In re NCAA I-A Walk-On FootBALL Players Litigation

Full title: IN RE NCAA I-A WALK-ON FOOTBALL PLAYERS LITIGATION

Court: United States District Court, W.D. Washington, at Seattle

Date published: May 3, 2006

Case No. C04-1254C (W.D. Wash. May. 3, 2006)

Opinion

Case No. C04-1254C.

May 3, 2006

ORDER

JOHN COUGHENOUR, District Judge

I. INTRODUCTION

This matter comes before the Court on the Plaintiffs' Motion for Class Certification (Dkt. No. 73), Defendant's Opposition (Dkt. No. 78), and Plaintiffs' Reply (Dkt. No. 101). Having considered the papers submitted by the parties and finding oral argument unnecessary, the Court DENIES Plaintiffs' motion, as follows.

II. BACKGROUND

Plaintiffs in this action — Nicholas Pilipauskis, Gary Daniels, Derek DuBois, Dennis DuBois, and Michael Whitesel¹ — are walk-on football players who played at NCAA Division I-A schools and who seek to have themselves designated as representatives of a class of similarly situated football players in this antitrust suit against Defendant the National Collegiate Athletic Association ("NCAA"). The NCAA is a voluntary, nonprofit, standard-setting association that promulgates the rules of competition for and operates annual national championships in 22 sports across three divisions. Over 1,200 educational institutions, athletics conferences, and related organizations are members of the NCAA. The NCAA regulates intercollegiate athletics in a number of ways, including prescribing rules of play, defining the length of seasons, imposing recruiting constraints, maintaining athletics records, defining eligibility parameters for players, delineating allowable coaching structures, and imposing sanctions when its rules are broken. The NCAA and its members believe that the NCAA "helps preserve amateurism and, by preventing schools with more prominent football programs from hoarding top players, also promotes competitive balance and fosters competition." (Def.'s Opp'n 1.)

1 Claims by additional Plaintiffs Andy Carroll and Brad Ledbetter were dismissed on January 9, 2006 by order of this Court, pursuant to a stipulation of the parties. (Order (Dkt. No. 77).)

At issue in this lawsuit is NCAA Bylaw 15.5.5, which imposes annual limits on the number of football scholarships that a member school may award. For Division I-A Football, an institution is limited to 85 "counters"² per year. Plaintiffs allege that they and the class they seek to represent would have received full grant-in-aid ("GIA")³ scholarships but for the Bylaw 15.5.5 restriction imposed on the number of GIA awards given to football team roster⁴ members. Plaintiffs cast Bylaw 15.5.5 as an anticompetitive agreement between Division I-A members whose purpose is to contain the costs of operating their 117 "big time college football" programs. Plaintiffs allege that the NCAA operates as a classic cartel, joining its competitor-members together to exert monopsony power that restricts competition for one of the major inputs (football players) to the relevant market (Division I-A college football). Accordingly, Plaintiffs argue that the scholarship limit is an unlawful horizontal restraint of trade imposed by the NCAA and its coconspirators in violation of the Sherman Act, 15 U.S.C. §§ 1, 2, and that the NCAA and its members have conspired to monopolize the "big time college football market." (Am. Compl.) Plaintiffs allege that "walk-ons"⁵ are injured by the cost-containment practice embodied by Bylaw 15.5.5 and that the subset of walk-ons that they seek to represent can prove this antitrust injury on a classwide basis.

2 A "counter" is "an individual who is receiving institutional financial aid that is countable against the aid limitations in a sport." NCAA, 2003-04 NCAA DIVISION I MANUAL, Bylaw 15.02.3 (2003) [hereinafter NCAA MANUAL].

3 "Grants-in-aid" apply toward the "cost of attendance," which the NCAA defines as the "total cost of tuition and fees, room and board, books and supplies, transportation, and other expenses related to attendance at the institution." NCAA MANUAL, Bylaw 15.02.2. However, a "full grant-in-aid" is limited to "tuition and fees, room and board, and required course-related books." Id. Bylaw 15.02.5. Student athletes may not receive financial aid that exceeds the value of a full grant-in-aid. Id. Bylaw 15.1.

4 The "roster," as used herein, refers to the list of "squad members" on the "first day of competition." NCAA MANUAL, Bylaw 15.5.9.2. The roster includes both scholarship and non-scholarship players.

5 As "walk-ons," Plaintiffs may have been recruited or unrecruited, but they have in common that they did not initially receive a GIA award. ( See Am. Compl. (Dkt. No. 17) 6.) A walk-on may later be awarded a GIA, which then counts toward the school's 85-GIA limit.

This action commenced on May 19, 2004. Plaintiffs seek injunctive relief invalidating Bylaw 15.5.5 (or any similar GIA maximum), as well as money damages (to be trebled according to statute), costs, and fees. This Court denied the NCAA's Rule 12(c) motion for judgment on the pleadings on September 14, 2005, finding (1) that Plaintiffs had sufficiently alleged that the scholarship limit implicates the Sherman Act in a way that eligibility rules do not, (2) that Plaintiffs are entitled to the opportunity to prove that there is a relevant market to which a rule-of-reason analysis can be applied, (3) that Plaintiffs had sufficiently alleged injury to competition, and (4) that Plaintiffs should have the opportunity to demonstrate that the NCAA has monopoly power over the alleged market. (Order (Dkt. No. 58).) After significant delay in briefing and discovery on the issue, the Court now takes up the question of whether Plaintiffs may proceed as representatives of a class.

