Ruling Clears Way for College Athletes to Receive Payments from Alston Damages Class Settlement

Ruling Clears Way for College Athletes to Receive Payments from Alston Damages Class Settlement

In February 2017, the NCAA and the 11 FBS conferences settled a class action lawsuit relating to the NCAA’s previous limit on athlete compensation. The $208.7 million settlement, part of the Alston case, resolved damages claims brought by scholarship athletes in football and men’s and women’s basketball who claimed that the NCAA’s then limit on the value of an athletic scholarship (at that time tuition and fees, room and board, and books) violated antitrust law. The damages claims sought the difference between the full cost of attendance for each of these athletes and the value of the athletic scholarship they received.

Distribution of the settlement funds to the class members has been delayed by an objection from a former football player to the amount of fees awarded to the plaintiffs’ lawyers. But on Wednesday, the Ninth Circuit rejected the football player’s arguments that the trial court judge had abused her discretion when awarding the plaintiffs’ lawyers $41.7 million in fees and $3.2 million in expenses. Assuming the football player does not petition for a re-hearing, the process of sending checks to athletes that are members of the class should begin soon.

The settlement covers Division I men’s basketball, Division I women’s basketball, and FBS football players who received an athletic scholarship that was below the cost of attendance for at least one semester between March 5, 2010 and March 21, 2017. All men’s and women’s basketball and football players who attended schools that began awarding cost of attendance scholarships after August 1, 2015 will receive payments (August 1, 2015 is the date that an NCAA rule change allowed Division I school to offer athletes scholarships that cover their full cost of attendance). Settlement money will also be available to athletes at schools that did not initially provide cost of attendance scholarships after the August 1, 2015 rule change, as long as those schools later provided cost of attendance payments or by June 1, 2017 indicated an intent to start providing cost of attendance payments during the 2017-18 school year.

Because the damages class was an opt out class, athletes do not have to file a claim to receive payment. The athletes covered by the settlement will have a check mailed to him or her (assuming the athlete did not previously opt out of the class) if they provided a valid taxpayer identification number to the settlement administrator after receiving notice of their inclusion in the settlement class. Class members who have previously been notified of their inclusion in the class (notices were sent beginning in August 2017) can check on the status of payments and update their address and taxpayer id number on the settlement administrator’s website. In addition, according to the settlement administrator, it was not able to provide notice to around 10% of the class members because of invalid email and postal addresses. Those athletes who did not receive notice of their inclusion in the class, but believe they should have, should also contact the settlement administrator.

The plaintiffs’ attorneys have a list of around 53,000 athletes who will receive payment under the settlement. Payment to each athlete will vary based on how many years they were on scholarship and the difference between the value of a traditional athletic scholarship and the cost of attendance at the athlete’s school. An athlete who received an athletic scholarship for four years will get an average of around $6,000.

As we reported earlier, the portion of the Alston case seeking to enjoin the NCAA from enforcing additional limits on athlete compensation is still ongoing. The NCAA has appealed the trial judge’s ruling that the NCAA’s limits on education-related benefits are illegal. Depending on how the Ninth Circuit rules, athletic scholarships could soon include additional compensation beyond an athlete’s cost of attendance.

About Mit Winter

Mit Winter focuses his practice on helping businesses of all types and sizes navigate complex challenges, with considerable experience assisting companies in general commercial litigation and business disputes, class action litigation, intellectual property matters, and a broad array of collegiate sports matters.

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