Court Denies NASL's Request for Injunction in Lawsuit vs. U.S. Soccer

(by Brian Straus si.com 11-3-17)

 

The NASL’s request for a mandatory injunction restoring its second-division status for the 2018 season has been denied by a U.S. District Court judge, leaving the short and long-term future of the league in peril.

 

Judge Margo Brodie ruled Saturday morning that although the NASL did clear several required legal hurdles, including that the loss of D2 status would constitute “irreparable harm,” it ultimately never “made a clear showing of entitlement to relief.” The league was unable to demonstrate that the U.S. Soccer Federation (the defendant) isn’t entitled to regulate and determine professional division designations, while Brodie found that the USSF “has provided plausible bases to conclude that [division standards] have procompetitive effects.”

 

Perhaps more importantly, Brodie ruled that the NASL “fails to present sufficient evidence of undue influence in the actual standard-setting process” despite “ample evidence of a conflict of interest between [the USSF] and MLS.” Those aren’t uncommon in membership associations, she wrote, and in this case they’re “guarded against by [the USSF’s] fiduciary duties to its members.”

 

Brodie ruled, “Given these safeguards, even if so motivated, members of the [USSF] Board and the Standard Task Force may not blindly benefit MLS to the detriment of NASL or other professional leagues. Because Plaintiff’s claims rely so heavily on Defendant’s alleged financial motives, the Court’s conclusion on this factor also undercuts somewhat the other proffered evidence.”

 

U.S. Soccer’s decision to grant waivers to the NASL in the past, and the board’s vote to award provisional D2 sanctioning despite a contrary recommendation from the federation’s pro task force, also are among the elements that led Brodie to conclude, “that Plaintiff has failed to establish a likelihood of success on the merits, let alone a ‘clear showing’ of entitlement to relief.”

 

She added, “Even assuming, however, that Plaintiff has sufficiently demonstrated that there is concerted action … Plaintiff nevertheless fails to demonstrate unreasonable restraint of trade.”

 

Overall, the standards the NASL was forced to meet to win a mandatory injunction, which would effectively strip USSF of its regulatory power and reverse the status quo for 2018, proved to be too high. The NASL still could press forward with its antitrust case, which could continue even if the league dissolves. It also could appeal Brodie’s ruling to the Second Circuit Court of Appeals.

 

The NASL released the following statement shortly after the ruling came down:

 

“We are very disappointed with the Court's decision in denying our motion for a preliminary injunction. We remain steadfast in our pursuit of antitrust claims against the U.S. Soccer Federation and are confident that justice will ultimately be served. In light of the extreme harm this decision poses to the NASL and our teams, players, coaches and fans, we will immediately begin reviewing all of our legal options including the process for appealing today's ruling.”

 

U.S. Soccer then said the following:

 

“U.S. Soccer’s responsibility is to ensure the long-term stability and sustainability of all professional leagues operating in the United States, as well as the teams that compete within those leagues. After providing numerous opportunities over the years for the NASL to meet the Professional League Standards, or at least provide a pathway to meet those standards, the elected and independent members of the U.S. Soccer Board of Directors ultimately made a decision not to sanction the NASL as a Division 2 league. The decision was made in the best interest of soccer in the United States, and today’s decision confirms it was the correct decision. U.S. Soccer is committed to finding ways to improve the long-term viability of all leagues and teams and, by doing so, continue building upon the growth of soccer in the United States. U.S. Soccer is committed to working with NASL as it considers its future.”

 

The NASL semifinals are scheduled for Sunday evening.

 

Meanwhile, it will be worth noting the impact of U.S. Soccer’s victory on embattled federation president Sunil Gulati and the upcoming election that seems to be attracting additional candidates almost daily. Gulati has been under immense pressure since last month’s failure to qualify for the 2018 World Cup, and the potential consequences and bad PR associated with the NASL lawsuit weren’t helping. Sources tell SI.com that Gulati still hasn’t decided whether to run for a fourth term and that he was disappointed when his former right-hand man, USSF VP Carlos Cordeiro, announced his candidacy this week.

Now Gulati has a piece of good news. It’s uncertain whether it’ll embolden him, or do anything to mollify a frustrated board. Rumors of an emergency meeting to evaluate Gulati’s position have been circulating for more than a week and on Thursday, New York-based Front Row Soccer confirmed that eight board members requested a meeting in order to “discuss the history of hiring of U.S. national team coaches.” That history, of course, has been written by Gulati.

SI.com understands that USSF CEO Dan Flynn contacted the board and asked to push the meeting back to early December, around the date of the MLS Cup final. Most, if not all, board members agreed. The information, answers or context they want from Gulati apparently can wait until then, and it’s quite possible the tone will soften a bit thanks to Saturday’s ruling.

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https://www.si.com/soccer/2017/11/03/nasl-us-soccer-court-ruling-injunction-division-2