O'bannon v. National Collegiate Athletic Association

Facts

D has some 1,100 member schools, organized into three divisions: Division I, Division II, and Division III. For football competition only, Division I's membership is divided into two subdivisions: the Football Bowl Subdivision (FBS) and the Football Championship Subdivision (FCS). FBS schools are permitted to offer more full scholarships to their football players and, as a result, the level of competition is generally higher in FBS than in FCS. FBS consists of about 120 of the nation's premier college football schools. D has a requirement that the participants be amateurs. D restricted eligibility for college sports to athletes who received no compensation whatsoever. In 1956, D permitted its members to give student-athletes scholarships based on athletic ability. These scholarships were capped at the amount of a full 'grant in aid,' defined as the total cost of 'tuition and fees, room and board, and required course-related books.' Student-athletes were prohibited from receiving any 'financial aid based on athletics ability' in excess of the value of a grant-in-aid, on pain of losing their eligibility for collegiate athletics. Student-athletes could seek additional financial aid not related to their athletic skills; if they chose to do this, the total amount of athletic and nonathletic financial aid they received could not exceed the 'cost of attendance' at their respective schools. In August 2014, D announced it would allow their member schools to increase scholarships up to the full cost of attendance. D limited student-athletes' compensation and their interactions with professional sports leagues. An athlete can lose his amateur status, for example, if he signs a contract with a professional team, enters a professional league's player draft, or hires an agent. And, most importantly, an athlete is prohibited-with few exceptions-from receiving any 'pay' based on his athletic ability, whether from boosters, companies seeking endorsements, or would-be licensors of the athlete's name, image, and likeness (NIL). O'Bannon (P), a former All-American basketball player at UCLA, visited a friend's house, where his friend's son told O'Bannon that he was depicted in a college basketball video game produced by Electronic Arts (EA). P saw an avatar of himself-a virtual player who visually resembled P, played for UCLA, and wore P's jersey number, 31. P had never consented to the use of his likeness in the video game, and he had not been compensated for it. P sued D and the Collegiate Licensing Company (CLC), the entity which licenses the trademarks of the NCAA and a number of its member schools for commercial use. P claimed that D's amateurism rules, insofar as they prevented student-athletes from being compensated for the use of their NILs, were an illegal restraint of trade under Section 1 of the Sherman Act, 15 U.S.C. § 1. Sam Keller (P), the former starting quarterback for the Arizona State University and University of Nebraska football teams, separately brought suit against D, CLC, and EA. Keller alleged that EA had impermissibly used student-athletes' NILs in its video games and that the NCAA and CLC had wrongfully turned a blind eye to EA's misappropriation of these NILs. Keller (P) stated a claim under Indiana's and California's right of publicity statutes, as well as a number of common-law claims. The district court granted P's motion for class certification. The court held that certification of a damages class under Rule 23(b)(3) was inappropriate, but it certified a class under Rule 23(b)(2) for injunctive and declaratory relief. After class certification was granted, Ps voluntarily dismissed their damages claims with prejudice. The plaintiffs also settled their claims against EA and CLC, and the district court preliminarily approved the settlement. The antitrust claims went to a bench trial before the district court. The court ruled and D appealed. 

Issues

Rule of Law

Holding and Decision

Legal Analysis

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