NCAA seeks Supreme Court intervention on First Amendment argument in student-athlete likeness antitrust litigation.

On October 25, 2013, the NCAA filed a motion for review by the U.S. Supreme Court of the Ninth Circuit's decision on the NCAA's First Amendment argument in the student-athlete likeness antitrust litigation. The Ninth Circuit determined that the First Amendment argument did not apply, because the NCAA did not change the likenesses of the football players enough in the NCAA Football series of video games. The NCAA contends that the argument does apply, and wants the Supreme Court to decide the issue. As mentioned yesterday, certiorari is infrequently granted.

If certiorari is granted, the Supreme Court would review the decision concurrently with the likeness antitrust litigation. This sort of review is analogous to when a football coach calls timeout in a game so he can challenge a referee's decision and obtain further review. Upon doing so, the referee consults instant replay and decides whether his decision is confirmed, stands, or is reversed. Here, the difference is that the referee does not review his own decision; the Supreme Court would review the Ninth Circuit's decision.

No surprise: NCAA's motion to dismiss student-athlete likeness antitrust lawsuit was denied.

It is no surprise that the NCAA's motion to dismiss the student-athlete likeness antitrust lawsuit was denied. The NCAA is the lone remaining defendant; all others have settled. The NCAA's attorneys who filed the motion could be sanctioned by the court, because there was no chance the motion would be granted and they filed it anyway.

If an attorney files a document in a lawsuit for an improper purpose like harassment or to needlessly increase the cost of litigation, the court can sanction the attorney who filed it. As you would expect, an attorney who files a motion for sanctions raises the personal stakes of everyone involved.

EA and Collegiate Licensing Co. settle with former players in NCAA likeness litigation; NCAA only remaining defendant.

EA Sports and the Collegiate Licensing Company, defendants in the NCAA student-athlete likeness antitrust litigation, settled all claims with former and current college players. The defendants are paying the plaintiffs $40 million. The case has not been certified as a class action, so this was a good time to settle. If the defendants waited until a ruling on the plaintiffs' motion for class certification, they could have lost a significant amount of leverage in settlement negotiations, and they did not have much leverage at this point anyway.

The NCAA has not settled. It is the only remaining defendant, and publicly shows no indication that it intends to settle. I would be surprised if the NCAA allows the case to go to trial. The NCAA is banking on denial of the plaintiffs' motion for class certification. It also expects more public support as the case draws closer to trial.

Publicly, the NCAA claims it is prepared to go down with the ship; either college sports stays the same or the current model will be replaced with a minor league sports model. To college sports fanatics, of which there are many, this existential threat should garner the NCAA more public support as trial draws closer. Privately, the NCAA must be examining its options for settlement and how it would affect the current NCAA model.

NCAA moves to dismiss student-athletes' claim in likeness antitrust litigation.

Yesterday, the NCAA moved to dismiss the plaintiffs' antitrust claim in the NCAA student-athlete likeness antitrust litigation. In moving for dismissal, a defendant must show that there is no factual scenario on which a plaintiff could win the case. Usually, a plaintiff can show some factual basis that would entitle him or her to relief.

The NCAA relied on NCAA v. Board of Regents of the University of Oklahoma, which deregulated college football television broadcasts and paved the way for conference realignment. The NCAA argues that Board of Regents categorically approved NCAA rules on amateurism. The student-athletes argue the opposite. The student-athletes are right, because the legality of the NCAA amateurism rules was not in question in Board of Regents. Only the legality of the NCAA rules on television broadcasts was under consideration. Accordingly, anything the court said about NCAA amateurism rules in Board of Regents was non-precedential.

Filing a motion to dismiss was an odd move by the NCAA, because it will be denied. Proper motion practice is to file a motion only when there is a chance it will be granted. Otherwise, it is a waste of time. The NCAA would have been better off filing a motion for summary judgment. Although unlikely, it would have at least had the possibility of being granted.

Conferences to stop licensing trademarks to EA Sports' NCAA Football video games; more posturing in settlement negotiations in NCAA student-athlete likeness antitrust litigation.

