O'Bannon v. NCAA

O'Bannon v. NCAA
U.S. Government · Public domain · source
Name	O'Bannon v. NCAA
Court	United States Court of Appeals for the Ninth Circuit
Full name	Edward O'Bannon, Jr., et al. v. National Collegiate Athletic Association, et al.
Date decided	September 30, 2015
Citations	802 F.3d 1049 (9th Cir. 2015)
Judges	Sidney R. Thomas, Jay Bybee, Gordon J. Quist
Prior actions	Certified as a class action; judgment for plaintiffs, 7 F. Supp. 3d 955 (N.D. Cal. 2014)
Subsequent actions	Certiorari denied by the Supreme Court of the United States, 2016

O'Bannon v. NCAA was a landmark antitrust law class-action lawsuit challenging the National Collegiate Athletic Association's use of the images and likenesses of its former student-athletes without compensation. The case, led by former UCLA Bruins men's basketball star Ed O'Bannon, argued that the NCAA's rules constituted an unlawful restraint of trade under the Sherman Antitrust Act. The litigation resulted in a significant judicial ruling that altered the NCAA's amateurism model and paved the way for future challenges to its economic structure.

Background and legal basis

The case originated in 2009 when former UCLA Bruins men's basketball player Ed O'Bannon saw his own likeness in a EA Sports college basketball video game. He filed suit against the National Collegiate Athletic Association, the Collegiate Licensing Company, and Electronic Arts, alleging violations of the Sherman Antitrust Act. The legal theory, developed by lead counsel Michael Hausfeld, posited that the NCAA's rules prohibiting student-athletes from being paid for the use of their names, images, and likenesses (NIL) constituted an illegal group boycott and price-fixing agreement. This suppressed the market value of athletes' NIL rights for decades after their graduation, a practice the plaintiffs argued was not necessary to preserve the distinction between college sports and professional sports.

District Court proceedings

In the United States District Court for the Northern District of California, Judge Claudia Wilkin presided over a bench trial in 2014. The plaintiffs presented economic experts like Roger Noll of Stanford University to demonstrate the commercial value of athlete NILs. The NCAA defended its amateurism rules, calling witnesses such as former SEC commissioner Mike Slive and NCAA president Mark Emmert. In a sweeping decision, Judge Wilkin ruled that the NCAA's rules were an unlawful restraint of trade. She issued an injunction prohibiting the NCAA from banning its member schools from offering FBS football and Division I men's basketball players limited compensation tied to the full cost of attendance, as well as trust funds of up to $5,000 per year for the commercial use of their NILs.

Ninth Circuit Court of Appeals ruling

The NCAA appealed to the United States Court of Appeals for the Ninth Circuit. A three-judge panel consisting of Sidney R. Thomas, Jay Bybee, and Gordon J. Quist heard the case. In September 2015, the panel partially affirmed and partially reversed the district court's ruling. The Ninth Circuit unanimously upheld the core finding that the NCAA's rules violated the Sherman Antitrust Act and affirmed the injunction allowing scholarships up to the full cost of attendance. However, it reversed the portion of the injunction permitting the $5,000 deferred compensation payments, reasoning that this crossed a line into paying athletes for their athletic performance, which could undermine the pro-competitive justification of preserving amateurism and consumer demand for college sports.

Supreme Court denial of certiorari

Both parties sought review by the Supreme Court of the United States. The NCAA petitioned for a writ of certiorari, asking the Court to overturn the antitrust violation finding, while the plaintiffs cross-petitioned to reinstate the $5,000 compensation remedy. In October 2016, the Supreme Court denied both petitions, allowing the Ninth Circuit's decision to stand as the final ruling. This denial was a critical moment, as it left intact the precedent that the NCAA's amateurism rules were subject to antitrust law scrutiny and that less restrictive alternatives, like full cost of attendance scholarships, must be considered.

Impact and legacy

The ruling had an immediate and profound impact on college athletics. It directly compelled the NCAA and its Power Five conferences to adopt policies guaranteeing scholarships covering the full cost of attendance. More significantly, it established a powerful legal precedent that weakened the NCAA's defense of its amateurism model in subsequent litigation, most notably in the Alston v. NCAA case that later reached the Supreme Court. The legal theories advanced in the case also fueled the national movement for Name, image, and likeness rights, which culminated in 2021 with the NCAA suspending its NIL rules following state laws and the decision in NCAA v. Alston. The case is widely seen as the catalyst that began the fundamental restructuring of the economic relationship between the NCAA, its member institutions, and student-athletes. Category:United States antitrust case law Category:National Collegiate Athletic Association case law Category:2015 in United States case law