DEPPE v. NATIONAL COLLEGIATE ATHLETIC ASSOCIATION
ORDER ON DEFENDANT'S MOTION TO DISMISS AND TO STRIKE IRRELEVANT ALLEGATIONS OF PLAINTIFF'S COMPLAINT - For the foregoing reasons, the Defendant's Motion for Partial Dismissal and to Strike Irrelevant Allegations of Plaintiff's Complaint (Filing No. 27 ) is GRANTED in part and DENIED in part. Count II is dismissed with prejudice. Mr. Deppe's injunctive relief claims are dismissed without prejudice. The Defendant's motion to strike is denied. Mr. Deppe is granted leave of twenty one days (21) from the date of this Order within which to file an amended complaint regarding his injunctive relief claims. (See Order.) Signed by Judge Tanya Walton Pratt on 3/6/2017. (JLS)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
PETER DEPPE on behalf of himself and all
others similarly situated,
THE NATIONAL COLLEGIATE ATHLETIC
Case No. 1:16-cv-00528-TWP-DKL
ORDER ON DEFENDANT’S MOTION TO DISMISS AND
TO STRIKE IRRELEVANT ALLEGATIONS OF PLAINTIFF’S COMPLAINT
This matter is before the Court on a Motion for Partial Dismissal and to Strike Irrelevant
Allegations of Plaintiff’s Complaint, filed pursuant to Federal Rules of Civil Procedure 12(b)(6)
and 12(b)(1) by Defendant, the National Collegiate Athletic Association (“the NCAA”). (Filing
No. 26.) The NCAA moves to dismiss Count Two of Plaintiff Peter Deppe’s (“Mr. Deppe”)
Complaint, as well as Mr. Deppe’s requests for injunctive relief. The NCAA also moves to strike
irrelevant allegations contained within Mr. Deppe’s Complaint under Rule 12(f). For the reasons
that follow, the Court grants in part and denies in part the NCAA’s Motion.
The following facts are not necessarily objectively true, but following the standard set forth
for considering motions to dismiss, the Court accepts all factual allegations as true and construes
the Complaint in the light most favorable to Mr. Deppe.
Mr. Deppe was a football punter in high school. (Filing No. 1 at 4.) He sought to play
football at the collegiate level, and was recruited by the following schools: Northern Illinois
University (“NIU”) (preferred walk-on); Central Michigan University (preferred walk-on);
Michigan State University (top two prospects for scholarship offer); Northwestern University
(preferred walk-on); Iowa State University (top two prospects for scholarship offer); University of
Toledo (offered scholarship); University of Minnesota (preferred walk-on). (Filing No. 1 at 5.)
Mr. Deppe ultimately chose NIU and enrolled in June 2014 as a preferred walk-on. (Filing No. 1
at 5.) He chose to “red shirt” during his first year at NIU, meaning he chose to forego that year of
athletic eligibility, which would then carry over to a later year. (Filing No. 1 at 6.) Mr. Deppe
planned to take over as the starting punter the following year, when he would still have four years
of athletic eligibility remaining. (Filing No. 1 at 6.) In August 2014, NIU’s special teams coach
told Mr. Deppe that he would begin receiving an athletic scholarship in January 2015. (Filing No.
1 at 6.) That coach, however, soon left to accept another coaching job, and the Head Coach
informed Mr. Deppe that he would not be receiving a scholarship. (Filing No. 1 at 6.)
NIU signed another punter sometime during 2015, which reduced Mr. Deppe’s prospects
for obtaining playing time or a second scholarship offer. (Filing No. 1 at 6.) He received official
letters of release from NIU in September 2015 and began recruiting with other schools. (Filing
No. 1 at 6.) During a visit to the University of Iowa (“Iowa”), the coaching staff told Mr. Deppe
that they wanted him on the team if he would be eligible to play during the 2016/2017 season.
(Filing No. 1 at 6.) In September 2015, Mr. Deppe’s parents contacted the NCAA regarding
whether he would be eligible to play in the fall of 2016. (Filing No. 1 at 7.) The NCAA indicated
that because Mr. Deppe was transferring from one Division I school to another, the NCAA rules
mandated that he would be ineligible for athletic competition for one year post-transfer and could
not participate until the 2017/2018 season. (Filing No. 1 at 7.)
