## Facts

- Peter Deppe enrolled at Northern Illinois University (NIU), a Division I school, as a preferred walk-on football punter without an athletic scholarship.
- Deppe redshirted in 2014, practicing but not competing.
- Deppe alleged that an NIU coach told him he would receive an athletic scholarship beginning in January 2015, but the scholarship was later denied.
- After NIU signed another punter in 2015, Deppe sought to transfer to improve his playing and scholarship prospects.
- The University of Iowa expressed interest in Deppe if he could compete in the 2016–2017 season.
- Deppe’s family contacted the NCAA, which stated that under the Division I “year-in-residence” rule Deppe would be ineligible to compete for one full academic year after transferring.
- Iowa pursued another punter who was immediately eligible, and Deppe sued the NCAA, alleging the transfer rule violated § 1 of the Sherman Act.

## Issues

1. Whether the NCAA’s year-in-residence transfer rule is subject to challenge under Sherman Act § 1 as an unreasonable restraint of trade.
2. Whether the rule is an amateurism-related eligibility rule that is presumptively procompetitive under governing precedent, requiring stronger pleadings to state a plausible rule-of-reason claim.

## Decision

- The Seventh Circuit affirmed dismissal under Rule 12(b)(6).
- The court characterized the year-in-residence requirement as an eligibility rule intended to preserve the amateur character of college athletics.
- Applying Supreme Court and circuit precedent, the court treated the rule as presumptively procompetitive.
- The complaint’s allegations (including claimed economic motivations and the existence of exceptions) did not plausibly overcome the procompetitive presumption or plead an unreasonable restraint under the rule of reason.

## Legal Principles

- A Sherman Act § 1 claim challenging NCAA regulations typically proceeds under the rule of reason and must plausibly allege an unreasonable restraint of trade.
- NCAA rules that define or preserve amateurism through eligibility restrictions may be treated as presumptively procompetitive under controlling precedent.
- At the pleading stage, when a challenged NCAA eligibility rule is presumptively procompetitive, a plaintiff must allege facts plausibly showing that anticompetitive effects outweigh procompetitive justifications.
- Under Seventh Circuit pleading standards for NCAA antitrust claims, a plaintiff must plausibly allege a cognizable market and competitive harm from the challenged restraint.

## Conclusion

The Seventh Circuit held that the NCAA’s year-in-residence transfer rule is an amateurism-related eligibility requirement and therefore presumptively procompetitive, and it affirmed dismissal because the complaint did not plausibly allege an unreasonable restraint of trade under Sherman Act § 1.


Deppe v. Nat’l Collegiate Athletic Ass’n, 893 F.3d 498 (7th Cir. 2018)