A few months back, we commented on Pennsylvania Governor Tom Corbett’s antitrust lawsuit against the NCAA. Specifically, we addressed the issue of whether Governor Corbett had standing to bring the suit. The Federal district court has now ruled on the issue and proved our analysis to be correct — partially. The Court dismissed the suit, and although it found that Governor Corbett and the Commonwealth lacked standing, the lack of standing was due to deficiencies in the factual allegations and the underlying claims.
In a 27 page opinion issued last week, Judge Yvette Kane dismissed the Commonwealth’s antitrust lawsuit. As we noted in our original analysis, the Commonwealth’s standing to bring the lawsuit was based on the parens patriae doctrine. The Court essentially agreed that the Commonwealth would have standing under this doctrine if it brought a valid antitrust claim. However, the Court did not believe that factual allegations relating to the underlying claims were sufficient to qualify as an antitrust violation and dismissed the suit accordingly. Specifically, the Court found that there could be no antitrust violation because the NCAA was not engaged in economic activity and the facts alleged were not sufficient to show a conspiracy.
Forbes.com legal contributor Marc Edleman wrote a good piece outlining why the Court was wrong with respect to the underlying claims. He notes how illogical it is for the Court to find the NCAA is not an economic actor given how many teams, including Penn State, generate over $100 million dollars in revenue. With respect to the Court’s finding of a lack of conspiracy, Edleman observes that although NCAA President Mark Emmert is just one person, when independent businesses come together to form a trade association,their association-wide decisions are collective action.
It will be interesting to see if Governor Corbett appeals the ruling. Many believe that regardless of the suit’s merit, Governor Corbett’s real motivation for bringing the suit was to boost his approval ratings. He may let this one stand given that any appeal decision might not come until after the next gubernatorial election in 2014.