National Collegiate Athletic Association v. Tarkanian

PETITIONER:National Collegiate Athletic Association
RESPONDENT:Tarkanian
LOCATION:Checker Gasoline Station

DOCKET NO.: 87-1061
DECIDED BY: Rehnquist Court (1988-1990)
LOWER COURT: Supreme Court of Nevada

CITATION: 488 US 179 (1988)
ARGUED: Oct 05, 1988
DECIDED: Dec 12, 1988

ADVOCATES:
Rex E. Lee – on behalf of the Petitioner
Samuel S. Lionel – on behalf of the Respondent

Facts of the case

Question

Audio Transcription for Oral Argument – October 05, 1988 in National Collegiate Athletic Association v. Tarkanian

William H. Rehnquist:

We’ll hear argument first this morning in Number 87-1061, National Collegiate Athletic Association v. Jerry Tarkanian.

Mr. Lee, you may proceed whenever you’re ready.

Rex E. Lee:

Mr. Chief Justice, and may it please the Court, the question in this case is whether the National Collegiate Athletic Association’s enforcement of its own standards, among its own members, is state action for Fourteenth Amendment and Section 1983 purposes.

In the early 1970’s, the NCAA began an investigation of certain alleged practices at the University of Nevada at Las Vegas, some of which involved its basketball program.

As is the case with all NCAA investigations, the primary responsibility for the investigation rests with the University, and both the University and the Association conducted their own investigations.

The Association’s counsel ultimately affirmed some 38 of its Infractions Committee’s findings of violations, 10 of which involved the Respondent, who had become the head coach after the time that the Association first received complaints about UNLV.

As part of the prescribed remedy, UNLV was directed to show cause why three persons should not be suspended from coaching and any involvement with intercollegiate athletic activities.

Those three persons were the former head coach, the Respondent, and an assistant coach.

As for the former coach, the suspension was to be permanent, and as to the other two, the suspension was to be for two years.

William H. Rehnquist:

The suspension from what, Mr. Lee?

Rex E. Lee:

From coaching, and from all involvement in booster activities and other intercollegiate activities.

It would not have affected his University appointment.

William H. Rehnquist:

So the NCAA said in effect to UNLV,

“You must suspend so-and-so for a certain period of time? “

Rex E. Lee:

Not quite.

What it said was… it was an order to show cause why they should not do so.

And that is an important point, actually, Mr. Chief Justice.

Pursuant to that order to show cause, the President of the University assigned a Vice President as hearing officer, who held a hearing and then as a result of that hearing identified for the President three options that were available to the University, and according to the Hearing Officer’s recommendation, those three options were the following:

The first was that the university could impose the recommended discipline, which would involve the two-year suspension.

A second was to refuse to do so, and according to the Hearing Officer, this ran the risk that the NCAA might impose other sanctions, some of which might be more severe.

And the third was to withdraw from NCAA membership.

Faced with those choices, the University opted to impose the suspension, which has never been carried out, because of an injunction which was ultimately affirmed by the Nevada Supreme Court, whose state action holding is now before this Court for review.

The Respondent does not contend… nor could he… that the NCAA itself is a governmental entity.

Rather, his argument–

William H. Rehnquist:

Mr. Lee, did the injunction run against he NCAA, as well as against UNLV?

Rex E. Lee:

–It ran against UNLV.

William H. Rehnquist:

Well, then how did NCAA get in the case?

Rex E. Lee:

Initially, they were not.

The case went up to the Nevada Supreme Court a first time, and the Nevada Supreme Court held that the NCAA was an indispensable party… so it was back, the NCAA was joined, and then it went up a second time.

And the Nevada Court made that at the instance of the Association?

Rex E. Lee:

Appearing as amicus, that is–

Who said that they were an indispensable part.

Rex E. Lee:

–That is correct, that is correct.

But we were not joined, initially.

We contended that we should be, and ultimately the Nevada Supreme Court agreed with us on that issue, the first time.

Sandra Day O’Connor:

But why did you contend that NCAA was indispensable, Mr. Lee?

Rex E. Lee:

Well, because the judgment that would ultimately come out of the court would necessarily have an important effect… after all, it was our determination that that was the appropriate remedy for the violation of our rules.

Sandra Day O’Connor:

Well, it’s a little strange to be arguing in a way that NCAA was a necessary party to the action, and yet should not be considered in any way as State actor.

Is there any tension there?

Rex E. Lee:

No, no, I think not, because of what this Court said in 1982 about what are the standards for determining state action, and they are not the same standards as for determining whether a party is indispensable.

And those two… there are two requirements, that this Court announced in Lugar v. Edmonson Oil.

The first is that you look to the substantive rule that is being enforced in the particular case and inquire into whether that rule has its source in some State authority.

The second is whether there is sufficient interlinking, intermeshing, between them.

Sandra Day O’Connor:

Do you think that Lugar was intended to be the definitive statement of how we determine state action in all cases, even those of perhaps delegation or joint participation?

Rex E. Lee:

Well, of course, Justice O’Connor, you know much about… much more about what the Court had intended.

Sandra Day O’Connor:

Well, you’re arguing that that is now the definitive rule.

I’m not sure that I can read Lugar that way, and I’m not sure whether those tests should be applied in all situations of delegation.

Rex E. Lee:

In our argument, is that they should.

Maybe not or its face… it appears to say all cases, and it announced two requirements, and it said that the difference between the two requirements are demonstrated… is demonstrated by two of the Court’s landmark cases.

Moose Lodge, which demonstrates the rule of decision, or the rule of conduct, requirement, and Flagg Brothers, which demonstrates the State actor requirement.

And both of those, of course, reach far beyond the context in Lugar, and far beyond the context in this case, and therefore in our view it is a general rule.

But you don’t have to go that far… excuse me.

