Appeals court upholds NCAA rule requiring transfers to sit out one season before playing

By Jonathan Bilyk | Jun 26, 2018

By Momoneymoproblemz [CC BY-SA 4.0 (https://creativecommons.org/licenses/by-sa/4.0)], from Wikimedia Commons

The NCAA can require student athletes to wait at least one full academic year before playing when transferring to a new Division 1 university or college, a federal appeals court in Chicago has ruled.

On Monday, July 25, a three-judge panel of the U.S. Seventh Circuit Court of Appeals upheld an Indiana federal judge’s findings that the NCAA’s so-called “year in residence” rule does not violate federal antitrust law, dismissing a class action lawsuit brought by a former punter for the football squad at Northern Illinois University.

“Uninhibited transfers with immediate eligibility to play would risk severing the athletic and academic aspects of college sports, threatening the character of intercollegiate athletics,” the judges wrote. “The year-in-residence rule guards against that risk and thus is ‘clearly meant to help maintain the ‘revered tradition of amateurism in college sports.’’”

The decision was authored by Seventh Circuit Judge Diane Sykes. Circuit judges William J. Bauer and Ilana D. Rovner concurred in the opinion.


Steve Berman  

The case against the Indianapolis-based NCAA landed in federal court in 2016, when plaintiff Peter Deppe, through his attorneys, sued the collegiate athletic association, accusing it of violating federal antitrust laws by unfairly restricting the ability of student athletes to transfer from one school to another of their choosing.

He also initially sued to challenge the NCAA’s rules capping the number of athletic scholarships each school can offer, but dropped that count from the lawsuit, to solely focus on the “year in residence” rule.

Under that rule, the NCAA generally requires any student athlete transferring from one university to another to wait at least one year before being allowed to play. There are certain exceptions to the rule, but Deppe and other athletes may not qualify for such waivers or exceptions.

Deppe sued after he was denied the chance to play for the University of Iowa during the 2016-17 school year. He had earned a spot at NIU as a walk-on punter, but was never granted a scholarship, leading him to seek to transfer. According to the court’s decision, Iowa declined to take on the task of seeking a waiver for Deppe, instead bringing on a different punter for the season.

Deppe then filed his class action, working with a legal team that includes attorneys Steven Berman, Elizabeth Fegan and others with the Chicago-based firm of Hagens Berman Sobol Shapiro, and attorneys with the firms of Riley Williams & Piatt LLC and The Paynter Law Firm PLLC, each of Indianapolis.

The NCAA is represented by attorneys with the firms of Faegre Baker Daniels LLP, of Indianapolis; Schiff Hardin LLP, of Ann Arbor, Mich.; Riley Safer Holmes & Cancila LLP, of Ann Arbor; and attorney Jacob K. Danziger, of Ann Arbor.

In the lawsuit, Deppe particularly alleged the year in residence rule costs athletes the chance to receive more generous scholarships, because, without the rule in place, colleges and universities would need to compete more fiercely to not only recruit, but retain, the best players.

The NCAA, however, asked the courts to dismiss the action, asserting the rule actually encourages the competitiveness of amateur college athletics, by encouraging players to remain at their respective schools, and increasing the risk to schools seeking to poach other schools’ better players.

The NCAA also noted prior rulings, including from the U.S. Supreme Court, largely deferring to the NCAA on the question of whether such a rule should be considered “presumptively procompetitive,” and thus, exempt from evaluation for any “anticompetitive effect.”

And both a federal district judge and the three judges at the Seventh Circuit backed that assertion, saying they believed the year in residence rule should not only be presumed to be “procompetitive,” but should be considered procompetitive in reality, as well.

The judges also sidelined Deppe’s attorneys’ attempt to argue the year in residence rule serves only to entrench the dominance of the “Power 5” athletic conferences – the Big 10, SEC, Big 12, Pac 12 and ACC – by allowing them to essentially entrap recruits, who could otherwise find more playing time at “less powerful schools.”

The judges, however, again took the opposite view, noting the rule also prevents those larger schools from treating “less powerful schools” as their farm clubs.

“… The rule impedes transfers in both directions,” Sykes wrote. “Without it, the ‘Power 5’ schools could poach rising stars from smaller schools, which would risk eroding the amateur character of the college game.”

The case was dismissed.

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Organizations in this Story

Faegre Baker Daniels, Llp Hagens Berman Sobol Shapiro, LLP NCAA Riley Safer Holmes & Cancila Llp Schiff, Hardin, Llp U.S. Court of Appeals for the Seventh Circuit U.S. District Court for the Southern District of Indiana

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