The Legal Battle: PGA Tour and LIV Golf
A timeline of events and analysis from actual lawyers.
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Hey Golfers —
The PGA Tour and LIV Golf have been locked in a legal battle since the summer of 2022.
Significant news dropped in the last few weeks. The courts granted the PGA Tour’s motion to add the Public Investment Fund and its governor, Yasir Al-Rumayyan, as defendants in the case.
Here’s a timeline of events:
August 3rd, 2022: Eleven LIV golfers filed an antitrust lawsuit against the PGA Tour in a U.S. District Court in California — titled “Mickelson et al. vs. PGA Tour”.
August 9th, 2022: A judge denied a temporary restraining order to three LIV golfers. The three were seeking to play in the FedEx Cup Playoffs.
September 25th, 2022: Phil Mickelson and other LIV golfers removed themselves from the antitrust lawsuit.
September 29th, 2022: The PGA Tour countersued LIV Golf for allegedly interfering with PGA Tour golfer’s contracts.
October 20th, 2022: The PGA Tour filed a federal lawsuit in the Southern District of New York against the Public Investment Fund and Yasir Al-Rumayyan.
November 22nd, 2022: The Public Investment Fund asked a federal judge in California to quash a request by the PGA Tour to compel their testimony and produce documents — claiming sovereign immunity.
January 24th, 2023: The PGA Tour filed documents to add the Public Investment Fund and Yasir Al-Rumayyan to the suit as co-defendants.
February 17th, 2023: A federal judge ruled that the Public Investment Fund and Yasir Al-Rumayyan aren’t entitled to sovereign immunity and must hand over information related to the case.
February 21st, 2023: The U.S. District Court for the Northern District of California ruled in favor of the PGA Tour — adding the Public Investment Fund and Yasir Al-Rumayyan as co-defendants to the lawsuit.
I am the furthest thing from an attorney — so I asked my friends at Conduct Detrimental to provide their legal analysis. Conduct Detrimental is a leader in writing about sports law — you can read and subscribe to their newsletter here.
John Nucci and Tarun Sharma wrote up the below for us.
Since August 2022, the PGA Tour, LIV Golf, and a handful of LIV players have been involved in two separate but related lawsuits. LIV and certain players are suing the PGA Tour for antitrust violations – arguing that the PGA Tour is trying to stop them from competing – while the PGA Tour is suing LIV for interfering with their contracts.
For months, the PGA Tour has tried to get documents, text messages, emails, and other communications from Saudi Arabia’s Public Investment Fund (PIF) and its governor, Yasir Al-Rumayyan. That information, they argue, will prove that PIF officials purposely tried to convince Tour members to leave the Tour and violate their contracts.
Although they were not initially parties to the case, the PGA Tour has argued that PIF and Al-Rumayyan should have to comply with those requests because that information is necessary for the PGA Tour’s lawsuit. Some of the PGA Tour’s arguments in support of that claim include the following:
PIF is a 93% owner of LIV and responsible for 100% of its funding;
Al-Rumayyan receives a weekly Excel sheet titled “His Excellency Action Tracker” — where he gets detailed reports of the LIV business;
PIF decides which golfers LIV may recruit and how much to pay them;
PIF approves LIV’s media deals, sponsorship, branding, and logos;
Al-Rumayyan approves LIV’s budget, makes key decisions, and participates in player recruitment in the U.S.
In response, Al-Rumayyan and PIF have argued that they are immune from the lawsuit under a federal law called the Foreign Sovereign Immunities Act (FSIA). Although FSIA generally makes foreign governments and officials immune from lawsuits in United States courts, there is a “commercial activity” exception to the law. That exception says that they cannot rely on the protections of FSIA if they are engaged in commercial activity in the U.S. that would otherwise subject them to a lawsuit in U.S. courts.
Last week, a judge sided with the PGA Tour and ruled that PIF and Al-Rumayyan’s actions are squarely within FSIA’s commercial activity exception. A couple of days later, Judge Beth Freeman, who is overseeing the case, also granted the PGA Tour’s motion to add PIF and Al-Rumayyan as defendants in the case. Although they were two separate decisions, they have largely the same effect. Both those parties will have to open up their books, produce their communications, and sit for depositions.
In response, PIF filed an amicus curiae (“friend of the court”) brief, arguing that the judge’s decision to subject PIF and Al-Rumayyan to discovery requests were wrongfully decided. The brief argues for Saudi Arabia’s “significant interest” in enforcing its own laws, which specifically prevent the disclosure of confidential information that would result from the discovery process. The brief characterizes the decision to allow discovery as “an extraordinary infringement on the sovereignty of a foreign state.” PIF’s attorneys asked that Judge Freeman review and overturn Judge van Keulen’s decision, preventing discovery efforts including PIF and Al-Rumayyan, from proceeding.
If the decision is not overturned, the Saudis will have to decide whether to comply with discovery, ignore the requests altogether, or simply drop or settle the case. Interestingly, PIF has already ignored a subpoena to testify in a Tesla fraud trial in the very same court in California.
Ultimately, these new developments make the possibility of settlement more likely than at any point in the case. Saudi Arabia is notoriously secretive, and they will almost certainly not want to produce their documents or communications or have their officials deposed by United States lawyers.
John Nucci is the Chief Golf Correspondent for Conduct Detrimental and a Corporate Associate Attorney in New York. He can be reached via Twitter at @JNucci23 or by email at JNucci57@gmail.com.
Tarun Sharma is a co-host and legal researcher with Conduct Detrimental and M&A Attorney based in Minneapolis, MN. He also co-founded and teaches the Sports & NIL Clinic Program at the University of Minnesota Law School. He can be reached via Twitter @tksharmalaw and on LinkedIn.
So what is next?
Document discovery is supposed to be completed by the end of March. But the PGA Tour is asking for a six-month extension — the Tour claims that the Public Investment Fund and Yasir Al-Rumayyan have taken extraordinary steps to avoid producing a single document or sworn testimony.
A tentative date for summary judgment in the antitrust case is July 23rd. And a trial date is set for January 8th, 2024 — the Tour is looking to push this date back.
Have yourself a great Monday. Talk to you next week!
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