NCAA v. California? There is Some Precedent

Photo: Robert Hanashiro, USA TODAY Sports

So, for over twenty years now I have been teaching sports law, and THE case in Sports Law I has been NCAA v. Tarkanian, 488 U.S. 179 (1988). Generations of law students have been required to memorize the holding (the NCAA is NOT a state actor, and therefore not subject to due process), and listen to me complain about the rationale behind it. The Supreme Court’s split decision, I argue, inappropriately disregarded the tremendous power of the NCAA. I haven’t changed my mind on that score. BUT – the landscape of the current controversy is significantly different than that which occurred in the 1980s, and that may dictate a different result this time around.

The Tarkanian saga begins, as all good stories do, in a tremendously successful D1 basketball program. “Tark the Shark’s” Runnin’ Rebels went 509-105 in 19 seasons, appearing in four Final Fours and taking home the NCAA D1 Championship in 1990, blowing out Duke 103-73. Meanwhile, following an infamous picture of some UNLV players in a hot tub with Richard Perry, aka “The Fixer”, Jerry’s program fell under NCAA scrutiny, ultimately resulting in a finding of 38 violations, including 10 by Jerry himself. Jerry, true to form, fought back when the NCAA issued a show cause order to UNLV, ordering UNLV to suspend Jerry or face further sanctions. Of course, UNLV was not exactly thrilled with this directive to fire its iconic coach.

In 1977, Jerry filed suit in Nevada state court against UNLV, alleging that he was deprived of his constitutional rights under the 5th and 14th Amendments. The court issued an injunction, and ultimately the Nevada Supreme Court found for Tarkanian, following the joinder of the NCAA as a party attempting to enforce its discipline upon Jerry through UNLV. The Supreme Court granted certiorari to determine whether or not the NCAA had engaged in state action and therefore was subject to the 5th and 14th Amendments and due process requirements.

Jerry’s argument before the Court was that UNLV’s actions in compliance with NCAA rules rendered the NCAA a state actor subject to due process. The majority decided that UNLV had not delegated power to the NCAA – despite the fact that Jerry’s disciplinary process had been conducted by the NCAA. In assessing the NCAA’s formidable practical power in enforcing its rules through UNLV, the majority stated in infamous Footnote 19:

The University’s desire to remain a powerhouse among the nation’s college basketball teams is understandable, and nonmembership in the NCAA obviously would thwart that goal.  But that UNLV’s options were unpalatable does not mean that they were nonexistent.

This complete disregard of UNLV’s predicament has drawn my ire for years. In 1988, UNLV had no realistic opportunity to withdraw from the NCAA. Who would they play? Who would play FOR them? At a time when there were limited numbers of television networks and no other institutions were under fire, UNLV had one course of action: compliance with the NCAA mandate. Period. With all due respect, legal reasoning cannot occur in a vacuum, nor should it be based upon unfounded assumptions about the real world. The dissent, which was written by Justice Byron “Whizzer” White, himself a former student-athlete and professional football player (who also wrote the dissent in NCAA v. Board of Regents), argued that the NCAA and UNLV had been joint actors in disciplining Jerry, and the fact that UNLV HAD complied with the NCAA directive in itself was compelling.

Meanwhile, the Nevada Legislature sprang into action to save Jerry. It passed a statute requiring that “any” national collegiate athletic association provide due process to any student-athlete, coach or institution in disciplinary proceedings. It further gave Nevada state courts the authority to enjoin proceedings which did not conform to these requirements and allowed institutions to recover damages suffered as a result of any penalties assessed. Further, it prohibited any national collegiate athletic association from impairing the rights or privileges of any such institution – meaning that the NCAA couldn’t just kick them out.

Subsequently, when UNLV was charged by the NCAA with violations, it attempted to invoke the due process requirements of the Nevada statute. The NCAA sought a declaratory judgment and injunctive relief on the grounds that the Nevada due process statute violated the Commerce Clause and the Contract Clause of the U.S. Constitution. Ultimately, the 9th Circuit agreed in NCAA v. Miller, stating:

It is clear that the Statute is directed at interstate commerce and only interstate commerce. By its terms, it regulates only interstate organizations, i.e., national collegiate athletic associations which have member institutions in 40 or more states. Nev.Rev.Stat. Sec. 398.055. Moreover, courts have consistently held that the NCAA, which seems to be the only organization regulated by the Statute, is engaged in interstate commerce in numerous ways. It markets interstate intercollegiate athletic competition.

