New suit alleges NCAA monopoly, seeks class action

A new federal lawsuit has been filed alleging that the Indianapolis-based NCAA constitutes an illegal college sports monopoly.

Filed in U.S. District Court for the Southern District of Indiana, John Rock v. the National Collegiate Athletic Association, 1:12-CV-1019, seeks class-action status and demand for a jury trial. John Rock is a former quarterback from Gardner-Webb University whose scholarship was not renewed after a change in coaches at the North Carolina school. Rock claims that he was assured a four-year scholarship as long as he remained eligible.

“The NCAA’s prohibition of multi-year scholarships and limits on the number and amount of athletic scholarships is an illegal restraint that limits the ability of student-athletes to market their services in a free and open market,” according to a statement from Seattle-based Hagens Berman LLP. The firm previously filed a similar unsuccessful claim against the NCAA.

“This suit arises out of a blatant price-fixing agreement and restraint between member institutions” of the NCAA, the lawsuit alleges. The lawsuit says the NCAA and the more than 1,000 colleges represented in its various divisions conspired to restrain trade by limiting the number of athletics scholarships and multiyear scholarships.

The NCAA did not immediately return telephone messages seeking comment. The National Law Journal reported that the NCAA issued this statement:

“The plaintiff has not yet served us with this lawsuit, though we understand media have received it. To that end, we cannot comment specifically. In general terms, it is difficult to imagine why this law firm keeps filing the same tired theories and misleading new groups of student athletes. We will read the new complaint in that light when we see it.”

Attorney Steve Berman filed a prior suit, Agnew v. NCAA, 11-3066, that in June was dismissed by the 7th Circuit U.S. Court of Appeals. The court affirmed the District Court’s finding that the plaintiffs’ case did not sufficiently identify a market required to prove a violation of the Sherman Antitrust Act.

“The relevant market is the nationwide market for the labor of student athletes,” Rock’s suit claims. Despite the NCAA’s nonprofit status, the suit says, “full scholarships in exchange for athletic services are not noncommercial, since schools make millions of dollars as a result of these transactions.”

The suit cites Forbes magazine’s estimate that the value of University of Texas’ football program in 2011 was $129 million, with $71 million in profit. It also cites published reports of the cost of recruiting, such as $434,095 the University of Kentucky spent in 2010 to court basketball prospects.

The suit also takes swipes at the NCAA’s “plush” headquarters and “bloated” executive salaries, including NCAA President Mark Emmert’s reported $1.6 million annual pay.    

William Riley and Joseph Williams of the Indianapolis firm Price Waicukauski & Riley LLC are listed as local plaintiff’s counsel in the complaint. An attorney at the firm on Friday referred inquiries to Hagens Berman.

Rock, the suit said, wasn’t formally told that he would lose his scholarship until July 2011, when it was too late for him to attempt to transfer to another school that could provide a football scholarship. Rock paid his way through his final year at Gardner-Webb and graduated this year with a degree in political science, according to the suit.