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POCONO INVITATIONAL SPORTS CAMP v. NATIONAL COLL. ATH. ASS'N

April 30, 2004.

POCONO INVITATIONAL SPORTS CAMP, INC., AND EASTERN INVITATIONAL BASKETBALL CLINIC, INC., AND FUTURE STARS BASKETBALL, LLC., AND FIVE-STAR BASKETBALL CAMP, INC., AND BLUE STAR PRODUCTIONS, INC., Plaintiffs
v.
NATIONAL COLLEGIATE ATHLETIC ASSOCIATION, Defendant



The opinion of the court was delivered by: ANITA BRODY, District Judge

MEMORANDUM AND ORDER

On November 9, 2000, plaintiffs Pocono Invitational Sports Camp, Inc. ("Pocono"), Eastern Invitational Basketball Clinic, Inc. ("Eastern"), Future Stars Basketball, LLC ("Future Stars"), Five-Star Basketball Camp, Inc. ("Five-Star"), and Blue Star Productions, Inc. ("Blue Star") brought this action against defendant National Collegiate Athletic Association ("NCAA"). Plaintiffs alleged two antitrust violations under the Sherman Antitrust Act, 15 U.S.C. § 1 and 2, and one count of tortious interference with contractual arrangements and prospective contractual arrangements.*fn1 Jurisdiction is based on the existence of a federal question. Defendant has moved for summary judgment on all counts. For the reasons set forth below, I grant defendant's motion.

I. FACTS*fn2

 A. The Parties

  Plaintiffs are operators of for-profit summer basketball camps for children and teenagers. (JSMF ¶ 26.) Plaintiffs also conduct a variety of other youth basketball events and activities, including shootouts, tournaments, travel teams, and leagues.*fn3 (Id.) Defendant has acknowledged that the plaintiffs in this case operate some of the finest summer basketball camps in the United States. (Pl. SMF ¶ 4.)

  Defendant NCAA, formed in 1905, is a non-profit, voluntary unincorporated association of approximately 1260 colleges, universities, athletic conferences and affiliated organizations. (JSMF ¶ 1, see also NCAA v. Bd. of Regents, 468 U.S. 85 (1984).) According to the NCAA Constitution, the purposes of the NCAA are, among other things, "[t]o uphold the principle of institutional control of, and responsibility for, all intercollegiate sports in conformity with the constitution and bylaws of [the NCAA]," "[t]o formulate, copyright and publish rules of play governing intercollegiate athletics," and "[t]o legislate, through bylaws or by resolutions of a Convention, upon any subject of general concern to the members related to the administration of intercollegiate athletics." (NCAA Constitution, Article 1.2.) One of the NCAA's many responsibilities is the regulation of coaches' recruiting of prospective student-athletes ("prospects"). (Def. SMF ¶ 12.) The NCAA Constitution includes a statement of the "basic purpose" of amateurism, which guides the organization's regulation of recruiting:
The competitive athletics programs of member institutions are designed to be a vital part of the educational system. A basic purpose of this Association is to maintain intercollegiate athletics as an integral part of the educational program and the athlete as an integral part of the student body and, by so doing, retain a clear line of demarcation between intercollegiate athletics and professional sports.
(NCAA Constitution, Article 1.3.1.)
  The NCAA Constitution also provides a Principle of Recruiting:
The recruiting process involves a balancing of the interests of prospective student — athletes, their educational institutions and the Association's member institutions. Recruiting regulations shall be designed to promote equity among member institutions in their recruiting of prospects and to shield them from undue pressures that may interfere with the scholastic or athletics interests of the prospects or their educational institutions.
(NCAA Constitution, Article 2.11.)

  Although the NCAA does not own, sponsor, or operate any youth basketball camps, some of the NCAA member institutions do own and operate camps ("institutional camps"). These institutional camps compete with plaintiffs' camps ("non-institutional camps") for campers. (Pl. SMF ¶ 9.) One notable difference between institutional and non-institutional camps is that institutional camps are subject to NCAA rules, including the entirety of the NCAA's amateurism and recruiting bylaws. (Def. SMF ¶ 55, NCAA Bylaw 13.13.) Among other things, these guidelines require that institutional camps be open to any and all entrants. Plaintiffs' non-institutional camps, on the other hand, are free to be selective. Non-institutional camps are not subject to the NCAA's direct control, although they are indirectly affected by many NCAA recruiting rules.

