Author: Mike Scarcella
(Reuters) – The U.S. Justice Department on Friday questioned the fairness of a $2.8 billion private settlement with the National Collegiate Athletic Association, suggesting it may not go far enough to compensate student athletes.
The Biden administration expressed its views in a filing in federal court in Oakland, California, where the NCAA has been mired in class action lawsuits with students for years.
The settlement, which requires court approval, would be among the largest class-action recoveries and would allow NCAA member schools to make payments directly to student-athletes for the first time.
In addition to the $2.8 billion settlement fund, the academic institutions are expected to pay about $20 billion over the next decade under the terms of the settlement.
Justice Department antitrust officials said in their filing that they are concerned about a provision in the 10-year settlement that limits the money available to schools to pay athletes.
The filing states, “while the proposed settlement allows for some relief, it still functions as an artificial price ceiling on what free market competition can otherwise deliver.”
He urged the court to reject the settlement or require language that makes clear that the restriction does not bar or apply to potential future lawsuits.
The NCAA and the Justice Department did not immediately respond to requests for comment. The Ministry of Justice is not a party to the litigation. The NCAA denied wrongdoing in agreeing to the settlement.
In a statement, the plaintiffs’ lead attorney, Steve Berman, defended the settlement and said its terms and conditions were clear.
Berman said failure to approve the deal “would waste billions of dollars for student-athletes.”
U.S. District Judge Claudia Wilken will weigh in on final approval of the settlement at a hearing in April.
The case is In re College Athlete NIL Litigation, U.S. District Court, Northern District of California, No. 4:20-cv-03919-CW.
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