Friday Feature: Sovereign Immunity and NIL - The Legal Shield That Could Reshape College Athletics
Introduction: A Doctrinal Shield Meets a Commercial Revolution
As the Name, Image, and Likeness (NIL) era transforms college athletics into a quasi-professional marketplace, one legacy doctrine from public law may become a pivotal player: sovereign immunity. Traditionally, sovereign immunity protects government entities and employees from civil liability for actions taken within the scope of their employment—unless the conduct involves fraud, gross negligence, or action outside the scope of official duties.
This legal shield, once confined to budget disputes and administrative torts, is now emerging as a powerful—and controversial—defense in NIL-related litigation. Public universities, whose athletic departments operate as arms of the state, may use sovereign immunity not just to avoid liability, but to gain a strategic advantage in the NIL arms race.
Jaden Rashada’s NIL Lawsuit: A Test Case for Sovereign Immunity
This tension is playing out in real time in the high-profile lawsuit filed by quarterback Jaden Rashada against University of Florida head football coach Billy Napier, Florida booster Hugh Hathcock, and former Florida NIL director Marcus Castro-Walker. Rashada alleges that Napier and others induced him to sign with Florida by promising a $13.85 million NIL deal—one that never materialized.
In response, Napier and Castro-Walker raised sovereign immunity as a defense in a motion to dismiss. While the court declined to resolve the issue at this early stage—calling it premature—it flagged a key question: Was the alleged NIL promise made within the scope of their employment?
Under Florida law, sovereign immunity protects state employees unless plaintiffs can show bad faith, malice, or gross negligence. Rashada argues that Napier’s conduct—endorsing a deal he had no authority to guarantee—was outside the bounds of his coaching role and thus not protected.
If courts ultimately accept sovereign immunity in this context, it would set a precedent with sweeping consequences. Coaches, staff, and administrators at public universities could make NIL-related promises during recruitment without fear of personal liability, as long as their conduct can plausibly be tied to official duties. That could give public institutions a recruiting edge over private schools, whose personnel lack immunity protections and face direct exposure in NIL litigation.
Coaches, Collectives, and Legal Grey Zones
The Rashada case also highlights a growing problem in the NIL space: the unregulated middle. These are actors—like collectives, boosters, or dual-role administrators—who operate in legal ambiguity, often with unofficial but influential ties to schools. They’re neither fully private nor clearly state actors, and that legal murkiness complicates questions of agency, inducement, and liability.
While the NCAA has attempted to rein in these practices through retroactive guidelines and calls for federal intervention, courts have been largely unsympathetic to post-hoc enforcement efforts. In the meantime, state law doctrines like sovereign immunity may become the new battlefield, determining who can be sued and under what conditions.
Institutional Risk and NIL Contract Drafting
From a compliance perspective, the implications for athletic departments and university counsel are enormous. If sovereign immunity shields coaches and officials in NIL matters, universities may face little legal accountability for false promises, unless plaintiffs can prove clear misconduct. That reality makes documentation and legal formalization of NIL conversations essential.
Expect to see more:
Indemnification clauses in coaching contracts,
Waivers of sovereign immunity (where possible),
Firewalls between university staff and collectives,
And explicit NIL disclaimers in scholarship and recruitment paperwork.
Failure to implement these controls could leave institutions legally protected but publicly exposed—as coaches hide behind immunity in disputes involving seven- and eight-figure promises.
Beyond Contracts: Constitutional Implications
Sovereign immunity does introduces constitutional law dimensions into NIL litigation. When public officials engage in what look like commercial transactions—only to later invoke immunity—they raise potential Fifth and Fourteenth Amendment issues. Plaintiffs may argue:
Due process violations (lack of remedy for a broken deal),
Equal protection concerns (different treatment based on school type),
Or even takings claims if state actors misappropriate value without recourse.
Moreover, as the House v. NCAA settlement reshapes how schools fund athlete compensation, questions will intensify around whether schools can enjoy NIL benefits without accepting legal responsibility for how those deals are represented.
Conclusion
The Jaden Rashada case is more than a dispute over a failed $13.85 million NIL deal—it’s a preview of the accountability gap in modern college sports. If sovereign immunity becomes a reliable defense in NIL lawsuits, public universities may wield disproportionate power, leaving athletes with few enforceable rights.
In the short term, sovereign immunity offers a tactical shield. But in the long run, it may erode trust in the NIL marketplace, turning it into a high-dollar, low-accountability market. Courts, regulators, and universities must decide whether defenses like sovereign immunity are appropriate tools in what is rapidly becoming a commercial contracting space.
Rashada v. Florida should serve as more than a cautionary tale—it should be a wake-up call to reexamine how NIL promises are made, memorialized, and enforced. If sovereign immunity is confirmed as a legally viable defense, it could result in public institutions gaining a huge advantage in the NIL space.