Judge grants preliminary injunction in Tennessee, Virginia NIL lawsuit versus NCAA

Judge Clifton L. Corker granted a preliminary injunction against the NCAA in the NIL lawsuit filed by the attorneys general of Tennessee and Virginia. The ruling now allows booster-funded NIL collectives to communicate with high school recruits and transfer portal players.

The decision, announced on Friday in the Eastern District Court of Tennessee in Greenville, Tennessee, comes after a preliminary injunction hearing on Feb. 13. Corker heard both sides in a hearing that lasted just over an hour, which included NCAA attorneys struggling to make clear to the court whether prospective athletes can engage in conversations about NIL opportunities.

“Without the give and take of a free market, student-athletes simply have no knowledge of their true NIL value,” Corker wrote in his decision. “It is this suppression of negotiating leverage and the consequential lack of knowledge that harms student-athletes.”

The court has ordered that the NCAA and “all persons in active concert or participation with the NCAA” are restrained from enforcing the interim NIL policy, NCAA bylaws or any other authority that prohibits athletes from negotiating NIL compensation. All of this comes in the aftermath of the NCAA launching an investigation into Tennessee for multiple alleged NIL violations.

Speaking to multiple NIL collective leaders across the country on Friday afternoon, it’s clear that the floodgates have opened. If the NCAA had any grip on inducements or pay-for-play before Friday, those have vanished. Collectives could begin to hit the road and sit down with top prospects.

Offer letters could become the latest trend in college sports. And the decision comes with the basketball and football transfer portal windows set to open again soon.

Corker wrote in Friday’s decision that “encouraging free and fair price competition in the NIL market by enjoining the NCAA’s NIL-recruiting ban will serve the public interest.”

What was focus in Tennessee NIL investigation?

According to the New York Times, the NCAA’s search at Tennessee centered around the use of a private plane to fly Tennessee quarterback Nico Iamaleava to Knoxville while he was a recruit, with funds for the plane raised by boosters. Tennessee Chancellor Donde Plowman and athletic director Danny White have been vocal supporters, along with multiple politicians, of taking legal action.

Tennessee Attorney General Jonathan Skrmetti released a statement Friday, stating that, “We will litigate this case to the fullest extent necessary to ensure the NCAA’s monopoly cannot continue to harm Tennessee student-athletes. The NCAA is not above the law, and the law is on our side.”

“Turning upside down rules overwhelmingly supported by member schools will aggravate an already chaotic collegiate environment, further diminishing protections for student-athletes from exploitation,” the NCAA wrote in a statement on Friday. “The NCAA fully supports student-athletes making money from their name, image and likeness and is making changes to deliver more benefits to student-athletes, but an endless patchwork of state laws and court opinions make clear partnering with Congress is necessary to provide stability for the future of all college athletes.”

The stakes are high for the NCAA, which is again in the courtroom battling for its hold on amateurism. Tennessee and Virginia are all-in and invested in the battle to defeat the governing body. Winning the lawsuit would leave the NCAA powerless in governing NIL in college sports.

“While the NCAA permits student-athletes to profit from their NIL, it fails to show how the timing of when a student-athlete enters such an agreement would destroy the goal of preserving amateurism,” the federal judge wrote Friday.

What does this mean for NCAA?

Corker’s ruling comes after he denied the states’ temporary restraining order against the NCAA, he cited that there was not enough requisite irreparable harm for the order to be issued. Tennessee and Virginia filed a declaration from Tennessee head coach Josh Heupel, who presented a case of irreparable harm, ahead of the preliminary injunction hearing.

“I’m assuming the NCAA is going to do the same thing it did in the transfer rules case and say, ‘We’re not going to enforce our NIL rule anywhere,'” Mit Winter, a college sports attorney with Kennyhertz Perry, told On3. “So, we’ll have no transfer rules or NIL rules in recruiting. What are collectives going to do now? They’re unleashed. This was already happening before. But now they’re going to do it without any fear of punishment.

“It will be interesting to see what rules the schools could have. They’re already involved with a lot of collectives as well, but this will just increase that involvement. Telling collectives what they want them to do and how much to offer. What is the recruiting process going to look like in the next few months?”

The preliminary injunction ruling is just a start. At its core, the lawsuit is an antitrust case. Corker has already written in his temporary restraining order decision Tennessee and Virginia are likely to succeed on the merits of their claim under the Sherman Act.

“Amateurism has been dead for many years already, going back probably to the O’Bannon case,” NIL and IP attorney Darren Heitner said. “The NCAA is not dead until its member institutions decide it has run its course and is no longer a worthy institution to run its members’ interests. I think anyone who jumps to the conclusion that a preliminary injunction order, as significant as it may be, is signaling the NCAA has now died are the same people who pretend to predict the future of the NCAA.

“Is the NCAA leaking today? Absolutely.”