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BOWERS v. NATIONAL COLLEGIATE ATHLETIC ASSOCIATION

August 6, 2001

MICHAEL BOWERS, PLAINTIFF,
v.
NATIONAL COLLEGIATE ATHLETIC ASSOCIATION, ACT, INC., NCAA INITIAL-ELIGIBILITY CLEARINGHOUSE, TEMPLE UNIVERSITY OF THE COMMONWEALTH SYSTEM OF HIGHER EDUCATION, UNIVERSITY OF IOWA, AMERICAN INTERNATIONAL COLLEGE, DEFENDANTS.



The opinion of the court was delivered by: Stephen M. Orlofsky, United States District Judge.

  OPINION
For the reasons discussed below, I conclude that: (1) the application of the NJLAD to the Defendants based upon the facts and circumstances of this case does not violate the Due Process Clause of the United States Constitution; (2) the application of the NJLAD to the Defendants based upon the facts and circumstances of this case does not violate the Dormant Commerce Clause of the United States Constitution; (3) the NCAA is not entitled to summary judgment on Bowers's NJLAD claim; and (4) ACT/Clearinghouse is entitled to summary judgment on Bowers's claim that it aided and abetted the NCAA in violation of the NJLAD. I also conclude that the State of New Jersey's Motion to Intervene, described below, must be granted. Additionally, Bowers's Motion to Amend, as it relates to the NJLAD, is granted.

I. FACTUAL AND PROCEDURAL HISTORY*fn1

At its core, this case tests the applicability of laws prohibiting disability-based discrimination to the practices of the NCAA. In this case, Bowers has sued the NCAA under the Americans with Disabilities Act ("ADA"), 42 U.S.C. § 12101 et seq., section 504 of the Rehabilitation Act, 29 U.S.C. § 794(a) and the NJLAD. Among other claims, Bowers alleges that the NCAA discriminates against the learning disabled through initial eligibility requirements that govern whether a student may participate in intercollegiate college athletics. Bowers has also sued Temple, Iowa, and AIC for discrimination on the ground that these schools stopped recruiting Bowers to play football when they concluded that his learning disability would likely result in the NCAA declaring him a nonqualifier. Bowers has also sued ACT/Clearinghouse, which is operated by ACT, and is responsible for making eligibility determinations pursuant to the NCAA's regulations. Temple recently filed a Third-Party Complaint against Delaware State University, the University of Memphis and the University of Massachusetts Amherst. Also, Bowers recently amended his First Amended Complaint to add state law claims of fraud, promissory estoppel and equitable estoppel against the University of Iowa.*fn2
On November 2, 2000, I filed Bowers III, 118 F. Supp.2d 494 (D.N.J. 2000). In Bowers III, I denied without prejudice the Defendants' motions for summary judgment as they related to Bowers's claims under the NJLAD. *fn3 Because no party had fully briefed the issue of the potential extraterritorial application of the NJLAD and whether such application would be constitutional, I granted twenty days to both Bowers and the Defendants to submit additional briefing on this issue. All parties submitted such briefing or joined another party's brief.*fn4
After reviewing these supplemental briefs, I determined that it was appropriate, under 28 U.S.C. § 2403(b) and Federal Rule of Civil Procedure 24(c), to certify to the Attorney General of the State of New Jersey that the constitutionality of the NJLAD had been called into question. By letter dated February 5, 2001, I informed the Attorney General that the constitutionality of the NJLAD had been called into question, and I invited the state to present its views on the question of whether the application of the NJLAD to the Defendants in this case would be constitutional. On March 6, 2001, the State of New Jersey filed a Motion to Intervene*fn5 and a brief on the issue of the constitutionality of applying the NJLAD to the Defendants in the circumstances of this case. Bowers, the NCAA and ACT subsequently submitted briefs in response to the state's brief.*fn6 As this issue is now thoroughly briefed, it is ready for resolution.

II. DISCUSSION

A. Due Process Clause

The United States Supreme Court has employed a "contacts" analysis, similar to that used in the personal jurisdiction context, to determine whether a particular state's substantive law may be constitutionally applied to a particular set of facts. In Allstate Insurance Company v. Hague, the Supreme Court determined "that for a State's substantive law to be selected in a constitutionally permissible manner, that State must have a significant contact or significant aggregation of contacts, creating state interests, such that choice of its law is neither arbitrary nor fundamentally unfair." 449 U.S. 302, 312-13 (1981). The Court explained that it "has invalidated the choice of law of a State which has had no significant contact or significant aggregation of contacts, creating state interests, with the parties and the occurrence or transaction." Id. at 308. The Eighth Circuit has explained that "[t]he basic rule is the state whose law is chosen to control a case must have a substantial factual contact with the parties or the transaction giving rise to the litigation. Without sufficient contacts, the state has no legitimate interest in the outcome of the litigation." McCluney v. Jos. Schlitz Brewing Co., 649 F.2d 578, 581 (8th Cir. 1981).
Therefore, under this method of analysis, to determine whether a state's substantive law may constitutionally apply to an occurrence or transaction, the relationship of the state, whose law is to be applied, to the facts at issue must be examined. The Defendants argue that New Jersey's contacts with this litigation are tenuous at best. Bowers argues that there are sufficient New Jersey contacts such that it would not offend the United States Constitution to apply New Jersey law here. Because each Defendant's relationship to New Jersey with respect to Bowers's action is unique, I will analyze each relationship separately to determine whether New Jersey law may, consistent with the Constitution, apply to Bowers's claims against each Defendant.
Before I examine New Jersey's contacts to this litigation, however, I must review some case law construing the NJLAD that provides a legal framework for the following discussion. It is relatively clear that, under New Jersey law, a plaintiff's New Jersey residence alone is not sufficient to trigger application of the NJLAD. See, e.g., Buccilli v. Timby, Brown & Timby, 283 N.J. Super. 6, 660 A.2d 1261 (N.J.Super. Ct. App. Div. 1995) (holding that Pennsylvania law, and not the NJLAD, would govern a New Jersey resident's employment claims where the resident worked exclusively in Pennsylvania and all of the alleged unlawful conduct occurred in Pennsylvania). It is also relatively clear, however, that an "out of state" defendant may be held liable under the NJLAD if New Jersey's contacts to the factual scenario are sufficient. See, e.g., McDonnell v. State of Illinois, 163 N.J. 298, 748 A.2d 1105 (2000) (affirming the decision of the Superior Court, Appellate Division, that the NJLAD may apply to a New Jersey resident's employment claims against the State of Illinois where the New Jersey resident worked in a New Jersey field office of the Illinois Department of Revenue). Bowers's action falls somewhere within these two extremes.