Sandra Day O’Connor:

Well, what if NCAA said, for example, we want drug testing of all participating athletes on a regular basis, and you either do that, or you run the risk of the school being dropped out of the NCAA.

Now, is there any… do we have exactly the same kind of an issue that we have here?

Rex E. Lee:

Not quite.

If, as I suggested, the first line of defense, Lugar applies across the board for all cases, then it would be the same.

But I… in any event, those two tests, and particularly the first one, ought to apply in a case such as this, and here is why.

Even if it is not the principled, of the two-part, across the board test in all cases that we take, at the very least, when the sole issue in the case is whether a particular rule of conduct has been violated, as it has in this case… the NCAA’s standards for eligibility and recruitment… then, at the very least when that’s the sole, ultimate issue in the case, then one of the relative inquiries, on a case-by-case approach… one of the most important inquiries… ought to be whether the rule of conduct in that particular case had a governmental source or a non-governmental source.

Well, Mr. Lee, how did the rule become applicable to Mr. Tarkanian?

Sure, it’s an NCAA rule, but it also becomes a school rule–

Rex E. Lee:

No–

–because they joined.

They’re a member.

They say,

“we agree to abide by the NCAA rules. “

Rex E. Lee:

–That’s correct.

So this is now the rule for the institution.

Otherwise, how did Tarkanian… how did he get in trouble with the University?

He violated one of their rules.

Rex E. Lee:

Yes.

The NCAA is composed in part of public universities and in part of State universities.

But it cannot be the rule, I submit, simply because you have some State universities and some private universities, that it thereby becomes, that it thereby becomes–

Anthony M. Kennedy:

Well, then, you don’t… do you find something erroneous in what I said, that it became a University rule when the University joined and said “We agree”?

Rex E. Lee:

–It really was not a University rule.

It remained–

Anthony M. Kennedy:

Well, if it wasn’t, how did they have the nerve to suspend Mr. Tarkanian?

Rex E. Lee:

–They have the nerve to suspend Mr. Tarkanian because they decided on the basis of their exercise of their own judgment that of the three options available to them, that was the one that was preferable to them.

It was not the NCAA that suspended Tarkanian.

Anthony M. Kennedy:

It certainly wasn’t.

It was the University.

Rex E. Lee:

That is correct.

Anthony M. Kennedy:

For violating its rule.

Rex E. Lee:

No, for violating… the University suspended Tarkanian not for violating its rule, but rather because it determined that, of the three options that were available to it, as a result of the order to show cause, the one that was most in the University’s interest was the option to impose the recommended, the recommended suspension.

John Paul Stevens:

Even if they did… even if the University suspended him for violating a University rule, that might make the University a State actor, but I don’t know why that makes NCAA a State actor.

What relief does the Nevada court grant against the NCAA?

Rex E. Lee:

The relief was against the University and not against the NCAA.

William H. Rehnquist:

Well, what business has the NCAA got here?

Well, there’s an injunction against the NCAA for taking any action against the University.

Rex E. Lee:

That is correct.

William H. Rehnquist:

Well, then, there was relief granted.

Rex E. Lee:

Well, excuse me, in that sense there was.

That is correct.

William H. Rehnquist:

The NCAA is prohibited from taking any action against UNLV.

Rex E. Lee:

That is correct.

Antonin Scalia:

And you also have to pay its fees, don’t you?

Rex E. Lee:

Ninety percent of them, 90 percent of the–

Antonin Scalia:

Mr. Lee, I’m a little confused about what was the basis for the firing here.

It seems to me if the man has an employment contract with the University, the University can’t say we’re firing you for breaking somebody else’s rules.

He must have violated some rule that was imposed by virtue of his employment with the University?

Rex E. Lee:

–The rules that he violated were the NCAA’s rules of eligibility and recruitment.

Antonin Scalia:

Well, how did they become applicable to him?

I assume they became applicable to him through his employment contract with the University.

Rex E. Lee:

They became applicable to him only because the NCAA prescribed

“We have determined that these violations have occurred. “

And the University was ordered to show cause why as a result of those violations he should not be suspended.

But it was the University–

Antonin Scalia:

But he must have had an obligation to someone not to commit those violations.

To whom did he have that obligation?

Rex E. Lee:

–Yes, he had an obligation to his University, in the sense that the University was jointly responsible with the NCAA for seeing to it that they did agree that they would enforce those rules.

But my point is this: that if you take seriously what this Court said in Lugar, about looking to the source of the substantive rules, this is the classic case in which, in which that requirement applies.

If you look to all of the factors that might enter into whether there is or is not state action, the only issue in this case, at the end of the day, the only substantive issue, is whether the rules, some rules have been violated.

Those rules are the eligibility rules that have been set by the University, that have been set by the NCAA, and which have become the University’s rules only in the sense that the University is one of those members.

But the University did not have to dismiss him.

There were other options that were available to them… and particularly, particularly in a case where the only issue, the only substantive issue, is the issue whether or not particular rules have been violated, then the source of those rules ought to be relevant to the state action issue.

Take action against him.

Rex E. Lee:

Excuse me?

The University decided to suspend him.

Rex E. Lee:

That is correct, but that was–

And they decided, well, this is one or our rules, that we’re going to insist he abide by.

Rex E. Lee:

–This case in that respect, Justice White, really follows a fortiori from this Court’s holding in Blum v. Yaretsky.

Rex E. Lee:

In that instance, what you had was a decision to transfer patients from a lesser-care facility… excuse me, from a higher-care facility to a lesser-care facility.

And the decision was made… the rule of conduct, or the rule of decision in that particular instance, if you will, was made by private individuals.

But once those private individuals, the doctors, made that decision, it had an effect on important Governmental interests.

The Governmental decision as to how to treat these individuals, the Medicaid program is a Governmental program, but the relevant decisions were in effect made by the private entities… including the amount of money that would be spent by Government.

