March 22
Cedar Point Nursery v. Hassid
No. 20-107, 9th Cir.
Preview by Riven Lysander, Senior Online Editor
At first glance, Cedar Point Nursery v. Hassid appears to be a property case revolving around an alleged per se taking that is at odds with agricultural workers’ right to organize. In the days leading up to oral argument, however, two independent constitutional law scholars have written opinion pieces for major publications, raising concern about the potential ripple effects of the outcome of this case. See Nikolas Bowie, Opinion, Do We Have to Pay Businesses to Obey the Law?, N.Y. Times (March 20, 2021), https://www.nytimes.com/2021/03/20/opinion/Supreme-Court-labor-property-rights.html (finding similarities between Hassid and Heart of Atlanta Motel, Inc. v. U.S., 379 U.S. 241); Aaron Tang, Opinion: Just One Supreme Court Case Could Blow Up Unions, Child Protection and Anti-Discrimination Law, Wash. Post (March 18, 2021, 1:25PM), https://www.washingtonpost.com/opinions/2021/03/18/supreme-court-case-could-devastate-unions-ability-organize-thats-just-start/ (warning that overturning the California statute at question in Hassid could lead to serious legal acceptance of discrimination). To address whether these concerns have merit, one must consider the facts of the case.
Petitioners Cedar Point Nursery and Fowler Packing Co. are agricultural businesses in California that together employ between 2,800 and 3,500 full- and part-time or seasonal employees. See Petitioners’ Brief on the Merits at 10–11, Cedar Point Nursery v. Hassid, No. 20-107 (U.S. filed Dec. 31, 2020). Together, the businesses challenge a regulation by the California Agricultural Labor Relations Board that requires agricultural businesses to grant union organizers access to the businesses’ private property for the purpose of speaking with employees and to “solicit[] their support [for the union(s)].” Id. at 4 (citing Cal. Code Regs. tit. 8, § 20900(e)). The Access Regulation, which was promulgated to protect agricultural workers’ right to organize, limits union organizers’ access to no more than three hours each day (“an hour before work, an hour after work, and an hour during the lunch period”), no more than 120 days per year; access is further limited by restrictions on disrupting business operation. Id. at 4–5. The Petitioners argue that the regulation is a “product of a bygone era”. Id. at 6. They contend that in a time when agricultural workers generally no longer reside on their employer’s property with little access to the outside world—and even those that do have access to mobile devices, radio, and other communication methods through which unions can advertise—the Access Regulation is outdated. Id. at 9. Further, they highlight that “[t]he regulation explicitly eschews a case-by-case determination, which it proclaims would cause ‘uncertainty and instability.’” Id. at 7 (quoting Cal. Code Regs. tit. 8, § 20900(d)). This, Petitioners argue, is the core of the Ninth Circuit’s error: they claim that this lack of flexibility in a case-by-case analysis places the Access Regulation in the territory of a per se physical taking without just compensation rather than a mere regulatory taking that concerns “restrictions on the use of property.” Id. at 18–19.
Respondents, on the other hand, point to the specific language of the Takings Clause of the Fifth Amendment: that no private property shall “be taken for public use, without just compensation.” Brief for Respondents at 14, Cedar Point Nursery v. Hassid, No. 20-107 (U.S. filed Feb. 5, 2021) (emphasis added). They argue that the Takings Clause exists to “prevent the government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole,” such as, for example, when the government demands access to private property for government use. Id. at 14–15 (quoting Murr v. Wisconsin, 137 S. Ct. 1933, 1943 (2017) (internal quotation marks omitted)). For Respondents, the limitations on the Access Regulation place this case squarely in the realm of a regulatory taking, for which no compensation is usually necessary. Under this analysis, “’the right to exclude others” is “one of the essential sticks in the bundle of property rights,’” but even an intrusion onto such a fundamental right is not sufficient to determine that a law has gone too far. Id. at 19 (analogizing PruneYard Shopping Center v. Robins, 447 U.S. 74 (1980) to the instant case).
