The Decision Before The Judge

This coming Monday (April 7), the eyes and attention of every college athletics administrator, journalist, scholar, and even nerdy fans will be fixated on one event. It is not the aftermath of the women’s basketball tournament championship game, nor is it the men’s tournament championship game Monday night. While these are marquee events with major brands and star players, their impact on the future of college athletics pales in comparison to what will occur in a Federal District Courthouse at 1 pm Eastern Time on Monday.

This is the setting for the final approval hearing for a legal settlement agreement, colloquially known as The House Settlement, regarding three separate antitrust lawsuits filed against the NCAA and the wealthiest athletic conferences, which were known at the time of the filing as “The Power 5.” This series will prepare readers for the hearing on Monday. Part I explained the background of the House case and how we got here. Part II analyzed the proposed NCAA rule changes contained in the House settlement. Part III (this article) discusses the hearing and its potential outcomes.

What Is The House Case?

House v NCAA is a class action lawsuit against the NCAA and the Power 5 Conferences by Arizona State swimmer Grant House and Oregon (now TCU) basketball player Sedona Prince on behalf of a class of over 10,000 athletes who played NCAA Division-I sports from 2016 onward. The lawsuit alleges that the NCAA’s amateurism rules regarding athlete compensation, particularly their prohibitions on NIL activities prior to 2021, are an illegal restraint of trade in violation of antitrust laws.

Last May, the NCAA and the plaintiffs’ counsel agreed upon settlement terms that included $2.6 billion in “NIL backpay” and injunctive relief (a legal term for protection from future lawsuits) as they attempt to institute and enforce new rules that significantly change the landscape of college athletics.

What Is The Purpose Of The Hearing?

Class action lawsuits are significantly more complicated than a typical civil lawsuit, and that’s particularly true as it pertains to a potential settlement agreement. In class action lawsuits, a few “named plaintiffs” (in this case, Arizona State swimmer Grant House) bring a lawsuit on behalf of themselves and others (the class) who have been similarly wronged by the alleged conduct of the defendant. Class action lawsuits are commonly seen in consumer issues like products liability or false advertising. Settlement agreements are complicated because not all class members are directly represented by the plaintiffs’ counsel. For example, the co-lead attorneys for the plaintiffs in this case are Jeffrey Kessler and Steve Berman. They are negotiating this settlement on behalf of thousands of athletes and trying to best represent their collective interests, but it is entirely infeasible for Kessler and Berman to speak with and understand the needs of all people who are impacted by the class.

In that light, Judges presiding over class action matters must take special care to ensure the settlement is fair to the class members. There has been a litany of formal objections to the terms of the settlement filed by members of both the damages class (mostly former athletes) and the injunctive relief class (mostly current and future athletes). This hearing will give those objectors an opportunity to appear before U.S. District Judge Claudia Wilken and discuss their issues. Kessler and Berman will be in attendance, as will an attorney for the defendants (the NCAA and Power 5 conferences).

Ultimately, Judge Wilken will weigh the arguments from all parties to determine whether she should approve the settlement. It’s worth noting that the standard for the settlement to be approved is not that it must solve all issues raised in the case (which this settlement certainly falls short of). Judge Wilken must only determine whether the settlement is fair, reasonable, and adequate to all concerned. As the objections illustrate, there is an honest argument to be had as to whether this settlement meets that standard.

Issues Raised In The Objection

According to Sam Ehrlich’s College Sports Litigation tracker, 16 formal objections have been filed. Most of these objections have been filed on behalf of several parties, some of whom prefer to remain anonymous. Four of the objections were filed without the assistance of counsel by a high school senior who intends to compete in Division I track and cross country, a current NCAA swimmer, LSU gymnast and NIL superstar Livvy Dunne, and former University of Washington/Seattle Seahawk linebacker Ben Burr-Kirven.

The objections raise issues with nearly every major aspect of the settlement, including the revenue-sharing limit, gender equity and Title IX concerns, roster limits, and the calculation of damages paid to former athletes. All of these issues have been raised and considered previously by Judge Wilken, who initially declined to grant the settlement preliminary approval, but later did so after the two parties made some minor changes. Little has changed in the meantime on the issues of the revenue-sharing cap and gender equity concerns, and it seems unlikely that either of those issues will hold up the settlement. However, the objections regarding the back damages calculations and particularly the roster limits could plausibly sway Judge Wilken.

Both Livvy Dunne and Ben Burr-Kirven’s objections focus on the calculation of back damages owed to athletes from the pre-NIL era. Burr-Kirven points to specific examples of players who had fewer accolades and played in fewer games than he did, yet their payments would far exceed his. Dunne’s objection raises issues with the lack of transparency in the calculations, a lack of full explanation of the legal fees contained in the settlement, and even some technical issues with the website where athletes process their claims. The settlement’s back damages portion is its most straightforward component. If it’s shown that the two parties didn’t get this part right, it could raise some concern for the judge.

Perhaps the most poignant issue discussed at the hearing is the implementation of roster limits. While they have always been part of the settlement and did not appear to be a point of much contention at the preliminary approval stage, as coaches have prepared to implement these roster limits, several athletes have been losing roster spots, and in some cases, scholarships. This issue has come to light in some of the objections and has been making news recently. Even some coaches have been publicly critical of the roster limits with Kansas State head football coach Chris Klieman, calling the college sports industry a disaster and lamenting the forced removal of students from his team.

Will Judge Wilken Grant Approval?

The likelihood of a decision being issued on Monday appears slim. Regardless of which way it goes, the ultimate decision will likely be a lengthy document to fully explain and unpack all of the nuances in the settlement. Judge Wilken has shown herself to be a thoughtful jurist, and as this will be the final case of her long career, she will want to do it right. The timeline for a decision is unclear, but the end of the week or early next week is likely the earliest we can expect it. As to what Judge Wilken ultimately decides: attempting a prediction is folly.

Conventional wisdom would suggest that the most likely outcome is approval of the settlement. However, the settlement is far from conventional in several ways. Not the least of which is that the terms of the settlement clearly violate antitrust law, which was the grounds for the lawsuit in the first place. It’s also worth noting that Judge Wilken cannot change the settlement. If, for example, she finds that the roster limits render the settlement unfair, she cannot simply remove those and approve the rest of the settlement. Her only options are to approve or not. In the event she does not approve, she can, and almost certainly will, make suggestions as to changes in the settlement that would receive her approval. The one near certainty: regardless of Judge Wilken’s decision, it will be appealed to the 9th Circuit.

So, while Monday’s hearing offers plenty of intrigue and may even be a significant inflection point in the future of college sports, the issues will be far from settled. Even if the settlement is approved and ultimately goes into effect next year, there are still several issues to sort out, and numerous lawsuits will continue to be filed. While it is possible the so-called “Wild West era” of the NCAA is coming to an end, the billable hours era will continue for the foreseeable future.