The Big Ten, Southeastern (SEC) and Pac-12 Conferences have decided to stop licensing their trademarks to EA Sports for its NCAA Football series of video games. Last month, the NCAA said it would discontinue licensing its trademarks to EA Sports for the NCAA Football video games. In light of the NCAA's decision, EA Sports said its next college football release would be titled "College Football '15."

The Big Ten, SEC and Pac-12 are just the first conferences to say they will not license their trademarks to EA Sports for the video game. More conferences are expected to do the same. While individual schools can still license their marks to EA Sports for the game, EA would no longer be able to mention the NCAA or any of the conferences in future releases. This would diminish the realism of the game, and likely severely diminish profits EA is able to realize.

The conferences' decision is a continuation of the strategy employed by the NCAA: The conferences are "taking their balls and going home." Rather than pay the players for licensing their likenesses in video games, the conferences and the NCAA before them are now simply saying they will not take any part in the game's production, to avoid having to compensate the players.

In settlement negotiations, this is probably the best strategy the NCAA and the conferences can employ, because it eliminates the student-athletes' ability to negotiate for future profits. Unfortunately for gamers, it could mean the beginning of the end for college football video games.

Challenging Major League Baseball's antitrust exemption: San Jose v. MLB.

Elsewhere, I discussed baseball's antitrust exemption:

- Why does Major League Baseball have an antitrust exemption?
- More on the antitrust exemption in baseball.
- An antitrust lawsuit against Minor League Baseball.

This is a good piece on a current lawsuit between the City of San Jose, California, and Major League Baseball. The City is challenging MLB's antitrust exemption, because it wants the MLB's Oakland Athletics to move to San Jose. MLB argues that stare decisis -- prior precedent or the status quo -- prevents the City from challenging the antitrust exemption. MLB also argues that the City does not have antitrust standing to bring suit, and allowing the City to do so would open the door for any city that wants a major league team to sue any major league organization.

Ultimately, more facts are needed to determine the merits of the City's case. Baseball's antitrust exemption will be overturned at some point in the future, but it is too early to tell if this is that point.

EA's First Amendment defense a no-go in NCAA student-athlete likeness antitrust litigation.

In the NCAA student-athlete likeness antitrust litigation, EA Sports argued that its use of player likenesses is protected speech under the First Amendment. The court shot down this argument, basically saying that EA Sports did not change the likenesses enough to qualify as protected speech. Instead, the court said that the likenesses were directly replicated in the game. The players' class action complaint seeks damages and relief for players whose game likeness does not differ more than 10 percent from their real-life attributes (height, weight, etc.).

It is not surprising that the First Amendment argument was unsuccessful. I played the NCAA Football video games throughout my youth, and the game's success hinges on its use of accurate player likenesses. Year-to-year, the actual gameplay does not change much. The reason people keep buying the game is the updated rosters for every major college football team and its ability to create a virtual proxy for real-life football.

Student-athletes allowed to amend complaint to include current players in NCAA student-athlete likeness antitrust litigation.

In the June 20th hearing on class certification in the NCAA student-athlete likeness antitrust litigation, the judge said a current student-athlete must join the lawsuit before she would consider certifying the classes made up of former student-athletes and current student-athletes. This meant that the judge allowed the former student-athletes to amend their complaint to include at least one current student-athlete. This suggests that the judge is at least considering certifying the classes, because she likely would not have allowed the former student-athletes to amend the complaint if she was going to summarily deny the motion for class certification.

As discussed earlier, there are two proposed classes: former student-athletes and current student-athletes. The former student-athletes are seeking damages for past use of their likenesses in television broadcasts and video games. Any current student-athletes joining the suit would seek injunctive relief, which would operate to prevent the NCAA from future use of their likenesses in television broadcasts and video games without their consent and some licensing revenue. The longer the NCAA waits to settle, the higher percentage of licensing revenue it will likely have to give to the student-athletes.

