Case4:09-cv-01967-CW Document639 Filed10/24/12 Page1 of 33

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
S CHIFF H ARDIN LLP
ATTORNEYS AT LAW ANN ARBOR

DEFENDANTS COUNSEL LISTED ON SIGNATURE PAGE

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA OAKLAND DIVISION

In re NCAA Student-Athlete Likeness Antitrust Litigation

Case No. 09-cv-1967-CW NOTICE OF MOTION AND MOTION OF DEFENDANTS TO STRIKE ANTITRUST PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION; STATEMENT OF RELIEF SOUGHT; AND MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT Date: Time: Dept: Judge: Complaint filed: November 29, 2012 2:00 p.m. Courtroom 2, 4th Floor Hon. Claudia Wilken May 5, 2009

MOTION TO STRIKE ANTITRUST PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION

CASE NO. 09-CV-1967-CW

Case4:09-cv-01967-CW Document639 Filed10/24/12 Page2 of 33

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
S CHIFF H ARDIN LLP
ATTORNEYS AT LAW ANN ARBOR

TABLE OF CONTENTS TABLE OF AUTHORITIES .......................................................................................................... ii NOTICE OF MOTION AND STATEMENT OF RELIEF SOUGHT........................................... 1 PRELIMINARY STATEMENT..................................................................................................... 1 STATEMENT OF FACTS ............................................................................................................. 2 I. The CCM Radically and Inconsistently Changes the Class Definition, Liability and Damages Theories ....................................................................... 3 A. The Alleged Damages Class: Changed From Former Student-Athletes Whose Likenesses Were Licensed After They Stopped Playing NCAA Sports To Current Student-Athletes Who Appear in “Game Footage” ..... 3 B. The Allegedly Illegal Conduct ................................................................................ 4 1. Changed From “Perpetual Release” Forms To The NCAA’s Amateurism and Eligibility Rules ............................................................... 4 2. Changed From Vertical to Horizontal Restraint of Trade............................... 6 C. The Allegedly Affected Products ............................................................................ 7 1. Changed From Archival Video and Merchandise To Live Broadcast ........... 7 2. Changed From Former Student-Athletes in Video Games to Current Student- Athletes in Video Games .............................................................. 8 D. The Alleged Relevant Market: Changed From “Collegiate Licensing” To Education and Group Licensing .............................................................................. 9 II. Plaintiffs Admitted That Live Broadcast and Amateurism Are Not In This Case ........... 10 ARGUMENT ................................................................................................................................ 12 I. The Court Should Strike the CCM Because It Deviates Materially From the 2CAC....... 12 II. The Court Should Strike the CCM Because Its Attempt To Set Forth A Horizontal Theory of Liability Is Contrary to Law of the Case ...................................................................... 14 III. The Court Should Strike the CCM Because Plaintiffs Are Judicially Estopped from Pursuing The Surprise Liability Theory Set Forth Therein .............................................. 14 A. Judicial Estoppel Precludes Inconsistent Positions for Litigation Advantage ...... 15 B. Plaintiffs’ Current Liability Theory Is Inconsistent With Their Earlier Positions ................................................................................................................ 16 C. Plaintiffs Succeeded In Persuading Courts To Accept Their Earlier Position.................................................................................................................. 17 D. Plaintiffs Would Derive An Unfair Advantage Or Impose An Unfair Detriment on Defendants If Not Estopped ............................................................ 19 E. Plaintiffs Have Engaged in “Chicanery”............................................................... 21 IV. Neither Plaintiffs, Nor The Putative Class, Will Be Prejudiced By Striking The CCM .................................................................................................................................. 22 V. The CCM Should Be Stricken As To EA and CLC For Unique and Independent Reasons ............................................................................................................................. 23 CONCLUSION ............................................................................................................................. 24
MOTION TO STRIKE ANTITRUST PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION

i

CASE NO. 09-CV-1967-CW

Case4:09-cv-01967-CW Document639 Filed10/24/12 Page3 of 33

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
S CHIFF H ARDIN LLP
ATTORNEYS AT LAW ANN ARBOR

TABLE OF AUTHORITIES 49er Chevrolet, Inc. v. General Motors Corp., 803 F.2d 1463 (9th Cir. 1986)........................................................................................... 24 Agnew v. NCAA, 683 F.3d 328 (7th Cir. 2012)....................................................................................... 21, 24 Anderson v. U.S. Dep’t of Hous. and Urban Dev., 554 F.3d 525 (5th Cir. 2008)............................................................................................. 12 Baughman v. Walt Disney World Co., 685 F.3d 1131 (9th Cir. 2012)............................................................................... 16, 18, 19 Bell Atlantic v. Twombly, 550 U.S. 544 (2007) .......................................................................................................... 24 Brown v. Am. Airlines, Inc., No. CV 10-8431 AG (PJWx), --- F.R.D. ---, 2011 WL 9131817 (C.D. Cal. Aug. 29, 2011) ................................................................................................ 12 Burns v. City of Dallas, No. 3:94-CV-2770-R, 1999 WL 47237 (N.D. Tex. Jan. 22, 1999) .................................. 12 Chavez v. Bank of Am. Corp., No. C-10-0653 JCS, 2012 WL 1594272 (N.D. Cal. May 4, 2012) .................................. 14 Chodos v. West Publ’g Co., 292 F.3d 992 (9th Cir. 2002)............................................................................................. 13 Coopers & Lybrand v. Livesay, 437 U.S. 463 (1978) .......................................................................................................... 22 Evans v. IAC/Interactive Corp., No. CV051104DSFCWX, 2007 WL 7086261 (C.D. Cal. Mar. 14, 2007) ................. 12, 14 Hamilton v. State Farm Fire & Cas. Co., 270 F.3d 778 (9th Cir. 2001)............................................................................................. 15 Helfand v. Gerson, 105 F.3d 530 (9th Cir. 1997)............................................................................................. 15 Hersh v. Nat’l Found. Life Ins. Co., No. C-11-03289 EDL, 2012 WL 381173 (N.D. Cal. Feb. 6, 2012) ..................... 18, 19, 21 In re Geneva Towers Assoc., No. C-93-2390 CW, 1994 WL 124840 (N.D. Cal. Mar. 30, 1994) .................................. 14 Jackson v. Bank of Hawaii, 902 F.2d 1385 (9th Cir. 1990)..................................................................................... 13, 20 Kendall v. Visa U.S.A., Inc., 518 F.3d 1042 (9th Cir. 2008)........................................................................................... 24
MOTION TO STRIKE ANTITRUST PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION

ii

CASE NO. 09-CV-1967-CW

Case4:09-cv-01967-CW Document639 Filed10/24/12 Page4 of 33

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
S CHIFF H ARDIN LLP
ATTORNEYS AT LAW ANN ARBOR

Khan v. S&C Elec. Co., No. 3:11-cv-03621, 2012 WL 4062811 (N.D. Cal. Sept. 14, 2012) ................................. 16 Marchiafava v. Gonzalez, Louisiana Police Dep’t, No. 06-414-RET-CN, 2008 WL 2437526 (M.D. La. June 16, 2008) ............................... 12 McGlinchy v. Shell Chem. Co., 845 F.2d 802 (9th Cir. 1988)............................................................................................. 13 Milton H. Greene Archives, Inc. v. Marilyn Monroe LLC, 692 F.3d 983 (9th Cir. 2012)................................................................................. 15, 17, 21 Munoz v. Giumarra Vineyards Corp., No. 1:09-cv-00703-AWI-JLT, 2012 WL 2617553 (E.D. Cal. July 5, 2012) ................... 12 NCAA v. Bd. of Regents of Univ. of Okla., 468 U.S. 85 (1984) ...................................................................................................... 21, 24 New Hampshire v. Maine, 532 U.S. 742 (2001) .......................................................................................................... 15 Plascencia v. Lending 1st Mortg., No. C 07-4485 CW, 2012 WL 253319 (N.D. Cal. Jan. 26, 2012) .............................. 12, 13

iii

MOTION TO STRIKE ANTITRUST PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION

CASE NO. 09-CV-1967-CW

Case4:09-cv-01967-CW Document639 Filed10/24/12 Page5 of 33

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
S CHIFF H ARDIN LLP
ATTORNEYS AT LAW ANN ARBOR

NOTICE OF MOTION AND STATEMENT OF RELIEF SOUGHT PLEASE TAKE NOTICE that on Thursday, November 29, 2012 at 2:00 pm before the Honorable Claudia Wilken, United States District Court, 1301 Clay Street, Suite 400 S, Oakland, CA 94612-5212, Courtroom 2, 4th Floor, defendants will and hereby do respectfully move the Court, pursuant to Federal Rules of Civil Procedure 8, 12, 16 and 23 and with leave of Court, Dkt. 591, for an order striking the class certification motion filed by Antitrust Plaintiffs (“plaintiffs”) in this action on August 31, 2012. PRELIMINARY STATEMENT “We don’t claim rights to be compensated for appearing in live broadcasts or playing on the field, the amateur principles that have been so hallowed.”1 “Unlike other cases involving the NCAA, this case does not involve questions of the protection of amateur sports, the student athlete experience, or other goals. The damages class here (Compl. 43) involves former student-athletes, who are citizens not subject to NCAA governance, and should be entitled to control, license, and profit from their own image and likeness.”2 Prior to August 31 of this year, the liability and damages theories alleged and pursued by plaintiffs had never changed. In the numerous individual and consolidated complaints, plaintiffs’ claims relied on the same handful of incorrect assertions: 1. The NCAA forced student-athletes to sign “perpetual release” forms; 2. The NCAA, CLC, EA and others, engaging in a series of vertical conspiracies, used these “perpetual release” forms to “boycott” former student-athletes; 3. The fruits of this conspiracy were a variety of “multimedia revenue streams” that featured the “image, likeness and/or name” of former student-athletes; 4. These “multimedia revenue streams” did not include revenues earned from the live broadcasts of football or basketball games; and 5. The remedy for this alleged wrongdoing was to compensate former studentathletes for defendants’ wrongful reliance on the “perpetual release” forms, and to enjoin defendants from relying on the forms in the future. Plaintiffs’ “perpetual release” theory – the only liability theory set forth in the Second Consolidated Amended Class Action Complaint (“2CAC”)3– was reaffirmed by plaintiffs in statements to defendants and the Court. It was repeatedly relied upon in the opinions of this Ellen Meriwether, Counsel for Antitrust Pls., Ex. 1, Tr. of Oral Arg., In re NCAA, No. 091967 (N.D. Cal. Feb. 8, 2012) (“Big Ten Hrg.”) at 15:15-2. 2 Ex. 2, Pl O’Bannon’s Opp. to NCAA’s Mot. to Dismiss the Compl., O’Bannon v. NCAA, No. CV-09-3329-CW (N.D. Cal. Oct. 27, 2009) (“O’Bannon Opp.”), Dkt. 107 at 3. 3 “¶__” are references to the 2CAC, Dkt. 327, unless otherwise noted. 1
MOTION TO STRIKE ANTITRUST PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION 1

