Reporting as Eligible: Two Recent Rulings Cast Doubt on NCAA Eligibility Rules
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The legal landscape in college sports has been shifting rapidly since the United States Supreme Court’s 2021 decision in NCAA v. Alston¹ holding that certain restrictions on certain education-related benefits for student-athletes violated the Sherman Antitrust Act. Two recent district court decisions on motions for preliminary relief highlight the increased scrutiny courts are placing on the NCAA’s amateurism rules.
Diego Pavia v. NCAA
In the first, Pavia v. NCAA², the United States District Court for the Middle District of Tennessee granted a preliminary injunction to plaintiff Diego Pavia, barring the NCAA from enforcing a rule that would have prevented Pavia from continuing his career as a college football player. During the 2024 season, Pavia served as the starting quarterback for Vanderbilt University’s football team, leading the team to nearly unprecedented success. Vanderbilt finished the season with a record of 7-6, including a stunning upset win over then-number-one ranked Alabama, leading to a memorable scene of Vanderbilt students and fans tearing down the goalpost from Nissan Stadium, carrying it three miles through downtown Nashville, and dumping it into the Cumberland River.
These circumstances, in a post-Alston world, make Pavia an extremely valuable commodity. Days after Alston, influenced both by developments in state law and also by the language in Alston, the NCAA adopted its first policy regarding compensation paid to college athletes for the use of their Name, Image, and Likeness (“NIL”). These payments have quickly grown into a billion-dollar industry. Pavia, as a starting quarterback for a major college football program, could earn over $1 million in NIL compensation next season, if he were permitted to play.
Under NCAA rules, however, Pavia is ineligible to join Vanderbilt or any other college football program for another season. Pavia began his college career in 2020, playing two seasons for a junior college, and then transferred to New Mexico State University, where he played in 2022 and 2023, before transferring again to Vanderbilt. The NCAA rules allow a student-athlete to play college sports for four seasons within five calendar years. As stated by the Court, “The clock starts from the first day of classes of a term for which the student-athlete is registered for full-time study at a ‘collegiate institution.’ A collegiate institution includes four-year colleges and two-year junior colleges, but does not include post-secondary educational institutions such as prep schools, even if such schools offer athletic opportunities.³ Even after Pavia received a waiver for his 2020 season due to the COVID-19 pandemic, his 2021 season at junior college, 2022 and 2023 seasons at New Mexico State, and his 2024 season at Vanderbilt exhausted his eligibility under the rules.
Pavia sued, claiming that the enforcement of these rules would unreasonably restrain trade under the Sherman Act. Pavia sought a preliminary injunction against enforcement of the rules, so that he could participate in the NCAA’s Transfer Portal Window⁴ and negotiate NIL opportunities, before the deadline for committing to a university and football program had expired. The NCAA opposed the injunction on two bases: first, arguing that the rules are not subject to the Sherman Act because they are not commercial in nature, and second, arguing that the rules would satisfy the “rule of reason” analysis under the Sherman Act in any event.⁵
The Court granted Pavia’s motion and entered a preliminary injunction. The Court held that the NCAA eligibility rules were commercial in nature because of the post-Alston change to NIL payments. The Court reasoned that, because NIL compensation was undoubtedly commercial, “it necessarily follows that restrictions on who is eligible to play and therefore to negotiate NIL agreements is also commercial in nature.”⁶ The Court rejected the NCAA’s argument that categorizing eligibility rules as commercial would “strip[] college athletics of its defining feature – that it is played by student athletes,” by noting that “this does not mean that the NCAA cannot impose eligibility rules, only that those rules will be subject to further scrutiny to determine whether they are an undue restraint on trade.”⁷
The Court further held that, under the “rule of reason” analysis, the anticompetitive effect of eligibility restrictions outweighed the procompetitive rationale of the NCAA rules. The Court noted that junior colleges, which are not members of the NCAA, compete with NCAA member schools for athletic talent. Because an athlete would receive significant advantages from maximizing their time with an NCAA program (including increased opportunities to earn NIL compensation), and because time at a junior college “starts the clock” for a college athlete under the eligibility rules, those rules “induce potential football players to attend NCAA institutions rather than non-NCAA institutions even when non-NCAA institutions, such as junior colleges, might be in their best interest.”⁸
The court held that this anticompetitive effect outweighed any procompetitive rationale proposed by the NCAA, including preserving the character of college athletics as a competition between student-athletes. In dicta, the court indicated that the NCAA might be able to survive a “rule of reason” analysis for an eligibility clock limited to the time an athlete spends at an NCAA member institution, as a less restrictive alternative. The NCAA has appealed the preliminary injunction.
John Wade v. NCAA⁹
In the second case, John Wade, a member of the basketball team at the University of Southern Mississippi (“Southern Miss”), sought an injunction on very similar grounds to the one sought by Pavia. Procedural miscues have stymied his attempts at relief, for now, but the case appears ultimately headed for a similar outcome.
Wade attended the University of California, Davis, beginning in 2018. He was not a member of the basketball team at Davis. He transferred to Contra Costa College, a junior college, and played two seasons of basketball, before transferring to California State University, Northridge, an NCAA member school competing in Division I. He received a medical redshirt waiver for his sole season at Northridge, meaning that his year there did not count against his eligibility. Wade transferred again to California State University, Stanislaus, a Division II NCAA member school, where Wade competed during the 2023-24 season. He then transferred to Southern Miss, and prepared to play for the 2024-25 season.
