in Newswire Published on March 28, 2023

Student-Athletes Accuse Eight Ivy League Universities of Price-Fixing Scheme [DISMISSED]

Last Updated on October 22, 2024

Choh et al. v Brown University et al.

Filed: March 7, 2023 ◆§ 3:23-cv-00305

A class action alleges eight Ivy League universities have illegally agreed to not provide Division I athletes with scholarships or other compensation or reimbursement for their athletic services.

Defendant(s)

Trustees of Dartmouth College Cornell University Yale University Princeton University Harvard University Brown University The Trustees of The University of Pennsylvania The Trustees of Columbia University in the City of New York The Ivy League Council of Presidents

Law(s)

Sherman Antitrust Act

State(s)

Connecticut

October 17, 2024 – Judge Dismisses Class Action Over Universities’ Alleged Athletics Price-Fixing Scheme

The proposed class action lawsuit detailed on this page was dismissed by a federal judge on October 9, 2024.

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In a 36-page order, United States District Judge Alvin W. Thompson granted the Ivy League universities’ May 2023 motion to dismiss the plaintiffs’ complaint, finding that the plaintiffs did not properly define a specific market allegedly harmed by the universities’ ban on athletic scholarships and failed to sufficiently allege market-wide anticompetitive effects.

Though the plaintiffs asserted that the relevant market was limited to the Ivy League university defendants, facts alleged in the complaint show that other academically selective schools—including Stanford University, the University of Notre Dame, Duke University and Rice University—also compete to offer educational services to student athletes and are among the institutions to which these students sell their athletic services, the judge asserted.

“As a consequence, the facts alleged by the plaintiffs are legally insufficient to show an adverse effect on competition as a whole in a relevant market,” Judge Thompson found. “At best, the plaintiffs’ allegations of anticompetitive effects relate to just some market participants, not effects in the market as a whole.”

In addition, the judge pointed out that one plaintiff’s claim must be dismissed because it is time-barred by the applicable statute of limitations.

The plaintiffs were denied any opportunity to amend their complaint. Court records indicate that if a motion for leave to amend is not filed within 30 days of the judge’s order, the case will be closed.

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A proposed class action alleges eight Ivy League universities have illegally agreed to not provide Division I athletes with scholarships or other compensation or reimbursement for their athletic services.

Want to stay in the loop on class actions that matter to you? Sign up for ClassAction.org’s free weekly newsletter here.

The 60-page antitrust lawsuit says that the apparent “anticompetitive” agreement, allegedly in place since the Ivy League athletic conference was formed in 1954, stipulates that any financial aid provided to Ivy League student-athletes is to be awarded based solely on economic need, “with no differentiation in amount or in kind (e.g. packaging) based on athletic ability or participation.”

According to the lawsuit, this “price-fixing agreement” has raised the cost of admission for Ivy League athletes and suppressed the compensation they receive for participating in intercollegiate athletic competitions, which reportedly generate an average of $33 million in annual revenue across all Ivy League universities.

“Absent the Ivy League Agreement, these schools would determine unilaterally, and in competition with each other, how many athletic scholarships to provide, by sport, and in what amounts, and how much to compensate (either directly or through reimbursement of tuition, room, and board, or both) for athletic services,” the suit summarizes.

The lawsuit out of Connecticut names as defendants Brown University, the Trustees of Columbia University in the City of New York, Cornell University, the Trustees of Dartmouth College, Harvard University, the Trustees of the University of Pennsylvania, Princeton University, Yale University and the Ivy League Council of Presidents, the body that coordinates the athletic activities of the Ivy League schools and enforces the alleged price-fixing agreement.

The plaintiffs, current and former Brown University basketball players, say they received full cost-of-attendance athletic scholarship offers from at least one other Division I college. However, as a result of the Ivy League price-fixing agreement, the plaintiffs were only awarded from Brown need-based financial aid that did not cover their full costs of attendance and paid no other compensation or reimbursement for their athletic services to the school.

“As a result, even with the opportunity to obtain need-based financial aid, recruited athletes frequently need to pay (or borrow) many thousands of dollars a year, which is especially onerous for athletes from lower-income families,” the lawsuit states. “The Ivy League Agreement, in short, has stymied competition that would have lowered and would lower the net cost of attendance for the Class Members.”

Per the filing, the defendants’ alleged misconduct has suppressed competition in two markets: the market in which Ivy League schools compete to offer educational services to athletically and academically high-achieving students and the market in which these students sell their athletic services to the Ivy League institutions.

Ultimately, defendants are prohibited by the federal Sherman Act from entering into a “horizontal agreement” to restrict price competition, especially when it comes to a commercial enterprise as lucrative as collegiate athletics, the suit contests.

The lawsuit looks to represent any Ivy League athletes recruited to play a sport by one or more Ivy League universities and, since March 7, 2019, attended an Ivy League university undergraduate program while playing a sport for that school.

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