The former student-athletes sought a written stipulation from the NCAA providing that the NCAA would not retaliate or harm current student-athletes joining the suit. This is a fair stipulation, but any current student-athletes joining should also be concerned about retaliation from disgruntled fans and teammates.

The importance of Thursday's class certification hearing in the NCAA student-athlete likeness antitrust litigation.

For the time being, Thursday's (6/20/13) hearing is still scheduled over former student-athletes' motion for class certification in the NCAA student-athlete likeness antitrust litigation. This link has a great summary of the legal issues involved for both the student-athletes and NCAA. It does a good job of explaining the consequences of an NCAA loss, at the class certification stage and at trial. This is the most significant issue affecting college sports since NCAA control of television appearances was deregulated in 1984. The 1984 decision was the precursor to current conference realignment.

If the student-athletes get what they want, it could affect the ability of smaller Division I programs to compete at the highest level of intercollegiate athletics. If the student-athlete classes are certified, they will get at least part of what they want, because the NCAA would have to make concessions in any settlement. If the student-athletes get all of the relief they want (which would not happen unless the case goes to trial), it is possible that only 20-60 major college sports programs could survive to compete in Division I.

Now, this would be the NCAA's "worst case scenario," but it is a possibility. Simply, you cannot predict the future of college sports until this matter is resolved, in settlement or at trial. Here are other posts in which I have either directly or indirectly discussed this case:

- Publicity rights and NCAA student-athletes.
- How class certification works in connection with the NCAA student-athlete likeness antitrust litigation.
- More on NCAA student-athlete likeness antitrust litigation.
- Recent U.S. Supreme Court case has implications for NCAA student-athlete likeness antitrust litigation.
- The unlikelihood of class decertification.

Keep in mind that only the hearing is scheduled for Thursday. A decision likely will not come until 2-6 weeks later.

Pennsylvania governor's antitrust lawsuit regarding Penn State football penalties dismissed.

Before oral argument in this case, I wrote about the opportunistic antitrust lawsuit filed by the Pennsylvania governor against the NCAA regarding penalties the NCAA divvied out to Penn State in light of its 2011 football scandal. The governor filed the lawsuit under antitrust law, which made absolutely no sense, particularly because the governor did not have standing to bring the lawsuit in the first place. The fact that this lawsuit had no merit betrays the political motivations behind it. The governor would have known this, and only brought the lawsuit in order to gain favor with his constituents. The lawsuit was dismissed this morning.

A judge tips her hand in the Apple e-books case.

A few different times, I mentioned the Apple e-books antitrust case. Trial is scheduled to begin on June 3rd, and the presiding judge recently hinted that the Department of Justice is likely to win, given what she knows now. It will be interesting to see if this pushes Apple to settle.

Exit fees and the Atlantic Coast Conference vs. the University of Maryland.

The lawsuit between the Atlantic Coast Conference (ACC) and the University of Maryland could have significance in future cases challenging collegiate conference grants of media rights. Maryland is suing the ACC over the conference's $50M "exit fee," which Maryland would be required to pay if it leaves for the Big Ten Conference. Maryland's defection to the Big Ten is a foregone conclusion, because the Big Ten has already included Maryland in its 2014 football schedule.

The ACC is seeking dismissal of the lawsuit, because it alleges that Maryland has not been damaged. The disposition of this case could be significant to the media rights issue, because both require any defecting schools to pay or forfeit an enormous amount of money to their conference. If the ACC's exit fee is an illegal restraint of trade, it makes it much more likely that grants of media rights are also restraints of trade.

More on Apple's e-books fight with the Department of Justice.

In the past, I wrote about Apple's dispute with the Department of Justice over allegations that Apple conspired with other publishers in the price fixing of e-books. Here is a good article on the current state of the case. Basically, Apple is the only defendant who has not settled, and is vigorously defending its business practices.

Is it a group boycott for major NCAA football programs to refuse to play smaller FBS and FCS schools?

