Student-Athletes’ Class Action Lawsuit Against NCAA Heats Up Even As Weather Gets Colder

On November 8, a federal district court in Northern California certified a class of former college student-athletes seeking injunctive relief against the NCAA for conspiring to deny them compensation for the licensing and use of their names, images, and likenesses. This was the fourth major development in a span of just two weeks in the consolidated action brought by former Division I college basketball and football players against the NCAA, EA Sports, and Collegiate Licensing Company.

In Re NCAA Student-Athlete Name & Likeness Licensing Litigation, Case No. 4:09-CV-01967, currently pending before Judge Claudia Wilken of the United States District Court for the Northern District of California, is the consolidated action of two class action lawsuits brought by a total of twenty-five former college athletes playing on Division I football and basketball teams from 1953 to the present. Led by former UCLA basketball star, Ed O’Bannon, twenty-one of the plaintiffs allege that the NCAA violated federal antitrust laws by conspiring to restrain competition in the market for the commercial use of the players’ names, images, and likenesses (the Antitrust Case). The remaining four plaintiffs, led by former Nebraska and Arizona State quarterback, Sam Keller, assert that the defendants violated their statutory and common law rights of publicity by misappropriating their names, images, and likenesses (the Right-of-Publicity Case). Recently, it was reported that defendants EA Sports and Collegiate Licensing Co. settled the actions against them for $40 million.

The recent stir of activity began on October 25, when Judge Wilken denied the NCAA’s motion to dismiss the Antitrust Case.That same day, the NCAA sought leave of the United States Supreme Court to intervene in an appeal filed in the Right-of-Publicity Case by EA Sports before it settled. EA Sports’ appeal challenged a Ninth Circuit ruling that the claims of the plaintiffs in the Right-of-Publicity Case are not barred by the First Amendment. The NCAA sought leave to intervene in order to preserve the appeal in light of the reported settlement between the plaintiffs and EA Sports.

Then, on November 4, 2013, the NCAA took additional action by filing suit against EA Sports and Collegiate Licensing Co. in Fulton County, Georgia, to block the $40 million settlement. In its complaint, the NCAA alleged that, because EA Sports failed to maintain liability insurance to cover pending third-party claims and because Collegiate Licensing Co. failed to ensure that EA Sports had adequate coverage, the defendants were in breach of their contractual obligations to the NCAA and should therefore be enjoined from settling the student-athletes’ class action lawsuits.

However, the certification of the class in the Antitrust Case is perhaps the most significant of the recent developments because it means the case can be tried before a jury on the merits of the plaintiffs’ claims. Judge Wilken certified a class of all current or former Division I basketball players and Football Bowl Subdivision football players whose names, images, or likenesses may be or may have been included in game footage or in video games licensed and sold by defendants, their co-conspirators, or their licensees after the conclusion of the athlete’s participation in intercollegiate athletics. (Note: Even though the Court left “Defendants” plural in the class definition, it recognized elsewhere in its ruling that EA Sports and Collegiate Licensing Co. had settled with the plaintiffs.) Plaintiffs’ purpose in seeking the injunction is to block the NCAA from restraining competition in the “group licensing market” for student-athletes’ names, images, and likenesses in the future.  In granting certification of this “Injunctive Relief Class,” Judge Wilken specifically found that an injunction would grant “uniform relief” to all class members.

It is significant to note that Judge Wilken also denied the plaintiffs’ request for certification of a damages class based on game footage and video games from 2005 to the present. The court determined that the plaintiffs failed to identify “a feasible way to determine which members of the Damages Subclass were actually harmed by the NCAA’s allegedly anticompetitive conduct.” Had the court done otherwise, the NCAA’s potential liability to such a class would have been, by all accounts, considerably greater.

What effect any of these developments will have remains to be seen, but it is certain that NCAA member institutions are paying close attention.