education in the United

Mar. 21, 2017 Elzinga

He concluded that the “relevant market in this case

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States” in which colleges operate as multi-sided platforms that

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balance their pricing to different constituents in the same way

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that a magazine must balance its pricing to subscribers and

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advertisers.

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the Court adopted the single-sided market definition from

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O’Bannon, the market for a college education combined with

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athletics or alternatively the market for the student-athletes’

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athletic services.

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therefore, address an issue that is not part of this case.

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Defendants have conceded that both sides’ Daubert motions would

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be moot to the extent that the Court granted summary judgment on

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any given issue.

Id. at 26.

However, in the summary judgment order,

Dr. Elzinga’s reports and opinions,

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Defendants argue that in addition to opining on the

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definition of the relevant market, Dr. Elzinga reached a

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“distinct conclusion that the NCAA’s amateurism rules are

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procompetitive,” which “does not turn on the adoption of his

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multi-sided market.”

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Elzinga Rpt. at 7-8); see also Jan. 16, 2018 Hearing Tr. at 74-

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77.

Defs. Opp. at 44 n.25 (citing Mar. 21, 2017

Plaintiffs respond that any proposed testimony by Dr.
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Elzinga on the issue of procompetitive justifications is

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dependent on his foreclosed opinions on market definition.

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Court agrees.

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procompetitive benefits in his hypothetical multi-sided market is

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not relevant to procompetitive effects in the relevant market.

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Daubert, 509 U.S. at 591.

The

Any testimony Dr. Elzinga gives regarding

Defendants contend that Dr. Elzinga also opines that “the

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NCAA’s financial aid rules provide a mechanism for avoiding an

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United States District Court
Northern District of California

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inefficient market failure, born of the incentive to free ride on

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the benefits of amateurism.”

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Therefore, he states, “The rules limiting play to schools that

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only allow eligible players on their teams is [sic] merely

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implementing the efficient solution, in which case the rules are

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not anticompetitive, they are procompetitive.”

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assumes that there is a procompetitive benefit to compensation

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restrictions and opines that the NCAA rules are necessary to

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prevent some schools from obtaining those purported benefits

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without themselves implementing the necessary restrictions.

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opinion does not provide any support for Defendants’ argument

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that the NCAA’s current rules restricting student-athlete

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compensation preserve the popularity of the NCAA’s product by

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promoting its current understanding of amateurism.

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not contend that it supports their argument regarding the

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integration of academics and athletics.

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Mar. 21, 2017 Elzinga Rpt. at 100.

Id.

Dr. Elzinga

This

Defendants do

Instead, this argument relates to an issue separate from the

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procompetitive justifications to be tried, namely, that college

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athletics requires that certain uniform rules be followed if its

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product is to be available.

NCAA v. Board of Regents of
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University of Oklahoma, 468 U.S. 85, 101 (1984).

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rule of reason analysis is applied rather than a per se rule of

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illegality.

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trial, however, are not addressed by Dr. Elzinga: whether the

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current, challenged rules have the two procompetitive benefits

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remaining at issue in this case, and whether less restrictive

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alternatives to those rules exist.

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United States District Court
Northern District of California

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O’Bannon, 802 F.3d at 1062.

This is why a

The questions for

Dr. Elzinga’s opinions are not relevant to any of the issues
remaining for trial and will not assist the Court.

The Court

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grants the motion to exclude his proposed testimony.

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II.

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Dr. Heckman
Plaintiffs move to exclude the testimony of Dr. Heckman, who

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was asked to evaluate human capital and economic outcomes for

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student-athletes as compared to comparable individuals who did

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not engage in collegiate athletics.

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substantial benefits to athletics participation.

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Heckman Rpt. at 4-7.

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testimony on the topic of the procompetitive effects of the

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challenged restraints.

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He concluded that there are
Mar. 21, 2017

Defendants seek to offer Dr. Heckman’s

Jan. 16, 2018 Hearing Tr. at 76-77.

Plaintiffs move to exclude Dr. Heckman’s testimony for three

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reasons.

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it does not suggest that student-athletes benefit specifically

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from the challenged restrictions, and therefore it is not

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relevant to this case.

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that the disputed issue is not whether college has benefits, but

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whether student-athletes in particular share in those benefits or

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whether, instead, Defendants subordinate student-athletes’

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academic well-being to Defendants’ financial gain.

First, they argue that, like his testimony in O’Bannon,

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Defendants respond

This issue is

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relevant, and the weight of Dr. Heckman’s testimony on it is a

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factual question for trial.

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Second, Plaintiffs contend that Dr. Heckman’s econometric
analysis is not reliable because he does not control for

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scholarship amounts, he is unable to ascertain which members of

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the data sets are Division I basketball or FBS football players

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and he uses data sets that are so old that no class member

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appears in them.

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United States District Court
Northern District of California

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conducted by the United States Department of Education in 1988

Dr. Heckman’s data was drawn from surveys

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and 2002.

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which Dr. Heckman could have relied.

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Heckman’s data and methodology relate to the weight of the

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evidence, not its admissibility.

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Plaintiffs have not identified any better data sets on
Their criticisms of Dr.

Finally, Plaintiffs move to exclude two categories of

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opinions in Dr. Heckman’s June 21, 2017 reply report that they

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contend were not adequately disclosed in his opening report and

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are unreliable speculation.1

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to the May 16, 2017 report of Dr. Noll.

