NASL v. USSF: Arguments from court hearing and judge's key ruling

After two and a half hours of arguments in the NASL's lawsuit against U.S. Soccer, Federal judge Margot K. Brodie  said she will make a ruling later this week on the NASL's request for a mandatory injunction to reserve U.S. Soccer's decision not to maintain the NASL's Division 2 sanctioning.

Here are some of the highlights from the hearing:

In a potentially decisive ruling, Judge Brodie ruled on Sunday that the "status quo" she was being asked to rule on was the U.S. Soccer's board of directors' decision on Sept. 1 not to grant the NASL Division 2 status for 2018, not the NASL's Division 2 status for 2017.

The issuance of a mandatory injunction -- ordering U.S. Soccer to change the status quo and overturn the BOD ruling -- is a much rarer ruling by a court than a prohibitory injunction -- ordering U.S. Soccer to maintain the status quo -- and generally carries a higher burden of proof: "a clear showing" the NASL will win its case for the abolishment of divisional standards or "where extreme or very serious damage" will result from the denial of the mandatory injunction.

In essence, U.S. Soccer is arguing the NASL has struggled to meet U.S. Soccer's sanctioning standards with the turnover of clubs in recent years and should not turn to the court for relief.

The NASL's position:

-- The sanctioning standards -- Professional League Standards -- are arbitrary and aren't pro-competitive;
-- A conspiracy between U.S. Soccer and MLS via its business relationships (Soccer United Marketing) impeded the NASL;
-- Conflicts of interest on the 15-person board of directors extend beyond the individual members who recused themselves on pro sanctioning and have tainted the entire board.

Some of the arguments related to the key elements for an injunction:

The NASL's position, as argued by its well-known sports litigator Jeffrey Kessler, is that it won't survive being "relegated" to Division 3.

The USSF's response from its principal outside counsel Russ Sauer: Just saying it's going out of business isn't enough to prove harm and any harm to the NASL has been self-inflicted. Also: USL clubs have succeeded at the Division 3 level.

U.S. Soccer is counting on the court's preference to defer to a governing authority's expertise on administrative matters and stresses the harm to that authority U.S. Soccer would be caused if its sanctioning decision was overturned by the court. It argued its activities were exempt from antitrust scrutiny under the Stevens Act, which gave authority to national governing bodies to regulate their sports.

The NASL's response: It did not dispute U.S. Soccer's authority on many soccer matters, but disagrees in this case, its disfavoring the NASL because of its commercial ties to MLS via SUM.

Judge Brodie, who was born in St. Kitts & Nevis, has admitted she knew nothing about soccer but was a fast learner, a quality of Federal judges delving into complex antitrust cases involving obscure business markets. One possibility she raised was to hold off on a decision and hear from those who have made declarations, trying to get at the heart of the matter: will the NASL really fold if it isn't a Division 2 league?

Among the facts that came out:

-- U.S. Soccer's board of directors voted 9-1 in favor of the decision to not sanction the NASL as a Division 2 league for 2018. The lone vote in favor of the NASL came from USASA president John Motta. Five board members recused themselves because of conflicts.

-- The expansion San Francisco Deltas will not return in 2018, and North Carolina FC, the only NASL team remaining from the 2010 USSF D-2 Pro League, will join the USL.

-- NASL clubs lost an average of $5 million in 2016.

Legal teams:
NASL (Winston & Strawn):
David G. Feher, Heather Lamberg-Kafele, Mark Edward Rizik, Jr., Jeffrey L. Kessler.
USSF (Latham & Watkins): Christopher S. Yates, Lawrence Edward Buterman, Russell F. Sauer, Adam Shamah.

15 comments about "NASL v. USSF: Arguments from court hearing and judge's key ruling".
  1. Kent James, November 1, 2017 at 8:33 a.m.

    Unless there is promotion/relegation, what difference does the "status" of the league make?

  2. Bob Ashpole replied, November 1, 2017 at 10:26 a.m.

    None except in the minds of potential buyers, investors, advertisers, broadcasters and concerned politicians. It certainly has no impact on the field.

    After creation of a viable 1st division, perhaps the next milestone in raising the game in the US will be the professionalization and commercialization of Division 2 soccer in the US.  A 20 team 1st division employs only about 500 professional players. (1st division club reserve teams should be considered lower division teams and are an important contribution to lower division play.) To significantly expand the opportunity for professional play, growth is needed below the 1st division. 

    While relegation and promotion makes sense for improving competition in areas dense with professional clubs and facilities, it makes no sense from a business perspective or either way in an isoloated market with only one team or in a small market with multiple teams. The best team simply may not be good enough on the field or strong enough financially to succeed.     

