United States District Court, N.D. California
IN RE NATIONAL COLLEGIATE ATHLETIC ASSOCIATION ATHLETIC GRANT-IN-AID CAP ANTITRUST LITIGATION
v.
NATIONAL COLLEGIATE ATHLETIC ASSOCIATION, et al., Defendants. MARTIN JENKINS, et al., Plaintiffs,
ORDER DENYING MOTION FOR JUDGMENT ON THE
PLEADINGS
CLAUDIA WILKEN UNITED STATES DISTRICT JUDGE.
Defendants,
the National Collegiate Athletic Association (NCAA) and a
group of Division I conferences, have filed a motion for
judgment on the pleadings, seeking an order dismissing
Jenkins in its entirety and dismissing the portion
of the consolidated action that seeks injunctive relief.
Plaintiffs in both actions have filed a consolidated
opposition and Defendants have filed a reply. Having
considered the parties’ papers, the record in this case
and argument, the Court DENIES the motion.
BACKGROUND
Plaintiffs
are student-athletes who played NCAA Division I Football Bowl
Subdivision football[1] and men’s and women’s
basketball between March 5, 2014 and the present.
Plaintiffs’
challenges relate to NCAA restrictions on the compensation of
student-athletes for their athletic performance. The NCAA
sets a cap on the grant-in-aid (GIA) that student-athletes
may receive.[2] At the time these complaints were filed,
the GIA was capped at the value of tuition, fees, room and
board and required course books. After Plaintiffs initiated
this litigation, the NCAA permitted conferences to allow
schools to compensate student-athletes with GIAs for up to
their cost of attendance.
Consolidated
Plaintiffs and Jenkins Plaintiffs allege in their complaints
that the NCAA and its member institutions[3]violate federal
antitrust law by conspiring to impose the cap on the amount
of monetary and in-kind compensation a school may provide a
student-athlete. Plaintiffs assert that, without the
NCAA’s cap on compensation, schools would compete in
recruiting student-athletes by providing more generous
compensation. Plaintiffs seek an injunction against the
NCAA’s rules limiting compensation for
student-athletes. Consolidated Plaintiffs seek, in addition
to an injunction, damages for the difference between the GIAs
awarded and the cost of attendance.
A.
O’Bannon v. NCAA
In
O’Bannon v. NCAA, a plaintiff class alleged
that the NCAA and its members conspired to fix at zero the
amounts paid to Division I men’s football or basketball
players for the use of their names, images and likenesses
(NILs) in violation of the Sherman Act, 15 U.S.C. § 1.
Following a bench trial, the Court entered findings of fact
and conclusions of law in favor of the plaintiffs,
determining that the NCAA’s rules were an unlawful
restraint of trade. The Court concluded that there were less
restrictive alternatives to the NCAA’s rules and
enjoined the NCAA and its member schools from agreeing to (1)
prohibit deferred compensation of an amount less than $5, 000
per year for the licensing or use of the plaintiffs’
names, images, and likenesses, or (2) prohibit scholarships
up to the full cost of attendance at the plaintiffs’
schools. The NCAA timely filed a notice of appeal to the
Ninth Circuit. On September 30, 2015, the Ninth Circuit
decided the NCAA’s appeal. The panel affirmed the
Court’s finding of an antitrust violation and affirmed
the remedy relating to scholarships. However, the majority
reversed the portion of the permanent injunction related to
deferred compensation. O’Bannon v. NCAA, 802
F.3d 1049, 1079 (9th Cir. 2015). Both parties’
petitions for writ of certiorari in the United States Supreme
Court are currently pending.
LEGAL
STANDARD
Rule
12(c) of the Federal Rules of Civil Procedure provides that
“[a]fter the pleadings are closed--but early enough not
to delay trial--a party may move for judgment on the
pleadings.” Such a motion, like a motion to dismiss for
failure to state a claim, addresses the sufficiency of a
pleading. Judgment on the pleadings may be granted when the
moving party clearly establishes on the face of the pleadings
that no material issue of fact remains to be resolved and
that the moving party is entitled to judgment as a matter of
law. Hal Roach Studios, Inc. v. Richard Feiner &
Co., 896 F.2d 1542, 1550 (9th Cir. 1989). In testing the
sufficiency of a pleading, the well-plead allegations of the
non-moving party are accepted as true, while any allegations
of the moving party which have been denied are assumed to be
false. Id. at 1550. However, the court need not
accept conclusory allegations. W. Mining Counsel v.
Watt, 643 F.2d 618, 624 (9th Cir. 1981). The court must
view the facts presented in the pleadings in the light most
favorable to the non-moving party, drawing all reasonable
inferences in that party's favor, General Conference
Corp. of Seventh Day Adventists v. Seventh-Day Adventist
Congregational Church, 887 F.2d 228, 230 (9th Cir.
1989), but need not accept or make unreasonable inferences or
unwarranted deductions of fact. McKinney v. De Bord,
507 F.2d 501, 504 (9th Cir. 1974).
DISCUSSION
Defendants
argue that the Ninth Circuit’s decision in
O’Bannon forecloses Plaintiffs’
challenge to the NCAA’s current rules because the Ninth
Circuit held that “offering [student-athletes] cash
sums untethered to educational expenses” was not a less
restrictive alternative to the NCAA’s current rules
under the rule of reason. 802 F.3d at 1078. The NCAA already
permits its members to offer GIA equal to the Cost of
Attendance. However, as Plaintiffs point out, in this case,
they also challenge rules prohibiting the provision of other
“benefits” and “in-kind” compensation
as well as cash compensation. See, e.g. Jenkins
Complaint at ¶¶ 41-42; CAC at ¶ 192.
Accordingly, as Plaintiffs assert, Defendants’ motion
for judgment on the pleadings is not well taken. The Ninth
Circuit’s decision in O’Bannon simply
forecloses one type of relief Plaintiffs previously sought:
cash compensation untethered to educational expenses. While
O’Bannon is binding on this Court, it does not
provide the basis for judgment on the pleadings. Motions for
judgment on the pleadings are “designed to dispose of
cases where the material facts are not in dispute and a
judgment on the merits can be rendered by looking to the
substance of the pleadings and any judicially-noticed
facts.” Holloway v. Best Buy Co., Inc., 2009
WL 1533668, *3 (N.D. Cal.). The Ninth Circuit’s
decision in O’Bannon limits the types of
relief Plaintiffs may seek but it does not provide a basis
upon which a judgment on the merits can be rendered.
CONCLUSION
For the
foregoing reasons, Defendants’ motion for judgment on
the pleadings is DENIED. (Case No. 14-2541, Docket No. ...