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Notice2024-12720

State of Ohio et al. v. National Collegiate Athletics Association; Proposed Final Judgment and Competitive Impact Statement

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Published

June 11, 2024

Issuing agencies

Justice DepartmentAntitrust Division

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[Federal Register Volume 89, Number 113 (Tuesday, June 11, 2024)]
[Notices]
[Pages 49194-49211]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-12720]

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DEPARTMENT OF JUSTICE

Antitrust Division

State of Ohio et al. v. National Collegiate Athletics
Association; Proposed Final Judgment and Competitive Impact Statement

Notice is hereby given pursuant to the Antitrust Procedures and
Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed Final Judgment,
Stipulation, and Competitive Impact Statement have been filed with the
United States District Court for the Northern District of West Virginia
in State of Ohio et al. v. National Collegiate Athletics Association,
Civil Action No. 1:23-cv-100. On January 18, 2024, the United States,
along with ten states and the District of Columbia, filed an Amended
Complaint alleging that the NCAA's Division I rule requiring student
athletes who transfer between institutions to complete a year in
residence before being eligible to compete in intercollegiate contests
unreasonably restrained trade in violation of section 1 of the Sherman
Act, 15 U.S.C. 1. The proposed Final Judgment, filed on May 30, 2024,
requires the NCAA to refrain from enforcing the offending rules and to
restore eligibility to certain affected student athletes.
Copies of the Amended Complaint, proposed Final Judgment, and
Competitive Impact Statement are available for inspection on the
Antitrust Division's website at <a href="http://www.justice.gov/atr">http://www.justice.gov/atr</a> and at the
Office of the Clerk of the United States District Court for the
Northern District of West Virginia. Copies of these materials may be
obtained from the Antitrust Division upon request and payment of the
copying fee set by Department of Justice regulations.
Public comment is invited within 60 days of the date of this
notice. Such comments, including the name of the submitter, and
responses thereto, will be posted on the Antitrust Division's website,
filed with the Court, and, under certain circumstances, published in
the Federal Register. Comments should be submitted in English and
directed to Yvette Tarlov, Chief, Media, Entertainment &
Communications, Antitrust Division, Department of Justice, 450 Fifth
Street NW, Suite 7000, Washington, DC 20530 (email address:
<a href="/cdn-cgi/l/email-protection#550c23302121307b013427393a23152026313a3f7b323a23">[email&#160;protected]</a>).

Suzanne Morris,
Deputy Director, Civil Enforcement Operations, Antitrust Division.

In the United States District Court for the Northern District of West
Virginia Clarksburg Division

Amended Complaint for Injunctive Relief

State of Ohio, 30 E. Broad St., 26th Floor, Columbus, OH 43215,
Commonwealth of Virginia, 202 North 9th Street, Richmond, VA 23219,
District of Columbia, 400 6th Street NW, 10th Floor, Washington, DC
20001, State of Colorado, 1300 Broadway, 7th Floor, Denver, CO
80203, State of Illinois, 100 West Randolph Street, Chicago, IL
60601, State of Minnesota, 445 Minnesota St., Suite #1400, St. Paul,
MN 55101, State of Mississippi, 550 High St., P.O. Box 220, Jackson,
MS 39205, State of New York, 28 Liberty Street, New York, NY 10005,
State of North Carolina, 114 W. Edenton Street, Raleigh, NC 27603,
State of Tennessee, P.O. Box 20207, Nashville, TN 37202, State of
West Virginia, P.O. Box 1789, Charleston, WV 25326, and United
States of America, U.S. Department of Justice, 950 Pennsylvania
Avenue NW, Washington, DC 20530, Plaintiffs, v. National Collegiate
Athletic Association, 700 W Washington Street, P.O. Box 6222,
Indianapolis, IN 46206-6222, Defendant.

Bailey,
Case No: 1:23-cv-00100
Judge Bailey

Amended Complaint for Injunctive Relief

1. The State of Ohio, Commonwealth of Virginia, District of
Columbia, and States of Colorado, Illinois, Minnesota, Mississippi, New
York, North Carolina, Tennessee, and West Virginia (``Plaintiff
States'') and the United States of America bring this action to
challenge Bylaw 14.5.5.1 (``Transfer Eligibility Rule'') of Defendant,
the National Collegiate Athletic Association (``NCAA''). This bylaw
imposes a one-year delay in the eligibility of certain college athletes
transferring between NCAA member institutions and unjustifiably
restrains the ability of these college athletes to engage in the market
for their labor as NCAA Division I college athletes. This action seeks
declaratory and injunctive relief against Defendant for a violation of
section 1 of the Sherman Act, 15 U.S.C. 1.

Introduction

2. NCAA member institutions and their college athletes engage in
intense competition on and off the field. The contests that take place
on fields and courts across the nation are the most visible. But off
the field, schools compete to recruit and retain talented

[[Page 49195]]

college athletes, and college athletes compete to market their labor to
the schools of their choice.
3. In the time since the NCAA's founding in 1906, the scope and
subject matter of its rules governing intercollegiate sports have
expanded significantly. It has not only adopted rules to ensure the
actual contests on the field are fair and safe, but it has also created
rules that control off-the-field competition among its members and
college athletes. Although some of these rules may be necessary to
administer college sports, rules that unreasonably restrict competition
between competitors, with no overriding procompetitive benefit, run
headlong into this nation's antitrust laws which are premised on the
belief that market forces provide the best outcomes.
4. One such NCAA rule is the Transfer Eligibility Rule, which
restricts the eligibility of college athletes who transfer between
Division I schools. The NCAA claims that this Rule promotes academic
well-being of college athletes and preserves its amateurism model. But
the connection between the Rule and academic well-being or athletic
amateurism is tenuous at best and is outweighed by the harm it does to
college athletes and consumers of college athletics. In the language of
antitrust law, the Transfer Eligibility Rule is a no-poach agreement
between horizontal competitor member schools that serves to allocate
the market for the labor of NCAA Division I college athletes. This
agreement plainly violates the Sherman Act. The fact that it was
created under the auspices of the NCAA does not shield it from
antitrust scrutiny. In contrast to college athletes, students with
academic or music scholarships can freely transfer institutions without
facing similar restraints on their ability to practice their craft.
Likewise, coaches and administrators face no comparable barriers.
5. The Transfer Eligibility Rule requires a year of academic
residency before a transferring Division I college athlete is eligible
to participate in NCAA athletic competition. Underscoring its
anticompetitive nature, the rule is not universally applied. A college
athlete's first transfer is excepted from this process, and there is a
discretionary waiver process. But the Rule remains the default for
Division I college athletes who transfer a second time.
6. For NCAA college athletes, a one-year waiting period for
eligibility can be devastating. This amounts to 20% of the total time
allotted by NCAA regulations for the completion of the college
athlete's total seasons of eligibility. Furthermore, only by competing
on the field or court can the college athlete receive the full benefits
of participation in Division I NCAA athletics.
7. The Transfer Eligibility Rule artificially deters players and
teams from achieving optimal matches by forcing college athletes to
weigh the one-year ineligibility period against the benefits of moving
to a better matched school. It is ironic that this rule, stylized as
promoting the welfare of college athletes, strips them of the agency
and opportunity to optimize their own welfare as they see fit.
8. Though the NCAA is an association of member institutions that
compete against each other to attract revenues, fans, and college
athletes, it has enacted and enforced anticompetitive rules and
policies that act as an unlawful barrier on the ability of certain
college athletes and universities to compete against each other.
9. Plaintiff States and the United States bring this action to put
a stop to Defendant's unjustified overreach into the lives and careers
of college athletes, to prevent the unjustified anticompetitive
restriction on universities who seek to compete for college athletes,
and to restore freedom of economic opportunity.

Jurisdiction and Venue

10. This Court has jurisdiction over this action under section 1 of
the Sherman Act, 15 U.S.C. 1, section 26 of the Clayton Act, 15 U.S.C.
26, and under 28 U.S.C. 1331 and 1337.
11. This Court may exercise personal jurisdiction over Defendant
because Defendant currently transacts business in the Clarksburg
Division of the Northern District of West Virginia. Defendant and its
member institutions conduct athletic competitions, ticket and
merchandise sales, television agreements, and other revenue-generating
activities in the Northern District of West Virginia.
12. Venue is proper in this district under section 12 of the
Clayton Act, 15 U.S.C. 22, and under 28 U.S.C. 1391(b)(2).

The Parties

13. The Attorneys General of the Plaintiff States bring this action
in their quasi-sovereign capacities as the chief law enforcement
officers of their respective states.
14. Plaintiff States have quasi-sovereign interests in protecting
their citizens, including but not limited to college athletes and the
consumers of college athletics, from economic harm and in ensuring that
their economies and the labor markets therein are not suppressed by
unjustified restraints of trade.
15. The Plaintiff States are granted authority to bring actions for
injunctive relief under federal antitrust law pursuant to 15 U.S.C. 26.
16. The United States brings this action pursuant to section 4 of
the Sherman Act, 15 U.S.C. 4, to prevent and restrain NCAA from
violating section 1 of the Sherman Act, 15 U.S.C. 1.
17. Defendant NCAA is an unincorporated association that acts as
the governing body of college sports. The NCAA includes more than 1,000
member colleges and universities throughout the United States,
including institutions in each of the Plaintiff States. These member
institutions are organized into three divisions, and Division I
includes over 350 schools. Through the NCAA Constitution and Bylaws,
the NCAA and its members have adopted regulations governing all aspects
of college sports, including specifically, the Bylaw at issue in this
case, Division I Bylaw 14.5.5.1. The NCAA Constitution and Bylaws were
adopted by votes of the member institutions and various NCAA councils,
and they may be amended by votes of the member institutions or NCAA
councils. Thus, the rules set forth in the NCAA Constitution and Bylaws
constitute horizontal agreements between the NCAA and its member
institutions and among NCAA member institutions.
18. As a practical matter, an academic institution that wishes to
participate in any meaningful way in the highest and most popular level
of collegiate athletics must maintain membership in the NCAA and abide
by the Division I rules and regulations promulgated by the NCAA and its
members. Failure to abide by these rules and regulations risks
subjecting sports programs at the academic institution to punitive
measures from the NCAA that include reduced athletic-scholarships,
suspensions, prohibition on post-season eligibility, vacating
previously-earned wins, monetary fines, and the so-called ``death
penalty.''
19. The NCAA and its member institutions control the highest and
most popular level of collegiate athletics. Therefore, any individual
who wishes to provide athletic services in exchange for the payment of
partial or full tuition for an undergraduate academic education and
wishes to derive the substantial benefits from competing at the highest
level of collegiate athletics must by necessity attend an NCAA Division
I member institution.

[[Page 49196]]

20. There are zero practical alternatives that can provide the
unique combination of attributes offered by Division I NCAA athletic
schools: (i) the ability to exchange athletics services for the payment
of the partial or full cost of an education plus room and board, (ii)
high quality academic educational services, (iii) top-of-the-line
training facilities, (iv) high quality coaches that will best be able
to launch players to professional careers, (v) national publicity
through national championships and nationwide broadcasting contracts,
(vi) opportunities to profit from name, image, and likeness (``NIL'')
agreements, and (vii) competition at the highest level of collegiate
athletics.

Background

The Transfer Eligibility Rule, NCAA Bylaw 14.5.5.1

21. The NCAA and its member institutions are organized under a
constitution and divided into three divisions. NCAA, Division I 2023-24
Manual, 3 (accessed Nov. 2, 2023), <a href="https://web3.ncaa.org/lsdbi/reports/getReport/90008">https://web3.ncaa.org/lsdbi/reports/getReport/90008</a>, included in this filing as Exhibit A. Each of the
NCAA's three divisions has the authority to determine its own governing
structure and membership. Id. at 5. The NCAA is overseen by a Board of
Governors which appoints the President to administer the Association
and ``implement directions of the Board of Governors and divisional
leadership bodies.'' Id. at 4. Each member institution is required to
``hold itself accountable to support and comply with the rules and
principles approved by the membership.'' Id. at 9.
22. Each NCAA division maintains its own legislative process for
adopting bylaws, with some bylaws applying to only one division and
others applying across divisions. Id. at 14. Proposed bylaw changes
that move through the divisional legislative process within an ``area
of autonomy'' as identified by the bylaws are adopted by certain
conferences and their member institutions. Id. at 15. Federated
legislation--changes that are applicable only to the adopting
division--can be made by the Division I Council. Id. at 17. The
Division I Council is comprised of representatives from member
institutions and conferences. Id. at 396-397. Member institutions can
propose amendments to the bylaws for the Division I Council's review
and can comment on proposed amendments under consideration. Id. at 17-
18.
23. NCAA Bylaw 13.1.1.3.1 provides that for undergraduate college
athletes that wish to transfer to a new member institution, the college
athlete must provide notice to the current institution during a
specified period for the college athlete's given sport. Id. at 75-76.
After notification of intent to transfer, the current institution must
``enter the [college athlete's] information into the national transfer
database,'' a process known as the NCAA Transfer Portal. Id. at 75.
According to a recent NCAA statement, 21,685 college athletes had
entered the transfer portal in 2023 as of September 12. DI Board
Statement Regarding Transfer Waivers, NCAA (Sept. 12, 2023), available
at: <a href="https://www.ncaa.org/news/2023/9/12/media-center-di-board-statement-regarding-transfer-waivers.aspx">https://www.ncaa.org/news/2023/9/12/media-center-di-board-statement-regarding-transfer-waivers.aspx</a>.
24. NCAA Bylaw 14.5.5.1, herein referred to as the Transfer
Eligibility Rule, states, ``A transfer student from a four-year
institution shall not be eligible for intercollegiate competition at a
member institution until the student has fulfilled a residence
requirement of one full academic year (two full semesters or three full
quarters) at the certifying institution.'' Exhibit A at 165. This rule
does not prevent a college athlete from practicing or participating in
other team activities during this one-year waiting period, only from
competing on gameday. Id. One exception to this rule found in NCAA
Bylaw 14.5.5.2.10 exempts college athletes transferring for the first
time from the Transfer Eligibility Rule. Id. at 167. NCAA Bylaw 12.8.1
provides that college athletes have five calendar years to complete
their four seasons of eligibility in any one sport. Id. at 55.
25. The NCAA Bylaws contain what is commonly known as the ``Rule of
Restitution,'' which provides:

If a student-athlete who is ineligible under the terms of the
bylaws or other legislation of the Association is permitted to
participate in intercollegiate competition contrary to such NCAA
legislation but in accordance with the terms of a court restraining
order or injunction operative against the institution attended by
such student-athlete or against the Association, or both, and said
injunction is voluntarily vacated, stayed or reversed or it is
finally determined by the courts that injunctive relief is not or
was not justified, the Board of Directors may take any one or more
of the following actions against such institution in the interest of
restitution and fairness to competing institutions:
(a) Require that individual records and performances achieved
during participation by such ineligible student-athlete shall be
vacated or stricken;
(b) Require that team records and performances achieved during
participation by such ineligible student-athlete shall be vacated or
stricken;
(c) Require that team victories achieved during participation by
such ineligible student-athlete shall be abrogated and the games or
events forfeited to the opposing institutions;
(d) Require that individual awards earned during participation
by such ineligible student-athlete shall be returned to the
Association, the sponsor or the competing institution supplying
same;
(e) Require that team awards earned during participation by such
ineligible student-athlete shall be returned to the Association, the
sponsor or the competing institution supplying same;
(f) Determine that the institution is ineligible for one or more
NCAA championships in the sports and in the seasons in which such
ineligible student-athlete participated;
(g) Determine that the institution is ineligible for
invitational and postseason meets and tournaments in the sports and
in the seasons in which such ineligible student-athlete
participated;
(h) Require that the institution shall remit to the NCAA the
institution's share of television receipts (other than the portion
shared with other conference members) for appearing on any live
television series or program if such ineligible student-athlete
participates in a contest selected for such telecast, or if the
Board of Directors concludes that the institution would not have
been selected for such telecast but for the participation of such
ineligible student- athlete during the season of the telecast; any
such funds thus remitted shall be devoted to the NCAA postgraduate
scholarship program; and
(i) Require that the institution that has been represented in an
NCAA championship by such a student-athlete shall be assessed a
financial penalty as determined by the Committee on Infractions.

Id. at 66-67. This rule allows the NCAA to punish college athletes and
their member universities for actions taken in accordance with court
orders if those orders are later revoked. Id.
26. Because of the commercial nature of the transactions between
college athletes and NCAA member institutions and the effect these
transactions have on college athletes and the consumers of college
athletics, the NCAA's enforcement of the Transfer Eligibility Rule
falls within the purview of the Sherman Act. The Transfer Eligibility
Rule's anticompetitive effects within the sport-specific markets for
the labor of NCAA Division I college athletes far outweigh the
pretextual procompetitive benefits, and the Rule is an unreasonable
restraint of trade that cannot survive rule of reason analysis.

Relevant Markets

27. Within NCAA Division I athletics, the Transfer Eligibility Rule
affects two broad categories of labor markets: (1) athletic services in
men's and women's Division I basketball and football bowl subdivision
(``FBS'') football, wherein each college athlete participates in his or
her sport-specific market, and (2)

[[Page 49197]]

athletic services in all other men's and women's Division I sports,
wherein each athlete participates in his or her sport-specific market.
Within these markets, college athletes compete for spots on NCAA
Division I member institution athletic teams, while the NCAA member
institutions simultaneously compete to secure elite-level college
athletes. In so doing, the NCAA member institutions secure the labor of
these college athletes through in- kind benefits--specifically,
scholarships, academic programs, access to modern training facilities,
and knowledge and training from premier coaching staffs.
28. The relevant geographic market is the United States. The NCAA
and its member institutions are located across the country, and they
engage in on-field competition and competition in the relevant labor
markets throughout the United States.
29. Participation in NCAA Division I athletic events on gameday
significant benefits to a college athlete. College athletes can
showcase their skill in front of national audiences, gain exposure to
professional team scouts, and compete against other college athletes at
the highest level of collegiate athletics. In addition, the recent
advent of NIL agreements presents college athletes the opportunity to
benefit financially--sometimes in the millions of dollars--while
playing college sports.
30. As mentioned above, there are no practical alternatives to the
Division I level of NCAA athletics for college athletes who seek to
market and showcase their elite-level skills. The benefits that come
with participation in NCAA Division I athletics include the ability to
exchange athletics services for (i) the payment of the partial or full
cost of an education plus room and board, (ii) high quality academic
educational services, (iii) top-of-the-line training facilities, (iv)
high quality coaches that will best be able to launch players to
professional careers, (v) national publicity through national
championships and nationwide broadcasting contracts, (vi)opportunities
to profit from NIL agreements, and (vii) competition at the highest
level of collegiate athletics.
31. Within these relevant markets, the NCAA maintains exclusive
power, dictating the rules and regulations for participation in
Division I athletics through the Division I Council and NCAA member
institutions.
32. Although the NCAA is a non-profit organization, the
transactions that member institutions make with college athletes yield
significant financial revenue for the member institutions and have
significant effects on the future earning potential of those college
athletes. Namely, these transactions include partial or full
scholarships in exchange for the college athlete's services. The
college athletes, in return, receive the means to develop, refine, and
showcase their skills--essential inputs to their future earning
potential. NCAA athletic events in which these college athletes compete
are marketed to consumers who view both in-person and via broadcasts of
these sporting events, yielding significant revenue to the NCAA's
member institutions and conferences. Accordingly, the transactions
between these member institutions and the college athletes are
inherently commercial in nature and fall under the purview of the
Sherman Act.

Anticompetitive Effects

33. The NCAA enacts and enforces rules that it claims promote the
well-being of college athletes and preserve the amateurism aspect of
Division I college sports.
34. The NCAA and its member institutions adopt these rules through
the member institutions and the Division I Council, making these rules
equivalent to horizontal agreements among the NCAA and its member
institutions who compete against one another for the labor of Division
I college athletes.
35. Despite what the NCAA may claim, the Transfer Eligibility Rule
restrains college athletes from freely moving among member institutions
to improve their economic opportunity, personal growth, and well-being,
a freedom afforded to other students at NCAA member institutions but
not to college athletes. This restriction violates the Sherman Act
because it has direct anticompetitive effects that harm college
athletes and consumers of college athletics.

The Transfer Eligibility Rule's Effects on College Athletes

36. College athletes compete within the relevant markets of their
respective sports for scholarships at NCAA Division I member
institutions. Within these markets, college athletes are harmed by the
Transfer Eligibility Rule. Effectively, the Transfer Eligibility Rule
operates as a no-poach, market allocation agreement among the NCAA and
its member institutions for the labor of NCAA Division I college
athletes. The Transfer Eligibility Rule harms college athletes in three
main areas of the relevant markets: (1) when college athletes are
making the decision on whether to transfer, (2) when college athletes
decide to transfer and are searching for a new institution to attend,
and (3) when college athletes are denied eligibility to compete for one
year after transferring to a new institution.
37. First, the Transfer Eligibility Rule harms college athletes by
discouraging them from transferring to a different institution that may
benefit their academic, mental, and athletic well-being. Because of the
Transfer Eligibility Rule, college athletes are denied the freedom of
choice among Division I schools once they have competed on behalf of a
given school. They are prevented from competing at a school to which
they might choose to transfer for an entire year, denying them the
benefits of competing in NCAA athletic events. This equates to a 20%
loss of the time given to them to complete their seasons of eligibility
and compete in the highest level of collegiate athletics.
38. With the threat of a year of ineligibility looming over
transfer decisions, college athletes may hesitate to transfer even when
a different institution may offer a situation that is better for the
college athlete than the situation at the current institution. College
athletes, just like non-athlete college students, may desire to
transfer schools for any number of reasons. Distance from family,
struggles with mental health, or better academic or athletic
opportunities elsewhere are just a few of the many reasons college
athletes may seek a transfer. The Transfer Eligibility Rule creates
friction in the relevant markets by deterring college athletes from
exploring better options within their sport-specific market.
39. Second, the Transfer Eligibility Rule affects college athletes
in the relevant markets by artificially disadvantaging second-time
transfers. Just like college athletes compete within the relevant
markets for scholarship positions on Division I athletic teams, NCAA
member institutions compete against each other to attract and retain
elite college athletes to compete on the institutions' athletic teams.
Second-time transferring college athletes are not able to apply for a
waiver of the Transfer Eligibility Rule until after they have been
accepted and enrolled at their new institution. Because the waiver
process is discretionary and has been inconsistently applied, member
institutions that accept a second-time transfer risk that the college
athlete might not be eligible to compete for an entire academic year.
This distorts the market by artificially deflating the value of a
second-time transfer.
40. In some instances, college athletes may have no choice but to
transfer or risk losing a scholarship at their current institution.
Head coaches can

[[Page 49198]]

essentially force a player into the transfer portal by threatening to
cut a player and revoke their scholarship, making the choice to
transfer no real choice at all. In such situations, college athletes
that have already transferred once, making them unqualified for the
first-time transfer exception, must face the consequences of the
Transfer Eligibility Rule despite having no control over the situation
at their current institution. Such situations force college athletes
into a transfer market where, compared to transfers who qualify for the
first-time exception, they face an artificial competitive disadvantage
because of the Transfer Eligibility Rule.
41. Third, the Transfer Eligibility Rule harms college athletes
transferring a second time by denying them the opportunity to compete
in NCAA Division I athletic events for an entire academic year after
transferring to a new institution. NCAA Division I sports are the
pinnacle of college athletics in the United States. Competing at this
high level of athletics comes with immeasurable opportunities for
personal, professional, and economic growth. For athletes seeking to
continue competing professionally after college, NCAA Division I sports
provide a platform to showcase athletic skills in front of national
audiences and professional scouts. The Transfer Eligibility Rule
unjustifiably denies these benefits to affected student athletes for an
entire academic year.
42. The NCAA has often noted the importance of its college
athletes' opportunities to compete at the highest level. See, e.g., The
Value of College Sports, NCAA (last visited Nov. 10, 2023), <a href="https://www.ncaa.org/sports/2014/1/3/the-value-of-college-sports.aspx">https://www.ncaa.org/sports/2014/1/3/the-value-of-college-sports.aspx</a> (where
the NCAA expressly notes that the value of college sports to its
college athletes includes unparalleled exposure and experiences through
``the opportunity to travel across the country and around the world for
regular-season contests, NCAA championships and foreign tours,'' which
``can open doors for the few who will compete professionally and for
the majority who will go pro in something other than sports.'').
43. While college athletes subject to the Transfer Eligibility
Rule's restrictions are allowed to practice and participate in other
team activities, they are expressly restricted from competing in their
sport. Practicing with one's teammates and competing on gameday are not
the same thing. Competition is fundamentally different. Even the NCAA's
public statements support this point:

NCAA tournaments are where dreams are fulfilled, lifelong
memories are made and communities come together under a shared love
for the game. Seeing college athletes, both in victory and defeat,
competing with passion and conviction wins our hearts long after the
clock hits zero. Simply put, championships represent the very best
of college athletics.
This deserves to be felt at every juncture. Transformation
Committee members evaluated differences that exist across sports to
find ways to improve equity and bring these experiences closer
together. We recognized that championships are the pinnacle of a
[college athlete's] Division I experience and sought to grant
greater access to championships for well-qualified teams while
honoring the existing structure for entry. For travel to
championships, our goal was to create new, elevated recommendations
so teams and college athletes would have a comparable experience
when traveling, regardless of sport or gender.

NCAA, NCAA Division I Transformation Committee Final Report, 14 (Jan.
3, 2023), <a href="https://ncaaorg.s3.amazonaws.com/committees/d1/transform/Jan2023D1TC_FinalReport.pdf">https://ncaaorg.s3.amazonaws.com/committees/d1/transform/Jan2023D1TC_FinalReport.pdf</a> (where Lynda Tealer, a member of the
Division I Transformation Committee and executive associate athletics
director at the University of Florida, reemphasized the importance of
competition at the highest level) (emphasis added).
44. Moreover, college athletes' opportunities to show the world the
fruits of their labor occur on fields, courts, and rinks where the NCAA
has unlawfully restricted their participation. Forced ineligibility and
missing even a single game can negatively impact a college athlete's
future earning potential. National television broadcasts provide
significant exposure for college athletes. One game can take a college
athlete from a local fan favorite to a household name. When even the
slightest differences among players can affect positioning and earning
potential in professional league drafts, every game is vital for
college athletes and can significantly impact their future earning
potential.
45. Apart from future earning potential, the Transfer Eligibility
Rule impairs college athletes' ability to take advantage of current and
future opportunities derived from their name, image, and likeness. NIL
agreements may vary depending on the school at which an athlete
competes (and the NIL-related resources a school might provide), the
degree of exposure that the athlete might expect from playing sports at
that school, the relationships a given school might have with third
parties interested in entering NIL agreements (through collectives or
otherwise), and ties to established media markets in which NIL
agreements may be more prevalent, among other factors. By limiting
eligibility for affected college athletes, the Transfer Eligibility
Rule prevents these college athletes from maximizing NIL valuations,
which can run into the millions of dollars. The Transfer Eligibility
Rule's restrictions for an entire academic year can have immeasurable
and lasting economic effects on college athletes.
46. In addition to the potential economic effects on these college
athletes and the dramatic impact these restraints have on the college
athletes' overall collegiate athletics experience, the NCAA's denial of
college athletes' ability to compete immediately through enforcement of
the Transfer Eligibility Rule has caused negative impacts on the mental
health and overall well-being of some college athletes.
47. There are numerous college athletes whose academic and athletic
aspirations are being unlawfully restrained by the Transfer Eligibility
Rule; the NCAA, media, and consumers of college athletics are well
aware of this issue as evidenced by recently publicized examples of
college athletes harmed by the Transfer Eligibility Rule.

