PUGH v. NATIONAL COLLEGIATE ATHLETIC ASSOCIATION

Filing 57

ENTRY ON MOTION FOR FINAL JUDGMENT OR CERTIFICATION OF INTERLOCUTORY APPEAL - For the reasons set forth above, Pugh's Motion for Final Judgment and Certification of Interlocutory Appeal is DENIED. (Filing No. 49 ) (See Entry.) Signed by Judge Tanya Walton Pratt on 12/6/2016. (JLS)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
DEVIN PUGH on behalf of himself and all
others similarly situated,
Plaintiff,
v.
THE NATIONAL COLLEGIATE ATHLETIC
ASSOCIATION,
Defendant.

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Case No. 1:15-cv-01747-TWP-DKL

ENTRY ON MOTION FOR FINAL JUDGMENT OR CERTIFICATION
OF INTERLOCUTORY APPEAL
This matter is before the Court on Plaintiff Devin Pugh’s (“Pugh”) Motion for Final
Judgment pursuant to Federal Rule of Civil Procedure 54(b) and Certification of Interlocutory
Appeal pursuant to 28 U.S.C. § 1292(b). (Filing No. 49.) On November 5, 2015, Pugh filed a
two-count class action complaint alleging that Defendant National Collegiate Athletic Association
(“NCAA”) violated the Sherman Act, 15 U.S.C. § 1. In particular, Count I is applicable to Pugh’s
claims regarding the NCAA’s prohibition of multi-year scholarships and the NCAA’s cap on
athletic scholarships, and Count II is applicable to Pugh’s claims regarding the NCAA’s transfer
rules. On September 27, 2016, the Court granted NCAA’s Motion to Dismiss Count II of the
Complaint. (Filing No. 48.) Pugh now seeks final judgment or, in the alternative, certification of
interlocutory appeal on Count II in order to permit immediate appeal to the Seventh Circuit. (Filing
No. 49.) For the reasons set forth below, the Motion for Final Judgment and Certification of
Interlocutory Appeal is DENIED.

I.

BACKGROUND

In 2010, Pugh accepted a Division I grant-in-aid to play football at Weber State University
(“Weber”), a Division I FCS school. (Filing No. 1 at 25.) A full grant-in-aid is the amount of
scholarship that sometimes is referred to as a full ride. It includes the cost of tuition, fees, room,
board and required textbooks for student athletes. The period of an award cannot exceed one year
and FCS schools may not award more than sixty-three full grants-in-aid. Id. at 8. Weber State’s
head coach, Ron McBride, pledged to Pugh that his grant-in-aid would be renewed annually so
long as he did well academically and remained eligible for NCAA competition. Id. In December
2011, after Coach McBride retired, Weber State named a new head football coach, Jody Sears. Id.
at 26. Coach Sears informed Pugh that Weber State would not renew his grant-in-aid and that he
should consider transferring to another school.
After sending highlight tapes to numerous schools, Pugh was offered full grants-in-aid at
several Division I FBS and FCS schools. Id. at 27-28. However, all of the grants-in-aid were
contingent upon his ability to play two more years of NCAA football. Id. Because NCAA’s “yearin- residence” bylaw required Pugh to sit out of competition for a full season, he only had one year
of competition left. Id. at 28. Pugh applied for a “hardship waiver,” which would have allowed
him to play immediately, however, NCAA denied the request. As a result, every grant-in-aid offer
was rescinded. Id.
In 2013, Pugh transferred to Colorado State University-Pueblo, a Division II school. Id.
Because Pugh transferred from a Division I school to a Division II school, he was eligible for a
one-time transfer exception and did not have to sit out for a year, giving him two seasons left to
play NCAA football. Id. However, Pugh’s new grant-in-aid award was less than at Weber State
and covered only tuition, but not books, housing, or any other costs. Id. at 29. As a result, Pugh’s

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school loans increased from approximately $3,000.00 per year to $6,000.00 per year.

Id.

