Devin Pugh (hereinafter “Devin” or “Plaintiff”) filed suit against the National Collegiate Athletic Association (hereinafter “NCAA” or “Defendant”) under Section 1 of the Sherman. The suit was filed on November 5, 2015 in the United States District Court, Southern District of Indiana, Indianapolis Division. Devin seeks unspecified damages and injunctive relief. The suit also seeks certification as a class action.

The facts as presented in the Class Action Compliant (hereinafter “Complaint”) are as follows. Devin accepted a football scholarship to attend Weber State University in 2010. At the end of the season, in approximately December 2012, Coach Sears sat Devin down in his office and informed him that Weber State would not be renewing his scholarship, and he should look into transferring to another school. Ultimately, Devin was offered full grants-in-aid at several FBS schools, including Colorado State, the University of Colorado, and Troy University. In addition, he received full grant-in-aid offers from FCS schools, including Portland State, University of Montana, and Eastern Washington University (which had just won the national championship the year prior). All of these grant-in-aid offers, however, were contingent upon Devin’s ability to play two more years of NCAA football. As a FCS football player looking to transfer to a four-year FBS or FCS school with a grant-in-aid offer, Devin was not eligible for the NCAA’s one-time transfer exception. So he applied for the only option available to him — a “hardship waiver,” which would have allowed him to play immediately upon transfer and thus be able to play for the two years remaining on his five-year clock. The NCAA, however, denied Devin’s request for a hardship waiver. He settled on Colorado State–Pueblo, and after a couple conversations with head coach John Wristen, Devin agreed to join the Thunderwolves for the 2013 season. Because he was transferring from a Division I school to a Division II school, he was eligible for a one-time transfer exception and would not have to sit out for a year, thereby giving him two seasons left to play NCAA football.

The Complaint states “[t]he specific practices challenged here are: (i) the NCAA’s prohibition on multiyear Division I football scholarships, (ii) its unlawful caps on the number of football Division I football scholarships that can be awarded by Division I member institutions, and (iii) the NCAA’s transfer rules that prohibit a Division I football player from transferring to another NCAA Division I school without loss of athletic eligibility for a period of time.”

Devin claims “[t]he relevant market is the nationwide market for the labor of Division I football student athletes. In this labor market, student athletes compete for spots on Division I football athletic teams of NCAA member institutions, and NCAA member institutions compete for the best Division I football collegiate student athletes by paying in-kind benefits, namely, Division I football scholarships, academic programs, access to training facilities, and instruction from premier coaches.” Devin further claims “[t]he restrictions outlined [in the Complaint] represent unlawful agreements not to compete in terms of price or output and constitute a naked restraint of trade and commerce.”

Plaintiff seeks to certify a class of similarly situated individuals. As such, Devin sues on his own behalf and the following two classes, including the following “Injunctive Relief Class” pursuant to Rule 23(a) and (b)(2):

All individuals who, from December 17, 2007 to the present, have been classified under NCAA rules as an “initial counter” (during their first fall term on campus or in the spring term prior to their first fall term on campus) on an NCAA Division I football team;

and the following “Core Issues Class” pursuant to Rule 23(a), (b)(3), and (c)(4):

All individuals who, from December 17, 2007 to the present, have been classified under NCAA rules as an “initial counter” (during their first fall term on campus or in spring term prior to their first fall term on campus) on an NCAA Division I football team, and

(1) were recruited by at least one school that is a member of the NCAA’s Division I Football Bowl Subdivision (“FBS”) (at the time of their recruitment or during their period of NCAA athletics eligibility), and

(2) did not receive their initial year’s athletics-related grant-in-aid for the full duration of their undergraduate education or five (5) years, whichever is shorter.

Plaintiff additionally sues on his own behalf and the following two classes, including the following “Transfer Injunctive Relief Class” pursuant to Rule 23(a) and b(2):

All individuals who, from November 4, 2011 to the present, have been a member of an NCAA Division I football team;

and the following “Transfer Core Issues Class” pursuant to Rule 23(a), (b)(3), and (c)(4):

All individuals who, from November 4, 2011 to the present, have sought to transfer from one NCAA Division I football school to another NCAA Division I football school, and pursuant to NCAA transfer rules, were considered to be, or would have been considered to be, athletically ineligible to participate in NCAA Division I football for any period of time.

Plaintiff sets forth a claim under Section 1 of the Sherman Act and requested the following relief: (1) a declaration by this Court that Defendant’s conduct constituted a conspiracy and that Defendant is liable for the conduct of or damage inflicted by any other coconspirator; (2) a declaration that the prohibition on multi-year athletic-based scholarships is unlawful; (3) a declaration that the NCAA’s restrictions on the number of athletic based scholarships that can be offered to student-athletes are also unlawful; (4) a declaration that the NCAA’s restrictions on players’ ability to transfer without loss of athletic eligibility are also unlawful; (5) equitable relief requiring NCAA member institutions to offer multi-year Division I football scholarships to remedy their past wrongful conduct, and enjoining Defendant from artificially reducing the total supply of scholarships available to NCAA student-athletes, and enjoining Defendant from restricting players’ ability to transfer without loss of athletic eligibility; (6) actual damages, trebled damages, and punitive damages; and (7) the costs of bringing this suit, including reasonable attorneys’ fees.

Plaintiff’s counsel is no stranger to suits of this kind and, specifically, has filed several suits against the NCAA in the last eight (8) to ten (10) years. Interestingly, many of these issues have been previously addressed. The NCAA presently allows member institutions to offer multi-year scholarships and multi-year scholarships in football were litigated in Agnew v. NCAA. Similarly, the imposed limits on football scholarships and, specifically, the number permitted to be offered was litigated in In re NCAA I-A Walk-On Football Players Litigation.  Also, in Smith v. NCAA, the Third Circuit indicated that eligibility rules (dealing with transfer restrictions) are not commercial in nature and, thus, Section 1 of the Sherman Act was not applicable. Specifically, the Smith court stated “[w]e agree with these courts that the eligibility rules are not related to the NCAA’s commercial or business activities. Rather than intending to provide the NCAA with a commercial advantage, the eligibility rules primarily seek to ensure fair competition in intercollegiate athletics.” In each of these cases, the NCAA was successful in protecting its rules and regulations. The law is certainly subject to change, but there appear to be a few roadblocks ahead.

For any questions, feel free to contact Christian Dennie at cdennie@bgsfirm.com