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Monday, October 21, 2019

Colleges amass financial records of big-time athletes in NCAA class action

By Steve Korris | Aug 24, 2007

LOS ANGELES -- California class action attorneys seek hundreds of millions in something like back pay for 48,000 college football and men's basketball players.

The attorneys claim in federal court at Los Angeles that athletes in big ticket sports deserve cash for travel, laundry, insurance and so on.

They seek damages from the National Collegiate Athletic Association under antitrust law, for setting a cap on grant-in-aid payments.

Under court order, workers at colleges throughout the land have aided plaintiffs by amassing confidential records of athletes.

The schools cannot deliver the records until athletes have had a chance to object, but objections won't make much difference.

The attorneys already obtained the records from NCAA, with numbers in place of names.

Anyone who objects to disclosure will stay in the case as a number.

Jason White, who received free Stanford University tuition with room, board and books, represents the class seeking damages.

Los Angeles attorney Stephen Morrissey filed the suit 18 months ago, in the Central District of California.

ESPN the Magazine estimated the claim of actual damages at $117 million, noting that the amount would triple under antitrust law.

Morrissey asserted an antitrust claim by portraying athletes as potential buyers of coaching services and academics.

He alleged that the cap on aid harmed them by forcing them to pay more than they would have paid without it.

He argued that antitrust law applied because there were no reasonably interchangeable substitutes for football and basketball.

He argued that, " other alternative combines the opportunity to compete at the highest level of college sports while earning a college degree, together with a greater prospect for advancement..."

He argued that without a cap, schools would compete for high school athletes by offering aid beyond tuition, room, board and books.

He claimed every athlete suffered harm, down to the 85th man in football and the 13th man in basketball.

He proposed to calculate for each athlete the difference between aid he received and his "cost of attendance."

He defined the class as everyone who received aid for playing football in Division I-A or basketball in 16 top conferences since February 2002.

NCAA moved to dismiss, claiming White did not plead a relevant market or allege harm to competition.

District Judge Gary Klausner denied NCAA's motion last September.

"Plaintiffs have sufficiently alleged an impact upon competition in a definable market," Klausner wrote.

NCAA resisted class certification, arguing that variations in talent would create economic conflict within the class.

NCAA argued that the suit required individual treatment because some schools lacked funds to absorb the cost of bigger aid packages.

NCAA argued that the suit required individual treatment because many class members received Pell grants in addition to grants-in-aid.

Klausner certified the class in October, finding "a common core of salient facts" behind everyone's claim.

"...[T]he Court finds little danger of intra-class conflict," Klausner wrote.

"Plaintiffs have offered plausible methods by which the Court may depend upon generalized forms of proof and avoid the kind of individual inquiry into questions of impact and damages which would make class certification improper," he wrote.

He wrote that the same general proofs would answer the question of individual school resources.

"Professional markets are different from college markets, but they share important characteristics," he wrote.

"The production functions (types and number of capital and labor inputs) and revenue generation models are similar."

He found Pell grants irrelevant no matter how large.

He wrote that NCAA could move for decertification if school resources defied general proof or if Pell grants proved relevant.

He wrote that he was keenly aware of the tenuous and theoretical nature of Morrissey's argument.

"Plaintiffs lead the Court down a narrow path," Klausner wrote.

He set trial June 12, 2007.

Morrissey moved for postponement to December due to discovery delays, but in February Klausner denied it.

Suddenly the case slipped out of his hands.

Chief Judge Alicemarie Stotler transferred it and 14 other Klausner cases to newly appointed District Judge Valerie Baker Fairbank.

In May, Magistrate Judge Margaret Nagle ordered NCAA to produce six years of information from financial reports of all schools in the class.

She ordered NCAA to produce six years of detailed student-athlete financial aid reports, with numbers replacing names.

She wrote that plaintiffs could move to disclose names at a later date.

On Aug. 10, Nagle ordered Morrissey to give NCAA a list of athletes for whom he contends privacy law has been satisfied.

Nagle ordered Morrissey to exclude those who objected to disclosure.

She wrote that after NCAA received the list, it could redact the name of an athlete if it could prove privacy law was not satisfied.

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