RaeQuan Battle

48. RaeQuan Battle is a member of the West Virginia University
(``WVU'') Men's Basketball Team. Before joining WVU, he played
basketball at the University of Washington for the 2019-20 and 2020-21
basketball seasons. Thereafter, he transferred to Montana State
University (``MSU'') and played there during the 2021-22 and 2022-23
basketball seasons.
49. Because Mr. Battle had transferred on a prior occasion, his
ability to transfer to WVU from MSU for the 2023-24 basketball season
was restricted by the Transfer Eligibility Rule. Thus, to be eligible
to play immediately, he needed to have a waiver approved by the NCAA.
WVU applied for him to receive a waiver for immediate eligibility, as
he and WVU believed that his circumstances fit within the NCAA's
criteria for waiver requests.
50. However, the NCAA recently denied his appeal for immediate
eligibility at WVU. Mr. Battle is completely devastated by the NCAA's
decision to deny him eligibility for the 2023-24 basketball season.
Losing his coach at MSU, which prompted his decision to transfer to
WVU, is a situation that he had no control over and severely affected
his mental health. The denial of competition only exacerbates this
impact to his mental health and overall well-being.

[[Page 49199]]

51. WVU is scheduled to play 31 regular season games during the
2023-2024 season. Mr. Battle is currently on the bench and has been
unable to play in six competitive games thus far this season because of
the Transfer Eligibility Rule. If he continues to be kept out of
competition through December, then that would mean missing seven
additional games (a total of 13 competitive games, which is almost half
of the regular season schedule). Once these games have been played,
they are gone forever. They will not be replayed in the future, and
opportunities for development, exposure, and joy from participating in
these contests are lost for Mr. Battle. Every passing game missed
further irreparably harms Mr. Battle.
52. Not participating in competitive games significantly impacts
Mr. Battle's ability to pursue NIL compensation and for his chances to
pursue a career in professional basketball.

Jarrett Hensley

53. Jarrett Hensley is a member of the Southern Illinois University
(``SIU'') Men's Basketball Team. Before joining SIU, Mr. Hensley played
at the University of North Carolina Greensboro (``UNCG'') until
deciding to transfer to the University of Cincinnati (``UC''). Because
the coach who recruited him to UNCG chose to leave UNCG for UC, Mr.
Hensley made the decision to follow his coach to UC. While this was a
difficult decision, Mr. Hensley's coach was the only real connection he
had to UNCG, so he and his family felt that following his coach to UC
was the right decision.
54. The adjustment to basketball and school at UC was extremely
difficult for Mr. Hensley, and he began to feel very depressed and
anxious. After UC made the move to the Big 12 Conference, the level of
competition and the amount of pressure Mr. Hensley put on himself only
increased, as the pressure to win increased tremendously. As the
coaches and staff started putting more emphasis on outcomes instead of
focusing on his collegiate athlete experience, UC staff encouraged Mr.
Hensley to enter the transfer portal, and he felt that it was necessary
to transfer somewhere closer to home and to family.
55. Mr. Hensley feels like SIU coaches promote a family environment
that makes him feel comfortable. As he knew he could make an impact and
play on the SIU team, SIU was the right place for him as a student and
athlete.
56. Mr. Hensley worked with the UC compliance staff in preparation
to file for a waiver of the Transfer Eligibility Rule, who assured him
that he would be immediately eligible upon transferring. As such, when
Mr. Hensley made the decision to enter the transfer portal, he was
convinced that he would be able to play immediately at his new school.
57. However, on the first day of school, SIU's coach had a meeting
with Mr. Hensley to let him know that his waiver was denied. He was
shocked, upset, and emotional. Being new to the school and having
basketball taken from him led to stress and anxiety. There would be
many nights that he didn't sleep at all. It made him question if he
even wanted to continue playing, and he even had conversations with his
coaches about potentially quitting the sport.
58. Mr. Hensley ultimately decided to stay at SIU and see the
waiver the process through. The process and the decision looms over him
every day. He struggles knowing that his season is in the hands of
someone else and that he cannot do anything about it.
59. If unable to compete for the 2023-2024 season, Mr. Hensley will
miss 31 games plus any postseason contests. Many of these games will be
televised. On December 5, 2023, Mr. Hensley was forced to sit out the
first SIU home basketball game against a Power 5 conference opponent
since 2007. Mr. Hensley knows he could have helped his team win that
nationally televised game, but because of the transfer Eligibility
Rule, he did not get the opportunity to compete in that contest. He
also missed out on the media coverage that could have helped him with
potential NIL opportunities.

Noah Fenske

60. Noah Fenske is currently a member of the football team at SIU.
He started his collegiate career at the University of Iowa on a
football scholarship.
61. Mr. Fenske left Iowa due to mental health concerns and decided
to transfer to the University of Colorado. While at Colorado, he dealt
with mental health issues and sought counseling, as the environment at
Colorado was difficult and the school transitioned through more than
one coaching staff while he was on the team.
62. The new coach at Colorado made it clear that current players
were not going to be welcomed back after spring practices, and as such,
Mr. Fenske had no choice but to look to transfer again in order to keep
his scholarship.
63. Mr. Fenske was advised that if he transferred to a lower-level
school, he would be eligible, even if he was transferring for a second
time. Despite receiving offers to play from Power 5 conference teams,
he entered the transfer portal hoping to find a place like SIU where he
could play football and finish his degree. He would not have
transferred if he had not been pushed into the decision and told that
he would be able to play immediately. He wanted to finish his degree at
Colorado and was only one year away, but when he was told that he would
not have a scholarship, he had no choice but to find another school.
64. After arriving at SIU under the assumption he would be
immediately eligible, Mr. Fenske was subsequently made aware that there
had been a rule change, and that a waiver would have to be filed with
the NCAA for immediate eligibility based on mental health struggles. To
apply for this waiver, Mr. Fenske was forced to relive and relate to
the NCAA the difficult circumstances that led to his mental health
struggles.
65. Mr. Fenske had many coaches tell him he was good enough to
enter the draft after the season, but as Mr. Fenske did not get to
compete, no one had the opportunity to assess his talent. In total, he
missed 11 regular season and two FCS Playoff games during the Fall 2023
season. Since his team was eliminated from the playoffs, Mr. Fenske
wonders every day if he could have made a difference in that loss.
Instead, the forced ineligibility from the Transfer Eligibility Rule
negatively impacted his ability to play professional football, his
ability to earn NIL money, and his mental health.

[[Page 49200]]

66. The NCAA's willingness to apply the Transfer Eligibility Rule
despite the negative mental health consequences suffered by college
athletes because of the Rule flies in the face of the lip-service that
the NCAA has proudly given to its commitment to understanding and
addressing college athletes' mental health concerns. See, e.g.,
Michelle Brutlag Hosick, NCAA President Charlie Baker Lays Out Agenda
for Growth, Transformation with Focus on Serving Student-Athletes, NCAA
(Aug. 2, 2023, 11:00 a.m.), <a href="https://www.ncaa.org/news/2023/8/2/media-center-ncaa-lays-out-agenda-for-growth-transformation-with-focus-on-serving-student-athletes.aspx">https://www.ncaa.org/news/2023/8/2/media-center-ncaa-lays-out-agenda-for-growth-transformation-with-focus-on-serving-student-athletes.aspx</a> (where the NCAA's national office, just
months ago, reaffirmed its guidance to ``[p]rovide a world-class
athletics and academic experience for [college athletes] that fosters
lifelong well-being.''); see also Charlie Henry, Social Series
Highlights Importance of Mental Health Resources and Education, NCAA
(May 5, 2022, 11:26 a.m.), https://www.ncaa.org/news/2022/5/25/media-
center-social-series-highlights-importance-of-mental-health-resources-
and-
education.aspx#:~:text=The%20NCAA%20has%20developed%20several,mental%20h
ealth%20needs%20of%20their (``NCAA has developed several educational
resources, including `Mental Health Best Practices: Understanding and
Supporting Student-Athlete Mental Wellness,' [a] resource . . .
designed with input from a diverse group of member and industry voices
to help schools support and address the mental health needs of their
[college athletes].''); see also Sports Science Institute, Mental
Health, NCAA, <a href="https://www.ncaa.org/sports/2021/2/10/sport-science-institute-mental-health.aspx">https://www.ncaa.org/sports/2021/2/10/sport-science-institute-mental-health.aspx</a> (last visited Nov. 10, 2023) (where the
NCAA discusses educational resources, best practices for campuses, data
and research, and summits and task forces, which all seek to address
the importance of safeguarding college athletes' mental health and
where the NCAA states that ``[m]ental health [is a part of athlete
health and] exists on a continuum, with resilience and thriving on one
end of the spectrum and mental health disorders that disrupt a [college
athlete's] functioning and performance at the other.'').
67. The Transfer Eligibility Rule harms college athletes at every
point in the transfer process and for the entire academic year where
the Rule forces affected college athletes to watch from the sidelines
and forego the benefits of competing in NCAA athletic events. The
Rule's chilling effect on transfer decisions can discourage college
athletes from seeking the environment that is most beneficial to their
well-being, and the Rule can limit the choices a college athlete has
when transferring by competitively disadvantaging them when seeking a
new school. Beyond the transfer process itself, the Rule prevents
affected college athletes from realizing the significant benefits that
come from competing in NCAA athletic events that are available only
through competing on gameday. Thus, the Transfer Eligibility Rule harms
college athletes in the relevant markets.

The Transfer Eligibility Rule's Effects on Consumers

68. The Transfer Eligibility Rule has downstream effects for
consumers who attend NCAA athletic events in-person and for consumers
who watch the events on television or listen on the radio. When the
Transfer Eligibility Rule prevents college athletes from competing at
their new institution after transferring, the Rule can decrease fan
interest in a team's season by making popular players ineligible for
competition and decreasing a team's competitiveness on gameday.
69. Furthermore, the Transfer Eligibility Rule is a barrier to
increased parity in college athletics that would create a better
product for consumers. By discouraging transfers through the academic
year in residence requirement, the Transfer Eligibility Rule benefits
larger and historically successful sports programs by allowing them to
retain talented players on their depth charts who may otherwise wish to
transfer and may be better served by transferring to another
institution. Similarly, programs outside of the traditional upper
echelon of college athletics would benefit from an environment without
the Transfer Eligibility Rule, as it would allow them to enroll such
transferring college athletes and have them compete in their athletics
program. This, in turn, would lead to more parity within college
athletics. A more level playing field of talent among Division I
institutions creates a more compelling product for consumers of college
athletics, and the Transfer Eligibility Rule stifles this increase in
parity. The Transfer Eligibility Rule harms consumers of college
athletics by making teams less competitive while affected college
athletes are ineligible for an entire academic year and by preventing
increased parity in college athletics that would create a more
compelling product for consumers.

The Rule of Restitution and Its Impact on College Athletes and NCAA
Division I Institutions

70. The Rule of Restitution, NCAA Bylaw 12.11.4.2, in a nutshell,
provides that, if a plaintiff obtains an injunction against the
unlawful conduct of the NCAA, and a college athlete and his or her
member institution conduct themselves in conformity with that
injunction, the NCAA may impose draconian punishments on both the
athlete and the institution if the injunction is ``vacated, stayed or
reversed or it is finally determined by the courts that injunctive
relief is not or was not justified.'' Exhibit A at 66-67.
71. The breadth of the Rule of Restitution is staggering and goes
well beyond final adjudication on the merits in the NCAA's favor. For
example, a college athlete could obtain a preliminary injunction to
play during his final year of eligibility and, once the season is over,
not wish to incur the cost and effort of continuing to litigate and
instead wish to voluntarily dismiss. Alternatively, a court could
determine that the athlete's eligibility had ended and the case was
thereby mooted, resulting in dismissal. In both instances, the NCAA
could impose harsh penalties in retaliation against the college athlete
and the athlete's school even though the only court to consider the
issue had ruled in the college athlete's favor.
72. Knowing this, many universities will not permit college
athletes who challenge NCAA rules in court to compete, even if a court
issues a temporary restraining order or preliminary injunction finding
that those rules are likely illegal. This, in turn, deters college
athletes from challenging the NCAA's substantive eligibility rules,
such as the Transfer Eligibility Rule.
73. The Rule of Restitution's purpose and effect is to deter
challenges to the NCAA's anticompetitive rules by attempting to deprive
courts of the ability to grant effective relief and depriving
individual college athletes and member universities of the practical
ability to rely on court orders in their favor. Thus, the Rule of
Restitution is itself a means of preventing defection from the
anticompetitive agreement by member schools and of weaponizing the
delay inherent in the litigation process to deter college athletes from
mounting challenges to the antitrust merits of the NCAA's rules.
74. For any relief granted by this Court during the pendency of
this case or on the merits to be effective, this Court must enjoin the
NCAA from enforcing the Rule of Restitution against

[[Page 49201]]

college athletes and NCAA member institutions in retaliation for
compliance with orders from this Court. Absent relief enjoining the
Rule of Restitution, schools still may not allow college athletes
ineligible under the Transfer Eligibility Rule to play for fear of
future retaliation by the NCAA.
75. Because of the Rule of Restitution, college athletes run the
risk of severe personal punishment and the risk of subjecting their
schools or teammates to the harsh sanctions of the Rule of Restitution
simply by following the terms of a court order. The rule amounts to the
NCAA effectively deciding for itself the rules of interim relief rather
than the courts. This deprives college athletes of the practical
ability to rely on a court's temporary or preliminary injunctive relief
in their favor. The Rule of Restitution is also a means of enforcing
cartel-style discipline among the NCAA's member institutions,
preventing defection, and manipulating rules of mootness to discourage
challenges to the rules. For injunctive relief from this court to be
effective, that relief must enjoin Defendant from punishing college
athletes and member institutions under the Rule of Restitution simply
for doing what a court of law prescribed for them to do.

