T his op inio n h a s b een circu lated am on g all jud g es of this  co u rt in re g u la r a ct iv e se rv ic e p u rs u a n t to C i r cu it R u le 40 (e). N o j ud ge reques ted t o hear this cas e en banc. The H onorab le Ed m ond E . C hang, J ud ge ofthe Un it ed  Sta tes D istrict Co u r t f or the N or the rn D istrict of Ill ino is, s i t t i ng by des i gna t i on. 

## In the 

# U n ited S ta tes Co urt o f Ap p ea ls

F o rth eS e v e n th C ir cu it
N o. 11

- 3066 J OS EP H A GNEW, et al., P la intif fs-A pp ella nts, v. N ATI ONA L C OLLEGI ATE A T HL ET I C A S S OC I A T I ON, D efend a nt-A pp ellee.

A pp eal from the United S t ates Di strictC our t fo r the S outhernDi stricto f Indian a, Indian apolisDiv isi on. No . 1:11- cv-00293

—Jan e E . M agnu s- Sti ns on, Judge .
A RGUED J AN UA RY 9, 2012

— D ECI DE D J UNE 18, 2012 

B efore F L A U M a nd K ANN E , C ircu it Judges , a nd C HAN G , D i s t r i ctJudg e . 2 N o. 11

- 3066

On Febr uar y 1 7, 20 12 , a ne w N CAA r eg ul at i on per m i t t i ng 1 m u lti -y ea r sc h o la rs h ip s b ec a m e fin a l. S ee St eve W i ebe rg, M u ltiy ea r S ch o larsh ip R u le Nar ro w ly S u rv ives O v errid e Vote , U SA T ODAY( F e b
. 1 7, 2 0 1 2 , 7 : 0 0 p . m . ) , h t t p : //w w w . u s a t o d a y . c o m/ sp or t s/ c o l l e g e /s t o r y /2 0 1 2 -0 2 -1 7/m u l t i y e a r -s c h o l a rship s-su rv iv esc l os e- vot e/53 13 71 94 / 1. Si nc e pl ai nt i ff s s ee k dam age s f or pr i or act ions taken by the N CA A an d it s m em ber schools , the repeal ofthe m ulti -year s cholar shi p p rohibit ion does notrender thi s cas e nonj usti ci able. F LA UM, Cir cu i tJudg e . J ose ph A gnew and Patr i ck C ou r tn ey (“p lain tiffs ”) h av e a t le as t t w o t h in gs in com m on: theywere both hi ghl y s uccess ful hi gh sc hool f oo tbal l pl aye rs thatea rned schol ar shi ps to pl ay f or N ati onalCol l egi ate A thl eti c Associ ati on ( “N CA A ”) D ivi si o n Ifo o tb allprogram s, an d they both suffered careeren di ngf o o tb al l i njuri es dur i ngthe i r c o l l eg e te nur es . The at h let ic s c h ola rs h ip s h eld by p lain tiffs atth e t im e o f th eir i nj uri es w er e g oo d fo r one yea r on ly, a nd needed to be re new ed to be val i d fo r any s ubsequent s eas ons. W hen p lain tiffs ’ i nj u rie s p re ve n te d th em from p lay in g foo tb all, th eir sc h ola r s h i p s w er e n otren ew ed . Pla in tiffs cla im th attw o NCA A re g ul at i o ns

— the c ap on the num ber ofschol ar shi ps gi ven perte am and the prohibi ti on o f mul t i
- y e a r s c ho l a r s hi ps

— pr ev ented them fro m o b- 1 ta in in g s c h ola rs h i p s t h at co ve re d th e e n tir e c os t o f th eir coll eg e edu ca ti o n. The se r egul at i o ns , a cc o r di ngt o pl ainti ff s, have an a nti com pe titi ve effect on the m ar ketf or student

- a thl e t e s , a nd the r e f o r e v i o l a t e § 1 o fthe S he r man Act. 1 5 U. S
. C. § 1
. The NCA A fi l ed a m o ti o n to di smi ss a nd th e di st r i ct co ur t g r an te d th at m o ti o n, fi ndi ng th at p l ainti ff s f ai l ed to a l l eg e a r el ev an t m ar k eto n whi chtheN o. 11

- 3066 3 N C A A ’s Bylaw s had an an ticom p etitive effect. Plaintiff s appeal ed the dism i ssa l
. W hi l e we depart f ro m so m e o f the di s t r i c tco ur t ’ s r e a s o ning, we u l t i mat e l y c o nc l ud e that pla i nti ff s’ co m pla i nt di d not su ffi ci entl y i denti fy a com m er ci alm ar ket

— an o bvi ous ne cess i ty f orS h er m an Act vi o l at i o ns

— an d thu s w e affirm the d istri ct cou rt’s dism i ssa l o fpl ai nti ff s’ sui t.
I . B a c kg r o und I n 200 6, a fte r re cei vi ng se ver alo ffer s fro m a num ber o f c o ll ege football team s, A gn ew enrolled at R ice U niversi tyo n a n a th l etic s cho l ar sh i p. I n e xc ha ng e f o r a g r ee i ng to pla y foo tbal l atRi ce, A gnew r ec ei ved a yea r ofeducatio n, room , an d bo ar d atn o c h ar ge . Th at sc h ola rs h ip w as re n ew ed for A gn ew ’s sec on d ye ar atR ice . D u rin g h is so p h om or e y ea r, A gn ew su ffer ed a se rie s o f footb allr el at ed i nj uri es . The i nj ur i es , a l o ngwi tha c o ac hi ng change at Ric e, r esul ted in the sc hool ’ s deci si on notto re ne w Ag ne w’ s s c ho l a r s hi p f o r h i s j un i o r y e a r . Ag ne w su cc es sful l y a ppea l ed th i s dec i si o n a nd r ec ei ve d o ne m or e y ear - l ong schol ar shi p, but he wa s unabl e t o acqui re a schol ar shi p f orhi s s eni orye ar . A s a r esul t, h e w as f or ced to pay fullpri ce forthe l astye aro fhis unde r g r adua te e duca ti o n. Courtneyend u red a si m i l arexper i ence. I n 200 9, C ou rt n ey d ec id ed to at te n d N or th C ar olin a A & T on fu ll athl eti c scho l ar sh i p t o pl ayf o o tb al l
. As wi thAgne w, the s c h o l a r s h i p w a s o n l y a y e a r l o n g . D ur i ng t r a i n i n gc a mp C ou r t n e y w as inju re d , an d as a re su lt, h is s c h ola rs h ip w as not re new ed. Due to hi s fi nanci alci rcum sta nces and the hi gh cost of out- of

- sta te tui ti on, Courtney4 N o. 11

- 3066

w as f or ced to tr ansferto a differ ent s chooland pay tui ti on o ut- of

- pocket
. Plaintiff s alle ge th at th eir fai lure to acq uire a sch olarsh ip eq ua l to the full cost of obta in ing a bach elor’ s d egree i s the result of th e N C A A ’s regulation of p artic ip at in g s c h oo ls’ a th let ic s c h ola rs h ip s. P lain tiffs sp ec ifica ll y ci te t wo NCA A by l aws ( th e “By l aws ”) a s th e sour ce o fthei r i nj ury: ( 1) the one- yea r schol ar shi p l i m i t, whi chpr o hibi ts NCA A m embe r s ch o o l s f r om o ffer i ng s t ud e nt
- a thl e t e s mul t i
- y e a r s c ho l a r s hi ps , 2 0 0 9
- 10 NC AA D I VI S I ON I M ANU AL, Byl aw 15
. 3. 3.1 ( 20 09
- 10 ) ; a nd ( 2) the cap on the num b er o f athle ti c sc hol ar shi ps a s chool c an offe r for ea c h te am in a giv en ye ar , see, e.g., 2009
- 10 NC AA D I VI S I ON I M ANU AL, Byl aw 15
. 5. 4. A ccor ding to p lain tiffs , N C A A m em b er sc h oo ls c om p et e in te n se ly ov er t h e p r e m ier st u d en t-a th let es in t h e c ou n tr y, an d if the Byl aw s had notbeen passe d, schoo l s would nee d to o ffermul ti
- y ea r s ch o l ar sh i ps to s ta y c om pet i ti ve i n the m ar ketf orel i te athl ete s. They as ser t that m ult i
- yea r s c h o l a r s h i p s u s e d t o b e th e n o r m bef o r e th e B y l a ws w ent into effect. The c urr ent b an o n such scho l ar shi ps, they cl ai m , f or ces student- athl et es w ho do no t hav e th eir sch olarship s renew ed to pay m ore fortheir un d erg r adua te e duca ti o n. Pl aint i ff s fur th erc o nt en d tha t th e l i m i to n the n umb e r o fa thl e t i c s c ho l a r s hi ps a s c ho o l c an o ffe r reduce s the t o t a l n umb e r o fa thl e t i c s c ho l a r s hi ps offer ed, thus pr eve nti ng so m e s tudents

— pe r ha ps those th at ar e i nju r ed bu t w ou ld h av e b ee n offe re d a m u ltiy e a r s c h o l a r s h i p b u tf o r th e B y l a ws

— f r o m o bta i ni ng a ba r g aine d f o r e duca ti o n. Pl aint i ff s th er efo r e m aintai n that the Byl aw s vi ol ate § 1 of the Sher m an A ct. 15 U
. S. C. § 1
.N o. 11

- 3066 5

A gnew ori ginall y fil ed the l aw sui t as a c las s act io n, but had 2 not fil ed a m oti on to c ert ify a cl ass at the ti m e ofthe dism issal ofth e cl a im s at i ss ue. Thu s, w hen plaint iff s’ cl aim s w ere dism is se d, the ent ir e l aw sui t was dis m is se d, s ince the re were no other parti es w ith le gally p ro tec ted i nter es ts i n the li ti gat i o n . SeeWi es m uel l erv. K os obucki, 5 1 3 F
. 3 d 7 8 4 , 7 8 6 ( 7 th Ci r. 2 0 0 8 ). On Oc tobe r 2 5, 2 01 0, pl ai nt i ff s fi l ed su i t ag ains t th e N CA A i n the Uni te d S ta te s Distri ct Cou r t f o r the No r th e r n D i st r i c to fC a l i f o r n i a . I n r e s p o n s e , th e NC AA 2 filed a m ot ion to d ism iss an d a m ot ion to tra n sfe r sim u lt a n e o u s l y . T h e mo t i o n t o d i s mi s s wa s fu l l y b r i e fe d, b ut in Fe b ru ar y 2 01 1, th e N or th er n D i s t r i c t o f C alifo rn ia dec i ded no t to r ul e o n the mot i o n a nd t o t r an sferthe case to the So uthern Dist ri ct o fI nd i ana. The part i es set a s chedule f orrebr i efi ng appl yi ng S eve nth Cir cui t ca se law , and before th e b rief s w ere su bm itted , plaintiff s fi l ed an am ended com pla i nt. The co m pla i nt al l ege d that th e B yla w s re su lte d in a h or izo n ta l ag r e e m e n t t o fix pri ces and reduce o utput, wh i ch cause d a r educti on o f th e s u p p ly of b ac h e lor’ s d eg re es an d an inc re as e in the pr i ce forbac helor’s degre es f ortho se that did not ha v e the i r s c ho l a r s hi ps r e ne we d. I n i ts mot i o n t o d is m i ss , the NCA A ar g ue d tha t pl ainti ff s’ co m pla i nt s h ou l d be di sm i sse d fo r thre e r eas ons: ( 1) i t f ai l ed to i denti fy a re l evant m ar ket, a neces sit y fo r a va l i d Sher m an A c t c laim ; ( 2) i t f ai l ed to al l ege f acts su fficie n t t o s h ow t h a t th e N C A A inju re d co m p et itio n in a r el ev an t m ar k et; a nd ( 3) i t f ai l ed to a l l eg e f ac ts s uffi ci en t to s ho w a n i nj ur y a s a r e s ul t o f a nt i c o mpe t i t i v e act s co m m i tt ed bythe NCA A. On S ept embe r 1, 2 01 1, the6 N o. 11