In major college football, there are two subdivisions within Division I: the Football Bowl Subdivision (FBS) and the Football Championship Subdivision (FCS). Since 1978, the FCS has determined its national champion through a playoff, which currently includes 16 teams. Recently, the FBS announced it was beginning a four-team playoff beginning in 2014. The participants in the four-team playoff -- called the College Football Playoff -- will be determined by a selection committee. The details of the selection committee have not been finalized, but strength of schedule will be a primary consideration.

Major college football conferences have taken different approaches to improving their strength of schedule, in order to improve their chances of qualifying a team in the four-team playoff field. Teams in the Big 12 Conference (Big 12) and Southeastern Conference (SEC) have had the most difficult schedules in recent years, due to the strength of the teams in each conference. Teams in the Big 12 play nine-conference games per year, while teams in the SEC play eight. The conventional wisdom is that if you play more conference games, it will improve your strength of schedule. With the five "best" conferences: the Big 12, SEC, Pac-12 Conference (Pac-12), Big Ten Conference and Atlantic Coast Conference (ACC), this is true. Along with the Big 12, the Pac-12 plays nine conference games, and the Big Ten will begin playing nine in 2016. Currently, FBS programs play 12 regular season games, including conference games. So, playing more conference games limits the amount of out-of-conference games a team can play.

In the past few months, the Big Ten has stated that it intends for its programs to cease playing FCS opponents. FCS schools give out fewer scholarships to players than those in the FBS, and are consequently deemed inferior competition. In turn, playing FCS schools hurts Big Ten programs' strength of schedule rating.

In antitrust law, a group boycott is a concerted refusal to deal among competitors. Here, the Big Ten has flatly stated that it intends to refuse to play FCS schools. A huge portion of yearly football revenue for FCS schools comes from playing major conference FBS schools, like those in the Big Ten. So, if Big Ten schools no longer play FCS schools, it will inhibit FCS schools' ability to compete.

Other teams and conferences have hinted at the notion of refusing to play FCS schools. University of Alabama head coach, Nick Saban, recently stated that he would like the five major conferences within the FBS to only play each other. This would mean that not only are FCS schools cut off from major college football, but FBS schools not in those five major conferences are as well.

Without more, this would be the definition of a classic group boycott: concerted action among major conference schools in refusing to play other Division I competitors. This is a very similar situation to what was criticized with the Bowl Championship Series (BCS). With the BCS, the criticism was that smaller conferences did not have access to lucrative BCS bowl games. Here, the same criticism could be leveled, because the smaller conference schools would not be able to access the lucrative four-team playoff.

The legality of the exclusive scheduling model (excluding smaller FBS and FCS schools) ultimately depends on the definition of the relevant market. If the market is defined as all Division I football programs, then the exclusive scheduling model is probably illegal because all Division I football programs are "competitors" of each other. Accordingly, agreeing with other conferences to cut off competitors is an illegal group boycott.

If the market is defined as all FBS programs, then the scheduling model may be illegal, because all FBS schools, including those in smaller conferences, are "competitors" of each other. If the market is defined as only major conference FBS programs, then the scheduling model is probably legal, because only the major conference programs are "competitors" of each other, and there is a corresponding justification for treating smaller FBS and FCS programs differently. If this issue becomes disputed in the future, the crux of the legal battle will concern how the relevant market is defined.

A new antitrust challenge to professional medical boards.

This is a new antitrust lawsuit challenging the ongoing education requirements of professional boards. This one involves medical board recertification. In the suit, the plaintiffs allege that the defendant forces physicians to spend a lot of money to comply with a recertification program without a sufficient procompetitive justification. In fact, the plaintiffs allege that the defendant exacts the heavy costs in order to make money.

The plaintiffs are the Association of American Physicians & Surgeons. The defendant is the American Board of Medical Specialties. Generally, antitrust lawsuits against professional boards fail, because courts let the boards determine their own requirements to maintain the quality of the profession. Given the deference to professional boards in the past, the defendant's conduct here will not be per se illegal. If the plaintiffs were to ultimately win, it would have to be under a full rule of reason analysis, because the presumption is that ongoing education requirements by professional boards is permissible.

