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State Cases You Need to Know: Ohio v. NCAA

John Bogert

State Cases You Need to Know: Ohio v. NCAA
Juan Algar via Getty Images


In 2021, in NCAA v. Alston, the Supreme Court upheld a district court order enjoining the NCAA from preventing its member schools from offering certain education-related benefits to student athletes. At the time, the Court made clear that it did “not address the legality of the NCAA's remaining compensation rules,” or other restrictions. Since then, competition in labor markets has only grown in importance in the antitrust bar, with particular focus on no-poach and non-compete agreements, and student athletes have brought numerous lawsuits challenging compensation bans; name, image, and likeness restrictions; and amateurism requirements. Now in Ohio v. NCAA, No. 1:23-cv-00100-JPB (N.D. W. Va.), a group of 7 State AGs (“the States”) is suing the NCAA for restricting student athletes’ ability to compete after transferring schools twice.

NCAA Bylaw, also known as the “Transfer Eligibility Rule,” requires student athletes who transfer between Division I schools twice to wait one year to compete again. The States allege this rule is a “no-poach agreement between horizontal competitor member schools . . . to allocate the market for the labor of NCAA Division I college athletes” that denies “college athlete[s] . . . the full benefits of participation in Division I NCAA athletics” and consumers a more competitive game to watch. The States raise their claim under Section One of the Sherman Act. In rebuttal, the NCAA claims that but for the restriction, frequent transferring would destroy the defining amateurism of the NCAA, and student academics and team stability would suffer.

On December 7, the States moved for a Rule 65 temporary restraining order, and the Northern District of West Virginia granted it. The court ruled that the transfer rule and its enforcement rules are “essentially horizontal agreements among competitors,” and “[t]he sole difference between this case and Alston is that Alston involved compensation,” whereas the States challenge “an even more direct restraint on trade: . . . rules which prohibit a student from playing.” In the court’s view, student athletes suffered because the NCAA’s member schools are keeping students from the “institution[s] that provide[] the best environment for their academic, mental, and economic well-being” by threatening students’ scholarships; name, image, and likeness income; and prospects at going pro. The court also agreed that athletic competition might be depressed by the rule because it benefits “larger and historically successful sports programs by allowing them to retain talented players.” The court then held that the NCAA’s alleged procompetitive justifications were pretextual or at least unduly restrictive.

On December 26 the court has granted the parties’ joint motion to convert the temporary restraining order into a preliminary injunction.