to reduce the high cost of part-time coaches&apos; salaries Some earned over $ 60,000 annually. The rule focused on limiting compensation to entry-level coaches to $ 16,000 per year. The NCAA does not dispute that the cost-reduction has effectively reduced restricted-earnings coaches&apos; salaries. The REC Rule was successful in artificially lowering the price of coaching services
The court sought to see if the pro-competitive benefits of the restriction -- retaining entry level jobs, reducing costs, and maintaining competitive equity -- justified the anticompetitive effects. The Court of Appeals found that the NCAA had failed to present evidence that the Rule would be effective over time in creating entry-level positions, reducing deficits, enhancing competition, leveling an uneven playing field, or reducing coaching inequities. Id. It also noted that cost-cutting by itself is not a valid pro-competitive justification. As a result, the Tenth Circuit concluded that the NCAA had not demonstrated a genuine issue of fact whether it had violated of the Sherman Act.
Proof that an entity has committed an antitrust violation does not afford plaintiffs an automatic right to damages under. Such proof establishes only that injury may result and does not mean that any plaintiff has been actually injured. Plaintiffs must establish that their injuries were caused by reason of defendant&apos;s anticompetitive activity.
An antitrust plaintiff who is injured in his person or property by anticompetitive activity is entitled to recover damages. In economic terms, the amount of damages is the difference between what plaintiff could have made in a hypothetical free economic market and what plaintiff actually made in spite of defendant&apos;s anticompetitive activities.
In the class action context the inference of antitrust injury is predicated on the establishment of certain facts: (1) an antitrust violation, typically a conspiracy to fix prices or allocate markets; (2) an ability on the part of defendant-conspirators to effectuate the conspiracy; (3) generalized price increases or damages in the industry involved; and (4) purchase or, as here, rental by plaintiffs during the period of anti-competitive activity. In such circumstances, unless it is clear that no plaintiff was injured, the fact that defendant may be able to defeat a showing of causation as to a few individual class members would not defeat the inference of antitrust injury; the exact amount of injury to each class member should be treated as an issue at the damage phase of the trial.
Conduct in violation of the antitrust laws may have three effects. In some respects the conduct may reduce competition, in other respects it may increase competition, and in still other respects effects may be neutral as to competition. The antitrust injury requirement ensures that a plaintiff can recover only if the loss stems from a competition-reducing aspect or effect of the defendant&apos;s behavior.
The National Collegiate Athletic Association [NCAA] seeks partial summary judgment with respect to groups of coaches. It also seeks summary judgment as to (1) claims of any individual class member who failed to return a timely and accurate &quot;Restricted Earnings Coach Information Sheet&quot;; (2) claims of individuals who are not class members; (3) damages incurred after May 25, 1995, when the NCAA rescinded the salary cap which violated the Sherman Act, (4) damages which represent a Consumer Price Index adjustment to plaintiff&apos;s base damage calculation; and (5) plaintiffs&apos; claim for injunctive relief.
The court sustained in part and overruled in part the National Collegiate Athletic Association&apos;s motions for partial summary judgment in the coaches&apos; class action suit for antitrust violations. The court overruled summary judgment as to all claims except with regard to a single coach who was not a restricted earnings coach, and thus was not a proper member of the class. The court held that the coaches established antitrust injuries as compensation limits such as those contained in the restricted earnings coaches rule violated the Sherman Act . A question of damages remained for the jury to decide precluding summary judgment. The court held that the claims of class members who failed to return a form to the court as directed could not be dismissed on summary judgment. The court held that such a dismissal violated the opt-out policy of
Sport law legal brief presentation
By Frank Campo
• Case Number: 5 F. Supp. 2d 921
• Case Decided on April 20, 1998
• The coaches brought a class action suit against
the National Collegiate Athletic Association
(NCAA) for antitrust violations (price-fixing
• The NCAA sought partial summary judgment.
• The NCAA adopted the Restricted
Earnings Coach Rule (REC Rule)