Richard Chakejian – Duane Morris Sports Law

April 10, 2025 by Bryan Shapiro

Jaden Rashada’s Claims Move Forward in Major NIL Litigation: Rashada v. Hathcock et al.

On April 8, 2025, Judge M. Casey Rodgers of the U.S. District Court for the Northern District of Florida ruled that the majority of claims asserted in Jaden Rashada’s lawsuit against University of Florida (“UF”) head coach Billy Napier, former UF director of NIL and player engagement Marcus Castro-Walker, and well-known UF booster and President of Velocity Automotive Solutions LLC (“Velocity”), Hugh Hathcock, will survive the defendants’ motions to dismiss and proceed to discovery. The case centers on Rashada’s allegations of fraudulent inducement and related claims tied to a Name, Image, and Likeness (NIL) agreement with the University of Florida, facilitated by the defendants. While Rashada’s claims of tortious interference were dismissed, the court allowed his fraudulent misrepresentation, conspiracy to commit fraud, and negligent misrepresentation claims to move forward. As previously discussed in this blog, the lawsuit, filed by Rashada in May 2023, stems from a four-year, $13.85 million contract that influenced his decision to flip his commitment from Miami to Florida in November 2022.

More specifically, and with respect to the Court’s denial of defendants’ motion to dismiss fraud claims, the court found that Rashada had sufficiently alleged fraudulent inducement by the defendants. Specifically, the complaint detailed how the defendants, acting through their roles at Velocity, made false promises regarding NIL opportunities to secure Rashada’s commitment to UF. The Court noted that these promises were alleged to have been made without the intent to fulfill them, aiming instead to benefit UF’s football program and enhance Velocity’s reputation. The Court also rejected defendants’ argument that Rashada failed to plead fraud with particularity, as required by the Rule 9(b) heightened pleading standard for fraud claims. The Court held that the complaint alleged specific facts detailing the fraudulent scheme, including communications and actions taken by the defendants that misled Rashada, which satisfied Rule 9(b). The Court also upheld the claim that Velocity aided and abetted the fraudulent actions, finding that Velocity, through its executives—e.g., Hathcock—had knowledge of the fraudulent scheme and provided substantial assistance in its execution.

Interestingly, the Court chose to essentially “punt” on the issue of sovereign immunity that defendants Napier and Castro-Walker raised in their motions to dismiss the complaint. Sovereign immunity, which protects state employees from lawsuits in certain circumstances, was raised by the defendants as a defense, but the Court ruled that it was premature to decide this matter at the motion to dismiss stage. The question of whether sovereign immunity applies to Napier and Castro-Walker will be explored further as the case progresses and is certainly an issue that all public institutions should be following closely.

Overall, this order is significant as it allows Rashada’s fraud-related claims to proceed, highlighting the Court’s recognition of the complexities involved in NIL agreements and the responsibilities of entities facilitating such arrangements. The decision underscores the importance of transparency and integrity in contractual negotiations within the collegiate sports arena. The Court’s ruling in Rashada v. Hathcock serves as a critical reminder of the legal obligations schools, coaches, boosters and collectives owe to student athletes in their NIL contractual relationships and negotiations. It remains to be seen if this case will actually proceed meaningfully through discovery or if a settlement is now imminent.

April 8, 2025April 8, 2025 by Bryan Shapiro

Judge Wilken Conducts Final Approval Hearing in House v. NCAA

On April 7, 2025, U.S. District Judge Claudia Wilken convened a final approval hearing for the proposed $2.8 billion settlement resolving three high-profile antitrust cases—House v. NCAA, Carter v. NCAA, and Hubbard v. NCAA. As discussed in previous updates, Judge Wilken has appeared supportive of this settlement from its initial filing, but she acknowledged at the hearing that there was room for improvement. Specifically, Judge Wilken directed attorneys representing both the athletes and the NCAA to provide an update within a week, addressing whether they could agree to certain issues she outlined:

Key Issues Highlighted by Judge Wilken:

Grandfathering Current Athletes and Scholarship Limits: One of the most significant concerns acknowledged by Judge Wilken was the potential impact of the settlement on current student-athletes who may lose their roster spots as a result of changes to scholarship structures under the settlement’s terms. Many objectors had voiced concerns with this aspect of the settlement. Judge Wilken noted that many athletes likely chose their institutions with the expectation of continuing to compete in their respective sports. She expressed that it would be unfair for these athletes to face the prospect of losing their scholarships due to roster limitations introduced by the settlement. In light of this, Judge Wilken suggested that these athletes should be “grandfathered in” and allowed to maintain their scholarships, which would prevent them from being disadvantaged by the new restrictions. She emphasized that the number of athletes affected would be relatively small and that such a move would likely generate goodwill among both athletes and the public. While the NCAA’s attorney pushed back on this, Judge Wilken urged the parties to discuss this option further with the NCAA, signaling that this issue may need to be resolved before final approval.
Challenge Rights for Future Athletes: Judge Wilken also demanded more precise language regarding the ability of future college athletes to challenge the settlement once they enter college. She expressed concerns about ensuring that athletes who are not yet part of the settlement class have the opportunity to object to its terms upon matriculation. Attorneys for both the NCAA and Players assured the court that class members could challenge the settlement after they enroll in college, with Judge Wilken retaining the authority to terminate the settlement if problems arise during its implementation.
Concerns Over Timing and Case Dependencies: At one point during the hearing, Judge Wilken considered the possibility of approving the Hubbard case while delaying her ruling on the House and Carter cases. However, after the NCAA attorney emphasized that the settlement requires all three cases to be approved together or else the entire settlement would collapse, Judge Wilken seemingly abandoned this approach. It was made clear that the three cases must proceed as a package.