On November 11, 2015, Mr. Deppe’s attorney sent a letter to the NCAA explaining Mr.
Deppe’s circumstances and asking the NCAA to allow him eligibility for the 2016 season. (Filing
No. 1 at 8.) The NCAA responded that it did not have a record of a waiver application on Mr.
Deppe’s behalf from the transfer institution, and that “the waiver process is initiated by an
institution to which a student is transferring and submitted to the NCAA Academic and
Membership Affairs staff for member committee review.” (Filing No. 1 at 8.) On or about
November 16, 2015, Iowa granted Mr. Deppe academic admission. (Filing No. 1 at 8.) Thereafter,
on November 19, 2015, Iowa informed Mr. Deppe that it had decided to pursue another punter
who had immediate eligibility, and that it would not pursue an NCAA waiver on his behalf. (Filing
No. 1 at 8.) On December 6, 2015, Mr. Deppe’s attorney sent the NCAA another letter, explaining
that Mr. Deppe faced a “chicken or egg” scenario: that Iowa would rather select a candidate with
immediate eligibility, as opposed to pursuing a waiver, and therefore that the waiver process
operates to the detriment of students seeking to transfer. (Filing No. 1 at 9.) The NCAA again
responded that only the transfer institution could request a waiver. (Filing No. 1 at 9.)
On March 8, 2016, Mr. Deppe filed a Complaint in this Court, asserting that the NCAA is
in violation of the Sherman Act by (1) limiting the number of Division I football scholarships that
a member institution can grant in a given year; and (2) promulgating a “year-in-residency” bylaw
that (with exceptions) requires Division I student athletes to forego a year of athletic eligibility
when they transfer to another Division I school. (Filing No. 1 at 3.) He seeks declaratory and
injunctive relief as well as damages.
In Count II of this cause of action, Mr. Deppe argues that the NCAA’s transfer bylaws
violate the Sherman Act as an unreasonable restraint on trade. (Filing No. 1 at 31.) Mr. Deppe
focuses his challenge on the “year in residence” requirement, which is listed in Article 14 of the
NCAA Division I Manual. (Filing No. 1 at 19.) That bylaw reads, in relevant part, as follows:
188.8.131.52. 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. 1 at 19-20).
The NCAA moves to dismiss Count II of Mr. Deppe’s Complaint under Federal Rule of
Civil Procedure 12(b)(6), for failure to state a claim upon which relief can be granted. (Filing No.
27 at 9.) The NCAA also moves to dismiss all of Mr. Deppe’s claims for injunctive relief under
Rule 12(b)(1), arguing that Mr. Deppe lacks standing to assert them. (Filing No. 27 at 22.) And,
if the Court grants the NCAA’s 12(b)(6) and 12(b)(1) motions, the NCAA moves to strike
allegations related to the dismissed counts as irrelevant under Rule 12(f). (Filing No. 27 at 26.)
The Court heard oral argument on the Motion to Dismiss on March 2, 2017. (Filing No. 42.)
II. LEGAL STANDARD
Federal Rule of Civil Procedure 12(b)(6) authorizes dismissal if the complaint fails to set
forth a claim upon which relief can be granted. “The purpose of a motion to dismiss is to test the
sufficiency of the complaint, not to decide the merits.” Gibson v. City of Chi., 910 F.2d 1510,
1520 (7th Cir. 1990). Accordingly, when analyzing a Rule 12(b)(6) motion to dismiss, a court
construes the complaint in the light most favorable to the plaintiff, accepts all factual allegations
as true, and draws all reasonable inferences in favor of the plaintiff. Tamayo v. Blagojevich, 526
F.3d 1074, 1081 (7th Cir. 2008).
At a minimum, the complaint must give the defendant fair notice of what the claim is and
the grounds upon which it rests; and the factual allegations must raise a right to relief above the
speculative level. See Bissessur v. Ind. Univ. Bd. of Trs., 581 F.3d 599, 602-03 (7th Cir. 2009);
Tamayo, 526 F.3d at 1081, 1083. While a complaint need not include detailed factual allegations,
a plaintiff has the obligation to provide the factual grounds supporting his entitlement to relief; and
neither bare legal conclusions nor a formulaic recitation of the elements of a cause of action will
suffice in meeting this obligation. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007); see also
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (“the pleading standard Rule 8 . . . demands more than
an unadorned, the-defendant-unlawfully-harmed-me accusation” and “[t]hreadbare recitals of the
elements of a cause of action, supported by mere conclusory statements, do not suffice”).