- 3066 dist ri ct c ourtgr anted t he N CA A ’ s m oti on t o dism i ss. T h e c ou rthel d that pl ai nti ff s f ai l ed to i denti fy a cogni zabl e m ar keti n w hi ch tra d e w as i m proper l y r estr ai ned, and that eve n i fpl ai nti ff s d id a d equatel y a l l ege that ther e i s a pro du ct m ar ketf orbac hel or ’ s d eg re es o r a l aborm ar ketf orstu d en t- athl ete s

— as pl aint i ff s co nte nde d dur i ngo r ala r g um ent

— thos e m ar ket s a re not co g n i z a b l e i n th e c o n t e x t o f th e S h e r ma n Ac t . S i n c e t he N CA A’s fi r sta r g um en t was s uffic i en t to di smi ss pl ainti ff s’ c laim s, the c ourtdi d not pass o n the N CA A ’ s o ther ar g um en ts . The di st r i ct co ur t al so he l d tha t pl aint i ff s ’ c l a i ms wo u l d be d i s mi s s e d wi th p r ej u d i c e f o r t wo re aso ns. Fi rs t, pl ai nti ff s a l re ady had the opportunit y to am en d their com p lai nt a fter be ing ex p osed to th e N C A A ’s ar gum ents i n the N or ther n D ist ri ct o fCal i f or ni a, and ye t they chose notto cl ear l y i denti fy a r el evantco m m er ci al m ar ke t. Se c on d , pla in tiffs d id n otsh ow h ow th ey co u ld al te r the i r c o m pl aintt o make i t su ffi ci en t sinc e, a cc o r di ng to th e d i s t r i c tc o u r t, th e ma r k e t s d i s c u s s e d a to r a l a r g um en t are not cogn izable un d er the Sherm an A ct. Plai nt iffs have appeal ed the dist ri ct c ourt ’ s deci si on t o dism i ss i ts cl ai m s a s wel l as i ts deci si on t o dism i ss w i th prej ud i ce.
I I . Discussi on P lain tiffs ’ su it w as br ou gh t p u rs u an t t o s ta tu to ry p ro visi ons f ound in the S herm an A ct a nd the Clay ton A ct. U nd er § 1 of the Sher m an A ct, “[ e] ver y c ontr act, co m bi natio n in t h e fo rm of tr u st or ot h er w ise , or co n sp ira c y, in re st rai nt o ftr ade orco m m er ce . . . i s decl ar ed to be i l l eg a l .” 1 5 U .S.C . § 1. P lain tiffs ’ civ il ca u se of ac tio n is ro ote d i n the Clay ton A c t, w hi ch st ate s that “ any per sonN o. 11

- 3066 7

w ho s hal l be i nj ured i n h is b usi ness orpro pertyby re aso n ofanythi ng f orbi dd en i n the anti tr ust law s m ay sue . . . and shal l rec ov er thr eef ol d the dam age s by hi m s us ta i ne d. ” 15 U. S
. C. § 1 5. Pl aint i ff s al l eg e th atthe Byl aw s a re a re str ai nt o n tr ade i n the l aborm ar ket f or stu d en t-ath letes and the p rod uc t m arket for bach elor’ s degre es, and thus vi ol ate d plaint iffs’ s tatutor y r i ghts unde r th e S he r m an Act. The N CA A c o nt en ds th at p l ainti ff s’ c o m pl aint d id no t i den ti fy a ny mar k et, i nc l udi ng a ba ch el o r ’ s deg r ee or l ab o r mar k et, i n whi chthe Byl aw s r est ra i ned tr ade. The N CA A further a rg u es that eve n i fpl ai nti ff s’ co m pla i nt di d suffici entl y i denti fy a product m ar ketf orbac hel or ’ s degr ees ora l aborm ar ket f o r st u d en t-a th let es , th os e m ar ke ts are n otco m m er c ial, and ther ef or e a re not c ogniz abl e under the S herm an A ct. I fthi s i s t rue, t h en any N CA A act i ons affecting tho se m ar kets

— to the e xtent that they a re m ar ket s

— a r e not subj ect to anti tr ust l aw s. I n re vi ew i ng the suffi ci ency ofa com pla i nt, we m ust ac c ep t a ll w ell p led fac ts as t r u e a n d d ra w all p er m iss ible in fer en c es in fa v o r o ft h e p lain tiff. Act i veD i s pos al, Inc . v. C ityof D a rien , 6 35 F
. 3d 88 3, 8 86 ( 7th Ci r . 2 01 1)
. The Feder alRule s o fCi vi l Pro cedure re quir e o nl y that a com pla i nt pro vi de the defe nd an t with “f ai r noti ce o f w h at th e . . . claim is an d th e g ro u n d s u p on w h i c h it re sts . ” Eri cks on v. Par dus , 5 51 U. S
. 8 9, 93 (200 7) ( quo ting B el l Atlanti c Corp. v. Tw om bly, 550 U
. S. 54 4 , 5 5 5 (2007)). W e hav e e xplai ned, however, thata com pla i nt m ay be “s o s k et ch y tha t th e compl aintdo es no t pr o vi de th e ty p e o fn o t i c e of th e c laim to w h ich th e d efe n d an t is en tit led u n d er [th e F ed er al R u les of C ivil P ro c ed u re ],” in8 N o. 11

- 3066

w hich case a d ism issal of the c o m p laint i s p rop er. Air b or neBe epe rs & Vi de o, Inc . v. AT& T M ob i l i ty L LC, 499 F. 3d 663, 66 7 ( 7th Ci r. 2 00 7). The Suprem e Cour t has described thi s no ti ce- ple adingst and ard as r equi ring a com pla i nt to “co ntai n suffi ci ent f actual m att er, ac c epted as tr ue, to ‘ sta te a cl ai m to r el i efthati s pl ausibl e o n i ts f ace. ’ ” Ash crof

tv. Iq b al , 12 9 S
. Ct. 1937, 19 49 ( 2009 ) ( quoti ng Tw om bly, 55 0 U.S
. at57 0)
. W hi le fac tualal l ega tions m ust be acc epted as tr ue, l ega l co ncl usi ons m ay n otbe co n sid er ed
. Id. Dism issal s under Rule 12(b) ( 6) ar e quest i ons ofl aw , a n d thus ar e r evi ew ed de novo
. A utry v. Nw . P rem ium Servs., Inc., 14 4 F
. 3d 1037, 10 39 ( 7th C ir. 19 98)
. A di str i ct c ourt ’ s deci si on t o dism i ss a com pla i nt with prej u d i ce i s r evi ew ed f orabuse o fdi scr etio n . Sta na rd v . Nyg ren , 658 F.3d 792 , 797 (7th C ir. 2011).
A . S h erm an A c t F ram ew ork T he pu rp ose of the She rm an A ct i s to p rotect con su m ers f r o m i nj ur y tha t r es ul ts fr o m di m i ni sh ed co m pet i ti o n. Ban ks v . NCAA , 97 7 F. 2d 1081 , 1087 (7 th Ci r. 19 92)
. “Thus, th e plaintiffm us t all ege, not only an inj ury to h im self, but an i nj ury to the m ar ketas well
. ” Car Carr i e rs, Inc . v. For d M ot orCo. , 74 5 F. 2 d 1 1 0 1 , 1 1 0 7( 7 th Ci r . 1 9 8 4 )
. Ac c o r di ngl y, a pla i nti ffm ust pro ve th re e el em ents to succee d unde r § 1 o fthe S he r m anAct : “ ( 1) a c o nt r ac t, c o m bina ti o n, orco nspir acy ; (2 ) a re sul tant unreas onabl e r est ra i nt o f tr ade i n [ a] r el ev an t m ar k et; a nd ( 3) a n a cc o m p an yi ng i nj ury. ” D enn y ’s M arina, Inc. v. Renfro P rods. , Inc. , 8 F. 3d 12 17, 1 2 2 0 (7 th C ir. 19 93 ). Th er e is n o q u es tio n th at all N CA A m embe r s ch oo l s ha ve a g r ee d t o abi de bytheN o. 11

- 3066 9 Byl aw s; the fi rs t s how in g of an ag re em ent o r contr act i s there f or e no t a t i ssue i n thi s ca se. T h e d i s t r i c tc o u r t ’ s di s mi s s a l o fp l a i n t i ff s ’ c l a i ms f o cus ed so l ely o n the s ec o nd ne ce ss ar y s ho wi ng

— w hether th er e ha s be ena n un r ea so nabl e r es tr ainto ft r ade i n a r el ev an t m arket. The c o ur t di d no t ul ti m at ely r ea chthe questi on o fwh etherthe re str ai nts were r eas onabl e, since i t found that pl ai nti ff s did n ot al l ege a re l evantm ar ket on wh i ch a re str ai nt o ftrade coul d oper ate . M ost§ 1 ca ses f ocus not on wh et h er a r el evantm ar ketexi sts , but on th e o th er as pec t o f th e se co nd r equi r ed s ho wi ng

— w hethe r a r e s t r a i nto ft r a de i n a g i v e n mar k e twas ac tu ally u n re as on ab le. W h ile ou r c en tr al d isc u ss ion w ill re vol ve ar ound w hethera re l evantm arketwas

— orev en coul d have be en

— id en tifie d in p lain tiffs ’ co m p l ain t, a bri efexpl anati on o fhow court s det er m i ne i fr est ra i nts ar e unr ea so nabl e wi l l b e he l pfuli n un der st an di ng why pl aint i ff s ar e m i st ak eni n the i r b el i eftha t a r el ev an t m ar ketneed notbe i denti fi ed at al l i n thi s ca se. Si nce the S herm an A ct i s m eant to protec t the be nefi ts o fc o m pet i ti o n, the de te r m inati o n o fwhethe r a r es tr aint i s unre aso nabl e m ust focus on “the co m peti ti ve effects ofchal l enged be havi orr el ati ve to such al ternati ves as i ts ab an d on m en t o r a le ss res tr ict ive su b st itu te .” P h illip A re ed a, Ant i t r us tLa w ¶ 1 500, at36 2-63 (19 86)
. Court s h av e e st ab l i s h ed th re e c at eg or ies of an aly sis

— per se, quick

- l oo k, and Rule o fReas on

— f ordeter m i ni ng wh ether ac ti o ns ha ve a nt i co m pet i ti ve effects, th ou gh t he m e t h o d s o fte n ble n d to ge th er . Ca l
. De n t a l A s s ’ n . v . F TC, 526 U
. S. 75 6, 779 (19 99) ( “The tr uth i s that o ur ca teg or i es10 N o. 11

- 3066 ofanal ysi s o fanti com peti ti ve effect ar e less fixed than ter m s l i ke ‘ per se, ’ ‘ qui ckl ook,’ a nd ‘ Rul e o fRe as o n’ t en d to m ak e t h em ap p e a r .”); s e ea l s o Uni t e d S t at e s v . Brown U ni v. , 5 F
. 3 d 6 5 8 , 6 6 8 ( 3 d C i r . 1 9 9 3 )
. Al l o fthes e me tho ds of a na l y si s ar e m ea ntt o a ns werthe s ame que st i o n:
“ wh e th e r o r n o tth e c h a l l e n g e d r e s t r a i n te n h a n c e s c o mpeti ti on. ” Cal. D e nt al , 52 6 U.S
. at78 0; N C AA v. Bd. of R ege nts , 468 U
. S. 85, 104 (1984 ). T he stan d ard fram ew ork forana lyzin g an ac tion’s an ti co m pet i ti ve e ffec ts o n a mar k eti s th e Rul e o fRe as on. Cf
. Ch i c ag o Pr o

f ’ l Sp o r t s Lt d
. P’s h ip v . NBA , 961 F. 2d 667, 67 3 ( 7th Ci r . 1 99 2)
. Undera Rul e o fRe as o n a na l y si s, the pla i nti ffcar ries th e bur den ofsho w i ng tha t a n agr eem en t o r c o nt r ac t ha s ana nt i co m pet i ti ve e ffec t o n a g i v e n m ar ke t w ith in a giv en ge og ra p h ic a re a. See R eifert v. S. C e nt . Wi s . M LS Corp
. , 450 F. 3d 312, 321 ( 7th Cir. 2006). As a thr es ho l d m at te r, a pl aint i ffm us t sh o w tha t th e defe nd ant has m ar ketpow er

