FOR PUBLICATION
UNITED STATES COURT OF APPEALSFOR THE NINTH CIRCUIT
E
DWARD
C.
O’B
ANNON
,
J
R
., OnBehalf of Himself and All OthersSimilarly Situated,
Plaintiff-Appellee
,v. N
ATIONAL
C
OLLEGIATE
A
THLETIC
A
SSOCIATION
, AKA The NCAA,
Defendant-Appellant
,andE
LECTRONIC
A
RTS
,
I
NC
.;C
OLLEGIATE
L
ICENSING
C
OMPANY
,AKA CLC,
Defendants
. Nos.14-1660114-17068D.C. No.4:09-cv-03329-CWOPINIONAppeal from the United States District Courtfor the Northern District of CaliforniaClaudia Wilken, Senior District Judge, PresidingArgued and SubmittedMarch 17, 2015—San Francisco, CaliforniaFiled September 30, 2015
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O’B
ANNON V
.
NCAA2Before: Sidney R. Thomas, Chief Judge, Jay S. Bybee,Circuit Judge and Gordon J. Quist,
*
Senior District Judge.Opinion by Judge Bybee;Partial Concurrence and Partial Dissent by Chief JudgeThomas
SUMMARY
**
Antitrust
The panel affirmed in part and reversed in part the districtcourt’s judgment after a bench trial in an antitrust suitregarding the National Collegiate Athletic Association’s rules prohibiting student-athletes from being paid for the use of their names, images, and likenesses.The district court held that the NCAA’s amateurism ruleswere an unlawful restraint of trade in violation of Section 1of the Sherman Antitrust Act. The district court permanentlyenjoined the NCAA from prohibiting its member schoolsfrom giving student-athletes scholarships up to the full costof attendance at their respective schools and up to $5,000 per year in deferred compensation, to be held in trust for student-athletes after they leave college.
*
The Honorable Gordon J. Quist, Senior District Judge for the U.S.District Court for the Western District of Michigan, sitting by designation.
**
This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader.
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O’B
ANNON V
.
NCAA3The panel held that it was not precluded from reaching themerits of plaintiffs’ Sherman Act claim because: (1) theSupreme Court did not hold in
NCAA v. Bd. of Regents of theUniv. of Okla.
, 468 U.S. 85 (1984), that the NCAA’samateurism rules are valid as a matter of law; (2) the rules aresubject to the Sherman Act because they regulate commercialactivity; and (3) the plaintiffs established that they sufferedinjury in fact, and therefore had standing, by showing that,absent the NCAA’s rules, video game makers would likely pay them for the right to use their names, images, andlikenesses in college sports video games.The panel held that even though many of the NCAA’srules were likely to be procompetitive, they were not exemptfrom antitrust scrutiny and must be analyzed under the Ruleof Reason. Applying the Rule of Reason, the panel held thatthe NCAA’s rules had significant anticompetitive effectswithin the college education market, in that they fixed anaspect of the “price” that recruits pay to attend college. Therecord supported the district court’s finding that the rulesserved the procompetitive purposes of integrating academicswith athletics and preserving the popularity of the NCAA’s product by promoting its current understanding of amateurism. The panel concluded that the district courtidentified one proper less restrictive alternative to the current NCAA rules
¯
i.e.
, allowing NCAA member to givescholarships up to the full cost of attendance
¯
but the districtcourt’s other remedy, allowing students to be paid cashcompensation of up to $5,000 per year, was erroneous. The panel vacated the district court’s judgment and permanentinjunction insofar as they required the NCAA to allow itsmember schools to pay student-athletes up to $5,000 per year in deferred compensation.
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