A California Superior Court Judge struck down a critical component of NCAA enforcement in early October, ruling that the organization’s “show cause” penalties unlawfully constrain a person’s right to seek employment under California law. Judge Frederick Shaller’s decision gave former USC assistant football coach Todd McNair a victory in his seven-year battle against the NCAA, although it remains uncertain whether that victory can withstand the inevitable scrutiny to be administered by other courts.
The NCAA relies on show cause penalties as one of its most devastating punishments, designed to deter bad behavior by NCAA coaches. The organization reserves these orders for serious offenses, and the orders require that a school hiring (or continuing to employ) an impacted coach to detail for the NCAA how it will monitor the coach. Additionally, if a coach laboring under a show cause order commits further rules violations, the organization will levy more severe punishments to the institution. Because these penalties are affixed to an individual, rather than the school, they can make the coach effectively unhirable.
McNair, who became embroiled in the Trojans’ football scandal a decade ago that pertained to impermissible gifts made to former running back, Reggie Bush, received a one-year show cause penalty as the result of his involvement in those infractions. Although the NCAA issued the order for only 12 months, an economics expert testified at trial that the punishment had cost McNair approximately $2.8 million, due to USC’s decision not to renew his contract and his subsequent inability to secure new college football employment.
Specifically, Shaller ruled that Section 19.02.3 of the NCAA’s 2017–18 handbook violated fundamental principles of contract law. He asserted that the provision, which describes show cause penalties as ordering schools hiring an impacted coach to satisfy the Committee on Infractions “why [the school] should not be subject to a penalty,” unduly burdens a citizen’s right to pursue employment. The rule impacted McNair at USC, throughout the state of California, and it “restricted, if not preempted [McNair’s employment], not only in Los Angeles, but in every state in the country.”
Reaction to the ruling was immediate and unequivocal. Because the NCAA handbook provision violated California law and thus, California schools would be immune from one of the NCAA’s most forceful punishments, Pac-12 commissioner, Larry Scott, wondered aloud if those schools “could continue to meet the requirements of NCAA membership.” The NCAA released a response that the decision “is wrong as a matter of law” and vowed to appeal the ruling.
Historical Underpinnings Contradict Decision; Reversal to Follow?
For the past several decades, the NCAA has enjoyed a successful track record defending itself against legal challenges to its enforcement prerogatives. Although many college sports fans mistakenly believe otherwise, the NCAA is a private organization consisting of voluntary institutional members.
The NCAA famously staved off a vigorous challenge in the late 1980s, when former UNLV men’s basketball coach, Jerry Tarkanian, contested his show cause penalty by alleging that the NCAA’s joint enforcement with UNLV—a public institution—made the NCAA a legal state actor. The Supreme Court held, however, that it was UNLV that contracted with the NCAA, and thus, contract principles applied as between the school and the NCAA, and not between Tarkanian and the NCAA.
Other plaintiffs subject to show cause orders have sought relief—and failed—on different contract law grounds, as well as tortious interference. Additionally, in the Tarkanian aftermath, the Nevada legislature enacted a statute that the NCAA must provide procedural due process protections to state employees. But the NCAA successfully challenged that statute on the basis of the Dormant Commerce Clause, because the statute directly interfered with interstate commerce. And even if a plaintiff can establish a prima facie case for a given cause of action, a court simply may reject the claim as void against public policy.
Ultimately, the power the Court granted to the NCAA in Tarkanian has deterred most litigation. Provided that the organization abides by its own bylaws, its adjudication has been considered lawful. The confluence of contract law, constitutional law, administrative law, and public policy imperatives have made the NCAA an elusive target for plaintiffs. Even in McNair’s case, his challenge to NCAA enforcement also included a concurrent (and a failed) defamation claim.
Based on the law as it has existed during the Tarkanian era, it appears likely that the California court’s ruling will be overturned. In Tarkanian itself, the Supreme Court cited the NCAA’s status as a national entity as a critical fact. The NCAA takes its rule-making guidance from institutional members in all 50 states, not merely Nevada or, in this case, California. For that reason, it does not act under the color of any individual state’s law.
While the Supreme Court’s analysis in Tarkanian examined whether the NCAA was a state actor, the organization’s 50-state status suggests this case may resolve at least partially on that basis as well. If California employees are immunized against show cause penalties, an imbalance thus arises that would erode NCAA enforcement capabilities generally. Other states also may choose to immunize their own coaches from this form of punishment, effectively making coaching jobs in those states more enticing relative to the rest of the country.
