Federal Judge Denies TRO Request From States Of Tennessee And Virginia In Antitrust Lawsuit Involving NIL

A federal judge in the Eastern District of Tennessee has denied a Temporary Restraining Order against the NCAA regarding NIL. This ruling now leaves both parties in the same place as they began, which is not being able to discuss NIL earnings with recruits before they sign with a school. 

All of this stems from the Attorneys General for the State of Tennessee and Commonwealth of Virginia filing an antirsut lawsuit last week against the NCAA. Now, this will not effect both sides meeting in court next week on the 13th to argue for an injunction, but this could certainly set a precedent. 

"On the record before the court there is sufficient evidence that that the NCAA/s NIL-recruiting ban likely harms competition."

From the outset of this filing, the hope from both states was that the court would rule in their favor before National Signing Day on Wednesday. Now that this will not be the case, both states will now seek to have a ruling in their favor before the judge next week. 

In the judge's decision on Tuesday, he cited that both states "failed to demonstrate, at this juncture, the requisite irreparable harm for the instance of a TRO". 

What should be noted in this case is the judge pointing out that this ruling could work in the favor of both states down the road. 

"Considering the evidence currently before the Court, Plaintiffs are likely to succeed on the merits of their claim under the Sherman Act," the judge noted. 

OutKick spoke with one lawyer familiar with these cases, who pointed towards the potential issue of players recovering loss compensation through a lawsuit against the NCAA, if the hearing 

"The Plaintiffs, and others similarly situated around the country, should feel optimistic that the Court has provided there is likelihood that the Plaintiffs will succeed on the merits. The Court here has provided that it cannot grant the injunctive relief, because the Plaintiffs have not shown they will suffer irreparable harm if the TRO is not issued. The Court provided that the student athletes are not losing all of their NIL opportunities due to the NCAA’s guidelines. The Court has essentially provided that the (prospective) Student Athletes’ damages here are monetary and they can always comeback and sue the NCAA (which some already have) for the money they may have lost out on due to the guidelines.

"It will be key for the Plaintiffs to show in the preliminary injunction hearing that there is irreparable harm. In other words they are going to have to show something has been done that cannot be fixed with money. Would be easier if they ruled a kid ineligible. Because you can never get the games, practices, potential to be seen by pro scouts back. But you can always recover money."

The state of Tennessee filed a lawsuit against the NCAA regarding alleged NIL violations by the University of Tennessee.

This gives the plaintiffs a pretty good argument when it comes to their case next week, which could set the narrative for future legislation against the NCAA. 

Judge Corker also said that "To the extent student-athletes are unable to obtain true value of their NIL, the harm is compensable by monetary damages and, thus, not irreparble." This line will likely make attorneys from both sides sigh in their chairs this evening. 

The antitrust case was filed last Wednesday, and makes it clear that they want the NCAA to stay out of the athletes' way when it comes to making money though NIL. The complaint also notes that the NCAA is not allowing the athletes to profit in a market that includes the transfer portal.

"The NCAA is thumbing its nose at the law," the complaint reads. "After allowing NIL licensing to emerge nationwide, the NCAA is trying to stop that market from functioning."

Given that the judge ruling on the TRO will be the one sitting on the bench next week, this could be a sign that the plaintiffs have a case that could sway in their favor. In terms of the temporary restraining order, it was as if the plaintiffs knew that the timeline in which they wanted this ruling could end up not working in their favor. 

Now that this part is over, both sides will meet in a Greeneville, Tennessee courthouse on February 13th to argue for a preliminary injunction. Even though the NCAA won its ruling today, it will be a much harder battle come next week. 

It will be interesting to see if the NCAA can manufacture an argument that works, especially with the Sherman Act hanging over their heads. 

Round one goes to the NCAA, with many more to go.