Justia Opinion Summary and Annotations

The National Collegiate Athletic Association (NCAA) limits how schools may compensate college-level “amateur” student-athletes. Current and former student-athletes brought suit under Section 1 of the Sherman Act, which prohibits “contract[s], combination[s], or conspirac[ies] in restraint of trade or commerce,” 15 U.S.C. 1. The Ninth Circuit declined to disturb NCAA rules limiting undergraduate athletic scholarships and other compensation related to athletic performance but enjoined certain NCAA rules limiting the education-related benefits, such as scholarships for graduate or vocational school, payments for academic tutoring, or paid post-eligibility internships.

The Supreme Court affirmed, considering only the enjoined subset of NCAA rules restricting education-related benefits. Because the NCAA enjoys monopoly control in the relevant market and is capable of depressing wages below competitive levels for student-athletes and thereby restricting the quantity of student-athlete labor, the Court applied “rule of reason” analysis. The Court rejected the NCAA’s argument for “an extremely deferential standard” because it is a joint venture among members who must collaborate to offer consumers a unique product.

While a “least restrictive means” test would be erroneous, the district court nowhere expressly or effectively required the NCAA to meet that standard. Only after finding the NCAA’s restraints “patently and inexplicably stricter than is necessary” did the court find the restraints unlawful. Judges must be sensitive to the possibility that the “continuing supervision of a highly detailed decree” could wind up impairing rather than enhancing competition but the district court enjoined only certain restraints—and only after finding both that relaxing these restrictions would not blur the distinction between college and professional sports and thus impair demand, and further that this course represented a significantly (not marginally) less restrictive means of achieving the same procompetitive benefits as the current rules. The injunction preserves considerable leeway for the NCAA.

Annotation

Primary Holding

Supreme Court upholds an injunction prohibiting enforcement of certain NCAA rules, limiting education-related benefits for student-athletes, such as scholarships for graduate or vocational school and payments for academic tutoring.