Paul L. Caron

Monday, November 20, 2023

Michigan And Ohio State Law Profs Debate Whether Antitrust Law Will Protect Jim Harbaugh From NCAA Discipline

Wall Street Journal, The Wild Legal Theory to Save Jim Harbaugh:

HarbaughAn antitrust scholar believes the rule Michigan is accused of breaking may be unenforceable. He just happens to teach at Michigan’s law school.

Michigan Law professor Daniel Crane was speaking at the Federalist Society’s national lawyers convention last week when the assembled legal wonks kept stopping him to discuss something that wasn’t on the originalism agenda: the explosive sign-stealing scandal engulfing his school’s football team.

After Crane’s beloved Wolverines drew the wrath of the college sports world, Crane cooked up a novel theory in their defense. In perhaps the spiciest piece ever to hit the Yale Journal on Regulation [Sign Stealing and the Antitrust Laws], Crane argued that the NCAA bylaw Michigan is accused of violating may be unenforceable—because it violates antitrust law.

Crane says that while he is a Michigan fan, he’s speaking on his own behalf and isn’t representing the university in any capacity. He’s simply an antitrust scholar with a rooting interest. And he believes that for the same reasons the NCAA has lost monumental rulings in areas such as athlete compensation, the rule Michigan is accused of breaking might not withstand a legal challenge.

The University of Michigan happens to possess not just a top-10 football team but also a top-10 law school. So it’s hardly surprising that faculty members on the brink of an Ann Arbor winter are amusing themselves by dreaming up legal defenses for Jim Harbaugh. Crane’s article was rapidly shared by the subset of the population that cares deeply about both the Sherman Act and Bo Schembechler. ...

Crane argues that the reasoning for that restriction is what’s key: it was implemented in 1994 as a cost-cutting measure, one that would prevent big-time programs from spending on something that smaller ones couldn’t afford. Crane says that’s the precise type of financial restriction that courts—and the Justice Department—have been skeptical of upholding.  ...

While Crane is a leading scholar on the subject, and even teaches hallmark NCAA cases to his law students, he has a bit of a bias when it comes to this case in particular. So there was only one reasonable thing to do: test his idea with an Ohio State law professor.

Felix Chang is admittedly conflicted when it comes to the game simply called The Game. He’s a visiting professor at Ohio State’s law school. He also got his law degree from that school up north.

“I’ve got split loyalties,” he said, before acknowledging that these days, he generally does cheer on the Buckeyes.

Chang is skeptical that Crane’s argument would fly in federal court. The problem with Crane’s interpretation, Chang says, is that restraining player compensation affected the labor market—unlike barring scouting. That shifts the test to whether a rule on scouting really affects consumers, and probably not just ones with a lot of maize-and-blue in their wardrobes.

“Classically, when you look at the welfare of consumers, you look at: is price raised, is output limited, is there any other anticompetitive effect, like lack of innovation?” he says. ...

Since Crane wrote his initial piece, he has been inundated with responses. There have been enthusiastic Michigan fans. There have also been less enthusiastic notes from people who don’t guzzle beer at Skeeps.

The response has been so overwhelming that Crane has penned a follow-up post in the same Yale journal that delves even further into the legal arguments about why enforcing the rule may raise antitrust issues [More on Sign Stealing and Antitrust].

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