NCAA’s ‘Year in Residence’ Rule Here To Stay

The Sports Law Insider has previously reported on the NCAA’s attempt to modernize their transfer rules. The NCAA has transitioned into a notification based system in which student athletes no longer have to receive permission from their current schools to transfer. Instead, they  enter their name into a national database that then notifies their current school of their decision to leave. However, the NCAA did allow individual conferences to install more stringent regulations if they wished. The Sports Law Insider then reported on the Athletic Coast Conference, BigTen Conference, Big 12 Conference, Pac-12 Conference and Southeastern Conference attempts to restrict the new transfer rule. The conferences voted on the ability to cancel a student’s scholarship at the end of the term if the student athlete notifies the school of their intent to transfer. This vote significantly restricts student athlete’s ability to transfer freely, as their financial aid is jeopardized.

Now, the Seventh Circuit has further restricted student athlete’s ability to transfer with their decision on Monday, June 25, finding that the controversial NCAA ‘year-in-residence rule’ is meant to preserve amateurism in college athletics. The rule was originally challenged by former college punter Peter Deppe in March 2016, as a class action antitrust claim. Deppe started his career at Northern Illinois University (NIU) in 2014 and earned an athletic scholarship after his freshman season. However, his special teams coach left the NIU shortly after. Then, NIU’s head coach decided not to honor his scholarship. When Deppe attempted to transfer to the University of Iowa to continue his career, the NCAA told him he would need to sit out a year before playing at Iowa. Subsequently, Iowa pursued a punter who was immediately eligible and did not offer Deppe a chance to play.

Deppe was prevented from playing immediately at Iowa because of the year-in-residence rule. The rule mandates that if a student athlete transfers from a division one institution to another division one institution, they are not eligible for competition at their new school until they meet a residence requirement of a full school year at the new school. Deppe argued in his original suit that the rule was anti-competitive. The original suit was dismissed in 2016, after U.S. District Judge Tanya Walton Pratt decided the rule promoted competition among college programs.

On appeal, Deppe primarily argued that Judge Pratt’s District Court ruling gave the NCAA “carte blanche” to violate antitrust laws. However, the Seventh Circuit believes the rule is easily characterized as an eligibility rule and thus was found to be entitled to a procompetitive presumption. The Court feared that without the rule, college athletes could effectively be “traded” and switch schools from year to year. The Seventh Circuit agreed with the NCAA that this possibility would threaten the amateur character of intercollegiate athletics. The court said, “Deppe has not persuaded us that the year-in-residence requirement is the rare exception to the general principle that the eligibility rules are procompetitive.” It will be interesting to see if the NCAA loosens transfer procedures now that the year-in-residence rule is here to stay, or if they continue to allow the individual conferences to make their own restrictive rules.

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