The Circuit Court identified two ways in which the Nevada statute violated the Commerce Clause. First, the law would impact the NCAA’s ability to enforce its rules uniformly across the nation, thereby impeding one of the NCAA’s main purposes (to provide a system for uniform regulation of intercollegiate athletics). As a practical matter, in order to have a uniform system of enforcement, the NCAA would have to apply the Nevada requirements to every school in every state, meaning that the Nevada statute would have reach beyond Nevada state lines – a clear violation of the Commerce Clause.

Second, the Nevada statute put the NCAA at risk of conflicting requirements in every state across the country. As the court observed: “Given that the NCAA must have uniform enforcement procedures in order to accomplish its fundamental goals, its operation would be disrupted because it could not possibly comply with all three statutes. ” 10 F.3d at 639.

In conclusion, the court stated:

We appreciate Nevada’s interest in assuring that its citizens and institutions will be treated fairly. However, the authority it seeks here goes to the heart of the NCAA and threatens to tear that heart out. Consistency among members must exist if an organization of this type is to thrive, or even exist. Procedural changes at the border of every state would as surely disrupt the NCAA as changes in train length at each state’s border would disrupt a railroad.  10 F.3d at 640.

At that point in my lecture notes, I conclude: that’s it. Unless the NCAA decides to revamp its approach, or absent federal legislation, the NCAA’s position as a private entity subject only to private association law insulates it from significant review. Under private association law, courts will only intervene where an association fails to follow its own rules, is arbitrary and capricious, or commits fraud or illegality. BUT, there are some significant differences this time around.

To begin with, the Tarkanian case involved one embattled institution – UNLV – that had no practical alternative to complying with the NCAA directive. The California Fair-Pay-to-Play Act impacts no less than 24 D1 institutions. (New York comes in second with 22.) Footnote 19 is no longer an issue. Given the exponential increase in the number and value of media platforms since the era of Tark the Shark, it is now very feasible for the Pac-12, or at least the California members of it, to create a separate, independent athletic association. As New York and other jurisdictions follow California’s lead, there is the realistic prospect of conferences OTHER than the Pac-12 opting out of the NCAA. At some point, the NCAA’s status as THE national intercollegiate athletic association – which was a fundamental factual foundation of the Miller decision – might become questionable. Right now, eight states in addition to California are considering similar legislation. IF that were to occur, it could seriously undermine the Commerce Clause argument. If that did NOT occur, however, the resulting regulatory chaos – multiple states with potentially multiple bills having differing requirements and/or prohibitions – would be exactly what the Ninth Circuit cited in Miller as a clear cut violation of the Commerce Clause.

So, what’s the solution? The NCAA designated a working group to review concerns about the name, image and likeness issues, and a report is to be issued October 28th. Meanwhile, as more and more states join in the fray, it seems inevitable that Congress will consider taking action on a national basis. The NCAA’s status as a private association provides it the protection of limited review in a court of law. It does not afford similar protection in the court of public opinion, where images of student-athletes, often people of color, struggling to make ends meet proliferate. Meanwhile, their performances on the court, field and rink benefit schools, apparel companies, television networks and, to a certain extent, college coaches. The NCAA’s $1 billion revenue doesn’t make for good optics, either.

It is certainly true that the revenue generated by the “money sports” – namely FBS football and D1 men’s and women’s basketball – support a variety of important and valuable programs such as Olympic sports. They also generate and foster campus and alumni communities and enhance the student educational experience for everyone. Moreover, many student-athletes are afforded educational and other opportunities because of their athletic prowess that they would not otherwise receive.

And so the debate continues. The only thing we know for sure is that this not going away anytime soon. It’s important to note that California is in the Ninth Circuit, so the Miller case is binding precedent. Of course, that does not mean that Miller would be binding in other Circuits, so it is entirely possible – and maybe even likely – that the same issue might be resolved differently elsewhere. That would pose a split among Circuit Courts, which is a classic case for a successful grant of certiorari by the Supreme Court. UNLV was first notified of a preliminary inquiry into possible violations in 1972. The 9th Circuit decision in Miller was issued in 1993 after Jerry Tarkanian fought his way to the Supreme Court and back. Looks like I have enough material for another 20 more years of law students . . .

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