NCAA faces new suit over number, length of football scholarships
Former Colorado State kicker's suit tries to use Ed O'Bannon ruling to establish antitrust violation. Case could be consolidated in Indiana with a similar lawsuit.
Already flooded with litigation, the NCAA faces another antitrust lawsuit that in part tries to use the Ed O'Bannon ruling to challenge the number and duration of scholarships for Division I football players.
Former Colorado State kicker Durrell Chamorro filed a class-action suit last week in Indianapolis federal court seeking damages for Division I football players who were impacted by the since-abandoned rule banning multiyear scholarships. In 2012, the NCAA passed a rule allowing schools to offer multiyear scholarships to all athletes for the first time since 1973. Some schools are taking advantage of the option.
Also, the lawsuit challenges the yearly cap on football scholarships by school. The NCAA permits Football Bowl Subdivision schools to offer 85 football scholarships and Football Championship Subdivision schools to provide 63.
The class attempts to represent all current and former Division I football players whose scholarship was reduced or not renewed for reasons other than what’s allowed in the NCAA bylaws. One of Chamorro’s attorneys is Steve Berman, who is trying to consolidate the Chamorro lawsuit with a similar one he brought in Indiana two years ago. The difference is now there's a plaintiff affiliated with an FBS conference as oppposed to only an FCS plaintiff.
Berman filed a motion to consolidate the Chamorro case in Indiana with the active John Rock lawsuit. Rock was a former Gardner-Webb quarterback whose 2012 lawsuit alleged the NCAA’s ban of multiyear scholarships and limits on scholarship numbers were illegal.
In August 2013, a federal judge in Indiana ruled against the NCAA’s motion to dismiss the Rock case, which is now nearing the class-certification process. U.S. District Judge Jane Magnus-Stinson wrote that the standard of proof would be high for Rock at trial and whether he “can gather enough evidence to prove that the relevant market he pleads is correct is a question for another day.”
Last month, U.S. Magistrate Judge Denise LaRue approved a joint request by the NCAA and Rock’s lawyers to reset a due date for the plaintiffs’ statement of special damages and settlement demand until Nov. 24.
Berman’s latest lawsuit cites seven times a California federal judge’s Aug. 8 ruling from the O’Bannon case, which found the NCAA violates antitrust law by prohibiting players from being paid for use of their names, images and likenesses. The O’Bannon references are largely an attempt to show that a relevant market exists that has been harmed under antitrust law. For instance, Berman cites the O’Bannon judge’s ruling that “FBS football … [is] the only supplier of the unique bundles of goods and services” provided to recruits.
In a court filing on Sept. 15, the NCAA agreed the Rock and Chamorro suits are similar but opposed consolidating them until the court hears the NCAA's motion to dismiss Chamorro. The NCAA said the Chamorro complaint "suffers from certain legal defects not present in the Rock complaint" and the association is "likely to move to dismiss Chamorro on those grounds."
According to the NCAA, Rock's attorneys said they do not intend to request any changes to the Rock pretrial schedule if the cases are consolidated. The NCAA is pushing to avoid a delay of the Rock case. The NCAA has until Sept. 24 to respond to Chamorro.
The Chamorro lawsuit alleges the NCAA’s old ban on multiyear scholarships injured “thousands” of athletes by causing them to pay “millions” more in tuition when their scholarships were reduced or not renewed. Players who are non-renewed either pay tuition out of pocket, uproot themselves by transferring to another school for a scholarship, uproot themselves to a new school while having to pay for tuition, or drop out of school, the suit says.
The complaint argues that the NCAA cannot use amateurism or competitive balance as procompetitive justifications for limiting the number of football scholarships. If competitive balance is determined to be a legitimate justification, Chamorro’s lawsuit offered five less-restrictive alternatives:
* The NCAA could require revenue sharing among schools.
* The NCAA could replace its current roster restrictions with new ones that actually increase competitive balance.
* The NCAA could impose limits on facility spending, instead of permitting major schools to spend "tens of millions of dollars on facilities that lesser schools cannot hope to imitate.”
* The NCAA could impose limits on recruiting budgets.
* The NCAA could impose restrictions on alumni donations to the athletics department.
In 2012, the NCAA barely passed a rule giving schools the option to provide multiyear scholarships. The arrangement was nearly scrapped when 62.12 percent of the 330 schools voting opposed the legislation -- just shy of the 62.5 percent needed to overturn the new rule.
Chamorros’s lawsuit notes that Indiana, USC, Purdue, Fresno State, Michigan State, North Carolina State, North Carolina, Ohio State and Iowa have recently chosen to award multiyear scholarships. “This expanding list of schools demonstrates the market forces that will eventually force all Division I schools to offer multiyear scholarships to football players,” the suit states.
The complaint cites comments several years ago from some schools that opposed making multiyear scholarships an option. For instance, Indiana State wrote that multiyear scholarships would create “nightmares” because a new coach and school "may be 'stuck' with a student-athlete they no longer want ... or the new coach may have a completely different style of offense/defense that the student athlete no longer fits into.”
Suit: Kicker warned he could lose scholarship
According to the lawsuit, Chamorro had his scholarship non-renewed in 2007 despite maintaing a 3.5 grade-point average and following all NCAA and university rules. Before Chamorro signed with Colorado State in 2005, Colorado State special teams coach Dave Arnold had told the kicker his scholarship would be for five years and that players “with four or five year scholarships had it better than coaches whose were reviewed every year,” the lawsuit says.
While Chamorro was in college, Colorado State coach Sonny Lubick had warned that “he could take his scholarship if he did not become the starter,” the lawsuit states. According to a 2011 USA Today article, Lubick told the Associated Press that Chamorro was put on notice after his first year and was told, "You've got to be better. We'll give you one more year."
Lubick informed Chamorro’s parents in January 2007 their son could compete for the starting position but his scholarship would not be renewed since it would go to a new player, according to the lawsuit. At a university appeals hearing, Lubick said the NCAA's scholarship cap prevented him from renewing Chamorro’s scholarship and providing aid to some other players, according to the suit.
Chamorro’s appeal was denied and he left Colorado State because he could not afford the cost of out-of-state tuition, the lawsuit states. He graduated from another school in 2010 with "substantial debt," according to the suit.
The lawsuit cites a passage from an NCAA Presidential Taskforce document that in part says, “Under the current structure of athletics scholarships, athletes may be legitimately concerned that their continued access to education depends on sports success. This can create a conflict of incentives that may lead to an emphasis on athletics at the cost of academics.”
The NCAA could have some legal precedent on its side. Four years ago, Berman brought a case against the NCAA by former Rice football player Joseph Agnew, who lost his scholarship as a senior and alleged the one-year limit amounted to price-fixing. In 2012, the U.S. Court of Appeals for the Seventh Circuit ruled against Agnew after the NCAA successfully argued that the lawsuit could not establish a harmed antitrust market for losing an athletic scholarship.
A new question in 2014: Has the O’Bannon ruling in California helped establish a harmed antitrust market in Indiana over scholarship lengths and limits?
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