This case represents the tug of war between the businesses’ right to exclude from property and the workers’ right of organization. Professors Bowie and Tang worry that should the right to exclude prevail, other statutes, such as those that prevent discrimination against racial minorities or offer regulatory protections through unannounced inspections, may also be at risk. See Bowie, supra; Tang, supra. While the scope of the decision’s penumbra remains to be seen, over 800,000 agricultural workers in California stand to be directly affected by the outcome of this case. See Philip Martin, Brandon Hooker Muhammad Akhtar, and Marc Stockton, How Many Workers Are Employed In California Agriculture?, 71 Cal. Agric. 30, 30 (2017). Whatever the ultimate scope may be, the Court’s balance of these two critical rights may carve the landscape for many battles to come.
March 23
United States v. Cooley
No. 19-1414, 9th Cir.
Preview by Joshua Keyser, Online Editor
In United States v. Cooley, the Supreme Court will address whether tribal police officers possess the authority to conduct traffic stops of non-Native vehicles in public highway rights-of-way based on a reasonable suspicion that the person(s) in the car are involved in criminal activity. Although the case is ostensibly about the specific authority to conduct these Terry stops—based on Terry v. Ohio, 392 U.S. 1 (1968)—the parties call upon the Court to decide whether the limits of police power on Native land are determined by the inherent powers of tribes as sovereigns or Congress’s explicit grant.
Respondent Joshua James Cooley, who was stopped by the side of a highway in the Crow Indian Reservation late at night, was approached by Crow Tribe police officer James Saylor for a wellness check. Saylor observed that Cooley “seemed to be non-[N]ative.” United States v. Cooley, 919 F.3d 1135, 1140 (9th Cir. 2019). Finding Cooley agitated and believing that he might use force, Saylor escorted Cooley to his patrol car. He then searched Cooley’s vehicle and found methamphetamine. Cooley was charged with one count of possession with intent to distribute methamphetamine and one count of possession of a firearm in furtherance of a drug trafficking crime. Id.
Cooley moved to suppress evidence obtained in the search on the grounds that Saylor exceeded his authority in violation of the Fourth Amendment analogue in the Indian Civil Rights Act of 1968 (ICRA), 25 U.S.C. §§ 1301–1304, which serves as tribal authorities’ guarantee of individual civil rights and liberties. Id. Finding that Saylor identified Cooley as non-Native, the District of Montana granted Cooley’s motion, as it was not “apparent” at the time of detention that Cooley had violated state or federal law. See id. at 1141. On appeal, the Ninth Circuit held that tribal officers are limited to conducting searches for “obvious” or “apparent” violations of state and federal law by non-Natives. See id. at 1142. Under this holding, even if Saylor had the type of reasonable suspicion of that would have empowered a non-tribal officer to conduct a search, his suspicion would not have been sufficient to empower tribal officers to search Cooley’s vehicle.
The United States argues that the lower courts should not have suppressed the evidence Saylor collected because policing authority follows inherently from tribal sovereignty as one of the most fundamental exercises of sovereign authority. See Brief for Petitioner at 19, United States v. Cooley, No. 19-1414 (U.S. filed Jan. 8, 2021). It contends that while certain powers are limited by the Crow Tribe’s “dependent sovereign” status, no statute, treaty, or judicial decision has expressly withdrawn the sovereign power to investigate and detain non-Natives within reservation boundaries. See id. at 19. The government contends that the Court has previously found this authority to extend to state highway rights-of-way. See id. at 23. Furthermore, the government argues that the Ninth Circuit’s “obvious” or “apparent” standard lacks legal support, as it is derived only from previous Circuit Court dicta, and that to uphold that standard would create practical problems for law enforcement by supplanting established Fourth Amendment standards in favor of an unclear new test. See id. at 33, 35.
