Deadline week arrives amid mounting concerns over House settlement

A seminal week in college athletics has arrived, along with mounting concerns from legal experts over what a potential settlement in the House v. NCAA case means for future college athletes.

If defendants – the NCAA and power conferences – agree to settlement terms by the plaintiffs’ Thursday deadline, it would open the door for schools to pay athletes as much as $22 million annually.

What has raised due process concerns among legal experts is a potential annual process for future college athletes to either opt-out or object to settlement terms.

Mit Winter, a college sports attorney with Kennyhertz Perry and board member with players’ association Athletes.org, believes it is “highly unlikely” a judge would certify such a settlement because it includes setting terms for a class of individuals (future athletes) not represented in the lawsuit.

“Based on my experience with litigating class actions, that would be extremely unusual, and I don’t think it’s legally possible,” Winter told On3. “A class-action settlement can bind absent class members. But it can’t bind those who are not class members at all.”

All D-I conferences will foot damages in House v. NCAA settlement
What to know as key week arrives for college sports

The plaintiffs’ attorneys – Jeffrey Kessler and Steve Berman – are not concerned with the legality of the opt-out element, a source familiar with their thinking told On3 on Sunday.

They believe they have set up a mechanism whereby the class will be certified, and every year there will be an adequate representative during the period of the settlement. Each year new college athletes will be given an opportunity to opt-out or object.

“So, the issue of adequate future representation is solved by this process,” the source said.

Will NCAA be safe from future lawsuits?

The potential element would not necessarily protect the NCAA from future lawsuits. But it could make it more difficult for larger (and far more costly) class-action suits to take hold. Marc Edelman, a sports antitrust expert and law professor at Baruch College’s Zicklin School of Business, also has concerns about the binding effect on future athletes. 

If the proposed element is accurate, a “problem lurks in the failure to lift the underlying restraint on athlete compensation moving forward,” Edelman told On3. 

“While a union can negotiate for a future revenue share that may be exempted from antitrust scrutiny based on the non-statutory labor exemption,” Edelman said, “there is no legal support for allowing a non-union group to negotiate for this kind of settlement without allowing for future antitrust challenges to what remains of the restraint.”

While it’s not uncommon for class-action settlements to bind wide groups of people – including defined class members who are not actually represented in the settlement discussions – the structure and scale of this potential settlement feels “unprecedented,” said Sam Ehrlich, a Boise State sports law professor.  

“It seems that the idea is to bind athletes indefinitely while only allowing them a chance to object each year – and you have the lead attorney (Jeffrey Kessler) openly saying those objections will go nowhere – and the whole idea of that feels like a major due process problem to me,” Ehrlich told On3. 

“The whole thing to me feels like a roughshod attempt to replicate a collective bargaining agreement, but without any of the legal powers and protections given to a formal collective bargaining relationship.”

Large due process questions remain

In the House case, certified classes include former and current Division I college athletes. As long as the court approves settlement terms, those terms will be binding on all absent class members that don’t opt-out of the settlement prior to a date set by the court. 

But legal experts say that’s different from a class-action settlement that purports to apply settlement terms to individuals who are not class members at all – future Division I athletes.

“We don’t even know who those individuals are – we have no idea who will or will not be a Division I college athlete in the future,” Winter said. “And even if we did know who those people are, they have no representation in the House case. So, there’s a large due process issue there.”