Supreme Court Rules Unanimously Against NCAA In Alston Case

·5 min read

In one of the most significant sports law decisions in U.S. history, the U.S. Supreme Court on Monday ruled unanimously against the NCAA in NCAA v. Alston. Justice Neil Gorsuch authored the opinion, with Justice Brett Kavanaugh authoring a concurring opinion where he advocated for a broader rebuke of NCAA amateurism.

In affirming a 2020 ruling by the U.S. Court of Appeals for the Ninth Circuit, all nine of the justices concluded that the NCAA and its more than 1,200 member schools and conferences are in violation of Section I of the Sherman Antitrust Act. The violation stems from members agreeing to limit how much each can compensate athletes for academic-related costs. The Ninth Circuit had affirmed a ruling by U.S. District Judge Claudia Wilken, who following a a 10-day bench trial in 2018, held in favor of the class led by former West Virginia running back Shawne Alston.

At issue are limitations on how schools and conferences reimburse or pay athletes for computer costs, study abroad programs, internship opportunities, scholarships to attend vocational schools and other academic-related expenses. Pursuant to the Supreme Court’s holding, NCAA rules on these topics will require modification or outright excision.

When it began eight years ago, the Alston case threatened far more dramatic changes. The case challenged NCAA caps on compensation of athletes, with the idea that schools act as a cartel in limiting how much each can pay. To illustrate, if major college programs had been able to compete for recruits Zion Williamson or Trevor Lawrence by offering them market value scholarships, the duo would have reaped the benefits of the competition. Perhaps they would have secured scholarships worth hundreds of thousands or even millions of dollars—much like the riches awarded to coveted free agents in pro leagues. That possibility ended when Judge Wilken and the Ninth Circuit held that the NCAA can lawfully restrict athletics-related expenses. However, the courts also held that the NCAA violates the law by restricting expenses that are “tethered” to academics.

Also important: Alston is not about obligating schools to spend more on athletes in the context of academic-related expenses. Rather, the ruling provides schools with the discretion to do so. To that end, schools will soon more freely vie with one another for athletes, just like they compete—and sometimes outbid—for coaches, staff, faculty, fundraising, admissions, media attention and numerous other targets. If a college doesn’t wish to reimburse a higher dollar amount for academic-related expenses, it need not take any action. The school might become less attractive to recruits, especially if comparable schools choose to reimburse. But that’s how competition works.

The most consequential impact of Alston is likely to be felt in the years ahead. The ruling repudiates a long-standing NCAA argument that it is owed favorable treatment under federal antitrust law.

Attorneys representing the NCAA have consistently invoked the U.S. Supreme Court’s 1984 ruling in NCAA v. Board of Regents, wherein Justice John Paul Stevens opined the NCAA enjoys “ample latitude” under antitrust law when setting amateurism rules that pertain to college athletes. The hurdle for NCAA attorneys in Alston, as stressed by Justice Brett Kavanaugh during the oral argument in March, is that Justice Stevens’ language was “dicta.” This means it was commentary not essential to the holding—the NCAA actually lost the Board of Regents case—and lacks the same degree of precedential impact.

While it is subject to further proceedings, the Alston ruling will serve as the definitive, precedential commentary for courts to apply in antitrust challenges to NCAA rules. Going forward, other antitrust challenges against NCAA rules will invoke Alston for support. For example, if high school athletes challenged NCAA recruiting restrictions, Alston would likely serve as precedent even though it concerned college athletes. This is because Alston establishes the NCAA is subject to the normal rigors of antitrust scrutiny and, in the context of Alston’s case (as well as Ed O’Bannon’s case), failed to pass such scrutiny.

The ruling is not a major surprise. During the oral argument in March, a majority of the justices expressed varying degrees of hostility toward arguments expressed by the NCAA’s attorney, Seth Waxman.

Justice Clarence Thomas, for example, wondered, “Is there a similar focus” about coaches’ salaries “that have ballooned?” Meanwhile, Justice Samuel Alito opined that athletes at top programs often appear to be “used up and cast aside,” and Justice Elena Kagan repeatedly asked why the NCAA and its members engage in price fixing, meaning (in this context) joining hands to limit potential compensation for athletes. The harshest NCAA critic was Justice Kavanaugh, who in blistering remarks demanded answers for “the exploitation of the student athlete.”

The Supreme Court’s ruling arrives at an already tumultuous period for “amateurism,” the NCAA’s system of rules that attempt to distinguish college athletes from pro athletes by denying the former from opportunities for compensation. Nineteen states have adopted name, image and likeness statutes that, as a general matter, will make it illegal under state law for colleges to deny their athletes opportunities to sign endorsement and sponsorship contracts. As of this writing, six of those statutes will go into effect on July 1.

A sometimes overlooked point is that while both Alston and NIL fall under the catch-all label “sports law” they involve very different areas of law. The former is a federal antitrust law controversy, while the latter focuses on mostly state law applications of intellectual property law (more precisely, the right of publicity). Whether the NCAA won or lost, Alston would not change NIL reforms. Alston and NIL are nonetheless linked in that they, and other amateurism topics, are governed by NCAA rules. Alston and NIL laws can, and will, compel changes to those rules.

NIL is also unresolved. As previously explained on Sportico, the NCAA could challenge NIL statues in court and seek restraining orders—moves that might delay NIL but also increase friction between the NCAA, member schools and athletes. Congress could also pass a federal NIL bill that would preempt state NIL statutes. However, if Congress takes any action on NIL, it would not occur until after July 1.

This story will be updated throughout the day with additional legal analysis.

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