Ivies’ Scholarship Policy Market Definition Slammed By Court (1)

A panel of Second Circuit judges wrestled with athletes’ legal argument that the Ivy League’s ban on athletic scholarships is a violation of antitrust law, as they strongly questioned the boundaries of the market for athletically and academically high achieving students.

During oral arguments Tuesday, Judge Beth Robinson asked how the plaintiffs can argue what the Ivy League is doing is “anticompetitive” when the schools get tens of thousands more applicants than they accept.

“It’s going to be tough to plausibly allege that they are able to attract, at a significant level, the students-athletes who have these options at all these other places where they can get scholarships there,” Robinson said.

At issue is a 1954 agreement among the eight Ivy League schools that prohibits them from awarding scholarships based on athletic achievement or participation. The elite schools—including Yale, Cornell, and Harvard—have instead offered significant financial aid based on economic need.

A former Brown University basketball player alleges the agreement is horizontal price-fixing, in which competing buyers of athletic services—the schools—colluded to refrain from competing on price through scholarships, therefore suppressing financial aid for student-athletes. The suit was dismissed by a trial court and appealed to the Second Circuit.

A ruling against the schools could reshape the Ivy League model and upend the longstanding policy prohibiting athletic scholarships.

What Makes a Market?

The Ivies sustained their agreement for more than 70 years, the plaintiffs say, proving they have collective power to affect the relevant market defined as “educational services for athletically and academically high-achieving (‘AAHA’) students who seek to graduate from college and play Division I sports in the NCAA.”

They also argue that the Supreme Court’s 2021 decision in NCAA v. Alston established that antitrust rules applied to college sports. Because the Ivy League schools are members institutions of the NCAA, they too should provide athletic scholarships, as opposed to assistance based solely on economic need.

Josh Davis, attorney with Berger Montague who represents the plaintiffs, said what matters in this case is which schools offer elite opportunities in athletics and academics.

“Those Ivies that offer each of these sports and certainly the group as a whole, are, we allege, in a plausible way, substitutes for each other that provide a level of opportunity that many students perceive as sufficiently distinctive that they would rather go to an Ivy League without an athletic scholarship than a non-Ivy with an athletic scholarship,” he said.

Judge Dennis Jacobs pushed back, saying it’s open-ended how many schools could be included.

“When you talk about schools that are academically elite, are you talking about liberal arts? You could say it’s elite because it has a great economics program. Is economics actually more of a rigorous study than agriculture? There’s a lot of leakage here in your theory.”

Competition Among Schools

In 2024, Judge Alvin W. Thompson of the US District Court for the District of Connecticut dismissed the case, saying the student-athlete plaintiffs failed to define the contours of the market, making it impossible to evaluate whether the defendant school had the market power necessary to withhold athletic scholarships.

A relevant market, an important threshold issue in antitrust litigation, includes all products reasonably interchangeable by consumers for the same purposes.

The plaintiffs appealed to the US Court of Appeals for the Second Circuit, saying the trial judge applied improperly high standards for pleading a relevant market ad that his order improperly placed the Ivy League above the law.

They are trying to establish that the defendant schools were anticompetitive, such as by artificially deflating compensation to student-athletes.

The Second Circuit has repeatedly made clear that the pleading requirement for the relevant market applies even when the plaintiffs are alleging a horizontal agreement among competitors, said Seth Waxman, attorney with WilmerHale who represented the defendant schools at the argument.

“The court below was entirely correct that the plaintiffs failed in this threshold obligation,” Waxman, a former US Solicitor General, said. “The Ivy League is not a plausible market. The complaint itself acknowledges that schools outside the Ivy League offer student-athletes both elite athletics and academics.”

Judge Richard C. Wesley also asked about the potential for other comparable schools to be included in the market.

“I would suspect there are far more—Michigan might feel like it’s entitled to a designation,” he said.

Waxman said it depends on the sport.

Wesley noted that, in lacrosse, Cornell is nationally prominent.

“There are too many variables here to make any kind of meaningful statement about what the economic impact of this is; it’s hard enough to figure out what the marketplace is,” Wesley said.

The case is Choh v. Brown Univ., 2d Cir., No. 24-2826, oral argument 3/17/26.