U.S. Supreme Court Declines to Hear O'Bannon Case

Kelleigh Irwin Fagan

Author: Kelleigh Irwin Fagan

POST DATE: 10.4.16
Ccha  Sports Law

Yesterday, the U.S. Supreme Court declined to hear O’Bannon v. National Collegiate Athletic Association (NCAA) case. After 7 years, this case is essentially over. This case has received significant media attention over the past several years.

In a nutshell, in 2009, the class that former UCLA basketball student-athlete Ed O’Bannon represents (current and former student-athletes) asserted claims against the NCAA alleging NCAA rules that limited the ability of student-athletes to profit from their name and likeness violated antitrust laws. At the district court level (trial level), Judge Wilken of the U.S. District Court, Northern District of California, found the NCAA rules at play did violate antitrust laws as their anti-competitive effects did not outweigh their pro-competitive benefits. Judge Wilken then asserted the NCAA could not prohibit member institutions from disallowing student-athletes to benefit from their name or likeness and she found member institutions could cap the student-athlete benefit at $5,000. On appeal, the 9th Circuit affirmed in part and overruled in part Judge Wilken’s decision. The 9th Circuit agreed these NCAA rules violated antitrust laws, but it found the $5,000 cap Judge Wilken set was arbitrary. Moreover, and what many saw as a win for the NCAA, it found the NCAA’s recent practice of permitting its member institutions to offer their student-athletes the full cost of attendance was all that the NCAA needed to do to avoid antitrust violations in this lawsuit.

The good and the bad

The good for the NCAA is that it is already doing what it needs to do to avoid antitrust violations on the issue of student-athlete name and likeness. The bad is the 9th Circuit has now set precedent that NCAA rules are subject to antitrust scrutiny. Prior to O’Bannon, many believed that the NCAA’s amateurism model was protected by the U.S. Supreme Court’s decision in the 1984 case of NCAA v. Board of Regents of Oklahoma University. If that protection ever existed, it is certainly in jeopardy now.

What now?

Challenges to the NCAA’s amateurism model are far from over. The case that will come to the forefront now—Jenkins v. NCAA—alleges the NCAA’s prohibition on pay-for-play violates antitrust rules. This case is housed in Judge Wilken’s court and will undoubtedly rely on this 9th Circuit precedent. While the O’Bannon case took a large step forward for anti-amateurism, it is the Jenkins case that could end amateurism as we know it. The class in Jenkins alleges that the NCAA member institutions are illegally conspiring by agreeing that no institution can pay student-athletes more than college scholarships or the full cost of attendance. Were Jenkins to prevail, it is conceivable that if institutions can no longer restrict “payment” to student-athletes, then the NCAA could not prohibit institutions from paying student-athletes more than the full cost of attendance or a full scholarship. This could essentially result in a “pay for play” system and schools could land recruits by offering more money.

What this means for our clients

With the Supreme Court declining to hear the O’Bannon case, there is no immediate effect on our clients as most clients are already offering full cost of attendance or have navigated their way through that option. But, with the Jenkins case, and likely other cases to be filed in the future, institutions cannot avoid continuing to plan for the unknown. Forward thinking schools will, or already have, started to prepare for any legal outcome in cases like Jenkins. Preparation can come in a myriad of ways: campus and athletic department-wide strategic planning, financial planning, proper education and training on-campus, and review of student-athlete rights, to name a few.

Click here to learn more about our firm and how we can partner with you.

For more information about Kelleigh and CCHA’s sports law practice, please visit her profile.