Following a football injury and job offer, Pugh left school with nine credits remaining to graduate,
which he intends to finish. Id. at 29.
On November 5, 2015, Pugh filed a class action Complaint alleging anti-trust violations
against NCAA. (Filing No. 1.) Count I of his Complaint asserts that NCAA bylaws violated the
Sherman Act by prohibiting multi-year Division I football scholarships and capping the number
of athletic scholarships that could be awarded by Division I member institutions. Count II of the
Complaint alleges that Division I Bylaw 14.5.5.1 (the “year-in-residence bylaw”) violates the
Sherman Act by requiring Division I student-athletes to forego a year of athletic eligibility when
transferring to another Division I school, amounting to an unreasonable restraint on trade. The
pertinent section of the bylaw states:
14.5.5.1. General Rule. A transfer student from a four-year institution shall not be
eligible for intercollegiate competition at a member institution until the student has
fulfilled a residence requirement of one full academic year (two full semesters or
three full quarters) at the certifying institution.
(Filing No. 34-2 at 34) (emphasis added).
On January 15, 2016, NCAA filed a partial motion to dismiss, seeking only to dismiss
Count II of the Complaint. On September 27, 2016, the Court granted NCAA’s partial motion to
dismiss, concluding that NCAA’s eligibility bylaws are “presumptively procompetitive” and,
therefore, do not violate the Sherman Act. (Filing No. 48.) Pugh now seeks final judgment or, in
the alternative, certification of interlocutory appeal on Count II in order to permit immediate appeal
to the Seventh Circuit. (Filing No. 49.)
II.

LEGAL ANALYSIS

Under 28 U.S.C. § 1291, federal appellate courts “have jurisdiction over all final decisions
of the district courts of the United States, and orders resolving fewer than all the claims in a case
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are not ‘final’ for purposes of an appeal.” General Ins. Co. v. Clark Mall Corp., 644 F.3d 375,
379 (7th Cir. 2011) (internal quotations omitted). However, Fed. Rule Civ. P. 54(b) provides the
following exception,
When an action presents more than one claim for relief – whether as a claim,
counterclaim, crossclaim, or third-party claim – or when multiple parties are
involved, the court may direct entry of final judgment as to one or more, but fewer
than all, claims or parties only if the court expressly determines that there is no just
reason for delay. Otherwise, any order or other decision, however designated, that
adjudicates fewer than all the claims or the rights and liabilities of fewer than all
the parties does not end the action as to any of the claims or parties and may be
revised at any time before the entry of a judgment adjudicating all the claims and
all the parties’ rights and liabilities.
Fed. R. Civ. P. 54(b). A Rule 54(b) order requires the district court to make two determinations:
(1) that the order in question was truly a “final judgment”, and (2) that there is no just reason to
delay the appeal of the claim that was “finally” decided. Gen. Ins. Co., 644 F.3d at 379.
In making the first determination, the district court is mindful that partial final judgment
may be entered only when all of one party’s claims or rights have been fully adjudicated or when
a distinct claim has been fully resolved with respect to all parties. Officer v. AS Chase Ins. Life &
Annuity Co., 500 F. Supp. 2d 1083, 1086 (N.D. Ind. 2007) (internal punctuation omitted). In this
regard, Rule 54(b) allows appeal of claims that are truly separate and distinct from those that
remain pending in the district court, where “separate” means having “minimal factual overlap”.
Lottie v. W. Am. Ins. Co., of Ohio Cas. Grp. of Ins. Cos., 408 F.3d 935, 939 (7th Cir. 2005) (“[t]he
test for separate claims under [Rule 54(b)] is whether the claim that is contended to be separate so
overlaps the claim or claims that have been retained for trial, that if the latter were to give rise to
a separate appeal at the end of the case, the court would have to go over the same ground that it
had covered in the first appeal.”).