Cooley contends that the Court has already rejected the government’s argument that tribes retained inherent sovereign powers over non-Natives; he argues instead that any authority over non-tribal members derives from Congress. See Brief for Respondent at 15, United States v. Cooley, No. 19-1414 (U.S. filed Feb. 12, 2021). Cooley further contends that the Court has evinced its deference to Congress on how jurisdictional gaps in Indian Country are resolved, declining to find inherent tribal authority where legislation is silent. See id. at 25–26. Cooley argues that Congress has spoken, granting the Secretary of the Interior authority to cross-deputize tribal police officers, which includes the authority to make warrantless arrests on probable cause. See id. at 28 (citing 25 U.S.C. § 2803(3)(A)–(D)). Because Saylor was not cross-deputized, Cooley claims that he lacked authority to conduct a Terry stop of a non-Native.
If the Court upheld the Ninth Circuit’s ruling, it could have far-reaching consequences for law enforcement in tribal reservations. The National Congress of American Indians, Tribal Nations, and Inter-Tribal Organizations notes that tribal officers would be alone among law enforcement officers in being held to a higher test than the “reasonable suspicion” standard required by Terry v. Ohio. See Brief Amici Curiae of National Congress of American Indians, Tribal Nations and Inter-Tribal Organizations at 7, United States v. Cooley, No. 19-1414 (U.S. filed Jan. 15, 2021). Additionally, the National Indigenous Women’s Resource Center expressed concern that the Ninth Circuit’s ruling would render it practically impossible for tribal officers to protect Native women victimized by domestic abuse. See Brief of Amici Curiae National Indigenous Women’s Resource Center, Confederated Tribes of the Chehalis Reservation, and Other Organizations in Support of Petitioner at 9, United States v. Cooley, No. 19-1414 (U.S. filed Jan. 15, 2021). It envisions a scenario where a tribal officer stops a vehicle with a bruised Native woman and asks whether this would meet the standard of an “obvious” violation of state domestic abuse law. See id. at 11–12. With the issues of tribal sovereignty entangled in this case, the Court’s decision may also have significant implications beyond a law enforcement context.
March 24
Caniglia v. Strom
No. 20-157, 1st Cir.
Preview by Reid Ostrom, Online Editor
The Court in Caniglia v. Strom confronts whether the “community caretaking” exception to the Fourth Amendment extends to warrantless intrusions of the home.
“Community caretaking” is an exception to the Fourth Amendment’s warrant requirement that allows police officers to conduct warrantless searches and seizures while performing certain “caretaker” functions. These “caretaker” functions include a broad, somewhat uncertain range of activities, but can include checking on persons who might be missing or need first aid, investigating noise complaints, removing a former partner from a domestic dispute, conducting welfare checks, or helping little children cross a busy street.
This community caretaking exception originates from Cady v. Dombrowski, in which the Supreme Court upheld a warrantless search of a disabled car that police reasonably believed contained a gun that could fall into improper hands if not recovered. 413 U.S. 433 (1973). The Court explained that police officers frequently perform such “community caretaking functions,” which are “totally divorced from the detection, investigation, or acquisition of evidence relating to the violation of a criminal statute.” Id. at 441.
In 2015, Edward Caniglia, the petitioner in the case now before the Court, got into a verbal dispute with his wife, Kim Caniglia. During the heated disagreement, Mr. Caniglia threw an unloaded handgun onto the table between them, asking, “[W]hy don’t you just shoot me and get me out of my misery?” Brief for Petitioner at 4, Caniglia v. Strom, No. 20-157 (U.S. filed Jan. 8, 2021). Mrs. Caniglia spent the night at a hotel after the argument. When she was unable to reach Mr. Caniglia by phone the next morning, Mrs. Caniglia called the police because she feared that her husband might have committed suicide or otherwise harmed himself. Officers arrived at the house and talked to Mr. Caniglia on the back porch (some officers reported that the conversation was calm, others said Mr. Caniglia appeared angry). Eventually, Mr. Caniglia agreed to be transported to a local hospital for a psychiatric evaluation, and the officers seized two of Mr. Caniglia’s firearms inside the house, fearing for the safety of both Mr. Caniglia and others. Mr. Caniglia was evaluated at the hospital, but not admitted as an inpatient, and no criminal investigation resulted from the incident. A few months later, the police department refused the Caniglias’ requests for the guns to be returned to them. They were only returned after suit was initiated.
