Abstract

Horizontal restraints are unlawful per se unless a court can identify some redeeming virtue that such restraints may create. In National Collegiate Athletic Association v. Board of Regents of the University of Oklahoma (“NCAA”), the Supreme Court rejected this standard, refusing to condemn horizontal restraints on price and output imposed by the NCAA without specifying any possible redeeming virtues. The Court emphasized that other restraints not before the Court were necessary to create and maintain athletic competition like that supervised by the NCAA. This exemption for sports leagues ensures that all restraints imposed by such entities merit Rule of Reason scrutiny, regardless of how harmful they appear.

Building on a forthcoming article, this Essay contends that NCAA’s sports league exemption contravenes traditional antitrust principles, including the ancillary restraints doctrine (which NCAA ignored). This Essay also argues that the exemption increases the number of false negatives and potentially impedes the conduct of Rule of Reason analysis. Finally, this Essay explains how the exemption inspired and informed an ill-advised doctrinal innovation, the so-called “Quick Look” methodology of Rule of Reason analysis, whereby courts condemn certain restraints “in the twinkling of an eye.” Some lower courts have recently extrapolated from this approach and exempted restraints limiting rivalry for the services of student athletes from Rule of Reason scrutiny, rendering such restraints lawful per se.

The United States Supreme Court is currently reviewing the Ninth Circuit’s holding in National Collegiate Athletic Association v. Alston, which condemned NCAA regulations limiting the size of athletic scholarships. This Essay provides the Alston Court with a roadmap for eliminating the sports league exemption, thereby placing such restraints on equal footing with restraints imposed by other entities. The Essay also advises the Court to reject lower court decisions that built upon the Quick Look doctrine and have treated restraints governing student athlete eligibility as lawful per se, thus exempting them from Rule of Reason scrutiny. Finally, the Essay concludes that the restraints before the Court in Alston may well produce cognizable antitrust benefits by overcoming the market failure that would result from unbridled rivalry for the services of student athletes. The Essay submits that the Court should articulate a Rule of Reason methodology in Alston that reflects the non-technological nature of such efficiencies.

Document Type

Article

Publication Information

11 Wake Forest Law Review Online 70-91 (2021)

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