Wade sought an extension for his eligibility, which expired under the NCAA rules in September 2024. The NCAA denied his request in July 2024, and Wade and Southern Miss lodged an internal administrative appeal with the NCAA. After the NCAA upheld its decision, Wade filed suit on December 20, 2024, and sought not only a preliminary injunction but also an ex parte temporary restraining order.
In a decision denying the restraining order, the United States District Court for the Southern District of Mississippi noted three shortcomings in Wade’s filing. First, the Court noted that Wade sought “to change the status quo” with his filing, and that accordingly, the accelerated relief of an ex parte temporary restraining order was improper.¹⁰ The court pointed out that Pavia had sought, and been denied, an ex parte temporary restraining order before ultimately prevailing on his request for a preliminary injunction. Second, the Court noted that Wade “does not even list which position on the basketball court he plays, much less what specific amount of NIL income that he is potentially missing out on.”¹¹ When compared to the substantial evidence of irreparable harm facing Pavia, the Court found that a temporary restraining order was even less justified. Finally, the Court noted that Wade waited until he had proceeded to exhaust his remedies within the NCAA’s internal processes, which he was not legally required to do. In fact, Wade filed his suit 20 days after exhausting his remedies with the NCAA, months after his six-year clock ran, and 12 games into Southern Miss basketball’s season. Accordingly, the Court found that “to at least some extent, Wade is partially to blame for this being an emergency in the first place."¹²
Despite denying the temporary restraining order, the Court set an expedited briefing schedule on the request for preliminary injunction, and held a hearing on January 10, 2025. Following this hearing, Wade and the NCAA reached a confidential settlement, and Wade was granted an eligibility waiver in exchange for dismissing his suit.
Analysis
In the immediate aftermath of the Pavia decision, the NCAA issued a blanket waiver granting an additional year of eligibility for former junior college transfers for the 2025-26 academic year. Assuming that the decision is upheld on appeal, the direct effects of the ruling could be profound, all on their own: rather than preferring offers from four-year Division I athletics programs directly out of high school, athletes may choose to attend junior colleges at an increased rate to further develop their skills, in order to increase their marketability and NIL compensation before transferring to an NCAA member institution.
More importantly for the broader picture of college athletics, both cases follow the trend of increased litigation against the NCAA’s rules, and both are likely to accelerate it. Even though Wade was denied his first request for relief, the Court in that case quoted liberally and favorably from the Pavia opinion, and signaled its willingness to follow the logic of that case. Moreover, the Court’s admonition in Wade, chiding the plaintiff for working within the strictures of the NCAA rather than running to court, is a flashing red sign to any athlete who may be aggrieved by any rule established by the NCAA, to sue and see where the chips fall.
Most significantly, despite the Pavia court’s articulation of a less restrictive measure in the form of a four-year eligibility clock limited only to time at an NCAA member institution, it is not clear whether that rule, or any other, would truly survive a “rule of reason” analysis in the current environment. A large cohort of college athletes have skill sets and attributes that make them significant contributors at the college level, but either lack the profile desired by professional sports leagues, or compete in sports without lucrative professional options. Consequently, their best opportunity to earn money with their skills would be to remain a college athlete as long as those skills qualified them to do so. For those athletes, any restriction on their eligibility would appear to have anticompetitive effects.
Finally, at least the Pavia case continues not only the trend of increased litigation against the NCAA, but also the trend of the NCAA finding itself on the losing end of that litigation, and having its authority curtailed as a result. Depending on the result of Wade’s preliminary injunction, it may also fit this trend. As the authority of the NCAA and the decades-old construct of the “student-athlete” is eroded and disrupted, other actors – conferences, NIL collectives, states, and individual postsecondary institutions – have stepped into the breach, if not to regulate, then simply to act. The increased activity on the part of colleges and universities, in particular, has profound consequences for compliance efforts as those schools: by way of example, on January 17, 2025, the Department of Education released guidance to schools, stating that direct payments from schools to athletes must comply with Title IX’s gender equity requirements. Whether the new administration will hew to this guidance remains unclear. Additional litigation is sure to follow, which in turn could lead to further regulatory and legislative responses.
Endnotes
594 U.S. 69, 141 S.Ct. 2141 (2021).
__ F. Supp. 3d ____, 2024 WL 5159888 (M.D. Tenn. December 18, 2024).
Id. at *4.
As a result of unrelated litigation against a separate NCAA rule regarding eligibility for transfer students, the NCAA has created a time-limited window during which student-athletes may declare their interest in transferring to a different school for purposes of participating in athletics on that new school’s team.
In order to determine whether commercial activity unreasonably restrains trade in violation of the Sherman Act, the courts will weigh the anticompetitive effects of the action against its procompetitive rationale. See, e.g., Chicago Bd. of Trade v. United States, 246 U.S. 231 (1918).
Pavia, 2024 WL 5159888 at *6.
Id. at *7.
Id. at *10.
John H. Wade v. National Collegiate Athletic Ass’n, No. 2:24-cv-196, 2024 WL 5212665 (S.D. Miss. Dec. 23, 2024).
Id. at *3.
Id.
Id. at 4.
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