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turn, was submitted in rebuttal to the March 21, 2017 reports of

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Drs. Elzinga and Heckman.

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Dr. Heckman’s reply report responds
Dr. Noll’s report, in

Plaintiffs’ first objection is to Dr. Heckman’s conclusion

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that Dr. Noll does not establish a college labor market monopsony

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or monopsony effects in such a market.

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proposed testimony, this conclusion is no longer relevant due to

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this Court’s summary adjudication of the issues of market

Like Dr. Elzinga’s

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Dr. Heckman’s June 21, 2017 reply report is titled
“Rebuttal Report of Professor James J. Heckman.” To avoid
confusion with the rebuttal reports submitted on May 16, 2017,
however, the Court refers to it as a reply report.
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definition and the anticompetitive effects in the relevant

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market.

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exclude Dr. Heckman’s testimony on this topic.

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Accordingly, the Court grants Plaintiffs’ motion to

Plaintiffs also move to exclude Dr. Heckman’s testimony that
Dr. Noll ignores the equilibrium effects of Plaintiffs’ proposed

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rule changes, including adverse effects for some or all class

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members.

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that Plaintiffs’ proposed rule changes would not result in other,

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United States District Court
Northern District of California

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detrimental changes to aspects of the student-athletes’

Dr. Heckman opines that Dr. Noll erroneously assumes

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relationship with the college, such as a loss of mentoring and

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coaching.

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Defendants’ proffered procompetitive justification that the

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NCAA’s current rules promote the integration of academics and

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athletics to survive the “fit” prong of the Daubert inquiry.

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Moreover, it is sufficiently responsive to Dr. Noll’s opinions.

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The Court denies the motion to exclude this proposed testimony.

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III. Drs. Rascher, Noll and Lazear

This testimony remains sufficiently relevant to

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Defendants move to exclude the testimony of Plaintiffs’

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economics experts Drs. Rascher, Noll and Lazear on three grounds.

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First, Defendants argue that the testimony of all three of these

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experts does not “fit” the facts of this case because it would,

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they say, “contradict the Ninth Circuit’s clear holding that the

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NCAA’s financial aid rules serve the procompetitive purposes of

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integrating academics with athletics and promoting amateurism.”

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Mot. at 54.

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judgment motion, which was denied in relevant part.

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therefore denies it for the reasons explained in the March 28,

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2018 order.

This argument merely duplicates Defendants’ summary

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The Court

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Second, Defendants argue that neither Dr. Lazear nor Dr.
Noll is a qualified expert in college athletics or the laws and

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NCAA rules that govern them and that their opinions on those

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topics should be excluded.

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opinion set forth in the experts’ reports, but on two portions of

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deposition testimony elicited by Defendants.

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testified to his understanding that antitrust law reflects an

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unambiguous societal judgment that when prices or quantities are

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United States District Court
Northern District of California

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restricted, the social cost outweighs the social benefit.

Defendants’ focus here is not on any

Dr. Lazear

Lazear

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Depo. at 176:20-178:24.

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athletes’ cost of attendance is calculated using the federal

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guidelines, which were not specifically designed as guidelines

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for athletic scholarships.

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respond that they will not offer expert testimony on legal

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conclusions.

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withhold any ruling until trial, when specific objections can be

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addressed in context.

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trial, the Court denies Defendants’ motion to exclude this

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testimony without prejudice to objection at trial, if necessary.

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Third, Defendants contend that the opinions of Drs. Rascher

Dr. Noll testified that that student-

Noll Depo. at 90:11-22.

Plaintiffs

They contend, however, that the Court should

Especially because this will be a non-jury

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and Lazear are unsupported by econometric or other analysis

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reflecting a generally accepted methodology.

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opinions that spending on coaches, administrators and facilities

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is currently inflated (supra-competitive) and that, absent the

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challenged rules, such spending would be reduced and redirected

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to student-athletes as cash compensation.

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colleges’ spending on coaching and facilities with that of

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professional sports teams.

This includes their

Dr. Rascher compared

He did not compare increases in
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colleges’ spending on athletic facilities with their spending on

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other facilities.

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empirical analysis that there is an overuse of capital or under-

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utilization of labor in the relevant market, but testified that

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he had looked at data associated with this market, such as data

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on the payment of coaches and the building and use of facilities.

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These objections go to the weight of the evidence at trial, not

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to its admissibility.

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United States District Court
Northern District of California

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proposed testimony of Plaintiffs’ experts.

Dr. Lazear admitted that he had not done

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The Court denies the motion to exclude the

CONCLUSION

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For the reasons set forth above, the Court GRANTS

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Plaintiffs’ motion to exclude the proposed testimony of Dr.

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Elzinga (Docket No. 807 in Case No. 14-md-02541 and Docket No.

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376 in Case No. 14-cv-02758).

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DENIES IN PART Plaintiffs’ motion to exclude the proposed

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testimony of Dr. Heckman (Docket No. 809-52 in Case No. 14-md-

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02541 and Docket No. 374-52 in Case No. 14-cv-02758).

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DENIES WITHOUT PREJUDICE Defendants’ motion to exclude portions

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of the proposed testimony of Drs. Rascher, Noll and Lazear

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

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Case No. 14-cv-02758).

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IT IS SO ORDERED.

The Court GRANTS IN PART AND

The Court

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Dated: April 25, 2018
CLAUDIA WILKEN
United States District Judge

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