"I was to leave the building immediately," Hausfeld said. "I was to take nothing with me. If I was caught on the premises, they would have me arrested as a trespasser."
Toll said the partners wanted to move quickly. Hausfeld is such a good lawyer, he said, the partners feared he'd find a creative way out.
HAUSFELD'S ENTRY INTO sports immediately followed that professional debacle. The day after he was fired, he set up a new firm in borrowed office space, along with a dozen lawyers and two assistants who had followed him out the door.
One day he received a call from Ken Feinberg, a prominent lawyer who handled the claims for the victims of the Sept. 11 attacks. Feinberg had served as a mediator on some of Hausfeld's cases. He mentioned Sonny Vaccaro, the street-wise former marketing executive who once shod young basketball players for Nike (and, later, Adidas and Reebok). Vaccaro, as much as anyone, built the empire of camps, tournaments and sneakers that still drives millions of dollars to coaches and universities. He had come to see the NCAA as an exploitative cesspool. By 2008, Vaccaro was touring the country as a reformer, denouncing the NCAA as "the worst organization in the world."
"I Googled him and saw who he had gone after: Nazi Germany and the Swiss banks! Apartheid!" Vaccaro says. "His cases were unbelievable." Vaccaro flew to Washington to meet Hausfeld in his K Street office. "He walks in and he's this little meek guy with a bowtie, 5-6, maybe 145 pounds, very soft-spoken," Vaccaro says. "You wouldn't think there was any energy there. Until we started talking." For the next hour, Vaccaro described his personal journey. When he finished, Hausfeld walked over and threw his arms around him.
"Let's go after them," Hausfeld said, according to Vaccaro.
Hausfeld says he took on the case "because it was right." But it was also a business opportunity his new firm desperately needed. The potential financial payoff for the firm was unclear. "But it was an opportunity for us to say, 'We're still here, and we're doing bigger and better things,'" says Jon King, a lawyer and former walk-on basketball player at Santa Clara who followed Hausfeld to his new firm.
King, who became the lead investigator on the case, said that at the time the firm had no ambitions to expand into sports law. But the NCAA seemed ripe for a challenge. Much of the case was sitting in plain sight. Vaccaro showed Hausfeld the obscure 1997 autobiography of Walter Byers, the NCAA's executive director from 1951 to 1988. Byers was astonishingly repentant: His book, "Unsportsmanlike Conduct: Exploiting College Athletes," asserts that, with his help, the NCAA erected a "nationwide money-laundering scheme" that enriches conferences, schools, coaches and TV networks on the backs of unpaid athletes. Byers confessed that he helped invent the term "student-athlete" to shield the NCAA from having to pay the players.
To Hausfeld, the book was "an amazing revelation" that helped to convince him he had a case. He found that other economists had reached the same conclusions about the NCAA. Two years after the publication of Byers' book, a former Berkeley economics professor named Ernie Nadel was watching a bowl game when an announcer mentioned that Florida coach Steve Spurrier earned $2 million a year. Nadel approached one of his colleagues, Dan Rascher and asked how it could be that the head football coach for a public university was making so much money.