Department of Justice joins lawsuit against NCAA transfer rules

The U.S. Department of Justice signed on to a lawsuit in the Northern District of West Virginia District Court on Thursday that challenges the NCAA’s transfer eligibility rule.

The lawsuit is now a civil antitrust lawsuit. The case centers around the governing body’s grip on athletes’ ability to transfer, citing the second-time transfer rule violates antitrust law. The move comes on the same day as Minnesota, Mississippi, Virginia, and the District of Columbia joining the lawsuit, upping the number of attorney generals involved in litigation to 11.

This comes after the NCAA agreed to terms on a preliminary injunction in the lawsuit in December, which lasts through the end of the spring sports season. The NCAA released guidance to schools last month that multi-time transfers who enter the transfer portal this fall or winter will be eligible to play at a new school in the 2024-25 academic year without securing a waiver.

According to the press release, the case is believed to be the first time the Department of Justice has signed on to a state-led antitrust lawsuit.

“There is strength in numbers,” Ohio Attorney General Dave Yost said in a statement. “This case would never have come to pass had many players not been sidelined by the NCAA’s arbitrary and unfair rule. We’re fighting for better competition and long-term change.”

Current NCAA rules permit athletes to transfer one time without having to miss a year, instead being eligible to play immediately. If an athlete wishes to transfer twice, they typically must have the NCAA grant a waiver to compete immediately. Without an approved waiver, the athlete must sit out the year. NCAA bylaw 14.5.5.1 states athletes who are transferring a second time or more are required to sit a year before being eligible.

According to the federal lawsuit, the NCAA’s rule “unjustifiably restrains the ability of these college athletes to engage in the market for their labor as NCAA Division I college athletes,” the complaint states. By making it daunting to transfer twice, the rule also denies athletes educational opportunities, per the Department of Justice release.

Elsewhere in Washington, D.C., on Thursday, the 11th NIL-related Congressional hearing since 2020 was held in the House Subcommittee on Innovation, Data, and Commerce. NCAA president Charlie Baker testified, discussing his new proposal for college sports, Project D-I, that would establish a new subdivision of Division I that gives institutions the freedom to craft policies and compensate athletes.

The main takeaway from the three-hour hearing was delivering an employment and antitrust exemption in this session of Congress looks slim.

The NCAA will now have to fend off another battle in the courtroom, this time with the Justice Department and 11 state attorney generals working against the governing body.

“We are proud to stand with our state law enforcement partners on behalf of college athletes across the nation,” Assistant Attorney General Jonathan Kanter said in a release. “NCAA Division I institutions compete with each other not just on the playing field or in the arena, but to recruit and retain college athletes. College athletes should be able to freely choose the institutions that best meet their academic, personal and professional development needs without anticompetitive restrictions that limit their mobility by sacrificing a year of athletic competition.”