III. PROPOSED CLASS DEFINITION

Plaintiffs seek to certify the following class: "all students who during the period starting four years from [ sic]⁶ the filing of the complaint were on the football pre-season practice rosters of NCAA Division I-A schools, but who did not receive a full grant-in-aid from their school." (Pls.' Mot. 1.) This class would not include all Division I-A walk-on football players. Rather, Plaintiffs intend this class to cover the subset of Division I-A walk-ons who practiced with the scholarship players in pre-season practice (or who counted as one of the 105 players allowed to attend such practice by NCAA rules). The Court describes this subset of walk-ons in more detail as follows.

6 Taken literally, this wording would mean that a class period of four years would start in 2008 (4 years from 2004). However, it is clear that the parties contemplate a four-year statute of limitations boundary on the class that ended in 2004 and includes players who participated in football seasons corresponding with academic years 2000-01, 2001-02, 2002-03, and 2003-04. ( See Am. Compl. 7-9 (discussing the named Plaintiffs' season involvement as walk-ons); Def.'s Opp'n, Ordover Decl. ¶ 9 n. 4 ("I understand that the `class period' is the four academic years from 2000-01 through 2003-04.").)

According to Plaintiffs, there is no limit on roster size during the season, but the average roster size is 115. (Pl.'s Mot., Tollison Decl. ¶ 20.) Because of the scholarship limit (85), the roster members who are not on scholarship must participate with the team as walk-ons. Thus, a hypothetical team with 85 scholarship players on a roster of 115 total players will have 30 non-scholarship walk-ons.⁷ However, not all walk-ons at Division I-A schools can attend pre-season practice. The NCAA imposes a limit on pre-season practice participation at 105 players per team. NCAA MANUAL, Bylaw 17.11.2.1.1 ("In Division I-A football, there shall be a limit of 105 student-athletes who may engage in practice activities prior to the institution's first day of classes or the institution's first contest, whichever occurs earlier.") Accordingly, the same hypothetical team described above would only be able to have 20 of its 30 walk-ons attend pre-season practice if it is to adhere to the pre-season practice limitation. It is these roughly 20 walk-ons who did attend pre-season practice at each Division I-A school for the 2000-04 seasons that would be members of Plaintiffs' purported class. Plaintiffs have dubbed these the "top-20 walk-ons." (Pl.'s Mot. 6.) However, it is not the number (20), but rather the status (pre-season practice attendance) that would define class membership, because, due to factors that change a given school's scholarship number ( e.g., a sanction that limits a school to awarding 84 scholarships in a particular year) or the number of pre-season practice attendees (which could be less than 105), there may have been slightly more or fewer walk-ons than 20 attending pre-season practice at a given school for a given season. The important criterion for class membership, therefore, is that a walk-on was one of the 105 or fewer players allowed by NCAA rules to attend Division I-A pre-season practices for the 2000-04 football seasons.

7 The Court acknowledges that some players may receive scholarships but, due to circumstances such as injuries, etc., still do not "count" toward their school's limit of 85. For the sake of this brief discussion, the Court assumes that everyone with a scholarship "counts" and attends pre-season practice.

IV. CLASS CERTIFICATION STANDARD

Federal Rule of Civil Procedure 23 governs class certification. To maintain a lawsuit as a class action, each of the four Rule 23(a) requirements, plus one of the three Rule 23(b) requirements must be satisfied. FED. R. CIV. P. 23. Here, Plaintiffs seek certification under Rule 23(b)(3). Plaintiffs therefore have the burden to show that their proposed class meets the requirements of Rules 23(a) and (b)(3). Zinser v. Accufix Research Inst., 253 F.3d 1180, 1186 (9th Cir. 2001), amended by 273 F.3d 1266 (9th Cir. 2001); see also In re Coordinated Pretrial Proceedings in Petroleum Antitrust Litig., 691 F.2d 1335, 1343 (9th Cir. 1982).

This Court may certify a class only if it is "satisfied, after a rigorous analysis," that the Rule 23 prerequisites for class certification are met. General Tel. Co. of the Southwest v. Falcon, 457 U.S. 147, 161 (1982). However, district courts have broad discretion to determine whether to certify a class within this framework. Id. In addition, because this is an antitrust case, application of Rule 23's standards must be guided by the general standards of inquiry for class actions, as well as the particular considerations relevant to antitrust cases. Among these is the principle that antitrust cases are "well suited for class actions." In re Playmobil Antitrust Litig., 35 F. Supp. 2d 231, 238 (E.D.N.Y. 1998). This suitability follows from the "important role that class actions play in the private enforcement of antitrust actions." Id. at 239. Nevertheless, class certification in antitrust cases ultimately depends on satisfaction of Rule 23's requirements, as in any other context.

Courts may not consider the merits of a case when deciding the question of class certification. Eisen v. Carlisle Jacquelin, 417 U.S. 156, 177 (1974) ("We find nothing in either the language or history of Rule 23 that gives a court any authority to conduct a preliminary inquiry into the merits of a suit in order to determine whether it may be maintained as a class action."). However, "the class determination generally involves considerations that are enmeshed in the factual and legal issues comprising the plaintiff's cause of action." Falcon, 457 U.S. at 160 (internal quotations omitted). While the substantive allegations of the complaint must be taken as true at the class certification stage, Blackie v. Barrack, 524 F.2d 891, 901 n. 17 (9th Cir. 1975); In re Potash Antitrust Litig., 159 F.R.D. 682, 688 (D. Minn. 1995) (antitrust context), "sometimes it may be necessary for the court to probe behind the pleadings" to "determine whether the interests of the absent parties are fairly encompassed within the named plaintiff's claim." Falcon, 457 U.S. at 160. As the First Circuit has noted, "a district court must formulate some prediction as to how specific issues will play out in order to determine whether common or individual issues predominate in a given case." Waste Mgmt. Holdings, Inc. v. Mowbray, 208 F.3d 288 (1st Cir. 2000) (citing Falcon, 457 U.S. at 160-61; Coopers Lybrand v. Livesay, 437 U.S. 463, 469 (1978)).

