State of Ohio et al. v. National Collegiate Athletics Association; Proposed Final Judgment and Competitive Impact Statement, 49194-49211 [2024-12720]

Agencies

• Antitrust Division
• Department of Justice

[Federal Register Volume 89, Number 113 (Tuesday, June 11, 2024)]
[Notices]
[Pages 49194-49211]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-12720]


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DEPARTMENT OF JUSTICE

Antitrust Division


State of Ohio et al. v. National Collegiate Athletics 
Association; Proposed Final Judgment and Competitive Impact Statement

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed Final Judgment, 
Stipulation, and Competitive Impact Statement have been filed with the 
United States District Court for the Northern District of West Virginia 
in State of Ohio et al. v. National Collegiate Athletics Association, 
Civil Action No. 1:23-cv-100. On January 18, 2024, the United States, 
along with ten states and the District of Columbia, filed an Amended 
Complaint alleging that the NCAA's Division I rule requiring student 
athletes who transfer between institutions to complete a year in 
residence before being eligible to compete in intercollegiate contests 
unreasonably restrained trade in violation of section 1 of the Sherman 
Act, 15 U.S.C. 1. The proposed Final Judgment, filed on May 30, 2024, 
requires the NCAA to refrain from enforcing the offending rules and to 
restore eligibility to certain affected student athletes.
    Copies of the Amended Complaint, proposed Final Judgment, and 
Competitive Impact Statement are available for inspection on the 
Antitrust Division's website at https://www.justice.gov/atr and at the 
Office of the Clerk of the United States District Court for the 
Northern District of West Virginia. Copies of these materials may be 
obtained from the Antitrust Division upon request and payment of the 
copying fee set by Department of Justice regulations.
    Public comment is invited within 60 days of the date of this 
notice. Such comments, including the name of the submitter, and 
responses thereto, will be posted on the Antitrust Division's website, 
filed with the Court, and, under certain circumstances, published in 
the Federal Register. Comments should be submitted in English and 
directed to Yvette Tarlov, Chief, Media, Entertainment & 
Communications, Antitrust Division, Department of Justice, 450 Fifth 
Street NW, Suite 7000, Washington, DC 20530 (email address: 
[email protected]).

Suzanne Morris,
Deputy Director, Civil Enforcement Operations, Antitrust Division.

In the United States District Court for the Northern District of West 
Virginia Clarksburg Division

Amended Complaint for Injunctive Relief

    State of Ohio, 30 E. Broad St., 26th Floor, Columbus, OH 43215, 
Commonwealth of Virginia, 202 North 9th Street, Richmond, VA 23219, 
District of Columbia, 400 6th Street NW, 10th Floor, Washington, DC 
20001, State of Colorado, 1300 Broadway, 7th Floor, Denver, CO 
80203, State of Illinois, 100 West Randolph Street, Chicago, IL 
60601, State of Minnesota, 445 Minnesota St., Suite #1400, St. Paul, 
MN 55101, State of Mississippi, 550 High St., P.O. Box 220, Jackson, 
MS 39205, State of New York, 28 Liberty Street, New York, NY 10005, 
State of North Carolina, 114 W. Edenton Street, Raleigh, NC 27603, 
State of Tennessee, P.O. Box 20207, Nashville, TN 37202, State of 
West Virginia, P.O. Box 1789, Charleston, WV 25326, and United 
States of America, U.S. Department of Justice, 950 Pennsylvania 
Avenue NW, Washington, DC 20530, Plaintiffs, v. National Collegiate 
Athletic Association, 700 W Washington Street, P.O. Box 6222, 
Indianapolis, IN 46206-6222, Defendant.

Bailey,
Case No: 1:23-cv-00100
Judge Bailey

Amended Complaint for Injunctive Relief

    1. The State of Ohio, Commonwealth of Virginia, District of 
Columbia, and States of Colorado, Illinois, Minnesota, Mississippi, New 
York, North Carolina, Tennessee, and West Virginia (``Plaintiff 
States'') and the United States of America bring this action to 
challenge Bylaw 14.5.5.1 (``Transfer Eligibility Rule'') of Defendant, 
the National Collegiate Athletic Association (``NCAA''). This bylaw 
imposes a one-year delay in the eligibility of certain college athletes 
transferring between NCAA member institutions and unjustifiably 
restrains the ability of these college athletes to engage in the market 
for their labor as NCAA Division I college athletes. This action seeks 
declaratory and injunctive relief against Defendant for a violation of 
section 1 of the Sherman Act, 15 U.S.C. 1.

Introduction

    2. NCAA member institutions and their college athletes engage in 
intense competition on and off the field. The contests that take place 
on fields and courts across the nation are the most visible. But off 
the field, schools compete to recruit and retain talented

[[Page 49195]]

college athletes, and college athletes compete to market their labor to 
the schools of their choice.
    3. In the time since the NCAA's founding in 1906, the scope and 
subject matter of its rules governing intercollegiate sports have 
expanded significantly. It has not only adopted rules to ensure the 
actual contests on the field are fair and safe, but it has also created 
rules that control off-the-field competition among its members and 
college athletes. Although some of these rules may be necessary to 
administer college sports, rules that unreasonably restrict competition 
between competitors, with no overriding procompetitive benefit, run 
headlong into this nation's antitrust laws which are premised on the 
belief that market forces provide the best outcomes.
    4. One such NCAA rule is the Transfer Eligibility Rule, which 
restricts the eligibility of college athletes who transfer between 
Division I schools. The NCAA claims that this Rule promotes academic 
well-being of college athletes and preserves its amateurism model. But 
the connection between the Rule and academic well-being or athletic 
amateurism is tenuous at best and is outweighed by the harm it does to 
college athletes and consumers of college athletics. In the language of 
antitrust law, the Transfer Eligibility Rule is a no-poach agreement 
between horizontal competitor member schools that serves to allocate 
the market for the labor of NCAA Division I college athletes. This 
agreement plainly violates the Sherman Act. The fact that it was 
created under the auspices of the NCAA does not shield it from 
antitrust scrutiny. In contrast to college athletes, students with 
academic or music scholarships can freely transfer institutions without 
facing similar restraints on their ability to practice their craft. 
Likewise, coaches and administrators face no comparable barriers.
    5. The Transfer Eligibility Rule requires a year of academic 
residency before a transferring Division I college athlete is eligible 
to participate in NCAA athletic competition. Underscoring its 
anticompetitive nature, the rule is not universally applied. A college 
athlete's first transfer is excepted from this process, and there is a 
discretionary waiver process. But the Rule remains the default for 
Division I college athletes who transfer a second time.
    6. For NCAA college athletes, a one-year waiting period for 
eligibility can be devastating. This amounts to 20% of the total time 
allotted by NCAA regulations for the completion of the college 
athlete's total seasons of eligibility. Furthermore, only by competing 
on the field or court can the college athlete receive the full benefits 
of participation in Division I NCAA athletics.
    7. The Transfer Eligibility Rule artificially deters players and 
teams from achieving optimal matches by forcing college athletes to 
weigh the one-year ineligibility period against the benefits of moving 
to a better matched school. It is ironic that this rule, stylized as 
promoting the welfare of college athletes, strips them of the agency 
and opportunity to optimize their own welfare as they see fit.
    8. Though the NCAA is an association of member institutions that 
compete against each other to attract revenues, fans, and college 
athletes, it has enacted and enforced anticompetitive rules and 
policies that act as an unlawful barrier on the ability of certain 
college athletes and universities to compete against each other.
    9. Plaintiff States and the United States bring this action to put 
a stop to Defendant's unjustified overreach into the lives and careers 
of college athletes, to prevent the unjustified anticompetitive 
restriction on universities who seek to compete for college athletes, 
and to restore freedom of economic opportunity.

Jurisdiction and Venue

    10. This Court has jurisdiction over this action under section 1 of 
the Sherman Act, 15 U.S.C. 1, section 26 of the Clayton Act, 15 U.S.C. 
26, and under 28 U.S.C. 1331 and 1337.
    11. This Court may exercise personal jurisdiction over Defendant 
because Defendant currently transacts business in the Clarksburg 
Division of the Northern District of West Virginia. Defendant and its 
member institutions conduct athletic competitions, ticket and 
merchandise sales, television agreements, and other revenue-generating 
activities in the Northern District of West Virginia.
    12. Venue is proper in this district under section 12 of the 
Clayton Act, 15 U.S.C. 22, and under 28 U.S.C. 1391(b)(2).

The Parties

    13. The Attorneys General of the Plaintiff States bring this action 
in their quasi-sovereign capacities as the chief law enforcement 
officers of their respective states.
    14. Plaintiff States have quasi-sovereign interests in protecting 
their citizens, including but not limited to college athletes and the 
consumers of college athletics, from economic harm and in ensuring that 
their economies and the labor markets therein are not suppressed by 
unjustified restraints of trade.
    15. The Plaintiff States are granted authority to bring actions for 
injunctive relief under federal antitrust law pursuant to 15 U.S.C. 26.
    16. The United States brings this action pursuant to section 4 of 
the Sherman Act, 15 U.S.C. 4, to prevent and restrain NCAA from 
violating section 1 of the Sherman Act, 15 U.S.C. 1.
    17. Defendant NCAA is an unincorporated association that acts as 
the governing body of college sports. The NCAA includes more than 1,000 
member colleges and universities throughout the United States, 
including institutions in each of the Plaintiff States. These member 
institutions are organized into three divisions, and Division I 
includes over 350 schools. Through the NCAA Constitution and Bylaws, 
the NCAA and its members have adopted regulations governing all aspects 
of college sports, including specifically, the Bylaw at issue in this 
case, Division I Bylaw 14.5.5.1. The NCAA Constitution and Bylaws were 
adopted by votes of the member institutions and various NCAA councils, 
and they may be amended by votes of the member institutions or NCAA 
councils. Thus, the rules set forth in the NCAA Constitution and Bylaws 
constitute horizontal agreements between the NCAA and its member 
institutions and among NCAA member institutions.
    18. As a practical matter, an academic institution that wishes to 
participate in any meaningful way in the highest and most popular level 
of collegiate athletics must maintain membership in the NCAA and abide 
by the Division I rules and regulations promulgated by the NCAA and its 
members. Failure to abide by these rules and regulations risks 
subjecting sports programs at the academic institution to punitive 
measures from the NCAA that include reduced athletic-scholarships, 
suspensions, prohibition on post-season eligibility, vacating 
previously-earned wins, monetary fines, and the so-called ``death 
penalty.''
    19. The NCAA and its member institutions control the highest and 
most popular level of collegiate athletics. Therefore, any individual 
who wishes to provide athletic services in exchange for the payment of 
partial or full tuition for an undergraduate academic education and 
wishes to derive the substantial benefits from competing at the highest 
level of collegiate athletics must by necessity attend an NCAA Division 
I member institution.

[[Page 49196]]

    20. There are zero practical alternatives that can provide the 
unique combination of attributes offered by Division I NCAA athletic 
schools: (i) the ability to exchange athletics services for the payment 
of the partial or full cost of an education plus room and board, (ii) 
high quality academic educational services, (iii) top-of-the-line 
training facilities, (iv) high quality coaches that will best be able 
to launch players to professional careers, (v) national publicity 
through national championships and nationwide broadcasting contracts, 
(vi) opportunities to profit from name, image, and likeness (``NIL'') 
agreements, and (vii) competition at the highest level of collegiate 
athletics.

Background

The Transfer Eligibility Rule, NCAA Bylaw 14.5.5.1

    21. The NCAA and its member institutions are organized under a 
constitution and divided into three divisions. NCAA, Division I 2023-24 
Manual, 3 (accessed Nov. 2, 2023), https://web3.ncaa.org/lsdbi/reports/getReport/90008, included in this filing as Exhibit A. Each of the 
NCAA's three divisions has the authority to determine its own governing 
structure and membership. Id. at 5. The NCAA is overseen by a Board of 
Governors which appoints the President to administer the Association 
and ``implement directions of the Board of Governors and divisional 
leadership bodies.'' Id. at 4. Each member institution is required to 
``hold itself accountable to support and comply with the rules and 
principles approved by the membership.'' Id. at 9.
    22. Each NCAA division maintains its own legislative process for 
adopting bylaws, with some bylaws applying to only one division and 
others applying across divisions. Id. at 14. Proposed bylaw changes 
that move through the divisional legislative process within an ``area 
of autonomy'' as identified by the bylaws are adopted by certain 
conferences and their member institutions. Id. at 15. Federated 
legislation--changes that are applicable only to the adopting 
division--can be made by the Division I Council. Id. at 17. The 
Division I Council is comprised of representatives from member 
institutions and conferences. Id. at 396-397. Member institutions can 
propose amendments to the bylaws for the Division I Council's review 
and can comment on proposed amendments under consideration. Id. at 17-
18.
    23. NCAA Bylaw 13.1.1.3.1 provides that for undergraduate college 
athletes that wish to transfer to a new member institution, the college 
athlete must provide notice to the current institution during a 
specified period for the college athlete's given sport. Id. at 75-76. 
After notification of intent to transfer, the current institution must 
``enter the [college athlete's] information into the national transfer 
database,'' a process known as the NCAA Transfer Portal. Id. at 75. 
According to a recent NCAA statement, 21,685 college athletes had 
entered the transfer portal in 2023 as of September 12. DI Board 
Statement Regarding Transfer Waivers, NCAA (Sept. 12, 2023), available 
at: https://www.ncaa.org/news/2023/9/12/media-center-di-board-statement-regarding-transfer-waivers.aspx.
    24. NCAA Bylaw 14.5.5.1, herein referred to as the Transfer 
Eligibility Rule, states, ``A transfer student from a four-year 
institution shall not be eligible for intercollegiate competition at a 
member institution until the student has fulfilled a residence 
requirement of one full academic year (two full semesters or three full 
quarters) at the certifying institution.'' Exhibit A at 165. This rule 
does not prevent a college athlete from practicing or participating in 
other team activities during this one-year waiting period, only from 
competing on gameday. Id. One exception to this rule found in NCAA 
Bylaw 14.5.5.2.10 exempts college athletes transferring for the first 
time from the Transfer Eligibility Rule. Id. at 167. NCAA Bylaw 12.8.1 
provides that college athletes have five calendar years to complete 
their four seasons of eligibility in any one sport. Id. at 55.
    25. The NCAA Bylaws contain what is commonly known as the ``Rule of 
Restitution,'' which provides:

