Four student-athletes who transferred from junior colleges to NCAA Division I schools challenged the NCAA's 'JUCO Rule,' which counts time spent at junior colleges toward a player's five-year eligibility clock. The rule rendered the players ineligible for the 2025-26 season because they had already used up their five years of eligibility while at the junior colleges. The players sued under the Sherman Antitrust Act, arguing the rule was an unreasonable restraint of trade. The district court granted a preliminary injunction allowing the players to participate, effectively waiving the rule for that season. The NCAA appealed, arguing the injunction was premature and the lower court misapplied antitrust law.
The Fourth Circuit began by addressing mootness, concluding the case was not moot because the issue was 'capable of repetition, yet evading review' due to the annual nature of college football seasons and the players' likelihood of facing the same eligibility issues in future years. The court then turned to the merits of the preliminary injunction, which requires a clear showing that the plaintiffs are likely to succeed on the merits. The court first confirmed that NCAA eligibility rules are commercial and subject to the Sherman Act, noting that these rules limit athletes' participation in a labor market. However, the court identified critical errors in the district court's application of antitrust doctrine. The district court had applied a 'quick-look' analysis, which allows for a cursory examination when anticompetitive effects are obvious. The Fourth Circuit held that this was error because NCAA rules are complex joint venture restraints that are presumptively procompetitive and require a full 'rule of reason' analysis. Under the rule of reason, the plaintiffs must define the relevant market, prove the NCAA's market power, and demonstrate actual anticompetitive effects. The court found the district court failed to make factual findings regarding the relevant market and did not require the players to provide evidence that the JUCO Rule reduced output, increased prices, or decreased quality. The court emphasized that without a proper market definition and evidence of harm to competition, the players could not meet their burden of proof at the preliminary injunction stage.
The preliminary injunction is vacated, meaning the NCAA's JUCO Rule is reinstated for the 2025-26 season and the players are ineligible. The case is remanded to the district court to conduct a full trial on the merits, where the players must properly define the relevant market and provide evidence of anticompetitive effects under the rule of reason. The decision clarifies that eligibility rules are not exempt from antitrust scrutiny but are entitled to a rigorous analysis that weighs their procompetitive justifications against their anticompetitive effects.