Although this does not require heightened fact-pleading, it does require the complaint to
contain enough facts to state a claim to relief that is plausible on its face. Twombly, 550 U.S. at
570; Tamayo, 526 F.3d at 1083 (“[a] plaintiff still must provide only enough detail to give the
defendant fair notice of what the claim is and the grounds upon which it rests, and, through his
allegations, show that it is plausible rather than merely speculative, that he is entitled to relief”).
A motion to dismiss under Rule 12(b)(1) challenges the court’s subject matter jurisdiction.
The burden of proof is on the plaintiff, the party asserting jurisdiction. United Phosphorus, Ltd. v.
Angus Chem. Co., 322 F.3d 942, 946 (7th Cir. 2003), overruled on other grounds by Minn–Chem,
Inc. v. Agrium, Inc., 683 F.3d 845 (7th Cir. 2012) (en banc). “The plaintiff has the burden of
supporting the jurisdictional allegations of the complaint by competent proof.” Int’l Harvester Co.
v. Deere & Co., 623 F.2d 1207, 1210 (7th Cir. 1980). “In deciding whether the plaintiff has carried
this burden, the court must look to the state of affairs as of the filing of the complaint; a justiciable
controversy must have existed at that time.” Id. “When ruling on a motion to dismiss for lack of
subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1), the district court must
accept as true all well-pleaded factual allegations, and draw reasonable inferences in favor of the
plaintiff, unless standing is challenged as a factual matter.” Ezekiel v. Michel, 66 F.3d 894, 897
(7th Cir. 1995) (citation omitted). Furthermore, “[t]he district court may properly look beyond the
jurisdictional allegations of the complaint and view whatever evidence has been submitted on the
issue to determine whether in fact subject matter jurisdiction exists.” Id. (citation and quotations
Federal Rule of Civil Procedure 12(f) allows the court to “strike from a pleading an
insufficient defense or redundant, immaterial, impertinent, or scandalous matter.” Fed. R. Civ. P.
12(f). The court may (1) act on its own, or (2) on a motion made by a party either before responding
to the pleading or, if a response is not allowed, within 21 days after being served with the pleading.
Id. Motions to strike are generally disfavored; however, “where ... motions to strike remove
unnecessary clutter from the case, they serve to expedite, not delay.” Heller Fin., Inc. v. Midwhey
Powder Co., Inc., 883 F.2d 1286, 1294 (7th Cir. 1989).
Motion to Dismiss Count II
The Court begins by noting that this issue is virtually identical to that raised in the NCAA’s
Partial Motion to Dismiss in Pugh v. National Collegiate Athletic Association, 2016 WL 5394408
(S.D. Ind. 2016), decided by this Court in September 2016. The parties here are both respective
counsel for the parties in Pugh and both acknowledged at oral argument that there are no legal
issues that distinguish this case from Pugh, and that the cases’ factual differences do not impact
the Court’s determination on this issue. Mr. Deppe raised the same arguments previously raised
in Pugh, respectfully submitting that in Pugh, the Court misapplied the Seventh Circuit’s reasoning
in Agnew v. National Collegiate Athletic Association, 683 F.3d 328 (7th Cir. 2012).
The Court concludes that its determination in Pugh remains unchanged, and the result is
the same in this case. The NCAA argues persuasively that the challenged “year-in-residence”
eligibility bylaw is presumptively procompetitive and, therefore, does not violate the Sherman Act.
The Sherman Act applies to NCAA regulations. Agnew, 683 F.3d at 341. However, “most
of the regulatory controls of the NCAA are justifiable means of fostering competition among
amateur athletic teams and therefore procompetitive because they enhance public interest in
intercollegiate activities.” Nat’l Collegiate Athletic Ass’n v. Bd. of Regents of the Univ. of Okla.,
468 U.S. 85, 117 (1984); Agnew, 683 F.3d at 341 (also noting that challenges to “procompetitive”
NCAA bylaws are properly dismissed during the motion to dismiss stage).
