Court rules on TRO in Tennessee, Virginia NIL lawsuit versus NCAA

On3 imageby:Pete Nakos02/06/24

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Andy Staples And Jesse Simonton On How The Ncaa Response To Tennessee, Virginia Fell Flat | 02.04.24

A federal judge in Tennessee denied a temporary restraining order Tuesday that would allow high school prospects and transfer portal players in two states to communicate with NIL collectives during their recruitment.

Judge Clifton L. Corker ruled in favor of the NCAA in the Eastern District of Tennessee after attorneys general in Tennessee and Virginia filed an antitrust lawsuit last Wednesday. The decision comes a day before National Signing Day.

In Corker’s decision, the judge states Tennessee and Virginia “failed to demonstrate, at this juncture, the requisite irreparable harm for the issuance of a TRO.”

While the TRO has been denied, Corker also notes in his decision that the two states’ merits are likely to succeed. A preliminary injunction hearing is set for Tuesday, Feb. 13.

“Considering the evidence currently before the Court, Plaintiffs are likely to succeed on the merits of their claim under the Sherman Act,” the judge writes.

A key reason why the TRO was not granted is that while athletes are not able to obtain their true NIL value, the harm is monetary damages and not irreparable, the judge writes.

This all comes in the wake of the NCAA launching an investigation into Tennessee athletics last week for alleged multiple NIL violations. Attorneys general in Tennessee and Virginia filed the antitrust lawsuit last Wednesday with a request for a TRO before Tuesday.

The ruling would have only impacted athletes in Tennessee and Virginia. More states could potentially join the lawsuit in the coming weeks.

The NCAA and attorneys general traded barbs over the weekend in response to each other. The NCAA said lifting the NIL ban on recruiting “invited chaos,” while Tennessee and Virginia argued the body’s rules are “impenetrable, shifting, and vague.”

All of this comes as the NCAA starts to show its teeth and govern the NIL landscape. The NCAA recently levied sanctions on Florida State and is also investigating Florida for the Jaden Rashada saga – both are cases allegedly involving recruiting infractions involving NIL collectives.

The court mentioning the plaintiffs have displayed the merits of their claim under the Sherman Act is crucial. In the case laid out by Tennessee and Virginia, the attorneys general were able to display that the NCAA rules impose a restraint on competition in the relevant market. Corker also writes in his decision that “there is sufficient evidence that the NCAA’s NIL-recruiting ban likely harms competition.”

“I actually think that part of it is kind of obvious,” Boise State sports law professor Sam Ehrlich told On3. “I think for the majority of the antitrust cases involving the NCAA, it’s been really clear that the NCAA rules restrict competition. What the NCAA goes toward is the procompetitive justifications. It’s definitely not a good thing for the court to be looking for it like that because it’s a balancing test.

“I think the AGs of Tennessee and Virginia, they didn’t get the TRO, but they’re pretty confident.”

What is NCAA investigating at Tennessee?

According to the New York Times, the NCAA’s search at Tennessee centers around the use of a private plane to fly Tennessee quarterback Nico Iamaleava to Knoxville while he was a recruit, with funds for the plane raised by boosters.

Last week’s court filing included testimony from economist Andy Schwarz. Plus, Tennessee athletic director Danny White and Spyre Sports Group co-founder James Clawson are declarants. Offensive lineman Jackson Lampley has also joined as a declarant.

White has also released a blistering statement. Tennessee Chancellor Donde Plowman also pushed back in an email to NCAA President Charlie Baker. She aimed at the body’s NIL rules, calling them “intellectually dishonest.”

In the past, the NCAA has reached a negotiated resolution with institutions in similar situations.

Tennessee has no plans of waving the white flag.