During a high-stakes courtroom hearing on Monday, U.S. District Judge Claudia Wilken challenged attorneys for the NCAA and for current and former D-I athletes represented by the House, Carter and Hubbard classes to prove their settlement is sufficiently fair, reasonable and adequate for her to grant final approval. The substance of Wilken’s interactions with those attorneys, as well as attorneys representing objectors, indicates she’s inclined to grant final approval.
By the end of the hearing, Judge Wilken made a pointed remark, stating, “It’s essentially a good settlement,” though she acknowledged there was room for improvement. She directed attorneys representing both the athletes and the NCAA to provide an update within a week, addressing whether they could agree to certain de facto demands she outlined.
One of those issues is whether current college athletes who may lose their roster spots as a result of the settlement could be grandfathered in. These athletes, Wilken observed, likely chose their colleges with the expectation of playing a sport—and attending to their interests should not be too onerous on the parties.
“There are not that many [athletes who would be grandfathered], it is not that expensive, it would [generate] a lot of goodwill,” Wilken said, imploring NCAA attorney Rakesh Kilaru to discuss the option with the NCAA. Kilaru expressed hesitation, saying that no athletes will lose a scholarship (regardless of a loss of roster spot) and those without athletic scholarships could already be cut under current rules.
Wilken also demanded more precise language regarding future college athletes and their ability to challenge the settlement once they enter college. Kilaru and players’ attorney Jeffrey Kessler assured her class members could, upon matriculation, object to the settlement and that Wilken would have the ability to terminate the settlement in mid-course if she identified problems.
At one point, Wilken suggested she might approve Hubbard while delaying her ruling on House and Carter. However, she ultimately abandoned that approach after Kilaru emphasized that the settlement explicitly requires all three cases to be approved in conjunction, or collapse.
Wilken made it clear from the outset of the hearing that she had no intention of derailing the settlement, commencing Monday’s hearing by essentially narrowing the scope of objections she was willing to seriously consider.
NCAA president Charlie Baker struck an optimistic tone after the hearing. In a statement, Baker said the hearing “was a significant step in modernizing college sports.” He added that, “if approved,” the settlement “will allow student-athletes the opportunity to receive nearly 50% of athletic department revenue in a sustainable and fair system for years to come.”
In a joint statement, the ACC, Big Ten, Big 12, Pac-12 and SEC wrote, “We will provide all requested information in a timely manner and remain focused on securing Judge Wilken’s approval of this proposed agreement.”
Wilken stressed “this is not a Title IX case,” and it is not about labor or employment laws, either. That meant whether male athletes are paid more than female athletes in ways that could be problematic under Title IX, and whether college athletes should be considered employees and be able to unionize aren’t factors in her decision. Wilken also said whether the settlement could lead to violations of state NIL laws is not a topic before her. She repeatedly underscored that her charge as the presiding judge is to determine if the settlement resolves the specific antitrust issues presented in the cases before her court.
Wilken offered praise to the players’ attorneys for “doing a great job” in notifying class members. Kessler said, “there is huge support for this settlement,” claiming that 118,879 athletes out of roughly 300,000 have either filed a claim or updated their information. In contrast, only 343 (about 0.088%) opted out and only 73 (about 0.019%) filed objections.
Another players’ attorney, Steve Berman, implored Wilken to consider “the elephant in the room” if she doesn’t approve the settlement. He noted the cases would go back to the docket, which, he predicted, will lead the NCAA to lobby for Congressional intervention to end the lawsuits. “Congress is the risk,” Berman said, “I can guarantee you they will go to Congress and [say] we now have [billions of dollars of liability on the line] … they will ask for [antitrust] immunity.”
Berman cited a bill introduced by U.S. Senator Ted Cruz (R-Texas) that calls for immunity. It’s unlikely this argument will have much sway with Wilken given that Congress has yet to take any action on NCAA legal issues in recent years (despite much fanfare). Wilken also suggested that whether Congress might pass a bill is not relevant to whether she ought to approve an antitrust class action settlement.
Wilken, however, expressed concern that future college players would see their rights forfeited if she approves the settlement. She specifically questioned whether the settlement releases claims for events that hadn’t yet occurred.
“One of the points of objection is that it’s unclear how this process will work,” Wilken said. “Simply stating ‘I object’ is different from outlining a clear process for raising such objections.”
Kessler attempted to assuage Wilken by saying the settlement, which will last 10 years, is designed to add class representatives who will be current athletes as time goes on. He also pointed out that this approach is standard in long-term settlements, including those in discrimination class action settlements. Kessler used this tactic to try to convince Wilken that the settlement’s method is ordinary, well established and worthy of approval. Kessler also stressed that the settlement does not release claims involving other potential acts by the NCAA that fall outside the settlement.
