Opinion ID: 1349664
Heading Depth: 1
Heading Rank: 2

Heading: Bassett's Antitrust Claim Against NCAA

Text: Bassett's Complaint alleges NCAA, the UKAA and the SEC conspired to prevent Appellant from coaching at any NCAA member school in violation of the Sherman Antitrust Act, 15 U.S.C. §§ 1-2 (2000) and the Clayton Act, 15 U.S.C. § 15 (2000), as the conspiracy amounts to a group boycott. The district court determined Bassett's antitrust allegation failed to state a claim because NCAA's actions were not commercial in nature and therefore, did not violate the Sherman Act. The district court held enforcement of the rules at issue here is not within the purview of antitrust law as it is not related to the NCAA's commercial or business activities. (JA 88). Citing Smith v. NCAA, 139 F.3d 180, 186 (3d Cir.1998), the district court held, [r]ather than intending to provide the NCAA or any of its member schools with a commercial advantage, enforcement of rules governing recruiting, improper inducements, and academic fraud `primarily seek[s] to ensure fair competition in intercollegiate athletics.' (JA 88). Even if they were commercial in nature, the district court reasoned, Bassett had still failed to state a claim because he failed to plead an antitrust injury. The district court relied on Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489, 97 S.Ct. 690, 50 L.Ed.2d 701 (1977), which defined antitrust injury as (1) injury of the type the antitrust laws were intended to prevent and (2) injury that flows from that which makes defendants' acts unlawful. The district court went on to say, because the purpose of the antitrust laws is to protect competition rather than competitors, a plaintiff must allege injury, not only to himself, but to a relevant market. Thus, failure to allege an anti-competitive impact on a relevant market amounts to a failure to allege an antitrust injury. (JA 88) (citing Banks v. National Collegiate Athletic Ass'n, 977 F.2d 1081, 1087 (7th Cir.1992), Brown Shoe Co. v. United States, 370 U.S. 294, 320, 82 S.Ct. 1502, 8 L.Ed.2d 510 (1962)). The district court determined Bassett's Complaint failed to allege any anticompetitive effect on an identifiable market, failed to allege any decrease in the supply or quality of coaching services, increase in cost of coaching services, or any harm to consumers resulting from his punishment. (JA 89). The district court concluded, Bassett's conclusory allegations of an antitrust injury-unsupported by any factual allegations that resemble a cognizable antitrust claim-are insufficient. (JA 89). On appeal, Bassett contends the trial court misunderstood the trade practice at issue. While Bassett claims the district court incorrectly presumed Bassett was attacking NCAA's standards for defining improper conduct, Bassett argues he was challenging NCAA's enforcement of its standards. Bassett contends NCAA permits member schools to deflect blame from themselves to coaches and such action is commercial in nature as it affects the labor market for all college coaches. The restraint at issue here is NCAA's boycott of coaches unjustly or excessively punished because of its disciplinary system. These bans affect interstate commerce by preventing schools across America from hiring boycotted coaches to generate sports revenue and by preventing these coaches from seeking gainful employment with NCAA institutions. (Final Reply Brief of Plaintiff-Appellant at 6-7). The restraint at issue here-the group boycott of coaches without adequate due process-is rooted in the commercialization of intercollegiate athletics. ( Id. at 11). Bassett contends NCAA's disciplinary scheme impacts commerce because the discipline involves financial sanctions. Bassett argues his Complaint alleges sufficient facts demonstrating the commercial nature of the trade restraint. According to Bassett, the show-cause sanction issued by NCAA may end a coach's career. Bassett cites to paragraphs 16-24 and 51-55 of his Complaint, which he contends provide the necessary facts to support his antitrust claim against NCAA. The pertinent paragraphs of Bassett's Complaint may be summarized as follows: (a) Bassett spends a great deal of time exposing what he calls the student-athlete myth and the money-making scheme of college football. (b) The thrust of his allegations is how NCAA relies on its members to perform the bulk of investigating alleged infractions, yet fails to abide by the due process guarantees under NCAA's constitution and bylaws. He then alleges a conspiracy by NCAA which violates the Sherman Act and Clayton Act via denial of due process. NCAA contends Bassett admitted to rules infractions while coaching at the UK and therefore, the show cause order issued against him is the result of his own admitted misconduct and not a conspiracy to prevent him from coaching in violation of federal antitrust laws. NCAA argues it is ironic that Bassett complains the showcause order and sanctioning conduct constitute commercial activity when the rules enforced by NCAA, in fact, punish the attempted commercialization of student athletes and amateur intercollegiate athletics. Furthermore, NCAA contends Bassett has failed to allege an antitrust injury. Rather, according to NCAA, Bassett's Complaint alleges only injury to Bassett and is devoid of facts alleging anticompetitive effects on a discernible market. NCAA also contends Bassett is barred by the doctrines of res judicata, collateral estoppel and law of the case because he failed to appeal the district court's dismissal of Bassett's similar claims against the SEC and the UKAA, which are now final judgments. Finally, NCAA contends the district court, on summary judgment, found Bassett had failed to demonstrate that NCAA acted improperly in following its established enforcement procedures. Therefore, NCAA claims Bassett is collaterally estopped from relitigating the propriety of NCAA's enforcement process.