By: Josh Goldberg, Esq.
This Thursday, September 21, 2023, Judge Claudia Wilkin will hold a hearing to consider the plaintiff’s Motion to Certify Class in the House v. NCAA In re College Athlete NIL Litigation ). The hearing is open to the public and will be streamed live on Zoom at 2:30 P.M. PST . Class certification is the process in which a court determines and certifies the plaintiffs to proceed on behalf of a larger designated class of claimants.
Judge Wilkin is the same district court judge who presided over the historic O’Bannon v. NCAA and Alston v. NCAA lawsuits that were monumental wins for college athletes. As such, Judge Wilkin has shown that she is open to ruling that NCAA compensation restrictions violate antitrust law.
The House v. NCAA case is currently set for trial on January 25, 2025 (it was previously set for September 16, 2024).
Since Name, Image, and Likeness (“NIL”) reform took effect on July 1, 2021, the next logical step in the quest for college athletes’ rights is determining some sort of revenue-sharing model that puts money into the pockets of the college athletes who are generating immense revenues for their schools.
Here’s what you need to know about the House case and what class certification would mean:
The House case was initially filed on June 15, 2020, over a year before NIL took effect. Grant House, at the time the case was filed, was a Division I college athlete who competed for the Arizona State University men’s swimming and diving team. Sedona Price, the other named plaintiff in the case, was a University of Oregon women’s basketball player at the time the case was filed. The third-named plaintiff is former Illinois football player Tymir Oliver, who initially brought a similar but separate claim against the NCAA, and had his case consolidated with the House.
The House case was initially brought, in part, to challenge the NCAA’s restraints that prohibit, cap, or otherwise limit the compensation Division I college athletes receive for the use of their NIL. Even now, with NIL being allowed, the case seeks backpay for lost NIL revenues, including: (1) lost NIL broadcast revenues; (2) lost NIL video game revenues; and (3) lost revenues from the third-party NIL deals that have been occurring since July 1, 2021, and would have been occurring since June 15, 2016, but for Defendants’ prior NIL Rules.
While college-athletes can now make money off their own NIL, college-athletes are still limited in the amount of compensation they are making as NCAA rules continue to prohibit the NCAA, conferences, and schools from directly paying college-athletes anything for the use of their NIL, and college-athletes do not receive a share of their school’s media revenues, school’s social media sponsorship arrangements, and school apparel deals, etc.
Plaintiffs’ media consultant Ed Desser contends that 10% of broadcast revenue is attributed to college athletes NIL incorporated into the broadcasts and Plaintiffs seek for each Power-5 conference (which are also named as co-defendants) to pay 10% of its broadcast revenues to every full scholarship football and basketball player on a team.
Note: With conference realignment changing the dynamics of the “Power-5” conferences across the country and new media rights deals, a lot can change by the time this lawsuit is resolved. As the NCAA operates now, college athletes do not receive any portion of these new billion-dollar deals.
The basis of the Plaintiff’s claims relies on Section 1 of the Sherman Antitrust Act, in which the Plaintiffs allege the NCAA, its member conferences, and other named defendants, have collectively conspired to restrain college-athletes ability to earn money from their NIL. If the proposed classes below are certified and the case proceeds, the Plaintiffs will need to establish the Defendants have entered a continuing horizontal and vertical contract, combination, and conspiracy to depress, fix, and limit the usage of college-athlete NIL causing significant anticompetitive effects in the relevant market.
The NCAA is arguing against the class certification, which would significantly increase the amount of damages on the line. The NCAA argues there is no commonality between each of the three separate proposed classes because there is a substantial difference in the value (if any) of the NIL rights of college athletes and therefore a conflict among class members. The Defendants also point out that the “Plaintiffs seek an award related to those alleged publicity rights of $1.3 billion to male student-athletes (96% of the total alleged damages)—but just $50 million for female student-athletes (or 4%).”[1]
The Defendants are seeking to exclude Desser’s opinions that student-athlete NIL is tied to 10% of broadcast revenues and state Desser’s claims are “unsupported by evidence, economics, or even common sense.” Id .
The Plaintiff’s Proposed Classes of Claimants
The Plaintiffs have moved to certify an injunctive relief class consisting of: All college athletes who compete on, competed on, or will compete on a Division I athletic team at any time between June 15, 2020, and the date of judgment in this matter, pursuant to Rules 23(a) and (b)(2) of the Federal Rules of Civil Procedure.
The Plaintiffs further moved the Court pursuant to Rules 23(a) and (b)(3) of the Federal Rules of Civil Procedure for an order certifying the following damages classes:
Football and Men’s Basketball Class: All current and former college athletes who have received full Grant-in-Aid (GIA) scholarships and compete on, or competed on, a Division I men’s basketball team or an FBS football team, at a college or university that is a member of one of the Power 5 Conferences (including Notre Dame), at any time between June 15, 2016, and the date of the class certification order in this matter.
Women’s Basketball Class: All current and former college athletes who have received full GIA scholarships and compete on, or competed on, a Division I women’s basketball team, at a college or university that is a member of one of the Power 5 Conferences (including Notre Dame), at any time between June 15, 2016, and the date of the class certification order in this matter.
Additional Sports Class: Excluding members of the Football and Men’s Basketball Class and members of the Women’s Basketball Class, all current or former college athletes who competed on a Division I athletic team prior to July 1, 2021, and who received compensation while a Division I college athlete for use of their NIL between July 1, 2021, and the date of the class certification order in this matter and who competed in the same Division I sport prior to July 1, 2021.
To certify a class, Plaintiffs must satisfy each element of Rule 23(a) and at least one of the subsections of Rule 23(b). Rule 23(a) provides that class certification is appropriate if: “(1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class.”
As for Rule 23(b), Plaintiffs here seek certification of the Injunctive Relief Class pursuant to Rule 23(b)(2) and the damages classes pursuant to Rule 23(b)(3). Rule (b)(2)’s requirements are met where “the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole.” Fed. R. Civ. P. 23(b)(2). Rule 23(b)(3) permits class certification where common questions of law and fact “predominate over any questions affecting only individual members” and class resolution is “superior to other available methods for the fair and efficient adjudication of the controversy.” Fed. R. Civ. P. 23(b)(3).
The Plaintiffs are seeking damages of more than $1.4 billion dollars, an amount that might not include treble damages if the classes are certified. If the classes are not certified, the Plaintiffs may still claim their own personal damages; however, those claims will all fall well below the billion-dollar mark.
As the debate rolls on whether college athletes should be deemed employees, the House case may be the final nail in the coffin for the NCAA if a new organizational structure is not implemented prior to this decision.
[1] See Defendants’ Joint Opposition to Plaintiffs’ Motion for Class Certification at pg. 1.