Lack of Procompetitive Justifications

76. With the anticompetitive effects of the Transfer Eligibility
Rule in the relevant markets described above, the burden must shift to
Defendant under the rule of reason to provide procompetitive
justifications for the Transfer Eligibility Rule. Despite what the NCAA
could offer as justifications for the Rule, these justifications are
pretextual and cannot outweigh the anticompetitive effects of the rule.
Furthermore, the purported goals for the Transfer Eligibility Rule can
be accomplished through less restrictive alternatives that are already
present in the NCAA's bylaws.

The Transfer Eligibility Rule's Purported Justifications are Pretextual

77. The NCAA claims that bylaws such as the Transfer Eligibility
Rule help college athletes maintain their academic progress and avoid
falling behind due to the logistics and change that come with
transferring schools. In addition, one purported justification for
rules like the Transfer Eligibility Rule is that it promotes the NCAA's
goal of preserving athletic amateurism, allowing it to widen consumer
choice through a unique product of amateur sports distinct from
professional sports. However, both the text and the actual impact of
the Transfer Eligibility Rule make these justifications pretextual.
78. Despite the NCAA's goal of promoting college athletes' academic
well-being, the Transfer Eligibility Rule does not accomplish this goal
and does not give college athletes additional time in their schedules
to acclimate to a new campus environment. The Rule prevents college
athletes from competing in NCAA athletic events for one academic year
following a transfer. However, the Rule does not prevent those college
athletes from participating in practices or other team activities
during this year of ineligibility. Sitting out an entire season of
practices and team workouts is not an option for college athletes who
want to maintain their standing on a team. Thus, even under the
restrictions of the Transfer Eligibility Rule, college athletes have no
additional time in their schedules for increased attention to academics
compared to their teammates who are eligible for competition except for
a few hours on gameday when affected college athletes are forced to
watch from the sidelines. Moreover, the NCAA does not limit the
eligibility of freshman college athletes, whose transition from high
school to college is far more arduous than that of a college athlete
transferring between schools. Therefore, the Transfer Eligibility Rule
does not promote the academic well-being of college athletes.
79. Furthermore, the Transfer Eligibility Rule does not support the
goal of maintaining athletic amateurism in the NCAA. The NCAA has
claimed in previous cases that the amateur nature of college athletics
makes it uniquely appealing to consumers, as it distinguishes NCAA
athletics from professional sports leagues. However, as a matter of
law, supposed benefits in the market for watching college athletics
cannot counterbalance harms the distinct, sport-specific markets for
college athlete labor. See Deslandes v. McDonald's United States, LLC,
81 F.4th 699, 703 (7th Cir. 2023). Even if this cross-market balancing
was appropriate, the Transfer Eligibility Rule has nothing to do with
college athletes maintaining amateur status.
80. NCAA Bylaw 12.1.2 requires that Division I college athletes
maintain amateur status to be eligible for NCAA competition. Exhibit A
at 37. This bylaw states:

An individual loses amateur status and thus shall not be
eligible for intercollegiate competition in a particular sport if
the individual:
(a) Uses athletics skill (directly or indirectly) for pay in any
form in that sport;
(b) Accepts a promise of pay even if such pay is to be received
following completion of intercollegiate athletics participation;
(c) Signs a contract or commitment of any kind to play
professional athletics, regardless of its legal enforceability or
any consideration received, except as permitted in Bylaw 12.2.5.1;
(d) Receives, directly or indirectly, a salary, reimbursement of
expenses or any other form of financial assistance from a
professional sports organization based on athletics skill or
participation, except as permitted by NCAA rules and regulations;
(e) Competes on any professional athletics team per Bylaw
12.02.12, even if no pay or remuneration for expenses was received,
except as permitted in Bylaw 12.2.3.2.1;
(f) After initial full-time collegiate enrollment, enters into a
professional draft (see Bylaw 12.2.4); or
(g) Enters into an agreement with an agent.

Id.
81. By the definition the NCAA uses in its own bylaws, the Transfer
Eligibility Rule does not affect anything related to a college
athlete's amateur status. Allowing college athletes to practice all
season with their teams but preventing them from competing on gameday
does nothing to a college athlete's amateur status. The absence of the
Transfer Eligibility Rule would do nothing to affect the amateur status
of transferring college athletes. The Transfer Eligibility Rule does
not serve the goal of preserving the NCAA's amateurism model nor does
it help preserve the amateur status of college athletes, and the
justifications for the Transfer Eligibility Rule are pretextual.

The Purported Goals of the Transfer Eligibility Rule Are Accomplished
Through Less Restrictive Bylaws Already in Place

82. While the goals of the Transfer Eligibility Rule may be
promoting the academic well-being of college athletes and preserving
athletic amateurism within the NCAA, less restrictive alternatives
already exist within the NCAA's regulatory structure that ensure that
college athletes maintain progress towards college degrees and prevent
college sports from becoming a free agent market like professional
sports leagues.

[[Page 49202]]

83. NCAA Bylaws already require college athletes to maintain
progress toward degrees to be eligible to compete in NCAA events. NCAA
Bylaw 14.4.1 requires college athletes to ``maintain progress toward a
baccalaureate or equivalent degree at that institution'' to be eligible
for intercollegiate competition at their college or university. Exhibit
A at 150-51. In addition, NCAA Bylaw 20.2.4.13 requires member
institutions to publish their progress-toward- degree requirements for
college athletes, thus making these requirements available to college
athletes at each institution. Id. at 367. Other NCAA Bylaws require
minimum credit hour and grade point averages for college athletes to be
eligible for competition. Id. at 151, 154.
84. Further, NCAA Bylaws already prohibit in-season transfers
within the same sport. Specifically, NCAA Bylaw 14.5.5.3 states,

A transfer student from a four-year institution who has received
a waiver of or qualifies for an exception to the transfer residence
requirement (per Bylaw 14.5.5.2) shall not be eligible for
competition in which the [college athlete's' performance could be
used for NCAA championship qualification or consideration if the
[college athlete] participated in competition at the previous four-
year institution in the same sport in which the [college athlete's]
performance could have been used for NCAA championship qualification
or consideration.

Id. at 168.
85. These NCAA Bylaws setting minimum academic requirements and
preventing in- season transfers already exist as less restrictive
alternatives to achieving the goals of the Transfer Eligibility Rule.
The academic eligibility requirements already in effect serve the goal
of preventing college athletes from falling behind academically while
still being eligible to compete in athletic events. If a college
athlete fails to make adequate progress toward a degree or otherwise
fails to meet minimum NCAA requirements, the student will be ineligible
to participate in competition. The requirement that the member
institutions provide college athletes with the progress-toward-degree
requirements at each institution allows college athletes to adequately
plan and know what will be required academically to maintain athletic
eligibility.
86. Furthermore, preventing in-season transfers with immediate
eligibility serves the goal of preserving athletic amateurism among
NCAA college athletes. This rule prevents the kind of free agent
movement among teams seen in professional sports leagues by preventing
college athletes from leaving mid-season either for participation on a
higher-achieving team or in search of more playing time. These goals
are accomplished without the unwarranted restrictions of the Transfer
Eligibility Rule.
87. With the goals of the Transfer Eligibility Rule met by less
restrictive alternatives already present in the NCAA's Bylaws, the NCAA
cannot justify imposing the restrictions of the Transfer Eligibility
Rule on college athletes. Any purported benefits of the Transfer
Eligibility Rule are far outweighed by the harm the rule inflicts on
college athletes and consumers of college athletics. With less
restrictive alternatives already in place, there is no justification
for the NCAA to restrict the choices of college athletes in the
relevant markets by enforcing the Transfer Eligibility Rule.

Count 1: Violation of Section 1 of the Sherman Act

88. Plaintiffs repeat and reallege each allegation set forth in the
preceding paragraphs as if fully set forth herein.
89. Defendant NCAA, by and through its officers, directors,
employees, agents or other representatives, and its member institutions
have entered an illegal agreement to restrain and suppress competition
in the relevant markets through the adoption and enforcement of the
Transfer Eligibility Rule. Specifically, the NCAA and NCAA member
institutions have agreed to unlawfully restrain the ability of Division
I college athletes to transfer to other Division I schools without loss
of athletic eligibility. The restraint imposed by the Transfer
Eligibility Rule cannot withstand analysis under the rule of reason.
90. The markets for athletic services in men's and women's Division
I basketball and football bowl subdivision (``FBS'') football and for
athletics services in all other men's and women's Division I sports are
relevant antitrust markets. The transactions between NCAA member
institutions and college athletes in these markets are commercial in
nature and fall under the purview of the Sherman Act.
91. This unlawful agreement among horizontal competitors has
unreasonably restrained competition among schools for the college
athletes competing in the relevant markets, as transferring college
athletes potentially face a one-year waiting period before obtaining
full eligibility to compete in NCAA athletic events at their new member
institution. The threat of this one-year waiting period discourages
transfers, disadvantages college athletes subject to this waiting
period, and prevents college athletes from realizing the benefits of
competing in NCAA athletic events for an entire academic year.
92. Division I college athletes have been deprived of the benefits
of free and open competition because of the Transfer Eligibility Rule.
Furthermore, college athletes forced to wait a year prior to
eligibility after transferring are deprived of the benefits that come
from competition in NCAA Division I athletic events, harming these
college athletes' current and future earning potentials.
93. As a direct result of Defendant's conduct, Division I college
athletes and consumers of college athletics have suffered and continue
to suffer antitrust injury due to the reduction in competition among
Division I schools for college athletes through the restrictions
imposed by the Transfer Eligibility Rule.
94. The Transfer Eligibility Rule yields few, if any, benefits to
competition in Division I collegiate athletics to the NCAA's member
institutions, to college athletes, or to consumers of NCAA athletics
contests. Any such benefits are far outweighed by the harm to
competition and to the college athletes who are subject to the Transfer
Eligibility Rule. Furthermore, the NCAA bylaws already contain less
restrictive alternatives that accomplish the NCAA's goals for the
Transfer Eligibility Rule.
95. Defendant's conduct is ongoing and will continue to impose
injury on college athletes and consumers of college athletics unless
injunctive relief is granted. This ongoing harm from the Transfer
Eligibility Rule affects residents and the economies of the Plaintiff
States by unreasonably restraining trade in labor markets for college
athletics within the Plaintiff States and throughout the United States.
96. Defendant and its member institutions' anticompetitive acts
were intentionally directed at the United States market and had a
substantial and foreseeable effect on interstate commerce.

Prayer for Relief

Wherefore, Plaintiffs respectfully request that this Court:
97. Adjudge and decree that Defendant's enforcement of NCAA Bylaw
14.5.5.1 violates section 1 of the Sherman Act, 15 U.S.C. 1;
98. Enter a permanent injunction, in a form that the Court deems
just and proper, pursuant to 15 U.S.C. 4 and 26, enjoining Defendant
from continuing to violate section 1 of the Sherman Act by enforcing
NCAA Bylaw 14.5.5.1 and from enforcing NCAA Bylaw 12.11.4.2

[[Page 49203]]

to punish college athletes and member institutions for actions taken in
compliance with any orders from this Court;
99. Award to each Plaintiff its costs, including reasonable
attorneys' fees; and
100. Order any other relief that this Court deems just and proper.

Dated: January 18, 2024

Dave Yost
Ohio Attorney General

Erik Clark
Deputy Attorney General for Major Litigation

Jennifer L. Pratt
Director of Major Litigation

Beth A. Finnerty
Section Chief, Antitrust Section

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William C. Becker (pro hac vice)
Principal Assistant Attorney General

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Steven Oldham (pro hac vice)
Assistant Attorney General, Major Litigation

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Edward J. Olszewski (pro hac vice)
Assistant Section Chief, Antitrust Section

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Derek M. Whiddon (pro hac vice)
Assistant Attorney General, Antitrust Section

Office of the Ohio Attorney General, 30 E. Broad St., 26th Floor,
Columbus, OH 43215, Telephone: (614) 466-4328, Email:
<a href="/cdn-cgi/l/email-protection#0156686d6d68606c2f4364626a6473414e69686e40464e2f666e77">[email&#160;protected]</a>, <a href="/cdn-cgi/l/email-protection#bfeccbdac9dad191f0d3dbd7ded2fff0d7d6d0fef8f091d8d0c9">[email&#160;protected]</a>,
<a href="/cdn-cgi/l/email-protection#642100130516004a2b08171e0113170f0d242b0c0d0b25232b4a030b12">[email&#160;protected]</a>, <a href="/cdn-cgi/l/email-protection#fabe9f889f91d4ad92939e9e9594bab5929395bbbdb5d49d958c">[email&#160;protected]</a>.

Attorneys for Plaintiff State of Ohio

FOR PLAINTIFF COMMONWEALTH OF VIRGINIA:

Jason S. Miyares
Attorney General of Virginia

Andrew N. Ferguson
Solicitor General

Kevin M. Gallagher
Deputy Solicitor General and Director of Tenth Amendment Litigation

Steven G. Popps
Deputy Attorney General, Civil Division

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Tyler T. Henry (pro hac vice forthcoming)
Assistant Attorney General and Manager, Antitrust Unit

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Jonathan M. Harrison II (pro hac vice forthcoming)
Assistant Attorney General, Consumer Protection Section

Office of the Virginia Attorney General, 202 North 9th Street,
Richmond, Virginia 23219, Phone: (804) 496-0485,
<a href="/cdn-cgi/l/email-protection#edb9a588839f94ad828c8ac39e998c9988c39b8cc3989e">[email&#160;protected]</a>, <a href="/cdn-cgi/l/email-protection#c5afada4b7b7acb6aaab85aaa4a2ebb6b1a4b1a0ebb3a4ebb0b6">[email&#160;protected]</a>.