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In making the second determination, the district court must consider whether “there is no
just reason for delay,” based on the effects that a delay of an appeal would have on the parties. See
ODC Commc’ns Corp. v. Wenruth Invs., 826 F.2d 509, 511-12 (7th Cir. 1987).
III.

DISCUSSION

As previously stated, Pugh requests final judgment or, in the alternative, certification of
interlocutory appeal on Count II in order to permit immediate appeal to the Seventh Circuit.
A.

Final Judgment
1.

Count II is not separate from Count I

Pugh contends that Counts I and II are separate and factually distinct, despite both arising
under section one of the Sherman Act. See Ty, Inc. v. Publications Int'l Ltd., 292 F.3d 512, 515
(7th Cir. 2002) (defines “separate” as “involving different facts”). Pugh specifically asserts that
Count I is separate because it examines whether NCAA established the now-repealed restraint on
multi-year scholarships to preserve amateurism or to conserve costs. (Filing No. 49 at 4.) Pugh
contends that the facts relating to Count II are different because it examines whether NCAA
established the “year-in-residence” requirement to preserve education and amateurism or for
economic motivations. Id.
In response, NCAA argues that there is a significant factual, evidentiary, and legal overlap
between Counts I and II. NCAA contends that the elements of the two claims are identical and
involve, at minimum, a singular injury and a singular measure of damages. NCAA asserts that
Pugh’s injury and potential damages, due to the loss of his athletic scholarship and the difference
in value of the scholarship and tuition costs received when Pugh transferred to the Division II
school, are central to both counts and regard the same facts. In reply, Pugh argues that the Court
should examine the focus of each claim, rather than the single event of Pugh losing his scholarship,

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when determining if the facts of the two counts overlap. Pugh asserts that Count I focuses on
injuries related to his recruitment from high school and offer from Weber College. In contract,
Pugh argues that Count II focuses on his ability to play at another Division I school after losing
his scholarship.
Although Counts I and II have some differences, the Court finds that there is significant
factual overlap between the two. Despite Pugh’s contention that Count I focuses on events
regarding his recruitment from high school and offer from Weber, Pugh specifically asserts in his
Complaint that his injury under Count I relates to his loss of scholarship and having to accept a
lesser scholarship. 1 Similarly, Pugh contends that because of the “year-in-residence” requirement
challenged under Count II, “Division I football players who have lost grants-in-aid at their current
schools are further faced with the decision to transfer to a Division I school where they are unlikely
to receive full grants-in-aid, if any aid at all, or transfer to a less competitive Division II school.”
(Filing No. 1 at 30.)
The Court concludes, and as NCAA persuasively argued, Counts I and II not only arise out
of the same transaction, namely the loss of Pugh’s scholarship, but the pertinent facts bearing on
damages are also the same. These claims are not considered “separate” for purposes of entering
final judgment. See Lottie, 408 F.3d at 939; See also Horwitz v. Alloy Auto. Co., 957 F.2d 1431,
1434 (7th Cir.1992) (“If there is a great deal of factual or legal overlap between counts, then they
are considered the same claim for Rule 54(b) purposes.”). Accordingly, Pugh’s motion for final
judgment is on this basis is denied.

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In a competitive market, Pugh would have received a multi-year grant-in-aid that covered all years of eligibility.
NCAA’s prohibition on multi-year Division I football grants-in-aid has injured thousands of student-athletes by
causing them to pay millions more in tuition when their Division I football scholarships are reduced or not renewed.
When these Division I football grants-in-aid are reduced or not renewed, a student is left with the decision to remain
at the school and pay for tuition and expenses out of pocket, consider transferring, or drop out of school all together.
(Filing No. 1 at 30.) (Emphasis added.)

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2.

