Seven States Sue NCAA in Antitrust Suit

A player runs across the NCAA logo during practice at the NCAA tournament college basketball in Pittsburgh on March 14, 2012. Keith Srakocic, File/AP Photo

A coalition of seven states has filed a groundbreaking antitrust lawsuit against the National Collegiate Athletic Association (NCAA).

Attorney Generals from Colorado, Illinois, New York, North Carolina, Ohio, Tennessee, and West Virginia filed the suit in West Virginia’s North District this week, challenging the NCAA’s authority to enforce a one-year delay in eligibility for athletes transferring between schools as a violation of the Sherman Act.

The Sherman Act is a federal statute in U.S. antitrust law that prohibits monopolistic practices and aims to promote fair competition across various industries.

The NCAA’s transfer eligibility rule “imposes a one year delay in the eligibility of certain college athletes transferring between NCAA member institutions and unjustifiably restrains the ability of these college athletes to engage in the market for their labor as NCAA Division I college athletes,” the lawsuit alleges.

Athletes are allowed to transfer as underclassmen once without having to sit out a year, but additional transfers require a waiver by the NCAA, which the states argue the NCAA has denied for no apparent reason in recent years.

“The NCAA began automatically exempting first-time transfers from the regulation in 2021, but has continued to enforce the rule for subsequent transfers and to deny waivers for no legitimate reason,” a press release from Tennessee Attorney General Jonathan Skrmetti said.

NCAA’s Transfer Rule Under Scrutiny

Athletes who are denied a waiver to begin competing immediately after transferring to a new institution face a mandatory one-year hiatus at their new school.

The complaint argues that the rule impedes athletes’ potential earnings from endorsement deals and professional opportunities. It underscores the significant exposure athletes receive from national broadcasts, where a single game can elevate their public profile dramatically.

This rule has been increasingly enforced under stricter guidelines, leading to numerous high-profile cases where waivers were either denied or heavily contested.

Several individual cases have been spotlighted in the lawsuit, demonstrating the rule’s impact on athletes’ careers and mental health.

One notable case involves RaeQuan Battle, a West Virginia basketball player who transferred from Montana State but was denied immediate eligibility.

Battle’s mental health was cited as a significant factor in his transfer decision, and his coach’s departure from Montana State further complicated his situation.

“WVU applied for him to receive a waiver for immediate eligibility, as he and WVU believed that his circumstances fit within the NCAA’s criteria for waiver requests,” the lawsuit states. “However, the NCAA recently denied his appeal for immediate eligibility at WVU. Mr. Battle is completely devastated by the NCAA’s decision to deny him eligibility for the 2023–24 basketball season … severely affect[ing] his mental health.”

North Carolina's RJ Davis drives to the basket with Villanova's Jordan Longino close behind during overtime in an NCAA college basketball game in the Battle 4 Atlantis at Paradise Island, Bahamas, on Nov. 23, 2023. Ronnie Archer/Bahamas Visual Services via AP

Similar circumstances were presented in the cases of Southern Illinois University (SIU) basketball player Jarrett Hensley after transferring from the University of North Carolina Greensboro and football player Noah Fenske, who transferred from the University of Iowa and the University of Colorado to SIU, showcasing the rule’s far-reaching consequences.

“The NCAA’s willingness to apply the Transfer Eligibility Rule despite the negative mental health consequences suffered by college athletes because of the Rule flies in the face of the lip-service that the NCAA has proudly given to its commitment to understanding and addressing college athletes’ mental health concerns,” the lawsuit continued.

The suit also claims the rule being enforced hurts consumers, stating “the Transfer Eligibility Rule has downstream effects for consumers who attend NCAA athletic events in-person and for consumers who watch the events on television or listen on the radio.”

“When the Transfer Eligibility Rule prevents college athletes from competing at their new institution after transferring, the Rule can decrease fan interest in a team’s season by making popular players ineligible for competition and decreasing a team’s competitiveness on gameday,” the suit continued. “Furthermore, the Transfer Eligibility Rule is a barrier to increased parity in college athletics that would create a better product for consumers.”

Restitution Problem

A key focus of the lawsuit is a challenge to another rule regarding restitution. The Rule of Restitution poses a severe risk for college athletes who challenge the NCAA’s rules.

The rule states, according to the lawsuit, that “if a plaintiff obtains an injunction against the unlawful conduct of the NCAA, and a college athlete and his or her member institution conduct themselves in conformity with that injunction, the NCAA may impose draconian punishments on both the athlete and the institution if the injunction is “vacated, stayed or reversed or it is finally determined by the courts that injunctive relief is not or was not justified.”

This situation creates a dilemma for schools, as they might hesitate to allow athletes to play, fearing future retaliation from the NCAA. Essentially, the rule deters athletes from challenging NCAA rules due to the potential repercussions on their careers and educational institutions​.

This aspect of the lawsuit emphasizes the need for judicial intervention to protect the rights of student-athletes and ensure fair application of NCAA policies​.

What the Lawsuit Seeks

The states are pursuing a temporary restraining order against the NCAA to halt the enforcement of the transfer eligibility rule.

North Carolina Attorney General Josh Stein emphasized that student-athletes, in good academic standing, should have the autonomy to make decisions that best serve their personal and professional interests.

“College sports are changing rapidly, but one thing remains the same: protecting student athletes has to be the top priority,” Mr. Stein said in a statement. “This rule has been applied inconsistently and hampers college athletes from freely making decisions about where they go to school. The NCAA has long claimed that the transfer rule is necessary to give students time to acclimate, but that justification doesn’t make sense for student-athletes who are in good academic standing. Coaches come and go as is best for their careers and families—students should enjoy that same freedom.”

NCAA’s Response and What’s Next

In response, the NCAA expressed disappointment with the lawsuit, suggesting that such legal actions could lead to frequent changes in team rosters.

“The NCAA is disappointed in the decision by seven state attorneys general to bring legal action—with the tacit support of a small number of schools—the result of which could potentially mean team rosters changing monthly or weekly,” NCAA spokeswoman Saquandra Heath said in a statement, according to the Associated Press.

This lawsuit represents a pivotal moment in collegiate athletics, challenging long-standing NCAA rules and advocating for greater agency and opportunity for student-athletes. The outcome of this legal battle could redefine the landscape of college sports, impacting athlete welfare, institutional policies, and the broader dynamics of intercollegiate competition.