As this Court concluded in Pugh, when considering a challenged bylaw, the Seventh
Circuit has stated that the “question to be answered” is whether the challenged NCAA bylaw is
“presumptively procompetitive” id. (noting that this threshold question is the “first-and possibly
only-question” and indicating that, if the question is answered in the affirmative, there is no need
for the court to conduct a “Rule of Reason” analysis of the challenged bylaw). Justifying the
procompetitive presumption for certain NCAA regulations, the Seventh Circuit explained that:
[a] certain amount of collusion in college football is permitted because it is
necessary for the product to exist. Accordingly, when an NCAA bylaw is clearly
meant to help maintain that revered tradition of amateurism in college sports or the
preservation of the student-athlete in higher education, the bylaw will be presumed
procompetitive, since we must give the NCAA ample latitude to play that role.
Id. (citing Bd. of Regents, 468 U.S. at 117) (internal quotations omitted).
The NCAA bylaw which Mr. Deppe challenges directly relates to eligibility. The
challenged “year-in-residence” bylaw is listed in Article 14 of the NCAA Division I Manual,
which is entitled “Eligibility: Academic and General Requirements”. (Filing No. 27 at 8.) In
addition, the challenged bylaw specifically references eligibility in its text. (Filing No. 1 at 1920.)
The Court concludes, as it did in Pugh, that Agnew instructs that eligibility bylaws such as
this one are presumptively procompetitive and do not violate the Sherman Act. Agnew, 683 F.3d
at 343 (“[m]ost-if not all-eligibility rules…fall comfortably within the presumption of
procompetitiveness afforded to certain NCAA regulations”); see also, Smith v. Nat’l Collegiate
Athletic Ass’n, 139 F.3d 180, 185-86 (3rd Cir. 1998) vacated on other grounds by Nat’l Collegiate
Athletic Ass’n v. Smith, 525 U.S. 459 (1999); McCormack v. Nat’l Collegiate Athletic Ass’n, 845
F.2d 1338, 1344-45 (5th Cir. 1988) (concluding that the eligibility rules “do not violate the antitrust
laws” and noting that “[t]he eligibility rules create the product [of college football] and allow its
survival in the face of commercializing pressures”).
Accordingly, because the challenged bylaw is directly related to eligibility, it is
presumptively procompetitive and no further analysis under the Sherman Act is required. See
Agnew, 684 F.3d at 341 (noting that challenges to bylaws that are presumptively procompetitive
are properly dismissed “in a twinkling of an eye” without a detailed analysis). Dismissal of Count
II of Mr. Deppe’s Complaint is warranted.
Standing and Injunctive Relief
Mr. Deppe requests equitable relief “requiring NCAA member institutions to offer multi-
year Division I football scholarships to remedy their past wrongful conduct, and enjoining
Defendant from artificially reducing the total supply of scholarships available to NCAA studentathletes, and enjoining Defendant from restricting players’ ability to transfer without loss of
athletic eligibility…” (Filing No. 1 at 33). The NCAA contends that Mr. Deppe has not met his
burden to establish that he has standing to raise a claim for injunctive relief, because he has not
established that he is currently subject to the challenged NCAA rules or that he will be subject to
them in the future. (Filing No. 27 at 23.) Mr. Deppe responds that he has four full years of athletic
eligibility remaining, and that he “demonstrated his interest in continuing to play college football
by seeking a release from NIU and drawing interest in multiple colleges.” (Filing No. 29 at 35.)
The “irreducible constitutional minimum of standing” requires a showing of (1) injury in
fact; (2) causation; and (3) redressability. Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83,
102-04 (1998); Scherr v. Marriott Int’l, Inc., 703 F.3d 1069, 1073-74 (7th Cir. 2013). Where a
complaint’s allegations demonstrate that the plaintiff cannot plausibly meet the requisite standing
requirements, the complaint should be dismissed pursuant to Rule 12(b)(1). See Retired Chic.
Police Ass’n v. City of Chic., 76 F.3d 856, 862 (7th Cir. 1996).
A showing of injury-in-fact requires a “real and immediate” threat of future violations of
the plaintiff’s rights. Scherr, 703 F.3d at 1074. Mr. Deppe’s Complaint contains no allegation
that he is currently enrolled in an NCAA Division I institution. It contains no allegation regarding
whether he is attempting to or is interested in playing football at a Division I institution. As the
NCAA points out, “the complaint is silent on what school Deppe is currently attending, whether
that school offers Division I football, and whether Deppe is willing or able to participate in that
football program, if it exists.” (Filing No. 27 at 24.) Mr. Deppe has simply provided no allegations
that would support a finding that he suffers the “real and immediate” threat of violations of his
rights by the NCAA.
