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Judge dismisses challenge to NCAA bylaws

September 7, 2011

Two former NCAA athletes whose scholarships were revoked following injuries have lost their suit that argued without certain NCAA Division I bylaws, they would have received multi-year athletic scholarships that would have covered the cost of their bachelor’s degrees.

Joseph Agnew and Patrick Courtney originally filed their suit, Joseph Agnew, et al. v. National Collegiate Athletic Association, No. 1:11-CV-293, in the U.S. District Court for the Northern District of California, but the suit was moved to the Southern District of Indiana at the request of the NCAA, which is headquartered in Indianapolis. After the suit was removed, the plaintiffs filed an amended complaint challenging two bylaws – the one-year scholarship limit, which prohibits NCAA member institutions from offering multi-year athletic-based discounts to student-athletes; and the cap on the number of athletic-based discounts a school can offer per sport each year.

The plaintiffs claim without these two bylaws, they would have been able to get multi-year athletic scholarships that would have covered the cost of their degrees.

The NCAA’s motion to dismiss argued that the two didn’t allege a relevant product market, geographic market, or anti-competitive effect on a relevant market to survive the motion to dismiss. The organization also claimed the plaintiffs lacked antitrust standing to challenge the bylaws.

Judge Jane Mangus-Stinson, bound by Banks v. National Collegiate Athletic Association, 977 F.2d 1081, 1087-88 (7th Cir. 1992), examined the suit under the “Rule of Reason” analysis. She declined to apply the “quick look” version of the rule as the plaintiffs argued, and found that the plaintiffs failed to plead a relevant product market for the bachelor’s degrees as a matter of law.

“The Court agrees with the NCAA that the ‘market’ for bachelor’s degrees is implausible as a matter of law because people cannot simply purchase bachelor’s degrees at Division I colleges and universities,” wrote Judge Magnus-Stinson, noting that student-athletes must still fulfill certain academic requirements to get the degree.

She dismissed the suit with prejudice Sept. 1, finding that the plaintiffs have already had two opportunities to plead their claims against the NCAA and did not cure deficiencies in their pleadings. They also didn’t give any indication that they could fully amend their complaint to cure the defects Judge Magnus-Stinson found in the amended complaint, if they were given that opportunity.

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