NASL Amends Anti-Trust Complaint; Adds MLS as a Defendant (Part I)

As I previously discussed, the NASL indicated that they would likely amend their federal anti-trust violation complaint. Well, they did that and then some, formally adding MLS as a defendant in the federal anti-trust case.

This was not necessarily unexpected, as there was always the potential for NASL to amend the complaint based on newly discovered information, or simply a decision to change legal strategies. The failure to obtain the preliminary injunction, as well as the decision to cease operations for the 2018 season essentially turned this into a case in pursuit of damages, along with the desire to reign in the power of USSF and MLS over professional soccer.

There are an additional 30 pages of information in the amended complaint, which alleges a conspiracy between USSF and MLS though SUM to monopolize the professional soccer market in this country, and prevent competition. I’m mainly going to focus on what additional information or legal theories are offered in this amended complaint, as well as anything generally that jumps out at me that may not have when the original complaint was filed. So, let’s go through the highlights:

Change in Strategy:

Gone is the request for a preliminary injunction (it appears they are not going to ask the 2nd Circuit to reconsider, or appeal to the Supreme Court), and in its place we have a request for damages, along with the declaratory judgment striking down the standards.

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The declaratory judgment relief remains the same; NASL has long argued that the Professional League Standards (PLS) are anti-competitive. Also, NASL explicitly argues, “USSF has arrogated to itself, without any statutory authority, the claimed power to “govern” professional soccer in the United States.” This appears to a full-on attack against the Ted Stevens Act, which USSF has in part used to justify their ability to impose and regulate the PLS over professional soccer in the United States. Indeed, NASL for the first time references the Champions World case, which found (in one jurisdiction) that USSF did not have an anti-trust exemption.

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Interesting. The Champions World case has never been challenged (or referenced, really) beyond the ruling in that case, probably because the underlying matter was resolved without going to trial (and the plaintiffs went out of business well before that). However, it’s not surprising that NASL would raise it at this point. There has never been a full reckoning on this issue; NASL went back and forth with their argument on whether USSF has the authority to impose/regulate PLS during the course of the preliminary injunction argument. Now it seems we’ll get to see the fight happen.

Cozy relationship:

The previous complaint certainly referenced MLS at points, and even referred to them as a “co-conspirator,” but the focus at that time was on the alleged nefarious actions of USSF, as it related to the attempt to secure the preliminary injunction. This time around, there is an attempt to show direct involvement between the parties, in an attempt to crush NASL. Most of this focuses on former USSF President Sunil Galati’s…relationship with the parties as former Vice President of MLS, and as an employee of Robert Kraft, owner of the New England Revolution.

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This is followed up with an attempt to tie Gulati’s successor, President Carlos Cordeiro as involved in the same alleged twisted schemes as his predecessor.

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Again, some of this suffers from the previous issues in the motion for a preliminary injunction: There is not yet proof to support these claims. However, as we’re not dealing with the attempt to get that injunction, the discovery process (or information NASL has but has yet to disclose) will determine how credible these claims are. Assuming NASL survives the motion to dismiss.

Kingpin:

Adding MLS to the lawsuit proper, NASL’s argument is essentially that MLS is the mob, having their hands in basically every aspect of soccer in the United States. Much of the argument focuses on MLS’ influence over the USSF governing process.

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The control that MLS has over the voting process has long been a bee in the bonnet of NASL, and I haven’t really seen a justification from the parties as to this particular allocation of votes. Interestingly, nobody aside from NASL seems to really raise a (public) stink about it, for whatever reason.  Seems like questions a deposition could get to the bottom of. The other thing I’ll mention is that NASL is going to great lengths to establish the relationship between MLS/USSF and for how long the parties have been working to allegedly control soccer in the US.

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As you can see, based on this, NASL believes that the parties were in cahoots from the start, and have since engaged in a systematic scheme to control professional soccer. Again, the cosy relationship between USSF and MLS is certainly something that will be subject to scrutiny, though it’s far from clear that the relationship as it currently stands is in violation of law.

Triple your fun:

With the motion for a preliminary injunction in the past, NASL is now focuses on two prayers for relief: The declaratory judgement finding that USSF does not have the right to regulate professional soccer, and damages suffered based on the alleged anti-competitive  actions of USSF and MLS. We’re still dealing with anti-trust, the playing field has moved somewhat.

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I’ll focus on the damages issues in a later post; it’s a bit more detailed than I want to get into here (I don’t want this to be a 3000 word entry). Suffice it to say, the issue is not clear cut; NASL’s own business decisions will be subject to scrutiny here. Even if they find USSF/MLS liable, the degree to which poor decisions by NASL impacted their situation will be something the court looks at. But combined with the New York State case, there is a lot of money at stake right now.

I think this is a good place to stop for now. Stay tuned for Part II, where we’ll look at the Professional League Standards and how they impact this suit, and professional soccer generally.

 

 

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