Here, the parties have submitted voluminous declarations from experts and others to supply the Court with the material needed to evaluate the factual and legal issues presented by this case in light of the foregoing standards for class certification analysis. While the Court will consider the expert materials submitted with class certification briefing, it will not "delve into the merits" of the expert opinions or "indulge `dueling' between" the parties' undisputedly well-qualified⁸ experts. In re Northwest Airlines Corp. Antitrust Litig., 208 F.R.D. 174, 218 (E.D. Mich. 2002) (internal citation omitted). Further, the Court declines the NCAA's invitation ( see Def.'s Opp'n 6-7) to embark on a full-fledged Daubert inquiry or an admissibility determination under the Federal Rules of Evidence at this stage of the litigation. See Dukes v. Wal-Mart, Inc., 222 F.R.D. 189, 191 (N.D. Cal. 2004) (citing cases in support of notion that Daubert inquiries and exacting expert standards are inappropriate at class certification stage). Rather, at this point, "the question is whether the expert evidence is sufficiently probative to be useful in evaluating whether class certification requirements have been met." Id. (citing In re Polypropylene Carpet Antitrust Litigation, 996 F. Supp. 18, 26 (N.D. Ga. 1997)). Determining the trial admissibility or the ultimate weight of opposing expert opinions is a far different inquiry than the threshold one appropriate here, where Plaintiffs' expert must only demonstrate that his methodology is not "so fatally flawed as to be inadmissible as a matter of law." Id.; see also In re Visa Check/MasterMoney Antitrust Litig., 192 F.R.D. 68, 76-80 (E.D.N.Y. 2000) (limited evaluation of expert testimony on class certification). Accordingly, the Court will address expert issues where appropriate, but will do so on a limited basis.

8 Neither side asserts that the opposing expert is unqualified. Moreover, both Plaintiffs' expert Dr. Tollison and the NCAA's expert Dr. Ordover appear to have sufficient qualifications. (Pls.' Mot., Tollison Decl. Ex. 1 ( curriculum vitae), Ex. 2 (expert testimony and reports provided in other cases); Def.'s Opp'n, Ordover Decl. Ex. 1 ( curriculum vitae), Ex. 2 (expert testimony provided in other cases).)

Having set forth the applicable standards for class certification analysis, the Court now turns to the requirements of Rules 23(a) and (b)(3).

V. RULE 23 ANALYSIS

A. Rule 23(a)

Rule 23(a) provides:

One or more members of a class may sue or be sued as representative parties on behalf of all only if (1) the class is so numerous that joinder of all members is impracticable ["numerosity"], (2) there are question of law or fact common to the class ["commonality"], (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class ["typicality"], and (4) the representative parties will fairly and adequately protect the interests of the class ["adequate representation"]. FED. R. CIV. P. 23(a) (emphasis added). The Court must address numerosity, commonality, typicality, and adequate representation separately in assessing whether Plaintiffs have met their Rule 23(a) burden.

1. Numerosity

Rule 23(a)(1) requires the class to be so numerous that complete joinder of individual class members is impracticable. The numerosity requirement calls for more than speculation, but less than an exact figure. ALBA CONTE HERBERT B. NEWBERG, 6 NEWBERG ON CLASS ACTIONS § 18:2 (4th ed. 2002) [hereinafter NEWBERG]. "A finding of numerosity may be supported by common sense assumptions, and it is especially appropriate in antitrust actions brought under Rule 23(b)(3)." In re Playmobil, 35 F. Supp. 2d at 239 (citing NEWBERG (2d ed. 1985)). Geographic dispersion also plays a role in determining whether joinder would be impracticable. Id.

Here, the purported class includes walk-on football players from all over the United States. Plaintiffs assert that there are "hundreds, if not thousands" of members of the proposed class. (Pl.'s Mot. 11.) The NCAA does not dispute Plaintiffs' allegation as to the size of the class, nor does it challenge class certification on the basis of failure to meet the numerosity requirement. Further, given an average roster size of approximately 115 during the 200-04 seasons,⁹ along with the NCAA-imposed limit of 105 players who can attend pre-season practice, it is reasonable to estimate that there were roughly 20 walk-ons who attended pre-season practice per season at many, if not all, of the 117 Division I-A schools. Thus, for one of the four seasons at issue here, the Court can reasonably estimate that at least 2,000 players probably would be class members, and a class of over 2,000 people nationwide certainly satisfies the numerosity requirement. See In re Flat Glass Antitrust Litig., 191 F.R.D. 472, 477 (W.D. Pa. 1999); Lewis v. National Football League, 146 F.R.D. 5, 8-9 (D.D.C. 1992). Accordingly, the Court finds that Rule 23(a)(1) is satisfied in this case.

9 It is undisputed that the average roster size during the seasons at issue in this lawsuit (2000-04) was at least 115. (Pl.'s Mot., Tollison Decl. ¶ 41 tbl.4 (showing data from the NCAA's website about roster sizes).)

2. Commonality

Rule 23(a)(2) requires that there be questions of law or fact common to the class. However, not all questions of law and fact need to be common to the class. Hanlon v. Chrysler Corp., 150 F.3d 1011, 1019 (9th Cir. 1998); NEWBERG § 18:5. Further, "individual issues of fact will invariably be present," and this reality will not preclude certification. NEWBERG § 18:6, at 21. As the Ninth Circuit has explained the test, "[t]he commonality preconditions of Rule 23(a)(2) are less rigorous than the companion requirements of Rule 23(b)(3) [that common issues predominate over individual ones]. Indeed, Rule 23(a)(2) has been construed permissively. . . . The existence of shared legal issues with divergent factual predicates is sufficient. . . ." Hanlon, 150 F.3d at 1019.

