The NCAA and its member universities and colleges have faced many recent challenges by current and former student athletes with respect to rules concerning eligibility and payments for their respective name, image and likeness (NIL). On May 21, 2024, University of Georgia quarterback Jaden Rashada filed a lawsuit against the University of Florida's head football coach and a large contributor to that university's NIL collective. In the case captioned Rashada v. Hathcock et al., Case No. 3:24-cv-00219 (N.D. Fla. 2024), Rashada filed a federal complaint in the northern district of Florida alleging that University of Florida head football coach Bill Napier and certain wealthy University of Florida boosters fraudulently induced him to forfeit a $9.5 million NIL deal to attend the University of Miami by "offering" him a $13.85 million NIL deal to attend Florida.
The complaint alleges that Rashada's offer from Florida was comprised of two funding sources. First, a Gators booster, through an automotive company, would pay to Rashada $5.35 million, with a $500,000 signing bonus. And second, Rashada would be paid the remaining amounts from Gator Guard, which the complaint describes as one of Florida's NIL collectives. To support its allegations, Rashada's complaint quotes purported text messages. Those messages include texts from boosters to Rashada's NIL agents that "We need to lock down Jaden!" and "[Florida would] want [Rashada] to flip this week." Based on the complaint, other texts include those from an attorney for Gator Collective, with the attorney saying, "I might go to sleep if I had $500K headed my way in two weeks ... But we need a commitment to get there!!!" Based on these communications, Rashada alleges that the defendants made various representations and promises to him "knowing that they lacked both the intention and the ability to fulfill them." Further, Rashada claims that Florida's NIL boosters made various representations that led him to believe that they "had authority to negotiate the NIL agreement" at issue. "As such, Defendants [] acted with actual and apparent authority with respect to their representations" regarding the NIL agreement.
The complaint alleges that Rashada is "the first scholar-athlete to take a stand against such egregious behavior." However, there is precedent for fraudulent inducement claims against universities by student athletes. In 1993, a college quarterback sued the University of Miami and its head coach, alleging that he was fraudulently induced to attend the university based of false promises of playing time. Fortay v. Univ. of Miami, Civil Action No. 93-3443 (D.N.J. 1993). That case settled for an undisclosed amount. Nonetheless, with the advancements of NIL deals and NIL collectives, it is likely that the Rashada case has the potential to set important precedent for the standards courts will impose when analyzing the behavior of the currently loosely regulated NIL collective industry. Importantly, this lawsuit is yet another type of attack that the NCAA and its member institutions are likely to face in the coming months, in addition to the antitrust claims that have been launched against the NCAA in recent years, which has caused the NCAA to become unable, or unwilling, to implement legitimate regulatory oversight over NIL.
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