Between per se illegality and the rule of reason, there exists a middle-ground known as the "quick-look" doctrine. Under the quick-look doctrine, the court engages in a more thorough analysis than is done with per se illegal conduct, but the court does not conduct a full rule of reason analysis. The court makes presumptions about the anticompetitive nature of the conduct, instead of making the plaintiff prove it. It is unlikely to apply here, because the court will not make a presumption on the anticompetitive nature of the professional board's conduct, given how this conduct has been considered permissible in the past.

Cable TV and bundling channels.

What happened:
A New York cable provider, Cablevision, sued Viacom for antitrust violations in connection with its practice of wholesale bundling, in which it forces cable providers to purchase packaged channels owned by the wholesaler.

How it affects you:
Wholesale and retail bundling of TV channels may both violate antitrust law. Wholesale bundlers sell TV channels to retailers. Retail bundlers sell TV channels to consumers. The current lawsuit focuses on wholesale bundling, but could have implications for retail bundling, including eventually allowing consumers to select the channels they want. All readers of this blog who have cable service inevitably have access to cable channels they never watch. This is retail bundling, and there are two primary ways retailers bundle their channels. Sometimes it is done by genre of channel. For example, there are sports packages that include ESPN, FOX sports and CBS sports channels. Sometimes channels are bundled by wholesale company. For example, Viacom owns Comedy Central and MTV, and those are often packaged together.

In both wholesale and retail bundling, consumers are forced to buy channels they do not want. More investigation is needed to ultimately determine whether the practice violates antitrust law. Bundling entails the provision of more than one item or service to a customer as a package, in which the purchase of one item is conditioned on the purchase of the other or others. The practice is inherently suspect for two primary reasons. First, it requires the customer to purchase one or more items or services they do not want or need. Second, it creates a situation in which predatory pricing may arise. If there are multiple items or services, the bundler can offer discounts on the product with high demand, and then spread the cost of that item or service over the remaining bundled items.

In the cable TV context, there is no current indication of predatory pricing, because there is no indication that individual channels are being offered at deep discounts but conditioned on the purchase of other higher priced channels. Both wholesale and retail bundling, however, are suspect and worth more investigation. If the procompetitive justification outweighs the anticompetitive effects, then wholesale bundling will not run afoul of antitrust law. If the anticompetitive effects outweigh the procompetitive justification, wholesale bundling will violate antitrust law. We do not have enough information to make a sweeping announcement whether the practice does or does not violate antitrust law. Fortunately, the practice is getting examined. We will have to wait and see about retail bundling.

Price fixing and the Apple e-books litigation.

Apple, Inc. is the only one of six defendants remaining in a price fixing suit alleged by the Department of Justice. All other defendants have settled. The other defendants were book publishers who contracted with Apple when Apple began offering iBooks with the iPad, to compete with Amazon's Kindle. Before the introduction of the iPad, the publishers provided their books to Amazon, and Amazon would then sell the e-books for $9.99. Foer and Patterson, American Antitrust Institute, E-books and Amazon, http://antitrustinstitute.org/~antitrust/sites/default/files/Ebooks%20and%20Amazon.pdf (last visited February 20, 2013). Apple alleges that Amazon's $9.99 price was predatory, but Amazon is not a party to the case. Amazon might be investigated for predatory pricing, but I have seen nothing authoritative substantiating the proposition that Amazon will be investigated -- only that they should be. Id.

The $9.99 price at which Amazon sold e-books prevented competitors from entering the market, and Apple contracted with the other defendants to allegedly fix prices in order to force Amazon to raise its price. The publishers threatened to withhold well over half of their fiction titles from Amazon in order to coerce Amazon to raise its prices. Eventually, Amazon agreed to adopt the publishers' price structure. Id. Consumers were harmed, because the prices of e-books rose.

It will be interesting to see how the case is resolved. The trial is scheduled for June 5, 2013. Apple is a corporate giant. Many companies do not have the resources that Apple has in fighting the government in an antitrust suit.

