Nightly Nuance - June 22, 2021

Hello, my friends. Continuing our journey through Supreme Court week, let’s discuss yesterday’s decision from the Court in National Collegiate Athletic Association v. Alston, et al. We have another unanimous decision of the Court, and this time it’s for real unanimous. Justice Gorsuch has written the Court’s opinion joined by all of the other justices. We have one concurring opinion from Justice Kavanaugh all by himself. And, here’s the real miracle: Justice Kavanaugh’s opinion is actually interesting and worth some time.

I want to give you a little bit of a law-student-style outline of the legal issue here. We’re talking about the Sherman Act, which is intended to prevent unreasonable restrictions on trade. Determining what is so unreasonable that it’s illegal is hard, and courts aren’t excited to second-guess business decisions. The main thing we need to understand is that the Sherman Act is premised on the idea that competition is the best way to regulate a market. Typically, courts are going to use what’s called, unhelpfully, the “rule of reason” analysis, which has three steps:

The plaintiff (the person or group bringing the lawsuit) has to show that the defendant (the person or business or group being sued) is doing something that has a substantially anticompetitive effect.  Most lawsuits fail at this step. If the plaintiff can do this, then… The defendant has to show that the activity the plaintiff is complaining about (the “challenged restraint”) is actually pro-competitive. If the defendant can do this, then… The plaintiff has to show that whatever that pro-competitive benefit is, the defendant can reasonably achieve it in a way that is less of a burden on competition.

In this case, the Court ultimately finds that the NCAA’s restriction on compensation related to education is anticompetitive and unreasonable.

“Related to education” is an important qualifier. Justice Kavanaugh tells us he’s ready to go even bigger at stripping away the NCAA’s power to make money off student-athletes without paying them market value for their labor.

As always, thank you for being here, and I look forward to your thoughts and questions! -b

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