Mr. Deppe argues that this case is analogous to United States v. National Association of
Realtors, 2006 WL 3434263 (7th Cir. 2006), contending that he suffers from the “continuing
effects of an anticompetitive policy.”
(Filing No. 29 at 36.)
But the allegation that he
“demonstrated his interest in continuing to play college football by seeking a release from NIU
and drawing interest in multiple colleges” is not sufficient to confer standing. Absent any
allegation that Mr. Deppe risks being subjected to the challenged NCAA bylaws, Mr. Deppe has
not pleaded an adequately “real and immediate” threat of future or continuing violations of his
Mr. Deppe also argues that the “inherently transitory” rule applies to his request for
injunctive relief, preventing dismissal based on lack of standing. As this Court noted in Pugh,
student-athletes are limited in their years of eligibility, and class actions are often protracted and
drawn out. But, as in Pugh, this is not a case in which the student-athlete’s eligibility period
“timed out” during the pendency of the action. But the Complaint contains no allegations that at
the time he filed his Complaint, Mr. Deppe was enrolled in a Division I institution or playing or
attempting to play football. So, at least as pleaded in Mr. Deppe’s Complaint, at no point in the
life of this case did he have standing to seek injunctive relief. See Holmes v. Fisher, 854 F.2d 229,
233 (7th Cir. 1988) (“[t]o permit the certification of a class headed by a ‘representative’ who did
not have a live controversy with the defendant on the day the suit began would be to jettison the
last vestiges of the case-or-controversy requirement in class actions”).
Dismissal of Mr. Deppe’s claims for injunctive relief is therefore required, because the
Court lacks subject matter jurisdiction over the dispute. The Court notes that Mr. Deppe may be
able to establish that he has standing by adequately pleading a sufficiently concrete and
particularized injury, and Mr. Deppe at oral argument requested the ability to do so. The Court
therefore grants the Motion to Dismiss without prejudice.
Motion to Strike Class Allegations
Given that the Court has granted the NCAA’s motion to dismiss Count II and the request
for injunctive relief, the NCAA moves to strike as irrelevant the allegations relating to the Transfer
Core Issues Class. 1 The NCAA contends that allowing those allegations to remain in the
Complaint will needlessly confuse and complicate the case, and that it will suffer prejudice if Mr.
Deppe seeks to expand the scope of discovery based on the irrelevant class allegations. (Filing
No. 32 at 24.)
The Court notes at the outset that motions to strike are generally disfavored. Midwhey
Powder, 883 F.2d at 1294. The NCAA conceded at oral argument that if the parties can reach an
agreement regarding the appropriate scope of discovery, any risk of prejudice would be
diminished. Moreover, the Court has granted its dismissal of the requests for injunctive relief
without prejudice, and Mr. Deppe’s counsel indicated at oral argument that he may seek to file an
amended complaint if given the opportunity to do so. Given the prospect of an amended complaint,
and the possibility of eliminating any potential prejudice through case management or agreement
regarding discovery, the Court denies the NCAA’s motion to strike.
For the foregoing reasons, the Defendant’s Motion for Partial Dismissal and to Strike
Irrelevant Allegations of Plaintiff’s Complaint (Filing No. 27) is GRANTED in part and
DENIED in part. Count II is dismissed with prejudice. Mr. Deppe’s injunctive relief claims are
dismissed without prejudice. The Defendant’s motion to strike is denied.
Mr. Deppe is granted leave of twenty one days (21) from the date of this Order within
which to file an amended complaint regarding his injunctive relief claims.
Mr. Deppe sues on behalf of himself and two putative classes: (1) the “injunctive relief class”, which includes “all individuals who, from November
4, 2011 to the present, have been a member of an NCAA Division I football team”; and (2) the “Transfer Core Issues Class”, which includes “all
individuals who, from November 4, 2011 to the present, have sought to transfer from one NCAA Division I football school to another NCAA
Division I football school, and pursuant to NCAA transfer rules, were considered to be, or would have been considered to be, athletically ineligible
to participate in NCAA football for any period of time.” (Filing No. 1 at 27.)
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