Attorneys for Plaintiff Commonwealth of Virginia
For Plaintiff District of Columbia:

Brian Schwalb
Attorney General

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Adam Gitlin
Chief, Antitrust and Nonprofit Enforcement Section (pro hac vice
forthcoming)

Mehreen Imtiaz
Assistant Attorney General (pro hac vice forthcoming)

Office of the Attorney General for the District of Columbia, 400 6th
Street NW, 10th Floor, Washington, DC 20001, Phone: 202-442-9864
(Gitlin), <a href="/cdn-cgi/l/email-protection#35545154581b525c41595c5b7551561b525a43">[email&#160;protected]</a>, <a href="/cdn-cgi/l/email-protection#1479717c6671717a3a7d79607d756e5470773a737b62">[email&#160;protected]</a>.

Attorneys for Plaintiff District of Columbia

FOR PLAINTIFF STATE OF COLORADO:

Philip J. Weiser
Attorney General
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Bryn Williams
First Assistant Attorney General (pro hac vice)

Elizabeth W. Hereford
Assistant Attorney General (pro hac vice)

Colorado Department of Law, Office of the Attorney General, Ralph L.
Carr Judicial Center, 1300 Broadway, 7th Floor, Denver, CO 80203,
Telephone: (720) 508-6000, Email: <a href="/cdn-cgi/l/email-protection#fab8888394d4ad939696939b9789ba99959b9dd49d958c">[email&#160;protected]</a>,
<a href="/cdn-cgi/l/email-protection#6a2f0603100b080f1e0244220f180f0c05180e2a09050b0d440d051c">[email&#160;protected]</a>.

Attorneys for Plaintiff State of Colorado

FOR PLAINTIFF STATE OF ILLINOIS:

Kwame Raoul
Attorney General

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Elizabeth L. Maxeiner
Chief, Antitrust Bureau

Elizabeth L. Maxeiner
Chief, Antitrust Bureau (pro hac vice)
Brian M. Yost
Assistant Attorney General, Antitrust Bureau (pro hac vice)

Office of the Illinois Attorney General, 100 W. Randolph St., Fl.
11, Chicago, IL 60601, Phone: (773) 790-7935,
<a href="/cdn-cgi/l/email-protection#783d141102191a1d0c10561519001d11161d0a381114191f561f170e">[email&#160;protected]</a>, <a href="/cdn-cgi/l/email-protection#5210203b333c7c2b3d2126123b3e33357c353d24">[email&#160;protected]</a>.

Attorneys for Plaintiff State of Illinois

FOR PLAINTIFF STATE OF MINNESOTA:

Keith Ellison
Attorney General

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Elizabeth Odette
Assistant Attorney General, Manager, Antitrust Division (pro hac
vice forthcoming)

James Canaday
Deputy Attorney General, Consumer Protection Division

Elizabeth Odette
Assistant Attorney General, Manager, Antitrust Division

Jon Woodruff
Assistant Attorney General, Antitrust Division

Office of the Minnesota Attorney General, 445 Minnesota St., Suite
#1400, St. Paul, MN 55101, Phone: (651) 728-7208 (Odette),
<a href="/cdn-cgi/l/email-protection#c58fa4a8a0b6eb86a4aba4a1a4bc85a4a2ebb6b1a4b1a0eba8abebb0b6">[email&#160;protected]</a>, <a href="/cdn-cgi/l/email-protection#296c454053484b4c5d4107664d4c5d5d4c69484e075a5d485d4c074447075c5a">[email&#160;protected]</a>,
<a href="/cdn-cgi/l/email-protection#d69cb9b8f881b9b9b2a4a3b0b096b7b1f8a5a2b7a2b3f8bbb8f8a3a5">[email&#160;protected]</a>.

Attorneys for Plaintiff State of Minnesota

FOR PLAINTIFF STATE OF MISSISSIPPI:

Lynn Fitch
Attorney General

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Caleb Pracht (pro hac vice forthcoming)
Special Assistant Attorney General, Consumer Protection Division

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Elisabeth Hart Martin (pro hac vice forthcoming)
Deputy Director, Consumer Protection Division

Mississippi Office of the Attorney General, 550 High Street, P.O.
Box 220, Jackson, MS 39205, Telephone: 601-359-4223,
<a href="/cdn-cgi/l/email-protection#eaa98b868f88c4ba988b89829eaa8b8d85c48799c48d859c">[email&#160;protected]</a>, <a href="/cdn-cgi/l/email-protection#bdf5dccfc993f0dccfc9d4d3fddcdad293d0ce93dad2cb">[email&#160;protected]</a>.

Attorneys for Plaintiff State of Mississippi

FOR PLAINTIFF STATE OF NEW YORK:

Letitia James
Attorney General

Christopher D'Angelo
Chief Deputy Attorney General, Economic Justice Division

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Elinor R. Hoffmann (pro hac vice)
Chief, Antitrust Bureau

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Amy McFarlane (pro hac vice)
Deputy Chief, Antitrust Bureau

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Bryan Bloom (pro hac vice)
Senior Enforcement Counsel, Antitrust Bureau

New York State Office of the Attorney General, 28 Liberty Street,
New York, NY 10005, Telephone: (212) 416-8269 (Hoffmann), Email:
<a href="/cdn-cgi/l/email-protection#50153c393e3f227e183f36363d313e3e1031377e3e297e373f26">[email&#160;protected]</a>, <a href="/cdn-cgi/l/email-protection#f7b69a8ed9ba94b196859b969992b79690d9998ed9909881">[email&#160;protected]</a>,
<a href="/cdn-cgi/l/email-protection#bbf9c9c2dad595f9d7d4d4d6fbdadc95d5c295dcd4cd">[email&#160;protected]</a>

Attorneys for Plaintiff State of New York

FOR PLAINTIFF STATE OF NORTH CAROLINA:

Joshua H. Stein
Attorney General of North Carolina

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Jasmine McGhee *
Senior Deputy Attorney General

Jonathan R. Marx *
Special Deputy Attorney General

Kunal Choksi *
Special Deputy Attorney General

North Carolina Department of Justice, 114 W Edenton St., Raleigh, NC
27603, Telephone: (919) 716-8611, Email: <a href="/cdn-cgi/l/email-protection#ffab95929e8d87bf919c9b9095d1989089">[email&#160;protected]</a>.

Attorneys for Plaintiff State of North Carolina

* pro hac vice

FOR PLAINTIFF STATE OF TENNESSEE:

Jonathan Skrmetti
Attorney General and Reporter

J. David McDowell
Deputy, Consumer Protection Division (pro hac vice)

Ethan Bowers
Senior Assistant Attorney General (pro hac vice)

Tyler T. Corcoran
Assistant Attorney General (pro hac vice)

Office of the Attorney General and Reporter P.O. Box 20207,
Nashville, TN 37202, Phone: (615) 741-8722, Email:
<a href="/cdn-cgi/l/email-protection#bffbdec9d6db91f2dcfbd0c8dad3d3ffded891cbd191d8d0c9">[email&#160;protected]</a>, <a href="/cdn-cgi/l/email-protection#3064495c55421e735f42535f42515e7051571e445e1e575f46">[email&#160;protected]</a>.

Attorneys for Plaintiff State of Tennessee

[[Page 49204]]

FOR PLAINTIFF STATE OF WEST VIRGINIA AND AS LOCAL COUNSEL FOR
PLAINTIFFS
STATE OF OHIO, COMMONWEALTH OF VIRGINIA, DISTRICT OF COLUMBIA, AND
STATES OF COLORADO, ILLINOIS, MINNESOTA, MISSISSIPPI, NEW YORK,
NORTH CAROLINA, AND TENNESSEE:

State of West Virginia ex rel.
Patrick Morrisey
Attorney General

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J Michael R. Williams
Principal Deputy Solicitor General

Douglas L. Davis, Sr.
Assistant Attorney General

Matthew M. Morrison
Assistant Attorney General

Office of the West Virginia Attorney General, P.O. Box 1789,
Charleston, WV 25326, Ph. (304) 558-8986, Fax. (304) 558-0184,
<a href="/cdn-cgi/l/email-protection#84c9ede7ece5e1e8aad6aad3ede8e8ede5e9f7c4f3f2e5e3ebaae3ebf2">[email&#160;protected]</a>, <a href="/cdn-cgi/l/email-protection#b9fdd6ccded5d8ca97f597fdd8cfd0caf9cecfd8ded697ded6cf">[email&#160;protected]</a>,
<a href="/cdn-cgi/l/email-protection#e7aa869393c9aac9aa8895958e948889a79091868088c9808891">[email&#160;protected]</a>.

Attorneys for State of West Virginia and Local Counsel for
Plaintiffs State of Ohio, Commonwealth of Virginia, District of
Columbia, and States of Colorado, Illinois, Minnesota, Mississippi,
New York, North Carolina, and Tennessee

FOR PLAINTIFF UNITED STATES OF AMERICA:
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Jonathan S. Kanter
Assistant Attorney General for Antitrust

Doha Mekki
Principal Deputy Assistant Attorney General for Antitrust

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Michael B. Kades
Deputy Assistant Attorney General for Antitrust

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Ryan Danks
Director of Civil Enforcement

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Miriam R. Vishio
Deputy Director of Civil Enforcement

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Yvette Tarlov
Chief, Media, Entertainment, and Communications Section

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Jared A. Hughes
Assistant Chief, Media, Entertainment, and Communications Section

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James H. Congdon*
Benjamin Rudfosky
Brendan Sepulveda*
Trial Attorneys

United States Department of Justice, Antitrust Division, Media,
Entertainment, and Communications Section, 450 Fifth Street NW,
Suite 7000, Washington, DC 20530, Tel: 202-598-2311, Fax: 202-514-
6381, Email: <a href="/cdn-cgi/l/email-protection#682209050d1b462b07060f0c0706281d1b0c0702460f071e">[email&#160;protected]</a>, <a href="/cdn-cgi/l/email-protection#0a486f64606b67636424587f6e656c7961734a7f796e6560246d657c">[email&#160;protected]</a>,
<a href="/cdn-cgi/l/email-protection#682a1a0d060c0906463b0d181d041e0d0c09281d1b0c0702460f071e">[email&#160;protected]</a>.

* pro hac vice forthcoming

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William J. Ihlenfeld
United States Attorney

Maximillian F. Nogay
Jordan V. Palmer
Assistant United States Attorneys

United States Attorney's Office Northern District of West Virginia,
P.O. Box 591, 1125 Chapline Street, Suite 3000, Wheeling, WV 26003,
Tel: 304-234-0100, Fax: 304-234-0110, Email: <a href="/cdn-cgi/l/email-protection#672a061f49290800061e27121403080d49000811">[email&#160;protected]</a>,
<a href="/cdn-cgi/l/email-protection#8ec4e1fceaefe0a0deefe2e3ebfccefbfdeae1e4a0e9e1f8">[email&#160;protected]</a>.

In the United States District Court for the Northern District of West
Virginia Clarksburg Division

State of Ohio, 30 E. Broad St., 26th Floor, Columbus, OH 43215,
Plaintiffs, v. National Collegiate Athletic Association, 700 W.
Washington Street, P.O. Box 6222, Indianapolis, IN 46206-6222,
Defendant.

Case No: 1:23-cv-00100
Judge Bailey

EXHIBIT A TO AMENDED COMPLAINT

(Exhibit A is NCAA, Division I 2023-24 Manual, available at <a href="https://web3.ncaa.org/lsdbi/reports/getReport/90008">https://web3.ncaa.org/lsdbi/reports/getReport/90008</a>)

In the United States District Court for the Northern District of West
Virginia Clarksburg Division

State of Ohio, State of Colorado, State of Illinois, State of
Minnesota, State of Mississippi, State of New York, State of North
Carolina, State of Tennessee, Commonwealth of Virginia, State of West
Virginia, District of Columbia, and United States of America,
Plaintiffs, v. National Collegiate Athletic Association, Defendant.