  3. Bob Ashpole replied, November 1, 2017 at 11:16 a.m.

    On the density issue, the Great Briton is a large island while the US is a large piece of a continent and Hawaii and other islands.  The US is approximately 42 times larger than Great Britan, not to mention that Hawaii is 2,390 miles from California and Alaska is about 900 miles from Washington state. Great Briton consists of one major island (Wales, Scotland and England). Distance increases time and money costs.

  4. Chuck Adams, November 1, 2017 at 10:35 a.m.

    Are these standards fair 

  5. Bob Ashpole replied, November 1, 2017 at 10:45 a.m.

    Fairness is usually the issue regarding application of standards in specific instances. "Are standards reasonable?" is the more typical question about standards.

  6. Paul Cox replied, November 1, 2017 at 5:49 p.m.

    Most national federations have standards for teams and leagues. USSF has, in my opinion, given too much leeway on the standards and should simply set reasonable standards and then leave it at that.

  7. R2 Dad replied, November 4, 2017 at 2:09 p.m.

    Depends on who is enforcing those standards, Chuck. "The USSF said its "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," adding that the decision to revoke the NASL's Division II status "was made in the best interest of soccer in the United States." I'm pretty sure Sunil's goals, priorities to decision revoke would be different than Wynalda's.

  8. Bob Ashpole, November 1, 2017 at 10:41 a.m.

    Promotion and relegation were origninally a feature of amateur club soocer in England. The Football League formed a second division in 1892 and that is when promotion and relegation began. In other words, it began as a necessity for improving league competition and not as a business device. 

    I don't see MLS wanting to form a 2nd division, especially since MLS is a business and the primary source of profit obviously is to increase TV broadcast revenues. Those profits would come from expanding 1st division competition, not from creating a 2nd division league competing with NASL and USL when they can instead field teams in the existing leagues.  

  9. Scott Johnson, November 1, 2017 at 1:47 p.m.

    So the league featuring the guy pushing hard for pro/rel is arguing in court that it will go out of business if it is "relegated"?


  10. Fire Paul Gardner Now, November 4, 2017 at 12:26 p.m.

    Seems like it hasn't been reported anywhere but NASL's request for an injunction was denied.  Highly unlikely it gets reversed on appeal.  Nice knowing you NASL.  

  11. Bob Ashpole replied, November 4, 2017 at 1:54 p.m.

    Thanks FPGN. I hadn't seen that reported anywhere. Didn't take the judge long to decide.

  12. R2 Dad replied, November 4, 2017 at 2:21 p.m.

    Both you guys are missing the point here. This is just the injunction--it has no bearing on how a  lawsuit would resolve, since the bar is set very high by the court. Essentially, there has to be proof of collusion/corruption BEFORE any discovery. In lieu of a smoking gun just lying around in plain sight, it's very difficult to get this kind of relief without a trial. The trial could still go forth, NASL could still win, but time is not on their side and without a change at the top (ie USSF election in February) it's unlikely NASL can survive at D3. I'm just glad that everyone can see that Sunil is so ready to flush the NASL teams that don't align themselves with MLS/USL. At the end of the day, this is all about exerting power to maintain the status quo that has failed us and a prime reason to elect anyone but Sunil in the upcoming election.

  13. Fire Paul Gardner Now replied, November 4, 2017 at 4 p.m.

    The NASL has failed itself with its business model which relied heavily on nostalgia for a Cosmos brand that barely anyone under the age of 50 is aware of.  Most of the NASL teams (other than poorly conceived teams like the SF Deltas) will just join USL so the loss of this clown league is a positive because it will streamline the lower divisions.  Ultimately we need strong lower divisions before pro/rel is a possibility.  

  14. Scott Johnson replied, November 4, 2017 at 10:48 p.m.

    This has long been a chicken-and-egg problem with lawsuits of this sort.  Often times, a plaintiff cannot prove its allegations (or show that a preponderance of the evidence supports its position, the standard in civil cases) without discovery--but simply making allegations that the other side is acting in bad faith is not sufficient to win discovery.  You have to have more than accusations before you get to go fishing.

    At any rate, this is still the injunction phase.  There is still more pleadings, and possibly a trial to get through.  That said, if NASL wants to allege conspiracy, it will probably have to do better than merely demonstrate motive.

  15. Bob Ashpole replied, November 5, 2017 at 8:55 a.m.

    I think some of you may be confusing federal preliminary injunctions with temporary restraining orders. Applications for TROs may be filed when the complaint is filed and typically is resolved in a few days. Plaintiff's decide the timing on motions for preliminary injunctions with regards to discovery. The judge controls when the motion for preliminary injuntion is heard, and the hearing may be combined with the trial of the case. 

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