There is Just Reason for Delay

Pugh also argues that final judgment on Count II is warranted because there is no just
reason for delay. “In determining whether there is no just reason for delay, the district court may
properly consider all of the consequences of a final judgment or the lack thereof and balance the
competing interests of the parties in the context of the particular case.” VDF FutureCeuticals, Inc.
v. Lewis, No. 13-CV-407, 2014 WL 4477947, at *2 (N.D. Ill. Sept. 10, 2014) (citing Bank of
Lincolnwood v. Fed. Leasing, Inc., 622 F.2d 944, 949 (7th Cir.1980)). The Court considers the
following non-exclusive list of factors:
(1) The relationship between the adjudicated and unadjudicated claims; (2) the
possibility that the need for review might or might not be mooted by future
developments in the district court; (3) the possibility that the reviewing court might
be obliged to consider the same issue a second time; (4) the presence or absence of
a claim or counterclaim which could result in set-off against the judgment sought
to be made final; (5) miscellaneous factors such as delay, economic and solvency
considerations, shortening the time of trial, frivolity of competing claims, expense,
and the like.
Id.
Pugh contends that it would be unduly prejudicial and costly to proceed with only Count I
through the stages of litigation before allowing the Court of Appeals to make a determination as
to Count II. In response, NCAA argues that Pugh failed to demonstrate that significant prejudice
or extraordinary consequence would arise if his motion is denied. NCAA contends that merely
eliminating what might otherwise be potentially unnecessary litigation costs is “not a sufficient
basis for the required finding that there was ‘no just reason for delay.’” Brunswick Corp. v.
Sheridan, 582 F.2d 175, 184 (2d Cir. 1978) (quoting W. Geophysical Co. of Am. v. Bolt Associates,
Inc., 463 F.2d 101, 103 (2d Cir. 1972)). NCAA also asserts that allowing immediate appeal of
Count II will likely amount to more inefficiencies and expenses because the only way that

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discovery costs will be conserved is if discovery is stayed until the appeal is final, resulting in a
needless lengthened litigation.
In reply, Pugh argues that because he will appeal the dismissal of Count II now or following
the resolution of Count I, it is more logical to resolve the appeal sooner than later. As previously
mentioned, the Court finds that the relationship between Counts I and II constitutes a compelling
reason to withhold 54(b) certification. The facts underlying both claims substantially overlap. If
Count I were to give rise to a separate appeal at the end of the case, the Court of Appeals would
have to review the same ground that it covered in the first appeal. See Lottie, 408 F.3d at 938-39.
Accordingly, Pugh’s final judgment motion is on this basis is denied.
B.

Certification of Interlocutory Appeal
In the alternative, Pugh requests the Court to issue a certification of interlocutory appeal.

Interlocutory appeals are governed by 28 U.S.C. § 1292(b). Under § 1292(b), a district court may
certify an interlocutory order for immediate appeal whenever the order: (1) involves a controlling
question of law, (2) as to which there is substantial ground for difference of opinion, and (3) an
immediate appeal from the order may materially advance the ultimate termination of the litigation.
In other words, to grant a petition for interlocutory review, “there must be a question of law, it
must be controlling, it must be contestable, and its resolution must promise to speed up the
litigation.” Ahrenholz v. Bd. of Trust. of the Univ. of Ill., 219 F.3d 674, 675 (7th Cir. 2002)
(emphasis in original). Importantly, each criterion must be met.
There is no dispute that the Court’s dismissal of Count II amounts to a question of law,
however, NCAA argues that Count II is not controlling, contestable, and its resolution would not
speed up litigation.

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1.

