UPDATE 11/22/19:

The NCAA has ruled James wiseman ineligible and will require him to pay $11,500.00 to charity, sit out nine games the impermissible benefit, plus three additional games punitively for playing the first three games of the season after being deemed “likely ineligible.” Sports Illustrated reported the NCAA may be opening an infractions case against the University arising out of Wiseman playing these three games. College sports analysts opine this is expected, but attorneys, athletes, and media commentators have aggressively criticized the NCAA’s actions and enforcement in this case, with attorney turned sportswriter Geoff Calkins on ESPN Radio’s Memphis affiliate raising due process, double jeopardy, and racial bias claims that would likely be weighed in a court of law, but are not currently being considered since the NCAA is both a party and the adjudicator in this case thus far. More legal commentary will follow if and as this story develops.

UPDATE 11/14/19:

James Wiseman’s attorneys today issued a statement saying that Wiseman is withdrawing his lawsuit: “It has become clear to Mr. Wiseman that the lawsuit he filed last week has become an impediment to the University of Memphis in its efforts to reach a fair and equitable resolution with the NCAA concerning his eligibility status. Therefore, Mr. Wiseman advised his legal team that he wished to withdraw his lawsuit.”

The University of Memphis issued a statement saying in part, “In order to move the matter forward, the University has declared James ineligible for competition and will immediately apply for his reinstatement. Pending that notification, James will be withheld from competition but will continue to practice with the team.”

CBS Sports and other media outlets are reporting that the NCAA, the University of Memphis and Wiseman’s family have been in discussions while the NCAA decides how many games Wiseman will be required to sit out.

We will continue to update this post as it develops.

Original Post:

What’s the deal with these NCAA legal headlines lately?

During opening week of the 2019-2020 college basketball season, the NCAA determined James Wiseman, freshman center for the University of Memphis men’s basketball team, who projects as the #1 pick in the 2020 NBA Draft, as “likely ineligible,” six months after initially ruling him eligible and days after he dominated in the Memphis season opener. Wiseman has sued the NCAA in Tennessee state court, and a temporary restraining order was granted allowing him to play with his team until a November 18 injunction hearing.

If he wins, it will set bold new precedent in cases against the NCAA. If he loses, the likely outcome is that he’ll be ruled ineligible and Memphis will be forced to vacate every game it wins with Wiseman this season plus suffer a posteseason ban in a year where the team was one of the favorites to win the national championship.

It’s the latest of several high-profile convergences of college sports, NCAA rules, and the legal system. The Wiseman headlines came hours after news of Ohio State sitting defensive end Chase Young, who reportedly took and repaid a loan so loved ones could travel to see him play in the Rose Bowl in violation of NCAA rules. Withholding Young from Ohio State’s game against Maryland likely cost Young his chance to win the Heisman Trophy.

Impermissible Benefits

Wiseman has sued the NCAA (the university is a nominal defendant) and is represented by Memphis legal heavyweights Ballin, Ballin & Fishman. Wiseman is alleging five counts, including breach of implied covenant of good faith and fair dealing, tortious interference, and promissory estoppel in that the NCAA arbitrarily retracted their May decision. The Complaint shows the NCAA approved Wiseman’s eligibility on May 29, 2019. The NCCA later notified the university they erred certifying his eligibility but said they would preserve Wiseman’s eligibility because that was their initial ruling. A statement by the university said Wiseman was initially ruled eligible but that additional issues would be further investigated. The university then received a bylaw interpretation from the NCAA on Oct. 31, 2019 notifying them of a recruiting violation. The NCAA notified the university that Wiseman was “likely ineligible” six days later.

The violation is that current Memphis head coach Penny Hardaway loaned Wiseman’s family $11,500 in the summer of 2017 for moving expenses from Nashville so Wiseman could attend Memphis East High School and play basketball where Hardaway was then the school coach. This itself is not an NCAA violation, but the issues were investigated at the time by the Tennessee high school athletics governing entity. Hardaway admitted he made the loan to Wiseman’s mother; Wiseman claimed he had no knowledge of the loan. But key to this is the NCAA considers Hardaway a booster for the University of Memphis, his alma mater, because after Hardaway’s retirement from his NBA career, he donated one million dollars to the school. NCAA rule 13.02.15.1 designates anyone is a booster “indefinitely” once they donate money to the athletic department or booster organization. The complaint interprets that “indefinitely” differs from “in perpetuity.” Further, an enforcement section on the NCAA website, as opposed to its rulebook, states “once an individual is identified as a ‘representative of the institution’s athletics interests,’ the person retains that identity forever.” Regardless, the NCAA views the loan as an impermissible benefit to a prospective student athlete. Tom Yeager, former Chairman of the NCAA Committee of Infractions, said “this is a textbook case that [Hardaway] is a booster.”

