NCAA v. Alston, Shawne

Whether the Sherman Act authorizes a court to subject the product-defining rules of a joint venture to full Rule of Reason review, and to hold those rules unlawful if, in the court’s view, they are not the least restrictive means that could have been used to accomplish their procompetitive goal.

Respondents brought this anti-trust action, claiming that Petitioner’s ceiling on student-athlete “education-related compensation and benefits” (e.g., graduation awards) was unlawful. 15 U.S.C. 1. The District Court analyzed the controversy under the three-step “rule of reason.” The court found (1) that the ceiling was anti-competitive; (2) that the ceiling nevertheless possessed “pro-competitive effects” because it improves consumer choice by preserving differences between collegiate and professional sports; and (3) that the limits were “more restrictive than necessary.” The court thus held that Petitioner is “prohibit[ed]… from limiting education-related benefits.” 375 F.Supp.3d 1058, 1062. The Ninth Circuit Court of Appeals affirmed, reasoning that Petitioner did not meet its “heavy burden” of justifying its anti-competitive rules. 958 F.3d 1239, 1257. Petitioner argues that the Ninth Circuit’s decision is inconsistent with the Court’s precedent. Specifically, Petitioner argues the lower courts erred in adopting a “least restrictive alternative” approach to the third-step. Petitioner further argues that their compensation limits were justified by the legitimate procompetitive purpose to preserve college sports.