The House Settlement Didn't Preempt State NIL Laws. The NCAA Enforced It Like It Did. Ili v. NCAA
Talanoa Ili was a 4-star linebacker out of Hawaii. He was MaxPreps Hawaii Player of the Year and negotiated a multi-year “NIL” deal to play for USC. The deal wasn’t with Nike or Gatorade. It was an old school pay-for-play deal: a collective paying a recruit to be on a specific school’s roster. But on June 6, 2025, Federal Judge Claudia Wilken approved the House settlement. The terms of the settlement killed Ili’s deal.
He still committed to USC, but he never got paid on that NIL deal.
The Lawsuit
On June 9, 2026, Ili and Stanford QB Charlie Mirer filed suit in federal court in California. They're not suing to get another year of eligibility like many athletes. And they're not challenging the House settlement itself. They’re claiming that the NCAA doesn’t have the authority to restrict NIL deals in states that already have NIL laws. Those NIL laws allow athletes to be paid for their name, image, and likeness, and the House settlement took that away from Ili.
In other words, this case is their attempt to return the NIL landscape back to the unrestricted era of NIL that existed prior to the House settlement. Their arguments are technical, based primarily on antitrust laws, like most litigation involving the NCAA.
How the House Settlement Comes into Play
The House settlement, agreed to by college athletes, the NCAA, and Power Four conferences in a class action lawsuit, allows universities to pay college athletes directly. The settlement also created oversight and enforcement of all NIL deals valued at over $600.00. Clearinghouse firm Deloitte reviews the NIL deals, and the College Sports Commission (CSC) is the entity that enforces the new rules. The CSC was created by the Power Four conferences as part of the House settlement.
The House settlement did two things with money. First, it capped the money schools could pay athletes at $20.5 million the first year, with slight increases each year. Second, it attempted to legitimize NIL deals by requiring the deals be for a valid business purpose (advertising a product or service available to the public) and compensation be at a fair market value. According to the lawsuit, the CSC rejected approximately 70% of NIL deals initially due to a violation of those guidelines. At the same time, however, 90% of NIL deals college athletes have with publicly traded companies are approved.
Judge Wilken, a federal judge, has presided over the House proceedings. While approving the House settlement, there was a discussion about the relationship between state NIL laws and the terms of the settlement. Judge Wilken expressly stated that the settlement does not require her to find that it preempts state NIL laws. Said another way, the settlement was approved without a determination as to its authority (or lack thereof) over state NIL laws.
That statement is the foundation of Ili’s lawsuit.
State NIL Laws vs. the House Settlement
Seventeen states passed laws that explicitly allow college athletes to earn money from their name, image, and likeness. The laws name the NCAA and say the NCAA is prohibited in preventing the college athletes from earning money from their NIL.
Defining What "Prevent" Means
California passed the first NIL in the country in 2019 called the Fair Pay to Play Act. The California statute says athletic associations "shall not prevent" a student from "earning compensation as a result of the use of the student's name, image, or likeness.”
Pay close attention to the wording, though. The laws use the word “prevent,” not “restrict,” or “limit,” or “regulate.” This distinction will be important in a minute.
So what happened to Ili and Miner to make them sue? Ili had a large, multi-year “NIL” deal to play football at USC. His deal was one of the Mad Max deals of old: there was no product being marketed, no commercial campaign, no legitimate use of NIL; just a simple pay-to-play contract. The collective was paying him because USC wanted him to play football at their school, not because the collective needed Ili to run ads for them. This is the exact type of NIL deal the CSC would reject. They didn’t need to, though, because the USC collective disbanded after the House settlement due to the new rules.
Ili is arguing that those new rules - the ones that caused him to lose his deal - violate the California NIL law I talked about a few paragraphs ago. He feels it’s a violation because the House settlement - to quote the law - “prevented him from earning money from his NIL.”
What does it mean to you when the NIL law says that the NCAA cannot “prevent” a college athlete from getting paid from their NIL?
The NCAA will argue they're not preventing anyone from earning NIL compensation. Athletes can still get legitimate NIL deals with companies, with brands, with any entity that has a genuine business purpose for the arrangement. Remember, the CSC, through NIL Go, approves publicly traded company deals at a 90%+ rate.
The NCAA and Power Four conferences are regulating (through CSC) what qualifies as True NIL versus pay-for-play. That's restriction, not prevention. If the California legislature wanted to use the word restrict or regulate, then they would have.
To put it in context, you have a legal, constitutional right to travel, but restrictions can be placed on that right. California provides athletes with the right to earn money using their NIL, but can the NCAA place restrictions on that right?
Ili’s counterargument is that when the practical result of the restriction is zero (when Ili's specific deal evaporates entirely) the effect is indistinguishable from prevention. That’s when restriction is prevention. If every collective deal is dead on arrival, you haven't restricted NIL; you've ended it. That’s the definition of preventing. Ili was prevented from earning money from his NIL deal due to the terms of the House settlement. Period.
But "prevent" is a high bar for Ili. Courts construe statutory language narrowly; words matter. Restrictions that leave athletes with some NIL opportunities, even reduced ones, will not be seen as “preventing” athletes from earning NIL, especially when there’s a 90%+ approval rate for national brands.