Courts take several steps in conducting a price fixing analysis. First, the court asks whether alleged price fixing is illegal on its face. If it is, the case is over and the defendant loses. If it is not, the second step is for the plaintiff to show the anticompetitive effects of the arrangement. "Anticompetitive effects" are the bad things that happen in the market as a result of the putative price fixer's conduct.

The third step is for the defendant to provide a plausible procompetitive justification. A "procompetitive justification" is when conduct literally constituting price fixing has a good reason for the restriction. The good reason for the restriction must benefit competition and the market.

If the defendant cannot provide a plausible procompetitive justification, the case is over after the second step. If the defendant can provide a plausible procompetitive justification, the fourth step is to check whether a very obvious less anticompetitive alternative exists. If there is, the defendant will be required to provide a very good explanation as to why it did not adopt the obvious less anticompetitive alternative. If the defendant provides a good explanation as to why it did not adopt the less anticompetitive alternative, the final step is a "Rule of Reason" balancing analysis.

The fact-finder, which is usually the jury, typically decides the outcome in a Rule of Reason analysis. It is a balancing of the anticompetitive effects and procompetitive justification. If the anticompetitive effects outweigh the procompetitive justification, the plaintiff wins. If the procompetitive justification outweighs the anticompetitive effects, the defendant wins. In antitrust law, Rule of Reason balancing is something of a "no holds barred" inquiry. There is no roadmap or set of factors that a court consults to determine whether the procompetitive justification outweighs the anticompetitive effects, or whether the anticompetitive effects outweigh the procompetitive justification.

Price fixing requires concerted action. Obviously, Amazon "fixed" its $9.99 price. Since it was a single company, Amazon cannot be guilty of price fixing. When Apple entered the e-books market, Amazon reportedly had about a 90 percent market share. Predatory pricing occurs if the prices complained of are below a measure of a rivals' costs, and the alleged predator had a reasonable probability of recouping its investment from below-market pricing. If a defendant prices its goods at or below its average variable cost, there is a very heavy burden on the defendant to show that their prices are not predatory. To have a reasonable probability of recouping one's investment, the defendant practically has to have monopoly power.

With a 90 percent market share, id., Amazon certainly had monopoly power when Apple entered the e-books market with the iPad. If Amazon engaged in predatory pricing, consumers would have been harmed, because the predator has to eventually raise prices in order to recoup its investment. Since Amazon is not a party to the suit, we do not know whether Amazon is in fact engaging in predatory pricing. Those are just the allegations.

When Apple and the other publishers coerced Amazon to adopt their pricing structure, the price of e-books rose, harming consumers. If the Department of Justice wins the case, which is probable, Apple's ability to compete in the e-books market is diminished. This would essentially give monopoly power back to Amazon, which could harm consumers again if it engages in predatory pricing.

The case has not been tried yet, so we do not how many steps the court will need to dispose of the case. The biggest question is whether Apple's conduct will get Rule of Reason treatment, or whether the government will win after Apple's asserted procompetitive justification regarding Amazon's conduct. I would be surprised if Apple ends up winning. If they do, it will certainly be in a Rule of Reason analysis.

Collegiate conference realignment and a horizontal restraint of trade.

In a previous post, I defined a horizontal restraint of trade as "concerted anticompetitive conduct by competitors in the distribution chain in order to eliminate, lessen, prevent or foreclose competition from another competitor or competitors." The definition is apt in the context of collegiate conference realignment. Recently, member institutions have been granting their media rights to the conferences with which they are affiliated, which may be such a horizontal restraint.

A grant of media rights is when a conference member agrees that all of its television revenue will go to the conference with which it is currently affiliated for X number of years. This holds true even if that school is no longer a member of the conference when the period expires. Effectively, the grant makes it cost-prohibitive for a school to change conferences during the grant period, because the school would forfeit all of its television revenue to its former conference for the remainder of the grant.