Ambiguity in NCAA rules will factor heavily in Wiseman’s argument, considering the donation occurred years before Hardaway became Memphis’ coach and what some attorneys consider an overbroad definition of a “booster.” Otherwise, the loan does not violate NCAA rules except for Hardaway’s status as a university booster indefinitely. At the time of the loan, many college basketball analysts predicted Wiseman would likely attend the University of Kentucky, not the University of Memphis.

It’s a stark change from thirty years ago, when the Supreme Court held in NCAA v. Tarkanian (which involved the University of Nevada-Las Vegas basketball team), the NCAA does not have to follow the same constitutional guidelines that cover government agencies in investigating violations. Although historically victorious in the court of law, the court of public opinion has not lately favored the NCAA. Examples abound of its Byzantine amateurism rules negatively impacting the students it claims to protect, and the NCAA itself is facing a paradigm shift as it announced it would explore bylaws changes in response to recent legislation passed in California and other states allowing college athletes to profit off their name, image and likeness. While that announcement lacked substance, it contrasts longstanding NCAA amateurism rules barring student-athletes, unlike any other student, from profiting off their personality rights. The NCAA collects over one billion dollars in annual revenue, universities build pro-level facilities, coaches command multimillion dollar salaries, but student-athletes receive none of the revenue generated by their participation in college sports.

These amateurism rules have seen courtroom challenges, most famously the landmark O’Bannnon v. NCAA antitrust case. But now, “the absurdity of the amateurism rules is under attack not just in court, but also in legislatures,” said Roger Abrams, neutral arbitrator for the Court of Arbitration for Sport and Northeastern University School of Law professor emeritus. California was the first state to pass a law allowing student athletes to profit off their name, image and likeness, and fifteen other states (including Tennessee) are exploring if not enacting laws allowing athletes to profit off these personality rights. In Congress, two democrats and two republicans have cosponsored H.R. 1804, The “Student-Athlete Equity Act” which would increase taxes on NCAA member schools if they bar compensating college athletes. Any contradicting NCAA action, like postseason bans on teams whose athletes profit off their personality rights, could open the lawsuit floodgates. Meanwhile, the NCAA rules have increasingly prompted elite athletes to forego college entirely by playing overseas or pursuing other paths to the NBA.

“The free market has to operate and these student-athletes have the same rights that everyone else has to take advantage of the commercial value of their names and likenesses,” said Abrams in 2014 after the O’Bannon ruling. Yet while athletes wait on name/image/likeness reform, college basketball saw high profile coaches (Kansas’s Bill Self, Arizona’s Sean Miller, LSU’s Will Wade) survive an FBI investigation into dealings with shoe companies allegedly funneling money to secure players to attend certain universities.

“Here we go….players declared immediately ineligible. Coaches get due process,” tweeted Jay Bilas, an attorney of counsel with Moore & Van Allen in Charlotte and ESPN college basketball analyst, in response to the Wiseman news, referring to the coaches implicated in the FBI’s investigation.

For the University of Memphis, the blow comes a decade after its 2008 Final Four season was vacated due to eligibility issues surrounding Derrick Rose, another freshman standout who was the #1 pick in the 2008 NBA draft. Rose was also ruled eligible by the NCAA, then retroactively ruled ineligible. In its case, as noted by Hogan & Hartson (now Hogan Lovells) alum and Memphis sportswriter Geoff Calkins, the NCAA didn’t allege, much less require proof, that the university did anything wrong, but under a strict liability theory (itself inconsistently applied), Memphis was penalized nevertheless. Calkins opined that case (compared to Wiseman’s) was stronger on the merits, but the university chose not to contest the NCAA’s determinations in the Rose case.