Nevertheless, what this Court said was that all the Government had done was to respond to those private decisions, and that is exactly what we have in this instance.

You have the NCAA having set its rules, and its members then responding to the termination of those rules violations, and that we submit, under Blum v. Yaretsky and under Lugar, is not state action.

You have a State arbitrator who says that there are three choices, but that the only viable choice is to allow the University’s delegation to the NCAA of the power to act as ultimate arbiter of these matters.

And the President of the University adopts that determination.

These are State officials who announce that the NCAA must be the ultimate arbitrator.

Do we not give some deference to that conclusion by the State officials as a matter of State law?

Rex E. Lee:

As a matter of State law, of course you give deference to them, Justice Kennedy.

But the issue here is whether the state action rules, which are of course constitutional determinations, and interpretations of Section 1983 by this Court… and what the State did in that instance was simply to determine, yes, we became members of the NCAA.

When we become members of the NCAA, we determine that we will abide by their rules.

But they also identified that they had other options.

Were their conclusions correct?

Was the arbitrator correct in what he identified as alternative two?

Rex E. Lee:

Yes, I think he was… yes, he was.

Alternative two was that they could have said no, and they could have… then other sanctions would have had to be–

Anthony M. Kennedy:

He was correct that the University’s only real option was to recognize NCAA as the ultimate arbiter?

Rex E. Lee:

–Well, I don’t know that he identified that as the only real option.

It was his recommended option.

But the… I think this point should be made very clear: UNLV did not have to fire Tarkanian.

That was their decision, their option, and they made it from a choice of those three.

Moreover, this first requirement that the Court established in Lugar, in any event, is absent in this case, and regardless of how far it extends, it should be applicable in a case, in a case such as this.

I think that key to decision is to draw a careful decision… excuse me, draw a careful distinction between what the NCAA did on the one hand, and what UNLV did on the other hand.

William H. Rehnquist:

Mr. Lee?

Rex E. Lee:

Yes?

William H. Rehnquist:

Let me return for a moment to this line of questioning… what does Mr. Tarkanian lose if you win here?

Rex E. Lee:

Well, that is… we believe that if we win, this Court, pursuant to the exercise of its equity powers, does have the authority simply to dissolve the injunction.

William H. Rehnquist:

Even the injunction against UNLV?

Rex E. Lee:

Well, we believe that is basically what happened in Moose Lodge, and that this Court would have the authority to do that.

But that is not a central part of our case, and the Court… in the event that the Court disagrees, then that is basically UNLV’s problem.

Because this will be the status of the case in the event that–

William H. Rehnquist:

So what does Mr. Tarkanian lose, if you win?

Rex E. Lee:

–At the present time, he has an injunction against UNLV that–

William H. Rehnquist:

And there’s no reason that he won’t keep on having that, even if you win here.

Rex E. Lee:

–And in that event… in the event that that happens, then here will be the status of the case.

There is still outstanding an order to show cause applicable to the University of Nevada.

And at that point, there will still be three options available to the University of Nevada, except that the third one will have changed.

And the third one will be to go back to the Nevada State Supreme Court, to go back to the Nevada court, and attempt to persuade them that the injunction should be dissolved because it was based on a premise which the United States Supreme Court has now declared to be faulty.

If you win, it means that… you represent the NCAA, I take it?

Rex E. Lee:

Yes.

Anthony M. Kennedy:

You want the injunction against the NCAA dissolved?

Rex E. Lee:

That is correct.

Anthony M. Kennedy:

And if that’s dissolved, it means you can take action against the University.

Rex E. Lee:

That is correct.

Anthony M. Kennedy:

And you may or may not?

Rex E. Lee:

That is correct.

William H. Rehnquist:

But the University isn’t a party here.

Only Mr. Tarkanian is a party.

Rex E. Lee:

That is right.

The University is not a party to the action before this Court.

And as a consequence, it will be just as Justice White said.

We can then take action against the University.

Anthony M. Kennedy:

Mr. Tarkanian, in Mr. Tarkanian’s suit, he got an injunction issued against the NCAA.

Rex E. Lee:

That is correct.

And that, of course, can be dissolved.

And in the event that that happens, then the University–

William H. Rehnquist:

Was it at his request that that court enjoined the NCAA from doing anything to UNLV, or was it at [= UNLV’s] request?

Well, they weren’t a party.

Rex E. Lee:

–Excuse me?

Anthony M. Kennedy:

The University wasn’t a party, was it?

Rex E. Lee:

Yes, the University was a party, but they did not appeal to the Nevada Supreme Court, they did not appeal to the Nevada Supreme Court.

But there will still be an outstanding order to show cause pending… the NCAA’s order to show cause, pending against the University of Nevada.

And they will then still have the same three options, except that the one option will now be modified because they will either have to go back and attempt to persuade the Nevada courts that the injunction was–

Anthony M. Kennedy:

Why isn’t this case just moot, if Mr. Tarkanian can’t win anything?

Rex E. Lee:

–Well, it isn’t moot for two reasons.

Because in the first place, we do have the matter of the attorney’s fees.

William H. Rehnquist:

But if the only outstanding question is fees, does that keep a case alive?

We’ve said costs don’t.

Rex E. Lee:

Well, I would hope that $200,000 does.

And I would think that the fee certainly does.

But in addition, more importantly–

John Paul Stevens:

But on the fee point, Mr. Lee, isn’t it true that the only justification for the fees was the 1983 action, which in turn depends on the state action?

Rex E. Lee:

–Yes, and that’s–

John Paul Stevens:

And that’s why no matter what we do, we have to decide that.