    If a student-athlete who is ineligible under the terms of the 
bylaws or other legislation of the Association is permitted to 
participate in intercollegiate competition contrary to such NCAA 
legislation but in accordance with the terms of a court restraining 
order or injunction operative against the institution attended by 
such student-athlete or against the Association, or both, and said 
injunction is voluntarily vacated, stayed or reversed or it is 
finally determined by the courts that injunctive relief is not or 
was not justified, the Board of Directors may take any one or more 
of the following actions against such institution in the interest of 
restitution and fairness to competing institutions:
    (a) Require that individual records and performances achieved 
during participation by such ineligible student-athlete shall be 
vacated or stricken;
    (b) Require that team records and performances achieved during 
participation by such ineligible student-athlete shall be vacated or 
stricken;
    (c) Require that team victories achieved during participation by 
such ineligible student-athlete shall be abrogated and the games or 
events forfeited to the opposing institutions;
    (d) Require that individual awards earned during participation 
by such ineligible student-athlete shall be returned to the 
Association, the sponsor or the competing institution supplying 
same;
    (e) Require that team awards earned during participation by such 
ineligible student-athlete shall be returned to the Association, the 
sponsor or the competing institution supplying same;
    (f) Determine that the institution is ineligible for one or more 
NCAA championships in the sports and in the seasons in which such 
ineligible student-athlete participated;
    (g) Determine that the institution is ineligible for 
invitational and postseason meets and tournaments in the sports and 
in the seasons in which such ineligible student-athlete 
participated;
    (h) Require that the institution shall remit to the NCAA the 
institution's share of television receipts (other than the portion 
shared with other conference members) for appearing on any live 
television series or program if such ineligible student-athlete 
participates in a contest selected for such telecast, or if the 
Board of Directors concludes that the institution would not have 
been selected for such telecast but for the participation of such 
ineligible student- athlete during the season of the telecast; any 
such funds thus remitted shall be devoted to the NCAA postgraduate 
scholarship program; and
    (i) Require that the institution that has been represented in an 
NCAA championship by such a student-athlete shall be assessed a 
financial penalty as determined by the Committee on Infractions.

Id. at 66-67. This rule allows the NCAA to punish college athletes and 
their member universities for actions taken in accordance with court 
orders if those orders are later revoked. Id.
    26. Because of the commercial nature of the transactions between 
college athletes and NCAA member institutions and the effect these 
transactions have on college athletes and the consumers of college 
athletics, the NCAA's enforcement of the Transfer Eligibility Rule 
falls within the purview of the Sherman Act. The Transfer Eligibility 
Rule's anticompetitive effects within the sport-specific markets for 
the labor of NCAA Division I college athletes far outweigh the 
pretextual procompetitive benefits, and the Rule is an unreasonable 
restraint of trade that cannot survive rule of reason analysis.

Relevant Markets

    27. Within NCAA Division I athletics, the Transfer Eligibility Rule 
affects two broad categories of labor markets: (1) athletic services in 
men's and women's Division I basketball and football bowl subdivision 
(``FBS'') football, wherein each college athlete participates in his or 
her sport-specific market, and (2)

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athletic services in all other men's and women's Division I sports, 
wherein each athlete participates in his or her sport-specific market. 
Within these markets, college athletes compete for spots on NCAA 
Division I member institution athletic teams, while the NCAA member 
institutions simultaneously compete to secure elite-level college 
athletes. In so doing, the NCAA member institutions secure the labor of 
these college athletes through in- kind benefits--specifically, 
scholarships, academic programs, access to modern training facilities, 
and knowledge and training from premier coaching staffs.
    28. The relevant geographic market is the United States. The NCAA 
and its member institutions are located across the country, and they 
engage in on-field competition and competition in the relevant labor 
markets throughout the United States.
    29. Participation in NCAA Division I athletic events on gameday 
significant benefits to a college athlete. College athletes can 
showcase their skill in front of national audiences, gain exposure to 
professional team scouts, and compete against other college athletes at 
the highest level of collegiate athletics. In addition, the recent 
advent of NIL agreements presents college athletes the opportunity to 
benefit financially--sometimes in the millions of dollars--while 
playing college sports.
    30. As mentioned above, there are no practical alternatives to the 
Division I level of NCAA athletics for college athletes who seek to 
market and showcase their elite-level skills. The benefits that come 
with participation in NCAA Division I athletics include the ability to 
exchange athletics services for (i) the payment of the partial or full 
cost of an education plus room and board, (ii) high quality academic 
educational services, (iii) top-of-the-line training facilities, (iv) 
high quality coaches that will best be able to launch players to 
professional careers, (v) national publicity through national 
championships and nationwide broadcasting contracts, (vi)opportunities 
to profit from NIL agreements, and (vii) competition at the highest 
level of collegiate athletics.
    31. Within these relevant markets, the NCAA maintains exclusive 
power, dictating the rules and regulations for participation in 
Division I athletics through the Division I Council and NCAA member 
institutions.
    32. Although the NCAA is a non-profit organization, the 
transactions that member institutions make with college athletes yield 
significant financial revenue for the member institutions and have 
significant effects on the future earning potential of those college 
athletes. Namely, these transactions include partial or full 
scholarships in exchange for the college athlete's services. The 
college athletes, in return, receive the means to develop, refine, and 
showcase their skills--essential inputs to their future earning 
potential. NCAA athletic events in which these college athletes compete 
are marketed to consumers who view both in-person and via broadcasts of 
these sporting events, yielding significant revenue to the NCAA's 
member institutions and conferences. Accordingly, the transactions 
between these member institutions and the college athletes are 
inherently commercial in nature and fall under the purview of the 
Sherman Act.

Anticompetitive Effects

    33. The NCAA enacts and enforces rules that it claims promote the 
well-being of college athletes and preserve the amateurism aspect of 
Division I college sports.
    34. The NCAA and its member institutions adopt these rules through 
the member institutions and the Division I Council, making these rules 
equivalent to horizontal agreements among the NCAA and its member 
institutions who compete against one another for the labor of Division 
I college athletes.
    35. Despite what the NCAA may claim, the Transfer Eligibility Rule 
restrains college athletes from freely moving among member institutions 
to improve their economic opportunity, personal growth, and well-being, 
a freedom afforded to other students at NCAA member institutions but 
not to college athletes. This restriction violates the Sherman Act 
because it has direct anticompetitive effects that harm college 
athletes and consumers of college athletics.

The Transfer Eligibility Rule's Effects on College Athletes

    36. College athletes compete within the relevant markets of their 
respective sports for scholarships at NCAA Division I member 
institutions. Within these markets, college athletes are harmed by the 
Transfer Eligibility Rule. Effectively, the Transfer Eligibility Rule 
operates as a no-poach, market allocation agreement among the NCAA and 
its member institutions for the labor of NCAA Division I college 
athletes. The Transfer Eligibility Rule harms college athletes in three 
main areas of the relevant markets: (1) when college athletes are 
making the decision on whether to transfer, (2) when college athletes 
decide to transfer and are searching for a new institution to attend, 
and (3) when college athletes are denied eligibility to compete for one 
year after transferring to a new institution.
    37. First, the Transfer Eligibility Rule harms college athletes by 
discouraging them from transferring to a different institution that may 
benefit their academic, mental, and athletic well-being. Because of the 
Transfer Eligibility Rule, college athletes are denied the freedom of 
choice among Division I schools once they have competed on behalf of a 
given school. They are prevented from competing at a school to which 
they might choose to transfer for an entire year, denying them the 
benefits of competing in NCAA athletic events. This equates to a 20% 
loss of the time given to them to complete their seasons of eligibility 
and compete in the highest level of collegiate athletics.
    38. With the threat of a year of ineligibility looming over 
transfer decisions, college athletes may hesitate to transfer even when 
a different institution may offer a situation that is better for the 
college athlete than the situation at the current institution. College 
athletes, just like non-athlete college students, may desire to 
transfer schools for any number of reasons. Distance from family, 
struggles with mental health, or better academic or athletic 
opportunities elsewhere are just a few of the many reasons college 
athletes may seek a transfer. The Transfer Eligibility Rule creates 
friction in the relevant markets by deterring college athletes from 
exploring better options within their sport-specific market.
    39. Second, the Transfer Eligibility Rule affects college athletes 
in the relevant markets by artificially disadvantaging second-time 
transfers. Just like college athletes compete within the relevant 
markets for scholarship positions on Division I athletic teams, NCAA 
member institutions compete against each other to attract and retain 
elite college athletes to compete on the institutions' athletic teams. 
Second-time transferring college athletes are not able to apply for a 
waiver of the Transfer Eligibility Rule until after they have been 
accepted and enrolled at their new institution. Because the waiver 
process is discretionary and has been inconsistently applied, member 
institutions that accept a second-time transfer risk that the college 
athlete might not be eligible to compete for an entire academic year. 
This distorts the market by artificially deflating the value of a 
second-time transfer.
    40. In some instances, college athletes may have no choice but to 
transfer or risk losing a scholarship at their current institution. 
Head coaches can

[[Page 49198]]

essentially force a player into the transfer portal by threatening to 
cut a player and revoke their scholarship, making the choice to 
transfer no real choice at all. In such situations, college athletes 
that have already transferred once, making them unqualified for the 
first-time transfer exception, must face the consequences of the 
Transfer Eligibility Rule despite having no control over the situation 
at their current institution. Such situations force college athletes 
into a transfer market where, compared to transfers who qualify for the 
first-time exception, they face an artificial competitive disadvantage 
because of the Transfer Eligibility Rule.
    41. Third, the Transfer Eligibility Rule harms college athletes 
transferring a second time by denying them the opportunity to compete 
in NCAA Division I athletic events for an entire academic year after 
transferring to a new institution. NCAA Division I sports are the 
pinnacle of college athletics in the United States. Competing at this 
high level of athletics comes with immeasurable opportunities for 
personal, professional, and economic growth. For athletes seeking to 
continue competing professionally after college, NCAA Division I sports 
provide a platform to showcase athletic skills in front of national 
audiences and professional scouts. The Transfer Eligibility Rule 
unjustifiably denies these benefits to affected student athletes for an 
entire academic year.
    42. The NCAA has often noted the importance of its college 
athletes' opportunities to compete at the highest level. See, e.g., The 
Value of College Sports, NCAA (last visited Nov. 10, 2023), https://www.ncaa.org/sports/2014/1/3/the-value-of-college-sports.aspx (where 
the NCAA expressly notes that the value of college sports to its 
college athletes includes unparalleled exposure and experiences through 
``the opportunity to travel across the country and around the world for 
regular-season contests, NCAA championships and foreign tours,'' which 
``can open doors for the few who will compete professionally and for 
the majority who will go pro in something other than sports.'').
    43. While college athletes subject to the Transfer Eligibility 
Rule's restrictions are allowed to practice and participate in other 
team activities, they are expressly restricted from competing in their 
sport. Practicing with one's teammates and competing on gameday are not 
the same thing. Competition is fundamentally different. Even the NCAA's 
public statements support this point:

    NCAA tournaments are where dreams are fulfilled, lifelong 
memories are made and communities come together under a shared love 
for the game. Seeing college athletes, both in victory and defeat, 
competing with passion and conviction wins our hearts long after the 
clock hits zero. Simply put, championships represent the very best 
of college athletics.
    This deserves to be felt at every juncture. Transformation 
Committee members evaluated differences that exist across sports to 
find ways to improve equity and bring these experiences closer 
together. We recognized that championships are the pinnacle of a 
[college athlete's] Division I experience and sought to grant 
greater access to championships for well-qualified teams while 
honoring the existing structure for entry. For travel to 
championships, our goal was to create new, elevated recommendations 
so teams and college athletes would have a comparable experience 
when traveling, regardless of sport or gender.

NCAA, NCAA Division I Transformation Committee Final Report, 14 (Jan. 
3, 2023), https://ncaaorg.s3.amazonaws.com/committees/d1/transform/Jan2023D1TC_FinalReport.pdf (where Lynda Tealer, a member of the 
Division I Transformation Committee and executive associate athletics 
director at the University of Florida, reemphasized the importance of 
competition at the highest level) (emphasis added).
    44. Moreover, college athletes' opportunities to show the world the 
fruits of their labor occur on fields, courts, and rinks where the NCAA 
has unlawfully restricted their participation. Forced ineligibility and 
missing even a single game can negatively impact a college athlete's 
future earning potential. National television broadcasts provide 
significant exposure for college athletes. One game can take a college 
athlete from a local fan favorite to a household name. When even the 
slightest differences among players can affect positioning and earning 
potential in professional league drafts, every game is vital for 
college athletes and can significantly impact their future earning 
potential.
    45. Apart from future earning potential, the Transfer Eligibility 
Rule impairs college athletes' ability to take advantage of current and 
future opportunities derived from their name, image, and likeness. NIL 
agreements may vary depending on the school at which an athlete 
competes (and the NIL-related resources a school might provide), the 
degree of exposure that the athlete might expect from playing sports at 
that school, the relationships a given school might have with third 
parties interested in entering NIL agreements (through collectives or 
otherwise), and ties to established media markets in which NIL 
agreements may be more prevalent, among other factors. By limiting 
eligibility for affected college athletes, the Transfer Eligibility 
Rule prevents these college athletes from maximizing NIL valuations, 
which can run into the millions of dollars. The Transfer Eligibility 
Rule's restrictions for an entire academic year can have immeasurable 
and lasting economic effects on college athletes.
    46. In addition to the potential economic effects on these college 
athletes and the dramatic impact these restraints have on the college 
athletes' overall collegiate athletics experience, the NCAA's denial of 
college athletes' ability to compete immediately through enforcement of 
the Transfer Eligibility Rule has caused negative impacts on the mental 
health and overall well-being of some college athletes.
    47. There are numerous college athletes whose academic and athletic 
aspirations are being unlawfully restrained by the Transfer Eligibility 
Rule; the NCAA, media, and consumers of college athletics are well 
aware of this issue as evidenced by recently publicized examples of 
college athletes harmed by the Transfer Eligibility Rule.

RaeQuan Battle

    48. RaeQuan Battle is a member of the West Virginia University 
(``WVU'') Men's Basketball Team. Before joining WVU, he played 
basketball at the University of Washington for the 2019-20 and 2020-21 
basketball seasons. Thereafter, he transferred to Montana State 
University (``MSU'') and played there during the 2021-22 and 2022-23 
basketball seasons.
    49. Because Mr. Battle had transferred on a prior occasion, his 
ability to transfer to WVU from MSU for the 2023-24 basketball season 
was restricted by the Transfer Eligibility Rule. Thus, to be eligible 
to play immediately, he needed to have a waiver approved by the NCAA. 
WVU applied for him to receive a waiver for immediate eligibility, as 
he and WVU believed that his circumstances fit within the NCAA's 
criteria for waiver requests.
    50. However, the NCAA recently denied his appeal for immediate 
eligibility at WVU. Mr. Battle is completely devastated by the NCAA's 
decision to deny him eligibility for the 2023-24 basketball season. 
Losing his coach at MSU, which prompted his decision to transfer to 
WVU, is a situation that he had no control over and severely affected 
his mental health. The denial of competition only exacerbates this 
impact to his mental health and overall well-being.

[[Page 49199]]

    51. WVU is scheduled to play 31 regular season games during the 
2023-2024 season. Mr. Battle is currently on the bench and has been 
unable to play in six competitive games thus far this season because of 
the Transfer Eligibility Rule. If he continues to be kept out of 
competition through December, then that would mean missing seven 
additional games (a total of 13 competitive games, which is almost half 
of the regular season schedule). Once these games have been played, 
they are gone forever. They will not be replayed in the future, and 
opportunities for development, exposure, and joy from participating in 
these contests are lost for Mr. Battle. Every passing game missed 
further irreparably harms Mr. Battle.
    52. Not participating in competitive games significantly impacts 
Mr. Battle's ability to pursue NIL compensation and for his chances to 
pursue a career in professional basketball.

Jarrett Hensley

    53. Jarrett Hensley is a member of the Southern Illinois University 
(``SIU'') Men's Basketball Team. Before joining SIU, Mr. Hensley played 
at the University of North Carolina Greensboro (``UNCG'') until 
deciding to transfer to the University of Cincinnati (``UC''). Because 
the coach who recruited him to UNCG chose to leave UNCG for UC, Mr. 
Hensley made the decision to follow his coach to UC. While this was a 
difficult decision, Mr. Hensley's coach was the only real connection he 
had to UNCG, so he and his family felt that following his coach to UC 
was the right decision.
    54. The adjustment to basketball and school at UC was extremely 
difficult for Mr. Hensley, and he began to feel very depressed and 
anxious. After UC made the move to the Big 12 Conference, the level of 
competition and the amount of pressure Mr. Hensley put on himself only 
increased, as the pressure to win increased tremendously. As the 
coaches and staff started putting more emphasis on outcomes instead of 
focusing on his collegiate athlete experience, UC staff encouraged Mr. 
Hensley to enter the transfer portal, and he felt that it was necessary 
to transfer somewhere closer to home and to family.
    55. Mr. Hensley feels like SIU coaches promote a family environment 
that makes him feel comfortable. As he knew he could make an impact and 
play on the SIU team, SIU was the right place for him as a student and 
athlete.
    56. Mr. Hensley worked with the UC compliance staff in preparation 
to file for a waiver of the Transfer Eligibility Rule, who assured him 
that he would be immediately eligible upon transferring. As such, when 
Mr. Hensley made the decision to enter the transfer portal, he was 
convinced that he would be able to play immediately at his new school.
    57. However, on the first day of school, SIU's coach had a meeting 
with Mr. Hensley to let him know that his waiver was denied. He was 
shocked, upset, and emotional. Being new to the school and having 
basketball taken from him led to stress and anxiety. There would be 
many nights that he didn't sleep at all. It made him question if he 
even wanted to continue playing, and he even had conversations with his 
coaches about potentially quitting the sport.
    58. Mr. Hensley ultimately decided to stay at SIU and see the 
waiver the process through. The process and the decision looms over him 
every day. He struggles knowing that his season is in the hands of 
someone else and that he cannot do anything about it.
    59. If unable to compete for the 2023-2024 season, Mr. Hensley will 
miss 31 games plus any postseason contests. Many of these games will be 
televised. On December 5, 2023, Mr. Hensley was forced to sit out the 
first SIU home basketball game against a Power 5 conference opponent 
since 2007. Mr. Hensley knows he could have helped his team win that 
nationally televised game, but because of the transfer Eligibility 
Rule, he did not get the opportunity to compete in that contest. He 
also missed out on the media coverage that could have helped him with 
potential NIL opportunities.

Noah Fenske

    60. Noah Fenske is currently a member of the football team at SIU. 
He started his collegiate career at the University of Iowa on a 
football scholarship.
    61. Mr. Fenske left Iowa due to mental health concerns and decided 
to transfer to the University of Colorado. While at Colorado, he dealt 
with mental health issues and sought counseling, as the environment at 
Colorado was difficult and the school transitioned through more than 
one coaching staff while he was on the team.
    62. The new coach at Colorado made it clear that current players 
were not going to be welcomed back after spring practices, and as such, 
Mr. Fenske had no choice but to look to transfer again in order to keep 
his scholarship.
    63. Mr. Fenske was advised that if he transferred to a lower-level 
school, he would be eligible, even if he was transferring for a second 
time. Despite receiving offers to play from Power 5 conference teams, 
he entered the transfer portal hoping to find a place like SIU where he 
could play football and finish his degree. He would not have 
transferred if he had not been pushed into the decision and told that 
he would be able to play immediately. He wanted to finish his degree at 
Colorado and was only one year away, but when he was told that he would 
not have a scholarship, he had no choice but to find another school.
    64. After arriving at SIU under the assumption he would be 
immediately eligible, Mr. Fenske was subsequently made aware that there 
had been a rule change, and that a waiver would have to be filed with 
the NCAA for immediate eligibility based on mental health struggles. To 
apply for this waiver, Mr. Fenske was forced to relive and relate to 
the NCAA the difficult circumstances that led to his mental health 
struggles.
    65. Mr. Fenske had many coaches tell him he was good enough to 
enter the draft after the season, but as Mr. Fenske did not get to 
compete, no one had the opportunity to assess his talent. In total, he 
missed 11 regular season and two FCS Playoff games during the Fall 2023 
season. Since his team was eliminated from the playoffs, Mr. Fenske 
wonders every day if he could have made a difference in that loss. 
Instead, the forced ineligibility from the Transfer Eligibility Rule 
negatively impacted his ability to play professional football, his 
ability to earn NIL money, and his mental health.

[[Page 49200]]

    66. The NCAA's willingness to apply the Transfer Eligibility Rule 
despite the negative mental health consequences suffered by college 
athletes because of the Rule flies in the face of the lip-service that 
the NCAA has proudly given to its commitment to understanding and 
addressing college athletes' mental health concerns. See, e.g., 
Michelle Brutlag Hosick, NCAA President Charlie Baker Lays Out Agenda 
for Growth, Transformation with Focus on Serving Student-Athletes, NCAA 
(Aug. 2, 2023, 11:00 a.m.), https://www.ncaa.org/news/2023/8/2/media-center-ncaa-lays-out-agenda-for-growth-transformation-with-focus-on-serving-student-athletes.aspx (where the NCAA's national office, just 
months ago, reaffirmed its guidance to ``[p]rovide a world-class 
athletics and academic experience for [college athletes] that fosters 
lifelong well-being.''); see also Charlie Henry, Social Series 
Highlights Importance of Mental Health Resources and Education, NCAA 
(May 5, 2022, 11:26 a.m.), https://www.ncaa.org/news/2022/5/25/media-
center-social-series-highlights-importance-of-mental-health-resources-
and-
education.aspx#:~:text=The%20NCAA%20has%20developed%20several,mental%20h
ealth%20needs%20of%20their (``NCAA has developed several educational 
resources, including `Mental Health Best Practices: Understanding and 
Supporting Student-Athlete Mental Wellness,' [a] resource . . . 
designed with input from a diverse group of member and industry voices 
to help schools support and address the mental health needs of their 
[college athletes].''); see also Sports Science Institute, Mental 
Health, NCAA, https://www.ncaa.org/sports/2021/2/10/sport-science-institute-mental-health.aspx (last visited Nov. 10, 2023) (where the 
NCAA discusses educational resources, best practices for campuses, data 
and research, and summits and task forces, which all seek to address 
the importance of safeguarding college athletes' mental health and 
where the NCAA states that ``[m]ental health [is a part of athlete 
health and] exists on a continuum, with resilience and thriving on one 
end of the spectrum and mental health disorders that disrupt a [college 
athlete's] functioning and performance at the other.'').
    67. The Transfer Eligibility Rule harms college athletes at every 
point in the transfer process and for the entire academic year where 
the Rule forces affected college athletes to watch from the sidelines 
and forego the benefits of competing in NCAA athletic events. The 
Rule's chilling effect on transfer decisions can discourage college 
athletes from seeking the environment that is most beneficial to their 
well-being, and the Rule can limit the choices a college athlete has 
when transferring by competitively disadvantaging them when seeking a 
new school. Beyond the transfer process itself, the Rule prevents 
affected college athletes from realizing the significant benefits that 
come from competing in NCAA athletic events that are available only 
through competing on gameday. Thus, the Transfer Eligibility Rule harms 
college athletes in the relevant markets.

The Transfer Eligibility Rule's Effects on Consumers

    68. The Transfer Eligibility Rule has downstream effects for 
consumers who attend NCAA athletic events in-person and for consumers 
who watch the events on television or listen on the radio. When the 
Transfer Eligibility Rule prevents college athletes from competing at 
their new institution after transferring, the Rule can decrease fan 
interest in a team's season by making popular players ineligible for 
competition and decreasing a team's competitiveness on gameday.
    69. Furthermore, the Transfer Eligibility Rule is a barrier to 
increased parity in college athletics that would create a better 
product for consumers. By discouraging transfers through the academic 
year in residence requirement, the Transfer Eligibility Rule benefits 
larger and historically successful sports programs by allowing them to 
retain talented players on their depth charts who may otherwise wish to 
transfer and may be better served by transferring to another 
institution. Similarly, programs outside of the traditional upper 
echelon of college athletics would benefit from an environment without 
the Transfer Eligibility Rule, as it would allow them to enroll such 
transferring college athletes and have them compete in their athletics 
program. This, in turn, would lead to more parity within college 
athletics. A more level playing field of talent among Division I 
institutions creates a more compelling product for consumers of college 
athletics, and the Transfer Eligibility Rule stifles this increase in 
parity. The Transfer Eligibility Rule harms consumers of college 
athletics by making teams less competitive while affected college 
athletes are ineligible for an entire academic year and by preventing 
increased parity in college athletics that would create a more 
compelling product for consumers.

The Rule of Restitution and Its Impact on College Athletes and NCAA 
Division I Institutions

    70. The Rule of Restitution, NCAA Bylaw 12.11.4.2, in a nutshell, 
provides that, if a plaintiff obtains an injunction against the 
unlawful conduct of the NCAA, and a college athlete and his or her 
member institution conduct themselves in conformity with that 
injunction, the NCAA may impose draconian punishments on both the 
athlete and the institution if the injunction is ``vacated, stayed or 
reversed or it is finally determined by the courts that injunctive 
relief is not or was not justified.'' Exhibit A at 66-67.
    71. The breadth of the Rule of Restitution is staggering and goes 
well beyond final adjudication on the merits in the NCAA's favor. For 
example, a college athlete could obtain a preliminary injunction to 
play during his final year of eligibility and, once the season is over, 
not wish to incur the cost and effort of continuing to litigate and 
instead wish to voluntarily dismiss. Alternatively, a court could 
determine that the athlete's eligibility had ended and the case was 
thereby mooted, resulting in dismissal. In both instances, the NCAA 
could impose harsh penalties in retaliation against the college athlete 
and the athlete's school even though the only court to consider the 
issue had ruled in the college athlete's favor.
    72. Knowing this, many universities will not permit college 
athletes who challenge NCAA rules in court to compete, even if a court 
issues a temporary restraining order or preliminary injunction finding 
that those rules are likely illegal. This, in turn, deters college 
athletes from challenging the NCAA's substantive eligibility rules, 
such as the Transfer Eligibility Rule.
    73. The Rule of Restitution's purpose and effect is to deter 
challenges to the NCAA's anticompetitive rules by attempting to deprive 
courts of the ability to grant effective relief and depriving 
individual college athletes and member universities of the practical 
ability to rely on court orders in their favor. Thus, the Rule of 
Restitution is itself a means of preventing defection from the 
anticompetitive agreement by member schools and of weaponizing the 
delay inherent in the litigation process to deter college athletes from 
mounting challenges to the antitrust merits of the NCAA's rules.
    74. For any relief granted by this Court during the pendency of 
this case or on the merits to be effective, this Court must enjoin the 
NCAA from enforcing the Rule of Restitution against

[[Page 49201]]

college athletes and NCAA member institutions in retaliation for 
compliance with orders from this Court. Absent relief enjoining the 
Rule of Restitution, schools still may not allow college athletes 
ineligible under the Transfer Eligibility Rule to play for fear of 
future retaliation by the NCAA.
    75. Because of the Rule of Restitution, college athletes run the 
risk of severe personal punishment and the risk of subjecting their 
schools or teammates to the harsh sanctions of the Rule of Restitution 
simply by following the terms of a court order. The rule amounts to the 
NCAA effectively deciding for itself the rules of interim relief rather 
than the courts. This deprives college athletes of the practical 
ability to rely on a court's temporary or preliminary injunctive relief 
in their favor. The Rule of Restitution is also a means of enforcing 
cartel-style discipline among the NCAA's member institutions, 
preventing defection, and manipulating rules of mootness to discourage 
challenges to the rules. For injunctive relief from this court to be 
effective, that relief must enjoin Defendant from punishing college 
athletes and member institutions under the Rule of Restitution simply 
for doing what a court of law prescribed for them to do.

Lack of Procompetitive Justifications

    76. With the anticompetitive effects of the Transfer Eligibility 
Rule in the relevant markets described above, the burden must shift to 
Defendant under the rule of reason to provide procompetitive 
justifications for the Transfer Eligibility Rule. Despite what the NCAA 
could offer as justifications for the Rule, these justifications are 
pretextual and cannot outweigh the anticompetitive effects of the rule. 
Furthermore, the purported goals for the Transfer Eligibility Rule can 
be accomplished through less restrictive alternatives that are already 
present in the NCAA's bylaws.

The Transfer Eligibility Rule's Purported Justifications are Pretextual

    77. The NCAA claims that bylaws such as the Transfer Eligibility 
Rule help college athletes maintain their academic progress and avoid 
falling behind due to the logistics and change that come with 
transferring schools. In addition, one purported justification for 
rules like the Transfer Eligibility Rule is that it promotes the NCAA's 
goal of preserving athletic amateurism, allowing it to widen consumer 
choice through a unique product of amateur sports distinct from 
professional sports. However, both the text and the actual impact of 
the Transfer Eligibility Rule make these justifications pretextual.
    78. Despite the NCAA's goal of promoting college athletes' academic 
well-being, the Transfer Eligibility Rule does not accomplish this goal 
and does not give college athletes additional time in their schedules 
to acclimate to a new campus environment. The Rule prevents college 
athletes from competing in NCAA athletic events for one academic year 
following a transfer. However, the Rule does not prevent those college 
athletes from participating in practices or other team activities 
during this year of ineligibility. Sitting out an entire season of 
practices and team workouts is not an option for college athletes who 
want to maintain their standing on a team. Thus, even under the 
restrictions of the Transfer Eligibility Rule, college athletes have no 
additional time in their schedules for increased attention to academics 
compared to their teammates who are eligible for competition except for 
a few hours on gameday when affected college athletes are forced to 
watch from the sidelines. Moreover, the NCAA does not limit the 
eligibility of freshman college athletes, whose transition from high 
school to college is far more arduous than that of a college athlete 
transferring between schools. Therefore, the Transfer Eligibility Rule 
does not promote the academic well-being of college athletes.
    79. Furthermore, the Transfer Eligibility Rule does not support the 
goal of maintaining athletic amateurism in the NCAA. The NCAA has 
claimed in previous cases that the amateur nature of college athletics 
makes it uniquely appealing to consumers, as it distinguishes NCAA 
athletics from professional sports leagues. However, as a matter of 
law, supposed benefits in the market for watching college athletics 
cannot counterbalance harms the distinct, sport-specific markets for 
college athlete labor. See Deslandes v. McDonald's United States, LLC, 
81 F.4th 699, 703 (7th Cir. 2023). Even if this cross-market balancing 
was appropriate, the Transfer Eligibility Rule has nothing to do with 
college athletes maintaining amateur status.
    80. NCAA Bylaw 12.1.2 requires that Division I college athletes 
maintain amateur status to be eligible for NCAA competition. Exhibit A 
at 37. This bylaw states:

    An individual loses amateur status and thus shall not be 
eligible for intercollegiate competition in a particular sport if 
the individual:
    (a) Uses athletics skill (directly or indirectly) for pay in any 
form in that sport;
    (b) Accepts a promise of pay even if such pay is to be received 
following completion of intercollegiate athletics participation;
    (c) Signs a contract or commitment of any kind to play 
professional athletics, regardless of its legal enforceability or 
any consideration received, except as permitted in Bylaw 12.2.5.1;
    (d) Receives, directly or indirectly, a salary, reimbursement of 
expenses or any other form of financial assistance from a 
professional sports organization based on athletics skill or 
participation, except as permitted by NCAA rules and regulations;
    (e) Competes on any professional athletics team per Bylaw 
12.02.12, even if no pay or remuneration for expenses was received, 
except as permitted in Bylaw 12.2.3.2.1;
    (f) After initial full-time collegiate enrollment, enters into a 
professional draft (see Bylaw 12.2.4); or
    (g) Enters into an agreement with an agent.

Id.
    81. By the definition the NCAA uses in its own bylaws, the Transfer 
Eligibility Rule does not affect anything related to a college 
athlete's amateur status. Allowing college athletes to practice all 
season with their teams but preventing them from competing on gameday 
does nothing to a college athlete's amateur status. The absence of the 
Transfer Eligibility Rule would do nothing to affect the amateur status 
of transferring college athletes. The Transfer Eligibility Rule does 
not serve the goal of preserving the NCAA's amateurism model nor does 
it help preserve the amateur status of college athletes, and the 
justifications for the Transfer Eligibility Rule are pretextual.

The Purported Goals of the Transfer Eligibility Rule Are Accomplished 
Through Less Restrictive Bylaws Already in Place

    82. While the goals of the Transfer Eligibility Rule may be 
promoting the academic well-being of college athletes and preserving 
athletic amateurism within the NCAA, less restrictive alternatives 
already exist within the NCAA's regulatory structure that ensure that 
college athletes maintain progress towards college degrees and prevent 
college sports from becoming a free agent market like professional 
sports leagues.

[[Page 49202]]

    83. NCAA Bylaws already require college athletes to maintain 
progress toward degrees to be eligible to compete in NCAA events. NCAA 
Bylaw 14.4.1 requires college athletes to ``maintain progress toward a 
baccalaureate or equivalent degree at that institution'' to be eligible 
for intercollegiate competition at their college or university. Exhibit 
A at 150-51. In addition, NCAA Bylaw 20.2.4.13 requires member 
institutions to publish their progress-toward- degree requirements for 
college athletes, thus making these requirements available to college 
athletes at each institution. Id. at 367. Other NCAA Bylaws require 
minimum credit hour and grade point averages for college athletes to be 
eligible for competition. Id. at 151, 154.
    84. Further, NCAA Bylaws already prohibit in-season transfers 
within the same sport. Specifically, NCAA Bylaw 14.5.5.3 states,

    A transfer student from a four-year institution who has received 
a waiver of or qualifies for an exception to the transfer residence 
requirement (per Bylaw 14.5.5.2) shall not be eligible for 
competition in which the [college athlete's' performance could be 
used for NCAA championship qualification or consideration if the 
[college athlete] participated in competition at the previous four- 
year institution in the same sport in which the [college athlete's] 
performance could have been used for NCAA championship qualification 
or consideration.

Id. at 168.
    85. These NCAA Bylaws setting minimum academic requirements and 
preventing in- season transfers already exist as less restrictive 
alternatives to achieving the goals of the Transfer Eligibility Rule. 
The academic eligibility requirements already in effect serve the goal 
of preventing college athletes from falling behind academically while 
still being eligible to compete in athletic events. If a college 
athlete fails to make adequate progress toward a degree or otherwise 
fails to meet minimum NCAA requirements, the student will be ineligible 
to participate in competition. The requirement that the member 
institutions provide college athletes with the progress-toward-degree 
requirements at each institution allows college athletes to adequately 
plan and know what will be required academically to maintain athletic 
eligibility.
    86. Furthermore, preventing in-season transfers with immediate 
eligibility serves the goal of preserving athletic amateurism among 
NCAA college athletes. This rule prevents the kind of free agent 
movement among teams seen in professional sports leagues by preventing 
college athletes from leaving mid-season either for participation on a 
higher-achieving team or in search of more playing time. These goals 
are accomplished without the unwarranted restrictions of the Transfer 
Eligibility Rule.
    87. With the goals of the Transfer Eligibility Rule met by less 
restrictive alternatives already present in the NCAA's Bylaws, the NCAA 
cannot justify imposing the restrictions of the Transfer Eligibility 
Rule on college athletes. Any purported benefits of the Transfer 
Eligibility Rule are far outweighed by the harm the rule inflicts on 
college athletes and consumers of college athletics. With less 
restrictive alternatives already in place, there is no justification 
for the NCAA to restrict the choices of college athletes in the 
relevant markets by enforcing the Transfer Eligibility Rule.

Count 1: Violation of Section 1 of the Sherman Act

    88. Plaintiffs repeat and reallege each allegation set forth in the 
preceding paragraphs as if fully set forth herein.
    89. Defendant NCAA, by and through its officers, directors, 
employees, agents or other representatives, and its member institutions 
have entered an illegal agreement to restrain and suppress competition 
in the relevant markets through the adoption and enforcement of the 
Transfer Eligibility Rule. Specifically, the NCAA and NCAA member 
institutions have agreed to unlawfully restrain the ability of Division 
I college athletes to transfer to other Division I schools without loss 
of athletic eligibility. The restraint imposed by the Transfer 
Eligibility Rule cannot withstand analysis under the rule of reason.
    90. The markets for athletic services in men's and women's Division 
I basketball and football bowl subdivision (``FBS'') football and for 
athletics services in all other men's and women's Division I sports are 
relevant antitrust markets. The transactions between NCAA member 
institutions and college athletes in these markets are commercial in 
nature and fall under the purview of the Sherman Act.
    91. This unlawful agreement among horizontal competitors has 
unreasonably restrained competition among schools for the college 
athletes competing in the relevant markets, as transferring college 
athletes potentially face a one-year waiting period before obtaining 
full eligibility to compete in NCAA athletic events at their new member 
institution. The threat of this one-year waiting period discourages 
transfers, disadvantages college athletes subject to this waiting 
period, and prevents college athletes from realizing the benefits of 
competing in NCAA athletic events for an entire academic year.
    92. Division I college athletes have been deprived of the benefits 
of free and open competition because of the Transfer Eligibility Rule. 
Furthermore, college athletes forced to wait a year prior to 
eligibility after transferring are deprived of the benefits that come 
from competition in NCAA Division I athletic events, harming these 
college athletes' current and future earning potentials.
    93. As a direct result of Defendant's conduct, Division I college 
athletes and consumers of college athletics have suffered and continue 
to suffer antitrust injury due to the reduction in competition among 
Division I schools for college athletes through the restrictions 
imposed by the Transfer Eligibility Rule.
    94. The Transfer Eligibility Rule yields few, if any, benefits to 
competition in Division I collegiate athletics to the NCAA's member 
institutions, to college athletes, or to consumers of NCAA athletics 
contests. Any such benefits are far outweighed by the harm to 
competition and to the college athletes who are subject to the Transfer 
Eligibility Rule. Furthermore, the NCAA bylaws already contain less 
restrictive alternatives that accomplish the NCAA's goals for the 
Transfer Eligibility Rule.
    95. Defendant's conduct is ongoing and will continue to impose 
injury on college athletes and consumers of college athletics unless 
injunctive relief is granted. This ongoing harm from the Transfer 
Eligibility Rule affects residents and the economies of the Plaintiff 
States by unreasonably restraining trade in labor markets for college 
athletics within the Plaintiff States and throughout the United States.
    96. Defendant and its member institutions' anticompetitive acts 
were intentionally directed at the United States market and had a 
substantial and foreseeable effect on interstate commerce.

Prayer for Relief

    Wherefore, Plaintiffs respectfully request that this Court:
    97. Adjudge and decree that Defendant's enforcement of NCAA Bylaw 
14.5.5.1 violates section 1 of the Sherman Act, 15 U.S.C. 1;
    98. Enter a permanent injunction, in a form that the Court deems 
just and proper, pursuant to 15 U.S.C. 4 and 26, enjoining Defendant 
from continuing to violate section 1 of the Sherman Act by enforcing 
NCAA Bylaw 14.5.5.1 and from enforcing NCAA Bylaw 12.11.4.2

[[Page 49203]]

to punish college athletes and member institutions for actions taken in 
compliance with any orders from this Court;
    99. Award to each Plaintiff its costs, including reasonable 
attorneys' fees; and
    100. Order any other relief that this Court deems just and proper.

Dated: January 18, 2024

Dave Yost
Ohio Attorney General

Erik Clark
Deputy Attorney General for Major Litigation

Jennifer L. Pratt
Director of Major Litigation

Beth A. Finnerty
Section Chief, Antitrust Section

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William C. Becker (pro hac vice)
Principal Assistant Attorney General

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Steven Oldham (pro hac vice)
Assistant Attorney General, Major Litigation

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Edward J. Olszewski (pro hac vice)
Assistant Section Chief, Antitrust Section

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Derek M. Whiddon (pro hac vice)
Assistant Attorney General, Antitrust Section

Office of the Ohio Attorney General, 30 E. Broad St., 26th Floor, 
Columbus, OH 43215, Telephone: (614) 466-4328, Email: 
[email protected], [email protected], 
[email protected], [email protected].

Attorneys for Plaintiff State of Ohio

FOR PLAINTIFF COMMONWEALTH OF VIRGINIA:

Jason S. Miyares
Attorney General of Virginia

Andrew N. Ferguson
Solicitor General

Kevin M. Gallagher
Deputy Solicitor General and Director of Tenth Amendment Litigation

Steven G. Popps
Deputy Attorney General, Civil Division

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Tyler T. Henry (pro hac vice forthcoming)
Assistant Attorney General and Manager, Antitrust Unit

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Jonathan M. Harrison II (pro hac vice forthcoming)
Assistant Attorney General, Consumer Protection Section

Office of the Virginia Attorney General, 202 North 9th Street, 
Richmond, Virginia 23219, Phone: (804) 496-0485, 
[email protected], [email protected].

Attorneys for Plaintiff Commonwealth of Virginia
For Plaintiff District of Columbia:

Brian Schwalb
Attorney General

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Adam Gitlin
Chief, Antitrust and Nonprofit Enforcement Section (pro hac vice 
forthcoming)

Mehreen Imtiaz
Assistant Attorney General (pro hac vice forthcoming)

Office of the Attorney General for the District of Columbia, 400 6th 
Street NW, 10th Floor, Washington, DC 20001, Phone: 202-442-9864 
(Gitlin), [email protected], [email protected].

Attorneys for Plaintiff District of Columbia

FOR PLAINTIFF STATE OF COLORADO:

Philip J. Weiser
Attorney General
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Bryn Williams
First Assistant Attorney General (pro hac vice)

Elizabeth W. Hereford
Assistant Attorney General (pro hac vice)

Colorado Department of Law, Office of the Attorney General, Ralph L. 
Carr Judicial Center, 1300 Broadway, 7th Floor, Denver, CO 80203, 
Telephone: (720) 508-6000, Email: [email protected], 
[email protected].

Attorneys for Plaintiff State of Colorado

FOR PLAINTIFF STATE OF ILLINOIS:

Kwame Raoul
Attorney General

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Elizabeth L. Maxeiner
Chief, Antitrust Bureau

Elizabeth L. Maxeiner
Chief, Antitrust Bureau (pro hac vice)
Brian M. Yost
Assistant Attorney General, Antitrust Bureau (pro hac vice)

Office of the Illinois Attorney General, 100 W. Randolph St., Fl. 
11, Chicago, IL 60601, Phone: (773) 790-7935, 
[email protected], [email protected].

Attorneys for Plaintiff State of Illinois

FOR PLAINTIFF STATE OF MINNESOTA:

Keith Ellison
Attorney General

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Elizabeth Odette
Assistant Attorney General, Manager, Antitrust Division (pro hac 
vice forthcoming)

James Canaday
Deputy Attorney General, Consumer Protection Division

Elizabeth Odette
Assistant Attorney General, Manager, Antitrust Division

Jon Woodruff
Assistant Attorney General, Antitrust Division

Office of the Minnesota Attorney General, 445 Minnesota St., Suite 
#1400, St. Paul, MN 55101, Phone: (651) 728-7208 (Odette), 
[email protected], [email protected], 
[email protected].

Attorneys for Plaintiff State of Minnesota

FOR PLAINTIFF STATE OF MISSISSIPPI:

Lynn Fitch
Attorney General

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Caleb Pracht (pro hac vice forthcoming)
Special Assistant Attorney General, Consumer Protection Division

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Elisabeth Hart Martin (pro hac vice forthcoming)
Deputy Director, Consumer Protection Division

Mississippi Office of the Attorney General, 550 High Street, P.O. 
Box 220, Jackson, MS 39205, Telephone: 601-359-4223, 
[email protected], [email protected].

Attorneys for Plaintiff State of Mississippi

FOR PLAINTIFF STATE OF NEW YORK:

Letitia James
Attorney General

Christopher D'Angelo
Chief Deputy Attorney General, Economic Justice Division

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Elinor R. Hoffmann (pro hac vice)
Chief, Antitrust Bureau

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Amy McFarlane (pro hac vice)
Deputy Chief, Antitrust Bureau

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Bryan Bloom (pro hac vice)
Senior Enforcement Counsel, Antitrust Bureau

New York State Office of the Attorney General, 28 Liberty Street, 
New York, NY 10005, Telephone: (212) 416-8269 (Hoffmann), Email: 
[email protected], [email protected], 
[email protected]

Attorneys for Plaintiff State of New York

FOR PLAINTIFF STATE OF NORTH CAROLINA:

Joshua H. Stein
Attorney General of North Carolina

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Jasmine McGhee *
Senior Deputy Attorney General

Jonathan R. Marx *
Special Deputy Attorney General

Kunal Choksi *
Special Deputy Attorney General

North Carolina Department of Justice, 114 W Edenton St., Raleigh, NC 
27603, Telephone: (919) 716-8611, Email: [email protected].

Attorneys for Plaintiff State of North Carolina

* pro hac vice

FOR PLAINTIFF STATE OF TENNESSEE:

Jonathan Skrmetti
Attorney General and Reporter

J. David McDowell
Deputy, Consumer Protection Division (pro hac vice)

Ethan Bowers
Senior Assistant Attorney General (pro hac vice)

Tyler T. Corcoran
Assistant Attorney General (pro hac vice)

Office of the Attorney General and Reporter P.O. Box 20207, 
Nashville, TN 37202, Phone: (615) 741-8722, Email: 
[email protected], [email protected].

Attorneys for Plaintiff State of Tennessee


[[Page 49204]]


FOR PLAINTIFF STATE OF WEST VIRGINIA AND AS LOCAL COUNSEL FOR 
PLAINTIFFS
STATE OF OHIO, COMMONWEALTH OF VIRGINIA, DISTRICT OF COLUMBIA, AND 
STATES OF COLORADO, ILLINOIS, MINNESOTA, MISSISSIPPI, NEW YORK, 
NORTH CAROLINA, AND TENNESSEE:

State of West Virginia ex rel.
Patrick Morrisey
Attorney General

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J Michael R. Williams
Principal Deputy Solicitor General

Douglas L. Davis, Sr.
Assistant Attorney General

Matthew M. Morrison
Assistant Attorney General

Office of the West Virginia Attorney General, P.O. Box 1789, 
Charleston, WV 25326, Ph. (304) 558-8986, Fax. (304) 558-0184, 
[email protected], [email protected], 
[email protected].

Attorneys for State of West Virginia and Local Counsel for 
Plaintiffs State of Ohio, Commonwealth of Virginia, District of 
Columbia, and States of Colorado, Illinois, Minnesota, Mississippi, 
New York, North Carolina, and Tennessee

FOR PLAINTIFF UNITED STATES OF AMERICA:
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Jonathan S. Kanter
Assistant Attorney General for Antitrust

Doha Mekki
Principal Deputy Assistant Attorney General for Antitrust

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Michael B. Kades
Deputy Assistant Attorney General for Antitrust

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Ryan Danks
Director of Civil Enforcement

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Miriam R. Vishio
Deputy Director of Civil Enforcement

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Yvette Tarlov
Chief, Media, Entertainment, and Communications Section

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Jared A. Hughes
Assistant Chief, Media, Entertainment, and Communications Section

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James H. Congdon*
Benjamin Rudfosky
Brendan Sepulveda*
Trial Attorneys

United States Department of Justice, Antitrust Division, Media, 
Entertainment, and Communications Section, 450 Fifth Street NW, 
Suite 7000, Washington, DC 20530, Tel: 202-598-2311, Fax: 202-514-
6381, Email: [email protected], [email protected], 
[email protected].

* pro hac vice forthcoming

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William J. Ihlenfeld
United States Attorney

Maximillian F. Nogay
Jordan V. Palmer
Assistant United States Attorneys

United States Attorney's Office Northern District of West Virginia, 
P.O. Box 591, 1125 Chapline Street, Suite 3000, Wheeling, WV 26003, 
Tel: 304-234-0100, Fax: 304-234-0110, Email: [email protected], 
[email protected].

In the United States District Court for the Northern District of West 
Virginia Clarksburg Division

    State of Ohio, 30 E. Broad St., 26th Floor, Columbus, OH 43215, 
Plaintiffs, v. National Collegiate Athletic Association, 700 W. 
Washington Street, P.O. Box 6222, Indianapolis, IN 46206-6222, 
Defendant.

Case No: 1:23-cv-00100
Judge Bailey

EXHIBIT A TO AMENDED COMPLAINT

(Exhibit A is NCAA, Division I 2023-24 Manual, available at https://web3.ncaa.org/lsdbi/reports/getReport/90008)

In the United States District Court for the Northern District of West 
Virginia Clarksburg Division

    State of Ohio, State of Colorado, State of Illinois, State of 
Minnesota, State of Mississippi, State of New York, State of North 
Carolina, State of Tennessee, Commonwealth of Virginia, State of West 
Virginia, District of Columbia, and United States of America, 
Plaintiffs, v. National Collegiate Athletic Association, Defendant.

Civil No. 1:23-cv-100
Judge John Preston Bailey

[Proposed] Final Judgment and Permanent Injunction

    1. Whereas the Plaintiff States of Ohio, Colorado, Illinois, 
Minnesota, Mississippi, New York, North Carolina, Tennessee, and West 
Virginia; the Commonwealth of Virginia; the District of Columbia 
(collectively, ``States''); and the
    United States of America have brought this action alleging 
violations of the Sherman Act, 15 U.S.C. 1 et seq., against Defendant 
National Collegiate Athletic Association (``NCAA'').
    2. Whereas Plaintiff States, through their respective Attorneys 
General, are duly authorized to bring suits for injunctive relief to 
enforce the Sherman Act pursuant to 15 U.S.C. 1 and 26.
    3. Whereas Plaintiff United States of America is duly authorized to 
bring suits for injunctive relief to enforce the Sherman Act pursuant 
to 15 U.S.C. 1 and 4.
    4. Whereas all parties consent to this venue and to the personal 
jurisdiction of the Court for purposes of this litigation, entry of the 
Final Judgment, and any subsequent litigation to enforce its terms.
    5. Whereas this Court has subject matter jurisdiction over this 
action under 15 U.S.C. 4 and 28 U.S.C. 1331 and 1337(a), and in the 
case of Plaintiff United States, 28 U.S.C. 1345.
    6. Whereas the NCAA's member institutions and conferences have 
adopted rules and regulations governing certain aspects of college 
sports.
    7. Whereas NCAA Bylaw \1\ 14.5.5.1, herein referred to as the 
Transfer Eligibility Rule, provides that certain transfer students 
shall not be eligible for intercollegiate competition in Division I 
until they have fulfilled an academic ``year of residence'' at their 
new institution, unless they qualify for a transfer exception or secure 
a waiver.
---------------------------------------------------------------------------

    \1\ All references to ``Bylaws'' or ``NCAA Rules'' are to the 
NCAA Division I 2023-24 Manual.
---------------------------------------------------------------------------

    8. Whereas Plaintiffs allege that the Transfer Eligibility Rule has 
unreasonably restrained competition for Division I student-athletes 
among schools and has prevented them from realizing the benefits of 
free and open competition for their athletic services.
    9. Whereas Plaintiffs allege that the Transfer Eligibility Rule 
yields few, if any, procompetitive benefits.
    10. Whereas Plaintiffs allege that, as a direct result of the 
NCAA's conduct, Division I student-athletes and consumers of college 
athletics have suffered and continue to suffer antitrust injury due to 
the reduction in competition among member institutions for student-
athletes' services.
    11. Whereas Plaintiffs therefore allege that the Transfer 
Eligibility Rule is an illegal agreement to restrain and suppress 
competition in the nationwide market for Division I student-athletes' 
labor in intercollegiate athletics, in violation of section 1 of the 
Sherman Act.
    12. Whereas NCAA Bylaw 12.11.4.2, herein referred to as the Rule of 
Restitution, provides that, if a student-athlete obtains an injunction 
against the NCAA, and the student-athlete and his or her member 
institution conduct themselves in conformity with that injunction, the 
NCAA may nonetheless impose certain penalties on both the student-
athlete and the member institution if the injunction is ultimately 
vacated, stayed, or reversed.
    13. Whereas Plaintiffs allege that the Rule of Restitution deters 
member institutions from relying on court orders finding that the 
NCAA's rules are

[[Page 49205]]

anticompetitive (or otherwise illegal) and, therefore, deprives courts 
of the ability to grant effective relief from violations of state and 
federal law.
    14. Whereas Plaintiffs allege that for injunctive relief 
prohibiting enforcement of the Transfer Eligibility Rule to be 
effective, the NCAA must also be enjoined from enforcing the Rule of 
Restitution to punish member institutions or student-athletes who 
immediately participate in intercollegiate competition following a 
transfer.
    15. Whereas following an evidentiary hearing, the Court entered a 
temporary restraining order and preliminary injunctive relief against 
the NCAA enjoining enforcement of the Transfer Eligibility Rule and the 
Rule of Restitution. Dkt. 39, 63.
    16. Whereas Plaintiffs allege that absent permanent injunctive 
relief, Division I student-athletes will continue to suffer irreparable 
harm from the Transfer Eligibility Rule, whether by missing games that 
cannot be replayed, failing to secure name, image, and likeness 
(``NIL'') deals or professional opportunities that would otherwise be 
available, or foregoing transfer decisions they would otherwise pursue.
    17. Whereas Plaintiffs allege that the balance of the equities 
favors issuing a permanent injunction, and issuance of a permanent 
injunction is in the public interest.
    18. Whereas the United States and the NCAA have agreed to resolve 
this matter by entry of this Final Judgment.
    Accordingly, it is Hereby Ordered, Adjudged, and Decreed:
    19. The foregoing recitals are incorporated and made a part of this 
Final Judgment.
    20. The NCAA shall take all steps necessary to comply with the 
Stipulation and Order entered by the Court.
    21. This Final Judgment resolves only the United States' claims 
with respect to the Transfer Eligibility Rule as applied to Division I 
student-athletes and does not affect other Bylaws or claims not made in 
this action. For the avoidance of doubt, this Final Judgment does not 
apply to any Bylaws of NCAA Division II or NCAA Division III nor does 
it resolve any antitrust claims regarding those rules.
    22. The NCAA and any person or organization acting in concert with 
it (including but not limited to its officers, employees, staff, member 
institutions, councils, and committees), are permanently restrained and 
enjoined from:
    a. enforcing the Transfer Eligibility Rule, NCAA Bylaw 14.5.5.1, or 
any substantially similar rule requiring a Division I student-athlete 
to maintain a period of residence or otherwise refrain from competition 
solely because of a transfer between NCAA member institutions;
    b. enforcing the Rule of Restitution, NCAA Bylaw 12.11.4.2, on any 
Division I member institution or student-athlete related to a student-
athlete's participation in intercollegiate competition following a 
transfer in reliance on this Court's temporary restraining order or 
preliminary injunction or this Final Judgment;
    c. taking any other action to retaliate against a Division I member 
institution for conduct related to the Transfer Eligibility Rule, 
including but not limited to (i) supporting a student-athlete who 
challenged the Transfer Eligibility Rule or (ii) permitting a student-
athlete to compete during the period of this Court's temporary 
restraining order or its preliminary injunction in reliance on those 
orders; and
    d. taking any action to retaliate against any Division I student-
athlete that transferred NCAA member institutions, including but not 
limited to those student-athletes who (i) challenged the Transfer 
Eligibility Rule, (ii) sought a waiver from the Transfer Eligibility 
Rule, or (iii) competed during the period of this Court's temporary 
restraining order or its preliminary injunction in reliance on those 
orders.
    23. The NCAA shall provide an additional year of eligibility to any 
Division I student-athlete who was deemed ineligible to compete for a 
season or any portion of a season of competition occurring during or 
since the 2019-20 academic year because of the Transfer Eligibility 
Rule provided the student-athlete:
    a. transferred between two member institutions more than once;
    b. is currently enrolled at a Division I member institution; and
    c. is currently eligible to compete, or their eligibility expired 
at the end of a season of competition completed during the 2023-24 
academic year.
    For the avoidance of doubt, a Division I student-athlete described 
in this provision shall have no fewer than six calendar years to 
complete their four seasons of intercollegiate competition in any one 
sport (see NCAA Bylaw 12.8), instead of the five calendar years set 
forth under NCAA Bylaw 12.8.1.
    24. For the purposes of determining or securing compliance with 
this Final Judgment or determining whether this Final Judgment should 
be modified or vacated, upon written request of Plaintiffs and 
reasonable notice to the NCAA, the NCAA must:
    a. permit, subject to legally recognized privileges, authorized 
representatives of Plaintiffs to inspect all books, ledgers, accounts, 
records, data, and documents in the possession, custody, or control of 
the NCAA relating to any matters contained in this Final Judgment;
    b. permit, subject to legally recognized privileges, authorized 
representatives of Plaintiffs to interview, either informally or on the 
record, the NCAA's officers, employees, or agents relating to any 
matters contained in this Final Judgment; and
    c. submit written reports or respond to written interrogatories, 
under oath if requested, relating to any matters contained in this 
Final Judgment.
    25. No information or documents obtained pursuant to this Final 
Judgment may be divulged by Plaintiffs to any person other than an 
authorized representative of Plaintiffs, except (a) in the course of 
legal proceedings to which the United States is a party, including 
grand-jury proceedings; (b) for the purpose of securing compliance with 
this Final Judgment; or (c) as otherwise required by law.
    26. If the United States receives a request under the Freedom of 
Information Act, 5 U.S.C. 552, for disclosure of documents or 
information obtained pursuant to this Final Judgment, the United States 
will act in accordance with that statute and with all applicable 
Department of Justice regulations regarding the protection of 
confidential commercial information. When providing any documents or 
information to the United States pursuant to this Final Judgment, the 
NCAA should designate the confidential portions of such materials as 
provided by 28 CFR 16.7.
    27. Within sixty (60) days of entry of this Final Judgment, the 
NCAA shall post a copy of this Final Judgment on its public website.
    28. The NCAA shall not take any action, nor adopt any rules, by-
laws or policies that have the effect of undermining or circumventing 
the provisions of this Final Judgment.
    29. The Court will retain jurisdiction for purposes of enforcing 
this Final Judgment and resolving any dispute that may arise under it.
    30. Plaintiff United States retains and reserves all rights to 
enforce the provisions of this Final Judgment, including the right to 
seek an order of contempt from the Court. The NCAA agrees that in a 
civil contempt action, a motion to show cause, or a similar action 
brought by the United States relating to an alleged violation of this

[[Page 49206]]

Final Judgment, the United States may establish a violation of this 
Final Judgment and the appropriateness of a remedy therefor by a 
preponderance of the evidence, and the NCAA waives any argument that a 
different standard of proof should apply. This Final Judgment should be 
interpreted to give full effect to the procompetitive purposes of the 
antitrust laws and to restore the competition Plaintiffs allege was 
harmed by the challenged conduct. The NCAA agrees that it may be held 
in contempt of, and that the Court may enforce, any provision of this 
Final Judgment that, as interpreted by the Court in light of these 
procompetitive principles and applying ordinary tools of 
interpretation, is stated specifically and in reasonable detail, 
whether or not it is clear and unambiguous on its face. In any such 
interpretation, the terms of this Final Judgment should not be 
construed against either party as the drafter.
    31. In connection with a successful effort by the United States to 
enforce this Final Judgment against the NCAA, whether litigated or 
resolved before litigation, the NCAA agrees to reimburse the United 
States for reasonable fees and expenses incurred by its attorneys, as 
well as all other costs including experts' fees, reasonably incurred in 
connection with that effort to enforce this Final Judgment, including 
in the investigation of the potential violation.

Dated: _____, 2024

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John Preston Bailey,
United States District Judge.

In the United States District Court for the Northern District of West 
Virginia Clarksburg Division

    State of Ohio, State of Colorado, State of Illinois, State of 
Minnesota, State of Mississippi, State of New York, State of North 
Carolina, State of Tennessee, Commonwealth of Virginia, State of West 
Virginia, District of Columbia, and United States of America, 
Plaintiffs, v. National Collegiate Athletic Association, Defendant.

Civil No. 1:23-cv-100
 Judge John Preston Bailey

Competitive Impact Statement

    In accordance with the Antitrust Procedures and Penalties Act, 15 
U.S.C. 16(b)-(h) (the ``APPA'' or ``Tunney Act''), the United States of 
America files this Competitive Impact Statement related to the proposed 
Final Judgment here.\1\
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    \1\ The Plaintiff States and the NCAA have agreed to a parallel 
proposed Consent Judgment that would resolve the States' claims in 
this action.
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I. Nature and Purpose of the Proceeding

    The United States joined this action against Defendant National 
Collegiate Athletic Association (``NCAA'') on January 18, 2024, to 
remedy a violation of section 1 of the Sherman Act, 15 U.S.C. 1. 
section 1 of the Sherman Act prohibits ``contract[s], combination[s], 
or conspirac[ies]'' in restraint of trade or commerce.'' 15 U.S.C. 1. 
The Sherman Act is designed to ensure ``free and unfettered competition 
as the rule of trade. It rests on the premise that the unrestrained 
interaction of competitive forces will yield the best allocation of our 
economic resources, the lowest prices, the highest quality and the 
greatest material progress. . . .'' National Collegiate Athletic Ass'n 
v. Board of Regents of Univ. of Okla., 468 U.S. 85, 104 n.27 (1984) 
(quoting Northern Pac. Ry. v. United States, 356 U.S. 1, 4-1 (1958)).
    The Amended Complaint alleges that the NCAA and its Division I 
members agreed to limit competition for student athletes. Former NCAA 
Bylaw 14.5.5.1 (the ``Transfer Eligibility Rule'') unjustifiably 
restrained the ability of college athletes to engage in the market for 
their labor.\3\ The Transfer Eligibility Rule, which was in effect at 
the time the Amended Complaint was filed and is described in more 
detail below, imposed a one-year delay in the eligibility of certain 
college athletes transferring between NCAA member institutions and thus 
reduced competition in the labor market for college athletes. This rule 
increased the cost of student-athletes transferring to different 
institutions and made Division I institutions less interested in 
recruiting student athletes.
---------------------------------------------------------------------------

    \3\ Plaintiffs State of Ohio, State of Colorado, State of 
Illinois, State of New York, State of North Carolina, State of 
Tennessee, and State of West Virginia filed the initial Complaint in 
this action on Dec. 7, 2023. Plaintiff United States, along with 
Plaintiffs Commonwealth of Virginia, District of Columbia, State of 
Minnesota, and State of Mississippi joined this action via an 
Amended Complaint filed on January 18, 2024.
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    The Amended Complaint also alleges that NCAA Bylaw 12.11.4.2 (the 
``Rule of Restitution'') furthers the anticompetitive effects of 
certain eligibility rules by deterring college athletes from 
challenging those rules. Under that rule, the NCAA can punish college 
athletes (and their associated institutions) that bring a legal 
challenge against the NCAA's eligibility rules and receive a court-
ordered injunction barring enforcement of those rules, if the 
injunction is later overturned or stayed. Concurrently with filing the 
initial Complaint, Plaintiffs sought a temporary restraining order to 
enjoin Defendant from enforcing the Transfer Eligibility Rule and the 
Rule of Restitution. ECF No. 2.
    The Court granted Plaintiffs' request for a temporary restraining 
order, finding that Plaintiffs were likely to succeed on the merits and 
enjoining the NCAA from enforcing the Transfer Eligibility Rule and the 
Rule of Restitution. Ohio v. National Collegiate Athletic Ass'n, No. 
1:23-CV-100,--F.Supp.3d--,2023 WL 9103711 (N.D. W. Va. Dec. 13, 2023). 
The Court subsequently converted the temporary restraining order into a 
preliminary injunction upon agreement of the parties. ECF No. 63.
    On April 17, 2024, the NCAA's Division I Council voted to withdraw 
the Transfer Eligibility Rule, modifying its bylaws to allow players to 
freely transfer multiple times without a year-in-residence requirement. 
This change was approved by the NCAA's Board of Governors on April 22, 
2024. See Division I Board of Directors ratifies transfer, NIL rule 
changes, available at: https://www.ncaa.org/news/2024/4/22/media-center-division-i-board-of-directors-ratifies-transfer-nil-rule-changes.aspx.
    The United States has now filed a proposed Final Judgment and 
Stipulation and Order, which are designed to ensure that the loss of 
competition alleged in the Amended Complaint is fully remedied and does 
not recur. Under the proposed Final Judgment, which is explained more 
fully below, the NCAA would be permanently enjoined from enforcing the 
former Transfer Eligibility Rule and prohibited from implementing 
similar rules in the future. The Stipulation and Order requires the 
NCAA to abide by and comply with the provisions of the proposed Final 
Judgment until the proposed Final Judgment is entered by the Court or 
until expiration of time for all appeals of any Court ruling declining 
entry of the proposed Final Judgment.
    The United States and the NCAA have stipulated that the proposed 
Final Judgment may be entered after compliance with the APPA. Entry of 
the proposed Final Judgment will terminate this action, except that the 
Court will retain jurisdiction to construe, modify, or enforce the 
provisions of the proposed Final Judgment and to punish violations 
thereof.

II. Description of Events Giving Rise to the Alleged Violation

A. Defendant NCAA

    Defendant NCAA is an unincorporated association that acts as the 
governing body of college sports.

[[Page 49207]]

Am. Compl. ] 17. The NCAA includes more than 1,000 member colleges and 
universities throughout the United States. Id. These member 
institutions are organized into three divisions, including Division I, 
which includes over 350 schools and allows for scholarships. Id. 
Division I schools compete with each other not only through athletic 
events but also in other upstream and downstream economic markets: for 
instance, NCAA Division I schools ``compete against each other to 
attract television revenues,'' Board of Regents, 468 U.S. at 99, and, 
at issue in this case, ``compete fiercely'' in the labor market ``for 
student athletes.'' National Collegiate Athletic Ass'n v. Alston, 594 
U.S. 69, 86 (2021). Through the NCAA Constitution and Bylaws, the NCAA 
and its members have adopted regulations governing all aspects of 
college sports, including the Transfer Eligibility Rule. The NCAA 
Constitution and Bylaws are adopted by the votes of member institutions 
and various NCAA councils, and they may be amended by votes of member 
institutions or NCAA councils. Am. Compl. ] 17. Accordingly, the rules 
set forth in the NCAA Constitution are horizontal agreements between 
the NCAA and its member institutions and among NCAA member 
institutions. Id.
    An academic institution that wishes to participate in any 
meaningful way in the highest and most popular level of collegiate 
athletics must maintain membership in the NCAA and abide by its 
Division I rules, regulations, and bylaws. Am. Compl. ] 18. Failure to 
abide by these rules puts academic institutions at risk of punitive 
measures from the NCAA that include, among other things, reduced 
athletic scholarships, prohibitions on postseason eligibility, vacating 
of previously earned wins, and monetary fines. Id. Because the NCAA and 
its member institutions have monopsony power in controlling the highest 
and most popular level of college athletics, any individual who wishes 
to provide athletic services in exchange for full or partial payment of 
undergraduate tuition as well as other substantial benefits gained from 
competing at the highest level of collegiate athletics must by 
necessity attend an NCAA Division I member institution and has no 
option but to abide by its rules. Am. Compl. ] 19.
    Participation in NCAA Division I athletics offers college athletes 
unique opportunities that are not available elsewhere: (i) the ability 
to exchange athletics services for the payment of the partial or full 
cost of an education plus room and board, (ii) high quality academic 
educational services, (iii) top-of-the-line training facilities, (iv) 
high quality coaches who will best be able to launch players to 
professional careers, (v) national publicity through national 
championships and nationwide broadcasting contracts, (vi) opportunities 
to profit from name, image, and likeness (``NIL'') agreements, and 
(vii) competition at the highest level of collegiate athletics. Am. 
Compl. ] 20.

B. Relevant Markets

    Within NCAA Division I athletics, the Transfer Eligibility Rule 
affects labor markets for athletic services in men's and women's 
Division I sports, wherein each college athlete participates in his or 
her sport-specific market. See Am. Compl. ] 27. Within these markets, 
NCAA member institutions compete to attract and enroll elite-level 
college athletes. In so doing, NCAA member institutions secure the 
labor of these college athletes through in-kind benefits: specifically, 
scholarships, academic programs, access to modern training facilities, 
and training from premier coaches and their staff. Id.
    Participation in NCAA Division I athletic competition confers 
significant and unique benefits to college athletes, such as the 
ability to showcase their skill before national audiences, gain 
exposure to professional team scouts, and compete against other elite 
college athletes. Am. Compl. ] 29. In addition, NIL agreements allow 
college athletes to benefit financially--sometimes for millions of 
dollars--from the aforementioned national exposure and elite 
competitive environment that NCAA Division I athletics provide. Id. 
There are no practical alternatives to NCAA Division I athletics for 
college athletes who seek these benefits. Id. at ] 30.
    The relevant geographic market is the United States. NCAA member 
institutions are located across the country, and many college athletes 
are willing to enroll in schools far distant from home to pursue 
athletic opportunities. Therefore, those NCAA member institutions 
engage in competition in the relevant labor markets throughout the 
United States. Am. Compl. ] 28. Within the relevant geographic and 
labor markets, the NCAA maintains exclusive power, dictating the rules 
and regulations for participation Division I athletics through the 
Division I Council and NCAA member institutions. Id. at ] 32.

C. The Transfer Eligibility Rule

    Under the Transfer Eligibility Rule, ``[a] transfer student from a 
four-year institution shall not be eligible for intercollegiate 
competition at a[n NCAA] member until the student has fulfilled a 
residence requirement of one full academic year (two full semesters or 
three full quarters) at the certifying institution.'' Am. Compl. ] 23 
(quoting NCAA Division I 2023-24 Manual, Am. Compl. Ex. A at 165). 
Although the Transfer Eligibility Rule was a default rule that applied 
to all transfers, a separate rule created an exemption for the first 
time a college athlete transfers; thus, the Transfer Eligibility Rule 
in effect applied only to the second time (or more) that a college 
athlete transferred schools. Id. While the Rule barred a college 
athlete from competing during this one-year waiting period, it did not 
exempt college athletes from all the other requirements and 
obligations--including practicing, traveling with the team, and other 
commitments--of being a college athlete. Id. Under NCAA Bylaw 12.8.1, 
college athletes have five calendar years to complete four seasons of 
competitive eligibility in any one sport. See Am. Compl. Ex. A at 55. 
Thus, this one-year waiting period removed 20% of the total time 
available for the college athlete to complete her athletic career. 
College athletes were thus forced to weigh the one-year ineligibility 
period against the potential benefits of moving to a better opportunity 
at another school. Am. Compl. ] 7. While the Rule provided for the 
possibility of a waiver of the ineligibility period, the granting of 
the waiver was at the discretion of the NCAA and only after the college 
athlete had already enrolled in a new school. In practice, those 
waivers were inconsistently and arbitrarily awarded, and, in any event, 
the uncertainty of the waiver process itself was a deterrent to 
transferring. Am. Compl. ] 39.

D. The ``Rule of Restitution''

    The NCAA Bylaws contain what is commonly known as the ``Rule of 
Restitution,'' which allows the NCAA to punish college athletes and 
their member institutions for actions taken in accordance with court 
orders if those orders are later revoked. Am. Compl. ] 25 (citing NCAA 
Bylaw 12.11.4.2, Am. Compl. Ex. A at 66-67). For example, under the 
Rule of Restitution, were a college athlete to challenge an NCAA bylaw 
preventing her participation, receive a court order enjoining the 
bylaw, and then go on to win a conference championship with her team 
that season, the school would be at risk of having its wins later 
vacated by the NCAA if the court's order were reversed.
    The obvious purpose and effect of the Rule of Restitution is to 
deter challenges

[[Page 49208]]

to the NCAA's anticompetitive rules by discouraging athletes from 
protecting themselves and thus trying to deprive courts of the ability 
to grant effective relief. Am. Compl. ] 73. Under the Rule of 
Restitution, college athletes run the risk of personal punishment and 
the risk of subjecting their schools or teammates to harsh sanctions 
simply by following the terms of a court order. Id. The Rule of 
Restitution grants the NCAA the ability to decide for itself the rules 
of interim relief rather than the courts. Id. Plaintiffs argued, and 
the Court agreed, that any injunctive relief against the Transfer 
Eligibility Rule would need to be paired with injunctive relief against 
the Rule of Restitution. Am. Compl. ] 74; Ohio v. NCAA, 2023 WL 
9103711, at *11-12.

E. Anticompetitive Effects

    The Transfer Eligibility Rule restrained college athletes from 
freely moving among member institutions to improve their economic 
opportunity, personal growth, and well-being, a freedom afforded to 
other students at NCAA member institutions but not to college athletes. 
The Transfer Eligibility Rule produced direct anticompetitive effects 
in the relevant markets in three phases of the college athlete transfer 
process: (1) when college athletes were deciding whether to transfer, 
(2) when college athletes decided to transfer and were searching for a 
new institution to attend, and (3) when college athletes were denied 
eligibility to compete for one year after transferring to a new 
institution. Ohio v. NCAA, 2023 WL 9103711, at *5.
    In the first phase, when college athletes were deciding whether to 
transfer, the Transfer Eligibility Rule discouraged college athletes 
from transferring to a different institution that may benefit their 
academic, athletic, mental, and financial well-being. Ohio v. NCAA, 
2023 WL 9103711, at *5. College athletes, just like non-athlete college 
students, seek to transfer schools for any number of reasons, including 
but not limited to better academic, athletic, or financial 
opportunities elsewhere. College athletes also seek to transfer 
institutions for reasons having nothing to do with sports, for example, 
a desire to be closer to home. The Transfer Eligibility Rule dampened 
competition in the relevant markets by deterring college athletes from 
exploring better options within their sport-specific market. Id.
    Second, the Transfer Eligibility Rule also artificially 
disadvantaged college athletes who choose to transfer a second time by 
reducing their attractiveness to potential destination institutions. 
Id. Second-time transfer college athletes were not able to apply for a 
waiver of the Transfer Eligibility Rule until after they had been 
accepted and enrolled at their new institution. Because the waiver 
process was discretionary and was inconsistently applied, member 
institutions that accepted a second-time transfer risked that the 
college athlete might not be eligible to compete for an entire academic 
year. This eligibility risk artificially deflated the value of a 
second-time transfer, creating an additional impediment in the market 
for college athlete labor. Id.
    Third, the Transfer Eligibility Rule harmed college athletes 
transferring a second time by denying them the opportunity to compete 
in NCAA Division I athletic events for an entire academic year after 
transferring to a new institution. Id. at *6. NCAA Division I 
competition is the pinnacle of college athletics in the United States. 
Competing at this high level of athletics comes with immeasurable 
opportunities for personal, professional, and economic growth. For 
athletes seeking to continue competing professionally after college, 
NCAA Division I competition provides a unique platform to showcase 
athletic skills in front of national audiences and professional scouts. 
The Transfer Eligibility Rule unjustifiably denied these benefits to 
affected college athletes for an entire academic year. Id.

F. The Transfer Eligibility Rule Lacks Procompetitive Justifications

    In its opposition to Plaintiffs' motion for a temporary restraining 
order, NCAA argued that the Transfer Eligibility Rule is 
procompetitive, as it ``aim[s] to promote academic success by 
minimizing the significant potential disruption from multiple 
transfers, promoting the benefits of team continuity and 
predictability, and protecting the viability of collegiate sports by 
preserving some level of competitive balance between programs and some 
level of continuity in the makeup of teams.'' ECF No. 32 at 9-10.
    Ruling on Plaintiffs' motion for a temporary restraining order, the 
Court found that these purportedly procompetitive justifications were 
``uncompelling'' and ``pretextual.'' Ohio v. NCAA, 2023 WL 9103711, at 
*7. The Court was unpersuaded by the NCAA's argument that the Rule 
promotes academic success, noting that the Rule only bars competition, 
not participation in practices or other team activities. Thus, second-
time transfers (who as a practical matter must train and attend 
practice to remain viable members of their teams) are likely to spend 
just as much time away from their studies as their teammates, save for 
a few hours of actual competition on gameday. Id. With respect to the 
NCAA's argument that the Transfer Eligibility Rule promotes team 
stability, the Court found that the NCAA Bylaws are silent as to the 
mid-season firing of coaches and contemplate first-time transfers. 
Accordingly, ``the NCAA's stability argument [is] without merit given 
that there are currently no restrictions on first time transfers or 
coaches leaving,'' two circumstances that could also affect team 
stability. Id.

G. Less Restrictive Alternatives to the Transfer Eligibility Rule

    To the extent the goals of the Transfer Eligibility Rule were to 
promote the academic well-being of college athletes and to prevent 
college sports from becoming a free agent market like professional 
sports leagues, the NCAA's other rules already promote these ends. Am. 
Compl. ] 82; Ohio v. NCAA, 2023 WL 9103711, at *8. For example, NCAA 
Bylaws already require college athletes to maintain progress toward 
degrees to be eligible to compete in NCAA events. NCAA Bylaw 14.4.1 
requires college athletes to ``maintain progress toward a baccalaureate 
or equivalent degree at that institution'' to be eligible for 
intercollegiate competition at their college or university. Am. Compl. 
Ex. A at 150-51. In addition, NCAA Bylaw 20.2.4.13 requires member 
institutions to publish their progress-toward-degree requirements for 
college athletes, thus making these requirements available to college 
athletes at each institution. Id. at 367. Other NCAA Bylaws require 
minimum credit hour and grade point averages for college athletes to be 
eligible for competition. Id. at 151, 154. Additionally, NCAA Bylaws 
already prohibit in-season transfers within the same sport, ensuring 
that college athletics do not morph into a professional free agent 
system. Am. Compl. ]] 84-86. In enjoining the Transfer Eligibility 
Rule, the Court found that these bylaws related to academic progress 
and in-season transfers accomplished NCAA's goals ``without the 
unjustified restrictions imposed by the Transfer Eligibility Rule.'' 
Ohio v. NCAA, 2023 WL 9103711, at *8.

