Next steps in O'Bannon case: Both NCAA and the plaintiffs could appeal
NCAA president Mark Emmert told ABC’s “This Week” on Sunday that the association would appeal U.S. District Judge Claudia Wilken’s historic decision in favor of the plaintiffs in the landmark O’Bannon v. NCAA antitrust case. Emmert’s announcement comes as no surprise. The NCAA wants to reverse Wilken’s finding that its model of amateurism violates antitrust law and will petition the U.S. Court of Appeals for the Ninth Circuit to vacate Wilken’s order.
To be clear, Wilken’s order does not mean that the NCAA is in violation of antitrust law across the United States. Her jurisdiction is technically limited to the U.S. District for Northern California, and her opinion only carries persuasive -- and not binding -- authority in other parts of the country. In other words, a federal judge in, say, Chicago or Houston could reach the opposite legal conclusion on amateurism if presented with a similar case. That said, the NCAA is unlike most defendants, and a loss on amateurism in one jurisdiction is effectively a loss in all jurisdictions. This is because the NCAA is a national association that sets uniform rules. Amateurism rules must be compatible with the law in all parts of the country; otherwise, some colleges and conferences would be treated differently by mere virtue of their location. So, a loss before a federal judge in northern California has the practical effect of a national loss for the NCAA.
A more interesting development would be for O’Bannon to appeal his own victory. I raised this possibility in my legal analysis of Wilken’s order. Now, I predict that O’Bannon’s attorneys will, in fact, file an appeal. I predict they will do so shortly after the NCAA files its appeal.
First, there is little to no downside for O’Bannon to appeal after the NCAA appeals. If the NCAA wins on appeal, it will occur because it appealed and sufficiently raised persuasive arguments. O’Bannon appealing would not change the fact that the NCAA has already filed an appeal.
Second, O’Bannon’s win came with major economic concessions to the NCAA. While Wilken ruled against the NCAA, she offered a limited injunction that some NCAA critics find underwhelming and confusing. This is most apparent in regard to compensation of Division I football and men’s basketball players for their name, image and likeness (NIL) rights. Wilken agreed with O’Bannon that the NCAA and its members unlawfully colluded to place the value of NIL rights at $0 and that players are entitled to compensation for NIL rights, payable via a trust after they leave college. Logically, it would follow that the NCAA and its members should be barred from any collusion on NIL rights, meaning member schools should compete and compensate players for NIL rights at market value.
Instead, Wilken held that the NCAA and its members can continue to collude, so long as the NCAA does not cap the value of NIL rights below $5,000 each year a student is academically eligible. Wilken also makes clear that schools could offer players less than $5,000 in deferred compensation, an apparent concession to DI schools with less lucrative football and men’s basketball programs. The NCAA, however, is barred from capping schools’ NIL trusts below $5,000. Schools are barred from conspiring with one another in determining the NIL trust amount.
Wilken attempted to explain the basis for the $5,000 cap as consistent with testimony from NCAA expert and former CBS president Neal Pilson, who told Wilken that he would not be troubled if schools made payments of $5,000 to players, payable after college. It is not entirely clear why Pilson’s suggestion, which arose spontaneously in response to a question on the stand, should constitute the basis of a new rule. In fairness to Wilken, she also reasoned that $5,000 is “comparable to the amount of money that the NCAA permits student-athletes to receive if they qualify for a Pell Grant and the amount that tennis players may receive prior to enrollment.” She also wrote that this “modest payment” would not undermine the NCAA’s legitimate goals in amateurism.
I expect O’Bannon’s lawyers to petition the Ninth Circuit and demand that players receive more than a “modest payment” for their NIL rights, requesting that prices be set according to the market. Other attorneys agree. Eugene Egdorf, who has represented clients who have previously sued the NCAA, told SI.com that O’Bannon “can and should appeal.”
“The entire premise of the antitrust law is to promote a free competitive market of supply, demand and pricing,” Egdorf said. “And yet, in response to the NCAA’s illegal and anti-competitive conduct -- that she herself resoundingly found -- Judge Wilken did the same thing by arbitrarily fixing prices with a cap of $5,000. This has absolutely no basis in the law, the facts of the case or even pursuant to the findings in her opinion. Absent a collective bargaining agreement, such as we see in monopolistic professional sports, any market-wide cap on compensation, be it $0, $5,000 or even $5 million, violates the antitrust laws and cannot be allowed to stand.”
Alan Milstein, who has litigated on behalf of Allen Iverson, Carmelo Anthony, Eddy Curry, Allan Houston, Maurice Clarett and numerous other sports figures, agrees. "This was a great victory for college athletes," Milstein told SI.com, "and hopefully the first real dent in the armor of the NCAA, tempered somewhat by the $5,000 cap imposed by the judge. But that cap makes no sense in light of the other rulings and hopefully will be erased by the Ninth Circuit."
Third, in petitioning the Ninth Circuit, O’Bannon would appeal to arguably the most progressive and labor-friendly federal circuit. The plaintiffs may be poised to receive a decidedly more favorable injunction from the Ninth Circuit than the one in which Wilken crafted. An appeal by the NCAA, O’Bannon or both would be heard by a three-judge panel, as assigned by Ninth Circuit Chief Judge Alex Kozinski. O’Bannon would receive a panel that, odds are, would be inclined to favor his views. There are 29 active judges on the Ninth Circuit. Twenty were nominated by Democratic presidents.
It is also possible that Kozinski could assign one of the Ninth Circuit’s 16 senior judges (semi-retired) to the appeal. Yet, of that group, nine were nominated by Democratic presidents. While party affiliation of the nominating president is a famously imprecise predictor of a judge’s philosophy, O’Bannon’s attorneys likely feel good about their chances before the Ninth Circuit.
The Ninth Circuit is not necessarily the last stop for an appeal in O’Bannon v. NCAA. The loser could, and almost certainly would, petition the U.S. Supreme Court for review. While the Supreme Court only grants cert to about one percent of petitions, Ninth Circuit decisions tend to be reviewed at a higher rate than those from other federal circuits. This is thought to reflect how Ninth Circuit judges routinely adopt idiosyncratic positions that Supreme Court justices find nonconforming. According to research compiled by attorney Daniel Wallach, over the last five Supreme Court terms of record, the Ninth Circuit was the most heavily-reversed federal circuit court by the Supreme Court, which granted cert to more petitions from Ninth Circuit cases than from any other circuit court.
The Supreme Court justices might also deem the O’Bannon case to be of such social importance that it warrants review. The NCAA would feel optimistic about its chances before the Supreme Court; five of the nine justices -- Chief Justice John Roberts and Justices Antonin Scalia, Clarence Thomas, Samuel Alito and Anthony Kennedy -- tend to favor the viewpoints of businesses over labor. But we’re at least a couple of years away from the Supreme Court deciding the O’Bannon case, in the unlikely event the court hears the case.
A lot can happen between now and then that would render the O’Bannon case much less significant or even moot, especially if the NCAA and its members voluntarily make changes, or if conferences force changes on the NCAA.
Michael McCann is a Massachusetts attorney and the founding director of the Sports and Entertainment Law Institute at the University of New Hampshire School of Law. He is also the distinguished visiting Hall of Fame Professor of Law at Mississippi College School of Law.
Sports Illustrated's Andy Staples breaks down the specifics of U.S. District Judge Claudia Wilken's ruling in the O’Bannon v. NCAA case.