Rex E. Lee:

–And that, of course, is more important, is even more important than the fees itself, because you do have, you do have an outstanding determination by a State supreme court that this area of individual freedom, which is guaranteed by the limitation of the state action doctrine, as the Court said in Lugar, has been withdrawn from the NCAA, and its ability to conduct its investigations in the way that it sees as in its best interests has been severely curtailed.

Let me just say that there are, in addition to the legal reasons that neither one of the Lugar tests, neither the rule of conduct issue nor the joint participation issue has been satisfied in this case.

There are good reasons why the state action rules should not apply to the NCAA’s enforcement of its own rules among its own members.

This Court said four years ago that the NCAA plays a critical role in the maintenance of a revered tradition of amateurism in college sports, and there can be no question but that it needs ample latitude to play that role.

This is the classic case that illustrates both that critical role and why it needs ample latitude in order to carry it out.

The procedures that it follows place principal responsibility, or divide the responsibility for enforcement, as between the two.

It is not a strictly adversarial kind of procedure.

What the NCAA has concluded over the years is that it can best be done by a combination of cooperation and adversarialness.

And the accomplishment… that ample latitude that this Court observed that the Association needs to carry out its critical role… will be aided by leaving this area of associational freedom continually available to the NCAA so that it can make its own judgments as to how best to carry it out.

The key to decision, I submit, to this case, is to distinguish rather carefully between what the NCAA does on the one hand and what the University did on the other.

What the NCAA did was to set its own standards for conduct.

Because they were the NCAA’s standards and not the University’s standards, the first of the Lugar requirements has not been satisfied.

Sandra Day O’Connor:

But didn’t the University make those standards its own by contract?

Rex E. Lee:

Well, I think not, and I think that to say that, to characterize it in that way, Justice O’Connor, really does violate the spirit of what I think to be not only Lugar, but also this Court’s more recent pronouncement in the area, which is West v. Atkins, in which those two requirements were repeated.

Rex E. Lee:

As the Lugar opinion says, they really aren’t the same.

They are two separate requirements.

And especially in a case where the only substantive issue at the end of the day is whether rules have been violated, you ought to ask,

“where do those rules come from? “

Those are not UNLV’s rules, they are the NCAA’s rules.

They are UNLV’s rules only in the sense that UNLV is a member of the Association.

But the Association itself is a private entity, and they are, the Association is, the source of the rules.

What the University did was, what the NCAA did not do, was to make the decision, was to suspend Tarkanian.

All the the NCAA did in this respect was to determine that its standards of conduct had been violated, that its conditions of membership had been violated, and then it was the University that exercised its choice among three options available to it.

For two independent reasons, therefore, we submit that the judgment of the Nevada court should be reversed.

Mr. Chief Justice, I’d like to save the rest of my time for rebuttal.

William H. Rehnquist:

Thank you, Mr. Lee.

We’ll hear now from you, Mr. Lionel.

Samuel S. Lionel:

Mr. Chief Justice, and may it please the Court, I’m looking at page three of our brief here, and I’m reading from the NCAA enforcement program.

Among other things, it says,

“The enforcement procedures are an essential part of the intercollegiate athletic program of each member institution. “

Thus, when the University became a member of the Association, its enforcement procedures became a part of its athletic program.

Not only that, by becoming a member, the University agreed to abide by the Constitution, the bylaws, the rules, the interpretations of those rules, and the policies of the NCAA.

Anthony M. Kennedy:

There is a question that there was state action in the case in the sense that the University is a state actor, and it did the suspending.

But why is the NCAA a state actor?

That’s the question.

Samuel S. Lionel:

The NCAA is a state actor because the University delegated to the Association the right to make the disciplinary standards and determinations and have a rule of conduct, as it did here… and that comes clearly under the Lugar, the delegation… there’s delegation under the first prong, Mr. Justice.

Anthony M. Kennedy:

So this is a sort of a joint action case?

Samuel S. Lionel:

Absolute, in our view, yes.

William H. Rehnquist:

Do you say the University delegated to the NCAA, or the NCAA delegated to the University?

Which?

Samuel S. Lionel:

No, the University delegated to the NCAA the right to set the standards, disciplinary standards, with respect to State employees involved in the athletic program, and to make determinations as to whether there were violations of those standards, and to impose penalties against State employees for their claimed violations of these standards.

William H. Rehnquist:

Well, did the University delegate to the NCAA the authority to make the final decision as to whether someone should be suspended or not?

Samuel S. Lionel:

Yes, it did, and that is exactly what happened here, because the NCAA said that Coach Tarkanian would be, should be suspended for two years, and the Hearing Officer, who held a hearing under the procedures contained, under the NCAA enforcement procedures adopted, said that this is what you are, we are contractually compelled, to carry out that sanction and recommended to the President of the University that it be done.

And the President of the University within two days wrote to Mr. Tarkanian and said,

Samuel S. Lionel:

“We have… I have no alternative, we must… are contractually bound to follow the penalties of the NCAA, adjudged by the NCAA, and you are therefore suspended for two years. “

Antonin Scalia:

When you say contractually bound, what… is there a term of years to a membership in the NCAA?

Samuel S. Lionel:

I’m not aware that there is.

Antonin Scalia:

And is there some liability, some financial liability, if you pull out?

Samuel S. Lionel:

There is no direct financial liability.

Antonin Scalia:

Then how can you say you are contractually bound?

The fact is, they could have repudiated the contract at any time.

Samuel S. Lionel:

But–

Antonin Scalia:

And said,

“We do our own hiring and firing. “

“We don’t like this particular decision and, therefore, we will no longer be part of the NCAA. “

Samuel S. Lionel:

–But as the record indicates, the NCAA is the only game in town.

If a university wants to engage in major athletics, it must be a member of the NCAA.

If it is not, it cannot engage in major athletics.

Antonin Scalia:

This was an adhesion contract?

The State of Nevada has been subjected to an adhesion contract, is that it?