CASE NO. 09-CV-1967-CW

Case4:09-cv-01967-CW Document639 Filed10/24/12 Page6 of 33

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
S CHIFF H ARDIN LLP
ATTORNEYS AT LAW ANN ARBOR

Court and Magistrate Judge Cousins. Yet when plaintiffs filed their Class Certification Motion (“CCM”), the “perpetual release” theory had all but disappeared. Plaintiffs now ask the Court to certify a class based on the following, entirely new, liability theory: 1. The NCAA forces current student-athletes to “compet[e] under collusive restraints,”4 including NCAA amateurism and eligibility rules mentioned nowhere in the 2CAC; 2. As a result of these “collusive restraints,” the NCAA and its members “have agreed not to pay, and do not pay, current or former student-athletes . . . for the use of their names, images and likenesses in connection with live television broadcasts of games and videogames;”5 and 3. The remedy for this alleged wrongdoing is to award current and former football and men’s basketball players 50% of all revenues earned by the NCAA or its member schools for the live broadcast of Division I football or men’s basketball games.6 It is beyond dispute that the class liability theory, and class definition, set forth in the CCM do not appear in the 2CAC or any other complaint filed by plaintiffs. Indeed, plaintiffs boasted to the press about the CCM’s last-minute change in theory: “I’m sure the NCAA will go ballistic over this,” another source, a member of plaintiffs’ legal team, told ESPN. “This is their worst nightmare, this issue coming front and center this deep into the case.”7 The Court should not reward plaintiffs’ gamesmanship. Class certification motions must conform to the allegations of the operative complaint. The Court should strike the CCM for its failure to do so. STATEMENT OF FACTS The class definition, liability and damages theories set forth in the CCM are fatally inconsistent with the allegations of the 2CAC, plaintiffs’ binding admissions to this Court, and this Court’s prior rulings.

CCM at 2. CCM at 3 (emphasis added). 6 Dkt. 633, Report of Roger Noll at 101-104 (“Noll”). 7 Tom Farrey, Change in Compensation Sought, Sep. 2, 2012, available at http://espn.go.com/college-sports/story/_/id/8324732/new-motion-lawsuit-ncaa-change-howathletes-compensated (last accessed October 16, 2012).
5

4

2

MOTION TO STRIKE ANTITRUST PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION

CASE NO. 09-CV-1967-CW

Case4:09-cv-01967-CW Document639 Filed10/24/12 Page7 of 33

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
S CHIFF H ARDIN LLP
ATTORNEYS AT LAW ANN ARBOR

I.

The CCM Radically and Inconsistently Changes the Class Definition, Liability and Damages Theories The CCM profoundly changes every significant aspect of the antitrust claims set forth in

the 2CAC and plaintiffs’ other complaints. The CCM introduces a new, much broader class definition, new allegations of illegal conduct, new products supposedly affected by that illegal conduct, and new relevant markets. A. The Alleged Damages Class: Changed From Former Student-Athletes Whose Likenesses Were Licensed After They Stopped Playing NCAA Sports To Current Student-Athletes Who Appear in “Game Footage”

The 2CAC sets forth the claims of named plaintiffs who played Division I men’s basketball or FBS football and “whose images have been licensed or sold by Defendants” since July 21, 2005. ¶¶8, 268. The “Antitrust Damages Class” alleged in the 2CAC is expressly limited to former student-athletes. ¶15. None of the named plaintiffs is a current student-athlete, and none of them seeks compensation for damages supposedly suffered while he was still in school. 2CAC, passim. Instead, the 2CAC repeatedly and specifically alleges that plaintiffs have been injured by alleged restraints that took place after plaintiffs stopped playing NCAA sports. Plaintiffs describe the wrongdoing at issue as relating to the “commercial exploitation of their images, likenesses and/or names following their cessation of intercollegiate athletic competition.” ¶9 (emphasis added).8 The 2CAC devotes dozens of paragraphs to describing the allegedly unlawful sale of archival video content featuring plaintiffs and other former student-athletes. See, e.g., ¶¶44-167.9 Significantly, plaintiffs do not allege that game broadcasts made while they, or other class members, were still in school were products of the wrongdoing alleged in the 2CAC, nor do they

See also ¶¶ 13, 17, 25, 26, 30. The Court relied on the representations in its orders, referring to allegations related to “former student-athletes.” See, e.g., Order Den. Electronic Art’s Mot. for J. on the Pleadings, Dkt. 455 at 3. The Court also characterized the plaintiffs’ classes as consisting “of current and former student-athletes who participated in Division I basketball or football and whose images, names, or likenesses have been licensed or sold by defendants, their co-conspirators, or their licensees after the conclusion of the student-athletes’ participation in college sports.” Order Granting Plaintiffs’ Mot. to Compel Financial Data, Dkt. 498 at 2 (Cousins, M.J.) (emphasis added); see also Order Den. Mot. to Compel Produc. of Doc. by Nonparties, Dkt. 64 at 3 (Cousins, M.J.) (same). 9 See also ¶¶ 11, 18. 3
MOTION TO STRIKE ANTITRUST PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION

8

CASE NO. 09-CV-1967-CW

Case4:09-cv-01967-CW Document639 Filed10/24/12 Page8 of 33

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
S CHIFF H ARDIN LLP
ATTORNEYS AT LAW ANN ARBOR

claim damages related to those broadcasts. ¶¶332-436 (listing products at issue). The 2CAC could not be more clear: this is a case brought by former student-athletes, seeking damages for allegedly illegal sales of their “name, image or likeness” made after plaintiffs had stopped playing NCAA sports.10 In the CCM, plaintiffs have redefined, and significantly expanded, their damages class to encompass all football and men’s basketball players whose “image, likeness and/or name” has been “included in game footage or videogames licensed or sold by Defendants,” including live broadcasts of “game footage.” CCM at 1-2; Noll at 12, 14. This is a dramatic expansion of the proposed damages class. Under the 2CAC, a damages class member was required to show that his “image, likeness or name” (1) was actually sold or licensed by defendants, (2) after he had stopped playing NCAA sports. See ¶¶44-167. Both of those requirements are now gone. Under the new class definition, the only apparent criterion for inclusion in the damages class is that a former student-athlete be on the roster of a Division I football or men’s basketball team that had one or more of its games broadcast on television while the class member was still in school. See Noll at 95-107. Inclusion on the roster appears to be sufficient for inclusion in the damages class regardless of whether the class member’s “image, likeness or name” was actually used in that broadcast. Id. Indeed, plaintiffs’ proposed “expert” testimony on damages would award damages to everyone who appeared on a roster during the class period. Noll at 107-108; see also Noll Appx. C-B2 (damages for rebroadcasts for all “Former Basketball Athletes”) and C-B13 (damages from live broadcasts for “Basketball Athletes on 2009-10 Roster”). This bears no resemblance to the previous damages class of former student-athletes whose “collegiate likenesses” were supposedly “wrongfully” licensed by defendants after graduation. The CCM dramatically, and impermissibly, expands the damages class. B. The Allegedly Illegal Conduct 1. Changed From “Perpetual Release” Forms To The NCAA’s Amateurism and Eligibility Rules

The 2CAC is quite specific about how defendants supposedly restrained trade. Plaintiffs
10

See ¶¶ 316, 489, 496. 4
MOTION TO STRIKE ANTITRUST PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION

CASE NO. 09-CV-1967-CW

Case4:09-cv-01967-CW Document639 Filed10/24/12 Page9 of 33

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
S CHIFF H ARDIN LLP
ATTORNEYS AT LAW ANN ARBOR

allege repeatedly, and at great length, that the alleged “restraint” was accomplished by the NCAA forcing student-athletes to sign “perpetual release” forms. Plaintiffs claimed that the “NCAA accomplishes its unreasonable restraint of trade” by “requiring all student-athletes to sign a form each year … that purports to require each of them to relinquish all rights in perpetuity to the commercial use of their images” and by requiring them to sign “at least one other similarly illegal consent form pursuant to Article 12.5.1.1 of its Bylaws.” ¶¶21-22; see also ¶502. Plaintiffs claimed that, absent these forms, NCAA members “would have competed against each other by offering higher amounts of post-graduation licensing revenues to student athletes.” ¶312; see also ¶¶23, 283-295, 301-305, 308. Importantly, these “perpetual release form” allegations are the sole basis of alleged NCAA wrongdoing identified in the 2CAC.11 The 2CAC’s focus on a “forms” conspiracy aimed at former student-athletes is also apparent from plaintiffs’ requested relief. In addition to money damages, they asked for

declaratory relief that NCAA forms “regarding future compensation rights are void and unenforceable.” ¶31.12 They similarly sought injunctive relief permanently enjoining the NCAA and its members from using forms “that purport to deprive former student-athletes of licensing and/or compensation rights, and further enjoining Defendants from selling, licensing or using former student-athletes’ rights.” ¶32 (emphasis added). Notably, the 2CAC does not request that the NCAA amateurism or eligibility rules like Division I Bylaw 12.1.2 (“Amateur Status”) – mentioned for the first time in the CCM – be declared illegal or enjoined. Nor does the 2CAC request any damages related to revenues earned from live broadcasts of NCAA sporting events, or any other damages resulting from “restraints” allegedly imposed on student-athletes while they are still in school. Indeed, the antitrust counts of the 2CAC expressly allege that purported actions of the NCAA, CLC, and EA are illegal precisely because they cannot be justified as attempts to protect amateurism given that plaintiffs have exhausted their NCAA eligibility. ¶¶492, 506.

