DOJ bolsters lawsuit against NCAA transfer rule
The Department of Justice joined a multistate lawsuit Thursday challenging the NCAA’s transfer eligibility rule as an illegal restraint on college athletes’ ability to sell their name, image and likeness and control their education.
The case is believed to be the first time that the DOJ has signed on to a state-led antitrust lawsuit.
Also Thursday, the House Innovation, Data and Commerce Subcommittee held a hearing titled, “NIL Playbook: Proposal to Protect Student Athletes’ Dealmaking Rights.” The proposed FAIR College Sports Act would give the NCAA antitrust protection, codify that athletes are not employees and prohibit schools from entering into NIL deals with athletes. It is one of several bills in Congress aimed at governing NIL on a federal level.
The legislation received mixed reviews among the witnesses on the panel, with UCLA quarterback Chase Griffin, who has more than 40 NIL deals in a dozen states, offering the harshest criticism.
“This bill simply codifies an outdated NCAA business model that Supreme Court Justice (Brett) Kavanaugh wrote ‘would be flatly illegal in almost any other industry in America,’” Griffin told the committee. “If enacted, this bill would deprive another generation of college athletes of a proven and growing pathway to the American dream.”
The transfer eligibility rule was not part of the hearing.
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In addition to the DOJ, three more states and the District of Columbia signed onto the transfer rule lawsuit led by Ohio Attorney General Dave Yost, bringing the total plaintiffs to 11. His office filed the lawsuit on Dec. 7 in the U.S. District Court for the Northern District of West Virginia.
“We are proud to stand with our state law enforcement partners on behalf of college athletes across the nation,” Jonathan Kanter, an assistant attorney general in the DOJ’s Antitrust Division, said in a press release.
“NCAA Division I institutions compete with each other not just on the playing field or in the arena, but to recruit and retain college athletes. College athletes should be able to freely choose the institutions that best meet their academic, personal and professional development needs without anticompetitive restrictions that limit their mobility by sacrificing a year of athletic competition.”
The states, and now the DOJ, are challenging the NCAA requirement that college athletes who transfer a second time among Division I schools sit out one year before competing in games. The NCAA started automatically exempting first-time transfers in 2021 but has continued to enforce the rule for subsequent transfers and denied waivers inconsistently and often without legitimate reasons, according to the Ohio attorney general.
“It just shows that the Ohio-led lawsuit here against the NCAA is on solid footing,” Yost said in a video statement about the DOJ jumping in.
“There is strength in numbers,” Yost said in a press release. “This case would never have come to pass had many players not been sidelined by the NCAA’s arbitrary and unfair rule. We’re fighting for better competition and long-term change.”
The federal government joining the case isn’t just a sign to the judge but to other people that “we’re right on the law,” he said. College sports have become “big, big business,” and it needs to be treated under the same kinds of laws and competition requirements other businesses have to live by. The NCAA model of 30 years ago, he said, doesn’t work today.
Last month, Judge John Preston Bailey issued a temporary restraining order, later extended to a preliminary injunction, prohibiting the NCAA from enforcing the rule and allowing college athletes to compete without fear of retaliation from the association.
The preliminary injunction will run through at least the end of the 2023-24 academic year, ensuring that winter and spring athletes can complete their seasons free from the rule’s restrictions.
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The court order impacted two college basketball players in Utah.
Utah guard Deivon Smith and BYU forward Marcus Adams Jr. — as well as other multiple-time transfers throughout the country — were allowed to play immediately and through the remainder of the season as a result of the injunction.
Smith, a two-time transfer, had previously had his transfer waiver denied and was in the appeals process, while the freshman Adams was waiting for news on his transfer waiver at the time.
Smith has appeared in nine games for the Utes, averaging 8.5 points and 4.8 assists per game. Adams played in one game for the Cougars before an injury sidelined him.
The NCAA said in a statement last month it would comply with the order and notify schools which would allow two-time transfers working through the waiver process, like Smith, to play immediately.
“This action provides clarity for student-athletes and member schools for the remainder of the academic year — any multiple-time transfer student-athlete who competes this season will be subject to the same eligibility and use of a season of competition rules as all other student-athletes,” the NCAA said in a statement.
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In addition to Ohio, the six states in the original lawsuit are Colorado, Illinois, New York, North Carolina, Tennessee and West Virginia. The new states joining the case are Minnesota, Mississippi and Virginia.
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