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TMCNet:  Hagens Berman: NCAA Football Player Challenges NCAA Rules Limiting Financial Aid and Compensation

[March 05, 2014]

Hagens Berman: NCAA Football Player Challenges NCAA Rules Limiting Financial Aid and Compensation

SEATTLE --(Business Wire)--

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 (News - Alert) 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 increasein 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 (News - Alert), 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.


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