Moreover, in the antitrust context, the existence of a conspiracy, its scope, its effect, whether it violates the Sherman Act, and whether it should be enjoined are standard "common questions." See, e.g., In re Flat Glass, 191 F.R.D. at 478-79; Northwestern Fruit Co. v. A. Levy J. Zenter Co., 116 F.R.D. 384 (E.D. Cal. 1986). In addition to conspiracy issues, allegations of price-fixing and monopolization are considered to be "common questions" as well. NEWBERG § 18:5. As one district court has noted, "[a]ntitrust price-fixing conspiracy cases, by their nature, deal with common legal and factual questions about the existence, scope and effect of the alleged conspiracy." Cumberland Farms, Inc. v. Browning-Ferris Indus. Inc., 120 F.R.D. 642, 646 (E.D. Pa. 1988).

The NCAA does not dispute that Plaintiffs have passed the Rule 23(a)(2) commonality test. Rather than dispute commonality, the NCAA contends that individual issues predominate over common ones, under Rule 23(b)(3), as discussed infra. Because commonality is not disputed and because the nature of this antitrust lawsuit makes it clear that common issues exist, the Court finds the commonality requirement satisfied in this case. By way of example, but not limitation, the Court notes that common issues here include: whether Bylaw 15.5.5 is a horizontal restraint of trade in violation of the Sherman Act; whether there is a relevant market for antitrust purposes; whether the NCAA and its members have improperly monopolized Division I-A college football; whether there has been injury to competition; and whether an injunction and/or damages are appropriate remedies for the alleged illegal conduct.

3. Typicality

Rule 23(a)(3) requires that the class representatives have claims or defenses typical of the class. Typicality is present if a plaintiff's claim "arises from the same event or practice or course of conduct that gives rise to the claims of other class members, and her or his claims are based on the same legal theory." NEWBERG § 18:8, at 26.

The main principle behind typicality is that the plaintiff will advance the interests of the class members by advancing her or his own self-interest. The alignment of interest is not the test for typicality. It is the result. . . . The plaintiff whose claim is typical will ordinarily establish the defendants' liability to the entire class by proving his or her individual claim.

Id. at 29; see also Hanlon, 150 F.3d at 1020 ("Under the rule's permissive standards, representative claims are `typical' if they are reasonably co-extensive with those of absent class members; they need not be substantially identical."); In re Playmobil, 35 F. Supp. 2d at 242 (typicality discussion); State of Minn. v. U.S. Steel Corp., 44 F.R.D. 559, 566-67 (D. Minn. 1968) (finding that disparity of proof of damages will not render claims atypical).

The NCAA's cursory objection to typicality (Def.'s Opp'n 23-24) is meritless. Not only does it miss the mark by confounding typicality of claims and typicality of parties,¹⁰ but it also unpersuasively raises a question of standing that is improperly framed as a class-certification issue, as discussed infra subsection V.A.4, note 12.

10 See Martino v. McDonald's System, Inc., 81 F.R.D. 81, 85 (N.D. Ill. 1979) ("Rule 23(a)(3) requires that the representative parties' claims be typical, not that the parties themselves be typical.").

Here, the legal theory to be advanced by all class members — that the NCAA and its members violated the Sherman Act — is identical. The facts going to the violation are also identical for each class member. All of the factual and legal inquiries will be the same to establish the relevant market, illegality, characterization of Bylaw 15.5.5 as a horizontal restraint, injury to competition, and the propriety of an injunction. Where the required proof diverges significantly is at the antitrust injury and damages stages, as discussed infra subsection V.B. However, because proof of an antitrust violation by the representatives would establish an antitrust violation as to the rest of the class as well, and, in turn, give rise to potential NCAA liability to the members of the class, and because "alignment of interest" is not required for a typicality finding, the Court finds that the typicality requirement is met notwithstanding divergent injury and damages issues.

4. Adequate Representation

Rule 23(a)(4) requires that the class representatives will be able to fairly and adequately protect the interests of the class. This requirement's purpose is to ensure that absent class members are "afforded adequate representation before entry of a judgment which binds them." Hanlon, 150 F.3d at 1020. As noted by the Second Circuit,

an essential concomitant of adequate representation is that the party's attorney be qualified, experienced and generally able to conduct the proposed litigation. Additionally, it is necessary to eliminate so far as possible the likelihood that the litigants are involved in a collusive suit or that plaintiff has interests antagonistic to those of the remainder of the class.

Eisen v. Carlisle and Jacquelin, 391 F.2d 555, 562 (2d Cir. 1968). Thus, two inquiries are required to determine whether representation will be fair and adequate. The first is whether the named plaintiffs and their counsel have any conflicts of interest with other class members; the second is whether the named plaintiffs and their counsel will prosecute the action vigorously on behalf of the class. Hanlon, 150 F.3d at 1020.

The NCAA does not challenge the representation by Plaintiffs' counsel — lead representation by the law firm of Hagens Berman Sobol Shapiro LLP, with Steve Berman as lead counsel for Plaintiffs and the proposed class. Further, the firm and lead counsel clearly are experienced and capable of providing vigorous and competent representation in this antitrust class action suit.