— that i s, the a b i l i ty to ra ise p ric es sign ifica n tly w ith ou t g oin g ou t o f bu siness

— w i thout w hic h t he defendant coul d not ca use an tic om p et itiv e effec ts on m ar ke t p r i c in g. V a lley L iquo rs, Inc . v. R enfie l d Im por t e rs , Lt d. , 822 F.2d 656 , 666 (7th C ir. 19 87 )
. I fthe pl aint i ffmeet s hi s bur den, the de fen dan t can sho w thatthe re str ai nt i n questi on a ctual l y has a proco m peti ti ve effect o n bal ance, wh i l e the pl ai nti ffcan dispute thi s cl ai m o r show that the r est ra i nt i n questi on i s not reas onabl y necess ar y t o achi eve the proco m peti ti ve ob j ec tiv e. A re ed a, Ant i t r us tLa w , ¶150 7b, at 397 (1986). The seco nd fra m ew or k uti l i zed byco urts

— the perse ru le

— i s e m plo yed w hen a “pract i ce f aci al l y a pp ear s t oN o. 11

- 3066 11 be o ne thatwould al w ays o r al m osta lw ays te nd to re str i ct c om peti ti on a nd decr eas e o utput. ” B d. of Regents , 468 U
. S. at10 0 ( quoti ng B road. M usi c, Inc. v. Co lum bia B road. Sys. , Inc. , 44 1 U.S
. 1, 19

- 20 (19 79) )
. Rest ra i nts that wo ul d f a l l u nd e r thi s c a t e g o r y a r e i l l e g a l a s a ma tte r of law for re as on s o f effic ien c y; ines se n c e, it is s im p ly not w or th t h e eff or t o r re sour ces ofa Rule ofReas on anal ysi s when “the Cour t [ can] pre dictwith c onfi dence th at th e R u le of R ea s o n w ill con d em n [a re st ra in t].” Atl . R ich

fie l d Co. v. U SA Pet r ol e um Co. , 49 5 U.S
. 32 8, 34 2 ( 1990 ) ( quoti ng A rizon a v. M arico p a C nty. M ed. Soc’y, 45 7 U .S. 332, 344 ( 1982 ) )
. U nd er the per se f ra m ew ork, a restraint is de em ed u nrea son able w ithou t any i nq uiry i nto the m ar ketco ntext in w hi ch the re strain t o perat es. B d. o f R eg ents , 4 68 U. S
. a t 10 0. Hor i zo nt alpr i ce fi xi ng and output l i m i tat i on a re class ic exam ple s o fbehav i or th at is co n sid er ed an tic om p et itiv e p er se . Id
. The thi rd fra m ew or k i s the “quic k- l oo k” anal ysi s, wh i ch i s us ed wher e t he p er s e f r amewor ki s i na ppr o pr i at e, b ut w here “no el abor ate i nd ustr y a nal ysi s i s req u i re d to dem onst ra te the an tic om peti ti ve chara ctero f
. . . an a g r e e men t, ” a nd p r o o fo fma r k e tp o we r i s n o t r e qu i r e d. B d. of Regents , 468 U .S. at 1 09 ( quoti ng N at ’ l So c’y of P rof ’l E ng ineers v. U n i ted S ta tes , 435 U
. S. 679, 692 (1978 ))
. Put another w ay, the q uic k- l oo k a pp ro ach ca n be us ed w he n “a n obs erver w ith ev e n a rud im en tary u nd ersta nd i ng o feco nom i cs c oul d concl ud e that the ar ra ngem ents i n que stio n w oul d have a n anti com peti ti ve effect o n c us t o mer s a nd ma r ket s, ” Cal. D e nt al , 52 6 U.S
. at77 0, bu t ther e a re nonethel ess r eas ons to exam i ne pote nti al12 N o. 11

- 3066 p ro c om p et itiv e jus tific at i on s. See He rb e r tHo v e nk a mp, Ant i tr us tLa w , ¶ 1 911c, at27 3 ( 1998 )
. A m ong othe r si tuati o ns , the qui ck- look a ppr o ac h i s us ed when a r es tr aint w oul d no rm ally be consi dered i l l ega l perse , but “a c e r t a i n de g r e e o fc o o pe r a t i o n i s n e c e s s a r y i fthe [ product at i ssue] i s t o be pr ese rv ed. ” B d. of Regents , 468 U.S
. at11 7; s e eal s o H ov en ka m p , Antitr us tLa w , ¶ 1911c , at 274 (1998). U nd er thi s approach, i f no l egi ti m ate j usti fi cati on s for f aci al l y a n ti com peti ti ve behavi or( such as pri ce- fi xi ng) ar e f o und, no mar k etpo wera na l y si s i s ne ce ss ar y a nd the c ourt“co nd em ns the prac tic e without a do. ” Chic ago P rof’ l Sports , 961 F.2d at 674
. Bu t ifj us tificat ions are f ound, a fullRule of Reaso n anal ysi s m ay need to ta ke p lac e. C f. Ch ica go P rof

’l Sp o rts Ltd . P ’ship v. N B A , 95 F. 3d 593, 600 (7th C ir. 1996). Plaintiff s con ten d that th e third fram ew ork

— the qui ckl oo k a pp ro ach

— i s th e appr o pr i ate m etho d f o r a na l y zing w hetherthe N CA A ’ s a cti ons have had an anti com peti ti ve e ffe c to n a c o m mer c i a l ma r k e t . T hi s a r g ume ntfi nd s su ppo r t i n B oard of Regents , w he re the Su p re m e C ou rt h eld th at sin c e c olle ge at h let ics is “a n ind u st ry in w hich horizont al r estrictions on com p etition are es senti ali fthe product i s t o be a vai l abl e a t a l l, ” i t is i napp ro pri ate to apply a per se rul e to N C A A regulati o ns , e ve n i fthe y a m o untt o ho r i zo nt alpr i ce fi xi ng an d ou tp u t lim ita tio n . 468 U .S
. at 10 0-0 1; a cco rd Chic ago P rof’ l Sports , 9 61 F
. 2d at 674
. Acco r di ngt o pl aint i ff s, the N CA A ’ s r est ri cti on o n the num bero fscho l ar shi ps a schoo l can provi de i s a cl earl i m i tat i on o n output ( that is, the n um ber of scholarsh ips an d , t he refore, bach elor’ s degre es) and the N CA A ’ s re st ri cti on o fscho l ar shi ps toN o. 11

- 3066 13
one yea r i s a cl earl i m i tat i on o n pri ce ( that i s, the pri ce o f b a c he l o r ’ s de g r e e s a nd the c o s t tha t s c ho o l s mus t pay f orstud ent- at h lete s)
. They there f or e a rgue thatdespi te the i na pp l i c a b i l i t y o fp e r s e r ul e cases , a qui c k

- l o o ka ppr o ac h i s war r an te d i n thi s ca se , a s i t was i n Bo a r d of R ege nts . Pla i nti ff s next ar gue that the qui ck- l oo k fra m ew or k a bso l ves them o fthe burden ofdescr ibi ng a re l evantm ar keto n w h i ch the Byl aw s hav e had an an ti co m pet i ti ve e ffec t. The S upr eme Cou rt, i n Boardof R ege nts , sta ted that“when there i s a n agr ee m en t n ot to com pete i n t er m s ofpri ce o r output, no el abor ate i nd ustr y a nal ysi s i s r equi re d,” and “nake d res tr ai nt[ s] o n pri ce a nd o utput re quir e[ ] so m e co m peti ti ve j usti fi catio n ev en in t h e a b se n c e o f a d et aile d m ar ke t a n aly sis .” 46 8 U. S
. a t 10 9- 10 ( i nt erna l quo tat i o n mar k s an d c ita tio n om itt ed ); see also L aw v. NCAA , 134 F. 3d 10 10, 1020 (10th Cir
. 19 98) ( “U nd era quickl oo k Rul e o f Re a s o n a na l y s i s , a nt i c o mpe t i t i v e e ffe c ti s e s t a b l i s he d, eve n w i thout a d ete rm i nati on o fthe re l evantm ar ket, wher e th e pl aint i ffs ho ws tha t a ho r i zo nt ala greem en t to fi x p rices exists .
. . . ”). O ut of con tex t, w hile these q uo tations se e m t o sup p ort pla i nti ff s’ vi ew o fthe quick

- l oo k doct rine, theyare m i sl e a d i n g . T h e qu o t e s fr o m B oard of Regents a nd Law ar e no t r efer r i ng t o the ne ed f o r a r el ev an t m ar k ett o e xi st, b ut ra therto the pla i nti ff’ s bur den of sh owing that an ag re em ent had ant i com peti ti ve effects o n a par ti cul arm ar ket
. A s no ted abo ve, a pla i nti ff’ s th reshol d burden und er th e Ru le ofRea son ana lysi s involves th e show ing of a preci se m ar ketdefi ni ti on i n ord er to dem onst ra te that a14 N o. 11

- 3066

Asi de fro m the f ac tthatthe pl ai nt i ff s m i s under s t and the 3 ne ed for the e xistenc e ofa re l eva ntm ar ke t, i ti s unc l ea r why they wo uld ad am antl y se ek to avoid the topic ofm arket pow er. Th i s a ppe a r s t o be a c l e a r m on op s on y c a s e , s i nc e the NCAA i s the on l y pur c has erofs t udentathl et i c l abor
. I n a ny e ven t, a sho w ing of m ark et p ow er is no t nece ssary in a ca se i nvol vi ng cl ea r re s t ri c t i ons onpr i c e and o ut putunl es s an d (co n tin u ed ...) defen dan t wi el ds m ar k etpo wer, whi ch, b y de fi ni ti o n, m e a ns tha tthe de fe nd a ntc a n pr o du c e a nt i c o mpe t i ti ve e ffec ts . SeeValley Li quors, Inc. , 82 2 F
. 2d at 666. The qui ckl oo k doct rine per m i ts pla i nti ff s t o f or go any s tri ct showing ofm ar ketpow er, and thus a speci fi c defi ni tio n of t h e re lev an t m ar ke t. Se eLa w , 13 4 F
. 3d at 1020 (“[W ]here a p ractice ha s obvious anticom p etitive ef

fects

— as do es pr i ce - fi xi ng

— ther e is n o need to prove that the defendant posse sse s m ar ketpow er .”)
. Thi s doe s no t m ean, however, thatther e nee d not be a re l evantm ar ket o n whi cha ct i o ns h ave a n a nt i co m peti ti ve e ffec t. The enti re poi nt o fthe Sher m an A ct i s t o prot ect com peti ti on i n th e c om m er c ial a re n a, Banks , 9 77F
. 2d at1 08 7; wi th o ut a co m m er ci alm ar ket, the goa l s o ft h e Sher m an A ct hav e n o place
. I fa pla i nti ffcan show that a defendant has en g ag ed i n n ak ed r es tr i ct i o ns o n pr i ce or ou tpu t, he c an d i s p e n se w ith an y s h ow in g of m ar ke t p ow er u n til a p r o c o mpe t i t i v e j u s t i f i c a t i o n i s s h o wn

— but th e exi ste nce of a re l evant m ar ket cannot be dispens ed w ith alt og et h er . Cf. La w , 13 4 F
. 3d at 1020
. I t i s the exi ste nce ofa com m er ci alm ar ket t hat i m pli cate s the S herm an A ct i n the fi rs t instance . 3N o. 11