Although the 2CAC mentions a few NCAA Bylaws, all of them relate to the so-called “perpetual release” forms identified in 2CAC ¶¶ 21 and 22. See ¶¶ 283-289, 303-304. 12 See also ¶ 498 and at Antitrust Prayer for Relief, ¶¶ F, H. 5
MOTION TO STRIKE ANTITRUST PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION

11

CASE NO. 09-CV-1967-CW

Case4:09-cv-01967-CW Document639 Filed10/24/12 Page10 of 33

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
S CHIFF H ARDIN LLP
ATTORNEYS AT LAW ANN ARBOR

The CCM, in contrast, largely ignores the claim that the class has been restrained by the 2CAC’s “forms conspiracy.” Although the forms are mentioned in passing, CCM at 4-5,

plaintiffs’ new liability theory no longer requires class members to demonstrate that they have signed, or been restrained by, the forms,13 nor do plaintiffs propose how such proof could or would be established for the class as a whole. Id. at 5. Instead, plaintiffs now propose to show that current student-athletes play NCAA sports “under collusive restraints” in which “the NCAA and its member schools have agreed not to pay, and do not pay, current or former student-athletes in Division I football or basketball for the use of their names, images and likenesses in connection with television broadcasts of games.” CCM at 2, 3. Plaintiffs’ new theory is not based in the supposed illegality of any of the NCAA forms or bylaws identified in the 2CAC. Rather, plaintiffs now claim that the NCAA’s television contracts with broadcasters, as well as NCAA Bylaws not identified in the 2CAC (including Division I Bylaw 12.1.2 (“Amateur Status”), mistakenly identified as Bylaw 12.2.1 in the CCM) give rise to the supposed “horizontal restraint.” Id. at 5-6.14 None of these supposedly illegal “restraints” is mentioned in the 2CAC. 2. Changed from Vertical to Horizontal Restraint of Trade

The CCM is premised entirely on the notion that class members have been damaged by a “horizontal agreement not to compete . . . for student-athletes.” CCM at 4. But this Court previously held that the 2CAC failed to establish such a horizontal restraint. In the briefing on the NCAA’s initial motion to dismiss this case, plaintiffs argued that their claims could be judged using the per se standard of review because the NCAA and its members were engaged in a horizontal price-fixing conspiracy. This Court disagreed: O’Bannon’s allegations do not suggest the existence of a horizontal agreement
13

See, e.g., id. at 5 (“The NCAA has contended that the Form was only in existence for a portion of the period in question. But there is no dispute that the principle of ‘amateurism’ expressed in the NCAA Constitution has been invoked for decades to deny compensation for use of a student-athlete’s name, image or likeness”). 14 In interrogatory responses served on September 24, 2012, plaintiffs also identified Division I Bylaws 13.2.1 (“Offers and Inducements”), 16.01 (“Awards, Benefits and Expenses for Enrolled Student-Athletes – General Principles”) and 16.02 (“Awards, Benefits and Expenses for Enrolled Student-Athletes – Definitions and Applications”) as part of the alleged “restraint” at issue here. See Wierenga Decl. at ¶¶ 13-14. None of these bylaws is mentioned in the 2CAC. 6
MOTION TO STRIKE ANTITRUST PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION

CASE NO. 09-CV-1967-CW

Case4:09-cv-01967-CW Document639 Filed10/24/12 Page11 of 33

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
S CHIFF H ARDIN LLP
ATTORNEYS AT LAW ANN ARBOR

to fix prices or to engage in a group boycott. … He does not claim that the member schools compete with each other to profit from former student athletes’ images. Order on NCAA’s and CLC’s Mot. to Dismiss, Dkt. 151 at 9 (emphasis added). Although plaintiffs filed subsequent complaints, none of those complaints, including the 2CAC, changed the allegations that this Court found failed to establish the existence of a horizontal conspiracy. The Court’s ruling, which is the law of the case, is flatly inconsistent with the CCM. Moreover, plaintiffs have abandoned, at least for purposes of certifying a class, the conspiracy claims that managed to survive defendants’ motions to dismiss – i.e., an alleged vertical conspiracy claim against the NCAA, CLC, and EA. Dkt. 151 at 7, 9; 2/8/2012 Hrg. Tr. at 7. C. The Allegedly Affected Products 1. Changed From Archival Video and Merchandise To Live Broadcast

In the 2CAC, plaintiffs alleged that their name, image or likeness is being used wrongfully in a variety of archival video footage. See ¶¶332-436. 15 Plaintiffs further alleged the “wrongful” sale of archival photos, ¶¶365-368, and the licensing of action figures, trading cards and posters, ¶¶369-371, video games, ¶¶372-419, and jerseys, t-shirts and other apparel, ¶¶428-436. Notably absent from the products that the 2CAC places at issue is the sale of “group licenses” for live broadcast.16 Nor does the 2CAC devote a single paragraph of its considerable length to alleging that live broadcasts of NCAA sporting events constitute, or result from, an illegal restraint of trade. In the CCM, plaintiffs now claim to be suing on behalf of “current or former studentathletes in Division I football or basketball for the use of their names, images and likenesses in connection with television broadcasts of games and videogames.” CCM at 3 (emphasis added). The footage was alleged used in (1) video clips shown during live broadcasts; (2) DVDs; (3) the NCAA “Vault”; (4) sales to advertisers; (5) streaming websites; and (6) rebroadcasts of classic games. ¶¶332-335, 336-346, 347-349, 350-360, 361-364, 420-427. 16 The 2CAC does discuss “Media Rights for Televising Games.” 2CAC at p. 99. But it is clear that the 2CAC challenges only the use of “video clips of former student-athletes competing in prior tournament games” during live games. ¶334. Merely stating that the NCAA and its members derive revenue from the broadcast of live games is clearly insufficient to put defendants on notice or state a claim for the sale of group licenses for live broadcast. See ¶¶ 169, 332, 333; see also ¶ 336 (clarifying that plaintiffs are challenging the “on-demand” sale of old games, not live games). 7
MOTION TO STRIKE ANTITRUST PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION 15

CASE NO. 09-CV-1967-CW

Case4:09-cv-01967-CW Document639 Filed10/24/12 Page12 of 33

1 2 3 4 5 6 7 8 9 10 11 12

Their expert report is devoted overwhelmingly to “demonstrating” that live broadcasts of NCAA football and basketball games result from a restraint of trade in which NCAA amateurism and eligibility rules somehow interfere with current student-athletes selling “group licenses” for use in those broadcasts. Noll at 6-10, 37-45. This new “live broadcast” theory finds no support in the 2CAC. Not a single named plaintiff has alleged facts demonstrating that he was “included” in a live broadcast of “game footage” during plaintiffs’ proposed class period, see, e.g., ¶¶45-167,17 nor has any named plaintiff alleged that NCAA amateurism or eligibility rules prevented him, while he was in school, from selling an individual or “group” license to a school or broadcaster in connection with live broadcasts of games in which he played. Id. 2. Changed From Former Student-Athletes in Video Games to Current Student-Athletes in Video Games

Just as this case has always been about re-broadcasts rather than live broadcasts as to NCAA, as to EA and CLC it has always been about former student-athletes rather than current 13 14 the allegations they believed sufficed to state a claim against EA related to EA’s alleged refusal to 15 16 to current student-athletes in plaintiffs’ opposition to EA’s motion to dismiss the 2CAC was 17 rebuffed by this Court. Plaintiffs argued that EA could have offered to pay a current student18 athlete for the use of his name or image, “with no money changing hands until after the student19 20 21 22 23 24 25 26 27 28
S CHIFF H ARDIN LLP
ATTORNEYS AT LAW ANN ARBOR

student-athletes.18 In opposition to EA’s motion to dismiss the 2CAC, plaintiffs made clear that

compensate former student-athletes who appear in EA’s video games.19 Even the one reference