Ili's Antitrust Claim
Ili's stronger claim lies in antitrust law. And to understand why, you need to understand what antitrust law is actually designed to prevent.
The Sherman Act (the antitrust/monopoly law) prohibits competitors from colluding to fix prices. Simple enough. What makes Ili's case interesting is who he's calling the competitors: the NCAA, the Power Four conferences, and their member schools. They are competing buyers of athlete NIL services. When competing buyers sit in a room together and agree on a ceiling for what they'll pay, that's horizontal price fixing. It doesn't matter that they called it a settlement. It doesn't matter that a judge approved it. A price-fixing agreement dressed up in legal clothes is still a price-fixing agreement.
The Supreme Court already told us the NCAA doesn't get a free pass from antitrust law. In NCAA v. Alston (2021), Justice Kavanaugh made it clear: the NCAA is not above antitrust scrutiny just because it says so.
Here’s the weakness in the NCAA’s case. The day Judge Wilken approved the House settlement, several key people made statements that will be used against them. SEC Commissioner Greg Sankey said the settlement "needs to be codified on the Hill." Big 12 Commissioner Brett Yormark said the same thing. NCAA President Charlie Baker said, "only Congress can resolve these issues." The settlement, itself, required the attorneys for the athletes to make "reasonable efforts" to support federal legislation to override state NIL laws.
If the settlement had the authority to impose uniform NIL restrictions in all 50 states, why would they need Congress? The answer is, they wouldn't. They knew the settlement didn't give them what they needed. They said so publicly. Then they enforced the restrictions as if it did; as if the settlement was federal law.
Ili will use their own words to prove his case.
Did Ili Waive His Right to Sue?
But before a court ever reaches the antitrust merits, Ili has to clear a bigger hurdle: he was almost certainly a class member in the House settlement.
The NCAA's first move will be to argue exactly that: you agreed to this structure and restrictions, you didn't opt out, so you waived your claims.
The House settlement was a class action. Athletes who didn't opt out are bound by it — bound by its terms, bound by its release of claims. Ili and Mirer, as current Power Four athletes in covered sports, were almost certainly class members. The first argument the NCAA will raise is that the case should be dismissed because Ili and Mirer already agreed to the restrictions on NIL deals they're now challenging.
Ili's response is that these claims didn't exist until after the settlement was approved. That’s because the harm came from how the NCAA chose to implement it, not from the settlement itself. That's the crux of Ili’s argument. The enforcement tactics made it so he was unable to secure an NIL deal.
The deeper issue is whether class counsel had the authority to waive rights that state law specifically created. There's a legitimate legal argument that a federal class action settlement (the House settlement) can't trump state laws. Those are rights the California legislature put in place specifically to protect these athletes. But that argument is hard for athletes to make while they’re simultaneously benefiting from the school direct-pay provisions (Rev-Share) the same settlement created. You're either bound by the settlement or you're not.
Ili and Mirer Should’ve Negotiated For It
California's Fair Pay to Play Act (NIL law) passed in 2019. The settlement wasn't finalized until 2025. That's six years of class counsel knowing those state statutes existed, knowing that 17 states had passed laws specifically naming the NCAA and prohibiting it from restricting athlete NIL compensation. If the athletes wanted a carve-out for NIL Rights States, or wanted the settlement to expressly preserve their rights under state law, the negotiating table was the place to demand it.
The NCAA is now operating within the rules that a federal court approved, that class counsel negotiated, and that the class, including these athletes, accepted. Arguing that the terms of the agreed upon settlement now violate state law, after the fact, with the benefit of the school direct-pay provisions still in place, is a hard sell. Courts don't like being used that way.
So where will all of this land?
The antitrust claim is Ili and Mirer’s strongest argument. The commissioners' public statements about needing one cohesive law just after finalizing a settlement shows their mind state. They can’t unring that bell. The Supreme Court already told us in Alston that the NCAA is no longer immune from antitrust scrutiny. And add in Judge Wilken's refusal to find that the settlement preempted state law, and the antitrust claim will be difficult for the NCAA to overcome.
But Ili has three significant problems. First, Ili being bound to the terms of the House settlement because he was a member of the class in that class action lawsuit could end the case at the motion to dismiss stage. Second, even if the antitrust theory survives, there’s a causation problem. Ili has to prove that the harm came from the NCAA's enforcement decisions in California specifically, not from the general disruption the settlement caused in every state. Third, the "prevent vs. restrict" argument won’t carry much weight given the high percentage of NIL deals that are approved when national brands are part of the deals.
But like most lawsuits, the outcome is more likely to be a settlement than a jury verdict. The lawsuit does serve as leverage, however, to get the NCAA and Power Four conferences back to the negotiating table, at least in NIL Rights States. The resolution Ili and Mirer will seek is a negotiated carve-out: different enforcement standards for athletes in states with NIL laws. Or at least an understanding that collective deals in those states don't have to meet the same NIL Go requirements, which is likely to bring on another class action lawsuit from athletes in states that don’t have NIL laws.
The other possibility is that Congress acts before this lawsuit is decided. Federal NIL legislation would actually accomplish what the House settlement couldn't: preempt state law through the Supremacy Clause and give the NCAA actual national jurisdiction it's been lobbying for since 2021. If that happens, this case becomes moot. And the NCAA gets exactly what it wanted all along and what it had for decades: total control.
Comments