We learned this in our first year of law school. We may have learned this watching TV shows:
A settlement resolves the claims in a case. It does not repeal state law. It does not bind people who were not suing over the issue someone later wants to raise.
That distinction is now at the center of a new lawsuit that could unsettle the carefully negotiated economics of college sports. On June 9, 2026, two college football players sued the NCAA in California federal court, arguing that the financial caps created by the landmark House settlement violate California’s own name, image, and likeness statute. Ili & Mirer v. NCAA (N.D. Cal., filed June 9, 2026).
They have sued the NCAA, the new College Sports Commission, and the power conferences, and they want the case certified as a class action on behalf of Division I football and basketball players.
What the settlement did and did not do
The House settlement resolved federal antitrust claims brought by athletes who said the NCAA’s restrictions on NIL and revenue sharing unlawfully suppressed their compensation. As part of the deal, schools may now pay athletes directly—but only up to a cap, set at roughly 22% of average power-conference media, ticket, and sponsorship revenue, which works out to about $20.5 million per school in the first year. The settlement also created the College Sports Commission to review NIL deals and make sure they reflect fair market value rather than disguised pay-for-play.
Here is the crucial point the new plaintiffs press: the House case was an antitrust case, and a settlement of antitrust claims does not extinguish claims under other bodies of law that were never litigated—including state NIL statutes, Title IX, and labor and employment law. When Judge Claudia Wilken granted final approval, she declined to entertain objections drawn from outside the antitrust claims actually before her, explaining those topics were beyond her purview. But she did not, and could not, declare that no future lawsuit could ever challenge how the settlement is implemented. That door was left open, and Ili and Mirer have now walked through it.
The California hook
California has a specific statute on point: the Fair Pay to Play Act, which started the entire NIL era. It says an athletic association cannot “prevent” an athlete from “earning compensation” through the use of their NIL and cannot render an athlete ineligible for being paid for it. The plaintiffs argue that the settlement’s caps do exactly what the statute forbids—they cap, and therefore restrain, compensation that California law says cannot be restrained.
The complaint puts a concrete face on the theory. Ili alleges that a USC-affiliated collective offered him a substantial multiyear deal before the settlement was approved but the offer disappeared once the caps took effect. He argues that he would have earned more for his NIL rights than he does now if not for the cap.
A handful of other states, including Texas and Virginia, have similarly worded statutes, which is why this California suit could be the first of several.
The NCAA’s likely defenses
This is case is far from a sure thing. Expect the NCAA to argue, that this is really a complaint about the settlement’s implementation and belongs before the settlement’s special master versus in a brand-new lawsuit. The NCAA will also argue that the claims are premature because athletes denied specific NIL deals must first use the settlement’s neutral arbitration process to challenge a Commission decision before running to court.
Cartain case law cuts against the plaintiffs: the Supreme Court’s Alston decision addressed education-related benefits, not revenue sharing, and the Ninth Circuit’s O’Bannon ruling required that compensation above the cost of attendance be “tethered to education”—precedent the settlement does not erase. And finally, a settlement is a bargain in which both sides gave something; without cost controls, the NCAA would never have agreed to pay athletes at all.
Practical takeaways
For schools, collectives, and businesses doing NIL deals—especially in California—this litigation is a reason to pay attention, not panic. A few points:
Treat the caps as contested, not settled. The revenue-sharing cap is now the target of active litigation under a state statute that predates the settlement. Build flexibility into multi-year NIL and collective arrangements so a change in the legal framework does not blow up your commitments.
Document deals as genuine NIL, not pay-for-play. The settlement’s review structure turns on whether a deal reflects real commercial value for an athlete’s name, image, and likeness. Deals papered as authentic endorsements, with deliverables and fair-market pricing, are far easier to defend than arrangements that look like disguised salary.
Use the channels the settlement created. If a deal is blocked or questioned, the arbitration and Commission-review process is not just red tape—courts often require parties to exhaust those avenues first. Know the process before you need it.
Watch your state’s statute. California’s Fair Pay to Play Act is the lever here, but Texas, Virginia, and others have comparable language. Where you operate matters, because the conflict between state NIL law and the national settlement will be resolved court by court.
A settlement bought the NCAA peace on one set of claims. It did not buy immunity from every law on the books. The next chapter of college sports economics will be written in cases exactly like this one.
David Seidman is the principal and founder of Seidman Law Group, LLC. He can be reached at david@seidmanlawgroup.com or 312-399-7390.
This blog post is not legal advice. Please consult an experienced attorney to assist with your legal issues.
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