Mr. Caniglia brought a civil action under 42 U.S.C. § 1983 against the City of Cranston, Rhode Island, and the officers for allegedly violating his Fourth Amendment right against unreasonable search and seizure when the police seized the guns inside his house without a warrant. The District Court dismissed this claim, ruling there was no Fourth Amendment violation under the community caretaking exception to the warrant requirement for search and seizure, and the First Circuit affirmed. With this decision, the First Circuit joined the Fifth and Eighth Circuits in extending the community caretaker exception to the home. See Caniglia v. Strom, 953 F.3d 112, 124 (1st Cir. 2020). On the other side of the circuit split, the Third, Seventh, Ninth, and Tenth Circuits have held that the caretaker exception cannot extend to the home. See Ray v. Twp. of Warren, 626 F.3d 170 (3d Cir. 2010). State courts are similarly split.
There has been confusion in applying this community caretaker exception. Courts sometimes use it in situations that very much involve suspected criminal activity, despite Cady’s direction otherwise, and often apply it interchangeably with exigency and emergency aid exceptions, which require a higher bar of an actual emergency. This has led to concerns that the community caretaker exception has become an “inappropriate catchall” for a wide range of police action, which lowers the standards of otherwise more stringent Fourth Amendment protections and opens the door for abuse. See Megan Pauline Marinos, Note, Breaking and Entering or Community Caretaking? A Solution to the Overbroad Expansion of the Inventory Search, 22 Geo. Mason U. Civ. Rts. L.J. 249, 251 (2012).
Mr. Caniglia argues that the community caretaker exception only applies to automobiles, and does not extend to the home, emphasizing that Cady’s reasoning was based on the “constitutional difference” between houses and automobiles. Brief for Petitioner at 11. On the other hand, respondent argues that because there is no suspected criminal activity in these community caretaker situations, the warrant and probable cause requirements are ill-suited. Brief for Respondent at 41–42, Caniglia v. Strom, No. 20-157 (U.S. filed Feb. 11, 2021). Instead, respondent argues, intrusions into the home for caretaker functions can be justified under the ultimate test of reasonableness. Brief for Respondent at 15–17.
This case presents an opportunity for the Supreme Court to clarify its purpose and scope for the community caretaking exception, and potentially provide guidance on the role of police in the community. Amid renewed focus and scrutiny of police action, this case has important implications for not only warrantless invasions into homes, but also police-community relations nationwide.
March 29
Goldman Sachs Grp, Inc. v. Ark. Teacher Ret. Sys.
No. 20-222, 2d Cir.
Preview by Jessica Ojeda, Online Editor
This case involves a securities class action brought by shareholders of Goldman Sachs Groups, Inc. (“Goldman”). Shareholders accuse Goldman of issuing false statements denying corporate conflicts of interest despite knowing that the company was riddled with undisclosed conflicts surrounding several collateralized debt obligation (“CDO”) transactions. It is alleged these misstatements artificially maintained an inflated stock price and that as a result of public revelations on Goldman’s actions, shareholders suffered a loss of $13 billion in stock value.
The case is now on certiorari from the Second Circuit Court of Appeals which affirmed the certification of a class action based on Goldman’s failure to rebut the Basic presumption, under which a class of petitioners may be presumed to have relied on respondent’s misstatements. There are two central issues up for review: (1) Whether a defendant in a securities class action may rebut this presumption of class-wide reliance recognized in Basic Inc. v. Levinson, 485 U.S. 224 (1988), by pointing to the generic nature of the alleged misstatements in showing that the statements had no impact on the price of the security, even though that evidence is also relevant to the substantive element of materiality; and (2) whether a defendant seeking to rebut the Basic presumption has only a burden of production or also the ultimate burden of persuasion.