17

Only Plaintiffs Patrick Maynor, Tyrone Prothro and Damien Rhodes played NCAA sports recently enough to have appeared in a live broadcast within the purported class period, yet none of them alleges that he actually did so. ¶¶ 123-130; 131-139; 152-158. Despite this fact, plaintiffs’ expert reports more than 95% of the class damages to the use of current studentathletes’ “name, image or likeness” in live broadcasts. CCM, Noll Appx. C-A1, C-14. 18 In response to a Motion to Dismiss the O’Bannon Complaint, Plaintiffs stated that “[u]nlike other cases involving the NCAA, this case does not involve questions of the protection of amateur sports, the student athlete experience, or other goals. The damages class here (Compl. 43) involves former student-athletes, who are citizens not subject to NCAA governance, and should be entitled to control, license, and profit from their own image and likeness.” O’Bannon v. NCAA, No. CV-09-3329-CW (N.D. Cal. Oct. 27, 2009), Dkt. 107 at 3 (emphasis in original). 19 See Antitrust Plaintiffs’ Opp. to Def. EA’s Mot. to Dismiss Second Am. Consolidated Compl., Dkt. 335 (“The [2CAC] alleges new facts showing EA joined Defendants’ conspiracy by agreeing to boycott former student athletes and to deny them compensation for EA’s use of their images, likenesses and names.”); see also id. at 6, 12. The only paragraphs referenced in Plaintiffs’ Opposition to EA’s motion to dismiss related to former student-athletes. See 2CAC ¶¶9, 17, 18, 271, 400, 496, 510. 8
MOTION TO STRIKE ANTITRUST PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION

CASE NO. 09-CV-1967-CW

Case4:09-cv-01967-CW Document639 Filed10/24/12 Page13 of 33

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
S CHIFF H ARDIN LLP
ATTORNEYS AT LAW ANN ARBOR

athlete graduated from college.” Antitrust Plaintiffs’ Opp. to Def. EA’s Mot. to Dismiss Second Am. Consolidated Compl., Dkt. 335 at 8. The Court explicitly rejected that argument: “EA correctly points out that agreeing to compensate current students would be futile, even if no money changed hands initially, because such an agreement would destroy those students’ eligibility to compete as student-athletes.” Order Den. EA’s Mot. to Dismiss, Dkt. 345 at 7. The Court’s rulings on EA’s motion for judgment on the pleadings and CLC’s motion to dismiss confirm that plaintiffs’ conspiracy claims as to EA and CLC were limited to former student-athletes. In denying EA’s motion for judgment on the pleadings, the Court found, that “[i]n the context of Antitrust Plaintiffs’ other allegations, on a motion for judgment on the pleadings, these terms can fairly be read to evidence a ‘meeting of the minds’ between EA and the other Defendants not to compensate former student-athletes.” Order Den. Electronic Art’s Mot. for J. on the Pleadings, Dkt. 455 at 8. Similarly, in considering CLC’s Motion to Dismiss the original Complaint, the Court held that the Complaint “asserts that NCAA’s and CLC’s actions excluded [Plaintiff] and other former student athletes from the collegiate licensing market.” Order on NCAA’s and CLC’s Mot. to Dismiss, Dkt. 151 at 4 (emphasis added). The Court further described the purportedly illegal agreements alleged in the Complaint as “agreements . . . for licenses to distribute products or media containing the images of [Plaintiff] and other former student athletes. For example, [Plaintiff] pleads an arrangement involving NCAA, CLC and Electronic Arts, Inc. concerning video games that contain the likenesses of former student athletes.” Id. at 7 (emphasis added). In its order denying CLC’s motion to dismiss the CAC, the Court similarly held that the claim against CLC was that “CLC [allegedly] administered licenses for various products and media containing the images of former student-athletes.” Order Granting EA’s Mot. to Dismiss and Den. CLC’s and NCAA’s Mot. to Dismiss, Dkt. 325 at 12-13 (emphasis added). D. The Alleged Relevant Market: Changed From “Collegiate Licensing” To Education and Group Licensing

Finally, the 2CAC alleges that the relevant market is “the collegiate licensing market in the United States, including licensing rights to current and former players’ images and
MOTION TO STRIKE ANTITRUST PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION

9

CASE NO. 09-CV-1967-CW

Case4:09-cv-01967-CW Document639 Filed10/24/12 Page14 of 33

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
S CHIFF H ARDIN LLP
ATTORNEYS AT LAW ANN ARBOR

likenesses.” ¶306. The 2CAC makes it plain that the market is a licensing market related to the “retail market for products identified with college athletics,” or more succinctly, a licensing market for “NCAA-related merchandise.” ¶¶319, 320, 324. There is no mention in the 2CAC of a relevant market for education, or student-athlete “labor.” The CCM abandons the “collegiate licensing” market and replaces it with two entirely new alleged markets: (1) “the student-athlete Division I college education market,” and (2) “the market for the acquisition of group licensing rights for the use of student-athletes’ names, images and likenesses in the broadcasts or rebroadcasts of Division I basketball and football games and in videogames featuring Division I basketball and football.” CCM at 18.20 Neither market appears in the 2CAC, as plaintiffs implicitly concede; their only citation in connection with these markets is to the Noll Report. II. Plaintiffs Admitted That Live Broadcast and Amateurism Are Not In This Case Plaintiffs expressly and repeatedly admitted to this Court, defendants, third parties, and courts around the country that the claims set forth in the 2CAC did not (1) arise out of, or seek compensation for, revenues earned by the NCAA or its members from the live broadcast or (2) challenge the NCAA’s amateurism rules. This Court, other courts, defendants and third parties all relied on these admissions. It is far too late for plaintiffs to back away from them now. Plaintiffs’ judicial admissions regarding live broadcast. Plaintiffs repeatedly told this Court that their claims “do not emanate from the live broadcasts” of NCAA basketball or football games, Ex. 1, Big Ten Hrg. at 14:22, and that they “don't claim rights to be compensated for appearing in live broadcasts or playing on the field.” Id. at 15:21-22. Plaintiffs made similar representations in pleadings filed with courts around the country:  “Raycom is correct in that Plaintiffs’ damages claims are related to the rebroadcast, rather than the live broadcast, of games. (Compl. 420-427.)” Ex. 3, Pls.’ Reply Mem. of Law in Supp. of Mot. to Compel Produc. of Doc. by Non-Party Raycom Sports, O’Bannon v. Raycom, No. 3:11-mc-00198-RJC-DSC (W.D.N.C. Feb. 3, 2012), Dkt. 8 at 2. “Plaintiffs do not challenge the propriety of any ‘sports broadcast or account’ and do not claim that BTN is required to pay Plaintiffs or obtain their consent.” Ex. 4, Pls.’ Reply Mem. in Supp. of Mot. to Compel Produc. of Doc. from Big Ten Network, In re NCAA,

20

Counsel for plaintiffs described have this as an “input market as to whether or not athletes who are not yet students have been restrained by NCAA policies, bylaws, rules, regulations and interpretations.” Ex. 6, Tr. of Case Management Conference, 19:1:4. 10
MOTION TO STRIKE ANTITRUST PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION

CASE NO. 09-CV-1967-CW

Case4:09-cv-01967-CW Document639 Filed10/24/12 Page15 of 33

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
S CHIFF H ARDIN LLP
ATTORNEYS AT LAW ANN ARBOR

No. 4:11-mc-80300-cw (N.D. Cal. Feb. 1, 2012) (Cousins, M.J.), Dkt. 49 at 5.21 “Plaintiffs do not challenge the legality of ‘televising’ college sports and do not seek (as the Big Ten acknowledges) to be paid for such broadcasts.” Ex. 5, Pls.’ Reply Mem. in Supp. of Mot. to Compel Produc. of Doc. from Big Ten, In re NCAA, No. 4:11-mc-80300CW (N.D. Cal. Feb. 1, 2012) (Cousins, M.J.), Dkt. 48 (Feb. 1, 2012) at 5-6. “Plaintiffs do not challenge the use of their identities in connection with the “televising” of college sports and do not seek to be paid for such broadcasts.” Ex. 7, Pls.’ Reply Mem. in Supp. of Mot. to Compel Non-Party Atlantic Coast Conference to Produc. Doc. in Resp. to Subpoena Duces Tecum, In re NCAA, No. 1:11-mc-00063-UA-LPA (M.D.N.C. Dec. 16, 2011), Dkt. 10 at 4.

Plaintiffs’ attempt to file a CCM based overwhelmingly on the notion that live broadcasts of NCAA sporting events are the product of an illegal conspiracy, CCM at 23 n.20 (citing Noll 9596, 89-90); Noll Appx. C-A1, C-A14, must be rejected in light of plaintiffs’ prior, emphatic assurances that they were not pursuing such a claim. Plaintiffs’ judicial admissions regarding amateurism. Plaintiffs similarly assured this Court that this case was not about amateurism. Plaintiffs denied that this case involved any challenge to the NCAA’s amateurism rules when they opposed the NCAA’s initial motion to dismiss, claiming instead that their theory was limited to injuries suffered by “citizens not subject to NCAA governance.” Ex. 2, O’Bannon Opp. at 3; cf., ¶268 (making same allegations). They said the same thing to Magistrate Judge Cousins earlier this year, claiming that “[w]e don’t claim rights to be compensated for appearing in live broadcasts or playing on the field, the amateur principles that have been so hallowed.” Ex. 1, Big Ten Hrg. at 15:15-2 (emphasis added). Indeed, in past disputes over the scope of discovery, plaintiffs argued that the concept of “amateurism” is at issue in this case not because the allegations of the 2CAC are sufficient to make it so, but rather because the NCAA supposedly “placed amateurism … at issue in its Answer and discovery responses.”22 Plaintiffs’ repeated reliance on the NCAA’s answer, rather than the 2CAC, for the relevance of “amateurism” to this case is a clear admission that the 2CAC

See also id. at 1 (“Plaintiffs’ claims arise from, inter alia, the re-broadcast and re-use of archival game footage”); 2 (“The value of these rights – i.e. rights to re-broadcast or re-use after the live season – is at the core of this case.”); 6 (stating that the uses at issue are “the licensing and use of archival footage and rebroadcasts of sporting events.”). 22 Pls.’ Reply Br. in Supp. of Mot. to Compel Dep. of NCAA Pres. Mark Emmert, Dkt. 375 at 5; see also Antitrust Pls.’ Mot. to Designate as Available for Use Prior Dep. Test. of Unavailable Former NCAA Exec. Dir. Walter Byers, Dkt. 350 at 2. 11
MOTION TO STRIKE ANTITRUST PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION

21

CASE NO. 09-CV-1967-CW

Case4:09-cv-01967-CW Document639 Filed10/24/12 Page16 of 33

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
S CHIFF H ARDIN LLP
ATTORNEYS AT LAW ANN ARBOR

fails to state a challenge to the NCAA’s amateurism rules.23 Nor did the NCAA somehow amend the 2CAC when it filed its affirmative defenses; the NCAA has always made clear that its affirmative defenses relate only to the NCAA Bylaws specifically identified in the 2CAC, and as a matter of law an answer cannot amend a complaint.24 ARGUMENT The Court has ample authority under Federal Rules of Civil Procedure 15, 16, and 23, as well at the Court’s inherent power over its docket, to strike plaintiffs’ CCM. There are several reasons why the Court should do so. I. The Court Should Strike the CCM Because It Deviates Materially From the 2CAC The 2CAC should be stricken because its proposed class definition, liability theory and damages theory are materially different from, and not supported by, the allegations of the 2CAC. Plaintiffs “may not expand the class beyond the claims that they plead in their operative complaint without first seeking leave to amend the complaint.” Plascencia v. Lending 1st Mortg., No. C 07-4485 CW, 2012 WL 253319, at *3 (N.D. Cal. Jan. 26, 2012) (Wilken, J.); see also Evans v. IAC/Interactive Corp., No. CV051104DSFCWX, 2007 WL 7086261, at *3 (C.D. Cal. Mar. 14, 2007) (requiring plaintiffs to seek leave to amend complaint where new theories were raised in motion for class certification); Munoz v. Giumarra Vineyards Corp., No. 1:09-cv-00703AWI-JLT, 2012 WL 2617553, at *17 (E.D. Cal. July 5, 2012) (refusing to consider new theories in class certification motion not pled in complaint and not appearing in the testimony of proposed class representatives); Brown v. Am. Airlines, Inc., No. CV 10-8431 AG (PJWx), --- F.R.D. ---, 2011 WL 9131817, at *13 (C.D. Cal. Aug. 29, 2011) (“Class certification is not a time for asserting new legal theories that were not pleaded in the complaint”). Indeed, granting a motion for class certification based on claims not pled in the operative complaint is an abuse of discretion. Anderson v. U.S. Dep’t of Hous. and Urban Dev., 554 F.3d 525, 529 (5th Cir. 2008). Plaintiffs made similar representations to the NCAA in meet and confers, claiming that amateurism was relevant not because plaintiffs’ complaint challenged amateurism but because the NCAA had raised it as a defense. Ex. 8, 2/14/12 Letter from R. Wierenga to R. Steiner; Ex. 9, 2/15/12 Letter from R. Steiner to R. Wierenga. 24 Marchiafava v. Gonzalez, La. Police Dep’t, No. 06-414-RET-CN, 2008 WL 2437526, at *1 n.1 (M.D. La. June 16, 2008); see also Burns v. City of Dallas, No. 3:94-CV-2770-R, 1999 WL 47237, at *3-*4 (N.D. Tex. Jan. 22, 1999). 12
MOTION TO STRIKE ANTITRUST PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION 23

CASE NO. 09-CV-1967-CW

Case4:09-cv-01967-CW Document639 Filed10/24/12 Page17 of 33

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
S CHIFF H ARDIN LLP
ATTORNEYS AT LAW ANN ARBOR

The CCM clearly expands the class beyond what plaintiffs have pled in the 2CAC. The CCM significantly expands the class definition. See supra at 3-6. It significantly changes, and expands, the class liability theory. Id. at 6-7. It radically changes the products supposedly at issue, and radically expands the damages sought by the class. Id. at 7-9. And it introduces two entirely new alleged relevant markets, while apparently casting aside the only relevant market previously alleged. Id. at 9-10. Plaintiffs could not make these sweeping changes without first seeking leave to amend the 2CAC. Plascencia, 2012 WL 253319 at *3. Since they have failed – indeed, refused – to do so, the CCM should be stricken. Striking the CCM is especially appropriate here because it is obviously too late for plaintiffs to seek leave to amend the 2CAC. Leave to amend “is not to be granted automatically,” especially in circumstances like this one. See, e.g., Jackson v. Bank of Hawaii, 902 F.2d 1385, 1387 (9th Cir. 1990). Late in discovery, complaint allegations can only be amended after seeking leave of court, and the “court may deny such a motion if permitting an amendment would prejudice the opposing party, produce an undue delay in the litigation, or result in futility for lack of merit.” Id. Amendments that create delay and further expense prejudice defendants who are entitled to rely on a timely close of discovery. McGlinchy v. Shell Chem. Co., 845 F.2d 802, 809 (9th Cir. 1988). A moving party also should not be allowed to amend a complaint where they “knew or should have known the facts and theories raised by the amendment in the original pleading.”25 Jackson, 902 F.2d at 1388; see also McGlinchy, 845 F.2d at 809 (affirming denial of leave to amend where leave not sought until six months after plaintiffs were aware of the new claims). Trial courts should also not grant leave to amend a complaint when the proposed amended complaint would be futile.26 Jackson, 902 F.2d at 1387, 1388 n.4. When a district court has previously granted leave to amend, its discretion to deny a subsequent motion is particularly broad, especially when the facts supporting the second motion to amend were available to the movant before the first amendment. Chodos v. West Publ’g Co., 292 F.3d 992, 1003 (9th Cir. 2002). Additional amendments should not be granted to “cure deficiencies by amendments previously allowed.” McGlinchy, 845 F.2d at 809-10. 26 For example, it is futile to amend a complaint if the proposed amendment would result in summary judgment against the moving party. See Jackson, 902 F.2d at 1388 n.4, 1391 n.9 (noting that even an amended complaint could suffer from legal insufficiency and merely result in extended waste leading back to the same dispositive result). Plaintiffs’ new theories are not supported by legal precedent. See infra at Section IV. 13
MOTION TO STRIKE ANTITRUST PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION 25

CASE NO. 09-CV-1967-CW

Case4:09-cv-01967-CW Document639 Filed10/24/12 Page18 of 33

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
S CHIFF H ARDIN LLP
ATTORNEYS AT LAW ANN ARBOR

The extraordinary differences between plaintiffs’ 2CAC and their CCM show that the CCM violates both sets of principles. It deviates materially from allegations of the 2CAC, and relies on legal theories expressly disavowed by plaintiffs (live broadcast) and rejected by the Court (defendants’ supposed horizontal agreement). Plaintiffs could not demonstrate any good reason why they waited to pursue their new theory, and defendants clearly have been prejudiced by the delay.27 For this reason, the CCM should be stricken. II. The Court Should Strike The CCM Because Its Attempt To Set Forth A Horizontal Theory Of Liability Is Contrary To Law Of The Case The CCM relies, indeed depends, on their new claim that the restraint they are challenging is a horizontal agreement between NCAA not to pay current and former student-athletes for their appearance in live and archival sports broadcasts. See supra at 6-7. Plaintiffs’ attempt to certify a class based on this kind of horizontal liability theory ignores this Court’s prior orders, which held that the O’Bannon complaint (and by extension the 2CAC) failed adequately to allege the existence of a horizontal agreement among NCAA members with respect to plaintiffs. That holding is now law of the case, and should not be disregarded. In re Geneva Towers Assoc., No. C-93-2390 CW, 1994 WL 124840, at *1 (N.D. Cal. Mar. 30, 1994) (Wilken, J.) (“Under the doctrine of the ‘law of the case,’ this Court is generally precluded from reconsidering an issue that has already been decided by the Court in the same case.”); Chavez v. Bank of Am. Corp., No. C-10-0653 JCS, 2012 WL 1594272, at *5-6 (N.D. Cal. May 4, 2012) (Spero, M.J.) (collecting cases and finding that prior determination was law of the case). As such, and having not amended their pleadings, plaintiffs cannot seek to certify a class based on theories the Court has already rejected as insufficiently pled. Evans, 2007 WL 7086261 at *3. Plaintiffs’ CCM, which seeks to certify a class that is dependent on a rejected theory, should be stricken. III. The Court Should Strike the CCM Because Plaintiffs Are Judicially Estopped from Pursuing The Surprise Liability Theory Set Forth Therein The CCM should also be stricken because it relies on theories and allegations that plaintiffs are judicially estopped from pursuing. For three years, plaintiffs told this Court and

See Wierenga Decl. at ¶¶ 15-18 (detailing burden that NCAA has incurred in connection with taking and providing discovery on plaintiffs’ now-abandoned “perpetual release” theory). 14
MOTION TO STRIKE ANTITRUST PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION

27

CASE NO. 09-CV-1967-CW

Case4:09-cv-01967-CW Document639 Filed10/24/12 Page19 of 33

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

others that their claims do not stem from live broadcasts of current student-athletes, that the restraint challenged was the effect of certain forms administered by the NCAA on former studentathletes, and that the relevant market was the so-called collegiate licensing market. Plaintiffs benefited greatly from the representations, inducing this Court and others to disregard arguments that defendants and third parties made regarding the legal infirmities in plaintiffs’ claims. Now, plaintiffs have dramatically and inconsistently revised their claims. The doctrine of judicial estoppel precludes plaintiffs’ attempt to “play[] fast and loose with the courts,” and protects “the dignity of judicial proceedings” by holding plaintiffs to their arguments and allegations. Hamilton v. State Farm Fire & Cas. Co., 270 F.3d 778, 782 (9th Cir. 2001); see also Helfand v. Gerson, 105 F.3d 530, 535 (9th Cir. 1997). A. Judicial Estoppel Precludes Inconsistent Positions for Litigation Advantage