While it does not object to Plaintiffs' counsel, the NCAA does cast doubt on the named Plaintiffs' ability to adequately represent the class by emphasizing competition between class members and by asserting that factual unknowns make it difficult, if not impossible to tell "which, if any, of [the walk-ons] would have" actually been awarded scholarships without the Bylaw 15.5.5 limit — thus questioning their relationship to the NCAA as injured parties. (Def.'s Opp'n 23.) The NCAA asserts, for example, the following requirements of Plaintiffs' proof of injury and damages: (1) that exact numbers be determined for each school's scholarship offerings in a "but for" world with no caps; (2) that each player be able to prove that, given this (allegedly undeterminable) number, he (and not other teammates) actually would have been awarded one of those scholarships; (3) that players from other schools would not have been preferred over him for one his school's scholarships; and (4) that in the "but for" world, he would have attended the same school that he actually attended (or, alternatively, if he would have attended a different school, which school that would have been). The NCAA argues that all of these questions and more must be answered for each class member before injury and damages can be determined.

Where a conflict exists between class members who allege an absence of dealing, such as the lack of scholarships offered here, the conflict may preclude certification if it goes to the merits of the litigation. NEWBERG § 18:17. To preclude certification, such a conflict must be "overriding." Id. at 58 (internal quotation omitted). Further, where "claims involve `amounts of business not done and without the slightest objective guidelines for apportioning individual damages among the class members,' this creates a conflict of interest as to an essential element of antitrust claims." Christiana Mortgage Corp. v. Delaware Mortgage Bankers, 136 F.R.D. 372, 380 (D. Del. 1991) (quoting Al Barnett Son, Inc. v. Outbound Marine Corp., 64 F.R.D. 43, 50 (D. Del. 1974)); see also Glictronix Corp. v. Am. Tel. Tel. Co., 603 F. Supp. 552, 585-86 (D.N.J. 1984); Chestnut Fleet Rentals, Inc. v. Hertz Corp., 72 F.R.D. 541, 544 (E.D. Pa. 1976).

While antitrust injury and damages issues are discussed in more detail infra subsection V.B., the Court specifically notes the following for purposes of this adequate representation discussion. Plaintiffs' expert clearly suggests that injury and damages can be proven on a classwide basis and that conflicts between class members about their individual damages will be largely irrelevant to these stages of proof. Plaintiffs further argue that there may be no need to ever determine individual damages to the level of certainty that the NCAA suggests. For instance, Plaintiffs' expert has proposed a general method by which to prove that a particular number of scholarships would be offered in the "but for" world and that each class member was injured, as well as a damages calculation formula that involves the number of years that an individual was a walk-on player, the value of a scholarship at his school during the years he was a walk-on, and the number of class members. ( See Pls.' Mot., Tollison Decl. 39-40 (damages formula).) However, even assuming for purposes of this discussion that these methods are permissible means of proving some level of classwide impact and classwide damages, they fail to account for the complex individual questions that will remain before this litigation can be concluded. Once a lump sum of classwide damages is calculated, this money must be distributed in some manner. Plaintiffs' expert offers no explanation about how each class member's actual damages will be determined after a generalized calculation is made. It is these specific calculations — along with the inseparable proof of causation — that present significant individual issues for each class member, as discussed infra subsection V.B, as well as provide evidence of fundamental intra-class conflicts.

The Court emphasizes that in considering the adequate representation element, the question is not whether individual damages need to be calculated. Rather, assuming that the mere need to calculate individual damages does not preclude certification, Bogosian v. Gulf Oil Corp., 561 F.2d 434, 456 (3d Cir. 1977), the question here is the means that will be required to make such individual damages calculations. In order to prove that he is entitled to a particular piece of the damages pie, each class member will have to offer proof that necessarily will involve arguing that a threshold number of other players (class members and non-class members) would not have gotten that same scholarship money. In a similar "failure-to-do-business" case, another district court found that

each of the potential class members is a competitor in the sense that each operates in the same relevant market and each competes for the fixed amount of business which this market generates. An illegal foreclosure of this limited market will necessarily generate a limited amount of damages. Since the named plaintiffs and the class members are competitors for this business, they will necessarily compete for the limited damages attributable to illegal foreclosure in the market. Plaintiffs' attempt to maximize their own damage recovery will conflict with the interests of the class because maximization of plaintiffs' damages will limit the amount of damages left for the class members to share.

Chestnut, 72 F.R.D. at 545. Assuming that Plaintiffs can establish the relevant market, that it was illegally constrained by an antitrust violation, and that some antitrust injury ensued, the damages conundrum described in Chestnut will be central to resolution of the instant case as well. If, for example, the players can prove that each school would have awarded 20 additional scholarships, they then will have to prove who would have received those scholarships — and for each to prove that he would have been in that group, he will have to prove that others were not. Therefore, even if the Court accepts the sufficiency of Plaintiffs' expert's proposed method of establishing classwide antitrust injury and classwide damages,¹¹ the Court finds that "no method at all" has been presented by Plaintiffs' expert to deal with the problem of intra-class antagonism at the damages calculation and distribution phase.

11 See infra subsection V.B for further discussion of whether such classwide proof is sufficient.

The purported class members in this failure-to-award-scholarships case have inherently conflicting interests. Accordingly, the representatives cannot adequately represent all members of the class. Class representatives and members indeed will have to "undercut" other class members' interests in order to proceed with this litigation. Because of this intra-class conflict, the Rule 23(a)(4) requirement of "adequate representation" cannot be met in this case.¹²