The Basic presumption applies to class certification disputes. Private class action securities litigation relies heavily on the concept of reliance, meaning that “in a generally efficient market where a company’s material public statements are reflected in the price of the stock, the decision to purchase or sell a company’s stock is presumed . . . to have been made in indirect reliance on those statements.” U.S. Supreme Court Accepts Case That Could Alter the Landscape of Private Securities Litigation, JDSUPRA (Jan. 15, 2021), https://www.jdsupra.com/legalnews/u-s-supreme-court-accepts-case-that-2399744/. Per Basic, courts may “presume reliance on a classwide basis if the plaintiffs ‘establish certain prerequisites—namely, that [the] defendants’ misstatements were publicly known, their shares traded in an efficient market, and [the] plaintiffs purchased the shares at the market price after the misstatements were made but before the truth was revealed.’” Ark. Teacher Ret. Sys. v. Goldman Sachs Grp., Inc. (ATRS II), 955 F.3d 254 at 260–61 (2d Cir. 2020) (citing to ATRS I, 879 F.3d at 481; see Halliburton Co. v. Erica P. John Fund, Inc., 573 U.S. 258, 268 (2014)).
The first issue up for review boils down to whether a defendant can rebut the Basic presumption at the class certification stage by showing corporate statements were too general to have a price impact, or whether defendant must wait until the merits stage inquiry on the Securities Exchange Commission’s Rule 10b-5 element of materiality. 17 C.F.R. § 240.10b-5; U.S. Supreme Court Accepts Case That Could Alter the Landscape of Private Securities Litigation, JDSUPRA, Jan. 15, 2021. Goldman attempted to introduce evidence that the alleged misstatements were “too general and vague for a reasonable shareholder to have relied on them” and thus “had no impact on [Goldman Sachs] stock price.” See ATRS II at 260. However, the Second Circuit held that the vague nature of Goldman’s misstatements could not be considered at the class certification stage in determining whether they affected Goldman’s stock price. An amici brief filed by the Securities and Financial Markets Association and others in support of Goldman argues that the Second Circuit’s interpretation makes the Basic presumption “effectively [ir]rebuttable, and [] burden[s] companies and their shareholders with meritless claims based on generic statements which have no price impact.” Brief of Amici Curiae Securities and Financial Markets Association, Bank Policy Institute, American Bankers Association, and U.S. Chamber of Commerce in Support of Petitioners at 3, Goldman Sachs Grp. v. Ark. Teacher Ret. Sys., No. 20-222 (U.S. Sept. 24, 2020).
The second issue seeks to clarify whether the defending party bears both the burden of production and the burden of persuasion under Basic. The Second Circuit determined that recent precedent emerging out of Waggoner v. Barclays PLC, 875 F.3d 79 (2d Cir. 2017) had shifted the burden of persuasion to Defendants, to be established by a preponderance of evidence. Goldman now argues that the Second Circuit erred both in disregarding evidence necessary to overcoming this burden and in shifting the burden altogether as conflicting with other circuits and Federal Rule of Evidence 301. Typically, under Rule 301, “In a civil case . . . the party against whom a presumption is directed has the burden of producing evidence to rebut the presumption. But this rule does not shift the burden of persuasion, which remains on the party who had it originally.” Fed. R. Evid. 301. The Second Circuit, however, argued that while 301 was the default rule, the Basic presumption had “altered” that rule and “imposed a burden of persuasion on defendants.” Petition for Writ of Certiorari, Goldman Sachs Grp., Inc. v. Ark. Teacher Ret. Sys., No. 20-222 at 12 (U.S. Aug. 21, 2020).
The Court’s decision in this case could potentially establish a new line of defense for plaintiffs seeking to bring class action suits by blurring the line between class certification and case merit while also allowing courts in such proceedings greater latitude to consider merit-related evidence.
