Former Division I Athletes Seek Reduction of “Grossly Excessive” Fees Awarded to NCAA in Antitrust Suit

As we have previously reported, former Division I football and basketball athlete plaintiffs won a settlement of $208.7 million from the NCAA for the NCAA’s antitrust practices capping student scholarships at values less than the actual cost of attendance. In a recent brief, class member Darrin Duncan articulates that the “central issue in the case is that [the NCAA] violated the antitrust laws by agreeing to and enforcing restrictive NCAA bylaws that cap the amount of athletically related financial aid and other benefits”.

Since the court issued its ruling, the NCAA was awarded legal fees and costs to the tune of $41.7 million, or about 20 percent of the overall settlement value. In response, Duncan filed a brief on May 21, 2018, arguing that the fee is “exorbitant” and should not stand, particularly because the settlement is considered to be a “mega-fund” exceeding a $100 million class payout. The former players maintain that mega-fund settlements require different treatment than lesser valued settlements because the intent is to “shift the benefit to the class when the settlement is relatively large to [the] cost of litigation, which is largely attorney fees”. Instead of a flat 20 percent, Duncan suggests that a sliding scale approach would be more appropriate, as it would prevent overcompensation “to the detriment of the class members they represent”. The general mega-fund rule of thumb used by other circuits decreases the percentage used for fee calculation once a settlement reaches the threshold value of $100 million. Duncan recommends using a range between 10 percent and 15 percent and urges the Ninth Circuit to fully adopt the mega-fund rule.

In support of the suggested rule and of the overall notion that the fees were unreasonable, the former college athletes assert that the court overlooked the important details of the rates and tasks claimed by the NCAA. In specific, they argue that the NCAA likely included billable hours for tasks such as document review that could have been, or were in fact, completed by lesser paid attorneys or support staff. Without the requisite details or an inquiry made by the court, the former players, via Duncan, propose that the substance comprising the ultimate value of the award should have been met with harsher scrutiny for both legitimacy and fairness.

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