Banks v. National Collegiate Athletic Ass'n
1990 WL 132568, 746 F. Supp 850, 1990 U.S. Dist. LEXIS 12255 (1990)
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Rule of Law:
NCAA eligibility rules designed to maintain amateurism, such as the 'no-draft' and 'no-agent' rules, do not violate Section 1 of the Sherman Antitrust Act because their procompetitive effects in preserving the unique product of amateur collegiate athletics outweigh their anticompetitive effects.
Facts:
- Braxston Banks was a football player for the University of Notre Dame with one year of collegiate eligibility remaining after suffering a knee injury.
- In March 1990, after a period of indecision, Banks formally entered the NFL draft by signing a form that stated, 'I HEREBY IRREVOCABLY RENOUNCE ANY AND ALL REMAINING COLLEGE ELIGIBILITY I MAY HAVE.'
- After deciding to enter the draft, Banks entered an oral agreement with an attorney, Everett Glenn, to market his athletic services to NFL teams.
- Glenn sent a letter to all 28 NFL teams advising them that his office would be representing Banks in the upcoming draft.
- Banks was not selected in the 1990 NFL draft.
- After the draft, Banks did not receive a free agent contract offer from any professional team.
- Notre Dame was willing to renew Banks's grant-in-aid and allow him to play his final year, but would not do so because NCAA rules now deemed him ineligible.
Procedural Posture:
- Braxston Banks filed a lawsuit against the National Collegiate Athletic Association (NCAA) and the University of Notre Dame in the U.S. District Court for the Northern District of Indiana.
- The complaint alleged that the NCAA's 'no-draft' (Bylaw 12.2.4) and 'no-agent' (Bylaw 12.3) rules violate Section 1 of the Sherman Antitrust Act.
- Banks filed a motion for a preliminary injunction to prevent the defendants from enforcing the bylaws against him, which would restore his eligibility to play football for Notre Dame during the 1990 season.
- The district court held a hearing on the motion for a temporary injunction.
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Issue:
Does a student-athlete seeking a preliminary injunction demonstrate a sufficient likelihood of success on the merits that the NCAA's 'no-draft' and 'no-agent' eligibility rules constitute an unreasonable restraint of trade in violation of Section 1 of the Sherman Antitrust Act?
Opinions:
Majority - Miller
No. The plaintiff has not shown a reasonable likelihood of success on his claim that the NCAA's 'no-draft' and 'no-agent' rules violate Section 1 of the Sherman Act. Applying the Rule of Reason, the court finds that these eligibility rules have a legitimate procompetitive purpose that outweighs any anticompetitive effect. The rules are central to the NCAA's mission of preserving amateurism and maintaining a clear line of demarcation between college and professional sports. This distinction creates the unique 'product' of college football, which widens consumer choice and enhances the overall market for sports entertainment. While the rules harm Banks individually, the Sherman Act protects competition, not individual competitors. Banks failed to demonstrate that the rules have a significant anticompetitive effect on the relevant market, such as distorting prices or reducing the supply of players, that would outweigh the well-established procompetitive justification of preserving the character of amateur athletics.
Analysis:
This decision illustrates the significant judicial deference granted to NCAA eligibility rules when challenged under antitrust law. It solidifies the principle that rules central to defining and preserving amateurism are likely to be upheld under the Rule of Reason, even if they have anticompetitive effects on individual athletes. The court's emphasis on the distinction between harm to a 'competitor' (Banks) versus harm to 'competition' (the market) sets a high bar for student-athletes seeking to challenge such regulations. This case reinforces the idea that the NCAA's role in creating the distinct 'product' of amateur college sports serves a procompetitive function that courts are reluctant to disturb.