March 30
TransUnion LLC v. Ramirez
No. 20-297, 9th Cir.
Preview by Neal Billig, Online Editor
In this case, the Court must decide whether Article III or Rule 23 of the Federal Rules of Civil Procedure permits an award of damages to absent class members who suffered only intangible injuries. See Brief for Petitioner, TransUnion v. Ramirez, No. 20-297 (U.S. filed Feb. 1, 2021). Article III standing requires a particularized and concrete injury, which can include intangible injuries when provided by statute. In Spokeo, Inc. v. Robins, 136 S.Ct. 1540 (2016), the Court held that a “risk of real harm” can satisfy the requirements of concreteness if the potential harm was more than a “bare procedural violation.” 136 S.Ct. at 1549. On remand, the Ninth Circuit opined a two-part inquiry—looking to both concreteness and particularity—for separating a material risk of real harm from a purely procedural violation. See Robins v. Spokeo, Inc., 867 F.3d 1108 at 1111 (9th Cir. 2017) (Spokeo II). In 2018, the Supreme Court affirmed the Ninth Circuit’s judgment in Spokeo II without comment, which led to circuit confusion about how to interpret the Spokeo decision. Ramirez, like Spokeo, involves violations of the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681, which provides statutory standing for procedural violation. See id. Ramirez presents the court with an opportunity to clarify concrete injury under Article III and consider the applicability of Spokeo to class actions.
Class representative Sergio Ramirez attempted to buy a car at a Nissan dealership in early 2011, but was rejected because his TransUnion credit report inaccurately flagged him as someone on the Department of the Treasury’s Office of Foreign Assets Controls’ (OFAC) terrorist watch list. See Ramirez v. TransUnion, LLC., 951 F.3d 1008, 1017–18 (9th Cir. 2020). Ramirez brought a class action against TransUnion for violating FCRA on behalf of 8,185 class members who had received the same inaccurate reports—that is, all members of the class were “falsely labeled by TransUnion’s name-only software as a potential OFAC match.” Id. at 1022. Only 1,853 class members had a credit report requested by a potential creditor or employer while the OFAC flag was on their reports. The district court granted class certification and a jury awarded the class $60 million in statutory and punitive damages. See id. at 1034–35.
On appeal, the Ninth Circuit found that every class member needed to have Article III standing to recover at the damages stage of the suit. See id. at 1023. Circuit Judge Murguia’s majority opinion utilized the two-step inquiry from Spokeo II to determine “whether the violation of a statutory right constitutes concrete injury.” Id. at 1025. Step one involves determining whether the statute that confers standing was established to protect concrete interests or purely procedural rights. Looking to the relevant portion of the statute, FCRA § 1681e(b), the Ninth Circuit found that the statutory purpose was “to protect consumers’ concrete interests” as a “threat to a consumer’s livelihood is caused by the very existence of inaccurate information in his credit report.” Id. Judge Murguia reasoned, “[A]lthough the FCRA’s disclosure requirements may seem ‘procedural’ in nature, Congress enacted them because they are the only practical way to protect consumers’ interests in fair and accurate credit reporting.” Id. at 1029.
Step two of the Ninth Circuit’s analysis looked at whether the procedural violation alleges harm or presents a “material risk of harm.” Id. at 1025. The court had “no trouble concluding that TransUnion’s disclosure violations exposed all class members to a material risk of harm” because all class members’ reports were available to potential creditors without prior notice. Id. at 1027, 1029.
TransUnion’s petition argues that the Supreme Court should apply the reasoning in Circuit Judge McKeown’s dissent. See Brief for Petitioner at 19–20, No. 20-297 (U.S. filed Feb. 1, 2021). Circuit Judge McKeown reasoned that standing only exits for the 1,853 class members whose information had actually been disclosed to a third party, not for the members who, although falsely labeled, suffered no actual harm. See Ramirez, 951 F.3d at 1041. She also found that Ramirez’s experience was atypical as a class representative and that the record did not point to a serious “serious likelihood of disclosure” for the majority of the class. Id. at 1040. While Ramirez will likely clarify the Article III standing requirements of Spokeo, the Court may take the chance to restrain class actions by raising the requirements for an intangibly injured class and their class representative.