Controlling Question of Law

Pugh contends that the issue raised under Count II is a controlling question of law. “A
question of law may be deemed ‘controlling’ if its resolution is quite likely to affect the further
course of the litigation, even if not certain to do so.” Sokaogon Gaming Enter. Corp. v. TushieMontgomery Associates, Inc., 86 F.3d 656, 659 (7th Cir. 1996). On September 27, 2016, the Court
issued an Order granting NCAA’s motion to dismiss Count II, concluding that NCAA’s eligibility
bylaws are “presumptively procompetitive” and do not violate the Sherman Act. In his Motion for
Interlocutory Appeal, Pugh asserts only that the Court’s dismissal of Count II demonstrates that
Count II is controlling and its resolution would affect the course of litigation. In response, NCAA
contends that Count II is not controlling because the Seventh Circuit sustaining or reversing this
Court’s dismissal of Count II would not materially impact the trial and resolution of Count I.
In reply, Pugh cites Hodgkins v. Goldsmith, Thrasher-Lyon v. CCS Commercial, LLC, and
In re Ocwen Fed. Bank FSB, when asserting that the Seventh Circuit does not require a
“controlling” question to affect the remaining claims. In Hodgkins, the court ruled that whether
Indiana’s curfew law violated the First Amendment was sufficiently “serious to the conduct of the
litigation” to constitute a “controlling question of law.” Hodgkins v. Goldsmith, No. IP99-1528C-T/G, 2000 WL 892964, at *26 (S.D. Ind. July 3, 2000). The court further stated that the issue
was controlling because it was the sole ground relied upon by the court to invalidate a state statute
and the ruling resolved the sole claim of an entire class. Id. In Thrasher-Lyon, the court ruled that
the issues were controlling because the reversal of the court’s ruling would essentially end the case
and if the court’s ruling was affirmed then it would color how the remainder of the case proceeded.
Thrasher-Lyon v. CCS Commercial, LLC, No. 11 C 04473, 2012 WL 5389722, at *2 (N.D. Ill.
Nov. 2, 2012). Lastly, in In re Ocwen Fed. Bank FSB, the court ruled that the question of law was

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controlling because twenty of a plaintiff’s twenty-three counts would be dismissed. In re Ocwen
Fed. Bank FSB, No. 04 C 2714, 2006 WL 1371458, at *2 (N.D. Ill. May 16, 2006).
In each of these cases cited by Pugh, controlling questions existed because the decision had
the real potential to result in the dismissal of the case, the dismissal of a class, or at minimum,
affect the course and ultimate resolution of the case. Despite listing the above cases and their
holdings, Pugh did not explain why the issue presented under Count II is a controlling question of
law. Pugh states only that “Plaintiff has satisfied this element.” (Filing No. 53.) Without more
facts, the Court finds that, unlike the questions of law in Hodgkins, Thrasher-Lyon, and In re
Ocwen Fed. Bank FSB, Count II is not a controlling issue of law.
2.

Contestable Question of Law

Pugh also contends that Count II is contestable because Agnew acknowledged in dictum a
debate over “whether all eligibility rules or just most eligibility rules are due a presumption.”
Agnew v. Nat’l Collegiate Athletic Ass’n, 683 F.3d 328, 343 n.6 (7th Cir. 2012). An issue is
contestable if there is a “difficult central question of law that is not settled by controlling
authority”, and there is a “substantial likelihood… that the district court[’s] ruling will be reversed
on appeal.” In re Brand Name Prescription Drugs Antitrust Litigation, 878 F.Supp. 1078, 1081
(N.D.Ill.1995).
This Court dismissed Count II pursuant to Agnew, ruling that NCAA eligibility bylaws are
“presumptively competitive.” Pugh asserts that there is a difference between eligibility rules that
protect amateurism and the challenged “year-in-residence” requirement. Pugh contends that
“presumptively competitive” eligibility rules are “essential to the very existence of… college
football” because they “define what it means to be an amateur or a student-athlete.” Id. at 343.
On the other hand, Pugh asserts that the “year-in-residence” requirement has little relation to