- 3066 15

(
. . . c on t i nu e d) 3 u n til a fu l l R u l e o f R ea so n an a ly sis ta k es p la ce . SeeBd. of R eg en ts , 468 U.S
. at 109- 10. O f cou rse, plain tiffs m u st show m or e tha n th is to actu ally 4 pr og r e s s pa s tthe m ot i on-t o- di s m i s s s t a ge . As s t a t e d sup ra , a s uc c es s ful Sh er m an Actpl ai nt i ffm us tpr ove th e exis t en c e of “( 1) a c ont ra c t, c om bi nat i on, or c ons pi ra cy ; (2 ) a re s ul t ant unreasonable r es tr aintoftr ade in the re le vant m arket; and (3) an accom pany ing i njury. ” De nny’s M a r i na , 8 F .3 d a t 122 0. It i s unqu es ti onab le thatthe m em ber s ch o ols ofthe N CA A agreed t o f ol l ow t he NC AA ’ s Byl aws , thus m ee t i ng the fi rs te l em en tof a Sherm an A ctcl aim
. Si nce the dis tr ic t c ourt concl ud ed that p lain tiffs d id n ot id en tify a r elev an t m ark et in the ir com p lain t, itdid not add res s w hether plai nti ff s adequ atel y a ll eged that the By laws are an unreas onab le res tr aintoftr ade or that the y s uff er ed an ac c om pany i ng i nj ur y. Li ke wis e, we ne ed n ot ana l yze pl ai nt i ff s ’ as s er t i ons r eg ar di ng the r ea s onabl enes s of th e NC AA ’ s r e s t r a i n t s o r p l a i n t i f f s ’ al l e g e d i nj u r y , s i n c e we ul t i mat e l y c o n c l u de th a tp l a i n t i ff s f a i l e d t o a l l e g e a r e l e v ant m ark et in th eir co m p lain t. The sta ge i s there f or e s et. To s ucceed i n i ts chal l enge ofthe dist ri ct c ourt ’ s di sm i ssa l, pl ai nti ff s m ust p ro ve tw o poi nts: ( 1) thatt h er e i s a co gni zabl e m ar keto n w h ich th e N C A A ’s a c tio n s c ou ld h av e h ad an tic o m p et iti ve e ffec ts ( th us im p l i ca tingthe S he r m anAct ) ; a nd (2) t h a t p lain tiffs d id , in fac t, id en tify th at m ar ke t in thei r com pla i nt. 4

B . A p p l i c a b i l i tyo ft h e S h e r ma n Ac tt o NC AA’ s B y l a ws The dis tr i ct c ourthel d that the bac hel or ’s d egr ee m ar k eta nd the s tu den t- athl et e l ab o r m arket, t o the16 N o. 11

- 3066
ex te n t t h at th ey ex istatall, cou l d n e v er be co gn iza b le m ar ket s und er the Sher m an A ct re gar dle ss of the clari ty o fpl aint i ff s’ com pl aint . F i r st, the di st r i ctc o ur t f o und that w e for ecl ose d any poss ibi l i ty th at a l aborm ar ket f o r s tu den t- athl et es c ou l d b e co g ni zabl e i n Banks v. NCAA , 977 F.2d 108 1 (7th C ir. 1992). T he district cou rt w en t o n to rejec t t h e p os sib i l i ty of a c og n iza b le m arketf orbac hel or ’ s degr ees , fi nd i ng two poi nts t o be p articu larl y rel evan t: (1) th at on e can not bu y a bach elor’ s de gree outr i ght, but ra therm ust m eetcer tai n re quir em ents to re cei ve the deg re e eve n aftertui ti on has been pai d; and (2 ) thatstud ent- athl ete s a re n ot gi ven bac he lor’ s d egrees for playing sp orts, b u t rathe r are gi ven the o pp or tuni ty to fulfi l l cer tai n re quir em ents that coul d l ead to the best owal ofa bachel or ’ s degr ee. Pl ainti ff s chal l enge the di str i ct c ourt ’ s fi nd i ngs. I t i s un de ni a b l e tha t a mar k e t o f s o me s o r t i s a t pl ayi n this case . A tr an sa ct i o n c l ea r l y o cc ur s be twe ena student- athl ete and a uni ver si ty: the student- athl ete u se s h i s a t h let ic a b ilitie s o n be h alf ofth e u n ive rs ity in e x c h a n g e f o r a n a th l e t i c a n d a c a d e mi c e d u c a t i o n, r o o m, and boar d. A s the S up re m e Court m ad e cl earl ong ago , ho wev er, the Sh er m anActwas i nt en ded f o r, a nd thus on ly a p p lies to , com m er c i a l tra n sa c tio n s. A pex Ho siery C o . v. Lead er, 310 U
. S. 469, 492- 9 3 (1 940). S e ea l s o Br own , 5 F
. 3d at6 65 ( “I t i s ax i o m at i c th ats ec ti o n o ne o fthe S h e r ma n A c tr e g u l a t e s o n l y t r a n s a c t i o n s th a ta r e c o mm er c ial in n at u re .”); A re ed a & H ov en ka m p , A ntitru st Law , ¶ 26 0b , a t 25 0 ( 20 00 )
. I n de te r m i ning w he th erthe ex c h an ge of fre e o r re d u c ed -ra te ed u c a t i on for a th let ic par ti c i p a t i o n c o n s t i t u t e s a c o g n i z a b l e ma r k e t, th e n, weN o. 11

- 3066 17

m us t det er m i ne whethe r s ucha t r an sa ct i o n c anb e co nsi dered com m er ci al
. To b egin w i th, the N CA A i s no t ex em p t fro m th e s tr ic t u re s o f th e Sh er m an A c t m er ely because i t i s a nonpro fi t e nti ty, as B oar d of Regents m ak es cle ar . See 46 8 U.S
. at10 0. There i s no cl earl i ne as to what co ns ti tu te s a “c o m m er ci al tr an sa ct i o n, ” but o ne lead ing com m en tator ha s su ggeste d th at “tod ay t h e term ‘c om m er c e’ is m u c h br oa d er t h a n i t w a s [in th e p as t] . . ., i ncl udi nga l mos te v e r y a c t i v i t y fr o m whi c h [ a n] a c t or a n t i c i p a t e s e c o n o mi c g a i n . ” A r e e d a & H o v e n k a mp, Ant i t r us tLa w , ¶260 b, at 250 (2000 ). The Sher m an A ct c l early ap p li es to at l eas t s om e o f th e N C A A ’s b eh av ior. SeeBd
. of Regents , 4 68 U
. S. 85 ; s e eal s o L a w , 134 F. 3d 1010 ( hol ding that the S herm an A ct a pp l i es to the NC A A ’ s re gu latio n ofthe sal ar i es of co ac he s)
. The que st i o n for us , ho wev er, i s whethe r a nd w hen the Sher m an A ct a pp l i es to the NC A A and i ts m em berscho ol s in re l ati on t o thei r i nter acti on with st u d en t-a th let es . Th e Su p re m e C o u rth as n otw eig h ed in on thi s i ssue dir ectly, but B oard of Regents , th e s em in al ca se o n th e i nt er ac ti o n be twe en th e N CA A a nd the Sher m an A ct, i m pli es that all r egul at i o ns pa ss ed bythe N CA A ar e su bj ect to the S herm an A ct. 46 8 U.S
. at11 7. I n B oard of Regents , the S upr eme Court rul ed th atthe N C A A ’s r estrictions on televising f ootba llgam es w ere a vi o l at i o n o f§ 1 o fthe S he rm an A ct . I n s o ho l di ng, the Court sta ted the f ol l owing: I t is r ea sonabl e t o ass um e that m osto fthe re gul ator y c ontr ol s o fthe N CA A ar e j usti fi abl e m eans of f o s t e r i n gc o mp e t i t i o n a mo n ga ma t e u r a th l e t i c t e a ms18 N o. 11

- 3066

an d the r efo r e pr o co m peti ti ve b ec au se the y e nha nc e publ i c i nt er es t i n int er co l l eg i at e athl et i cs . The sp ec ific re st r a i n ts on footb all te lec as ts th at are ch all en ged i n thi s ca se do no t, ho wev er, fi t i nt o the sa m e m o l d a s do r ul es de fi ni ngth e co ndi ti o ns o fthe conte st, the el i gib ilityo fpart i ci pants, o r the m anner in w hich m em bers of a joint ente rp rise shall sh are the r es po ns ibi l i ti es a nd the b en efi ts o fthe t o ta l v en ture . Id
. Th i s pr e s ume s the a pp l i c a b i l i t y o f the S he r man Act to NCA A by l aws , sin ce no pr o co m pet i ti ve j us ti fi ca ti o ns w oul d be nece ssa ryf ornonc om m er ci alact i vi ty to w hi ch the Sher m an A ct doe s not a pp l y. N onethel ess , co ur ts ha ve s trug g l ed w ith the a ppl i cabi l i tyo fthe Sher m an A ct t o N CA A r egul ati ons. S pec i fi ca l l y, the Thi r d a nd F i fth C ir cui ts ha ve c o nf ro nt ed t h e i ssue at hand
. The Thi rd Ci rcui t deci ded th e i ss ue de fi ni ti ve l y, b utl i m i te d i ts ho l di ngt o the N C A A ’s e ligib ility ru les
. S e eS mith v. NCAA , 13 9 F
. 3d 180 ( 3d Ci r . 1 99 8)
. I n Sm ith , th e T h ird C i r c u it u p h eld the di sm iss al ofa sui t cl ai m i ng tha t a n N CA A by l aw “p ro h ibit in g a st u d en t-a th let e from p ar tic ip at in g in i nt e r c o l l e g i a t e a thl e t i c s wh i l e e nr o l l e d in a g r a du a te prog ra m atan insti tu tion othe r than the stud entat hlete’ s unde r g r adua te i ns ti tu ti o n” v i o l at ed th e Sh er m an A c t. Id
. a t 18 2. The c o ur t fi r sthe l d tha t th e N C A A ’s el igibil ity r ules are n o t related to the N C A A ’s com m er ci al i nter est s, and thus the Sher m an A ct d oes n otap p ly t o th e N C A A ’s p ro m u lga tio n of su c h ru les
. Id. at 185- 86; s ee also G a ines v . N CA A , 746 F. Supp. 738, 74 3-N o. 11

- 3066 19 44 ( M
. D. Te nn. 1 99 0) ( di st i ng ui sh i ngb etween the N CA A’s c o m m er ci alr ul es a nd no nc o m m er ci alr ul es , a nd fi ndi ngtha t el i g ibi li ty r ul es a r e o fthe l at te r ty pe, a nd thus notsubj ect to the S herm an A c t). I n an al ternati ve ho l di ng, the Thi r d Ci r cui t al so r ea so ne d tha t even ifthe N CA A’s act i o ns wer e su bj ec t to the S he r m anAct, the pl aint i ff’ s su i t sh o ul d ha ve b ee n di smi ss ed bas ed o n a R u le of R ea so n an aly sis
. Sm ith , 1 39 F. 3d at 186. Th e cou rt obs erve d thatN CA A el i gibi l i ty rul es “al l ow fo r survi val ofthe product, am ate u r sp or ts, and al l ow fo r an ev en pla yi ng fi el d,” thus m aking the m pro com peti ti ve on b ala n c e. Id. at1 87
. Con trar y t o the Thi r d Ci r cui t, the F i fthCircu i t as su m ed wi th o utde ci di ngtha t th e She r manAc ta pp l i e s t o the NCAA’ s p r o mul g a t i on o fe l i g ibi l i tyr ul es i n M c Cor ma ck v
. NCAA
. 84 5 F
. 2d 1338 , 1343

- 44 ( 5th Ci r. 19 88)
. The Fi fth Ci rcui t no netheles s ru led th at a p ar tic u lar N C A A elig ibili t y ru le