Not only did the NCAA and the Pac-12 criticize Judge Shaller’s ruling, so did others in far-flung destinations such as Indiana, where Notre Dame’s Athletic Director, Jack Swarbrick, mocked the ruling as “a quintessential California decision” and compared it to the state’s recent enactment of its own net neutrality law. Critics of Judge Shaller’s decision undoubtedly will point both to legal doctrines as well as the “revered tradition” of amateurism in college sports that the NCAA primarily is responsible to uphold.
Sentiment, Not Law, May Pose Greatest Threat; But the Line Must Hold
While the inevitable appeal of the Superior Court’s ruling appears likely to succeed, it would be unwise to dismiss the outcome as irrelevant. Judge Shaller, an elected judge and undergraduate alumnus of USC, may have provided something of a signaling function to future plaintiffs, the NCAA, and the public. While challenges to NCAA enforcement authority mostly were dormant for two decades, various issues are now percolating just under the surface and appear likely to become more urgent in coming years.
Some recent enforcement debacles may foreshadow further difficulties. Shortly after the Jerry Sandusky sexual molestation scandal unfolded at Penn State and grievously damaged the school’s ability to defend itself, an NCAA official admitted that she relied on a “bluff” to persuade PSU to sign a $60 million consent decree, because internally the organization doubted it possessed legitimate enforcement authority. The NCAA also violated ethical norms while pursuing the University of Miami for recruiting violations, when organization investigators sidestepped their lack of subpoena power by paying an attorney—who ostensibly was deposing witnesses in a related criminal matter—to obtain information regarding the investigation. The NCAA invited further ridicule by issuing no penalties following its protracted investigation of the University of North Carolina, which had become embroiled in an academic scandal but not actually violated NCAA bylaws.
These incidents fueled public perception of the organization as a bumbling, yet dictatorial force acting beyond its authority. If skeptics can convince the public that the NCAA is unable to competently tend to its own affairs, then why should it be able to override a state’s public policy?
But not all is lost. The NCAA did outlast opponents in antitrust litigation pertaining to likenesses of former athletes, and it breathed a sigh of relief when the National Labor Relations Board declined to exercise jurisdiction over the Northwestern football team’s attempt to unionize. To the extent the organization has acted pursuant to its traditional role within the amateur sports landscape, it appears to stand on relatively steady footing. McNair poses a challenge to the NCAA’s enforcement powers, where it has suffered high-profile setbacks, but the implications of Judge Shaller’s decision impact the organization’s existence more generally than was true in the specific Penn State, Miami, and UNC scenarios.
Accordingly, courts should exercise their discretion not to succumb to popular, yet legally unsound rulings. If changes are made to NCAA enforcement authority, those changes must be nationally applicable. The implication of the McNair ruling, that California schools are immune to show cause punishments, renders a level playing field impossible nationwide. As in Miller, where Nevada legislated greater protections for its own coaches against NCAA enforcement, the “revered tradition” of amateur athletics cannot stand if states are allowed to tilt the balance of power in their favor. If the NCAA is to enjoy a future overseeing college athletics, its ability to ensure equality must remain intact.
 See, e.g., Cohane v. Nat’l Collegiate Athletic Ass’n, 612 F. App’x 41, 43 (2d Cir. May 15, 2015) (summary order).
 See Nat’l Collegiate Athletic Ass’n v. Miller, 10 F.3d 633, 639 (9th Cir. 1993).
 See, e.g., Bassett v. Nat’l Collegiate Athletic Ass’n, 528 F.3d 426, 438 (6th Cir. 2008) (holding that plaintiff football coach’s purported contract with the school’s athletic director, a promise that the NCAA would not investigate if the coach offered to resign, would be void even if recognized).
https://ncbarblog.com/wp-content/uploads/2018/06/Blog-Header-1-1030x530.png00SportsandEntertainmenthttps://ncbarblog.com/wp-content/uploads/2018/06/Blog-Header-1-1030x530.pngSportsandEntertainment2019-01-07 11:57:152019-02-05 13:35:03The Show Must Not Go On: NCAA Faces Enforcement Hurdle Following Court’s Prohibition Against Show Cause Penalties