Quick Look Review as a New Path to Salvation: NCAA v. Alston.

AuthorFeng, Rogan

College sports are big business in America. The broadcast license extension for the NCAA's "March Madness" basketball tournament is worth $8.8 billion. (1) The Football Bowl Subdivision's "College Football Playoff" television rights sold for $5.64 billion. (2) Colleges compete fiercely for their share of the pie, investing fortunes in coaches (3) and sports facilities. (4) But the schools do not compete in one important respect: per NCAA rules, the main component of athlete compensation is largely limited to a full-ride scholarship. (5) In NCAA v. Alston, (6) the Supreme Court weighed in on this arrangement and upheld a lower court ruling that the NCAA's limitations on education-related benefits, such as graduate or vocational school scholarships, illegally restrained trade. (7) The significance of this case for sports law can hardly be overstated. In opening the door to education-related benefits, Alston invites yet more ambitious challenges to remaining NCAA compensation restrictions, including those that currently prohibit cash salaries. (8) However, while Alston provides a historic breakthrough for Division I athletes, it is no victory for antitrust plaintiffs more generally. In its decision, the Court revisited a doctrine known as "quick look review"--an abbreviated, less fact-intensive version of the standard rule of reason--and suggested that challenged practices may be upheld, not just struck down, with a mere quick look. (9) The Court hands antitrust defendants a new legal argument. It also risks adding to the already-significant lower court confusion over quick look doctrine.

The NCAA imposes many restrictions on student athlete compensation in the name of preserving amateurism. According to its rules, schools cannot pay salaries to athletes, and non-cash compensation is subject to exacting limitations. (10) Alston, for example, was largely concerned with the NCAA's restrictions on non-cash, education-related benefits, which can include post-eligibility scholarships, tutoring services, and paid internships. (11) The NCAA has often defended its compensation restrictions by characterizing them as pro-competitive rules that are necessary to foster amateurism. (12) In essence, the NCAA argues that if student athletes were paid, college sport would be indistinguishable from professional sport and, as such, not a viable commercial product. The Supreme Court, in a 1984 case concerning the NCAA's television rights plan, seemed to approve of this reasoning, noting that the preservation of amateurism "widen[ed] consumer choice" and was "procompetitive." (13)

In antitrust language, the NCAA does not--nor could it--claim that its rules do not restrain competition. Rather, the NCAA argues that its compensation rules are not unreasonable restraints. Section 1 of the Sherman Antitrust Act expressly prohibits "[e]very contract, combination ... or conspiracy, in restraint of trade or commerce among the several States." (14) Notwithstanding the statute's sweeping language, the Supreme Court has read the Act as only prohibiting those business practices that are "unreasonable" restraints on trade. (15)

Most often, courts assess reasonability on a case-by-case basis, using a balancing test known as the rule of reason. The test involves three steps. (16) First, a plaintiff must show that challenged conduct has significant anticompetitive effects. (17) Then, the burden shifts to defendants to show that there are pro-competitive effects. (18) Finally, if a court finds pro-competitive effects, the burden shifts back to the plaintiff to show that there are substantially less restrictive rules that could achieve the same pro-competitive effect. (19) In essence, the rule of reason three-step provides for a fact-intensive assessment of a challenged restraint's economic impact. (20)

The cost of evaluating restraints on a case-by-case basis is high. (21) Hence, courts have also developed other tests, which allow for particularly harmful practices to be struck down summarily. At the opposite end of the spectrum from the rule of reason, the per se rule allows courts to "conclusively presume[] ... [that a practice is] unreasonable" (22) as long as it belongs to a category of practices that "always or almost always tend to restrict competition and decrease output[.]" (23) And in between the per se rule and the rule of reason, the Court has also fashioned a lesser-known "quick look review" that relieves plaintiffs of the burden of proving anticompetitive effect, but still gives defendants the chance to provide procompetitive justification. (24)

In NCAA v. Alston, the plaintiffs, a class of current and former Division I athletes, alleged that the NCAA's compensation rules violated Section 1 of the Sherman Antitrust Act. (25) The district court held that the NCAA's compensation rules were subjected to a rule of reason. (26) Applying the three-step test, Judge Wilken of the Northern District of California enjoined NCAA's rules against education-related benefits but left in place rules against cash payment. First, as the parties did not meaningfully contest that the challenged restraints suppress the price of athletes'...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT