Judge delays approval of $2.8 billion NCAA settlement over roster limit question

By Mike Scarcella

April 24 (Reuters) - A U.S. judge has declined for now to grant final approval to a $2.8 billion settlement with the National Collegiate Athletic Association that would compensate student athletes for past and future commercial use of their names, images and likenesses.

In an order on Wednesday, U.S. District Judge Claudia Wilken in Oakland, California said a provision of the settlement that would immediately cap the number of students named to team rosters was unfair to some members of the class action.

Wilken said a “significant” number of students would lose their roster spots under the settlement terms. The judge provided suggestions about how to resolve the issue to the benefit of the plaintiffs.

The settlement would resolve three lawsuits that claimed NCAA rules barring payments to athletes violated U.S. antitrust law. The settlement includes past monetary damages, and would allow schools for the first time to directly pay student athletes. The NCAA has denied any wrongdoing.

Steve Berman, a lead attorney for the plaintiffs, in a statement said Wilken turned away most of the objections to the settlement.

“With the leverage of this order, maybe we will be successful this time,” Berman said. “If not, she is aggressively resetting the case for trial and we look forward to that if need be.”

The NCAA said it was reviewing Wilken’s order and remained focused on “securing approval of this significant agreement.”

In addition to the $2.8 billion upfront payment, the settlement would provide tens of billions of dollars to class members over the next 10 years. It allows schools to pay athletes from funds the universities receive from broadcasts and other commercial sources. The plaintiffs estimated that pool to be worth around $20 billion.

The plaintiffs in a filing on April 14 defended the proposed roster caps, saying that U.S. judges in other cases have “recognized the ability of sports organizations to have reasonable rules regulating their sports, which includes roster sizes.”

Wilken directed the NCAA, the plaintiffs’ lawyers and attorneys who represented some challengers to the settlement to meet with a mediator to discuss potential modifications to the settlement.

In statements, three lawyers who represented students opposing roster limits welcomed Wilken’s order.

Attorney Steven Molo said “these arbitrary and cruel roster limits are inflicting needless pain on many student-athletes who have dedicated themselves to their sports.”

The judge on Wednesday set out a schedule for additional arguments on the merits of the plaintiffs' claims.

The case is In re: College Athlete NIL Litigation, U.S. District Court for the Northern District of California, No. 4:20-cv-03919-CW.

For plaintiffs: Jeffrey Kessler of Winston & Strawn, and Steve Berman of Hagens Berman Sobol Shapiro

For NCAA: Rakesh Kilaru of Wilkinson Stekloff

For certain objectors: Laura Reathaford of Lathrop GPM; Douglas DePeppe of Buchalter; and Steven Molo of MoloLamken

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