Samuel S. Lionel:

Well, that’s actually what happened in this instance here, but that is the only game in town.

And as a matter of fact, what happened here, is initially Coach Tarkanian sued only the University, and obtained an injunction.

The University was requested by the NCAA to appeal that, which it did, and then the NCAA filed an amicus brief taking the position that it was an indispensable party because the injunction against the University impaired the right of the NCAA to enforce the penalties which it had judged under its program.

In that amicus brief, it said the following: that the University was bound by contract to abide by the NCAA penalties.

Anthony M. Kennedy:

Even if it wasn’t bound, even if it could just have said,

“Sorry, we’re not going to suspend Mr. Tarkanian. “

Even if contractually they could have done it, they didn’t.

They said, they did just the reverse.

They said,

“We will abide by that rule. “

Samuel S. Lionel:

Yes, they did.

And in any, almost every state action, there is an option on the part of the state actor and on the part of the State.

When the state fires somebody, and there may be a constitutional violation involved… the 1983 case… they could not have fired that person.

There is always an option.

Sandra Day O’Connor:

Well, the record looks like the University basically agreed with Mr. Tarkanian here, and did not want to fire him, and didn’t agree with the NCAA’s assessment of the facts, and chose not to appeal the State court decision that said the University couldn’t fire… couldn’t suspend him.

And it looked very much like the University is not acting jointly, in a sense, in that sense, with the NCAA.

It basically took Mr. Tarkanian’s view of the thing.

Samuel S. Lionel:

I submit that that, Justice O’Connor, is not really what happened here.

Under the rules, the University was supposed to cooperate when charges were filed… and they did.

They investigated it as they were required and filed everything that was filed, participated in the hearing.

There was nothing in the rules that say that the University must lay down and agree with everything the NCAA did.

They filed charges, and they admitted some of those charges, and in some cases they did not admit those charges.

And the Committee on Infractions made a determination, and then they said that Coach Tarkanian, the University should suspend Tarkanian for two years.

And when it came back, the hearing Officer said that the basis for those findings and the sanctions appeared to be clearly in doubt, and the due process that was followed was somewhat suspect, but we are contractually compelled, and therefore you should do it, Mr. President.

Mr. President said,

“We have no alternative. “

“We will do it. “

“We will say that there was joint participation at all times. “

It is true that the University did not agree with what happened.

Thurgood Marshall:

Mr. Lionel, are we bound by the ruling of the Nevada court that the NCAA is a party and has to be a party?

Is there nothing we can do about that?

Samuel S. Lionel:

Justice Marshall, it would appear that is a… may very well be law of this case, particularly when it came into being at the instigation of the Association.

This case was over, we thought, many years ago, until they filed that petition to… the amicus brief.

Thurgood Marshall:

The amicus brief determines what we shall do?

Samuel S. Lionel:

I may have to withdraw.

I would assume this Court can do what it wishes in this case here.

[Laughter]

Thurgood Marshall:

No, I don’t mean not, no, I don’t mean that.

I mean it seems to me that this is a crucial point, and I just want to know am I bound to recognize it?

Samuel S. Lionel:

It would seem to me that one could very well say that the Association should not be committed at this time to say that we claim that we were indispensable, this case has gone on for years only because the Court agreed that we had rights to protect at that time.

Now we’re saying we should not be a party.

I think, arguably, it could be estopped from taking that position.

We have been troubled by that.

Thurgood Marshall:

I thought that’s what you were saying all along–

Thurgood Marshall:

–Mr. Lionel, in looking at our cases… although they’re not all easy to reconcile… there does appear to be one common theme.

And that is, is that the entity in question must be held to be a state actor, or there is no relief… Mrs. Marsh and the company town, the Eagle coffee shop, the Lugar case.

Here, the State remains a party, it remains responsible.

It remained obligated to Tarkanian, not to discharge him.

Why is it necessary for the NCAA to be in the suit for any meaningful relief to be given to your client?

Samuel S. Lionel:

If the NCAA is not enjoined from proceeding against the University, and to take steps which might ultimately throw the University out of the NCAA, the victory of Mr. Tarkanian is a hollow one, because there will be no basketball program anymore.

He will have nothing to coach.

He will not be able to get a job coaching college athletics because of what has happened in this particular case.

The rules say that before any University hires someone as a coach, they should check to see what his history may have been with respect to any claimed violations against the NCAA.

And I submit under those–

Well, did he claim a reputational interest in this case?

His argument is that he wants to keep his job, and he won that argument.

His argument is he wants to keep his position, and he won that argument.

The University is there, it’s a responsible entity.

It’s subject to the jurisdiction of the Court for all of the relief that he sought.

And so it seems to me that under our cases, there’s no necessity for finding the NCAA to be a state actor.

Samuel S. Lionel:

–I would say, I would say he, his… as I pointed out, he would have no victory, and not only that, whether or not… certainly he has in our view a 1983 cause of action, because the NCAA is a joint participant–

William H. Rehnquist:

But you never asserted that in the Nevada courts.

You didn’t sue the NCAA.

Samuel S. Lionel:

–Well, what happened was, we amended the complaint after the reversal and remand, so the NCAA could then become a party.

We amended it, and stated a 1983 claim against the NCAA.

So this present complaint is against both the University and the NCAA, stating claims under 1983, and the courts below found… the trial court found that there was a 1983 case against both.

Only the NCAA did appeal to the State court, and is here.

But there clearly is a claim, and our position is that there is such a claim… that the NCAA is a joint participant, that the NCAA under West v. Atkins was delegated these disciplinary rights over a State employee… and we say we are a stronger case than West v. Atkins.

In West v. Atkins, you find a delegation, and you find a deferral by the State.

In this case, there is a delegation.

There is a deferral by the State, and then the State afforded the NCAA significant assistance in saying to Tarkanian, “You are now suspended”.