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NCAA’s academic justification and the commercial purpose of the rule prevents it from being
“presumptively competitive.”
In response, NCAA argues that the Court’s dismissal of Count II was based on a
straightforward application of the Seventh Circuit’s decision in Agnew and no conflicting law
exists. NCAA contends that the issue is not contestable merely because it raises a purported
question of first impression, and further asserts that Pugh failed to show that there is a substantial
likelihood that the Court’s ruling will be reversed on appeal. In reply, Pugh relies on Boim when
arguing that Count II raises a novel issue and, despite NCAA’s contention, the issue is contestable.
See Boim v. Quranic Literacy Inst. & Holy Land Found. For Relief And Dev., 291 F.3d 1000,
1007–08 (7th Cir. 2002) (holding that questions of first impression regarding the interpretation of
statutes were contestable).
The Court agrees that novel and difficult questions of first impression, similar to the
interpretation of a statute, are contestable, however, “the mere lack of judicial precedent on the
issue does not establish substantial ground for difference of opinion.” See In re
Bridgestone/Firestone, Inc. Tires Prod. Liab. Litig., 212 F. Supp. 2d 903, 909 (S.D. Ind. 2002)
(quoting In re Demert & Dougherty, Inc., 2001 WL 1539063, at *6 (N.D.Ill.2001)); See also
Patrick v. Pyod, LLC, No. 1:14-CV-00539-RLY, 2014 WL 5343284, at *1 (S.D. Ind. Oct. 20,
2014). The Court finds that Pugh has not articulated how Count II presents a difficult central
question of law. Pugh asserts that he will explain on appeal the substantial grounds against
presuming that the “year-in-residence” requirement is procompetitive.

This is insufficient.

Without more facts, the Court is unable to determine whether a “substantial ground for difference
of opinion” exists. See Hodgkins, 2000 WL 892964, at *26 (holding that although the court

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ultimately sided with plaintiffs, there existed a “substantial ground for difference of opinion”
where defendants presented “very substantial arguments” for their position).
Because the factors are “conjunctive, not disjunctive,” Pugh’s Motion fails because Pugh
has not presented evidence that Count II is a controlling and contestable question of law. See
Ahrenholz, 219 F.3d at 676. The Court also notes that, as outlined above, an interlocutory appeal
would not speed up the litigation in this case. An “[i]nterlocutory appeal is fitting only where
‘exceptional circumstances justify a departure from the basic policy of postponing appellate review
until after the entry of a final judgment.’” Heckler & Koch, Inc. v. German Sport Guns GmbH,
No. 1:11-CV-01108-SEB, 2015 WL 4878191, at *2 (S.D. Ind. Aug. 14, 2015) (quoting Coopers
& Lybrand v. Livesay, 437 U.S. 463, 475, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978)). The Court finds
that an exceptional circumstance does not exist.
IV.

CONCLUSION

For the reasons set forth above, Pugh’s Motion for Final Judgment and Certification of
Interlocutory Appeal is DENIED. (Filing No. 49.)
SO ORDERED.
Date: 12/6/2016
DISTRIBUTION:
Jacob K. Danziger
350 S. Main Street, Suite 210,
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Daniel E. Pulliam
FAEGRE BAKER DANIELS LLP (Indianapolis)
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Kathy Lynn Osborn
FAEGRE BAKER DANIELS LLP (Indianapolis)
[e-mail]

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Daniel J. Kurowski
HAGENS BERMAN SOBOL SHAPIRO LLP
[e-mail]
Steve W. Berman
HAGENS BERMAN SOBOL SHAPIRO LLP
[e-mail]
Elizabeth A. Fegan
HAGENS BERMAN SOBOL SHAPIRO, LLP
[e-mail]
Joseph N. Williams
RILEY WILLIAMS & PIATT, LLC
[e-mail]
William N. Riley
RILEY WILLIAMS & PIATT, LLC
[e-mail]
Cherie Phears O’Reilly
SCHIFF HARDIN LLP Atlanta
[e-mail]
Gregory L. Curtner
SCHIFF HARDIN, LLP - Michigan
[e-mail]
Robert James Wierenga
SCHIFF HARDIN, LLP - Michigan
[e-mail]
Suzanne L. Wahl
SCHIFF HARDIN, LLP - Michigan
[e-mail]
Sara Willingham
THE PAYTNER LAW FIRM PLLC
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Stuart McKinley Paynter
The Paynter Law Firm PLLC
[e-mail]

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