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Sports Law
University of South Carolina School of Law
McCulloch, Joseph M. Jr.

McCullough Sports Law – Fall 2014

Amateurism, State Action, and Right of Participation

7-18

û Taylor v. Wake Forest (App. N.C.1972) –P. 8→ Taylor was recruited by and signed a letter of intent to play football. Taylor played for the team in his freshman year. During the fall semester, he compiled a GPA of 1.0, far below the 1.35 the school required all students to have. He did not attend practices in spring and his GPA rose to 1.9. Because he stopped playing, the University revoked his scholarship. He sued to recover $5,500 in expenses.

° Π contends that there was an oral agreement that athletic activities would be suspended if there was any conflict between athletics and education

° The application filed by Taylor said that he would abide by the rules of the University

° When Taylor refused to maintain his athletic eligibility and this meant both physically and scholastically (which with he agreed), in the absence of any injury or other plausible excuse (other than failing to devote more times to his studies) – he was not complying with his K obligations

Q NCAA amended its rules to provide that “where a student’s athletic ability is taken into consideration in any degree in awarding financial aid, such aid shall not be awarded in excess of one year

Q Article 13.1.1.3 – no athletic representation of another college may contact the student-athlete without permission from his current college

û Educational Malpractice and the Universities Responsibility

û Trial Court → Ross v. Creighton University (Ill. Dis. 1990) –P. 12 → Ross, a former basketball player, threw pieces of furniture outside a hotel window saying they represented Creighton Univ b/c they caused his depression. He alleges that the university caused this episode and otherwise injured him by recruiting him to attend the school on a scholarship knowing (based on test scores) that he would be unable to be successful. After 4 years, he only had 96 credits and a D average.

° Π asserts a hybrid claim of Negligent Infliction of ED and Educational Negligence.

Q “Negligence in recruiting and repeatedly re-enrolling an athlete utterly incapable – without substantial tutoring and other support – of performing the academic required to make educational progress.”

° Educational malpractice has been repeatedly rejected by American courtsà judicial abstinence

Q Does a duty run from the plaintiff to the defendant

Q Education is an intensely collaborative process, requiring the interaction of student and teacher

Q Without the effort of the student, he cannot be educated

Q In edu., the ultimate responsibility for success remains always with the student

° Having rejected both the educational malpractice claim and the Negl. Infliction of ED claim, the court then asked whether Ross had a COA that was sui generis (“unique or peculiar”)

Q Ross argues that the present case is so unique and egregious that, despite the lack of precedent, a cause of action should be found to exist.

Q Ross’ inability to plead a cause of action under existing laws strongly counsels against creating a new cause of action in his favor

û 7th Circuit Decision → Ross v. Creighton (1992)

° “A contract between a private institution and a student confers duties upon both parties which cannot be arbitrarily disregarded and may be judicially enforced.”

° However, “a decision of the school authorities relating to the academic qualification of the students will not be reviewed…Courts are not qualified to pass an opinion as to the attainments of a student and courts will not review a decision of the school authorities relating to academic qualifications of the student.”

° The policy concerns that preclude a cause of action for educational malpractice apply with equal force to bar a breach of contract claim attacking the general quality of an education

° To state a claim for breach of contract, the Π must do more than simply allege that the education was not good enough

Q Instead, Π must point to identifiable contractual promise that the defendant failed to honor

° Thus, if the Δ took tuition money and provided no edu a breach of K claim may be available

° Π contends that the Δ knew that he was not qualified and that the defendant breached its promise by reneging on its commitment to provide those services and consequently, cut him off from any participation in and benefit from the school’s academic program

Q The proper question therefore is not whether there was a breach but whether the University had provided any real access to its academic curriculum at all

° In our view, the allegations of the complaint are sufficient to warrant further review

° The court noted that the judicial system should not get involved in disputes between colleges and student athletes – we believe that the district court can adjudicate Ross’ specific and narrow claim that he was barred from any participation in and benefit from the university’s academic program w/out second-guessing the professional judgment of the University faculty on academic matters

86-98

û NCAA v. YEO (2005) Yeo, a world-class swimmer who had competed in two Olympic games (for her native Singapore) before participating in intercollegiate competition in the U.S., had requested “equitable relief” against UT-Austin in 2002 to resolve an ongoing eligibility controversy stemming from her transfer to Texas from the University of California in 2000. Yeo’s status at the time was threatening to prevent her from competing in the 2002 NCAA women’s swimming and diving championship.

° The NCAA attempted to intervene, but the district court struck down the intervention and granted a temporary restraining order permitting Yeo to swim in the meet. At a hearing several months later, the trial court granted a permanent injunction preventing UT-Austin from retroactively declaring Yeo ineligible. The court of appeals held that Yeo had a protected interest in “her already established athletic reputation.”

° The Π argued that she was entitled to notice and a meaningful hearing before NCAA rules were applied to her because of her unique reputation and earning potential.

Q Π Alleges that had she been disqualified from competing in the championship meet, people would have suspected that it was for her own misconduct and not for UT-Austins mistakes in attempting to comply with NCAA rules.

° However, the Texas Supreme Court ruled that Yeo’s reputation of “the most decorated athlete in the history of the Republic of Singapore” did not enjoy a special protection under the Texas Constitution. The court wrote that it would apply in the Yeo case the rule that was established 20 years ago in: “students do not possess a constitutionally protected interest in their participation in extracurricular activities.”

