March 5, 2014
SEATTLE – Student athletes playing under NCAA auspices today filed an antitrust
class-action lawsuit against the NCAA and the NCAA’s most powerful
members including the Pac-12, Big Ten, Big-12 as well as the SEC and ACC,
claiming these entities have agreed in violation of national antitrust
laws to cap the value of athletic scholarships despite the fact that the
NCAA’s valuation of athletic scholarships is far below the actual
cost of attending school, and far below what the free market would bear.
The class-action case seeks to represent former NCAA Division I Football
Bowl Subdivision (FBS) scholarship players who have played from February
2010 to the present within those conferences.
“Members of FBS teams have generated significant annual revenue for
NCAA members and their business partners in a highly commercialized and
professionalized entertainment industry,” said Steve Berman, managing
partner of Hagens Berman Sobol Shapiro LLC and lead attorney on the case.
“Not a single dollar of that revenue would exist if it were not
for the efforts of the Football Bowl Subdivision football players themselves.”
The new suit filed in U.S. District Court in San Francisco alleges that
the NCAA and these five Power Conferences have systematically colluded
to disrupt the free market and deprive FBS football players of the full
economic benefits of their labor. According to the complaint, NCAA rules
artificially depress the value of athletic scholarships – known
as Grants-in-Aid or GIAs – to typically several thousand dollars
less per year, per player, than the actual cost to attend an NCAA school.
The suit’s plaintiff – former West Virginia University football
star Shawne Alston – received a grant-in-aid scholarship from WVU
that was intended to cover all tuition and registration fees, required
course-related fees, room, meals and required textbooks, but was significantly
lower than the roughly $40,000 annual cost of attendance.
In 2012, Alston had to take out a $5,500 loan to cover the difference between
his GIA and the actual costs of attendance. During the 2011-2012 academic
years, Alston led the WVU Mountaineers in number of touchdowns, securing
major victories. In his senior year, Alston led the team to its being
ranked eighth in the nation. Still, during his time at WVU, Alston was
unable to work, given rigorous academic and athletic obligations, and
took out loans to cover costs that were not covered in the college’s
scholarship.
The complaint alleges that in a market unrestricted by NCAA and member
restrictions on GIAs, schools would compete for star athletes like Alston
and pay at least the full cost of attendance. The lawsuit seeks an injunction
to prohibit any agreement on capping GIA’s below the cost of attendance
and past damages for players who had to pay the difference between their
scholarship and the cost of attendance as a result of the illegal agreement.
“The NCAA and its members should stand for fairness and equal opportunities
to share in economic success. I hope that this litigation can be part
of making that a reality,” Alston said. “I’m extremely
humbled by the opportunity to step forward on behalf of my football teammates,
opponents and all other FBS football players.”
The complaint alleges that each of the five Power Conference Defendants
has stated that they would implement an increase in GIAs, and that every
FBS player would likely receive additional compensation above the cost
of attendance, if they were not bound by collusive agreements with other
Division I schools. Additionally, the complaint alleges that the defendants,
“repeatedly claim powerlessness, year after year, to change their
lucrative status quo, because smaller NCAA members won’t agree to
the change. Were the Defendant Conferences to act unilaterally, each would
raise the GIA cap above the current levels.”
The suit was filed on behalf of FBS football players by lead attorneys
Steve Berman and Bruce Simon. Berman is the managing partner of Hagens
Berman and the lead attorney in related cases Owens v. NCAA in which football
players are challenging the NCAA’s neglects to protect student-athletes
from concussions, and Keller v. NCAA, in which student-athletes are challenging
the NCAA's ability to sell their likeness to video-game publishers.
Simon is a lead partner at Pearson Simon, and one of the plaintiffs’
attorneys in O’Bannon v. NCAA, where student-athletes are challenging
the NCAA’s restraints on players sharing in the licensing of their
images in products such as live broadcasts.
According to Berman, the new case differs in certain respects from the
ongoing cases about image rights.
“This new case gets at a fundamental issue having nothing to do with
image rights, but everything to do with basic economic rights. FBS football
players should no longer be treated as second class citizens,” Berman
said. “They generate massive amounts of money for the schools and
the NCAA, and these players should not have to struggle to make ends meet
while they are surrounded by multi-millionaire coaches.”
“Our case contains a proposal that is designed to provide economic
fairness,” Berman said. “Numerous reasonable, less restrictive
alternatives are available to Defendants’ current anti-competitive
practices, including allowing incremental competition between Power Conference
Defendants and against their co-conspirator conferences within FBS as
to the financial aid terms that conference members will make available
to college football players.”
“We expect the NCAA to defend this case with their standard playbook,
based on their version of ‘amateurism’ which is the same defense
the NCAA has deployed in most cases of this type,” said lead attorney
on the case, Bruce Simon. “In this new case, we look forward to
continuing to demonstrate that the NCAA’s defense does not apply.
FBS football cannot continue to thrive without the dedication of the student
athletes, but the NCAA and Power Conferences should abide by the antitrust
laws that all other businesses must follow.”
The complaint requests past damages to compensate class members for the
difference between the value of scholarships and the actual cost of attending
school, and also requests an injunction to enjoin defendants from continuing
to enforce their anticompetitive rules. Additionally, the complaint requests
the appointment of an External Antitrust Compliance Monitor to ensure
that defendants conduct themselves in compliance with the antitrust law,
and to provide a mechanism for future judicial oversight of defendants’
operations, as was recently approved in the antitrust litigation captioned
United States v. Apple, Inc., case number 1:12-CV-2826, filed in U.S.
District Court in the Southern District of New York.
Current or former NCAA athletes seeking more information about the case
can contact Hagens Berman at 206-623-7292 or Pearson Simon at 415-433-9000.
They can also email
NCAAscholarships@hbsslaw.com.
More information about these issues is available at
http://www.hbsslaw.com/cases-and-investigations/cases/NCAA-Scholarships and
www.pswlaw.com.
About Hagens Berman
Hagens Berman Sobol Shapiro LLP (HBSS) represents consumers, whistleblowers,
investors, workers and others in complex and class-action litigation.
The firm is currently involved in a number of cases representing NCAA
and NFL athletes on image/likeness issues, as well leading a class-action
case against the NCAA regarding concussions, and also representing former
NFL players in regards to concussions. The firm has offices in nine cities
and has been named to the National Law Journal's Plaintiffs' Hot
List six times. Founded in 1993, HBSS continues to successfully fight
for plaintiffs' rights in large, complex litigation against large
corporations, recovering numerous multimillion-dollar awards. More about
the law firm and its successes can be found at
www.hbsslaw.com. Visit the firm's class-action law blog at
www.classactionlawtoday.com.
About Pearson Simon
Pearson, Simon & Warshaw, LLP (PSW) has emerged as a nationally recognized
force in class action lawsuits and complex litigation, with offices in
Los Angeles and San Francisco. PSW’s attorneys' skill and experience
have enabled clients to press for justice against major companies. The
firm’s veteran trial lawyers have obtained more than $1 billion
in settlements and verdicts on behalf of plaintiffs in a wide range of
cases. More about the law firm can be found at
www.pswlaw.com.
Contacts
Firmani + Associates Inc.
Mark Firmani, 206-443-9357
mark@firmani.com