March 31
Nat’l Collegiate Athletic Ass’n v. Alston (Am. Athletic Conf. v. Alston)
No. 20-512, 9th Cir.
Preview by Jacob Orgel, Senior Online Editor
In Alston, the Supreme Court is set to hear a class action challenge to the NCAA’s limitations on student athlete compensation brought by current and former collegiate football and basketball players alleging infringement of federal antitrust laws. The Court granted the NCAA’s petition for certiorari to review the Ninth Circuit’s decision that its restrictions on compensation eligibility violate the Sherman Antitrust Act, 15 U.S.C. §§ 1–38, which aims to encourage marketplace competition. The Ninth Circuit granted the student-athletes’ request for injunctive relief uncapping education-related compensation.
In analyzing the district court finding for the student-athletes, the Ninth Circuit relied heavily on its 2015 decision in O’Bannon v. NCAA II, in which a former NCAA basketball player won an injunction against the NCAA permitting student-athletes to receive scholarships covering students’ cost of attendance at their schools. See O’Bannon v. Nat’l Collegiate Athletic Ass’n II, 802 F.2d 1049 (2015). The Ninth Circuit applied a similar Rule of Reason assessment to the one it utilized in Bannon II, which imposed a three-step framework: (1) student-athletes had the initial burden of showing that “‘the restraint produces significant anticompetitive effects within a relevant market’; (2) if they carry that burden, the NCAA ‘must come forward with evidence of the restraint’s procompetitive effects’; and (3) [s]tudent-[a]thletes ‘must then show that any legitimate objectives can be achieved in a substantially less restrictive manner.’” See In re Nat’l Collegiate Athletic Ass’n Grant-in-Aid Cap Antitrust Litigation, 958 F.3d 1239, 1256 (2020) [hereinafter NCAA Grant-in-Aid Cap] (quoting O’Bannon II at 1070).
Under this analysis, the Ninth Circuit agreed with the district court’s findings that the student-athletes carried their burden by showing that the NCAA’s compensation restrictions constituted significant anticompetitive practices. See NCAA Grant-in-Aid Cap at 1256–57. While the Ninth Circuit conceded, as it had in O’Bannon II, that the NCAA has a cognizable interest in preserving “amateurism” as an essential element of its business model’s distinction with professional sports, it confirmed the district court’s decision that this interest was not advanced by limiting non-cash benefits related to education. See id. at 1257–60. Thus, the Ninth Circuit held that the NCAA did not make a compelling case as to a procompetitive element advanced by its limitations. The court then agreed with the less restrictive alternative proposed by the student-athletes in which the NCAA would uncap education-related benefits and academic awards while still permitting individual conferences to set their own limits. See id. at 1260–63.
Alston is the most significant NCAA antitrust case to come before the Supreme Court since its decision in NCAA v. Board of Regents of the University of Oklahoma, in which the Court found the NCAA’s restrictions on television rights to game broadcasts to violate the Sherman and Clayton Antitrust Acts. 468 U.S. 85 (1984). In Board of Regents, the Court notably postulated in dicta that the NCAA has historically preserved demand for its model by prohibiting payments to student-athletes, though the NCAA’s compensation restrictions were not before the Court. See id. at 102.
In Alston, the Court will have its first opportunity to review the NCAA’s restrictions on student-athlete compensation since California’s passage of its landmark Fair Pay to Play Act, which was signed into law in 2019 and will enter into effect in 2023. The act requires the NCAA and its member institutions to permit student-athletes enrolled in California colleges and universities to earn compensation from the use of their names, images, and likenesses. Alston will undoubtedly be an important signifier of the Court’s NCAA-related jurisprudence under this new chapter of liberalizing compensation regulations for student-athletes.