So, this is a stronger case than that.

John Paul Stevens:

May I ask a question about your delegation thought?

Am I correct in believing that the rules that the NCAA enforces are in effect minimums, that say you can only pay a player so much?

John Paul Stevens:

But the Nevada University could impose stricter rules without violating its obligations to the NCAA, couldn’t it?

Samuel S. Lionel:

I’m sure that’s true.

John Paul Stevens:

So it hasn’t really delegated the rulemaking power, it merely said our rules will be at least as strict as those that you prescribe.

Samuel S. Lionel:

But the delegation is broader than rulemaking power and standards, creating standards.

But the NCAA, under the delegation, was permitted to have investigations, hearings, and make determinations.

John Paul Stevens:

That were not binding unless the University agreed to abide by them.

Samuel S. Lionel:

The University did, and that’s exactly what the NCAA said in its amicus brief, when it sought intervention.

And it said further–

John Paul Stevens:

Well, let me just be sure I understand you.

For your delegation argument, you’re not really relying on the fact that they delegated rulemaking power, but rather that they delegated enforcement power, is that it?

Samuel S. Lionel:

–Yes.

John Paul Stevens:

So who made the rules would really not be critical to your case?

Samuel S. Lionel:

That’s correct, but in fact they were their rules, and which became part–

John Paul Stevens:

Nevada did not make them any stricter than they had to?

Samuel S. Lionel:

–That’s correct.

John Paul Stevens:

But you’re saying that the NCAA had the authority to discharge or suspend the Nevada coach?

Samuel S. Lionel:

Yes.

As a matter of fact, the rules which are set forth in our appendix indicate–

John Paul Stevens:

They did not have an option to withdraw from the NCAA?

Samuel S. Lionel:

–Not a realistic option in any way.

John Paul Stevens:

But they had a legal option, didn’t they?

Samuel S. Lionel:

Just as the judge in Dennis v. Sparks had a legal option not to accept the alleged–

John Paul Stevens:

Well, let me give you this example.

Supposing United Airlines tells O’Hare Airport in Chicago that we won’t land here anymore, because we think your airport manager is doing a sloppy job of turning on the lights, or something like that, at night.

They just say, we won’t do it.

And O’Hare says, well, we can’t operate without United, so we’ll fire him.

Would United become a state actor because they have enough economic power to insist on that kind of result?

Samuel S. Lionel:

–The mere… if you–

You want to try to say no.

[Laughter]

Samuel S. Lionel:

–It’s a gray area.

One can always see a situation where someone can have enough economic power to do something.

John Paul Stevens:

That’s what you’re saying this association has.

And I give you another example of the same degree of economic power, and you seem hesitant to say it’s state action.

Samuel S. Lionel:

If there is sufficient economic power to affect them, then I would say–

John Paul Stevens:

So, any time a private entity can, as a condition of doing business with a public entity, insist on something, why, that private entity is a state actor?

Samuel S. Lionel:

–There’s a big gray area in there, and I’d like to–

John Paul Stevens:

I don’t know if it’s all that gray.

Samuel S. Lionel:

–I can see a situation where an alumnus of the University would come to the President and say,

“I’m the biggest… I give you, donate more money than anybody else, and I will give you an additional $10 or $ [= 15] million if you fire somebody there. “

And I would say that gets pretty close to saying that person could be a state actor, if that person is fired without due process of law.

I would say that person might be a joint participant.

William H. Rehnquist:

Well, what about it, say, Chrysler Motors has a plant in Wisconsin, and isn’t satisfied with the way it’s working?

So it wants to move that plant out of Wisconsin, but it says,

“Okay, we’ll negotiate with the legislature. “

“If you’ll revise certain laws, thus and so, and do thus and so, we won’t move out. “

Now, does that make Chrysler a state actor in Wisconsin?

Samuel S. Lionel:

No.

I would say no.

That is pressure, that one might get from a newspaper or something of that nature.

That person has no right to demand that the State give them overt, official significant help.

William H. Rehnquist:

Well, of course, your example, the alumnus had no “right” to demand anything.

Samuel S. Lionel:

Well, it gets very close, in that it puts them under the gun.

William H. Rehnquist:

Well, what’s the difference between the two cases?

It isn’t a matter of right, because neither one had any right.

Samuel S. Lionel:

As I… I find a great gray area, and at some point if it puts someone arguably out of business, a university, it’s very important that the university must have this, otherwise it would not be able to operate,… this is in this case that the university needs to be a member of the NCAA basketball program, which is an important matter–

Is there some written indication of what membership in the [= NCAA] means?

Samuel S. Lionel:

–From the standpoint of what, Justice?

Anthony M. Kennedy:

Well, what do they understand?

What is… does a member say

Anthony M. Kennedy:

“We will abide by the NCAA rules? “

Samuel S. Lionel:

Yes, well,–

Anthony M. Kennedy:

Is there something in writing to that effect?

Samuel S. Lionel:

–We have not been able to find anything in writing, except the rules of the NCAA, the constitution and the bylaws say that a member agrees to abide by our constitution, the bylaws, our rules, and our enforcement program.

Anthony M. Kennedy:

So by becoming a member, you say the member has agreed, in advance, in advance.

Samuel S. Lionel:

Yes.

Anthony M. Kennedy:

This isn’t just an ad hoc situation?

Samuel S. Lionel:

Absolutely.

He has agreed, and that was the exact position that the NCAA took in its amicus brief.

Antonin Scalia:

Mr. Lionel, let me ask you… assuming I accept your theory of adhesion contract, which is I think what we’ve been talking about… is it clear that this is an adhesion contract, I mean that there was no other option?

Aren’t there a lot of universities that don’t belong to the NCAA?

The world comes to an end if you can’t belong to the NCAA?

I thought probably more don’t belong than do belong, isn’t that right?