Civil No. 1:23-cv-100
Judge John Preston Bailey

[Proposed] Final Judgment and Permanent Injunction

1. Whereas the Plaintiff States of Ohio, Colorado, Illinois,
Minnesota, Mississippi, New York, North Carolina, Tennessee, and West
Virginia; the Commonwealth of Virginia; the District of Columbia
(collectively, ``States''); and the
United States of America have brought this action alleging
violations of the Sherman Act, 15 U.S.C. 1 et seq., against Defendant
National Collegiate Athletic Association (``NCAA'').
2. Whereas Plaintiff States, through their respective Attorneys
General, are duly authorized to bring suits for injunctive relief to
enforce the Sherman Act pursuant to 15 U.S.C. 1 and 26.
3. Whereas Plaintiff United States of America is duly authorized to
bring suits for injunctive relief to enforce the Sherman Act pursuant
to 15 U.S.C. 1 and 4.
4. Whereas all parties consent to this venue and to the personal
jurisdiction of the Court for purposes of this litigation, entry of the
Final Judgment, and any subsequent litigation to enforce its terms.
5. Whereas this Court has subject matter jurisdiction over this
action under 15 U.S.C. 4 and 28 U.S.C. 1331 and 1337(a), and in the
case of Plaintiff United States, 28 U.S.C. 1345.
6. Whereas the NCAA's member institutions and conferences have
adopted rules and regulations governing certain aspects of college
sports.
7. Whereas NCAA Bylaw \1\ 14.5.5.1, herein referred to as the
Transfer Eligibility Rule, provides that certain transfer students
shall not be eligible for intercollegiate competition in Division I
until they have fulfilled an academic ``year of residence'' at their
new institution, unless they qualify for a transfer exception or secure
a waiver.
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\1\ All references to ``Bylaws'' or ``NCAA Rules'' are to the
NCAA Division I 2023-24 Manual.
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8. Whereas Plaintiffs allege that the Transfer Eligibility Rule has
unreasonably restrained competition for Division I student-athletes
among schools and has prevented them from realizing the benefits of
free and open competition for their athletic services.
9. Whereas Plaintiffs allege that the Transfer Eligibility Rule
yields few, if any, procompetitive benefits.
10. Whereas Plaintiffs allege that, as a direct result of the
NCAA's conduct, Division I student-athletes and consumers of college
athletics have suffered and continue to suffer antitrust injury due to
the reduction in competition among member institutions for student-
athletes' services.
11. Whereas Plaintiffs therefore allege that the Transfer
Eligibility Rule is an illegal agreement to restrain and suppress
competition in the nationwide market for Division I student-athletes'
labor in intercollegiate athletics, in violation of section 1 of the
Sherman Act.
12. Whereas NCAA Bylaw 12.11.4.2, herein referred to as the Rule of
Restitution, provides that, if a student-athlete obtains an injunction
against the NCAA, and the student-athlete and his or her member
institution conduct themselves in conformity with that injunction, the
NCAA may nonetheless impose certain penalties on both the student-
athlete and the member institution if the injunction is ultimately
vacated, stayed, or reversed.
13. Whereas Plaintiffs allege that the Rule of Restitution deters
member institutions from relying on court orders finding that the
NCAA's rules are

[[Page 49205]]

anticompetitive (or otherwise illegal) and, therefore, deprives courts
of the ability to grant effective relief from violations of state and
federal law.
14. Whereas Plaintiffs allege that for injunctive relief
prohibiting enforcement of the Transfer Eligibility Rule to be
effective, the NCAA must also be enjoined from enforcing the Rule of
Restitution to punish member institutions or student-athletes who
immediately participate in intercollegiate competition following a
transfer.
15. Whereas following an evidentiary hearing, the Court entered a
temporary restraining order and preliminary injunctive relief against
the NCAA enjoining enforcement of the Transfer Eligibility Rule and the
Rule of Restitution. Dkt. 39, 63.
16. Whereas Plaintiffs allege that absent permanent injunctive
relief, Division I student-athletes will continue to suffer irreparable
harm from the Transfer Eligibility Rule, whether by missing games that
cannot be replayed, failing to secure name, image, and likeness
(``NIL'') deals or professional opportunities that would otherwise be
available, or foregoing transfer decisions they would otherwise pursue.
17. Whereas Plaintiffs allege that the balance of the equities
favors issuing a permanent injunction, and issuance of a permanent
injunction is in the public interest.
18. Whereas the United States and the NCAA have agreed to resolve
this matter by entry of this Final Judgment.
Accordingly, it is Hereby Ordered, Adjudged, and Decreed:
19. The foregoing recitals are incorporated and made a part of this
Final Judgment.
20. The NCAA shall take all steps necessary to comply with the
Stipulation and Order entered by the Court.
21. This Final Judgment resolves only the United States' claims
with respect to the Transfer Eligibility Rule as applied to Division I
student-athletes and does not affect other Bylaws or claims not made in
this action. For the avoidance of doubt, this Final Judgment does not
apply to any Bylaws of NCAA Division II or NCAA Division III nor does
it resolve any antitrust claims regarding those rules.
22. The NCAA and any person or organization acting in concert with
it (including but not limited to its officers, employees, staff, member
institutions, councils, and committees), are permanently restrained and
enjoined from:
a. enforcing the Transfer Eligibility Rule, NCAA Bylaw 14.5.5.1, or
any substantially similar rule requiring a Division I student-athlete
to maintain a period of residence or otherwise refrain from competition
solely because of a transfer between NCAA member institutions;
b. enforcing the Rule of Restitution, NCAA Bylaw 12.11.4.2, on any
Division I member institution or student-athlete related to a student-
athlete's participation in intercollegiate competition following a
transfer in reliance on this Court's temporary restraining order or
preliminary injunction or this Final Judgment;
c. taking any other action to retaliate against a Division I member
institution for conduct related to the Transfer Eligibility Rule,
including but not limited to (i) supporting a student-athlete who
challenged the Transfer Eligibility Rule or (ii) permitting a student-
athlete to compete during the period of this Court's temporary
restraining order or its preliminary injunction in reliance on those
orders; and
d. taking any action to retaliate against any Division I student-
athlete that transferred NCAA member institutions, including but not
limited to those student-athletes who (i) challenged the Transfer
Eligibility Rule, (ii) sought a waiver from the Transfer Eligibility
Rule, or (iii) competed during the period of this Court's temporary
restraining order or its preliminary injunction in reliance on those
orders.
23. The NCAA shall provide an additional year of eligibility to any
Division I student-athlete who was deemed ineligible to compete for a
season or any portion of a season of competition occurring during or
since the 2019-20 academic year because of the Transfer Eligibility
Rule provided the student-athlete:
a. transferred between two member institutions more than once;
b. is currently enrolled at a Division I member institution; and
c. is currently eligible to compete, or their eligibility expired
at the end of a season of competition completed during the 2023-24
academic year.
For the avoidance of doubt, a Division I student-athlete described
in this provision shall have no fewer than six calendar years to
complete their four seasons of intercollegiate competition in any one
sport (see NCAA Bylaw 12.8), instead of the five calendar years set
forth under NCAA Bylaw 12.8.1.
24. For the purposes of determining or securing compliance with
this Final Judgment or determining whether this Final Judgment should
be modified or vacated, upon written request of Plaintiffs and
reasonable notice to the NCAA, the NCAA must:
a. permit, subject to legally recognized privileges, authorized
representatives of Plaintiffs to inspect all books, ledgers, accounts,
records, data, and documents in the possession, custody, or control of
the NCAA relating to any matters contained in this Final Judgment;
b. permit, subject to legally recognized privileges, authorized
representatives of Plaintiffs to interview, either informally or on the
record, the NCAA's officers, employees, or agents relating to any
matters contained in this Final Judgment; and
c. submit written reports or respond to written interrogatories,
under oath if requested, relating to any matters contained in this
Final Judgment.
25. No information or documents obtained pursuant to this Final
Judgment may be divulged by Plaintiffs to any person other than an
authorized representative of Plaintiffs, except (a) in the course of
legal proceedings to which the United States is a party, including
grand-jury proceedings; (b) for the purpose of securing compliance with
this Final Judgment; or (c) as otherwise required by law.
26. If the United States receives a request under the Freedom of
Information Act, 5 U.S.C. 552, for disclosure of documents or
information obtained pursuant to this Final Judgment, the United States
will act in accordance with that statute and with all applicable
Department of Justice regulations regarding the protection of
confidential commercial information. When providing any documents or
information to the United States pursuant to this Final Judgment, the
NCAA should designate the confidential portions of such materials as
provided by 28 CFR 16.7.
27. Within sixty (60) days of entry of this Final Judgment, the
NCAA shall post a copy of this Final Judgment on its public website.
28. The NCAA shall not take any action, nor adopt any rules, by-
laws or policies that have the effect of undermining or circumventing
the provisions of this Final Judgment.
29. The Court will retain jurisdiction for purposes of enforcing
this Final Judgment and resolving any dispute that may arise under it.
30. Plaintiff United States retains and reserves all rights to
enforce the provisions of this Final Judgment, including the right to
seek an order of contempt from the Court. The NCAA agrees that in a
civil contempt action, a motion to show cause, or a similar action
brought by the United States relating to an alleged violation of this

[[Page 49206]]

Final Judgment, the United States may establish a violation of this
Final Judgment and the appropriateness of a remedy therefor by a
preponderance of the evidence, and the NCAA waives any argument that a
different standard of proof should apply. This Final Judgment should be
interpreted to give full effect to the procompetitive purposes of the
antitrust laws and to restore the competition Plaintiffs allege was
harmed by the challenged conduct. The NCAA agrees that it may be held
in contempt of, and that the Court may enforce, any provision of this
Final Judgment that, as interpreted by the Court in light of these
procompetitive principles and applying ordinary tools of
interpretation, is stated specifically and in reasonable detail,
whether or not it is clear and unambiguous on its face. In any such
interpretation, the terms of this Final Judgment should not be
construed against either party as the drafter.
31. In connection with a successful effort by the United States to
enforce this Final Judgment against the NCAA, whether litigated or
resolved before litigation, the NCAA agrees to reimburse the United
States for reasonable fees and expenses incurred by its attorneys, as
well as all other costs including experts' fees, reasonably incurred in
connection with that effort to enforce this Final Judgment, including
in the investigation of the potential violation.

Dated: _____, 2024

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John Preston Bailey,
United States District Judge.

In the United States District Court for the Northern District of West
Virginia Clarksburg Division

Civil No. 1:23-cv-100
Judge John Preston Bailey

Competitive Impact Statement

In accordance with the Antitrust Procedures and Penalties Act, 15
U.S.C. 16(b)-(h) (the ``APPA'' or ``Tunney Act''), the United States of
America files this Competitive Impact Statement related to the proposed
Final Judgment here.\1\
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\1\ The Plaintiff States and the NCAA have agreed to a parallel
proposed Consent Judgment that would resolve the States' claims in
this action.
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I. Nature and Purpose of the Proceeding

The United States joined this action against Defendant National
Collegiate Athletic Association (``NCAA'') on January 18, 2024, to
remedy a violation of section 1 of the Sherman Act, 15 U.S.C. 1.
section 1 of the Sherman Act prohibits ``contract[s], combination[s],
or conspirac[ies]'' in restraint of trade or commerce.'' 15 U.S.C. 1.
The Sherman Act is designed to ensure ``free and unfettered competition
as the rule of trade. It rests on the premise that the unrestrained
interaction of competitive forces will yield the best allocation of our
economic resources, the lowest prices, the highest quality and the
greatest material progress. . . .'' National Collegiate Athletic Ass'n
v. Board of Regents of Univ. of Okla., 468 U.S. 85, 104 n.27 (1984)
(quoting Northern Pac. Ry. v. United States, 356 U.S. 1, 4-1 (1958)).
The Amended Complaint alleges that the NCAA and its Division I
members agreed to limit competition for student athletes. Former NCAA
Bylaw 14.5.5.1 (the ``Transfer Eligibility Rule'') unjustifiably
restrained the ability of college athletes to engage in the market for
their labor.\3\ The Transfer Eligibility Rule, which was in effect at
the time the Amended Complaint was filed and is described in more
detail below, imposed a one-year delay in the eligibility of certain
college athletes transferring between NCAA member institutions and thus
reduced competition in the labor market for college athletes. This rule
increased the cost of student-athletes transferring to different
institutions and made Division I institutions less interested in
recruiting student athletes.
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\3\ Plaintiffs State of Ohio, State of Colorado, State of
Illinois, State of New York, State of North Carolina, State of
Tennessee, and State of West Virginia filed the initial Complaint in
this action on Dec. 7, 2023. Plaintiff United States, along with
Plaintiffs Commonwealth of Virginia, District of Columbia, State of
Minnesota, and State of Mississippi joined this action via an
Amended Complaint filed on January 18, 2024.
---------------------------------------------------------------------------

The Amended Complaint also alleges that NCAA Bylaw 12.11.4.2 (the
``Rule of Restitution'') furthers the anticompetitive effects of
certain eligibility rules by deterring college athletes from
challenging those rules. Under that rule, the NCAA can punish college
athletes (and their associated institutions) that bring a legal
challenge against the NCAA's eligibility rules and receive a court-
ordered injunction barring enforcement of those rules, if the
injunction is later overturned or stayed. Concurrently with filing the
initial Complaint, Plaintiffs sought a temporary restraining order to
enjoin Defendant from enforcing the Transfer Eligibility Rule and the
Rule of Restitution. ECF No. 2.
The Court granted Plaintiffs' request for a temporary restraining
order, finding that Plaintiffs were likely to succeed on the merits and
enjoining the NCAA from enforcing the Transfer Eligibility Rule and the
Rule of Restitution. Ohio v. National Collegiate Athletic Ass'n, No.
1:23-CV-100,--F.Supp.3d--,2023 WL 9103711 (N.D. W. Va. Dec. 13, 2023).
The Court subsequently converted the temporary restraining order into a
preliminary injunction upon agreement of the parties. ECF No. 63.
On April 17, 2024, the NCAA's Division I Council voted to withdraw
the Transfer Eligibility Rule, modifying its bylaws to allow players to
freely transfer multiple times without a year-in-residence requirement.
This change was approved by the NCAA's Board of Governors on April 22,
2024. See Division I Board of Directors ratifies transfer, NIL rule
changes, available at: <a href="https://www.ncaa.org/news/2024/4/22/media-center-division-i-board-of-directors-ratifies-transfer-nil-rule-changes.aspx">https://www.ncaa.org/news/2024/4/22/media-center-division-i-board-of-directors-ratifies-transfer-nil-rule-changes.aspx</a>.
The United States has now filed a proposed Final Judgment and
Stipulation and Order, which are designed to ensure that the loss of
competition alleged in the Amended Complaint is fully remedied and does
not recur. Under the proposed Final Judgment, which is explained more
fully below, the NCAA would be permanently enjoined from enforcing the
former Transfer Eligibility Rule and prohibited from implementing
similar rules in the future. The Stipulation and Order requires the
NCAA to abide by and comply with the provisions of the proposed Final
Judgment until the proposed Final Judgment is entered by the Court or
until expiration of time for all appeals of any Court ruling declining
entry of the proposed Final Judgment.
The United States and the NCAA have stipulated that the proposed
Final Judgment may be entered after compliance with the APPA. Entry of
the proposed Final Judgment will terminate this action, except that the
Court will retain jurisdiction to construe, modify, or enforce the
provisions of the proposed Final Judgment and to punish violations
thereof.