12 The NCAA's final challenge to adequacy of representation — that the named plaintiffs are "not typical of, or even in, the class" (Def.'s Opp'n 23) — does not raise an appropriate class certification inquiry. Rather, it goes to standing. The U.S. Supreme Court "has held that standing is not a class issue, but a requirement that must be met by every plaintiff, whether the suit is brought individually or on behalf of a class." NEWBERG § 18:15, at 48 n. 2 (citing Laird v. Tatum, 408 U.S. 1 (1972), and noting that the "so-called membership in the class requirement" is "in reality . . . a conclusion, not an independent class representative test, that the plaintiff has standing and that the plaintiff's claims are typical.").
The NCAA has not claimed that the Plaintiffs lack standing to sue the NCAA regarding Bylaw 15.5.5. Rather, the NCAA attempts to add to the class definition requirements that walk-ons were "carefully recruited" and that they were "most likely to play in actual games," specifically by noting that Nicholas Pilipauskis was "not recruited, carefully or at all" and that Dennis DuBois and Michael Whitesel never played in any games. (Def.'s Opp'n 24.) These characteristics are not part of the proposed class definition, and these Plaintiffs' capacity to represent the class cannot be challenged on these bases. The only seemingly legitimate challenge to the representative Plaintiffs' "class membership" is that to Dennis DuBois, because he allegedly never participated in pre-season practice at any school. ( See Def.'s Opp'n, Wheeler Decl. Ex. F (Dep. of Dennis DuBois 56-57, 89).) This, however, is not a class certification issue and has no impact on the named Plaintiffs' ability to adequately represent the purported class.

B. Rule 23(b)

While finding that Plaintiffs have failed to satisfy Rule 23(a)(4) is sufficient to deny class certification, the Court must conduct a "searching inquiry" under Rule 23, and therefore will test Plaintiffs' proposed class under Rule 23(b)(3) as well. Rule 23(b) provides:

An action may be maintained as a class action if the prerequisites of subdivision (a) are satisfied, and in addition:

. . . .

(3) the court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members ["predominance"], and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy ["superiority"]. The matters pertinent to the findings include: (A) the interest of members of the class in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already commenced by or against members of the class; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; (D) the difficulties likely to be encountered in the management of a class action.

FED. R. CIV. P. 23(a) (emphasis added).

1. Predominance of Common Questions of Law and Fact

The Rule 23(b)(3) "predominance" inquiry differs from the "commonality" inquiry of Rule 23(a)(2). The Rule 23(b)(3) analysis "presumes that the existence of common issues of fact or law have been established pursuant to Rule 23(a)(2)," and instead "focuses on the relationship between the common and individual issues." Hanlon, 150 F.3d at 1022. In the antitrust context, "issues of conspiracy, monopolization, and conspiracy to monopolize have been viewed as central issues which satisfy the predominance requirement." NEWBERG § 18:26, at 86-89. Further, "individual damage questions do not preclude a Rule 23(b)(3) class action when the issue of liability is common to the class." Id. § 18:27, at 91. While antitrust cases commonly satisfy the predominance test, a "mere allegation of price-fixing will not satisfy" Rule 23(b)(3). In re Potash, 159 F.R.D. at 693. Thus, in considering Rule 23(b)(3), the Court must look to the claims Plaintiffs seek to litigate in the factual context of the case and determine whether the elements of Plaintiffs' claims lend themselves to common proof. Id. at 693-94; see also In re NASDAQ Market-Makers Antitrust Litig., 169 F.R.D. 493, 517 (S.D.N.Y 1996) (describing plaintiffs' burden on class certification with respect to elements of antitrust liability). Obtaining a remedy for the price-fixing conspiracy that Plaintiffs allege requires proving (1) a violation of the Sherman Act, (2) the "fact of damage," and (3) the amount of damages. Id.; see also Bogosian, 561 F.2d at 545-56; Chestnut, 72 F.R.D. at 547-48.

In the instant case, the first element of Plaintiffs' antitrust claim involves not only proving the existence of NCAA Rule 15.5.5, but also whether it violates the Sherman Act. The NCAA argues that because it does not dispute the existence of the scholarship cap, the existence of a conspiracy is a nonissue, and therefore cannot be a common issue that could predominate. The Court disagrees. The existence of the scholarship cap is not all that Plaintiffs must prove to establish a violation of the Sherman Act. Indeed, this Court has already ruled that a "rule-of-reason" analysis will be required to determine whether Bylaw 15.5.5 violates antitrust law. In re NCAA I-A Walk-On Football Players Litig., 398 F. Supp. 2d 1144, 1150 (W.D. Wash. 2005). The Court agrees with Plaintiffs ( see Pl.'s Reply 4) that the application of the rule-of-reason analysis creates additional common issues, and that the NCAA's assertion to the contrary is untenable. In addition, the parties' dispute about whether this case involves true "price-fixing" ( see Def.'s Opp'n 7-9; Pls.' Reply 3-5) is a common issue that cannot be ignored simply because the NCAA agrees that Bylaw 15.5.5 exists.

Thus, the Court finds that, as to the first element of Plaintiffs' antitrust claim, there are multiple common issues to be resolved. These common issues include the legal questions discussed here, as well as whether Bylaw 15.5.5 is an illegal horizontal restraint of trade, whether there is a "relevant market," and whether there was an improper monopolization of Division I-A college football. Further, there is no question that such common issues "predominate" as to the existence of an antitrust violation — indeed, no individual issues have even been identified as to this element.

However, once the existence of an antitrust violation has been fully litigated, the predominance of common issues will fade quickly. In this case, predominance of common issues as to one element of Plaintiffs' claim is insufficient for a finding of predominance of common issues as to the entire litigation. The individualized determinations that will be required to prove antitrust injury and damages provide an insurmountable barrier to class treatment, as follows.