° “The courts do not and connot intervene in the resolution of conflicts which arise in the daily operation of school systems and which do not directly and sharply implicate basic constitutional values.”

Q So for the court to intervene there must be a real and large constitutional rights issue at play

û Bloom v. NCAA (2004) P. 91→The University of Colorado recruited Π to play football. Before college he competed in Olympic and World Cup skiing competitions and received commercial endorsements for ski equipment and a contract to model for Tommy Hilfiger.

° NCAA Bylaws: Permit students to engage in professional sports in which they do not participate in college.

° Based on this Bylaw, Π and the University asked the NCAA to waive its rules restricting student-athlete endorsement and media activities.

Q The NCAA denied the waivers and Π discontinued his modeling, endorsement and media activities so that he could participate in the 2002 football season.

° Π sued the NCAA for declaratory and injunctive relief asserting that his endorsements, modeling, and media activities were necessary to support his professional skiing career, something which the NCAA rules permitted.

v In his complaint, Π alleged:

(i) As a 3rd pty beneficiary of the K between the NCAA and its members, he was entitled to enforce NCAA bylaws permitting him to engage in and receive remuneration from a professional sport different from his amateur sport;

(ii) As applied to the facts of this case, the NCAA’s restrictions on endorsements and media appearances were arbitrary and capricious; and

(iii) Those restrictions constituted improper and unconscionable restraints on trade.

° The Court of Appeals of Colorado interpreted the NCAA endorsement and media activities bylaws and found that, unlike other bylaws, these rules do not contain any sport-specific qualifiers.

Q The court held that the bylaws presented a clear and unambiguous intent to prohibit student-athletes from engaging in endorsement and media appearances without regard to the source of the opp or whether the activities are customary to the participation in a related professional sport.

Q The court also affirmed the trial court decision that the application of these rules in Δ’s case was rationally related to the legitimate purpose of retaining the clear line of demarcation between intercollegiate athletics and professional sports.

° The Ct of Appeals affirmed the trial court’s order denying Π’s request for a preliminary injunction against the NCAA and the University of Colorado allowing him to play college football.

° Court held that any action to make money while you are an athlete could be considered

° Notes: The most severe penalty available to the Association is the so-called death penalty. This may be imposed where an institotion is a “repeat violator,” that is there is a major violation within five years of a previous major violation.

0 in cash to the kid to help out his family. Kid signs a letter of intent and makes an official visit. Tries to get his eligibility restored but it never is. Goes on to get drafted in the first round and makes millions.

° Coach tells the school about four years later. Coach argues that he knew the kid was a pro so gave money to a pro not a recruit. The coach’s expert cant explain, however, why he would continue recruiting the kid and have him sign a letter of intent

° Issue becomes whether or not he is sued for cause

° Question of materiality

û Page 34. Appendix

û Perks in being in a coaching contract

TWEN:

û Vanderbilt University v. DiNardo (1999)→ The Sixth Circuit Court affirmed the district court’s judgment that the contract contained an enforceable liquidated damages provision and affirmed the portion of the judgment reflecting damages calculated under the original contract, but reversed and remanded the district court’s judgment concerning enforceability of an addendum to the contract.

° In addition to considering the damage amount reasonable, the court concluded that the circumstances in DiNardo satisfied another significant element necessary for a valid liquidated damages clause—damages were properly uncertain at the time the contract was drafted. Al though DiNardo’s salary was not directly attributable to specific anticipated damages, salary amount was reasonable to use for the damages calculation given the unquantifiable nature of damages in this case.

° The court noted that “[t]he potential damage to [Vanderbilt] extends far beyond the cost of merely hiring a new head football coach. It is this uncertain potentiality that the parties sought to address by providing for a sum certain to apply toward anticipated expenses and losses.”

° There are many more unknowns for a new football coach coming inà committee to find a new coach, paying off the old staff and hiring new, dip in success after old coach leaves, etc. turnover creates issues

° Defining this “uncertain potentiality” is an important goal of liquidated damages clauses in general. The court noted that DiNardo had the benefit of counsel when drafting his agreement, pointing out that the damages provision had already been renegotiated and reduced once from the original amount (gross to net salary). In fact, the contract contained another liquidated damages provision, very similar to the clause that DiNardo argued was unreasonable, that protected DiNardo in the event that the roles were reversed and Vanderbilt breached the contract

° Why do you want a liquidated damages clause?–> it can be hard to figure out damages so it sets them out beforehand for BOTH PARTIES- mutual and reciprocal clause. Liquidated damages must be reasonable and actually tied to a basis or they become a penalty. You can’t get damages if it is deemed a penalty within the contract. Formula arrived at by the coach and the school was an approved formulaà number of years left multiplied by the base salary.

û Contracts: Duties, Responsibility, Term of Employment, compensation and standard fringe benefits, radio shows, tv, endorsements, shoe contracts, apparel, and equipment, summer camps, speeches, termination by university for cause: Moral turpitude.

û Merger Clause: what is on this paper counts, nothing else is part of the contract. Put this in the contract**

û Liquidate Damages Clauses make breaking a K a lot easier ->unlike the GT case, you don’t have to argue over what a perk is

û You have to see if there is a termination for cause or (like in this case) a termination for no cause

û In most states liquidated damages are not allowed if the damages are a penalty for breach

û The court here said that it was impossible to calculate the damages caused by losing a coach and having to find another one

û The court said that the accounting that Vandy had done was about right àthis becomes the standard for todays K