By: Lilah Wylde and Alison Silveira
On April 23, 2025, the U.S. District Court for the Northern District of California issued a significant order in House v. NCAA and two related antitrust class actions (collectively known as In re College Athlete NIL Litigation), tentatively approving portions of the NCAA’s proposed settlement—but stopping short of granting final approval. At issue: the NCAA’s premature implementation of Division I roster limits before securing judicial sign-off.
The court’s rebuke offers a stark reminder of how judicial scrutiny of class settlements—particularly Rule 23(b)(2) injunctive relief classes—can derail even the most sweeping attempts at structural reform. It also raises fresh compliance concerns for athletic departments navigating evolving name, image, and likeness (NIL) rules and pending litigation.
The Settlement: A Groundbreaking, Conditional Step
The proposed House settlement includes over $2.7 billion in back pay to college athletes and prospective revenue-sharing provisions. In a move lauded by some as ushering in a new era of college athletics, the NCAA and Power Five conferences also proposed future policy changes—chief among them, the introduction of team-specific roster caps intended to control expenses and facilitate revenue-sharing models.
Critically, the settlement created two classes: a Damages Class entitled to monetary relief and an Injunctive Relief Class, consisting of current and future Division I athletes whose rights are to be impacted by systemic NCAA reforms.
Judicial Pushback on Roster Limits
Despite “tentatively” approving most aspects of the agreement, Judge Wilken withheld final approval due to concerns that the immediate implementation of roster limits would irreparably harm certain athletes in the Injunctive Relief Class. The Court expressed concern that these athlete’s “roster spot will be or has been taken away as a result of the immediate implementation of the settlement agreement, yet they will be deemed to have released their injunctive and declaratory relief claims as part of the settlement agreement.” . That, the court held, “is not fair,” and violates the equity requirements of Rule 23(b)(2).
The NCAA’s defense—that some class members might ultimately benefit from increased scholarship access—fell flat. Judge Wilken distinguished prior precedents cited by the parties, noting that none involved injunctive relief settlements that affirmatively harmed a subset of the protected class.
The court gave the NCAA 14 days to work with a mediator or magistrate judge to propose modifications, suggesting potential fixes such as grandfathering impacted athletes or phasing in roster limits gradually by attrition.
The NCAA’s Response: Operationalizing House—Now on Hold
On April 21, 2025—just two days before Judge Wilkin paused final approval—the NCAA Division I Board of Directors issued a statement conditionally approving rule changes designed to implement the House settlement. These reforms track closely with the core provisions of the settlement agreement and were crafted to bring NCAA policy in line with a new legal and economic reality.
Key elements of the proposed rules include:
- Permission for schools to provide up to $20.5 million per year in direct financial benefits to athletes, mirroring the settlement’s revenue-sharing model;
- Authorization for schools to offer full scholarships to all athletes on a declared roster, eliminating longstanding sport-specific scholarship caps;
- Elimination of over 150 NCAA rules that previously constrained athlete benefits;
- Establishment of centralized platforms for monitoring and reporting NIL activity;
- Creation of an NCAA enforcement unit focused on compliance with the new framework.
The Board emphasized that these changes are contingent on final judicial approval of the House settlement.
The bottom line: while the NCAA has moved swiftly to align its policies with the anticipated future of college athletics, it may have moved too fast. Until Judge Wilkin grants final approval, these proposed reforms—however sweeping—remain aspirational and legally unenforceable.
Key Takeaways for Athletic Departments
- Hold the Line on Roster Changes: Institutions should suspend all compliance activity related to House settlement terms—especially roster limits—until a revised agreement receives final approval.
- Monitor Judicial Developments: If Judge Wilken finds the parties’ modifications inadequate, she could deny approval outright, reigniting litigation on the merits—including Sherman Act claims. Alternatively, if the Court feels that the parties’ proposed fix with respect to the Court’s concerns on roster limits could adversely impact class members, it may require a new round of notice to class members which could delay approval of the proposed settlement for months.
- Prepare for a New Revenue Model: The Court has given the parties a road map to how to fix the settlement in a way that would allow it to approve the settlement and not require a new round of notice to class members. If the parties are able to follow that road map, the Court appears poised to approve the settlement. Colleges should prepare for a world in which they are permitted to share revenue directly with athletes, and work with counsel to prepare legally sound revenue sharing contracts that avoid inadvertently triggering other legal challenges.
- Expect More Compliance Complexity: Schools must now juggle evolving NIL regulations, Title IX obligations, and emerging employment law theories—all in an uncertain legal landscape.
Conclusion
The House settlement may be the most ambitious attempt to reshape college athletics in decades. Judge Wilken’s April 23, 2025 order is a reminder that structural reforms must not only promise equity, but actually deliver it. For universities, athletic departments, legal counsel, and compliance officers, the next few weeks will be critical as the NCAA and the plaintiffs attempt to salvage a deal that has already changed the game.
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