— th e re str i cti on o n benefi ts aw ar ded to stud ent- athl ete s

— ea si l y s ur vi ve d a Rul e o fRe as on an al y si s, e ve n a t th e d ism iss al s ta ge . Id
. As in Sm ith , th e F i fth Ci r cui t cited the el i g ib i l i t y r ul e s ’ ab i l i t y t o c r e a t e the p r o du c to fc o l l ege football, p r eserve that prod uc t, an d pres erve “a m ixtu re conta i ni ng so m e a m ate ur e l em ents. ” Id
. at13 44- 45. W hi l e thi s Ci rcui t has notdefi ni ti vel y deci ded wh ether a co g ni zabl e m ar k ete xi st s be twe enuni ve r si ti es a nd student- athl ete s under the S herm an A ct, o ur ca se of Ban ks v . NCAA i nc l ude d a di sc us si o n of th e i ss ue i n the f o r m o fd i c t a f o u n d i n th e maj o r i t y o p i n i o n ( C o ffe y a nd Gr an t, JJ
. ) a nd i n a pa r ti alc o nc ur r en ce a nd di ss en t (Fla u m , J. ). Se ege ne r al l y 9 7 7F
. 2 d 1 0 8 1
. I n Banks , a f or m er U ni ver si ty ofN otr e Dam e foo tball pl aye r chal l enged20 N o. 11

- 3066 the NC A A ’ s r ule bar ring a n y pla yer s who have hi re d an a g e n t o r en te re d a p ro fes sio n al d ra ft. Id
. a t 1 0 8 2. The m aj or i ty hel d t hat the pl ai nti ff’ s co m pla i nt f ai l ed to al l ege an a nti com peti ti ve effect on a rel evantm ar ket, an d th u s a ffi r me d th e d i s t r i c t c o u r t ’ s d i s mi s s a l o ft he p lain tiff’s c l a im
. Id. at1 09 3 ( “[ W ] e ne ed no t r ea chthe m er i ts ofwh etherth e n o- draft r ule i s a ‘ m ate ri alte rm o f em plo ym ent’ as the diss ent a rgues be cause Banks has f ai l ed to al l ege how the no- draft a nd no- age nt r ule s are restraints of trad e . . . . ”). I n d ic ta, the m aj ority determ i ned that eve n i f the pla i nti ff had pr oper l y a lleg ed an ti co m pet i ti ve effec ts o f th e N CA A b y l aw i n q uest i o n, h is claim w ou ld h av e f a iled
. Id. at 1090

- 91. The o pini on reason ed that the n o-draft an d no-agen t bylaw s w ere both el i gibi l i ty re quir em ents, wh i ch ar e e sse nti alto pr es er vingthe e xi st en ce o fa f o o tb al l l ea g ue c o ns i st i ng o fs tu dent- athl et es a s wel l a s m aint aini nga c l ea r l i ne ofdem ar catio n bet w een c ol l ege spor ts and profess i onal sp or ts . Id
. at10 89- 90. Fur ther, the m aj or i ty exp re sse d doubt thata l aborm ar ketf orN CA A athl ete s e x ist s at al l, since “the va l ue o f[ a] scho l ar shi p i s ba sed upon th e sc ho o l ’ s tu i ti o n a nd r o o m a nd b o ar d , no t bythe supp l y a nd d em and fo r pla yer s. ” Id
. a t 10 91
. The diss ent, co nver sel y, bel i eve d that the pl ai nti ffhad al l ege d anti com peti ti ve effects o n the nati onw i de l abor m ar ke t fo r c olle ge foo tb all p lay er s, a m ar ke t t h at is co gn izabl e unde r the S he r m an A ct, a nd tha t a vi ew o fthe N C A A ’ s e l i gibi l i ty rul es as noncom m er ci alwas “an outm oded i m age o fi nt er col l egi ate spor ts that no l onge r j ibes w i th r eal i ty. ” Id
. at 1095, 1099 (Fl au m , J
. , dissen ting). Succes sful co l l ege f oo tbal l pro gr am s o ften l ead toN o. 11

- 3066 21

T o illu str a te , Fo r be s r e p or ted tha t the U niv ersity of Te xas’ 5 c ol l eg e f ootb allt ea m was worth $ 12 9 m i l l i on i n 2 01 1 a nd (co n tin u ed ...) l ar ge profi ts, and to acqui re tho se profi ts, scho ol s m ust pay i n-k i nd bene fi ts, nam el y, gr ant- i n-a i d, acc es s t o tr ai ni ng f aci l i ti es, and i nstr ucti on fro m pre m i erco achi ng. Id
. at10 96, 10 99. S i gni fi cantl y, th e diss ent no ted that th e n o-a ge n t a n d n o-d ra ft ru les a r e n otn ec es sa rily She rm an A ct violati ons , bu t beli eved that the p lai nt iff’ s com pla i nt sho uld have sur vi ved a m otion to di sm i ss, and the proco m peti ti ve j usti fi cati ons of the e l i gibi l i ty rul es at sta ke shoul d have be en ex am in ed m or e cl ose l y. Id
. at10 98. W e s tar t with the vi ew thatthe Sher m an A ct app l i es to the NCA A bylaw s g en er al l y . As indi ca te d abo ve , the S he r m an Act appl i es to co m m er ci al tr an sa ct i o ns, a nd the m oder n d efi ni ti on o fco m m er ce incl ud es “al m ost eve ry acti vi ty f ro m w hi ch [ an] ac to r an tic i pates ec on om ic g ain .” A re e d a & H ov en ka m p , Ant i t r us tLa w , ¶ 26 0b , at 2 50 (20 00 ). N o k n ow led ge ab le ob se rv er co u ld e a r n e s t l y a s s e r tth a tb i g - t i me c o l l e g e f o o tb a l l p r o g r a ms c om p et in g for h igh ly so u gh t -aft er h igh sc h oo l footb all p l a y e r s d o n o ta n t i c i p a t e e c o n o mi c g a i n fr o m a su c c es s fu l rec ru itin g p ro gr am . D es p ite th e n on p ro fit sta tus o fN CA A m em berscho ol s, th e transact i ons thos e schools m ake with pr em i erathl ete s

— ful l s c ho l a r s hi ps i n exchange f or athl eti c se rv i ces

— ar e n otn on c om m er c ial, si n c e school s ca n m ake m i l l i ons ofdol l ar s a s a r esul t o f these tr ansact i ons. I nd eed, thi s i s l i kely o n e r eas on that 522 N o. 11

- 3066

(
. . . c on t i nu e d) 5 g en er a te d $7 1 m ill io n in p ro fits . C h ri s S m ith , C o lleg e F o o tb a ll’s M o s tVal ua b l e Te a ms , F ORBES (D ec . 22 , 20 1 1 , 11 :43 a.m .), htt p://w w w .for b es .co m / si tes / chri ss m it h/ 2011/ 12/ 22/ coll egefo o tb a lls -m o st-v a lu a b le -te a m s/. som e s chool s a re wil l i ng to pay thei r f oo tbal l co aches up to $5 mi l l i o n a y e a r r a the r tha n i nv e s t tha t mon e y i nto ed u c at ion al re so u rc es . See K ris tin D eR am u s e t a l., Coll ege Foot b al l Coac h S al ary Datab as e, 20 06-20 11 , ( N ov. 17, 20 11 1 1 :0 2 A M ), U SA T ODAY, http: //w w w . usato day. com /s port s/ c olle ge / f o o t b a l l / s t o r y / 2 0 1 1

- 1 1

- 17 /c ov er -c olle ge -foo tb allcoa ches- sal ar i es- ri se/5124 2232/1 ( pu tting to p sal ar y for a c o lle ge he ad f ootba llcoach at rough ly $5.2 m il li on). Tha t i s no t to s ug g es t th ata l l uni ve r si ti es wi tha f oo tbal l pro gr am ar e s ol el y dri ven byec onom i c be nefi t; the p ro fi ts deri ved fro m athl eti cs c an ai d a uni ver si ty i n m an y posi ti ve w ays thatf al l i n l i ne with the m i ssi on o fthe uni ve r si tya s a whol e. Buttha t does no t pr ev en t m any unive rsi ti es, thr ough thei r f oo tbal l te am s, fro m e n t e r i n gth e r e c r u i t i n gma r k e t, s e t t i n gth e i r r e c r u i ti ng b u d ge t, an d m ak in g re c ru itin g d ec isio n s w ith ec on om ic i nte r es ts i n mi nd. S i m i l ar l y, s tu den t- athl et es c o nte m p lat in g s c h ola rs h ip offe rs likely inc lu d e e c o n om ic f ac to r s i n the i r d ec i si o n- m ak i ngpr o ce ss , s ucha s th e val ue o f a g i v e n de g r e e o r the i nc r e a s e d po t e nt i a l f or en try i nt o p rofes si o na l f o o tb al l
. I t f o l l o ws tha t th e N CA A ’ s by l aw s ca n have an anti com pe tit ive o r a pro co m pet i ti ve e ffec t o n col l eg i at e athl et i cs g en er al l y a nd th e n at ion al c olle ge footb all re c ru iti n g m ar ke t s p ec ifical l y, and thos e e ffects can have an ec onom i c co m ponent.N o. 11

- 3066 23 Thus , th e tr an sa ct i o ns b etwee n NCA A sc ho o l s an d s t u d en t-a th let es are , to so m e d eg re e, co m m er c ial in nature , and ther ef or e t ake pl ace i n a r el evantm ar ketwith re sp ec t t o t h e Sh er m an A c t. S e eWhi t ev. NCAA , CV 06

- 999- RG K ( C.D. Cal
. S ept. 20 , 20 06) ( hol ding that un d er th e S he r m anAct, “ M aj o r Co l l eg e F o o tb al l ” i s a r el ev an t m ar ke t in w hi ch “co l l ege s a nd uni ver si ti es com pete to attrac t pros p ective stu d en t-ath letes”). N one ofthi s i s t o sugge st that al l N C A A by l aw s, o r ev en any N CA A by l aw s, ar e v i ol ati ve ofthe Sher m an A c t . O n th e c on tr ar y, B o a rd o f R egen ts i m pl i es tha t th e S he r m anActdo es a ppl y t o NCA A re g ul at i o ns , b ut m o str egul at i o ns wi l l b e a “j us ti fi ab l e m ea ns o ff o st er i ng com p etition a m o n g am ateu r athletic team s,” and are th er efo r e pr o co m pet i tive. 4 68 U. S
. a t 11 7. I n f ac t, the Su p re m e C ou rtse em ed to cr ea te a p re su m p tio n in f a v o r o fc e r t a i n NCAA r ul e s wh e n i ts t a t e d: I t i s r eason able to assu m e tha t m ost of the regu latory contr ol s o fthe N CA A ar e . . . proc om peti ti ve because they enhance publ i c i nter esti n inter colle gi ate athl eti cs. The speci fi c r est ra i nts . . . that ar e chal l enged in th is cas e d o n ot, h ow ev er , fit in to th e s a m e m old as do rul es de fi ni ngthe c o ndi ti o ns o fthe c o nt es t, the eligibi l i ty ofpart i ci pants, o r the m anner i n w hi ch m em be r s o fa j o i nte nt er pr i se s ha l l s ha r e th e r es po nsib ilitie s a n d th e b en efit s o f th e t ot al v en tu re . Id. W e c on st ru e t h is lan gu a g e a s a lice n se to find ce rt ain N CA A by l aw s that “ fit into the s am e m ol d” as thos e di sc us se d i n B o a r d o

f R egen ts to be p ro c om p et itiv e “ in the tw i nkl i ng o fan e ye, ” B d. of Regents , 468 U
. S. at11 0 n. 3924 N o. 11

- 3066 ( c i t a t i o n a nd qu o t a t i o n m ar ks o mi t t e d)

— th ati s, a t th e m ot ion -to -d ism iss st ag e. S e eA m. Ne e d l ev . N. F
. L. , 13 0 S. Ct. 22 01, 22 16- 17 ( 2010 ) ( obs er vi ng tha t ce rt ai n agr eem ents between m em ber s o fa j oi nt v en tu re ar e “ l i kel y t o su rvive the R ule of Reason ” su ch th at th ey d o not req uire “a d et aile d an aly sis ,” an d th u s t h e R u le of R ea so n “c an . . . be a pp l i ed i n the tw in klin g ofan e ye” )
. Thus, the fi rs t

