Tag: athletes

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.

As discussed in our prior Alerts (including on June 6, August 1, and September 6, 2024), three major class action antitrust lawsuits brought against the NCAA: House v. NCAA, Hubbard v. NCAA, and Carter v. NCAA — all from athletes claiming the NCAA violates the Sherman Act—reached a preliminary settlement agreement that has been pending before U.S. District Court Judge Claudia Wilken. Following the Court’s September 5, 2024 fairness hearing, where Judge Wilken raised various concerns regarding the settlement’s language relating to the NCAA’s efforts to limit athlete compensation from outside entities required the parties, Judge Wilken ordered the parties to go back to the drawing board to respond to her concerns. To that end, the parties filed a revised settlement proposal that included the elimination of the term “booster” from the settlement and further clarified that NCAA enforcement of pay-to-play rules regarding NIL would be limited to review of deal with people and entities who are closely affiliated with schools—which was defined in the settlement as anyone who provided more than $50,000 to a school.

On October 7, 2024, Judge Wilken granted preliminary approval to the revised version of the multi-billion-dollar settlement of these three antitrust lawsuits. Based on Judge Wilken’s concerns at the fairness hearing, many thought that the Judge would schedule another hearing before ruling on the revised settlement and/or issue an opinion explaining why the newly proposed language was satisfactory, particularly because the restrictions on third-party NIL deals remained largely unchanged from the original version. Judge Wilken did not do so and simply granted the revised settlement proposal and issued a schedule for how the case will proceed.

Importantly, Judge Wilken’s grant of preliminary approval does not mean she will grant final approval.  The class action process will now allow individuals to file objections to the settlement and athletes to opt out of the class. Additionally, there is a real possibility that any approved settlement could be challenged at the U.S. Court of Appeals for the Ninth Circuit and then at the U.S. Supreme Court.  The grant of preliminary approval does, however, indicate that Judge Wilken believes that these issues can be resolved through a court settlement. In any event, and no matter what happens with the final approval of the settlement, it can’t stop labor and employment lawsuits (including Johnson v. NCAA and Fontenot v. NCAA), NLRB charges (including those involving Dartmouth and USC athletes) and lawsuits brought under Title IX.

College athletic departments will likely now (if they haven’t already) begin acting fast to implement their revenue share plans, because college athletes will begin negotiating their 2025 revenue share agreements during this upcoming recruiting portal season (December 2024 for college football).

Key upcoming dates include:

• January 31, 2025 for opt-outs and objections;
• March 3, 2025 for the parties’ deadline to respond to objections; and
• April 7, 2025 for the Final Approval Hearing (which coincides with the 2025 Men’s March Madness Basketball Championship)

As the settlement process continues, schools, collectives, athletes, and any other party involved in college athletics should monitor these developments and speak to legal counsel to ensure they have a full understanding of, and stay current on, all rules, laws, and guidance.