Samuel S. Lionel:

No, No university with any kind of athletic program is not a member, is not a member.

Antonin Scalia:

No university with any kind of an athletic program?

Samuel S. Lionel:

Any kind of a… let’s call it a major athletic program.

Antonin Scalia:

It’s that much the end of the world, that there was no realistic option except to belong to the NCAA?

Samuel S. Lionel:

No realistic option.

Antonin Scalia:

I think a lot of educators would be surprised to hear that.

Well, they can shut down the football program, basketball.

Well, it’s not in the record… is anything in the record about how many universities belong or do not belong?

Samuel S. Lionel:

Yes, I believe there are approximately 1,000 universities, at least half of which are State universities.

All the service academies are members.

Thurgood Marshall:

All?

Samuel S. Lionel:

Yes, all the service academies.

Thurgood Marshall:

And all the universities in this country belong?

Samuel S. Lionel:

No, no.

But approximately 1,000 universities.

Thurgood Marshall:

Well, how many universities are there?

Samuel S. Lionel:

I don’t know that.

Samuel S. Lionel:

Justice Marshall.

Thurgood Marshall:

Well, what good is the figure of 1,000 if I don’t know what to compare it with?

Samuel S. Lionel:

Well, it encompasses all universities which have major athletic programs.

Thurgood Marshall:

I know some who don’t belong.

Samuel S. Lionel:

There are.

Thurgood Marshall:

The one I graduated from didn’t.

I just can’t help but interjecting the fact that the University of Chicago survived without an athletic program.

[Laughter]

Samuel S. Lionel:

And that survived well.

With respect to the Lugar case, we think we fall clearly under Lugar.

The first prong of Lugar indicates two different types of situations, one where there is a delegation… and here there is that delegation to the NCAA, of the right to make those disciplinary standards and determination… and number two, that if there is, if the State imposes a rule of conduct… now, the rule of conduct here is the NCAA saying that Jerry Tarkanian did this, which he shouldn’t, and there should be a two-year suspension.

And the University imposed that.

That clearly comes under Lugar, and there can be no doubt that insofar as the Association is concerned, its conduct is attributable to the State.

Byron R. White:

Let me ask you a question.

Let’s assume that we agree with you, that the NCAA is a state actor insofar as Mr. Tarkanian is concerned, that he has a remedy against the University.

But what… even if that’s the case, what was the basis for the injunction against the NCAA from taking action against the University itself?

Samuel S. Lionel:

Because if it were permitted to take action against the University, the injunction that Coach Tarkarian received will not help him any.

Why?

Samuel S. Lionel:

Because if the University no longer belongs to the NCAA–

So?

Samuel S. Lionel:

–It won’t have a major college athletic program.

He will have nothing there that he can coach.

Byron R. White:

Well, did he ask for an injunction against–

Samuel S. Lionel:

Yes, he did.

Byron R. White:

–Against the NCAA?

Samuel S. Lionel:

Yes, we never sought–

Byron R. White:

Or was that the University?

Samuel S. Lionel:

–Against both.

When we amended the complaint, after the remand, to make it so the NCAA could become a party, we amended it and also stated a claim under 1983 against the Association.

And we sought an injunction… we never sought damages.

Byron R. White:

So you think that any time the NCAA thinks one of its rules has been violated, it can be forbidden to throw the member out?

Samuel S. Lionel:

No.

It’s only if we can… the NCAA–

Byron R. White:

I don’t see what the basis… even if you win on a state action thing, what’s the basis for telling the NCAA that it can’t suspend the University, if the University wants to keep Mr. Tarkanian on, that’s fine.

But it’s not going to be a member.

Samuel S. Lionel:

–But the injunction… Coach Tarkanian would then have obtained just a Pyrrhic victory.

He has–

William H. Rehnquist:

Maybe that’s all he’s entitled to.

Samuel S. Lionel:

–But his constitutional rights have been infringed upon.

He’s been denied due process in connection with this, and he–

Byron R. White:

Well, I know, but the NCAA shouldn’t be required to keep a member on that isn’t living up to its rules.

Samuel S. Lionel:

–The only rule that would be involved here would be the non-suspension of Coach Tarkanian.

Antonin Scalia:

The Constitution forbids the University from firing Coach Tarkanian without proper process, but surely the Constitution doesn’t require that the University give him a major-league basketball team to coach, does it?

Samuel S. Lionel:

No, it doesn’t.

Antonin Scalia:

So then what is the… maybe the Chief Justice is right, that all he is entitled to under the Constitution is a Pyrrhic victory, that he can coach whatever basketball team the University has?

Samuel S. Lionel:

Well, it would seem to me that a court of equity could do what the court below did here.

The court said,

“He has a right to have vindicated his constitutional rights. “

He is not vindicated but if we are going to say he can’t continue to do what he did before, in which the court found he had a property right.

In effect, if there is no injunction against the NCAA, he will have lost that property right to be that basketball coach–

Antonin Scalia:

Property right, not just to have a job with the University, not just to coach the University’s basketball team, but a property right to coach an NCAA basketball team… that’s what the Constitution guarantees him?

Samuel S. Lionel:

–Yes, and also, there were other rights that flowed from that, as we pointed out.

He lost… he had clinics, he had other matters, and radio programs, all of which came from the fact that he was the basketball coach at the University.

Antonin Scalia:

Well, but your position, as I understand it, is that if the NCAA is a state actor, it has to follow constitutional procedures when it imposes sanctions on anybody.

And you would really require them to remodel their whole procedural mechanisms for dealing with this kind of case and maybe… you know, if you’re right, it seems to me that they would have an obligation to follow due process procedures, and not use private investigators, to rely on hearsay and that sort of thing.

So what really is at stake is what kind of procedures they can use when the member that’s being challenged is a public entity rather than a private one.