If an antitrust violation is established, the second and third elements of Plaintiffs' claim relate to the fact and amount of damages caused by that violation — issues that will involve almost entirely individual determinations on the facts of this case. While these elements both go to Plaintiffs' injuries, they remain separate inquiries. The second element — "fact of damage" or "antitrust injury" — "flows from that which makes defendants' acts unlawful." Blue Shield of Virginia v. McCready, 457 U.S. 465, 484 (1982). Proof of such impact can be "made on a common basis so long as the common proof adequately demonstrates some damage to each individual." Bogosian, 561 F.2d at 454 (emphasis added). Antitrust "[i]mpact is a distinct element of liability, independent of proof of a violation and independent of the matter of individual damages." Glictronix, 603 F. Supp. at 588. Thus, liability cannot be established until this second element is proven.

Upon showing that some degree of damage was sustained by each plaintiff under the "fact of damage" test, Plaintiffs must then prove and measure their damages to satisfy the third element. See Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 114 n. 9 (1969). However, in a Rule 23(b)(3) analysis, the contours of the third element require the least scrutiny. See In re Potash, 159 F.R.D. at 694 ("[T]he issue in the common impact analysis is the fact, not the amount, of injury."). Moreover, once antitrust injury is established ( i.e., liability attaches), the overall burden of proving damages is reduced in antitrust cases. Moore v. Jas. H. Matthews Co., 682 F.2d 830, 836 (9th Cir. 1982) ("A study of the adjudicated cases in [the antitrust] area readily dispels any impression that [the] question of damages is governed by an application of the common law rule of reasonable certainty. The cases have long since departed from this rule in antitrust litigation.").

Here, the NCAA puts most of its emphasis in opposing class certification on the argument that individual issues predominate as to injury and damages. (Def.'s Opp'n 9-23.) The NCAA argues that the Court must (impermissibly) accept "four `key' assumptions" made by Plaintiffs' expert in order to find common impact. ( Id. at 9.) These "assumptions" are defined by the NCAA as the following: (1) Bylaw 15.5.5 actually limited the number of scholarships at all 117 Division I-A schools during the class period because they all awarded 85 scholarships each year; (2) all schools would add 20 scholarships if Bylaw 15.5.5 did not exist; (3) each member of the class would have received one of those scholarships; and (4) each member would have attended the same school even without the Bylaw 15.5.5 restrictions. ( Id.) As discussed below, the Court finds "assumptions" (1) and (2) to be insignificant, given Plaintiffs' proposed method of proof, but the Court finds that "assumptions" (3) and (4) cannot be resolved without significant individual inquiry going far beyond Plaintiffs' suggested method of generalized proof. The Court will utilize the NCAA's four groupings, as outlined here, in discussing the questions they raise regarding predominance.

Plaintiffs and their expert maintain that questions (1), (2), and (3) may be proven by data analysis modeling what a "but for" world would look like without the scholarship cap. A fundamental difference between Plaintiffs' expert and the NCAA's expert is how they frame such a model. Plaintiffs argue that the proper frame of reference involves comparing current practices to pre-restraint practices, which in turn will prove that antitrust impact resulted from Bylaw 15.5.5. In contrast, the NCAA argues that there is no way — if the restraint were lifted tomorrow — that all 117 schools would offer 20 more scholarships because they do not all offer 85 today. Plaintiffs answer the NCAA's criticism of their expert methodology by emphasizing that practices in a restrained world should not inform construction of any useful "but-for" model of an unrestrained world. As noted supra, this Court will not engage in a battle of the experts or a detailed back-and-forth between the expert declarations submitted on this motion. Nor will it endorse either party's approach. It is enough for the Court to find that Plaintiffs' proposed method of analyzing pre-restraint data, considering ongoing economic factors, and modeling a "but for" world are sufficient to meet their burden on class certification on the questions of (1) whether Bylaw 15.5.5 actually limited the number of scholarships at all 117 Division I-A schools during the class period and (2) whether all schools would have awarded 20 additional scholarships in the absence of Bylaw 15.5.5.

However, accepting Plaintiffs' method as sufficient for class-certification purposes to prove the number of scholarships that would have been awarded in a "but for" world does not dispose of questions (3) and (4) about which players would have been awarded those scholarships. Thus, even if "antitrust injury" can be proven to some degree as a general matter ( i.e., some players were hurt by Bylaw 15.5.5), antitrust injury as to each member of the class (proof of which is required, see Bogosian, 561 F.2d at 454) cannot be proven without considering the facts surrounding each class member, including whether each one of them would have actually been awarded one of the additional scholarships and which school he would have attended. Fully proving antitrust injury requires providing answers to highly individualized questions such as these.

The NCAA argues that detailed discovery will be necessary to prove antitrust injury (and damages) — such as that each and every coach and walk-on at all 117 schools for the 4-year class period will need to be interviewed to determine who would have been awarded scholarships if more were available, which players would have been "traded in" for other "better" players, and which players would have crossed divisions or attended other schools. The Court does not need to determine whether this is accurate, but finds that a threshold number of individualized inquiries will be required such that individual issues will predominate on the question of antitrust injury, and, therefore, liability.

Plaintiffs' presumption that each class member would have been injured is unsupported, even if Plaintiffs are correct about the number of scholarships that would have been available but for Bylaw 15.5.5. Plaintiffs have not offered any method of proving that the purported class members would have been the same players injured by the restraint. As with the adequate representation determination, the difficulty here stems from the nature of this case, where Plaintiffs allege failure to award scholarships. The nexus between the number of scholarships available in the "but for" world and the members of the purported class ( i.e., matching scholarships with real players) requires individualized proof. Even if there could be some level of relevant common proof of generalized antitrust injury, the individual issues going to full satisfaction of this critical element of liability clearly predominate.

