## Facts

- Current and former Division I FBS football and Division I men’s and women’s basketball players brought a class action alleging NCAA and conference rules unlawfully capped athlete compensation.
- Defendants were the NCAA and eleven Division I athletic conferences participating in FBS football or Division I men’s basketball.
- NCAA bylaws limited the value of athletic grants-in-aid and restricted certain cash and in-kind benefits, justified by the NCAA as preserving “amateurism,” competitive balance, and academic integration.
- Plaintiffs alleged a horizontal agreement among member schools (through the NCAA and conferences) that fixed the price of athlete labor by imposing national caps on scholarships and related benefits.
- Plaintiffs proposed less restrictive alternatives, including: (1) shifting regulation from national NCAA rules to conference-level rules, and (2) eliminating national limits on benefits tied to education expenses or incidental to athletic participation.
- The case was in an MDL posture; after class certification, the parties filed cross-motions for summary judgment on Sherman Act § 1 claims.

## Issues

1. Whether the challenged NCAA compensation limits must be evaluated under the antitrust rule of reason rather than treated as categorically lawful or unlawful.
2. Whether plaintiffs produced sufficient evidence of anticompetitive effects in a relevant market for elite college athlete labor.
3. Whether defendants established procompetitive justifications for the restraints as a matter of law at summary judgment.
4. Whether plaintiffs’ proposed less restrictive alternatives were legally or factually foreclosed such that defendants were entitled to summary judgment.

## Decision

- The court largely denied defendants’ motion for summary judgment and permitted the core § 1 claims to proceed to a bench trial under the rule of reason.
- The court held that prior NCAA antitrust precedent did not immunize current compensation caps from evidence-based rule-of-reason scrutiny.
- The court found plaintiffs presented triable evidence that NCAA rules capped what schools could offer for athletes’ services, supporting anticompetitive effects in the alleged labor market.
- The court treated defendants’ asserted justifications (including maintaining a college/professional distinction and supporting academics) as potentially cognizable, but found disputed facts as to whether the specific restraints were reasonably necessary.
- The court held plaintiffs’ proposed less restrictive alternatives—conference-level regulation and removing national caps on education-related and incidental benefits—were supported by evidence and not foreclosed as a matter of law.
- The court narrowed certain peripheral theories and focused the case for trial on the challenged limits affecting FBS football and Division I basketball, particularly as to education-related and incidental benefits.

## Legal Principles

- NCAA eligibility and compensation restraints are subject to Sherman Act § 1 scrutiny and, when materially affecting competition, are evaluated under the rule-of-reason framework.
- At summary judgment, a defendant is not entitled to judgment if plaintiffs produce evidence creating a triable issue that coordinated rules suppress price competition for labor.
- Procompetitive justifications for restraints on athlete compensation may be considered, but whether particular caps are reasonably necessary can require fact-finding.
- Under the rule of reason, plaintiffs may defeat summary judgment by presenting evidence of less restrictive alternatives that could be comparably effective in achieving legitimate objectives while reducing harm to competition.

## Conclusion

The court held that NCAA caps on grants-in-aid and related benefits could not be upheld as a matter of law at summary judgment and must be tested at trial under the rule of reason, because plaintiffs offered triable evidence of anticompetitive effects and viable less restrictive alternatives, while defendants’ justifications depended on disputed facts about necessity and consumer demand.


In re NCAA Athletic Grant-in-Aid Cap Antitrust Litig., No. 4:14-md-02541-CW, 2018 WL 1524005 (N.D. Cal. Mar. 28, 2018)