Samuel S. Lionel:

That’s correct.

And in fact, as a result of this case, as the result of a Congressional oversight committee investigation which followed shortly thereafter, the NCAA has changed many of their rules with respect to this type of investigation.

Byron R. White:

Well, I think then that even if you win, as Justice Stevens suggests, if the NCAA wanted to take some action against a State university, even though no employee was involved, it would have to follow due process procedures.

Samuel S. Lionel:

Proceeding against the University?

Samuel S. Lionel:

I frankly don’t know the answer.

The University’s under injunction not to suspend Tarkanian.

Byron R. White:

Well, if the University’s become a member of this association, and it delegated… it makes this big delegation, and so… and the NCAA has some rules that it must comport with due process?

Samuel S. Lionel:

Yes, it must.

Byron R. White:

In moving against the University?

Samuel S. Lionel:

No, that may be just private activity, that may be just private activity.

Anthony M. Kennedy:

Well, if it is, what is the basis here for an injunction against the NCAA from moving against the University?

Even if it can be called a state actor by Mr. Tarkanian?

Samuel S. Lionel:

Because then Mr. Tarkanian has not… his property right has not been protected.

He’s been denied due process of law.

Byron R. White:

Well, but you certainly are putting the NCAA in a strange position in not being able to throw out a member that refuses to abide by its rules.

Just as a matter of equity I would think that the injunction is very suspect against the NCAA.

Samuel S. Lionel:

The NCAA was really the moving party here.

The NCAA is really responsible for this denial of due process to Coach Tarkanian.

Well, he’s had his remedy against the University.

He’s no longer suspended.

Samuel S. Lionel:

I submit that would be a meaningless remedy, and that the injunction against the NCAA should be–

He’s still going to be paid his salary, what more does he want?

Radio programs.

The Constitutional right to radio programs.

Samuel S. Lionel:

–His due process rights were violated.

Well, his due process rights were violated were procedural, weren’t they?

Samuel S. Lionel:

Also substantive.

Byron R. White:

What was the substantive violation?

Samuel S. Lionel:

Because there was no basis for the findings, the court found that they had been substantively violated.

William H. Rehnquist:

Thank you, Mr. Lionel.

Mr. Lee, you have four minutes remaining.

Rex E. Lee:

Thank you, Mr. Chief Justice.

In answer to Justice White’s question, the obligation that the UNLV is under tort appears on page 80 of the joint appendix.

And what it is, of course, is an agreement to, it’s on fundamental policy 2(b),

Rex E. Lee:

“shall be obligated to apply and enforce this legislation and the enforcement program of the Association shall be applied to an institution when it fails to fulfill this obligation. “

What the UNLV agreed to do was to abide by the NCAA’s rules.

What it did not agree to do, and could not have agreed to do, as a governmental entity, was to delegate any kind of discipline of State employees or any other Governmental function to the NCAA.

And the way it’s tested is this: assume that what President Bepler had said, back in 1977, was

“No, our answer to the order to show cause is we cannot and will not, because under our judgment, he just doesn’t deserve to be suspended, and that is a function that is non-delegable as a matter of Nevada State law. “

What the NCAA would have done at that point is to look to other sanctions.

They would not have, and could not have required that he be dismissed.

Byron R. White:

So you say it looks like the university is looking around for a set of rules to have in its university, and it suddenly runs across the NCAA which has promulgated a bunch of rules that it recommends for universities to adopt, and so the university says, gee, here’s a bunch of rules, we’ll just adopt them.

Rex E. Lee:

No, as a condition of membership, they have agreed, as a condition of membership–

Byron R. White:

Well, they just simply agreed to adopt this set of rules?

Rex E. Lee:

–That is correct.

As a condition of membership… and in the event that they decide not to follow those rules, or not to follow the NCAA procedures, they can either accept… it wasn’t just a matter of NCAA membership, though if it were, the legal rule would still have been the same.

They could have accepted other, less severe sanctions, such as an extended period of probation, pure scholarships, etcetera.

Byron R. White:

Let’s assume they’re wrong on the state action, that Tarkanian was entitled to a remedy here.

What was the basis for the injunction against the NCAA’s taking action against the University?

Rex E. Lee:

Because the State court judge said that UNLV had acted wrongfully, and there was a derivative, there was a derivative right from the NCAA.

I do not defend that… I do not think that’s right… but that was the basis for the injunction.

And I want to stress that the only relief we’re asking for is the relief of, of the release of the injunction against the NCAA.

Byron R. White:

And do you argue that even if it’s held to be a state actor, that injunction shouldn’t stand?

I don’t know–

Rex E. Lee:

No, no, no.

Byron R. White:

–I’ve never heard you say that.

Rex E. Lee:

No, no, no.

I’m not saying that even if we’re held–

Byron R. White:

But that’s the argument.

That’s the question that I asked you.

Even if you lose on state action, why should you be forbidden to take action against the University?

Rex E. Lee:

–I see.

I think there are good reasons why we shouldn’t, but we also think we are not a state actor, for reasons that have been stated.

What this whole argument this morning has demonstrated is the mischief that you get into once you open the door beyond those two Lugar requirements.

Rex E. Lee:

There are good reasons for those two Lugar requirements, and also for the rule in Blum v. Yaretsky.

All that happened here was a response by a governmental entity to a non-governmental entity.

Blum v. Yaretsky says that that is not sufficient.

And once you open that door, you get into problems like the United Airlines hypothetical, and like the numerous others that are raised in our brief.

There are lots of accrediting agencies, for example, that set standards, private entities, that set standards for Governmental entities to abide by.

Are they bound by the full panoply of Fourteenth Amendment and 1983 restrictions on their area of private activity, and also subject to damage actions?

We would hope not.

William H. Rehnquist:

Thank you, Mr. Lee.

The case is submitted.