The NCAA not only challenges Plaintiffs' ability to show classwide antitrust injury, it also alleges that damages calculations will be infeasible, if not impossible. Plaintiffs dispute the NCAA's claim that individual damages calculations are necessary. Further, Plaintiffs' expert has presented a formula for figuring damages on a classwide basis, taking into account the number of years that an individual was a walk-on player, the value of a scholarship at his school during the years he was a walk-on, and the number of class members. ( See Pls.' Mot., Tollison Decl. 39-40 (damages formula).) Such an approach is acceptable in antitrust cases generally. NEWBERG § 18:53. However, the Court finds such generalized proof of damages unacceptable under the circumstances of this case, where individual issues permeate the determination of both liability and damages.

For the reasons set forth supra subsection V.A.4, the Court finds that individual issues clearly predominate as to the element of damages. Specifically, each player must prove that he would have received a scholarship (injury) and how much it would have been (damages). The Court acknowledges that individual damages determinations alone are not enough to prevent class treatment. However, "damages" cannot be considered in a vacuum. On the facts of this case, proof of injury likely will provide a foundation for proof of damages for each player. Thus, rather than being a severable issue, proof of damages is wrapped up in proof of liability itself. Accordingly, individual damages issues join with individual liability issues to prevent class certification in this case.

Not only is individualized proof required at the damages phase as a practical matter, it is a constitutional requirement as well. Plaintiffs allege that they "have been injured in their business and property," and have requested that the Court award treble damages. Because Plaintiffs have brought an action at law, they are entitled to the jury trial that they have demanded. Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 504 (1959) ("[T]he right to trial by jury applies to treble damage suits under the antitrust laws."); see also Burnham Chem. Co. v. Borax Consol., 170 F.2d 569 (9th Cir. 1948) (complaint for damages alleging violation of Sherman Act was an action at law rather than a suit in equity). Further, even when legal and equitable claims are joined in the same action, "the right to jury trial on the legal claim, including all issues common to both claims, remains intact." Curtis v. Loether, 415 U.S. 189, 196 n. 11 (1974). Accordingly, each class member also would be entitled to a jury trial. Indeed, "class action plaintiffs may obtain a jury trial on any legal issues they present." Ross v. Bernhard, 396 U.S. 531, 541 (1970). These include issues of causation and damages. Plaintiffs suggest no way to deal with each purported class member's Seventh Amendment right to have his damages determined by a jury.

As discussed supra in regard to intra-class conflict, each class member would have an incentive to prove that he would have received a scholarship, while others would not have been awarded the scholarship for which he would have been competing. Each potential class member would have the right to make such a case to a jury, and, in order to receive damages, each class member would be required to do so, because the prerequisite antitrust injury requires individualized proof as well.

Finally, Plaintiffs appear to propose that, after injury is established, each player's amount of damages will be simply a function of the price of an education at the school he actually attended. Unanswered is the question of what to do if a class member would prefer to argue to the jury that his damages should be higher because he would have preferred to go to a more expensive school. Because Plaintiffs have proposed to calculate damages using a generalized damages formula that presumably does not account for individual issues such as this, the prospect of decreasing the damages pot due to one individual's jury right presents a host of problems as to every other class member as well.

Plaintiffs can obtain no remedy without proving antitrust injury. The resolution of individual issues necessary to proving this essential element of liability precludes class treatment. Likewise, the closely related question of amount of damages requires individualized proof. While the necessity for individualized damages calculations alone normally will not preclude class certification, the facts of this case demonstrate that the issues of antitrust injury and damages will be intertwined to such a degree that individual issues are not simply about damages. Rather, they go to the heart of the lawsuit.

The test for Rule 23(b)(3) is predominance of common issues. The Court acknowledges that there are only common issues as to whether there is an antitrust violation. However, the individual issues that are involved in impact and causation determinations and damages calculations overshadow the common issues in this case. Here, "the predominant question is, not the issue of a violation of the antitrust laws in the abstract, but whether a particular member was damaged and, if so, by how much." Chestnut, 72 F.R.D. at 548. For the foregoing reasons, the Court finds that individual issues predominate over common issues, and that the predominance requirement of Rule 23(b)(3) cannot be satisfied in this case.

2. Superiority of the Class Action Method

The Court finds that class action treatment is inferior, particularly in light of its findings supra that individual issues predominate over common ones. Should Plaintiffs — proceeding as individuals in this case — prevail, Bylaw 15.5.5 will have been found unlawful. Success in this lawsuit at the liability phase (antitrust violation plus antitrust injury) will set the stage for other plaintiffs (would-be class members or others) to bring separate lawsuits if they choose, so that they may attempt to prove their own antitrust injury and damages. The Court finds this method — allowing individuals to bring separate suits that will require almost wholly individualized proof — far superior to certifying the instant case as a class action.

Moreover, the recovery for each individual — the cost of an entire college education in some cases — likely would be substantial enough to encourage individual plaintiff suits against the NCAA as a practical matter. Further, attorney's fees are available by statute, and the cost of subsequent litigation would be insubstantial for future plaintiffs, particularly if an antitrust violation is established here. Thus, the twin concerns in antitrust cases of low individual recovery and high litigation costs are not present in this case.

Finally, the Court finds that a class action would be unmanageable. The potential for thousands of complicated jury trials on antitrust injury and damages is great. The Court has duly considered alternatives to denying class certification, such as bifurcation and subsequent decertification, but finds these inferior, particularly in light of the attendant Seventh Amendment implications of using these devices in this case, where individual issues go to liability as well as damages.

For the foregoing reasons, the Court finds that class treatment is inferior and that the superiority requirement of Rule 23(b)(3) cannot be satisfied in this case.

Because Plaintiffs have failed to satisfy all of the requirements of Rules 23(a) and (b)(3), the Court cannot certify a class in this matter.

VI. CONCLUSION

For the reasons set in this Order, Plaintiffs' motion for class certification is hereby DENIED.

SO ORDERED.