SW Legal studies in Business

Limits on Transfers by College Athletes Not Anticompetitive
Description Appeals court affirmed the dismissal of a suit brought by a college soccer player who wished to transfer from one college to another in the same conference. NCAA rules would make her sit out of competition for one year and lose one year of eligibility. The court held that this rule has a logical basis to enhance competition that outweighs the negative effects.
Topic Antitrust
Key Words College Sports; Restraint of Trade; Rule of Reason; Relevant Market
C A S E   S U M M A R Y
Facts Tanaka was recruited out of high school to play college soccer at the University of Southern California. Unhappy there, she asked if she could transfer to another school and was told she could. Wanting to stay in Los Angeles, she decided to transfer to UCLA. USC, not liking that move, invoked the NCAA rule that limits transfers within a conference and would therefore require her to sit out her first year at UCLA and lose one year of athletic eligibility. She sued USC and the NCAA for restraint of trade in violation of the Sherman Act. The district court ruled against Tanaka, holding that the matter was "noncommercial" so it was exempt from antitrust. Tanaka appealed.
Decision

Affirmed. The rule of reason applies in such a case. The courts look to see if the restraint's harm to competition outweighs its procompetitive effects. The NCAA rule that discourages athletes from tranfers within a conference does not have significant anticompetitive effects within the relevant markets for purposes of the Sherman Act. The relevant market is national in scope; the transfer rule applies to intraconference transfers. She has no cause of action.

Citation Tanaka v. University of Southern California, 252 F.3d 1059 (9th Cir., 2001)

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