1. The NCAA

The NCAA's argument that application of the NJLAD against it in this case fails the Allstate analysis is mainly based on the following arguments: (1) "Bowers' allegations that he was denied access to `places of public accommodation' involve only `places of public accommodation located outside of the State of New Jersey;" (2) "Bowers never sought access to any `places of public accommodation' located within the State of New Jersey;" and (3) "Since Bowers did not seek admission to an NCAA member institution within the State of New Jersey, the NCAA had no contact at all with any of the NCAA member institutions located within the State of New Jersey with regard to Michael Bowers or the NJLAD claims asserted in his lawsuit." See NCAA Supp. Mem. in Support of Summary Judgment on All Claims Brought Under the NJLAD ("NCAA Supp. Mem.") at 1 (emphasis in original).*fn7
Additionally, the NCAA argues that the New Jersey Legislature never intended the NJLAD to have extraterritorial effect and contends that no case has applied the NJLAD to a factual scenario where a plaintiff sought access to a public accommodation located outside of New Jersey, in support of its argument that the NJLAD may not apply here. See NCAA Supp. Mem. at 4-6.
The NCAA's arguments assume that the proper focus and determinative factor in this case is the location of the public accommodation to which Bowers sought access. For example, the NCAA reasons that if its allegedly discriminatory conduct is the application of the initial eligibility rules, that application could only have taken place at the public accommodations the NCAA operates, the defendant universities, and those places are not located in New Jersey. Even assuming that Bowers did not seek access to any public accommodation located in New Jersey, however, the situs of the public accommodation is only one of many potential contacts between New Jersey and the underlying facts giving rise to this litigation.
The New Jersey Supreme Court has explained that a proper consideration to determine the applicability of the NJLAD is whether the alleged discriminatory behavior "was expected or intended to cause injury in New Jersey." Blakey v. Continental Airlines, Inc., 164 N.J. 38, 67, 751 A.2d 538 (2000). While the issue in Blakey was whether the State of New Jersey could exercise personal jurisdiction over certain defendants, the New Jersey Supreme Court's focus on whether the alleged discrimination was expected or intended to cause injury in New Jersey translates to the context of the Allstate analysis. If alleged discrimination was expected or intended to cause injury in New Jersey, that is one contact that New Jersey would have to the facts underlying subsequent litigation concerning that alleged discrimination.
An examination of other case law reveals that New Jersey courts have de-emphasized the importance of the physical situs of the public accommodation. See National Organization of Women v. Little League Baseball, Inc., 127 N.J. Super. 522, 318 A.2d 33 (N.J.Super. Ct. App. Div.), aff'd, 67 N.J. 320, 338 A.2d 198 (1974) (holding that "[t]he statutory noun `place' . . . is a term of convenience, not of limitation . . . employed to reflect the fact that public accommodations are commonly provided at fixed `places'"); Dale v. Boy Scouts of America, 160 N.J. 562, 588-89, 734 A.2d 1196 (1999), rev'd on other grounds, 530 U.S. 640 (2000) (following the reasoning of Little League, the Supreme Court of New Jersey refused to limit the definition of "place" under the NJLAD to fixed physical locations). While both Little League and Dale involved some physical "place" located within New Jersey, these cases reveal the New Jersey Supreme Court's reluctance to allow a strict definition of "place" limit the reach of the NJLAD. As explained by the Appellate Division in Dale, "[t]o have the LAD's reach turn on the definition of `place' is irrational because `places do not discriminate; people who own and operate places do.'" Dale v. Boy Scouts of America, 308 N.J. Super. 516, 533, 706 A.2d 270 (N.J.Super. Ct. App. Div. 1998) (quoting Welsh v. Boy Scouts of America, 993 F.2d 1267, 1282 (7th Cir. 1993)) (Cummings, J., dissenting). In conjunction with the New Jersey state legislature's statutory command that the NJLAD be liberally construed, see N.J.S.A. § 10:5-3, this reasoning of the New Jersey Supreme Court is helpful in analyzing the NCAA's emphasis on the location of the place of public accommodation.
As explained above, the location of the place of public accommodation is but one potential contact between New Jersey and the facts underlying this litigation. The NCAA contends that virtually no qualitative connections exist between itself and New Jersey with regard to this case. As explained by the NCAA:
The relevant NCAA rules in this case were not decided upon in New Jersey or drafted in New Jersey, and they were not specifically directed at activities or institutions located in New Jersey any more than they were directed at activities or institutions in any other state. . . . The NCAA's role in relation to New Jersey and this case is therefore an extremely limited one: it promulgated a nationwide set of rules of general applicability governing intercollegiate athletics which where allegedly applied by other ...

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