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Pugh v. National Collegiate Athletic Association

United States District Court, S.D. Indiana, Indianapolis Division

September 27, 2016

DEVIN PUGH, Plaintiff,
v.
NATIONAL COLLEGIATE ATHLETIC ASSOCIATION, Defendant.

          ENTRY ON PARTIAL MOTION TO DISMISS

          TANYA WALTON PRATT, JUDGE United States

         This matter is before the Court on the Defendant, National College Athletic Association's (“NCAA”) Partial Motion to Dismiss. (Filing No. 34.) On November 5, 2015, the Plaintiff, Devin Pugh (“Pugh”), filed a class action complaint alleging anti-trust violations against the NCAA. Count II of the Complaint alleges that Division I Bylaw 14.5.5.1 (the “year-in-residence bylaw”) violates the Sherman Act by requiring Division I student-athletes to forego a year of athletic eligibility when transferring to another Division I school. On January 15, 2016 the NCAA filed a motion to dismiss Count II of the Complaint. For the following reasons, the Court grants the NCAA's partial motion to dismiss.

         I. BACKGROUND

         In 2010, Pugh accepted a Division I grant-in-aid to play football at Weber State University, a Division I FCS[1] school. (Filing No. 1 at 25.) A full grant-in-aid is the amount of scholarship that sometimes is referred to as a full ride. It includes the cost of tuition, fees, room, board and required textbooks for student athletes. The period of an award cannot exceed one year. Weber State's head coach, Ron McBride, pledged to Pugh that his grant-in-aid would be renewed annually so long as he did well academically and remained eligible for NCAA competition. (Id.) In December 2011, after Coach McBride retired, Weber State named a new head football coach, Jody Sears. (Id. at 26.) Around the same time, Coach Sears informed Pugh that Weber State would not be renewing his grant-in-aid and that he should look into transferring to another school.

         After sending highlight tapes to numerous schools, Pugh was offered full grants-in-aid at several FBS and FCS schools. Id. at 27-28. However, all of the grants-in-aid were contingent upon his ability to play two more years of NCAA football. Id. Because the NCAA's “year-in-residence” bylaw required that Pugh sit out of competition for a full season, he only had one year of competition left. Id. at 28. As a result, Pugh applied for a “hardship waiver, ” which would have allowed him to play immediately and for the two years remaining on his five-year clock. Id. The NCAA, however, denied the request for a hardship waiver and, as a result, every grant-in-aid offer was rescinded. Id.

         In 2013, Pugh transferred to Colorado State University-Pueblo. Id. Because Pugh transferred from a Division I school to a Division II school, he was eligible for a one-time transfer exception and did not have to sit out for a year, giving him two seasons left to play NCAA football. Id. However, Pugh's new grant-in-aid award was less than at Weber State, covering only tuition, but not books, housing, or any other costs. Id. at 29. As a result, Pugh's school loans increased from approximately $3, 000.00 per year to $6, 000.00 per year. Id. Following a football injury and job offer, Pugh left school with nine credits left to graduate, which he intends to finish. Id. at 29.

         In Count II of this cause of action, Pugh argues that the NCAA's transfer bylaws violate the Sherman Act as an unreasonable restraint on trade. Id. at 36-37. He focuses his challenge on the “year in residence” requirement, which is listed in Article 14 of the NCAA Division I Manual, entitled “Academic Eligibility”. (Filing No. 34-2 at 7, 34; Filing No. 35 at 7: Filing No. 43 at 7.)

         That bylaw reads, in relevant part, as follows:

14.5.5.1. General Rule. A transfer student from a four-year institution shall not be eligible for intercollegiate competition at a member institution until the student has fulfilled a residence requirement of one full academic year (two full semesters or three full quarters) at the certifying institution.

(Filing No. 34-2 at 34) (emphasis added).

         II. LEGAL STANDARD

         Federal Rule of Civil Procedure 12(b)(6) authorizes dismissal if the complaint fails to sets forth a claim upon which relief can be granted. “The purpose of a motion to dismiss is to test the sufficiency of the complaint, not to decide the merits.” Gibson v. City of Chi., 910 F.2d 1510, 1520 (7th Cir. 1990). Accordingly, when analyzing a Rule 12(b)(6) motion to dismiss, a court construes the complaint in the light most favorable to the plaintiff, accepts all factual allegations as true, and draws all reasonable inferences in favor of the plaintiff. Tamayo v. Blagojevich, 526 F.3d 1074, 1081 (7th Cir. 2008).

         At a minimum, the complaint must give the defendant fair notice of what the claim is and the grounds upon which it rests; and the factual allegations must raise a right to relief above the speculative level. See Bissessur v. Ind. Univ. Bd. of Trs., 581 F.3d 599, 602-03 (7th Cir. 2009); Tamayo, 526 F.3d at 1081, 1083. While a complaint need not include detailed factual allegations, a plaintiff has the obligation to provide the factual grounds supporting his entitlement to relief; and neither bare legal conclusions nor a formulaic recitation of the elements of a cause of action will suffice in meeting this obligation. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007); see also Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (“the pleading standard Rule 8 . . . demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation” and “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice”).

         Although this does not require heightened fact pleading of specifics, it does require the complaint to contain enough facts to state a claim to relief that is plausible on its face. Bell Atl. Corp., 550 U.S. at 570; Tamayo, 526 F.3d at 1083 (“[a] plaintiff still must provide only enough detail to give the defendant fair notice of what the claim is and the grounds upon which it rests, and, through ...


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