Chalmers v. National Collegiate Athletic Association

Background

Sixteen former collegiate student-athletes sued the National Collegiate Athletic Association (NCAA) and six member conferences. They alleged that, while they were in college, NCAA rules and agreements required them to give up rights connected to their names, images, and likenesses (NIL). They claimed that the NCAA and the conferences later used or licensed that material commercially without paying them.

The amended complaint asserted four claims: two claims under Section 1 of the Sherman Act, alleging a conspiracy and group boycott that restrained the market for the athletes’ NILs; a Section 2 Sherman Act monopolization claim; and a state-law unjust-enrichment claim. The plaintiffs sought monetary and injunctive relief. The NCAA moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a complaint does not state a legally sufficient claim.

Statute of limitations

The court held that the Sherman Act claims were untimely. Federal antitrust damages claims generally must be filed within four years after the injury. The plaintiffs argued that each later commercial use of their NILs was a new injury that restarted the four-year period. The court rejected that theory, holding that later uses of NILs acquired under older agreements were performance of those agreements, not new and independent antitrust acts.

The court also rejected the plaintiffs’ alternative arguments. It held that the damages were no longer too uncertain by the end of each plaintiff’s college career, so the exception for speculative damages did not extend the filing deadline. It found no basis for equitable tolling, which can extend a deadline only in extraordinary circumstances when a plaintiff could not reasonably have discovered the claim despite diligence. The court also held that laches, an unreasonable delay that prejudices the opposing party, barred the request for injunctive relief even though statutes of limitations do not technically apply to such relief.

Claim preclusion

The court separately held that earlier litigation barred important portions of the amended complaint. Claim preclusion, sometimes called res judicata, generally prevents parties or members of a previously bound class from bringing claims arising from the same conduct when those claims were or could have been raised earlier.

The court held that the earlier O’Bannon class judgment barred the plaintiffs’ request for injunctive relief. All 16 plaintiffs were within the class covered by that judgment, and the court found that both cases challenged the NCAA’s restrictions on compensation for student-athletes’ NILs. The court concluded that differences in terminology—such as describing the alleged arrangement as a monopoly or a monopsony—did not change the substance of the claims.

The court also held that the Alston settlement agreement barred the damages claims of 10 plaintiffs who had been members of the Alston settlement class. The agreement released broad categories of monetary claims against the NCAA and covered claims arising from the same legal and factual allegations. The court further stated that claim-preclusion principles independently barred those damages claims.

Unjust enrichment

The court granted dismissal of the unjust-enrichment claim. It held that the claim duplicated the antitrust claims because the plaintiffs identified no separate basis for requiring the defendants to pay them. The court also held that the claim was untimely and that the Alston settlement and claim-preclusion principles independently barred the unjust-enrichment claims of the 10 Alston class members.

Disposition

The court granted the NCAA’s motion to dismiss the amended complaint. It dismissed the amended complaint in full with prejudice, directed the Clerk of Court to terminate the pending motions, and closed the case.