This time, Wiseman has decided to fight back.

What Will Happen?

“The biggest story on Wiseman is that schools no longer accept NCAA authority. It used to be most everyone was afraid to fight the NCAA in open court” tweeted Clay Travis, a controversial sports personality and Tennessee lawyer who presents a CLE entitled “The NCAA Legal Dumpster Fire.” The NCAA has met recent resistance and legal challenges to its investigations and decisions. Promissory estoppel was one of the claims brought by five former University of Louisville players in Hancock v. NCAA, alleging the players not involved in a sex-for-play scandal (which led to the NCAA vacating Louisville’s 2013 championship) were painted in a false light. Settlement in that case was announced in September 2019, and it’s possible the University of Memphis and the NCAA will reach a settlement as well. In another newsmaking case, the University of North Carolina was investigated by the NCAA for fraud and academic dishonesty. Despite factual findings and NCAA action, the school fought back, ultimately not receiving sanctions. However, Yeager advocates against this, and said, “everyone just needs to trust the NCAA and trust the process” concerning eligibility inquiries.

Experts differ predicting what’s next. Randy Fishman, co-counsel in the case, expects there will be discussions with the NCAA before the Nov. 18 state court hearing. David Anthony, a member of Bone McAllester & Norton in Nashville, told the Daily Memphian online newspaper that in the hearing in Shelby County Chancery Court (if it occurs before negotiations or the NCAA’s likely move to file for removal to federal court), a preliminary injunction ruling could delay the case for months unless the NCAA moves for summary judgement. To prevail on an injunction hearing, Wiseman must prove irreparable harm; the balance between that harm and the injury granting the injunction would inflict on the NCAA; the probability that the NCAA will succeed on the merits; and the case’s public interest. But it’s likely the case gets tied up in courts for months.

Anthony recognizes a big challenge for Wiseman’s attorneys will be showing the NCAA would not succeed on the merits. CBS Sports analyst Gary Parrish highlights the underlying facts suffice as breaking NCAA rules and that the complaint does not mirror the university’s Nov. 8 statement regarding the initial eligibility determinations. Bilas called the case “a garden variety” rules violation on ESPN, and said Memphis continuing to play Wiseman was brazenly risky, citing the NCAA’s restitution rule where if the NCAA prevails in court, it could levy heavy penalties to the Memphis program for playing an ineligible player, including suspending Hardaway, scholarship reductions, vacating wins, and postseason bans. Yeager concurs, and doesn’t consider this case unique from any other booster-provided impermissible benefits cases.

Richard G. Johnson, an Ohio lawyer who represented the plaintiff in Oliver v. NCAA, the first successful suit against the NCAA brought by a college athlete, disagrees. He believes Wiseman, Hardaway, and the university are in the right, noting in a twitter thread boosters only violate NCAA benefits rules for enrolled athletes. The benefit occurred two years before Wiseman enrolled in college and a year before the coaching vacancy resulting in Hardaway’s hiring. This is significant, said Alan Milstein, the litigation department chairman at Sherman, Silverstein, Kohl, Rose & Podolsky in New Jersey who has represented NBA legends Allen Iverson and Carmelo Anthony. He told the Memphis Commercial Appeal he believes Memphis is justified letting Wiseman play despite the NCAA notice and believes Wiseman will play this season, comparing the circumstances to Cam Newton’s 2010 case while enrolled at Auburn University. Like Wiseman, Newton had no knowledge of benefits given to his father but was allowed to play college football. But NCAA rules changed after Newton’s case to hold students accountable for their parents’ actions, and the NCAA has since punished players similarly circumstanced at North Carolina, BYU, Kansas, Kentucky, Syracuse, and Louisville.

Bilas also identified Wiseman could repay the loan, then apply for reinstatement after sitting for a portion of the season. Fishman intimated this was an outcome explored initially but was abandoned due to the NCAA not specifying what consequences it would levy as Wiseman weighed his options. Fishman characterized it as the NCAA telling Wiseman to “go ahead and plead guilty, then we’ll tell you what we’re going to do.” The parties could still come to an agreement where Hardaway accepts some consequence or the school gives back certain basketball-related revenues too the NCAA, but still find a way for Wiseman to play and Memphis to participate in the NCAA Tournament. It was announced November 13 this is the path taken by the NCAA with Chase Young and Ohio State, who will only miss two games. It was reported Young’s honesty and OSU being forthcoming helped in this instance. Michael McCann, a UNH law professor and legal analyst for Sports Illustrated, thinks negotiations are wise, lest the NCAA “cut off its nose to spite its face;” as elite athletes increasingly forego collegiate competition entirely, noting Wiseman would draw interest and ratings to the NCAA Tournament.