The Ninth Circuit recently explained: [J]udicial estoppel generally prevents a party from prevailing in one phase of a case on an argument and then relying on a contradictory argument to prevail in another phase. It is an equitable doctrine invoked not only to prevent a party from gaining an advantage by taking inconsistent positions, but also because of general considerations of the orderly administration of justice and regard for the dignity of judicial proceedings, and to protect against a litigant playing fast and loose with the courts. Milton H. Greene Archives, Inc. v. Marilyn Monroe LLC, 692 F.3d 983, 993 (9th Cir. 2012) (internal citations omitted). The United States Supreme Court has identified three factors that courts should consider in applying the doctrine: First, a party's later position must be clearly inconsistent with its earlier position. Second, courts regularly inquire whether the party has succeeded in persuading a court to accept that party's earlier position, so that judicial acceptance of an inconsistent position in a later proceeding would create the perception that either the first or the second court was misled.... A third consideration is whether the party seeking to assert an inconsistent position would derive an unfair advantage or impose an unfair detriment on the opposing party if not estopped. Id. at 994 (quoting New Hampshire v. Maine, 532 U.S. 742, 750–51). Additionally, “chicanery or knowing misrepresentation” by the party to be estopped is a factor to be considered in the judicial

26 estoppel analysis but is not an “inflexible prerequisite” to its application. Id. at 995. 27 28
S CHIFF H ARDIN LLP
ATTORNEYS AT LAW ANN ARBOR

15

MOTION TO STRIKE ANTITRUST PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION

CASE NO. 09-CV-1967-CW

Case4:09-cv-01967-CW Document639 Filed10/24/12 Page20 of 33

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
S CHIFF H ARDIN LLP
ATTORNEYS AT LAW ANN ARBOR

B.

Plaintiffs’ Current Liability Theory Is Inconsistent With Earlier Positions

The class liability theory set forth in the CCM is wholly inconsistent with the allegations of the 2CAC and plaintiffs’ prior representations.28 Baughman, 685 F.3d at 1133; Khan v. S&C Elec. Co., No. 3:11-cv-03621, 2012 WL 4062811, at *10 (N.D. Cal. Sept. 14, 2012) (Spero, M.J.). Live Broadcast. Prior to the class certification motion, plaintiffs repeatedly represented to this Court, and courts across the country, that they do not claim injury or damages related to the live broadcast of NCAA athletics. They stated that their claims did not emanate from live broadcasts, that they did not seek to be paid for live broadcasts, and that archival rights and rebroadcasts were “at the core of this case.” See supra at 7-8 & n.16. The liability and damages theories set forth in the CCM, in contrast, rely overwhelmingly on the notion that plaintiffs and the class have been damaged by illegal behavior related to live broadcasts. CCM at 1-2; Noll at 37-45, 95-108. Plaintiffs should be estopped from making such a significant reversal in their theories. Baughman, 685 F.3d at 1133. Forms versus Bylaws. The 2CAC alleges that the defendants conspired to use NCAA forms supposedly signed by former student-athletes while they were still in school to “boycott” plaintiffs from being paid “in connection with the commercial exploitation of their images, likenesses and/or name following their cessation of intercollegiate athletic competition.” ¶9.29 This theory was entirely based on the ability of former student-athletes to engage in commercial activities after they ceased NCAA participation. Plaintiffs specifically disavowed any claims related to current student athletes or amateurism, stating that their claims did implicate questions of amateurism. Ex. 2, O’Bannon Opp. at 3 (emphasis in original); cf. 2CAC, ¶268. The CCM, in contrast, claims that NCAA amateurism and eligibility rules constitute a Whether these representations are factual or legal is irrelevant; judicial estoppel applies either way. Baughman v. Walt Disney World Co., 685 F.3d 1131, 1133 (9th Cir. 2012). 29 See also Antitrust Plaintiffs’ Opp. to Def. EA’s Mot. to Dismiss Second Am. Consolidated Compl., Dkt. 335 at 12 (“The [2CAC] alleges conduct by EA that furthered Defendants’ ongoing conspiracy to exclude former student athletes from the collegiate licensing market and deny them compensation for the commercial exploitation of their names, likenesses and images.”), 13 (“[The 2CAC] identifies agreements between EA and NCAA/CLC, including agreements to abide by the NCAA’s Bylaw 12.5.1.1 and agreements to exploit the names, images and likeness of student-athletes without compensation.”). 16
MOTION TO STRIKE ANTITRUST PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION 28

CASE NO. 09-CV-1967-CW

Case4:09-cv-01967-CW Document639 Filed10/24/12 Page21 of 33

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
S CHIFF H ARDIN LLP
ATTORNEYS AT LAW ANN ARBOR

“horizontal agreement not to compete” for current student-athletes. CCM at 4. Plaintiffs have gone far past the “forms” conspiracy of the complaint and now attack the principle of amateurism, including an apparent attack on several NCAA Bylaws not mentioned in the 2CAC. Id. at 5, n.4; see also Wierenga Decl. at ¶¶7-9. They should be estopped from making this fundamental change in their liability theory at this late date. Market Definition. From the beginning, plaintiffs have told the Court that their relevant market was the “collegiate licensing market,” Ex. 2, O’Bannon Opp. at 18. Plaintiffs made similar representations to courts across the country on their motions to compel third-party documents.30 Now, plaintiffs rely on two new relevant markets: “the student-athlete Division I college education market and the market for the acquisition of group licensing rights for the use of student-athletes’ names, images and likeness in the broadcasts or rebroadcasts of Division I basketball and football games and in videogames featuring Division I basketball and football.” CCM at 18. Both of these “markets” are clearly inconsistent with plaintiffs’ prior representations. The “college education” market is not the same as the “collegiate licensing” market. The “group licensing” market is likewise inconsistent with the “collegiate licensing” market. The market previously identified by plaintiffs included both individual and group rights, did not include live or first “broadcasts” of games, was not limited to Division I basketball and football games, and included photographs and other merchandise. The “group licensing” market differs in all these material aspects. C. Plaintiffs Succeeded In Persuading Courts To Accept Their Earlier Position

Plaintiffs persuaded this and other courts to accept their prior representations. If this Court accepts plaintiffs’ new positions, it would create the perception that either those prior courts or this Court was misled. Milton H. Greene Archives, 692 F.3d at 993-94. Live Broadcast. This Court – and others – relied on plaintiffs’ prior representations. At See Ex. 10, Mem. in Supp. of Pls.’ Mot. to Compel Non-Party Atlantic Coast Conference to Produc. Doc., In re NCAA, No. 1:11-mc-00063-UA-LPA (M.D.N.C. Dec. 16, 2011), Dkt. 3 at 12 (stating that the “Collegiate Licensing Market” is “the defined relevant market in this case”); Ex. 11, Pls.’ Mem. of Law in Supp. of Their Mot. to Compel Produc., In re NCAA, No. 1:11-mi00129-WSD (N.D. Ga. Dec. 13, 2011), Dkt. 1-1 at 17 (same). 17
MOTION TO STRIKE ANTITRUST PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION 30

CASE NO. 09-CV-1967-CW

Case4:09-cv-01967-CW Document639 Filed10/24/12 Page22 of 33

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

the hearing on plaintiffs’ motions to compel document production by the Big Ten Conference, Big Ten Network, and Fox, this Court said: So the basis of my tentative ruling is not that I think the copyright act precludes discovery. I'm more focused on the relevance of the documents sought. I suppose if I interpreted the plaintiffs' claims differently and I thought the very basic claim they're asserting is one emanating from the live broadcast of sporting events and that if somehow they would get that discovery, it would make this more of a copyright case than an antitrust case, then I think those issues would be as live. But I don't view that issue as controlling my analysis here.” Ex. 1, Big Ten Hrg. at 11:14-23 (emphasis added). Plaintiffs were therefore able to avoid argument on copyright preemption, and the effect of California Civil Code § 3344(d) (which expressly states that live sports broadcasts do not violate individuals’ rights of publicity), by telling the Court that live broadcasts were not part of their case and that only rebroadcasts were at issue. Plaintiffs made similar representations to other courts, which likewise relied on plaintiffs’ claims that live broadcast was not in the case. See supra at 10-11. Courts ordered third parties to produce “all documents responsive to Request 1 that relate to the rebroadcast of any portion of Division I football or basketball games.”31 Others relied on this Court’s decision on the Big Ten motion to compel in directing the ACC, SEC and SWAC to make productions.32 Those courts, like this Court, were misled by plaintiffs.33 See Hersh v. Nat’l Found. Life Ins. Co., No. C-1103289 EDL, 2012 WL 381173, at *5 (N.D. Cal. Feb. 6, 2012) (Laporte, M.J.). Forms versus Bylaws. The Court relied on and repeated plaintiffs’ allegations about the nature of the defendants’ alleged conspiracy: “Plaintiff claims that, among other things, Form 083a and Article 12.5.1.1 enable the NCAA and CLC to enter into licensing agreements with

31

23 24 25 26 27 28
S CHIFF H ARDIN LLP
ATTORNEYS AT LAW ANN ARBOR

Ex. 12, Mem. and Order, In re NCAA, No. 3:11-mc-00198-GCM-DSC (W.D.N.C. Feb. 16, 2012), Dkt. 12 at 4 (emphasis added). 32 Ex. 13, Mem. Opinion and Order, In re NCAA, No. 1:11-mc-00063-UA-LPA (M.D.N.C. Dec. 16, 2011), Dkt. 16 at 3, 9; Ex. 14, Order, O’Bannon v. Southeastern Conference, No. 2:11mc-04184 (N.D. Ala. June 15, 2012), Dkt. 27 at 2-10, 12-13. 33 This Court also ordered Turner to renew negotiations with plaintiffs in light of the Big Ten decision. Ex. 15, Order Den. Motion to Compel Produc. of Doc. by Nonparty, In re NCAA, No. 12-mc-80027-CW (NC) (N.D. Cal. Feb. 28, 2012), Dkt. 12 at 1. Turner’s reliance also supports estoppel. Baughman, 685 F.3d at (9th Cir. 2012). See also Ex. 16, Order, In re NCAA, No. 2:11-mc-189-AVC (D. Conn. Sept. 28, 2012) (characterizing plaintiffs’ claims as foreclosure from compensation “for the commercial use of the plaintiffs’ names, images and likenesses after their days of college sports.”). 18
MOTION TO STRIKE ANTITRUST PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION

CASE NO. 09-CV-1967-CW

Case4:09-cv-01967-CW Document639 Filed10/24/12 Page23 of 33

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
S CHIFF H ARDIN LLP
ATTORNEYS AT LAW ANN ARBOR

companies, such as EA, that distribute products containing student-athletes’ images, likeness and names, even after the student-athletes have ended their collegiate athletic careers.”34 This Court relied on plaintiffs’ claims that they were not challenging amateurism and were not asking for payments (even if deferred) for current student-athletes when it agreed with EA that “agreeing to compensate current students would be futile, even if no money changed hands initially, because such an agreement would destroy those students’ eligibility to compete as student-athletes.” Order Den. EA’s Mot. to Dismiss, Dkt. 345 at 7. The Court relied on plaintiffs’ representations that the forms, and not amateurism or the bylaws as a whole, were the restraint at issue. Market Definition. This Court relied on O’Bannon’s characterization of the market as the “collegiate licensing market” in its conclusion that O’Bannon had adequately pled a relevant market. Order on NCAA’s and CLC’s Motions to Dismiss, Dkt. 151 at 10. Plaintiffs have no evidence that the courts hearing its motions to compel did not similarly rely on such representations. See Hersh, 2012 WL 381173 at *5. This Court and other federal courts accepted plaintiffs’ prior representations. If the Court were to now accept their current inconsistent claims, it would create the perception that either the prior courts or this Court had been misled. Plaintiffs must therefore be estopped from asserting their revised claims. D. Plaintiffs Would Derive An Unfair Advantage Or Impose An Unfair Detriment on Defendants If Not Estopped

If plaintiffs are not estopped, they will derive an unfair advantage or impose an unfair detriment on the defendants. See Baughman, 685 F.3d at 1134 (allowing plaintiff to claim that

Ex. 17, Order Den. Def. NCAA and CLC’s Mot. to Dismiss, Russell v. NCAA, No. 4:11cv-04938-CW (N.D. Cal. May 16, 2012), Dkt. 21 at 3. See also Ex. 1, Big Ten Hrg. at 7:9-12, 19-21 (“If the purpose here were to have a hearing on amateurism in athletics, then the relevance would be very, very broad, and every one of the materials that is sought by the plaintiffs would be relevant to that purpose. … That's not the purpose of this proceedings. We are looking at the scope of discovery arising from an antitrust vertical restraint of trade allegation.”); Order Den. Electronic Arts Inc.’s Mot. for J. on the Pleadings, Dkt. 455 at 7 (“Antitrust Plaintiffs allege that Defendants required student-athletes to sign NCAA Form 08-3a, or a form similar to it … and that in this form, student-athletes were required to give NCAA and third parties acting on its behalf the right to use their name or image.”); Order on NCAA’s and CLC’s Mot. to Dismiss, Dkt. 151 at 3 (“O’Bannon claims that, among other things, Form 08-3a and Article 12.5.1.1 enable NCAA to enter into licensing agreements with companies that distribute products containing student athletes’ images.”). 19
MOTION TO STRIKE ANTITRUST PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION

34

CASE NO. 09-CV-1967-CW

Case4:09-cv-01967-CW Document639 Filed10/24/12 Page24 of 33

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
S CHIFF H ARDIN LLP
ATTORNEYS AT LAW ANN ARBOR

she’d never used a wheelchair (contrary to prior assertions) would make her claim stronger and give her an unfair advantage over her opponent.) Defendants have litigated these claims for three years, believing plaintiffs’ claims to be the ones that plaintiffs have repeatedly articulated both to the courts and to defendants. Instead, plaintiffs waited until the end of discovery to announce their inconsistent new claims. The unfair detriment posed by plaintiffs’ last-minute changes to their class definition and liability theory is compounded by their failure to take, or provide, proper discovery. See Jackson, 902 F.2d at 1387 (finding prejudice where amended complaint filed late in the case would require additional discovery on different legal theory and facts). Defendants would be sorely prejudiced if plaintiffs were permitted to go forward with their new antitrust theories. There has been no discovery taken, and there is no evidence in the record, on plaintiffs’ “live broadcast” theories, which account for overwhelming percentage of claimed class damages. See Noll Appx. C-A1, C-A14. This is also true for plaintiffs’ new allegations that various NCAA rules meant to preserve the NCAA’s brand of intercollegiate athletics, as embodied in various amateurism and eligibility rules, are restraints of trade. Instead, defendants have taken and provided discovery on the theories pled in the 2CAC. Defendants have spent millions on discovery. Permitting plaintiffs to fundamentally change theories would be unfair, given significant time and money spent by defendants in making discovery on topics that plaintiffs no longer intend to pursue on behalf of the class, like (a) NCAA forms, (b) photographs, (c) trading cards, (d) action figures, and (e) the post-eligibility “collegiate licensing market.” Defendants will suffer an unfair detriment if they are forced to defend a class certification motion based on legal claims that have obvious legal problems, but were never tested by a motion to dismiss because plaintiffs refused to disclose those claims in any of their complaints. Plaintiffs’ new theory consists of little more than the blanket assertion that NCAA financial aid and eligibility rules are, ipso facto, violations of the Sherman Act. See, e.g., CCM at 7-9, 19-21. The law is decisively to the contrary: it has been settled for decades that NCAA eligibility rules do not violate the antitrust laws. Almost thirty years ago, the Supreme Court held that “[i]t is 20
MOTION TO STRIKE ANTITRUST PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION

CASE NO. 09-CV-1967-CW

Case4:09-cv-01967-CW Document639 Filed10/24/12 Page25 of 33

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
S CHIFF H ARDIN LLP
ATTORNEYS AT LAW ANN ARBOR

reasonable to assume that most of the regulatory controls of the NCAA are . . . procompetitive because they enhance public interest in intercollegiate athletics,” and specifically cited NCAA rules that prevented athletes from being paid as an example of those clearly procompetitive rules. Bd. of Regents, 468 U.S. at 117, 101-02. The Seventh Circuit declared just a few months ago that “most if not all” NCAA eligibility rules are procompetitive as a matter of law, finding that eligibility rules are “clearly necessary to preserve amateurism and the student-athlete in college football” and “define what it means to be an amateur or a student-athlete, and are therefore essential to the very existence of the product of college football.” Agnew v. NCAA, 683 F.3d 328, 343 (7th Cir. 2012). The court found the same was true for “bylaws eliminating the eligibility of players who receive cash payments beyond the costs attendant to receiving an education.” Id. Plaintiffs’ new theory of class recovery depends entirely on the notion that putative class members have been illegally “restrained” from bargaining for “cash payments beyond the costs attendant to receiving an education” – a “restraint” that “clearly protects amateurism” and thus “fall[s] comfortably within the presumption of procompetitiveness afforded to certain NCAA regulations.” Id. at 343. That new theory is clearly defective as a matter of law. Similarly, defendants haven been denied an opportunity to demonstrate that plaintiffs’ new claims to shared revenue from live broadcasts are barred by the First Amendment, the doctrine of copyright preemption and related doctrines. See Hersh, 2012 WL 381173 at *5. The Court has previously refused to address these issues because they were not necessarily raised by liability theory pled in complaint. Ex. 1, Big Ten Hrg. at 11:14-23. For all of these reasons, plaintiffs will derive an unfair advantage and impose an unfair detriment on the defendants if the Court does not strike the CCM. E. Plaintiffs Have Engaged in “Chicanery”

While not an “inflexible prerequisite” or element of the doctrine of judicial estoppel, the Ninth Circuit has held that “chicanery or knowing misrepresentation” by the party to be estopped is a factor to be considered. Milton H. Greene Archives, 692 F.3d at 995. Here, plaintiffs have always known that their articulated claims did not include current student-athletes or amateurism. Plaintiffs said at much at the very first motion to dismiss hearing three years ago: 21
MOTION TO STRIKE ANTITRUST PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION

CASE NO. 09-CV-1967-CW

Case4:09-cv-01967-CW Document639 Filed10/24/12 Page26 of 33

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
S CHIFF H ARDIN LLP
ATTORNEYS AT LAW ANN ARBOR

[Mr. Hausfeld]:

One, there is no question that the NCAA and its member institutions prohibit any student athlete to receive any compensation while they are a student athlete in any form other than their scholarship. That’s clear. They enforce that rule through all their member institution. Are you complaining about current students? That’s an interesting issue. now… I might, but not necessarily right

The Court: Mr. Hausfeld:

Ex. 18, Tr. of Oral Arg., In re NCAA, No. 09-1967 (N.D. Cal. Dec. 17, 2009) at 59:15-24. This Court clearly relied on plaintiffs’ various admissions in its several rulings. Plaintiffs never asked to amend their complaint to include the new claims of current student-athletes for compensation for live broadcasts. Their attempt to introduce these claims in the CCM is not a result of mistake or inadvertence but a calculated decision to abandon the claims the parties have spent the last three years litigating.35 Plaintiffs must be estopped from presenting these new claims. IV. Neither Plaintiffs, Nor The Putative Class, Will Be Prejudiced By Striking The CCM Plaintiffs will not be prejudiced if the class certification papers are stricken. Defendants are only asking for the CCM to be stricken. They are not asking, at this time, that the named plaintiffs’ claims be limited or dismissed. If the Court grants the motion to strike, Plaintiffs could proceed on their individual claims without prejudice. See Coopers & Lybrand v. Livesay, 437 U.S. 463, 467 (1978) (“An order refusing to certify, or decertifying, a class does not of its own force terminate the entire litigation because the plaintiff is free to proceed on his individual claim.”). Indeed, if the new theory goes forward, the named plaintiffs will be prejudiced by additional discovery and motion practice, the costs associated with prolonged litigation, and by the additional time that it will take to have their claims adjudicated. Because no named plaintiff has alleged that he is a member of the live broadcast class, new named plaintiffs would have to be added to represent the new live broadcast damages class. That process will protract this litigation In July 2011, the NCAA wrote a letter confirming plaintiffs’ counsel’s statement that plaintiffs were “not asserting claims [or] seeking damages based on the original broadcasts of NCAA sponsored championship sporting events” and that they did “not claim that the initial broadcasts constitute a violation of the Sherman Act.” Ex. 19, 7/15/11 Letter from G. Curtner to J. King at ¶ 10. Plaintiffs never disagreed. Now, in a statement to ESPN, plaintiffs’ counsel has bragged about changing their theory this late in the case. Farrey, supra at 2. 22
MOTION TO STRIKE ANTITRUST PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION 35

CASE NO. 09-CV-1967-CW

Case4:09-cv-01967-CW Document639 Filed10/24/12 Page27 of 33

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
S CHIFF H ARDIN LLP
ATTORNEYS AT LAW ANN ARBOR

further without foreseeable benefit to the named plaintiffs, who are not a part of the live broadcast damages class. Absent class members also will not be prejudiced if the Court grants the motion to strike. No complaint has set forth live broadcast claims; accordingly, no absent class member could have reasonably been relying on this case to vindicate those claims. Even if plaintiffs and absent class members were to suffer prejudice if the motion to strike is granted, the prejudice defendants will suffer by having to litigate an entirely new case after three years of fact-finding and motion practice far outweighs any prejudice plaintiffs may claim. V. The CCM Should be Stricken As To EA and CLC For Unique and Independent Reasons The case plaintiffs now seek to pursue – a claim based on alleged injury caused to current student athletes by the NCAA rules – has absolutely nothing to do with EA or CLC. Neither EA nor CLC adopted the NCAA rules; they had no power to change them; and, furthermore, they are not in the business of television broadcasting. Not only were these claims were never pled against EA or CLC, but it would have been futile to do so, because an outside party’s compliance with the rules set up by the NCAA and its members does not amount to illegal conspiratorial conduct. Plaintiffs’ theory against EA and CLC is premised on nothing more than the allegation that EA and CLC are purportedly “complicit” in an alleged horizontal agreement among NCAA schools simply because they have followed NCAA amateurism rules: “The agreement [i.e., conspiracy] is carried out through NCAA bylaws,” which the “NCAA requires its business partners to follow . . . , and both EA and CLC had done so.” CCM at 4, 6. Plaintiffs’ new “rulesconspiracy theory” should be stricken as to EA and CLC for two fundamental and independent reasons. First, plaintiffs never alleged in the 2CAC (and never argued in defending it) that EA’s or CLC’s adherence to NCAA rules constituted the evidence of its participation in the alleged antitrust conspiracy. Indeed, plaintiffs survived EA’s motion to dismiss the 2CAC by telling the Court they had pled something more than just following the rules, i.e., that EA’s agreement to
MOTION TO STRIKE ANTITRUST PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION

23

CASE NO. 09-CV-1967-CW

Case4:09-cv-01967-CW Document639 Filed10/24/12 Page28 of 33

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27

compensate former student-athletes went “beyond the requirements of NCAA’s rules and policies.” Order Den. EA’s Mot. to Dismiss, Dkt. 345 at 7 (emphasis added). Second, because courts (including the Supreme Court) have uniformly held that the NCAA amateurism rules are both legitimate and procompetitive,36 the allegation that EA and CLC followed such rules, even if true, would only mean that EA and CLC abided by lawful rules and regulations, which as a matter of law cannot provide a sufficient basis for an antitrust conspiracy claim. See Bell Atlantic Co. v. Twombly, 550 U.S. 544, 553-54 (2007) (legitimate or innocuous business activities, even if done through concerted actions, not subject to challenge under antitrust laws); 49er Chevrolet, Inc. v. General Motors Corp., 803 F.2d 1463, 1467 (9th Cir. 1986). The Ninth Circuit has made clear that merely doing business pursuant to the NCAA

rules does not constitute an antirust conspiracy. Kendall v. Visa U.S.A., Inc., 518 F.3d 1042, 1048, 1049 (9th Cir. 2008) (“rational, legal business behavior” such as merely following the rules set by another “is insufficient as a matter of law to constitute a violation of Section 1 of the Sherman Act.”). This Court made the same observation when it dismissed the original CAC against EA. Order Granting EA’s Mot. to Dismiss and Den. CLC’s and NCAA’s Mot. to Dismiss, Dkt. 325 at 9 (“An ‘account of a defendant’s commercial efforts’ is not, on its own, sufficient to support a § 1 claim”) (quoting Kendall). If the mere agreement to follow a business partner’s rules (here NCAA’s rules) were sufficient to constitute an antitrust conspiracy, then every single business partner of the NCAA and every current and former student-athlete, among others, would be antitrust co-conspirators in the alleged conspiracy. In short, because the theories asserted in the CCM were never pled against EA or CLC and are contrary to settled law, the Court should strike the CCM as to EA and CLC. CONCLUSION The Court should not tolerate plaintiffs’ attempted surprise change from a post-eligibility, forms-based foreclosure from downstream merchandise markets case to a “pay-for-play,” amateurism-based foreclosure from live broadcast revenue case. Plaintiffs should be held to their
36

28
S CHIFF H ARDIN LLP
ATTORNEYS AT LAW ANN ARBOR

See, e.g., Agnew, 683 F.3d at 343; Bd. of Regents of Univ. of Okla., 468 U.S. at 101-02, 24
MOTION TO STRIKE ANTITRUST PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION

117.
CASE NO. 09-CV-1967-CW

Case4:09-cv-01967-CW Document639 Filed10/24/12 Page29 of 33

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
S CHIFF H ARDIN LLP
ATTORNEYS AT LAW ANN ARBOR

representations and should not be rewarded for gamesmanship. Due process requires no less.

Respectfully submitted, Dated: October 24, 2012 Schiff Hardin LLP By: /s/ Robert J. Wierenga Robert J. Wierenga (SBN183687) Attorneys for Defendant NCAA Dated: October 24, 2012 Kilpatrick, Townsend & Stockton LLP By: /s/ Peter M. Boyle Peter M. Boyle (pro hac vice) Attorneys for Defendant CLC Dated: October 24, 2012 Keker and Van Nest LLP By: /s/ R. James Slaughter R. James Slaughter Attorneys for Defendant EA

25

MOTION TO STRIKE ANTITRUST PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION

CASE NO. 09-CV-1967-CW

Case4:09-cv-01967-CW Document639 Filed10/24/12 Page30 of 33

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
S CHIFF H ARDIN LLP
ATTORNEYS AT LAW ANN ARBOR

CERTIFICATE OF SERVICE I hereby certify that on October 24, 2012, I electronically filed the foregoing document with the Clerk of the Court using the CM/ECF system which will send notification to the e-mail addresses registered.

By:

/s/ Robert J. Wierenga Robert J. Wierenga (SBN183687) SCHIFF HARDIN LLP Attorneys for Defendant NCAA

40984-0001 AA\200038839.1

1

MOTION TO STRIKE ANTITRUST PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION

CASE NO. 09-CV-1967-CW

Case4:09-cv-01967-CW Document639 Filed10/24/12 Page31 of 33

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
[PROPOSED] ORDER GRANTING DEFENDANTS MOTION TO STRIKE Case No. 09-cv-1967-CW

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA OAKLAND DIVISION

In re NCAA Student-Athlete Name and Likeness Licensing Litigation

Case No. 09-cv-1967-CW [PROPOSED] ORDER GRANTING DEFENDANTS MOTION TO STRIKE ANTITRUST PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION Date: November 29, 2012 Time: 2:00 p.m. Dept: Courtroom 2, 4th Floor Judge: Hon. Claudia Wilken Complaint filed: May 5, 2009

1

Case4:09-cv-01967-CW Document639 Filed10/24/12 Page32 of 33

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
[PROPOSED] ORDER GRANTING DEFENDANTS MOTION TO STRIKE Case No. 09-cv-1967-CW

IT IS HEREBY ORDERED that Defendants Motion to Strike Antitrust Plaintiffs’ Motion for Class Certification is GRANTED.

IT IS SO ORDERED.

DATED: ______________

______________________________________________ Honorable Claudia Wilken United States District Judge

2

Case4:09-cv-01967-CW Document639 Filed10/24/12 Page33 of 33

1 2 3 4
addresses registered.

CERTIFICATE OF SERVICE I hereby certify that on October 24, 2012, I electronically filed the foregoing document with the Clerk of the Court using the CM/ECF system which will send notification to the e-mail

5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
[PROPOSED] ORDER GRANTING DEFENDANTS MOTION TO STRIKE Case No. 09-cv-1967-CW
40984-0001 AA\200038834.1

By:

/s/ Robert J. Wierenga Robert J. Wierenga (SBN183687) SCHIFF HARDIN LLP Attorneys for Defendant NCAA

3