Kilaru, the NCAA’s attorney, tried to persuade Wilken that another of her concerns—the loss of roster spots—was an unjustified reason for her to reject the settlement. The settlement calls for the elimination of athletic scholarship caps, meaning much more money will be distributed to college athletes in the aggregate.
Yet the tradeoff in that change is roster limits, which will lead to some athletes, including walk-ons, losing roster spots.
Kilaru emphasized that the elimination of scholarship limits will reflect a sizable transfer of monetary benefits to athletes. But Wilken countered, “that’s small comfort” to athletes who will receive neither a roster spot nor a scholarship. Wilken also worried that there are athletes who relied on a roster spot in their college decision and suggested they be grandfathered out of the settlement.
The NCAA attorney then countered Wilken, urging her to “look at these provisions as a unified whole” and alluding to the fact that a settlement is a tradeoff between the parties where each gives and gets. He opined the settlement is much better for college athletes than “years” of further litigation and mentioned that Wilken can’t “blue pencil out provisions.” That expression—blue pencil—refers to a judge rewriting terms of a contract, and a class action settlement is a contract.
Kilaru noted that roster spots aren’t currently guaranteed for a non-scholarship athlete. A school can already cut that athlete at any time, and that status quo won’t change with the settlement, Kilaru stressed. He also suggested the number of athletes impacted by scholarship caps is very small.
Wilken also interacted with attorneys Steven Molo, Michael Hausfeld and Laura Reathaford, LSU gymnast Livvy Dunne and other attorneys and athletes. Molo, who was the first objectors’ counsel to speak, argued that there should not be any roster or scholarship limits, which drew a hiked eyebrow from Wilken. Wilken seemed unpersuaded by the idea that roster limits are necessarily problematic under antitrust law. She incredulously asked if it would make sense for “dozens and dozens” of college athletes to be “on the sidelines” and noted teams with unlimited rosters could have competitive advantages over others. Wilken also acknowledged that roster limits are common in sports and opined that while she felt bad some athletes are “sad” to lose roster spots, sadness is not a reason to reject an antitrust class action settlement.
However, and especially in her interaction with Reathaford—whose daughter, Temple gymnast Emma Reathaford, is an objector—Wilken was moved by the idea that current athletes should be exempted from loss of roster spots. The idea is that those athletes didn’t know about the possibility when they picked a school.
To that end, Judge Wilken appeared interested in finding ways to mitigate the temporary hardships faced by athletes during the “interregnum period,” the time between the settlement’s approval and the implementation of its provisions. She could tell the parties that she is inclined to approve the settlement provided they tweak the language to protect current athletes from roster-spot loss—particularly since she was told not many athletes will be impacted. Wilken took that approach last fall when she objected to NIL rules in the settlement and the parties altered the language to gain her preliminary approval of the settlement.
From the start of the hearing, Wilken mentioned she is unlikely to issue a ruling from the bench on Monday. She will likely issue a written decision in the coming weeks, but there is no deadline—the timing is entirely up to her.
The settlement has two major features. First, it would pay damages of about $2.8 billion to D-I athletes dating back about eight years and reflecting lost NIL, video game and broadcasting opportunities on account of eligibility rules. Second, it would implement a structure that colleges can share up to 22% of the average power conference athletic media, ticket and sponsorship revenue with their athletes, with $20.5 million expected to be the initial annual cap.
College athletes would continue to receive athletic scholarships and be able to sign NIL deals with third parties, though NIL deals that exceed $600 would be subject to independent review to ensure they are not cloaking pay-for-play arrangements.
Wilken stressed that whether—as argued by the Justice Department under the administration of then-President Joe Biden—the cap itself violates antitrust law is not the relevant question for her. Biden’s DOJ maintained the cap swaps a worse cap of $0 with a milder one ($20.5 million) but still reflects competing businesses in the form of NCAA member colleges and conferences joining hands to restrain how much each can compensate athletes.
“We are not adjudicating if it is an antitrust violation,” the judge noted. “We are adjudicating whether it is a proper balance of risks and rewards” in relation to the rest of the settlement that is being judged under Rule 23 of the Federal Rules of Civil Procedure and which requires that class action settlements be fair, reasonable and adequate to class members.
This story has been updated with additional information from Monday’s hearing and a joint statement from the ACC, Big Ten, Big 12, Pac-12 and SEC.