Grants were originally implemented to stabilize conference membership. They have done so. At its simplest, an antitrust violation occurs if the anticompetitive effects of conduct outweigh any plausible procompetitive justification. Some conduct is so anticompetitive that there is no need to weigh the conduct against the procompetitive justification. So, the procompetitive justification of stabilizing conference membership would be weighed against the anticompetitive effects.

A grant of rights is anticompetitive conduct, because it prevents a school from freely changing its conference affiliation to make the most money. The conduct is by competitors, because the conferences are in competition with each other, and the schools are in competition with each other. Finally, the goal of the conduct is to lessen competition among competitors. Thus, a horizontal restraint is effected.

Whether a grant of rights is ultimately enforceable depends on how any procompetitive justification would be weighed against any anticompetitive effects, assuming the grant is not per se illegal. If the procompetitive justification of conference stability outweighs the anticompetitive effects of a grant of rights, the grant would be enforceable. If not, the grant would be unenforceable. It is also likely that the conference in question would argue for some kind of collective bargaining exemption, as is done with the statutory and nonstatutory labor exemptions.

We may never see this in court, because a school would need to challenge the grant of rights in the first place. It would be a risky proposition, given the consequences of losing in court. If we see such a challenge at all, it would be near the expiration of the grant period, because less money would be at risk.

Pennsylvania governor's antitrust lawsuit is without merit and illustrates the "antitrust standing" requirement.

Oral argument is set for May 1, 2013, in Pennsylvania governor Tom Corbett's antitrust lawsuit against the NCAA. The oral argument is over a motion to dismiss, filed by the NCAA against the governor's claim. Corbett is seeking to overturn and remove the penalties levied against Penn State University in connection with the Jerry Sandusky sex-abuse scandal. Penn State signed a consent decree with the NCAA, so it is interesting that the governor is bringing suit. Simply put, Corbett's lawsuit has virtually zero chance of success. In fact, I would be surprised if it is not dismissed after May's oral argument.

I discussed antitrust standing in a previous post. It is hard to see how the governor would have standing to bring the suit in the first place. To have standing, the governor must have suffered an antitrust injury due to anticompetitive conduct. The state must have suffered the type of injury that the antitrust laws were designed to prevent. Corbett argues that the NCAA's penalties against Penn State are anticompetitive. For a multitude of reasons, Corbett's argument has no merit.

For one, the antitrust laws protect competition, not competitors. In the context of collegiate athletics, Penn State is a "competitor." Harming Penn State does not harm other schools. Second, Penn State would seemingly have to bring the lawsuit, not the governor. Even though Penn State is a state-funded institution, it is hard to fathom how the governor is harmed by the penalties that must be paid by the athletic department. Third, consent decrees are valid and enforceable in court. Fourth, the NCAA is a single-entity that promulgates rules for effective competition. In order for an antitrust violation here, concerted action would be needed. "Concerted action" requires multiple entities. So, it would have to be other schools that made the decision to penalize Penn State, which is not true. The NCAA levied the penalties against Penn State. The NCAA is pretty clearly a separate entity from the schools that comprise its membership.

This would not be the first time the governor has been opportunistic. Eight days before Jerry Sandusky was indicted, he and his staff rented hotel rooms in State College, so he could be front-and-center when the Sandusky story broke. So, bringing a lawsuit without merit is about par for the course for him.

Recent U.S. Supreme Court case has implications for NCAA student-athlete likeness antitrust litigation.

In a recent case, the U.S. Supreme Court made it more difficult for the student-athletes in the NCAA student-athlete antitrust litigation to obtain class certification. In an earlier post, I discussed the requirements for a class action.

The Comcast ruling means that the student-athletes in the NCAA case will need to be able to prove damages with specificity; not necessarily at the class certification stage, but later. It just needs to be shown at the class certification stage that damages are ascertainable. Comcast poses a problem, because the proposed subclasses in the NCAA case (current and former basketball and football players) contain players of vastly different talents and potential licensing values. Since some of the players' licensing values are so disparate from others, it might preclude class certification because of the difficulty or impossibility of proving damages.