clock menu more-arrow no yes mobile

Filed under:

NCAA Grabbing $$, Lawyers Try To Get Some.

This is simply flabergasting.  Some lawyers have gotten together with a group of apparently disaffected souls around the country and are attempting to have a civil class action certified against the NCAA based on the Racketeer Influenced Corrupt Organizations (RICO) Act over the NCAA basketball tournament ticket lottery.  I think this deserves a bit closer look.

Details follow after the jump ...


This is the kind of behavior that gives both the legal profession and the NCAA a bad name.  RICO, as most of you undoubtedly know, was passed in the 1970's for the express purpose of enabling federal authorities to put organized crime out of business.  The most fundamental use of RICO in the criminal context is to use lesser crimes commonly committed by corrupt organizations such as mail and wire fraud to be used to describe a pattern of corruption that, if proved, provides greatly enhanced penalties.

In the civil context, such as we have here, RICO provides for something known as "treble damages," which awards the successful plaintiff three times the amount of  actual damages awarded at trial, as well as costs and attorney fees.  Thus, the civil application of RICO is potentially very lucrative, and due to the broad reach of some of the crimes which are RICO precursors like mail and wire fraud, violations of state law and even "obscenity", some attorneys have successfully brought cases by characterizing fact patterns as those of a "corrupt organization" that could not reasonably have been said to be more than negligence or carelessness.

Lawsuits such as this are seen by unethical legal professionals at a chance to win a huge financial bonanza as well as reap the business increase that only a nationwide blizzard of press coverage can provide.  These kinds of lawsuits are very costly to defend, and require a lot of front-end work to try to make sure that A) the class doesn't get certified or B) the case gets dismissed before it can be brought before a jury.

The problems with this particular suit are manifold and obvious.  One is that there must be criminal behavior to establish a RICO claim.  The plaintiffs apparently intend to allege that the lottery system the NCAA uses to employ falls under the rubric of "illegal gambling."

While the lottery system used by the NCAA charging a substantial fee just to apply is transparent greed, in my opinion, and arguably wrong in an ethical sense, the idea that it is a RICO violation isn't just novel, it's absurd.  Furthermore, the U. S. Supreme Court has established what amounts to a 4-year statute of limitations in Agency Holding Corp. v Malley-Duff & Associates, Inc., 483 U.S. 143 (1987) on the application of RICO, and this lottery with service charge approach has been going on since at least 1988.  Not only that, the lottery apparently takes place in New Jersey, so if such a lottery is legal there, it seems unlikely that claims of illegality in other states will succeed, since your application either has to be mailed to New Jersey or submitted online.

But despite my doubts about the propriety of the RICO allegations under the lawsuit, I think the NCAA is doing a bad thing here and should stop.  If they are making a profit off the service charge, that should end immediately and all monies in excess of actual costs of the lottery should be refunded with interest.  If the NCAA needs more money from ticket sales, it should simply raise the price of the tickets and stop sticking it to fans who try unsuccessfully to win tickets in their lottery.  In addition, the NCAA should agree to timely refund all moneys collected, rather than hanging on to it for up to nine months as alleged in the complaint.

Nobody minds paying a small fee for processing, but when you get into the $9 and $10 dollar range per ticket application rather than per customer, it begins to look very much like a full-out money grab by somebody.  It's obvious to me that it shouldn't give rise to a claim under RICO, but it doesn't have to be illegal in order to be a questionable and even unethical practice.

Shame on you, NCAA.  This is weak and just looks plain greedy and even a bit predatory.  Stop it before you wind up spending all that money defending lawsuits.