While Carter and Hubbard’s antitrust lawsuits are convinced that U.S. District Judge Claudia Wilken may approve their traditional, multibillion dollar settlement, crew athletes and others are now in their way.
Grace E. Menke, a former Yale University swimmer, and five other original members of the Yale, Oregon State, George Washington, and Texas team filed objections to the lawsuit last Friday and oppose the movement for tentative settlement approval.
Before going into detail about the objectors ‘ arguments, it’s worthwhile to briefly discuss opposition brief filed by two different events that have an impact on whether or not the settlement is approved or rejected.
In a presented competitive class action against the Ivy League and its eight schools over the conference’s policy to never award athletic scholarships or offer other compensation for sport services, Tamenang Choh and Grace Kirk’s attorneys urged Wilken to refuse primary approval next Thursday. Although neither House, Carter, or Hubbard are Ivy League or its institutions, Choh and Kirk would still be subject to the arrangement because it applies to DI players. They may be expected to file legal lawsuits against the Ivy League and its affiliated institutions, putting their scenario in a bind. In the event that Wilken releases their claims, they request that the primary negotiation be denied.
Then, on Friday, attorneys for school athletes in two different school athlete competitive cases—Fontenot v. NCAA and Cornelio v. NCAA—similarly asked Wilken to refuse tentative approval. Their overarching concern is that their cases, which, like House/Carter/Hubbard, accuse the NCAA and its member schools of violating antitrust law by conspiring to limit athlete compensation, remain separate and not preempted by settlement terms. They criticize the settlement for “adopting economic assumptions favorable to the NCAA” and claim that it is woefully inadequate for athletes. They contend that the settlement would only bring in$ 600 million from claims in Fontenot worth more than$ 24 billion. They also argue the settlement offers nothing for claims raised by Cornelio, which concerns partial scholarship amounts and are ( allegedly ) worth over$ 300 million.
Back to the objectors. Their main argument is that the settlement would continue to defraud college athletes, particularly women athletes, of their due compensation and illogically replace one illegal cartel with another.
The settlement directs the vast majority of compensation to football and men’s basketball players, according to their brief submitted by attorneys from Mololamken LLP and Conrad | Metlitzky | Kane LLP. The objectors contend that despite receiving more than$ 100, 000, nearly all female athletes, with the exception of” select basketball players,” would be paid a comparatively under-sea$ 125. This arrangement, the objectors assert, “reinforc]es ] wrongful gender inequities instead of remedying them” and would constitute” a major setback for efforts to achieve gender equity in college athletics”.
The objectors claim that line of reasoning ignores disparities in how college sports has promoted women’s sports because they generate the most revenue for college sports and that their athletes should receive the most money from the settlement.
” The NCAA”, the objectors assert, “historically depressed the value of women athletes ‘ NIL by failing to invest in promoting women’s sports”. A deal that favors men’s basketball players and football players perpetuates sexism from that perspective.
The objectors also contend that the settlement under-compensates women” by forbidding the release of claims for those losses while omitting compensation for lost scholarship opportunities.” The settlement would compensate compensate for lost scholarship opportunities, as well as lost NIL opportunities and other compensation for lost opportunities to profit from broadcasting, video games, and other revenue sources. The opponents claim that women have suffered the most from NCAA scholarship caps. Consider, for example, rules allowing up to 85 football players on full-ride scholarships but no women’s sport having more than 20 equivalent slots.
The objectors argue that the settlement would replace the traditional price-fixing system, which imposes a salary cap analogous to a salary cap, provided there are no salaries and no agreements were made with the players ‘ union. Participating schools will be able to pay athletes for their athletic services in addition to scholarships and other benefits, as the objectors have argued. But schools will be capped at” 22 % of the average of the school’s shared revenue” which is expected to be” about$ 23.1 to$ 32.9 million annually”.
The opponents acknowledge that the settlement’s pro-sports system will provide additional funding for college athletes, who are currently denied this funding. Still, the objectors argue,” that collusive, artificially depressed payment structure is not fair, reasonable, or adequate, even if it provides more compensation than student-athletes could have earned under the NCAA’s previous anticompetitive restraints”.
The objectors claim that” the vast majority of class members” are getting a “raw deal” because they would be paid “far less than the federal minimum wage [$ 7.25 per hour ] for the hours they put in to work for their schools and the NCAA.”
The objectors ‘ claims that the federal minimum wage would be “less than seven hours of work per year at the federal minimum wage” would amount to” an order of magnitude lower than the number of hours student-athletes provide to their schools in athletic labor,” are” under the radar” of the objectors ‘ data. The objectors refute Johnson v. NCAA, arguing that “at the very least, under the Fair Labor Standards Act, college athletes are deserving of the minimum wage.”
The plaintiffs also criticized the settlement for ( allegedly ) failing to include the voices of college athletes, even though the cases were brought by a group of college athletes, including former Oregon and current TCU basketball players Sedona Prince, current TCU football player Tymir Oliver, former Oklahoma State ( now Carolina Panthers ) football players Chuba Hubbard, former Auburn track and field athletes Keira McCarrell, former Duke ( now Buffalo Bills ) football players DeWayne Carter, and Stanford soccer player Nya Harrison.
” No student-athletes”, the objectors write, “were offered a seat at the bargaining table”. The statement makes a critical argument that players ‘ attorneys, who could potentially receive millions of dollars from the settlement, were speaking for themselves during settlement negotiations rather than speaking for themselves.
While the objectors and the Choh, Kirk, Fontenot and Cornelio parties arguably present compelling arguments, they face challenging odds in trying to convince Wilken to deny preliminary approval. Antitrust class action settlements are typically granted preliminary approval by judges. Class members, like the objectors, can opt out of a preliminarily approved settlement before final approval, preserve their legal claims and pursue their own cases.
Despite this, Wilken might find these fresh arguments persuasive on the pre-approval question. If Wilken finds them to be convincing, she might have concerns about how their settlement is structured, including regarding compensation for female athletes. Those attorneys might then revise the settlement’s terms to address Wilken’s critiques. In a recent antitrust dispute involving UFC fighters, an analogous sequence occurred. The presiding judge changed the terms after the fighters and the UFC expressed concerns about how fighter compensation was distributed. Unfortunately, the judge still refused preliminary approval, leading to the case resuming on the docket.
It should be noted that Wilken’s preliminary approval of the settlement wo n’t guarantee her final approval. Between those approvals, Wilken would host a fairness hearing, where she would hear from objectors and other interested parties. If there are too many class members opt out, Wilken may reject the settlement before receiving final approval if she believes the settlement will have an impact too drastically on the college sports industry ( note: a federal judge rejected the Google Book Settlement because it would go too far in reshaping an industry ).
Wilken is scheduled to hold a hearing on Sept. 5 to discuss preliminary approval. Houston Christian University has already filed an appeal with the U.S. Court of Appeals for the Ninth Circuit to stop the settlement, despite the school’s previous rejection of the request.
If you get the sense there are a lot of moving parts before the settlement becomes a reality, you’re right. Except for the almost certain possibility of more moving parts, including potential state court litigation that would add complexity, delay, and cloud.
Buckle up. Many billable hours await.