If there’s one case that could deliver a knockout blow to the NCAA, it’s In Re College Athlete NIL Litigation.
In a new petition to the U.S. Court of Appeals for the Ninth Circuit, the defendants—the NCAA and Power Five conferences—bluntly warn that losing could force them to pay over $4 billion in damages.
U.S. District Judge Claudia Wilken recently certified the case, which was brought by Arizona State swimmer Grant House, former Oregon and current TCU basketball player Sedona Prince, and former Illinois football player Tymir Oliver, as a class action on behalf of more 14,500 college athletes.
By preventing conferences from sharing broadcasting revenue with the players, depriving players of video game revenue they might have earned if the NCAA had allowed players to appear in video games and, until 2021, denying players NIL opportunities, the NCAA and Power Five conferences allegedly violated antitrust law.
The defendants now seek a permissive interlocutory appeal, meaning an appeal before a final judgment in the case and one the appellate court can decline. A final judgment for In Re College Athlete NIL Litigation will occur when it’s over on the merits. That won’t happen for a while; the case isn’t scheduled for a jury trial until 2025.
Unfortunately for the NCAA and the Power Five, interlocutory appeals in class actions are rarely granted. Appellate courts prefer to review class actions after their merits have been determined and in one piece, rather than in preliminary and piecemeal forms.
But the granting of an interlocutory appeal isn’t unprecedented in college sports. Earlier this year the U.S. Court of Appeals for the Third Circuit heard an interlocutory appeal in Johnson v. NCAA, a case that concerns whether college athletes are employees under the Fair Labor Standards Act.
The NCAA and Power Five’s petition, filed on Nov. 17, aggressively asserts the Ninth Circuit should feel compelled to hear their appeal.
“Denial of this petition would be the death knell of this litigation,” the petition ominously warns.
The defendants insist the risk of an astronomically high damages award “may well force” them to “settle without relation to the merits of the class’s claims.” Stated differently, even if the NCAA and Power Five believe the players’ legal arguments are weak and would be rejected by a jury, they literally can’t afford to be wrong. A jury award of more than $4 billion would be economically ruinous for the NCAA and Power Five and perhaps put them out of business.
The petition’s use of the dramatic phrase “death knell” was made with precedent in mind. In 2005, the Ninth Circuit held that while an interlocutory review of a class action ought to be a “rare occurrence,” it is justified when there is a “presence of a death knell situation for either party absent review.”
The petition sharply rebukes Judge Wilken (who was also the presiding judge in two historic cases the NCAA lost, O’Bannon v. NCAA and Alston v. NCAA) as misunderstanding and misapplying requirements for class certification.
“Few things are more individualized than one’s NIL,” the petition asserts as a reason why NIL issues should not be brought via a class. “Some star quarterbacks and individual gymnasts have received substantial NIL compensation; thousands of other athletes have received nothing.” The NCAA and Power Five also maintain there is “no way” to determine the economic value of an athlete’s NIL unless it is done on an individual basis.
The petition also quotes USC quarterback Caleb Williams for his recent remarks questioning why Electronic Arts will reportedly pay college football players a flat $500 fee to appear in its forthcoming game, EA Sports College Football.
“It’s like if you go to school and you are a straight-A student and there’s another kid whose strong suit isn’t school and he gets B’s or B-minuses,” Williams told Yahoo Sports in August. “How fair would it be if you get the same grade as him? That never works in school and it doesn’t make sense. That’s how I look at that game with the situation with the $500.”
As the NCAA and the Power Five conferences see it, Williams’s remarks underscore why an NIL-based class action is problematic. Judge Wilken, they wrote, certified a class when star athletes will be “drastically worse off” by being grouped with lesser players than if they pursued their own lawsuits.
The defendants raise a similar theme with broadcast NIL (BNIL), which loosely means the money college athletes say they should have been paid, and should be paid going forward, for appearing on game broadcasts. The NCAA and Power Five insist it is unrealistic to assume that every athlete in a given sport and conference “would accept the same amount” of BNIL compensation.
But the plaintiffs, led by attorneys Jeffrey Kessler and Steve Berman, note that unionized athletes in pro leagues do just that. As Kessler recently stated in a hearing, “You can be Tom Brady or the lowest player in the NFL” and that player will still get an “equal share.” They share in broadcast revenue with owners as part of collectively bargained group licensing—an arrangement not currently possible in college sports since the athletes are not (yet) recognized as employees and thus can’t form a union. While collective bargaining is not possible for college athletes, it is not a prerequisite to BNIL payment.
The NCAA and Power Five contend the BNIL model proposed by the plaintiffs is unrealistic, particularly since it would trigger inequities by sport. Men’s basketball players would be paid more than football players in the same conference, and female athletes would only receive 4% of the revenue.
The players will have a chance to respond to the NCAA and Power Five by Dec. 4.