 B. NCAA Regulating Activity and the Challenged Regulations

  Under its constitution, the NCAA membership adopts and amends its various bylaws and regulations to advance the organization's principles. (NCAA Constitution, Article 2.01.) Plaintiffs challenge certain regulations affecting the recruiting of Division I basketball players at their summer basketball camps.*fn4 Specifically, plaintiffs challenge three of these NCAA recruiting regulations as anticompetitive: (1) the NCAA requirement that Division I coaches can only evaluate prospects at non-institutional basketball camps if the camps are certified by the NCAA (Bylaw 13.13.3) and the requirements with which non-institutional camps must comply in order to be certified (Administrative Regulation § 30.16); (2) the reduced number of days coaches are permitted to visit plaintiffs' camps; and (3) the prohibition of Division I men's basketball coaches from accepting employment with non-institutional camps attended by prospects (former Bylaw 13.13.2.3.2, in effect from 1990 to 2001).

  I will describe each of the challenged recruiting regulations in turn.

 The Certification Requirement and Process

  Plaintiffs object to both the existence of the certification requirement, and the certification process. Since 1993, Division I basketball coaches are only permitted by the NCAA to attend (1) institutional camps and (2) non-institutional camps certified by the NCAA. (JSMF ¶ 71.) In order for a summer basketball event in men's basketball to be certified, an application form must be submitted to the NCAA forty-five days before the camp begins. The following criteria must be met:*fn5