— an d p os sib ly on ly

— questi on t o be a nsw er ed w hen NC AA b y l a ws a r e c h a l l e n g e d i s wh e th e r th e NC AA re gul ati ons at i ssue ar e ofthe type that have been bl ess ed b y t h e Su p re m e C ou rt, m ak in g t h e m p re su m p tiv ely pr o co m pet i ti ve . W e no w turn t o tha t que st i o n. The parti es disa gr ee on the sc ope o fthe presum pti on f avo ring ce rt ai n N CA A r egul ati ons. Pl ai nti ff s a rgue that the pr esum pti on s houl d be lim ited t o N CA A el i gibi l i ty r ul es . The y di sti ng uis h Banks , Sm ith , a nd M cCor m ac k on th e gr ounds that the r egul ati ons up hel d i n thos e ca ses , u n like th e re gu lat ion s h er e, w er e e ligib ility ru les
. Se eBanks , 977 F. 2d 1081 ( sugge sting i n dict a that pr oco m peti ti ve j usti fi cati ons f orN CA A el i gibi l i ty rul es w oul d und oubtedl y o utw ei gh anyanti com peti ti ve effect s i fthe Sher m an A ct d oes, in fact, ap p ly t o said ru les); Sm ith , 13 9 F
. 3d 180 ( sa m e) ; M cC orm ack, 8 45 F
. 2d at1 34 5 ( r ea so ni nga t th e m oti on t o dism i ss sta ge that “[ t] he el i gibi l i ty r u l es cre ate th e pro d u c t and all ow i ts su rvival in the f ace of com m erc ializ in g p re ss u r e s ,” an d th u s “ d o n otvio lat e t h e a n titr ust l aw s”)
. The N CA A , o n the othe r h an d , a rgues that the pr oco m peti ti ve presum pti on sh oul d not be l i m i ted to e l i g ibi l i tyr ul es . De spi te the Fif thCi r cui t’ s cl ea r c o nceptual i zati on o fthe l i m i tat i on o n col l egi ate athl ete c o m p e n sa tio n as an eligib ility ru le, se e M cCo rm ack, 84 5N o. 11

- 3066 25 F. 2d at 1343 , the N CA A a rg ues that the r egul ati on a t i ssue i n M cCo rm acki s be tte r chara cter i zed as a fi nanci al aid ru le, sim ilar t o t h e B yla w s a t is su e in th is c as e. It ther ef or e a rgues that a ny pro com peti ti ve presum pti on th atmightha ve b ee n a t pl ayi n M cCo rm a ck sh ou ld apply here
. I n consi deri ng the parti es’ ar gum ents and atte m pti ng to disc er n the sco pe ofthe presum pti on e stabl i shed by B oard of Regents , i t i s i m po r ta nt to co ns i der the con te xt in w hi ch thatpre sum pti on was di scusse d. Dir ectly pr ec ed in g the l anguage thatal l ege dlyes tabl i shes the pr esum pti on i s a r em i nd erthatthe N CA A ’ s co l l usi ve behavi oris o n l y per m i ssibl e be cause “a cer tai n degr ee ofco oper ati on i s nec ess ar y i f the type ofco m peti ti on th at [ the NC A A ] and i ts m em beri nsti tuti ons see k t o m ar keti s t o be pr ese rv ed. ” B d. of Regents , 46 8 U.S
. at11 7. T h e Su p re m e C ou rtm ad e t h is p oin t in gre a t e r d et ail in a s epara te sect i on o fi ts opi ni on, wh er e i t e xplai ned w hy “ho ri zonta l r est ra i nts o n com peti ti on a re es senti al i fthe product [ ofco l l egi ate spor ts] is to be avai l abl e a t al l
. ” Se ei d. a t 9 8-1 05
. The Co ur t ex pl aine d tha t an y l eague spor t wil l r equi re the j oi nt e stabl i shm ent o f cer tai n rul es, such as the “si ze of the fi el d” or the “ num ber ofpl aye rs o n a t eam . ” Id
. a t 10 1. Co l l ege footbal l, the cour t r eas oned, r equi re s e ven m or e j oi nt ac ti vi ty, since the NC A A se eks to m ar keta parti cul arbr and of f o o tb all

— c olle ge footb all. T h e id en tific at ion of th is “pro du ct” w i th a n aca dem i c tr adit i on di ffer enti ate s col l ege f oo tball fr om and m ake s i t m or e popul arthan p ro fess i onalspor ts to w hi ch i t m i ght o ther w i se be26 N o. 11

- 3066
com parabl e, such a s, f orexam ple , m inorl eague bas ebal l
. I n o rd erto pre ser ve the c hara cterand qual i ty ofthe “pro du ct, ” a thl ete s m ust no t be pai d, m ust be r equi r ed to a tt en d c l as s, a nd the li ke. And the i nt e g r i t y o fthe “ pr o du c t ” c a nn o tb e p r e s e r v e d e xc e pt by m utual ag re em ent; i fan insti tuti on a dopted s uc h r e s t r i c t i o ns un i l a t e r a l l y, i t s e ffe c t i v e ne s s a s a com peti toro n the pla yi ng field m i ght s oo n be dest ro ye d . Th u s, th e N C A A p lay s a vit al ro le in en ab l i ngco l l eg e f o o tb al l to pre se r ve i ts c ha r ac te r, a nd as a r esul t e nabl es a pro du ct t o be m ar ke ted wh i ch m i ght o ther w i se be unava i l abl e. Id . at 1 01 -02 . H er ein lies t h e s c o p e of th e p ro c om p et itiv e p re su m p tio n for c er ta in N C A A reg u lat ion s. A ce rt ain am ount o f c oll usi on i n col l ege f oo tbal l i s per m i tte d b e c a us e i ti s n e c e s s a r y f o r the p r oduct t o e xi s t . Ac c o r di ngl y, w hen an N CA A byl aw i s cl ear l y m eant to h elp m ai ntai n the “r eve re d tra dit i on o fam ateuri sm i n col l ege sp or ts ” o r th e “ p re se rv a t i o n of th e s tu d en t-a th let e in hi ghereducati on,” t h e b yla w w ill b e presum ed p ro c om p et it ive , sin c e w e m u st giv e t h e N C A A “a m p le l a t i t ud e t o pl a y tha tr ol e. ” Id
. at12 0. But i fa re gul ati on i s no t, o n i ts f ace, hel ping to “pres er ve a t ra dit i on that m i ght o ther w i se die , ” ei thera m or e s ear chi ng Rul e o f Reaso n anal ysi s wil l be necess ar y t o convi nc e us ofi ts proco m peti ti ve oranti com p et iti ve nature , o r a qui ck loo k a t t h e ru le w ill obv iou sly illus tr at e it s a n ti c om p et itiv en es s. Seeid
. I n B oard of Regents , f o r i ns ta nc e, the S upr e me Co ur tr ul e d tha tthe l i mi t a t i o n o n the ty pe o f tel evi si on co ntra cts that m em ber scho ol s a re al l owed to enteri nto does not ai d i n the preserv at ion ofam ate uri smN o. 11

- 3066 27

W e ne ed no t tou ch up o n t h e d eb ate o f w he the r all eligib ility 6 ru les or just m os t el igibili ty rul es are du e a p re su m p tion, as the B y law s at issue in th is case are n ot, in fact, eligib ility ru les. o r s tu den t- athl et es , a nd is t hu s a vi o l at i o n o fthe S h er m an A c t. Id
. Th e Co ur t r ej e c t e d the a r g ume ntthat th e t ele vis ion p lan eq u aliz ed co m p et itio n on th e fie ld and rea sone d that, in a n y e vent, “the N CA A i m poses a va ri etyo fot h er r est ri cti ons desi gned to se rv e am ate uri sm wh i ch ar e m uch bett erta i l or ed to the goa l of c om p et itiv e b a l a n c e . . . [an d ] w h ich are ‘cle ar ly su ffic ien t’ t o p re se rv e c om p et itiv e b a l an c e t o t h e e x te n t itis w i thi n the N CA A ’ s power t o do so
. ” Id
. at11 7- 20. M ost

— if n otall

— elig ibilit y ru les , on th e o th er h an d , fall com f or tabl y withi n the presum pti on o fpro c om peti ti vene ss aff or ded to cer tai n N CA A r egul ati ons, as bo th p a r t i e s a g r e e . Be y o n d th e o b v i o u s f a c tth a tth e S u p r e me 6 Co ur te xp l i c i t l y me nt i o ne d e l i gibi l i t y r ul e s a s a ty pe that “fi t[ s] i nto the s am e m ol d” as othe r procom p etit i ve rul es, th ey a re cl ear l y nec ess ar y t o prese rv e a m ate uri sm and the s tudent-a thl ete i n col l ege f oo tbal l
. I nd eed, they define wh at i t m eans to be a n am ate ur o r a s tudentathl ete , and ar e there f or e e sse nti alto the ver y e x iste nce of t h e p ro d u c t o f co lleg e fo otb all. Acc or d Banks , 97 7 F
. 2d a t1 0 8 9- 90 ( “ [ T ] h e n o - d r a ftr u l e a n d o th e r l i k e NC AA re gul ati ons prese rv e the br i ght l i ne o fdem ar c at i on be

tw ee n co lleg e a n d ‘p a y f o r p lay ’ footb all.” ); Sm ith , 13 9 F
. 3d at 187 ( “[ T] he NCA A’s e l i g ibi l i tyr ul es a l l o w f o r the survi va l o f the product, am ate ur s port s, and al l ow fo r an ev en p lay in g field .”); M cCo rm ack, 8 45 F. 2d at13 44

- 45 ( “T he28 N o. 11

- 3066

O ne s hould not m is take the analys is w e dis cuss here as 7 re qui ri ng pr oofofthe p ro c om pet i t i ve natur e ofthe NC AA ’ s “n o pa ym ent” rules on a cas e-by

- cas e basi s. This analysi s involves a de t er m i nat i on ofwhethe r a r ul e i s , oni t s f ace, s uppor t i ve of the “ n o p aym ent” and “s tudent- athl ete ” m od el s, not whether
“ no pa ymen t ” r ul e s a r e the m s e l ve s pr oc ompe t i t i ve

— und er B oa rd of R eg en ts , the y cl earl y are. N CA A m ar ket s co l l ege f oo tb al l as a product di stinct f r o m pr o fe s s i o na l f o o tb a l l
. T he e l i g ib i l i t y r ul e s c re ate th e prod uc t and a llow i ts su rvival in the f ace of com m erci al i zi ng pre ssur es. ”)
. There m ay n ot be such a thi ng as a s t u d e n t
- a th l e t e , f o r i n s t a n c e , i fi twa s n o tf o r t h e NC AA rul es re quir i n g c l ass at tendance, and thus no “detai l ed analys i s, ” A m . Nee dle, 13 0 S
. Ct. at22 16- 17, would be n ec es sa ry to d ee m su c h ru les p ro c om p et itiv e. C f. Bd. o f R eg en ts , 4 6 8 U. S
. a t1 0 2
. T h e s a me g o e s f o r b y l a ws el i m i nati ng the el i gibi l i ty ofpl aye rs wh o re cei ve cash paym ents beyo nd the cos ts att endant to re cei vin g an educati on

— a ru le t h at cle ar ly p ro te c ts am at eu ris m . C f. M cCo rm ack, 84 5 F
. 2d 1338
. 7 T h e B yla w s a t i s s u e in th is c as e, h ow ev er , are n oteligibi l i ty r u l e s , n o r d o we c o n c l u d e th a t th e y “ fi t i n t o t he sa m e m old ” a s e ligib ility ru les
. Se e In r eN CA A I

-A Wal k- on Foot b al l Pla ye rs Li t igat i on , 39 8 F
. Supp.2d 1 144, 11 49 ( W
. D.W ash. 20 05) ( fi nd i ng tha t t he cap o n the num bero f schol ar shi ps a c ollege tea m can gr ant doe s no t i m pli cate student- athl ete el i gibi l i ty “in the sam e m anner as rul es re q u irin g s tu d en ts to at te n d cla ss or ru les rev ok in g e l i gib i l i t y f o r e n t e r i n ga pr o fe s s i o n a l d r a ft ” )
. T h e s e B y l a ws