II. Description of Events Giving Rise to the Alleged Violation

A. Defendant NCAA

Defendant NCAA is an unincorporated association that acts as the
governing body of college sports.

[[Page 49207]]

Am. Compl. ] 17. The NCAA includes more than 1,000 member colleges and
universities throughout the United States. Id. These member
institutions are organized into three divisions, including Division I,
which includes over 350 schools and allows for scholarships. Id.
Division I schools compete with each other not only through athletic
events but also in other upstream and downstream economic markets: for
instance, NCAA Division I schools ``compete against each other to
attract television revenues,'' Board of Regents, 468 U.S. at 99, and,
at issue in this case, ``compete fiercely'' in the labor market ``for
student athletes.'' National Collegiate Athletic Ass'n v. Alston, 594
U.S. 69, 86 (2021). Through the NCAA Constitution and Bylaws, the NCAA
and its members have adopted regulations governing all aspects of
college sports, including the Transfer Eligibility Rule. The NCAA
Constitution and Bylaws are adopted by the votes of member institutions
and various NCAA councils, and they may be amended by votes of member
institutions or NCAA councils. Am. Compl. ] 17. Accordingly, the rules
set forth in the NCAA Constitution are horizontal agreements between
the NCAA and its member institutions and among NCAA member
institutions. Id.
An academic institution that wishes to participate in any
meaningful way in the highest and most popular level of collegiate
athletics must maintain membership in the NCAA and abide by its
Division I rules, regulations, and bylaws. Am. Compl. ] 18. Failure to
abide by these rules puts academic institutions at risk of punitive
measures from the NCAA that include, among other things, reduced
athletic scholarships, prohibitions on postseason eligibility, vacating
of previously earned wins, and monetary fines. Id. Because the NCAA and
its member institutions have monopsony power in controlling the highest
and most popular level of college athletics, any individual who wishes
to provide athletic services in exchange for full or partial payment of
undergraduate tuition as well as other substantial benefits gained from
competing at the highest level of collegiate athletics must by
necessity attend an NCAA Division I member institution and has no
option but to abide by its rules. Am. Compl. ] 19.
Participation in NCAA Division I athletics offers college athletes
unique opportunities that are not available elsewhere: (i) the ability
to exchange athletics services for the payment of the partial or full
cost of an education plus room and board, (ii) high quality academic
educational services, (iii) top-of-the-line training facilities, (iv)
high quality coaches who will best be able to launch players to
professional careers, (v) national publicity through national
championships and nationwide broadcasting contracts, (vi) opportunities
to profit from name, image, and likeness (``NIL'') agreements, and
(vii) competition at the highest level of collegiate athletics. Am.
Compl. ] 20.

B. Relevant Markets

Within NCAA Division I athletics, the Transfer Eligibility Rule
affects labor markets for athletic services in men's and women's
Division I sports, wherein each college athlete participates in his or
her sport-specific market. See Am. Compl. ] 27. Within these markets,
NCAA member institutions compete to attract and enroll elite-level
college athletes. In so doing, NCAA member institutions secure the
labor of these college athletes through in-kind benefits: specifically,
scholarships, academic programs, access to modern training facilities,
and training from premier coaches and their staff. Id.
Participation in NCAA Division I athletic competition confers
significant and unique benefits to college athletes, such as the
ability to showcase their skill before national audiences, gain
exposure to professional team scouts, and compete against other elite
college athletes. Am. Compl. ] 29. In addition, NIL agreements allow
college athletes to benefit financially--sometimes for millions of
dollars--from the aforementioned national exposure and elite
competitive environment that NCAA Division I athletics provide. Id.
There are no practical alternatives to NCAA Division I athletics for
college athletes who seek these benefits. Id. at ] 30.
The relevant geographic market is the United States. NCAA member
institutions are located across the country, and many college athletes
are willing to enroll in schools far distant from home to pursue
athletic opportunities. Therefore, those NCAA member institutions
engage in competition in the relevant labor markets throughout the
United States. Am. Compl. ] 28. Within the relevant geographic and
labor markets, the NCAA maintains exclusive power, dictating the rules
and regulations for participation Division I athletics through the
Division I Council and NCAA member institutions. Id. at ] 32.

C. The Transfer Eligibility Rule

Under the Transfer Eligibility Rule, ``[a] transfer student from a
four-year institution shall not be eligible for intercollegiate
competition at a[n NCAA] member until the student has fulfilled a
residence requirement of one full academic year (two full semesters or
three full quarters) at the certifying institution.'' Am. Compl. ] 23
(quoting NCAA Division I 2023-24 Manual, Am. Compl. Ex. A at 165).
Although the Transfer Eligibility Rule was a default rule that applied
to all transfers, a separate rule created an exemption for the first
time a college athlete transfers; thus, the Transfer Eligibility Rule
in effect applied only to the second time (or more) that a college
athlete transferred schools. Id. While the Rule barred a college
athlete from competing during this one-year waiting period, it did not
exempt college athletes from all the other requirements and
obligations--including practicing, traveling with the team, and other
commitments--of being a college athlete. Id. Under NCAA Bylaw 12.8.1,
college athletes have five calendar years to complete four seasons of
competitive eligibility in any one sport. See Am. Compl. Ex. A at 55.
Thus, this one-year waiting period removed 20% of the total time
available for the college athlete to complete her athletic career.
College athletes were thus forced to weigh the one-year ineligibility
period against the potential benefits of moving to a better opportunity
at another school. Am. Compl. ] 7. While the Rule provided for the
possibility of a waiver of the ineligibility period, the granting of
the waiver was at the discretion of the NCAA and only after the college
athlete had already enrolled in a new school. In practice, those
waivers were inconsistently and arbitrarily awarded, and, in any event,
the uncertainty of the waiver process itself was a deterrent to
transferring. Am. Compl. ] 39.

D. The ``Rule of Restitution''

The NCAA Bylaws contain what is commonly known as the ``Rule of
Restitution,'' which allows the NCAA to punish college athletes and
their member institutions for actions taken in accordance with court
orders if those orders are later revoked. Am. Compl. ] 25 (citing NCAA
Bylaw 12.11.4.2, Am. Compl. Ex. A at 66-67). For example, under the
Rule of Restitution, were a college athlete to challenge an NCAA bylaw
preventing her participation, receive a court order enjoining the
bylaw, and then go on to win a conference championship with her team
that season, the school would be at risk of having its wins later
vacated by the NCAA if the court's order were reversed.
The obvious purpose and effect of the Rule of Restitution is to
deter challenges

[[Page 49208]]

to the NCAA's anticompetitive rules by discouraging athletes from
protecting themselves and thus trying to deprive courts of the ability
to grant effective relief. Am. Compl. ] 73. Under the Rule of
Restitution, college athletes run the risk of personal punishment and
the risk of subjecting their schools or teammates to harsh sanctions
simply by following the terms of a court order. Id. The Rule of
Restitution grants the NCAA the ability to decide for itself the rules
of interim relief rather than the courts. Id. Plaintiffs argued, and
the Court agreed, that any injunctive relief against the Transfer
Eligibility Rule would need to be paired with injunctive relief against
the Rule of Restitution. Am. Compl. ] 74; Ohio v. NCAA, 2023 WL
9103711, at *11-12.

E. Anticompetitive Effects

The Transfer Eligibility Rule restrained college athletes from
freely moving among member institutions to improve their economic
opportunity, personal growth, and well-being, a freedom afforded to
other students at NCAA member institutions but not to college athletes.
The Transfer Eligibility Rule produced direct anticompetitive effects
in the relevant markets in three phases of the college athlete transfer
process: (1) when college athletes were deciding whether to transfer,
(2) when college athletes decided to transfer and were searching for a
new institution to attend, and (3) when college athletes were denied
eligibility to compete for one year after transferring to a new
institution. Ohio v. NCAA, 2023 WL 9103711, at *5.
In the first phase, when college athletes were deciding whether to
transfer, the Transfer Eligibility Rule discouraged college athletes
from transferring to a different institution that may benefit their
academic, athletic, mental, and financial well-being. Ohio v. NCAA,
2023 WL 9103711, at *5. College athletes, just like non-athlete college
students, seek to transfer schools for any number of reasons, including
but not limited to better academic, athletic, or financial
opportunities elsewhere. College athletes also seek to transfer
institutions for reasons having nothing to do with sports, for example,
a desire to be closer to home. The Transfer Eligibility Rule dampened
competition in the relevant markets by deterring college athletes from
exploring better options within their sport-specific market. Id.
Second, the Transfer Eligibility Rule also artificially
disadvantaged college athletes who choose to transfer a second time by
reducing their attractiveness to potential destination institutions.
Id. Second-time transfer college athletes were not able to apply for a
waiver of the Transfer Eligibility Rule until after they had been
accepted and enrolled at their new institution. Because the waiver
process was discretionary and was inconsistently applied, member
institutions that accepted a second-time transfer risked that the
college athlete might not be eligible to compete for an entire academic
year. This eligibility risk artificially deflated the value of a
second-time transfer, creating an additional impediment in the market
for college athlete labor. Id.
Third, the Transfer Eligibility Rule harmed college athletes
transferring a second time by denying them the opportunity to compete
in NCAA Division I athletic events for an entire academic year after
transferring to a new institution. Id. at *6. NCAA Division I
competition is the pinnacle of college athletics in the United States.
Competing at this high level of athletics comes with immeasurable
opportunities for personal, professional, and economic growth. For
athletes seeking to continue competing professionally after college,
NCAA Division I competition provides a unique platform to showcase
athletic skills in front of national audiences and professional scouts.
The Transfer Eligibility Rule unjustifiably denied these benefits to
affected college athletes for an entire academic year. Id.

F. The Transfer Eligibility Rule Lacks Procompetitive Justifications

In its opposition to Plaintiffs' motion for a temporary restraining
order, NCAA argued that the Transfer Eligibility Rule is
procompetitive, as it ``aim[s] to promote academic success by
minimizing the significant potential disruption from multiple
transfers, promoting the benefits of team continuity and
predictability, and protecting the viability of collegiate sports by
preserving some level of competitive balance between programs and some
level of continuity in the makeup of teams.'' ECF No. 32 at 9-10.
Ruling on Plaintiffs' motion for a temporary restraining order, the
Court found that these purportedly procompetitive justifications were
``uncompelling'' and ``pretextual.'' Ohio v. NCAA, 2023 WL 9103711, at
*7. The Court was unpersuaded by the NCAA's argument that the Rule
promotes academic success, noting that the Rule only bars competition,
not participation in practices or other team activities. Thus, second-
time transfers (who as a practical matter must train and attend
practice to remain viable members of their teams) are likely to spend
just as much time away from their studies as their teammates, save for
a few hours of actual competition on gameday. Id. With respect to the
NCAA's argument that the Transfer Eligibility Rule promotes team
stability, the Court found that the NCAA Bylaws are silent as to the
mid-season firing of coaches and contemplate first-time transfers.
Accordingly, ``the NCAA's stability argument [is] without merit given
that there are currently no restrictions on first time transfers or
coaches leaving,'' two circumstances that could also affect team
stability. Id.

G. Less Restrictive Alternatives to the Transfer Eligibility Rule

To the extent the goals of the Transfer Eligibility Rule were to
promote the academic well-being of college athletes and to prevent
college sports from becoming a free agent market like professional
sports leagues, the NCAA's other rules already promote these ends. Am.
Compl. ] 82; Ohio v. NCAA, 2023 WL 9103711, at *8. For example, NCAA
Bylaws already require college athletes to maintain progress toward
degrees to be eligible to compete in NCAA events. NCAA Bylaw 14.4.1
requires college athletes to ``maintain progress toward a baccalaureate
or equivalent degree at that institution'' to be eligible for
intercollegiate competition at their college or university. Am. Compl.
Ex. A at 150-51. In addition, NCAA Bylaw 20.2.4.13 requires member
institutions to publish their progress-toward-degree requirements for
college athletes, thus making these requirements available to college
athletes at each institution. Id. at 367. Other NCAA Bylaws require
minimum credit hour and grade point averages for college athletes to be
eligible for competition. Id. at 151, 154. Additionally, NCAA Bylaws
already prohibit in-season transfers within the same sport, ensuring
that college athletics do not morph into a professional free agent
system. Am. Compl. ]] 84-86. In enjoining the Transfer Eligibility
Rule, the Court found that these bylaws related to academic progress
and in-season transfers accomplished NCAA's goals ``without the
unjustified restrictions imposed by the Transfer Eligibility Rule.''
Ohio v. NCAA, 2023 WL 9103711, at *8.