A Shadow Cast

The NCAA has cast a shadow on one of basketball’s heartwarming stories. A Memphis native, Hardaway played college basketball at the university, then played fifteen seasons in the NBA where he was one of basketball’s biggest superstars of the 1990s, but whose prime was plagued by injuries. After retirement, Hardaway became a philanthropic fixture in Memphis, investing in a city with high crime and poverty metrics. He started coaching at an inner-city middle school at the request of coach Desmond Meriweather, a childhood friend of Hardaway’s, who was fighting terminal cancer. Hardaway coached the team to multiple middle school state championships, and continued with that nucleus of players to East High School where more state titles followed.

Meanwhile, the University of Memphis basketball program sunk to its nadir in the years after the vacated 2008 season. Then-coach John Calipari left in 2009, taking with him to the University of Kentucky star recruits John Wall and DeMarcus Cousins, leaving Memphis to flounder in the wake under replacement coaches Josh Pastner and Tubby Smith. Memphis historically averages making the NCAA Tournament’s Sweet Sixteen approximately every four years despite membership in athletic conferences without the lucrative media rights packages of “power conferences” like the Big Ten or SEC. However, Memphis hasn’t played in the NCAA Tournament since 2014 nor made the Sweet Sixteen since 2009, with basketball attendance dropping to its lowest point in fifty years. When Memphis fired Smith in 2018, it hired Hardaway to restore the basketball program and prepare players for the NBA. The move was kismet, as Hardaway followed the path of his college coach, Larry Finch, another native basketball star who played on the university’s first Final Four team in 1973 and also coached Memphis after playing professionally.

Hardaway went to work; his 2019 recruiting class was ranked #1 in the country, anchored by several highly ranked local prospects including James Wiseman. The narrative was fated after decades of disappointment and near-misses for a school still waiting for its first NCAA championship.

In the first three hours after the news broke, The Daily Memphian reported there were 290,000 tweets mentioning the NCAA with 43,000 mentioning Wiseman. Social media outcry lambasting the NCAA came from, among others, LeBron James, sports analysts, coaches like Tony Dungy, attorneys and politicians. Jalen Rose, a former NBA star turned ESPN analyst, called the NCAA’s actions “selective enforcing.” Tennessee state senator Brian Kelsey and state representative Antonio Parkinson have added language to their bills modeled after California’s Fair Pay to Play Act so that “no Tennessee public university may discriminate against a player based on a donation to the university by a coach.” Tennessee Congressman David Kustoff announced on November 12th he will investigate the NCAA for “improper conduct” and “a history of unfair practices.”

Many posts claimed the NCAA targets Memphis over “blue-blood” schools from more lucrative conferences, and that the NCAA was targeting Hardaway, who has ruffled establishment feathers for the unapologetic swagger in which he recruits as a relatively young African American former NBA All-Star. Hardaway’s first two recruiting classes include players who decommitted from Duke, Kentucky, and Wichita State to be coached by Hardaway and Mike Miller, a two-time NBA champion now an assistant coach on Hardaway’s staff. A grassroots media outlet tweeted quotes from Wiseman’s attorney Leslie Ballin stating if Hardaway wasn’t black, Ballin doesn’t believe these events would happen. Most identified the ruling punishes Wiseman worst of all, who committed none of the acts at issue, and is an eighteen year old college freshmen known for earning good grades and fluency in Mandarin beyond his basketball talent.

As for what’s next, Wiseman will continue to play until the next hearing or unless all sides can come to an understanding. Playing in the face of the NCAA ineligibility is risky, but Memphis and Wiseman are ready to fight. Considering recent cases and the state regulatory changes coming, there may not be a better time for this basketball and legal court battle.

Peter Colin is a technical client manager at Thomson Reuters. The views expressed are entirely those of the author and not Thomson Reuters