— a one -year l im it to sch ola r s h ip s and a l im it on sch olar-N o. 11

- 3066 29 shi ps per tea m

— are not i nh eren tly or o bviou sly neces sary f orthe prese rv ati on o fam ate uri sm , the student- athl ete , or the gen era l p r o d uc t of coll ege football. I ssu ing m ore sc ho l ar sh i ps ( th us c r ea tingmor e amat eur pl ay er s) a nd i ssui ng lon ge r schol ar shi ps cannot be s ai d to have an obviou sly negative im p act on am a t e urism
. N or i s the re an o bvi ous e ffect on the abi l i ty of c ollege f oo tbal l to s u r v i v e wi th o u tth e B y l a ws i n qu e st i o n . T h e NC AA ar gues that m ult i
- yea r schol ar shi ps w oul d m ake i t t oo diffi cul t forl ess w ea lth y schoo l s t o com pete i n the re crui ti ngma r k e t, b utthi s c l a i m i s we a k e ne d b y the f a ct th at th e re st ric tio n on m u lti-y ea r sc h ola rs h ip s w as on ly in st itu te d in 1 97 3, Z ac h ar y St au ffer , N CA A A p pro ves N ew R ules

— B u t D o They M a tter? , F RONTLI NE ( Oct. 28 , 2011 , 4 : 5 8 p . m . ) , http: //w w w . pbs. or g/w gbh/pages/fro ntl ine/ s p o r t s / mo n e y - an d- m ar ch

- ma d n e s s /n c a a - a p p r o v e s - n e wr ul e s -b ut
- d o - th e y - ma t t e r/, a n d h a s r e c e n tlyb e e n r e s c i nd e d, see St ev e W ieb er g, sup ra. I n a ny e v e nt, the c l a i m is f ar too gr eata l eap to m ake witho ut ev i denti ar y pr oo fat th e ful l Rul e o f R eason st ag e. S i m i l ar l y, the r ul es l i m i ting th e n u mb e r o fs c h o l a r s h i p s a v a i l a b l e f o r e v e r y NC AA tea m m ay have proco m peti ti ve effects , suc h as the pr eve n tio n of elit e p ro gr am s s to c kp ilin g a t h let es , bu t itis n otint u itiv e t h at th e re c ru itin g m ar ke t w ou ld be u n ab le t o h a n d l e th i s p o t e n t i a l p i t f a l l o n i t s o w n . T h e B y l a ws at i ssue, es pec ially the prohibi ti on a gainst m ult i
- yea r schol ar shi ps, se em to be ai m ed at contai ni ng uni ver si ty c os t s , no t p re se rv in g t h e p ro d u c t o f co lleg e fo otb all, though e vi dence pres ented a t a l ate r sta ge coul d prove th atthe By l aws a r e, i n f ac t, k eyt o the s ur vi va l o fthe s t u d e n t
- a th l e t e a n d a ma t e u r i s m.30 N o. 11

- 3066 I t is tru e th at th e p rohibition agains t m ulti-year scholarshi ps i s, i n a s ense, a rul e co ncer ni ng the am ou nt o f paym ent a pl aye r re cei ves f orhi s l abor, and thus m ay seem to i m p li cate the sp li t be t w e e n a m ateu r and pa y-for

pl ays po r ts . Af te r a l l, s tu den t- athl et es a r e pai d, b ut thei r p ay m en t i s l i m i ted to r ei m burse m ent forco sts att en dant to r ecei vi ng an educati on. Fo r the purpos es o fc o l l e g e s p o r t s , a n d i n th e n a me o fa ma t e u r i s m, w e co nsi der pl aye rs wh o re cei ve nothi n g m ore than educati onalco sts i n re turn forthei r serv ice s to be “u npa i d ath letes. ” I t i s f o r thi s r ea so n, tho ug h, tha t th e prohibi ti on a gainst m ult i
- yea r schol arshi ps does not i m pli cate the prese rv ati on o fam ateuri sm , f orwh ether ornot a p layer re cei ves f our yea rs o feducati onal ex p en se s o r on e y ea r of e d u c at ion al e x p en se s, h e is st ill ana m at eu r . I t i s no t unt i l pa y m ent a bo ve a nd b ey o nd educat i o na l c o s t s i s r e c e i v e d tha ta p l a y e r i s c o ns i de re d a “pa i d a th l et e. ” The NCA A co ul d ( butdo es not ) a r g ue that paym ent o fm or e than o n e year ’ s e du cati onalco sts f oro nl y o ne ye aro fathl eti c se rv i ces

— a s cenar i o that m ay u n f old if a p lay er w ith a m u lti-y ea r sc h ola rs h ip is r el eas ed fro m the tea m o r i nj ured

— woul d r es ul t i n the de s t r uc t i o n o fa mat e ur i s m. On c e a g a i n, thi s a s s e r t i on is bel ied by th e fact tha t m ulti-year scholarsh ips w ere w h olly p er m iss ible be for e 1 97 3, see Z ac h ar y St au ffer , sup ra , an d am at eu ris m , by a ll ac c ou n ts , w as aliv e a n d w ell i n c o l l eg e spo rts in t he fi r sts ev ende ca des o fthe tw e n tie th ce n tu ry . See, e.g., M ec h elle V oe p el, Col l ege athle te s are alre ady get ti ng paid, E S P N. COM (July 18, 2011), http: //s p or ts .es p n .go.c om /n c aa /c olu m ns/s tory?co lum ni st= voe pel _m echel l e& i d=67399 71.N o. 11

- 3066 31 A s forthe N CA A ’ s a rgum ent that, ac c or d i ng to M cC o rm ack, bo th el i gibi l i ty rul es and fi nanci alai d rul es a r e d e s e r v i n go fa p r o c o mpe t i t i v e p r e s u mpt i o n, we disa gr ee. The N CA A ’ s l i m i tat i on o n athl ete co m pe n sati o n beyond educati onalexpenses , wh i ch w as i m pli cate d i n M cCo rm ack, di r ec tly a dva nc es the g o alo fmai nt aini ng a “ cl earl i ne o fdem ar c at i on be tw een inter col l egi ate a thl e t i c s a nd p r o fe s s i o na l s po r ts, ” B a nks , 97 7 F
. 2d at 1089 ( quoti ng G a ines , 74 6 F
. Supp. at 744) , and t h u s is bes t ca te g orized as a n e l i g ibi l i tyr ul e ai m ed atpr es er vingthe ex i st en ce o fa m at eu r i sm a nd the s tu den t- athl et e. The Byl aw s at iss ue i n thi s ca se, o n the othe r hand , ar e no t dir ectly r el ate d to the s epara ti on o fam ate ur ath l eti cs f r o m pa y - f o r - pl aya th l et i cs , a s ex pl aine d i n the pr ec eding paragra p h s. N ordo they he l p prese rv e the exi ste nce o f the student- athl ete ( as a f aci al m att er, anyway), since th eya ctua l l y l i m i t th e numbero fa th l et es a war ded fi na nci a l a i d a nd the a mou nto ffi na nc i a l a i d tha ta n a thl ete can be awarded. Thus, fina n c i alai d rul es do not al w ays as si sti n the pr es er va ti o n o fa m at eu r i sm o r the ex i st en ce o fs tu den t- athl et es , s o t he r egul at i o ns a t i ss ue cannot be pr esum pti vel y pr oco m peti ti ve sim plybec ause the y r e l a t e t o fi na nc i a l a i d. The l ack ofa proco m peti ti ve presum p ti on i n f avo r of th e t w o B yla w s u n d e r c o n sid er at ion d oe s n oteq u al a fi ndi ngtha t th eya r e an ti co m pet i ti ve ; i t si m pl y mean s th at th ey ca nno t be dee m ed pr o co m pet i ti ve a t th e m o ti o nto- dism i ss sta ge. I n f act, so m e o fthe proco m peti ti ve ar gum ents m ade bythe N CA A , i fsupporte d by e vi dence, c ou ld lea d to a fin d in g t h at th e B yla w s a re rea so n ab le r es tr i ct i o ns o n t r ade
. The di st r i ctc o ur t di d no t r ea chthe32 N o. 11

- 3066 iss u e o f w h et h er th e N C A A B yla w s w er e a n u n re as on ab le r e s tr ict ion on tra d e, bu t ra th er h eld th at p lain tiffs d id not

— a nd c o ul d n ot

— a lleg e a rele va n t m ar ke t c og n iza b le u n d e r th e S h e r ma n A c t . A s w e h a v e ma d e c l e a r, we disa gr ee that pla i nti ff s could not ha ve al l eg ed a r el ev an t cogni zabl e m ar ket, but w e u lti m ate l y c oncl ud e that pl a i nt i f f s d id not id en tify su c h a m ar ke t in th eir c om p lain t, s e ei nf

r a Pa rt C, and th at th e d istri ct cou rt’s di s mi s s a l wa s j us t i fi e d.
C. Ad e qua c yo fPl a i nt i f f s ’ C o mpl a i nt A s a l re ad y n ote d, naked pri ce a nd o utput contr ol s ca n o bv i at e th e nee d f o r a de ta i l ed m ar k eta na l y si s i n a Sh er m an A c t c as e, B d. of Regents , 468 U
. S. at10 9, but that does not el i m i nate the ne ed f ora re l evantco m m er ci al m ar ke t to ex istalt og et h er . A pex Ho siery, 31 0 U.S
. at49 2- 93. I n a n a r ea tha t i s no t o bv i o us l y c o m m er ci al, a nd thus where the S he r manAc t ’ s a pp l i c a t i o n i s n o tc l e a r l y a pparent, we bel i eve i t i s incum bent on the pl ai nti ffto describe the ro ugh conto urs of the re l evantco m m er ci al m ar ketin w hi ch anti com peti ti ve effects m ay be fel t, eve n w hen a quick

- l oo k a pp ro ach is a l l thati s ca l l ed f or . I t m ust there f or e be deter m i ned w hetherthe actual m ar k et s al l eg edl y i d en ti fi ed i n pl aint i ff s’ c o m pl aint

— the m ar ketf orbac hel or ’ s degr ees an d t he m ar ket f orstud ent- athl ete l abor

— wer e ac tu al l y i den ti fi ed, a nd ifso , whethe r the y a dequa te l y de sc r ibe the r el ev an t m ar keto n w hi ch the Byl aw s m ay have ha d an anticom pet i ti ve e ffec t. The di st r i ctc o ur t he l d tha t pl ain-N o. 11

- 3066 33 ti ff s f ai l ed to i den ti fy i n the i r c o m pl aint eithero fthe m ar ket s they no w pre sent, and w e a gr ee. P l a i n t i ff s c o me c l o s e s tt o i d e n t i fy i n ga r e l e v a n tc o mm er ci alm ar keti n thei r d iscussi on o fbac hel or ’ s degr ees , b u t w e n on et h ele s s c on c lu d e t h at th e c om p lain t fa lls sh ort. Pl ai nti ff s a dm i t that be f or e fi l i ng the i r am ended co m pl ainti n the l o wer co ur t, th eyr emov ed two i m po r ta nt port i ons f ro m thei r original co m pla i nt: ( 1) a sect i on headi ng ent i tl ed “Rel evantM ar ket, ” a nd ( 2) a sente nce sta ti ng tha t “ bachel or ’ s degr ees fro m acc re dit ed col l ege s an d /or universi t ies const itute a d isti nc t prod uc t m arket
. ” I t i s cl ea r, the r efo r e, tha t th eyb el i ev ed a r el ev an t m ar ketneed notbe i denti fied o r they att em pted to he dge the i r b et s byk ee pi ngthe i r m arketa l l eg at i o ns v a g u e . P l a i n t i ff s ’ c o mpl a i n tdi d s t a t e th a t“ NC AA m em beri nsti tuti ons com pete w i th ea ch other to att ra ct and e nro l l hi ghl y ski l l ed athl ete s to thei r i nsti tuti on for obt ai ni ng ba chel or ’ s degr ees , ” which atl eas t s ugges ts th e existen ce of som e m ar ket, but the c onfi nes o fthat m ar ketar e f arto o uncle ar . Fo r i nstance , i t i s no t a p p a r en t wh e th e r p l a i n t i ff s b e l i e v e th a tth e B y l a ws affect an o ver al l m ar ketf orbach elo r’ s degr ees , wh i ch w oul d i m pact s chol ar sh i p athl ete s a nd non- athl ete s al i k e, o r s o m e su bs i di ar y mar k ettha t o nl y c o nc erns at hl ete s a tte m pti ng to o btain educati onaldegr ees in exchan ge forathl eti c se rv i ces. Thi s m ay see m l i ke ni tpick i ng, but i fa Sher m an A c t c l ai m o fthi s nature progr ess es past the quick