 
• A comprehensive financial disclosure of information related to the operation of the event (and any team participating in the event) [must be submitted];
• Admissions fees charged to all event participants must be similar;
• No air or ground transportation or other gifts or inducements shall be provided to the event participants or their coaches or relatives;
• A prospective student-athlete who attends an NCAA certified event shall not retain any athletics equipment or apparel provided for his use at the event other than an event T-shirt. All other apparel (e.g. shoes or shorts) may be retained only if the prospect is charged the normal retail value of such items (as opposed to the event's cost in purchasing the items); • Compensation provided to event personnel shall be commensurate with the going rate for event personnel of like teaching ability and event experience;
• The event or tour shall include a comprehensive educational session presented in-person or in a video format that includes a review of regulations related to initial-eligibility standards, gambling, agents and drug use (Revised January 13, 2003)',
• An event operator, staff member of a league or member of any team may not participate if the individual has been found guilty or pleaded guilty in a court of law for having been involved in sports bribery, point shaving or game fixing;
• The event shall not be conducted in a venue where sports wagering on intercollegiate athletics is permitted, or on property sponsored by an establishment that permits sports wagering on intercollegiate athletics or branded with signage for such an establishment; The event (and any team participating in the event) shall not be operated or managed by any individual or agency involved in the marketing of any individual's athletics reputation or ability;
• The event (and any team participating in the event) may not receive financial support from any individual or agency involved in marketing any individual's athletics reputation or ability or any representatives of an NCAA member institution's athletics interests that is assisting or has assisted in the recruiting process;
• Individuals involved in coaching activities must have been approved in accordance with guidelines established by the NCAA basketball certification staff (Revised January 13, 2003);
• Participants on nonscholastic teams must be legal residents of the state in which the team is located or a geographically adjoining state and not more than a total of three prospects from adjoining states may participate on any one nonscholastic team (Revised January 13, 2003); and
• A participant may receive an award, provided the cost of the award is included in the participant's entry fee (Adopted January 13, 2003).
(NCAA Bylaw 30.17, adopted 11/1/01, effective April 1, 2002 (except those requirements noted as having been adopted or revised on January 13, 2003).)
  The institutional camps are not subject to the certification requirements, but are required to abide by all NCAA amateurism and recruiting bylaws. These bylaws require that institutional camps, among other things:
• ust be open to any and all entrants (Bylaw 13.13.1.2),
• are not permitted to pay a prospect's expenses to attend camp (Bylaw 13.13.1.5.2),
• may only give prospects awards with the understanding that the cost of such awards is included in the admissions fees (Bylaw 13.13.1.5.4),
• must include an educational session detailing NCAA initial-eligibility standards to all camp participants (Bylaw 13.13.1.6.)
  There is no evidence on the record about what fees, if any, are required of non-institutional camps that wish to be certified. Plaintiffs are currently all certified. Plaintiffs have offered no evidence about what harm compliance with this requirement and process has caused them. The Reduction in the Length of Coach Visits to Plaintiffs' Camps
  In 1981, the NCAA developed a complex recruiting calendar for Division I men's basketball. (JSMF ¶ 76.) The recruiting calendar is divided by type of permitted coach activity, and there are four types of recruiting periods: Contact periods, Evaluation periods, Quiet periods and Dead periods. The NCAA bylaws describe the periods as follows:
Contact Period: that period of time when it is permissible for authorized athletics department staff members to make in-person, off-campus recruiting contacts and evaluations. (NCAA Bylaw 13.02.4.1)
Evaluation Period: that period of time when it is permissible for authorized athletics department staff members to be involved in off-campus activities designed to assess the academic qualifications and playing ability of prospects. No in-person off-campus recruiting contacts shall be made with the prospect during an evaluation period. (NCAA Bylaw 13.02.4.2)
Quiet Period: that period of time when it is permissible to make in-person recruiting contacts only on the member institution's campus. No in-person, off-campus recruiting contacts or evaluations may be made during the quiet period. (NCAA Bylaw 13.02.4.3)
Dead Period: that period of time when it is not permissible to make in-person recruiting contacts or evaluations on or off the member institution's campus or to permit official or unofficial visits by prospects to the institution's campus. The provision of complimentary admissions to a prospect during a dead period is prohibited, except as provided in Bylaw 13.8.2.5 for a prospect who visits an institution as part of a group. During such a dead period, a coaching staff member may not serve as a speaker at or attend a meeting or banquet at which prospects are in attendance, except as provided in Bylaw 13.1.9.1, and may not visit the prospects' educational institutions. It remains permissible, however, for an institutional staff member to write or telephone prospects during such a dead period. (NCAA Bylaw 13.02.4.4)
  Plaintiffs object to the reduced length of the evaluation period, which has fluctuated many times over the years. In 1981, the summer evaluation period was 45 days. (JSMF ¶ 76.) Although the period was shortened to one month in 1983, from 1984 to 1986 it was increased back to 45 days. (JSMF ¶ 77.) In 1987, the summer evaluation period was decreased again to 21 days. (JSMF ¶ 78.) From 1989 to 1994, the period was 27 days. (JSMF ¶ 79.) In 1994, the evaluation period was reduced to 24 days. (JSMF ¶ 80.) In 2000, when this suit was filed, the NCAA reduced the evaluation period from 24 days to 14 days for the summer of 2001. (Def. SMF ¶ 85.) In 2002, the evaluation period was 20 days. (Def. SMF ¶ 92.)

  Plaintiffs claim that giving their campers the opportunity to display their skills before Division I college basketball coaches, which can only occur during the evaluation period, is essential to the success of their camps.*fn6 (Pl. SMF ¶ 10.) Accordingly, plaintiffs factor the NCAA recruiting calendar into their camp schedules.*fn7 However, plaintiffs concede that they cannot and do not guarantee to campers that any Division I coaches will attend the camps to observe the campers. (JSMF ¶ 94.)

  Although plaintiffs claim that the NCAA permits observations and evaluations to take place at institutional basketball camps throughout the months of June, July and August, defendant claims that institutional camps are never permitted to have formal observation and evaluation of players by Division I coaches. Plaintiffs have offered the following evidence in support of their claim that the institutional camps permit observation and evaluation throughout the summer: (1) the text of NCAA Bylaw 13.13.1.1.2: "An institution's football or basketball camp or clinic may be conducted only during the months of June, July and August, unless such activities meet the provisions regarding developmental clinics set forth in Bylaw 13.12.3.1"; and (2) the deposition of Wilbur H. Klein, a representative of plaintiff Five-Star, which suggests that observation and evaluation occur by Division I coaches who are employed by the institutional camps. Plaintiffs offer no evidence suggesting that a Division I coach who is not ...


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