The NCAA News - News & Features

Association pursues appeal of restricted-earnings ruling

Kathryn H. Vratil, U.S. district judge for Kansas, ruled a year ago that the NCAA violates federal antitrust law with its restricted-earnings coach provision. That provision limited coaches in the position to $12,000 in income during the school year and $4,000 for the summer.

In January, the court permanently enjoined the NCAA from reinstituting the monetary limitations.

An NCAA appeal of the ruling in the case is pending before the U.S. Court of Appeals for the 10th Circuit, which is in Denver.

The suit was brought by five Division I men's basketball restricted-earnings coaches. A class-action suit also was filed by a men's lacrosse coach representing restricted-earnings coaches in other sports and a separate suit was filed by several baseball coaches. The three cases are being considered together by the Kansas court.

Rulings on attorneys' fees

The appeals court already has stepped into the case because of a ruling from Vratil concerning interim plaintiffs' attorney fees and the need for the NCAA to pay those fees.

In mid-April, Vratil ordered the NCAA to pay the interim attorneys' fees. The NCAA chose instead to post a bond covering 125 percent of the amount it had been ordered to pay in legal fees (about $560,000) pending an appeal of the fee issue, rather than pay the fees and try to get them back later if the NCAA wins on appeal. On May 3, Vratil found the NCAA in contempt for not paying the fees and began assessing a penalty.

The NCAA asked the appeals court to halt Vratil's order that the Association pay the plaintiffs $5,000 a day in fines the first week and $10,000 a day thereafter for every day that $450,000 in attorneys' fees were not paid to the plaintiffs.

On May 8, the federal appeals court approved the NCAA's bond and stayed Vratil's order that the interim attorneys' fees be paid.

In a brief order, the appeals court said the interim attorneys' fee award is "inextricably intertwined" with the appeal from the permanent injunction, and it let the bond stand pending appeal of the fees and others issues in the case.

Restricted-earnings history

The restricted-earnings coach position was approved at the 1991 NCAA Convention as part of a legislative effort to aid with development of new coaches and to contain intercollegiate athletics costs while maintaining competitive equity. The NCAA has claimed that the position was intended to aid primarily in the development of new coaches and never was intended to serve the same purpose as a full-time assistant's position.

After Vratil's ruling last May, the NCAA Administrative Committee rescinded the compensation provisions of the legislation but left intact other elements such as the restriction in Division I basketball that an individual cannot serve as a restricted-earnings coach if he or she previously has been a head or assistant coach.

In advance of this year's Convention, the membership proposed three amendments-to-amendments related to the restricted-earnings position. The NCAA Council asked the sponsors to withdraw the proposals and all were withdrawn before they were considered by the membership.

But at the plaintiffs' request, Vratil issued a permanent injunction barring the NCAA from "reenacting the compensation limitations embodied in NCAA Bylaws 11.02.3 and 11.3.4." Attorneys for the NCAA appealed Vratil's decision January 24 to the 10th Circuit in Denver.

If Vratil's antitrust judgment stands, the NCAA faces triple damages that could run into millions of dollars.

Class-action ruling

A request from the plaintiffs for certification of the suit as a class action was granted in part and denied in part by Vratil. She certified the class for purposes of the injunction but not for damages. If the suit were certified as a class action, the damages could be applied to all restricted-earnings coaches rather than those particular coaches who have filed suit.

In another area of the litigation, the NCAA and its legal counsel face possible sanctions for allegedly failing to provide financial data the coaches say they need to figure the amount of damages. The NCAA claims it does not have the information and can obtain it from members schools only if the schools choose to provide it. Vratil has rejected that argument.

NCAA officials were called to a hearing March 29 in Kansas City, Missouri, concerning the data available to the NCAA and its refusal or delay in providing the information.

Attorneys for the coaches have asked the judge to enter a default judgment that would strip the NCAA of the ability to contest the amount of damages to be awarded to the coaches and to remove the Association's Indianapolis lawyers from the case.

The NCAA has indicated its belief that such sanctions are wholly inappropriate. Vratil has taken those issues under advisement.