III. Explanation of the Proposed Final Judgment

    The relief required by the proposed Final Judgment addresses the 
loss of competition alleged in the Amended Complaint. Paragraph 22 
permanently enjoins the NCAA from enforcing the Transfer Eligibility 
Rule or any substantially similar rule requiring a

[[Page 49209]]

college athlete to maintain a period of residence or refrain from 
competition because of a transfer between NCAA member institutions. 
Paragraph 22 of the proposed Final Judgment also prohibits the NCAA 
from enforcing the Rule of Restitution on any member institution or 
college athlete related to a college athlete's participation in 
intercollegiate competition following a transfer in reliance on this 
Court's orders.
    Paragraph 23 of the proposed Final Judgment requires the NCAA to 
issue an additional year of eligibility to any qualifying college 
athlete who was previously deemed ineligible to participate because of 
the Transfer Eligibility Rule for a season or any portion of a season 
during or since the 2019-20 academic year. Those college athletes will 
have no fewer than six years to complete their four seasons of 
intercollegiate competition and thus will not be disadvantaged from 
having sat out a year because of the Transfer Eligibility Rule.
    The proposed Final Judgment also contains provisions designed to 
promote compliance with and make enforcement of the Final Judgment as 
effective as possible. Paragraph 30 provides that the United States 
retains and reserves all rights to enforce the Final Judgment, 
including the right to seek an order of contempt from the Court. Under 
the terms of this paragraph, the NCAA agrees that in any civil contempt 
action, any motion to show cause, or any similar action brought by the 
United States regarding an alleged violation of the Final Judgment, the 
United States may establish the violation and the appropriateness of 
any remedy by a preponderance of the evidence and that the NCAA has 
waived any argument that a different standard of proof should apply. 
This provision aligns the standard for compliance with the Final 
Judgment with the standard of proof that applies to the underlying 
offense that the Final Judgment addresses.
    Paragraph 30 provides additional clarification regarding the 
interpretation of the provisions of the proposed Final Judgment. The 
proposed Final Judgment is intended to remedy the loss of competition 
that the United States alleges would otherwise result from the 
continued application of the Transfer Eligibility Rule. The NCAA agrees 
that it will abide by the proposed Final Judgment and that it may be 
held in contempt of the Court for failing to comply with any provision 
of the proposed Final Judgment that is stated specifically and in 
reasonable detail, as interpreted in light of this procompetitive 
purpose.
    Paragraph 31 provides that if the Court finds in an enforcement 
proceeding that the NCAA has violated the Final Judgment, the United 
States may apply to the Court for appropriate relief, including 
contempt remedies and any additional relief to ensure the NCAA complies 
with the terms of the Final Judgment. In addition, to compensate 
American taxpayers for any costs associated with investigating and 
enforcing violations of the Final Judgment, Paragraph 31 provides that, 
in any successful effort by the United States to enforce the Final 
Judgment against the NCAA, whether litigated or resolved before 
litigation, the NCAA must reimburse the United States for attorneys' 
fees, experts' fees, and other costs incurred in connection with that 
effort to enforce this Final Judgment, including the investigation of 
the potential violation.
    Under the proposed Final Judgment, the United States may file an 
action at any time against NCAA for other Bylaws or claims not made in 
this action. Paragraph 23 states that only the United States' claims 
with respect to the Transfer Eligibility Rule as applied to Division I 
college athletes is resolved pursuant to the proposed Final Judgment, 
and that the proposed Final Judgment specifically does not apply to any 
Bylaws of NCAA Division II or NCAA Division III nor does it resolve any 
antitrust claims regarding those rules. The proposed Final Judgment 
applies only to the Transfer Eligibility Rule as applied to Division I 
college athletes and does not mean that the United States condones any 
other Bylaws of NCAA Division I or any of the Bylaws of NCAA Division 
II or NCAA Division III.

IV. Remedies Available to Potential Private Plaintiffs

    Section 4 of the Clayton Act, 15 U.S.C. 15, provides that any 
person who has been injured as a result of conduct prohibited by the 
antitrust laws may bring suit in federal court to recover three times 
the damages the person has suffered, as well as costs and reasonable 
attorneys' fees. Entry of the proposed Final Judgment neither impairs 
nor assists the bringing of any private antitrust damage action. Under 
the provisions of section 5(a) of the Clayton Act, 15 U.S.C. 16(a), the 
proposed Final Judgment has no prima facie effect in any subsequent 
private lawsuit that may be brought against Defendants.

V. Procedures Available for Modification of the Proposed Final Judgment

    The United States and the NCAA have stipulated that the proposed 
Final Judgment may be entered by the Court after compliance with the 
provisions of the APPA, provided that the United States has not 
withdrawn its consent. The APPA conditions entry upon the Court's 
determination that the proposed Final Judgment is in the public 
interest.
    The APPA provides a period of at least 60 days preceding the 
effective date of the proposed Final Judgment within which any person 
may submit to the United States written comments regarding the proposed 
Final Judgment. Any person who wishes to comment should do so within 60 
days of the date of publication of this Competitive Impact Statement in 
the Federal Register, or within 60 days of the first date of 
publication in a newspaper of the summary of this Competitive Impact 
Statement, whichever is later. All comments received during this period 
will be considered by the U.S. Department of Justice, which remains 
free to withdraw its consent to the proposed Final Judgment at any time 
before the Court's entry of the Final Judgment. The comments and the 
response of the United States will be filed with the Court. In 
addition, the comments and the United States' responses will be 
published in the Federal Register unless the Court agrees that the 
United States instead may publish them on the U.S. Department of 
Justice, Antitrust Division's internet website.
    Written comments should be submitted in English to: Yvette Tarlov, 
Chief, Media, Entertainment, and Communications Section, Antitrust 
Division, United States Department of Justice, 450 Fifth St. NW, Suite 
7000, Washington, DC 20530, [email protected].
    The proposed Final Judgment provides that the Court retains 
jurisdiction over this action, and the parties may apply to the Court 
for any order necessary or appropriate for the modification, 
interpretation, or enforcement of the Final Judgment.

VI. Alternatives to the Proposed Final Judgment

    As an alternative to the proposed Final Judgment, the United States 
considered continuing the litigation and seeking a full trial on the 
merits against Defendant. The United States is satisfied, however, that 
the relief required by the proposed Final Judgment is likely to ensure 
competition

[[Page 49210]]

in the relevant markets by remedying the anticompetitive effects 
alleged in the Amended Complaint. Thus, the proposed Final Judgment is 
likely to achieve all or substantially all the relief the United States 
would have obtained through litigation but avoids the time, expense, 
and uncertainty of a full trial on the merits.

VII. Standard of Review Under the APPA for the Proposed Final Judgment

    Under the Clayton Act and APPA, proposed Final Judgments, or 
``consent decrees,'' in antitrust cases brought by the United States 
are subject to a 60-day comment period, after which the Court shall 
determine whether entry of the proposed Final Judgment ``is in the 
public interest.'' 15 U.S.C. 16(e)(1). In making that determination, 
the Court, in accordance with the statute as amended in 2004, is 
required to consider:

    (A) the competitive impact of such judgment, including 
termination of alleged violations, provisions for enforcement and 
modification, duration of relief sought, anticipated effects of 
alternative remedies actually considered, whether its terms are 
ambiguous, and any other competitive considerations bearing upon the 
adequacy of such judgment that the court deems necessary to a 
determination of whether the consent judgment is in the public 
interest; and
    (B) the impact of entry of such judgment upon competition in the 
relevant market or markets, upon the public generally and 
individuals alleging specific injury from the violations set forth 
in the complaint including consideration of the public benefit, if 
any, to be derived from a determination of the issues at trial.

15 U.S.C. 16(e)(1)(A) & (B). In considering these statutory factors, 
the Court's inquiry is necessarily a limited one as the government is 
entitled to ``broad discretion to settle with the defendant within the 
reaches of the public interest.'' United States v. Microsoft Corp., 56 
F.3d 1448, 1461 (D.C. Cir. 1995); United States v. U.S. Airways Grp., 
Inc., 38 F. Supp. 3d 69, 75 (D.D.C. 2014) (explaining that the 
``court's inquiry is limited'' in Tunney Act settlements); United 
States v. InBev N.V./S.A., No. 08-1965 (JR), 2009 U.S. Dist. LEXIS 
84787, at *3 (D.D.C. Aug. 11, 2009) (noting that a court's review of a 
proposed Final Judgment is limited and only inquires ``into whether the 
government's determination that the proposed remedies will cure the 
antitrust violations alleged in the complaint was reasonable, and 
whether the mechanisms to enforce the final judgment are clear and 
manageable'').
    As the U.S. Court of Appeals for the District of Columbia Circuit 
has held, under the APPA a court considers, among other things, the 
relationship between the remedy secured and the specific allegations in 
the government's Amended Complaint, whether the proposed Final Judgment 
is sufficiently clear, whether its enforcement mechanisms are 
sufficient, and whether it may positively harm third parties. See 
Microsoft, 56 F.3d at 1458-62. With respect to the adequacy of the 
relief secured by the proposed Final Judgment, a court may not ``make 
de novo determination of facts and issues.'' United States v. W. Elec. 
Co., 993 F.2d 1572, 1577 (D.C. Cir. 1993) (quotation marks omitted); 
see also Microsoft, 56 F.3d at 1460-62; United States v. Alcoa, Inc., 
152 F. Supp. 2d 37, 40 (D.D.C. 2001); United States v. Enova Corp., 107 
F. Supp. 2d 10, 16 (D.D.C. 2000); InBev, 2009 U.S. Dist. LEXIS 84787, 
at *3. Instead, ``[t]he balancing of competing social and political 
interests affected by a proposed antitrust decree must be left, in the 
first instance, to the discretion of the Attorney General.'' W. Elec. 
Co., 993 F.2d at 1577 (quotation marks omitted). ``The court should 
also bear in mind the flexibility of the public interest inquiry: the 
court's function is not to determine whether the resulting array of 
rights and liabilities is the one that will best serve society, but 
only to confirm that the resulting settlement is within the reaches of 
the public interest.'' Microsoft, 56 F.3d at 1460 (quotation marks 
omitted); see also United States v. Deutsche Telekom AG, No. 19-2232 
(TJK), 2020 WL 1873555, at *7 (D.D.C. Apr. 14, 2020). More demanding 
requirements would ``have enormous practical consequences for the 
government's ability to negotiate future settlements,'' contrary to 
congressional intent. Microsoft, 56 F.3d at 1456. ``The Tunney Act was 
not intended to create a disincentive to the use of the consent 
decree.'' Id.
    The United States' predictions about the efficacy of the remedy are 
to be afforded deference by the Court. See, e.g., Microsoft, 56 F.3d at 
1461 (recognizing courts should give ``due respect to the Justice 
Department's . . . view of the nature of its case''); United States v. 
Iron Mountain, Inc., 217 F. Supp. 3d 146, 152-53 (D.D.C. 2016) (``In 
evaluating objections to settlement agreements under the Tunney Act, a 
court must be mindful that [t]he government need not prove that the 
settlements will perfectly remedy the alleged antitrust harms[;] it 
need only provide a factual basis for concluding that the settlements 
are reasonably adequate remedies for the alleged harms.'' (internal 
citations omitted)); United States v. Republic Servs., Inc., 723 F. 
Supp. 2d 157, 160 (D.D.C. 2010) (noting ``the deferential review to 
which the government's proposed remedy is accorded''); United States v. 
Archer-Daniels-Midland Co., 272 F. Supp. 2d 1, 6 (D.D.C. 2003) (``A 
district court must accord due respect to the government's prediction 
as to the effect of proposed remedies, its perception of the market 
structure, and its view of the nature of the case.''). The ultimate 
question is whether ``the remedies [obtained by the Final Judgment are] 
so inconsonant with the allegations charged as to fall outside of the 
`reaches of the public interest.''' Microsoft, 56 F.3d at 1461 (quoting 
W. Elec. Co., 900 F.2d at 309).
    Moreover, the Court's role under the APPA is limited to reviewing 
the remedy in relationship to the violations that the United States has 
alleged in its Amended Complaint, and does not authorize the Court to 
``construct [its] own hypothetical case and then evaluate the decree 
against that case.'' Microsoft, 56 F.3d at 1459; see also U.S. Airways, 
38 F. Supp. 3d at 75 (noting that the court must simply determine 
whether there is a factual foundation for the government's decisions 
such that its conclusions regarding the proposed settlements are 
reasonable); InBev, 2009 U.S. Dist. LEXIS 84787, at *20 (``[T]he 
`public interest' is not to be measured by comparing the violations 
alleged in the complaint against those the court believes could have, 
or even should have, been alleged''). Because the ``court's authority 
to review the decree depends entirely on the government's exercising 
its prosecutorial discretion by bringing a case in the first place,'' 
it follows that ``the court is only authorized to review the decree 
itself,'' and not to ``effectively redraft the complaint'' to inquire 
into other matters that the United States did not pursue. Microsoft, 56 
F.3d at 1459-60.
    In its 2004 amendments to the APPA, Congress made clear its intent 
to preserve the practical benefits of using judgments proposed by the 
United States in antitrust enforcement, Public Law 108-237 Sec.  221, 
and added the unambiguous instruction that ``[n]othing in this section 
shall be construed to require the court to conduct an evidentiary 
hearing or to require the court to permit anyone to intervene.'' 15 
U.S.C. 16(e)(2); see also U.S. Airways, 38 F. Supp. 3d at 76 
(indicating that a court is not required to hold an evidentiary hearing 
or to permit intervenors as part of its review under the Tunney Act). 
This language explicitly wrote into the statute what Congress intended 
when it first enacted the Tunney Act in 1974. As Senator Tunney 
explained: ``[t]he court is

[[Page 49211]]

nowhere compelled to go to trial or to engage in extended proceedings 
which might have the effect of vitiating the benefits of prompt and 
less costly settlement through the consent decree process.'' 119 Cong. 
Rec. 24,598 (1973) (statement of Sen. Tunney). ``A court can make its 
public interest determination based on the competitive impact statement 
and response to public comments alone.'' U.S. Airways, 38 F. Supp. 3d 
at 76 (citing Enova Corp., 107 F. Supp. 2d at 17).

VIII. Determinative Documents

    There are no determinative materials or documents within the 
meaning of the APPA that were considered by the United States in 
formulating the proposed Final Judgment.

Dated: May 30, 2024

Respectfully,
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Maximillian F. Nogay
Assistant United States Attorney

United States Attorney's Office, Northern District of West Virginia, 
P.O. Box 591, 1125 Chapline Street, Suite 3000, Wheeling, WV 26003, 
Tel: 304-234-0100, Fax: 304-234-0110, Email: [email protected].

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James H. Congdon *
Trial Attorney

United States Department of Justice, Antitrust Division, Media, 
Entertainment, and Communications Section, 450 Fifth Street NW, 
Suite 7000, Washington, DC 20530, Tel: (202) 538-3985, Fax: (202) 
514-6381, Email: [email protected].

* pro hac vice

Attorneys for Plaintiff United States of America

[FR Doc. 2024-12720 Filed 6-10-24; 8:45 am]
BILLING CODE 4410-11-P