Court: Illinois Association Overreached in Enforcement of Transfer Rules

An appeals court tells the IHSAA that it overreached in the enforcement of its transfer rules.

Jasmine Watson, a highly talented basketball player, attended Elkhart (Ind.) Memorial High School. Near the end of the 2007-08 school year, Jasmine's mother Valerie was informed by her employer that her hours would be reduced to 24 per week. As a result of the reduction in her wages, Valerie was unable to make timely mortgage payments on the family home and, in June 2008, received a foreclosure notice from her mortgage company.

Valerie immediately began looking for another place to live because, in the event that she should have to move to a different school district, she did not want her children to have to switch schools in the middle of the school year. When Jasmine's basketball coach, Larry Fielstra, learned that Valerie was having a hard time locating a suitable home in Elkhart, he referred her to a property where he had arranged for the owner to waive the security deposit and offer the house at a reduced rent. Valerie, however, rejected the property because it was located next to a liquor store. When Fielstra heard that Valerie was looking beyond Elkhart for housing, he offered to provide transportation to Jasmine so that she could live with her family and still attend Elkhart Memorial.

Valerie eventually rented a home in South Bend, where she grew up and still had extended family, and enrolled her children in the Washington High School District. In accordance with Indiana High School Athletic Association rules, Valerie completed a transfer report for Jasmine, requesting that Jasmine retain her athletic eligibility. The request was sent to Elkhart Memorial for input and approval, but Elkhart coaches demurred, claiming that the Watsons' transfer was based on athletic reasons and undue influence.

After conducting an internal investigation, the IHSAA Review Committee supported the Elkhart coaches' view, concluding that the Watsons' move to South Bend violated the association's transfer rule, the purpose of which is to "preserve the integrity of interschool athletics and to prevent or minimize recruiting and school jumping for athletic reasons." In addition, the committee determined that one of the Washington basketball coaches violated the association's undue influence rule when he encouraged Jasmine to transfer to Washington. (The rule identifies a number of examples of prohibited inducements to transfer, such as "free transportation; transportation by a coach; offer or acceptance of residence with coach; reduced rent for parents; or any inducement to get parents or student to enroll in a particular school or to induce parents to change residence for athletic reasons.") As a result of the committee's ruling, Jasmine was declared ineligible for 2008-09, her senior year.

Because high school athletic associations are private entities, the courts will generally not interfere in their internal decision-making. There are, however, circumstances in which a court will substitute its judgment for the judgment of the association - for example, if the court believes that the association's actions were arbitrary or capricious, or that it acted in disregard of the facts of the case.

The Watsons went to court seeking an injunction prohibiting the IHSAA from enforcing its decision. In granting a preliminary injunction, the trial court found that the review committee's findings were based on hearsay and overreaching assumptions. The court concluded that since the Watsons' move to South Bend occurred soon after being served with a foreclosure notice, which was caused by a reduction in Valerie Watson's income, the move was clearly for economic and family reasons, not because of any recruitment efforts allegedly made by the Washington coach. In addition, the trial court found that the IHSAA completely ignored the clear violation of IHSAA rules by the Elkhart Memorial coaching staff in trying to retain Jasmine.

In Indiana High School Athletic Association v. Watson [913 N.E.2d 741 (Ind. 2009)], the IHSAA made two assertions before the Court of Appeal of Indiana. First, the IHSAA argued that Jasmine Watson was ineligible to participate because she moved to South Bend as a result of undue influence by the Washington High School coaches. However, in reviewing the rule and the facts presented, the court held that even if it accepted all of the IHSAA's evidence as fact, all that it established was that a number of conversations took place in which one or more Washington coaches encouraged Jasmine to think about transferring to Washington. No illicit offers were made, no bribes extended - in fact, no inducements were made whatsoever, aside from some friendly boasting about a championship ring. None of this, the court concluded, rose to the level of the "undue influence" prohibited by the rule.

As the court concluded, however, the same could not be said for Elkhart Memorial's staff. In reviewing the facts, the court noted that it was undisputed that Fielstra found a home in Elkhart at a reduced rent for the Watsons and offered to provide transportation to enable Jasmine to attend Elkhart Memorial after her family moved to South Bend, and that an assistant basketball coach offered to let Jasmine live with her so that she could continue to attend Elkhart Memorial after her family moved to South Bend. All of these acts, the court ruled, unquestionably fell within the prohibited conduct outlined by the undue influence rule.

As for the IHSAA's second argument, that the trial court erred by finding that it acted arbitrarily and capriciously when it declared Jasmine ineligible under the transfer rule, the IHSAA reiterated its belief that the move to South Bend occurred primarily for athletic reasons, and not, as the trial court found, because of Valerie's financial difficulties and the Watsons' inability to find suitable housing in Elkhart. In support of its position, the IHSAA argued that instead of moving to South Bend the Watsons could have: 1) remained in their foreclosed home until kicked out, theoretically giving the family a longer period of time to find a home in Elkhart, no matter the risk that the children might have had to transfer schools in the middle of the school year; 2) settled for a home in Elkhart that was too small, too expensive, or situated in an undesirable area; and/or 3) permitted Jasmine to live with her basketball coach, in another town.

In rejecting the standard applied by the IHSAA as unreasonable, untenable and unrealistic, the court ruled that the facts clearly support the trial court's conclusions. Finding that the IHSAA's conduct rose to the level of willful and unreasonable decision-making that was in disregard of the facts and circumstances before it and that, consequently, it acted arbitrarily and capriciously, the Court of Appeal ruled the trial court did not err in entering a preliminary injunction against the IHSAA.

As noted, athletic associations are generally given wide latitude in establishing and enforcing their rules. However, one need not look far - the Tennessee Secondary School Athletic Association in Brentwood, the National Collegiate Athletic Association in Oliver - to find instances in which the courts determine that such entities overreach. So although the "arbitrary and capricious" standard of review is narrow, administrators of any private sports or fitness organization would be well-advised to apply their rules in a reasonable manner - in light of the facts or circumstances of each specific case.

Legal Action

Barred from a Cincinnati public pool three years ago because he was "creeping out" parents and lifeguards who accused him of staring at kids, Robert Kennedy got a measure of revenge in February when a federal appeals court ruled that pool administrators may have violated his constitutional rights. The decision by the U.S. 6th Circuit Court of Appeals reverses a lower court ruling and allows Kennedy's lawsuit against the city, a pool supervisor and a police officer to go forward. Confiscating Kennedy's $10 pool pass and ordering him to stay away from other pools, parks and recreation department property, the court ruled, would be improper if Kennedy (who was found by police who questioned him to have no outstanding warrants and no history of sex crimes) broke no rules or was not charged with a crime.

The NCAA's licensing contracts will be laid bare after a San Francisco district court judge in February refused to dismiss Ed O'Bannon's class-action antitrust lawsuit against the association. The judge's denial of the NCAA's motion to dismiss is considered just the first legal hurdle for the plaintiffs, who claim that former athletes should be compensated for the use of their images and likenesses in television advertisements and video games, and on apparel. The association's licensing deals are estimated at more than $4 billion. Jon King of Hausfeld LLP, one of the lead lawyers representing O'Bannon, a former UCLA basketball star, called the decision "a truly historic day," telling reporters, "To our knowledge, no one has ever gotten behind the scenes to examine how student-athletes' current and future rights in their images are divided up and sold . . . We think [the NCAA's] hypocrisy will be fully exposed once their numbers are put in the public eye."