- l oo k s tag e a nd ente rs a full

- fl edged Rule ofReas on a nal ysi s, the sco pe ofthe m ar ketbec om es ofcent ra l i m port ance.34 N o. 11

- 3066 M or eov er, ev en i fwe deem ed pla i nti ff s’ co m pla i nt to putthe NCA A on su ff i ci en t no ti ce o fthe r el ev an t m ar ketaffecte d by the Byl aw s, we w ou ld s ti l l have doubts about pla i nti ff s’ abi l i ty t o su rv i ve a m oti on t o di smi ss . As ment i o ne d abo ve , the c us to m erb as e i n a pr o du c t ma r k e tf o r b a c he l o r ’ s de g r e e s wo ul d inc l ud e m an y m ore p eop le th an sch olarship ath letes. B ach elor’ s d eg re es are iss u ed to liter ally th ou sa n d s o f p eo p le, on ly a smal l po r ti o n o fwhi cha r e schola r sh i p a th l et es , a nd an ev en sm al ler por ti on o fwh i ch ar e a thl ete s whose schol ar shi ps w er e no t r enewed
. The anti com peti ti ve i m pact o fan NC A A by l aw would there for e li kel y b e ver y m i ni m al
. A notherpro bl em with th e al l ege d m ar ket f o r b ach el o r ’ s deg r ee s, whi chwas di sc us se d b y the di s t r i c t c o ur t, i s the f a c t tha t de g r e e s a r e no tauto
m ati cal l y re cei ved orguar antee d up on paym ent o f t ui t i o n. As ma nyu nh a pp yu nd e r g r a du a t e s c a n a t t e st, paym ent o ftui ti on does n ot ensur e the r ecei pt ofa degr ee. P lainti ff s ci te Br own i n supp or t o fthei r propos ed m ar ke t, w h er e t h e T h ird C irc u it f o u n d a c og n iza b le m ar k etf o r e ducati o na l s er vi ce s pr o vi ded byI vyLe ague col l ege s. 5 F. 3d 65 8. B u t the di ffer ence between a m ar ket for ed uc ational services an d a m arket for bach elor’ s degre es i s o fvi tali m port ance. A stu d en t is o w ed educati onali nstr ucti on upon paym ent o ftui ti on, thou gh wh at a s tud ent doe s with that i nstr ucti on a nd wh ether th at ins tr u c tio n lea d s t o a d eg re e is u p to t h e s t u d en t. A bachel or ’ s degr ee, o n the othe r hand , i s no t bo u gh t o utr i g ht
. I t i s t he oppor t uni ty to ear n a b achel or ’ s degr ee th ato ne pa y s f o r ( o r pe r f o r m s athl et i c se r vi ce s f o r, a s th e case m ay be). T hu s, p lai nt iffs’ com p lai nt d id not ide nt ifyN o. 11

- 3066 35

Agai n, this does no tne c es s ar i l y m ea n thatan y c hal l en ge of 8 any NCAA by l a w wi l l s ur vi ve the m ot i on - t o- di s m i s s s t a ge. M any NC AA byl aws c an be dee m ed pr ocom pet i t i ve “i n the twinkling ofan eye. ” C f. B d . of R eg en ts , 468 U .S. at 109 n. 39 (co n tin u ed ...) a p ro d u c t m ar ke t fo r b ac h elo r ’s d eg re es , bu t e ve n if it d id , w e w oul d l i kel y fi nd thatsuch a m ar ket

— to the extent that i t e xi sts

— i s n o tc o g n i z a b l e u n d e r the Sher m an A ct. The properi denti fi cati on o fa l aborm ar ke t for stud entathl ete s, on the o therhand, would m eetpl ai nti ff s’ bur d en ofde sc r ibinga c o g ni zabl e m ar k etunde r the She rm an A ct. A s an initialm atter, l abor m arkets are cogni zabl e under the S herm an A ct. N ic h ols v. Spence r Int’ l P re ss, Inc. , 37 1 F
. 2d 332, 33 5- 36 (7 th Ci r. 19 67)
. The Banks m ajorit y, ind ict a, op in ed th at th e m ar ke t fo r sc h ola rs h ip athl ete s ca nnot be co nsi dered a l aborm ar ket, since schoo l s do not engag e in pri ce c om pe tit i on f orpl aye rs , nor d oes supply and dem and determ i ne the worth o f st u d en t-a th let es ’ la b o r. 97 7 F .2d at10 91 . W e fin d th is ar gu m en t u n c on vi n c i n g for t w o re as on s. Firs t, th e o n ly reas on thatco l l ege s do not engag e in pri ce c om peti ti on f o r s t u d e n t
- at hl et es i s th a to th e r NC AA b y l a ws p re ve n t t h e m f r o m d oin g s o. T h e fa c t t h at ce rt ain pr o co m pet i ti ve , l eg iti m ate t r ade r es tr i ct i o ns e xi sti n a gi ven ind ustr y doe s no t re m ove thati nd ustr y fro m th e p u rv iew of th e Sh er m an A c t a lt o g e th er . Ra th er , all N CA A act i ons that ar e f aci al l y a nti com peti ti ve m ust have proco m peti ti ve j usti fi cati ons supp or ting thei r exi stence . S eco n d, col l ege s do, i n f act, co m pete f orstud ent-

836 N o. 11

- 3066

(
. . . c on t i nu e d) 8 ( q u o tin g P . A re ed a , The“Rul e o f Re a s o n” i n Ant i t r us tAnalysi s: G eneral Issues 3 7 -3 8 (F ed er a l Ju d ic ia l C en te r, Ju n e 1 9 8 1 )). athl et es , tho ug h the pr i ce the y pa y i nv o l ve s i n- k i nd benefi ts as opposed to cas h. Fo r i nstance , co l l eg es m ay com pete to hi re the coa ch tha t w i l l be bestabl e t o lau n c hp lay er s fro m th e N C A A to th e N at i o n al F oo tb all League, an a ttr acti ve com ponent f ora pros pecti ve c o lleg e fo otb all p lay er . C olle ge s a lso en ga ge in v er ita b le ar m s r aces to pro vid e top- of

- the- l i ne tr ai ni ng f aci l i ti es whi c h, i n tu r n, a r e s u p p o s e d t o a t t r a c tc o l l e g i a t e a th

l et es . M an y future s tu den t- athl et es a l so l o o kt o the st r en g tho fa c o l leg e’ s ac ade m i c pr o g r ams in de ci di ng w here to at tend. Th es e ar e al l parto fthe com peti ti ve m ar ketto at tr act stud ent- athl ete s whose a thl eti c l abor can re sul t i n m any benefi ts f or a col l ege , i ncl ud i ng eco no m i c g ain. U nfo rtunatel y forpl ai nti ff s, nothin g r ese m bl i ng a disc ussi on o fa re l evantm ar ketf orstud ent- athl ete l ab o r c anb e f o und i n the a m en ded co m pl aint . I nde ed, the w or d l abori s who lly abse nt. Pl ai nti ff s cl ai m thatthey “allege [ d] that there was ‘ no pra cti calal ternati ve’ avai l abl e forstud ents w i shi ng to p ursue an educati on i n e x c h a n g e f o r th e i r p l a y i n gab i l i t y, ” b u tth e p a r a g r a ph th atthe y c i te t o i n the i r am en ded co m pl ainte xpl ains th e l ac ko f“ pr ac ti ca l alterna ti ve s” f o r c o l l eg es want i ng to fi el d team s o utsi de ofthe N CA A ’s fr am ew or k, not the l ack of“pra cti calal ternati ves” f orstud ent- athl ete s. Pl ainti ff s ap p ea r to have m ade the str ate gi c deci si on to f or go i denti fyi ng a specific re l evantm ar ket
. W hatev erN o. 11

- 3066 37 the r eas ons f orthatst ra teg i c decision , they c annot now offerposthoc ar gum ents att em pti ng to i l l um i nate a bur i e d ma r k e ta l l e g a t i o n . We th e r e f o r e a ffi r m the dist ri ct c ourt ’ s di sm i ssa l o fpl ai nti ff s’ cl ai m s.
D . Dismissalw i t h P r ej ud i ce The dis tr i ct c ourt ’ s deni alo fpl ai nti ff s’ r equest to amend th ei r c o m pl ainti s r ev i ewe d fo r abu se ofdi sc r et i o n, Sta na rd, 658 F.3d at79 7, w h ich is a “ h ea vy bu rd en .” Jac ks on v. BungeCorp. , 40 F. 3d 239, 246 (7th C ir. 1994). U nd er R ule 15 ( a) o fthe Feder alRule s o fCi vi l Pro cedure, a com pla i nant m ay am end hi s com pla i nt as a m att er o fc o ur se i n r es po ns e to a mo ti o n t o di smi ss , b uta ny su bs eque nta m en dm en ts ca n o nl y b e m ade wi thc o ns en t ofthe o pp o s i ng pa r t y o r the c o ur t ’ s l e a v e . W e have st a t e d tha t a di s t r i c t c o ur t i s no t r e qu i r e d t o g r a ntsuch l eave wh en a pla i nti ffhas had m ult i ple o pp or tuni ti es to st at e a cla im u p on w h ich reli e fm ay be gra n te d
. E m ery v. A m . Gen. Finance, Inc. , 13 4 F
. 3d 1321 , 13 22- 23 ( 7th C ir. 1998). B y our cou nt, plaintiffs had three op p ortu ni ti es to id ent i fy a r el ev an t m ar k eti n whi chthe N CAA a l l e g e dl y c o mm i t t e d v i o l a t i o ns o fthe S he rm an Act
. P l a i nt i ff s o b v i o us l y c o ul d h a v e e s t a b l i s he d a r el ev an t m ar k etfro m the o ut se t, b utthe y a l so ha d the opportunity t o a m en d thei r com pla i nt and i ncl ud e a n id en tific at ion of a c og n iza b le m ar ke t a fte r th e fu ll bri efi ng and ar gum ent o fthe N CA A ’ s m oti on t o dism i ss in th e C alifo rn ia d ist ric t c ou rt . F u rt h er , pla in tiffs ac tu ally to o ka d v a n t a g e o fth e i r ab i l i ty t o a me n d th e i r c o mpl ai nt i n the I nd iana di st r i ctc o ur t, y ete ve n a fte r c o nfr o nt i ng38 N o. 11

- 3066 the NC A A ’ s cl ai m thata re l evantm ar kethad not been i denti fi ed, theyst i l l di d not incl ud e a c lea r i denti fi cati on ofthe m ar keti n w hi ch the N C A A a l l ege dlyact ed in an an tic om p et itiv e m an n er . F u rt h er , “[i]t is a ba sic pri nci ple thatthe com pla i nt m ay not be a m end ed by th e b r i efs in o p p os itio n to a m ot ion to d ism iss , no r c an it be a m en ded bythe bri ef s o n appeal
. ” Thom as on v. N a ch trieb , 888 F.2d 1202 , 1 205 (7th Cir. 1989). W e the refore cannot fi nd thatthe dist ri ct c ourtabuse d i ts disc retio n i n dis m i ssi ng pl ai nti ff s’ cl ai m s with prej ud i ce.

I I I . Concl usio n Forthe f or ego i ng r eason s, w e A F F I RM the deci si on ofthe dist ri ct c ourt .

6- 18- 12