Justia Antitrust & Trade Regulation Opinion Summaries

Articles Posted in Education Law
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Deppe, a punter, enrolled at Northern Illinois University (NIU), a National Collegiate Athletic Association Division I school, in 2014 without an athletic scholarship. Deppe decided to “red shirt” his first year; he practiced with the team but did not compete, so the clock did not run on his four years of NCAA athletic eligibility. In 2015 NIU signed another punter, so he looked for a new program. Coaches at the University of Iowa, another Division I school, told Deppe they wanted him if he would be eligible to compete during the 2016–2017 season. The NCAA indicated that under its year-in-residence rule, Deppe would be ineligible to compete for one year following his transfer. An exception permitting a one-time transfer with immediate athletic eligibility in limited circumstances was unavailable to Deppe. A player who transfers under extenuating circumstances may obtain a waiver of the NCAA’s requirement that a student’s four years of playing time be completed in five calendar years; the school to which he transfers must initiate the process. Iowa's football staff notified Deppe that the team had decided to pursue another punter who had immediate eligibility and would not initiate the process for him. Deppe sued the NCAA on behalf of himself and a proposed class alleging violations of the Sherman Act. The Seventh Circuit affirmed dismissal. The year-in-residence requirement is an eligibility rule clearly meant to preserve the amateur character of college athletics, is therefore presumptively procompetitive, and need not be tested for anticompetitive effect under a full rule-of-reason analysis. View "Deppe v. National Collegiate Athletic Association" on Justia Law

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Edinboro, a Pennsylvania public university, collaborated with Edinboro University Foundation, a nonprofit entity, to construct new dormitories. In 2008, the Foundation amended its Articles of Incorporation to authorize borrowing funds “to acquire, lease, construct, develop and/or manage real or personal property.” The University leased property to the Foundation in a favorable location; the Foundation issued bonds to raise the funds and completed construction. Since 1989, the University required non-commuting first-year and transfer students to reside on-campus for two consecutive semesters. Two and one-half years after the first phase of the new dormitories opened, the University amended its policy to require certain students to reside on-campus for four consecutive semesters. Businesses that provide off-campus housing sued, asserting that the University and the Foundation conspired to monopolize the student housing market in violation of the Sherman Act, 15 U.S.C. 2. Plaintiffs did not sue the University, conceding that it is an arm of the state subject to Eleventh Amendment immunity. The Third Circuit affirmed dismissal. The University’s actions are not categorically “sovereign” for purposes of “Parker” immunity, so the court employed heightened scrutiny, citing the Supreme Court’s decision in Town of Hallie v. City of Eau Claire, (1985), which requires anticompetitive conduct to conform to a clearly articulated state policy. The University’s conduct withstands Hallie scrutiny. The Foundation’s actions were directed by the University, so the Foundation is also immune. View "Edinboro College Park Apartments v. Edinboro University Foundation" on Justia Law

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Students and former students of the University of Alabama, Auburn University, and the University of Alabama at Birmingham, filed three separate class-action lawsuits in the Jefferson Circuit Court challenging the legality of so-called "dining-dollars" programs implemented by the universities and pursuant to which all undergraduate students were required to pay a mandatory dining fee each semester, which was then credited back to the students in the form of "dining dollars" that could be spent only at on-campus dining outlets controlled exclusively by the food-service vendors for the universities - Aramark Educational Services, Inc., at UA; Compass Group, USA, Inc. (Chartwells) at Auburn; and Sodexo, Inc., at UAB. The trial court dismissed the three actions, and the students appealed. The Supreme Court consolidated the appeals for the purpose of writing one opinion and affirmed all three. The students sued the boards of trustees governing the universities and the food-service vendors, alleging that the dining-dollars programs violated: (1) state antitrust laws; (2) the Alabama Constitution inasmuch as it forbids the State from having an interest in a private enterprise; (3) the rule in 16-1-32(d) barring universities from charging excessive transaction fees to merchants that accept university-issued debit cards; and (4) the common-law prohibition on conversion. Because the boards of trustees are entitled to state immunity pursuant to section 14 of the Alabama Constitution, all claims against them were properly dismissed. The university administrators and foodservice vendors were entitled to immunity on the asserted antitrust claims as well, albeit state-action immunity as opposed to state immunity. Moreover, because the students lacked standing to pursue a cause of action for a violation of 16-1-32(d), and because the students did not and could not allege the necessary elements of a conversion claim, the trial court also properly dismissed the students' other claims.View "Vandenberg v. Aramark Educational Services, Inc." on Justia Law

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Plaintiffs were high school football players that earned scholarships to play for National Collegiate Athletic Association Division I football programs. Both suffered career-ending football injuries at college. Their athletic scholarships were good for one year. When injuries prevented them from playing football, their scholarships were not renewed. Plaintiffs challenge two NCAA regulations as having an anticompetitive effect, in violation of the Sherman Act. 15 U.S.C. 1: the cap on the number of scholarships given per team and the prohibition of multi-year scholarships. The district court dismissed, finding that plaintiffs failed to allege a relevant commercial market on which NCAA Bylaws had an anticompetitive effect. The Seventh Circuit affirmed. It was not clear whether plaintiffs believed that the Bylaws affect an overall market for degrees, which would impact scholarship athletes and non-athletes alike, or some market that only concerns athletes attempting to obtain education in exchange for athletic services. Plaintiffs claimed that they alleged that there was no practical alternative for students wishing to pursue an education in exchange for playing ability, but the complaint explained the lack of practical alternatives for colleges wanting to field teams outside of the NCAA framework, not the lack of alternatives for student-athletes. View "Agnew v. Nat'l Collegiate Athletic Ass'n" on Justia Law