The concerns articulated by Judge Wilken suggest that significant revisions may be necessary before the settlement can receive final approval. Stakeholders, including educational institutions, student-athletes, and NIL entities, should anticipate potential adjustments to the settlement’s terms and prepare for possible changes in compliance requirements. Close monitoring of further developments is advisable to stay informed about the evolving legal landscape in collegiate athletics.

Within the next week, the NCAA and plaintiffs will respond to Judge Wilken’s concerns. Following that response, stakeholders should anticipate further developments in the settlement’s structure, particularly around scholarship policies and the scope of future athlete challenges. Institutions should review their current scholarship and NIL policies to ensure they remain in compliance with any potential changes resulting from the final settlement.

March 12, 2025April 1, 2025 by Bryan Shapiro

NCAA Litigation Update: What’s Coming Next in House v. NCAA

In approximately one month, on April 7, 2025, Judge Wilken will hear arguments from certain parties who have objected (“Objectors”) to the proposed settlement agreement to resolve several student-athlete compensation lawsuits against the NCAA—House, Carter and Hubbard. As previously discussed on this Blog, the Objectors will have the opportunity to voice their arguments before the Court, on behalf of all parties that submitted objections to the settlement, before the Court decides whether to approve the settlement. Judge Wilken invited several Objectors, including LSU gymnast Livvy Dunne, to appear before the Court. Ms. Dunne is believed to be one of the most successful NIL earners in college sports and has a reported net worth of approximately $9.5 million. Ms. Dunne’s success is remarkable because gymnastics is not one of the traditional “revenue” sports, i.e., football and men’s basketball. Ms. Dunne provides a unique voice for current and former college athletes who did not and do not benefit from the platform afforded to men’s football and basketball players. Ms. Dunne’s apparent value to LSU in a “non-revenue” sport provides an important perspective to the Court in light of the fact that the proposed settlement largely benefits football and men’s basketball players.

In addition to Ms. Dunne, the invited Objectors include swimmer Gannon Flynn, runner Gracelyn Laudermilch, football player Benjamin Burr-Kirven, the United States government, athletes represented by Michele Roberts (former director of the NBA Players Association), and other groups of athletes represented by various law firms. Although the Objectors were invited to speak at the April 7th hearing, it is unclear as to whether they will accept the invitation. The Court is likely to inquire as to: (i) the transparency of how the calculations are being made for the estimate of lost NIL opportunities; and (ii) why the same formula is being applied to all athletes across every sport despite the many inherent differences in each sport. The Objectors have argued that the current calculation framework set forth in the settlement does not accurately reflect the current NIL market, which took time to develop as businesses became more familiar with NIL and the industry matured. The Objectors have also taken issue with the fact that the current settlement framework does not account for athletes that have built large social media presences, such as Ms. Dunne, while competing in “non-revenue” sports.

The Objectors have until March 14, 2025 to notify the Court whether they intend to appear in person for the April 7, 2025 hearing. Despite the invitation to voice their positions, the purpose of the hearing is not to renegotiate the proposed settlement’s terms but to determine whether to approve the settlement or reject it and allow other related lawsuits to proceed toward potentially more thorough and appropriate resolutions.

January 14, 2025January 14, 2025 by Bryan Shapiro

Will NCAA Student Athletes Gain Additional Years of Eligibility?

The NCAA has been facing multiple battles on multiple legal fronts as plaintiffs use the antitrust laws to undermine the traditional regulatory scheme. As we have previously discussed, plaintiffs have already attacked transfer restrictions and the NCAA’s prohibitions on student athletes’ ability to receive direct compensation and payments. The latest battle is over the duration of student athlete eligibility. Whereas plaintiffs are now targeting NCAA D-1 Bylaw 12.8.1, which limits eligibility to five years with some minor exceptions. A new antitrust challenge could significantly extend that window—provided that the student athlete remains a full-time student at their given university.

The NCAA’s eligibility rules have been targeted in the past few months following a federal judge in Tennessee restraining the NCAA from preventing Vanderbilt quarterback, and former JUCO transfer, Diego Pavia from playing in 2025-26. Now, the NCAA is in a legal battle with John Wade III over Wade’s eligibility status after he has exhausted his five-year eligibility period. Last month, Wade filed a complaint against the NCAA asserting that eligibility restrictions imposed by colleges, which are competing businesses that join hands through NCAA rulemaking, violate Section 1 of the Sherman Act. On January 9, 2025, Wade filed his memorandum in support of his request to immediately enjoin the NCAA from prohibiting him from resuming his basketball career at the University of Southern Mississippi in the 2024-2025 season. U.S. District Judge Taylor B. McNeel held an argument on the motion on Friday, January 10, 2025.

In the complaint and injunction request, Wade argues that restricting college athletes’ opportunities through eligibility rules denies them the chance to improve “their economic opportunity, personal growth, and well-being with NIL opportunities.” The major challenge here is whether the longstanding rule—NCAA D-1 Bylaw 12.8.1—is in violation of federal antitrust laws. The determination of this challenge could conceivably lead to college athletes having longer careers—and, in some instances, even longer than some professional careers.