III. Explanation of the Proposed Final Judgment

The relief required by the proposed Final Judgment addresses the
loss of competition alleged in the Amended Complaint. Paragraph 22
permanently enjoins the NCAA from enforcing the Transfer Eligibility
Rule or any substantially similar rule requiring a

[[Page 49209]]

college athlete to maintain a period of residence or refrain from
competition because of a transfer between NCAA member institutions.
Paragraph 22 of the proposed Final Judgment also prohibits the NCAA
from enforcing the Rule of Restitution on any member institution or
college athlete related to a college athlete's participation in
intercollegiate competition following a transfer in reliance on this
Court's orders.
Paragraph 23 of the proposed Final Judgment requires the NCAA to
issue an additional year of eligibility to any qualifying college
athlete who was previously deemed ineligible to participate because of
the Transfer Eligibility Rule for a season or any portion of a season
during or since the 2019-20 academic year. Those college athletes will
have no fewer than six years to complete their four seasons of
intercollegiate competition and thus will not be disadvantaged from
having sat out a year because of the Transfer Eligibility Rule.
The proposed Final Judgment also contains provisions designed to
promote compliance with and make enforcement of the Final Judgment as
effective as possible. Paragraph 30 provides that the United States
retains and reserves all rights to enforce the Final Judgment,
including the right to seek an order of contempt from the Court. Under
the terms of this paragraph, the NCAA agrees that in any civil contempt
action, any motion to show cause, or any similar action brought by the
United States regarding an alleged violation of the Final Judgment, the
United States may establish the violation and the appropriateness of
any remedy by a preponderance of the evidence and that the NCAA has
waived any argument that a different standard of proof should apply.
This provision aligns the standard for compliance with the Final
Judgment with the standard of proof that applies to the underlying
offense that the Final Judgment addresses.
Paragraph 30 provides additional clarification regarding the
interpretation of the provisions of the proposed Final Judgment. The
proposed Final Judgment is intended to remedy the loss of competition
that the United States alleges would otherwise result from the
continued application of the Transfer Eligibility Rule. The NCAA agrees
that it will abide by the proposed Final Judgment and that it may be
held in contempt of the Court for failing to comply with any provision
of the proposed Final Judgment that is stated specifically and in
reasonable detail, as interpreted in light of this procompetitive
purpose.
Paragraph 31 provides that if the Court finds in an enforcement
proceeding that the NCAA has violated the Final Judgment, the United
States may apply to the Court for appropriate relief, including
contempt remedies and any additional relief to ensure the NCAA complies
with the terms of the Final Judgment. In addition, to compensate
American taxpayers for any costs associated with investigating and
enforcing violations of the Final Judgment, Paragraph 31 provides that,
in any successful effort by the United States to enforce the Final
Judgment against the NCAA, whether litigated or resolved before
litigation, the NCAA must reimburse the United States for attorneys'
fees, experts' fees, and other costs incurred in connection with that
effort to enforce this Final Judgment, including the investigation of
the potential violation.
Under the proposed Final Judgment, the United States may file an
action at any time against NCAA for other Bylaws or claims not made in
this action. Paragraph 23 states that only the United States' claims
with respect to the Transfer Eligibility Rule as applied to Division I
college athletes is resolved pursuant to the proposed Final Judgment,
and that the proposed Final Judgment specifically does not apply to any
Bylaws of NCAA Division II or NCAA Division III nor does it resolve any
antitrust claims regarding those rules. The proposed Final Judgment
applies only to the Transfer Eligibility Rule as applied to Division I
college athletes and does not mean that the United States condones any
other Bylaws of NCAA Division I or any of the Bylaws of NCAA Division
II or NCAA Division III.

IV. Remedies Available to Potential Private Plaintiffs

Section 4 of the Clayton Act, 15 U.S.C. 15, provides that any
person who has been injured as a result of conduct prohibited by the
antitrust laws may bring suit in federal court to recover three times
the damages the person has suffered, as well as costs and reasonable
attorneys' fees. Entry of the proposed Final Judgment neither impairs
nor assists the bringing of any private antitrust damage action. Under
the provisions of section 5(a) of the Clayton Act, 15 U.S.C. 16(a), the
proposed Final Judgment has no prima facie effect in any subsequent
private lawsuit that may be brought against Defendants.

V. Procedures Available for Modification of the Proposed Final Judgment

The United States and the NCAA have stipulated that the proposed
Final Judgment may be entered by the Court after compliance with the
provisions of the APPA, provided that the United States has not
withdrawn its consent. The APPA conditions entry upon the Court's
determination that the proposed Final Judgment is in the public
interest.
The APPA provides a period of at least 60 days preceding the
effective date of the proposed Final Judgment within which any person
may submit to the United States written comments regarding the proposed
Final Judgment. Any person who wishes to comment should do so within 60
days of the date of publication of this Competitive Impact Statement in
the Federal Register, or within 60 days of the first date of
publication in a newspaper of the summary of this Competitive Impact
Statement, whichever is later. All comments received during this period
will be considered by the U.S. Department of Justice, which remains
free to withdraw its consent to the proposed Final Judgment at any time
before the Court's entry of the Final Judgment. The comments and the
response of the United States will be filed with the Court. In
addition, the comments and the United States' responses will be
published in the Federal Register unless the Court agrees that the
United States instead may publish them on the U.S. Department of
Justice, Antitrust Division's internet website.
Written comments should be submitted in English to: Yvette Tarlov,
Chief, Media, Entertainment, and Communications Section, Antitrust
Division, United States Department of Justice, 450 Fifth St. NW, Suite
7000, Washington, DC 20530, <a href="/cdn-cgi/l/email-protection" class="__cf_email__" data-cfemail="abd2ddcedfdfce85dfcad9c7c4ddebded8cfc4c185ccc4dd">[email&#160;protected]</a>.
The proposed Final Judgment provides that the Court retains
jurisdiction over this action, and the parties may apply to the Court
for any order necessary or appropriate for the modification,
interpretation, or enforcement of the Final Judgment.

VI. Alternatives to the Proposed Final Judgment

As an alternative to the proposed Final Judgment, the United States
considered continuing the litigation and seeking a full trial on the
merits against Defendant. The United States is satisfied, however, that
the relief required by the proposed Final Judgment is likely to ensure
competition

[[Page 49210]]

in the relevant markets by remedying the anticompetitive effects
alleged in the Amended Complaint. Thus, the proposed Final Judgment is
likely to achieve all or substantially all the relief the United States
would have obtained through litigation but avoids the time, expense,
and uncertainty of a full trial on the merits.

VII. Standard of Review Under the APPA for the Proposed Final Judgment

Under the Clayton Act and APPA, proposed Final Judgments, or
``consent decrees,'' in antitrust cases brought by the United States
are subject to a 60-day comment period, after which the Court shall
determine whether entry of the proposed Final Judgment ``is in the
public interest.'' 15 U.S.C. 16(e)(1). In making that determination,
the Court, in accordance with the statute as amended in 2004, is
required to consider:

(A) the competitive impact of such judgment, including
termination of alleged violations, provisions for enforcement and
modification, duration of relief sought, anticipated effects of
alternative remedies actually considered, whether its terms are
ambiguous, and any other competitive considerations bearing upon the
adequacy of such judgment that the court deems necessary to a
determination of whether the consent judgment is in the public
interest; and
(B) the impact of entry of such judgment upon competition in the
relevant market or markets, upon the public generally and
individuals alleging specific injury from the violations set forth
in the complaint including consideration of the public benefit, if
any, to be derived from a determination of the issues at trial.

15 U.S.C. 16(e)(1)(A) & (B). In considering these statutory factors,
the Court's inquiry is necessarily a limited one as the government is
entitled to ``broad discretion to settle with the defendant within the
reaches of the public interest.'' United States v. Microsoft Corp., 56
F.3d 1448, 1461 (D.C. Cir. 1995); United States v. U.S. Airways Grp.,
Inc., 38 F. Supp. 3d 69, 75 (D.D.C. 2014) (explaining that the
``court's inquiry is limited'' in Tunney Act settlements); United
States v. InBev N.V./S.A., No. 08-1965 (JR), 2009 U.S. Dist. LEXIS
84787, at *3 (D.D.C. Aug. 11, 2009) (noting that a court's review of a
proposed Final Judgment is limited and only inquires ``into whether the
government's determination that the proposed remedies will cure the
antitrust violations alleged in the complaint was reasonable, and
whether the mechanisms to enforce the final judgment are clear and
manageable'').
As the U.S. Court of Appeals for the District of Columbia Circuit
has held, under the APPA a court considers, among other things, the
relationship between the remedy secured and the specific allegations in
the government's Amended Complaint, whether the proposed Final Judgment
is sufficiently clear, whether its enforcement mechanisms are
sufficient, and whether it may positively harm third parties. See
Microsoft, 56 F.3d at 1458-62. With respect to the adequacy of the
relief secured by the proposed Final Judgment, a court may not ``make
de novo determination of facts and issues.'' United States v. W. Elec.
Co., 993 F.2d 1572, 1577 (D.C. Cir. 1993) (quotation marks omitted);
see also Microsoft, 56 F.3d at 1460-62; United States v. Alcoa, Inc.,
152 F. Supp. 2d 37, 40 (D.D.C. 2001); United States v. Enova Corp., 107
F. Supp. 2d 10, 16 (D.D.C. 2000); InBev, 2009 U.S. Dist. LEXIS 84787,
at *3. Instead, ``[t]he balancing of competing social and political
interests affected by a proposed antitrust decree must be left, in the
first instance, to the discretion of the Attorney General.'' W. Elec.
Co., 993 F.2d at 1577 (quotation marks omitted). ``The court should
also bear in mind the flexibility of the public interest inquiry: the
court's function is not to determine whether the resulting array of
rights and liabilities is the one that will best serve society, but
only to confirm that the resulting settlement is within the reaches of
the public interest.'' Microsoft, 56 F.3d at 1460 (quotation marks
omitted); see also United States v. Deutsche Telekom AG, No. 19-2232
(TJK), 2020 WL 1873555, at *7 (D.D.C. Apr. 14, 2020). More demanding
requirements would ``have enormous practical consequences for the
government's ability to negotiate future settlements,'' contrary to
congressional intent. Microsoft, 56 F.3d at 1456. ``The Tunney Act was
not intended to create a disincentive to the use of the consent
decree.'' Id.
The United States' predictions about the efficacy of the remedy are
to be afforded deference by the Court. See, e.g., Microsoft, 56 F.3d at
1461 (recognizing courts should give ``due respect to the Justice
Department's . . . view of the nature of its case''); United States v.
Iron Mountain, Inc., 217 F. Supp. 3d 146, 152-53 (D.D.C. 2016) (``In
evaluating objections to settlement agreements under the Tunney Act, a
court must be mindful that [t]he government need not prove that the
settlements will perfectly remedy the alleged antitrust harms[;] it
need only provide a factual basis for concluding that the settlements
are reasonably adequate remedies for the alleged harms.'' (internal
citations omitted)); United States v. Republic Servs., Inc., 723 F.
Supp. 2d 157, 160 (D.D.C. 2010) (noting ``the deferential review to
which the government's proposed remedy is accorded''); United States v.
Archer-Daniels-Midland Co., 272 F. Supp. 2d 1, 6 (D.D.C. 2003) (``A
district court must accord due respect to the government's prediction
as to the effect of proposed remedies, its perception of the market
structure, and its view of the nature of the case.''). The ultimate
question is whether ``the remedies [obtained by the Final Judgment are]
so inconsonant with the allegations charged as to fall outside of the
`reaches of the public interest.''' Microsoft, 56 F.3d at 1461 (quoting
W. Elec. Co., 900 F.2d at 309).
Moreover, the Court's role under the APPA is limited to reviewing
the remedy in relationship to the violations that the United States has
alleged in its Amended Complaint, and does not authorize the Court to
``construct [its] own hypothetical case and then evaluate the decree
against that case.'' Microsoft, 56 F.3d at 1459; see also U.S. Airways,
38 F. Supp. 3d at 75 (noting that the court must simply determine
whether there is a factual foundation for the government's decisions
such that its conclusions regarding the proposed settlements are
reasonable); InBev, 2009 U.S. Dist. LEXIS 84787, at *20 (``[T]he
`public interest' is not to be measured by comparing the violations
alleged in the complaint against those the court believes could have,
or even should have, been alleged''). Because the ``court's authority
to review the decree depends entirely on the government's exercising
its prosecutorial discretion by bringing a case in the first place,''
it follows that ``the court is only authorized to review the decree
itself,'' and not to ``effectively redraft the complaint'' to inquire
into other matters that the United States did not pursue. Microsoft, 56
F.3d at 1459-60.
In its 2004 amendments to the APPA, Congress made clear its intent
to preserve the practical benefits of using judgments proposed by the
United States in antitrust enforcement, Public Law 108-237 Sec. 221,
and added the unambiguous instruction that ``[n]othing in this section
shall be construed to require the court to conduct an evidentiary
hearing or to require the court to permit anyone to intervene.'' 15
U.S.C. 16(e)(2); see also U.S. Airways, 38 F. Supp. 3d at 76
(indicating that a court is not required to hold an evidentiary hearing
or to permit intervenors as part of its review under the Tunney Act).
This language explicitly wrote into the statute what Congress intended
when it first enacted the Tunney Act in 1974. As Senator Tunney
explained: ``[t]he court is

[[Page 49211]]

nowhere compelled to go to trial or to engage in extended proceedings
which might have the effect of vitiating the benefits of prompt and
less costly settlement through the consent decree process.'' 119 Cong.
Rec. 24,598 (1973) (statement of Sen. Tunney). ``A court can make its
public interest determination based on the competitive impact statement
and response to public comments alone.'' U.S. Airways, 38 F. Supp. 3d
at 76 (citing Enova Corp., 107 F. Supp. 2d at 17).

VIII. Determinative Documents

There are no determinative materials or documents within the
meaning of the APPA that were considered by the United States in
formulating the proposed Final Judgment.

Dated: May 30, 2024

Respectfully,
-----------------------------------------------------------------------
Maximillian F. Nogay
Assistant United States Attorney

United States Attorney's Office, Northern District of West Virginia,
P.O. Box 591, 1125 Chapline Street, Suite 3000, Wheeling, WV 26003,
Tel: 304-234-0100, Fax: 304-234-0110, Email: <a href="/cdn-cgi/l/email-protection" class="__cf_email__" data-cfemail="137e726b3d7d7c74726a536660777c793d747c65">[email&#160;protected]</a>.

-----------------------------------------------------------------------
James H. Congdon *
Trial Attorney

United States Department of Justice, Antitrust Division, Media,
Entertainment, and Communications Section, 450 Fifth Street NW,
Suite 7000, Washington, DC 20530, Tel: (202) 538-3985, Fax: (202)
514-6381, Email: <a href="/cdn-cgi/l/email-protection" class="__cf_email__" data-cfemail="4f252e222a3c612c2021282b20210f3a3c2b202561282039">[email&#160;protected]</a>.

* pro hac vice

Attorneys for Plaintiff United States of America

[FR Doc. 2024-12720 Filed 6-10-24; 8:45 am]
BILLING CODE 4410-11-P

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