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Dawson v. National Collegiate Athletic Association

United States Court of Appeals, Ninth Circuit

August 12, 2019

Lamar Dawson, Plaintiff-Appellant,
v.
National Collegiate Athletic Association; PAC-12 Conference, Defendants-Appellees.

          Argued and Submitted October 15, 2018 San Francisco, California

          Appeal from the United States District Court for the Northern District of California Richard Seeborg, District Judge, Presiding D.C. No. 3:16-cv-05487-RS

          Mark C. Rifkin (argued) and Jeffrey G. Smith, Wolf Haldenstein Adler Freeman & Hertz LLP, New York, New York; Betsy C. Manifold, Wolf Haldenstein Adler Freeman & Hertz LLP, San Diego, California; John M. Kelson, The Law Offices of John M. Kelson, Oakland, California; Jerry K. Cimmet, San Mateo, California; for Plaintiff-Appellant.

          Daniel S. Volchok (argued) and David M. Lehn, Wilmer Cutler Pickering Hale and Dorr LLP, Washington, D.C.; Kenneth D. Sulzer, Steven B. Katz, and Sarah Kroll-Rosenbaum, Constangy Brooks Smith & Prophete LLP, Los Angeles, California; for Defendant-Appellee National Collegiate Athletic Association.

          Kiran A. Seldon (argued), Jeffrey A. Berman, and Diana Tabacopoulos, Seyfarth Shaw LLP, Los Angeles, California, for Defendant-Appellee PAC-12 Conference.

          Before: Sidney R. Thomas, Chief Judge, Andrew J. Kleinfeld, Circuit Judge, and George H. Wu, [*] District Judge.

         SUMMARY [**]

         Labor Law

         The panel affirmed the district court's dismissal of a Division I college football player's claim that he was an employee of the National Collegiate Athletic Association and the PAC-12 Conference within the meaning of the Fair Labor Standards Act and California labor law and thus entitled to minimum wage and overtime pay.

         The panel held that Division I football players were not employees of the NCAA or PAC-12 as a matter of federal law because the economic reality of the relationship between the NCAA/PAC-12 and student-athletes did not reflect an employment relationship. The panel concluded that NCAA regulations providing a limitation on scholarships did not create any expectation of compensation; plaintiff could not demonstrate that the NCAA or the PAC-12 had the power to fire or hire him; and there was no evidence that the NCAA rules were conceived or carried out to evade the law. Further, the revenue generated by college sports did not convert the relationship between student-athletes and the NCAA into an employment relationship. Thus, the NCAA and Pac-12 were regulatory bodies, not employers of student-athletes under the Fair Labor Standards Act.

         The panel also affirmed the district court's dismissal for failure to state a claim of plaintiff's California law claims. The panel held that the district court properly relied on a legislative exception for student-athletes from workers compensation benefits and the California courts' interpretation of this exception. The panel held that, under the California Labor Code, student-athletes were not employees of the NCAA/PAC-12.

          OPINION

          THOMAS, CHIEF JUDGE.

         We consider whether Lamar Dawson and Division I Football Bowl Subdivision ("FBS") Football Players are employees of the National Collegiate Athletic Association ("NCAA") and PAC-12 Conference ("PAC-12") within the meaning of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201-219, and California labor law. We have jurisdiction pursuant to 28 U.S.C. § 1291. Because the claims fail as a matter of law, we affirm the judgment of the district court.

         I

         Dawson played football for the University of Southern California ("USC"), a Division I FBS member of the NCAA's PAC-12 Conference. In this putative class action case, Dawson does not allege that he was an employee of USC, so the pure question of employment is not before us, and we need not consider whether he had employment status as a football player, nor whether USC was an employer. That question is left, if at all, for another day. Rather, the only issue before us is whether the NCAA and PAC-12 were his employers under federal and state law.

         The NCAA is an "unincorporated not-for-profit educational organization" comprised of more than 1, 100 colleges and universities throughout the United States. NCAA member schools are organized into three Divisions based on the number and quality of opportunities that the schools provide to participate in intercollegiate athletics. Division I consists of approximately 351 schools. Approximately 253 Division I schools have Division I football programs, of which approximately 128 fall within the FBS. The PAC-12 is an unincorporated association which operates a multi-sport collegiate athletic conference, and is a formal conference member of the NCAA Division I FBS.

         NCAA member schools "agree to administer their athletics programs in accordance with the constitution, bylaws, and other legislation of the [NCAA]." The NCAA's constitution and bylaws establish academic eligibility requirements, provide guidelines and restrictions for recruitment, impose limits on the number and size of athletic scholarships, and regulate the scheduling and conditions of practice and games.

         The NCAA bylaws also govern financial aid and prohibit compensation for student-athletes. Bylaw 15.1 provides that student-athletes may receive financial aid on the basis of athletic ability, but that the amount of aid must not exceed "the value of his or her cost of attendance." Student-athletes receiving aid in excess of the cost of attendance limitation "shall not be eligible to participate in intercollegiate athletics."

         NCAA Bylaw 12.1.4 provides that financial aid is "not considered to be pay or the promise of pay for athletics skill." Bylaw 12.1.2 further prohibits any payment to a student-athlete for athletic services. Student-athletes who accept payments may be subject to revocation of their amateur status and eligibility under seven conditions.[1]

         In his complaint, Dawson alleged that the NCAA and the PAC-12 acted as an employer of the class members by "prescribing the terms and conditions under which student-athletes perform services." Dawson claims that the NCAA and PAC-12, as joint employers, failed to pay wages, including overtime pay, to Dawson and to class members in violation of federal and state labor laws.

         The NCAA and the PAC-12 moved to dismiss Dawson's complaint for failure to state a claim upon which relief can be granted. The district court granted the motion, ...


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