NASL loses appeal for preliminary injunction against U.S. Soccer -- what are its options?

The North American Soccer League lost the appeal of the decision in U.S. District Court, where it was denied a preliminary injunction seeking to maintain Division 2 sanctioning for 2018 while its lawsuit against the U.S. Soccer Federation continued.

The decision by a three-judge panel for the U.S. Court of Appeals for 2nd Circuit came more than two months after it heard oral arguments in the NASL v. USSF case and more than three months after the initial decision was handed down in U.S. District Court in Brooklyn.

The decision was not unexpected, given the judicial discretion appeals courts give lower court decisions. And it has nothing to do with the underlying antitrust suit the NASL filed against the USSF that should go forward except to the extent that the NASL did not make a "clear showing" that it would win that case.



What about the underlying case? That doesn't mean that the NASL can't win the case or that evidence might not be presented that will bolster what one legal expert otherwise believes might be a difficult case to win.

The Court of Appeals seemed to have sympathy for the Professional League Standards the USSF implemented and the NASL has been attacking, and it asserted that U.S. Soccer's conflict of interest policies regarding board deliberations on pro soccer matters or matters related to SUM would make it difficult to prove there was a conspiracy against the NASL, absent direct or circumstantial evidence.

What is the state of the NASL? The reality is that the NASL continued to fall apart since it sought the preliminary injunction to keep it going as a Division 2 league.

When the lawsuit was filed in September, the NASL was finishing up its 2017 season with eight teams and had two more teams planned for the 2018 season. Since then, the 2017 champion San Francisco Deltas and FC Edmonton folded, and North Carolina FC and Indy Eleven moved to the USL.

The four holdovers are the New York Cosmos, Jacksonville Armada, Miami FC and Puerto Rico FC. The NASL had plans to add two teams for the 2018 season: 1904 FC in the San Diego area and Orange County-based California United FC. Facing stadium issues, 1904 FC has not announced plans to play in 2018.

In one form or another, Jacksonville, Miami FC and California United FC have plans to enter teams in the NPSL or UPSL.

The NASL announced plans in January to switch to a fall-spring calendar, keeping its split season. It issued no statement on its Web site or Twitter account following Friday's release of the U.S. Court of Appeals decision. Indeed, it has not posted anything on its Web site or Twitter account since before the U.S. Soccer presidential election on Feb. 10.

What are the NASL's legal options?
The NASL could seek to ask for the appeal to be reheard by all the 2nd Circuit judges or it could file a writ of certiorari to the Supreme Court -- both are generally longshots -- though both seem moot points, given the unlikelihood of a Division 2 NASL league playing any time soon.

(The one lingering issue from the decisions of both the District Court and Court of Appeals is why they did not consider the "extreme harm" NASL faced if a preliminary injunction wasn't granted to be sufficient to issue the injunction.)

The NASL could go ahead with its antitrust lawsuit back in District Court, where it would have to first fight off a motion to dismiss by the USSF. It seeks a permanent injunction to eliminate U.S. Soccer's divisional structure, allowing leagues to operate without designations and without the Division 1 classification that, the NASL argues, gives MLS an advantage.

The NASL has also filed a civil suit against members of the USSF's board of directors for breach of their fiduciary duties to the NASL in the handling of the sanctioning decision. It is seeking injunctive, monetary -- not less than $100 million -- and declaratory relief.

The NASL could also settle, though that seems unlikely at this point unless it somehow involves a resolution of the case against members of the USSF's board of directors in New York state court. Any victory in District Court on divisional designations alone would at this point be something of a Pyrrhic victory.

8 comments about "NASL loses appeal for preliminary injunction against U.S. Soccer -- what are its options?".
  1. Bob Ashpole, February 24, 2018 at 12:35 p.m.

    Good article. I have one comment.

    "That doesn't mean that the NASL can't win the case or that evidence might not be presented that will bolster what one legal expert otherwise believes might be a difficult case to win." 

    That "one legal expert" is usually the same one the decides which party wins the case. Unless something significantly changes from the presentation on the motion, logically one should expect the judge to rule consistently. 

    The majority of lawsuits are not resolved by judges. They are resolved by the parties through agreement. Think what losing a motion like this and then an appeal does to the plaintiff's barganing position. That is an important significance to these events. 

  2. R2 Dad, February 24, 2018 at 9:13 p.m.

    If USSF is honest, they have to ask themselves why two NASL teams would rather shut down than transfer to USL. What is that telling us about the state of soccer in 2018? Shouldn't USSF care about teams/fans in Edmonton and San Fran? And if they don't, shouldn't they? There is a tendency to think of team ownership as the driving force of the sport, but in most of the world it's the fans that have the final say. If you act like sheep, you will be treated like sheep.

  3. Rob Lepley replied, February 25, 2018 at 6:09 p.m.

    R2 Dad, with San Francisco, even before the end of the season there was rumblings that they wouldn't be back the following season to financial losses that they had in their first season. And for Edmonton it was probably a combination issue of financial losses and the long term goal of playing in the upcoming  Canadian league that will probalby start in 2019. 

  4. R2 Dad replied, February 27, 2018 at 1:43 p.m.

    Rob, that sounds like you're excusing USSF from any responsibility, which in my view is incorrect. San Francisco Deltas finally sold out Kezar and won the league--they and their fans should be rewarded by USSF and encouraged to grow, not punished because they're affiliated with the "wrong" league. That is the kind of BS parochialism that hurts the sport. Soccer clubs are businesses and like all businesses they like stability so they can plan ahead. Once MLS co-opted USL there was never going to be a scenario where USSF would support the NASL business model because they were already in bed with MLS/SUM. Yes, NASL preferrred shooting themselves in the foot, but why are leagues in a position where they have to justify their existence based on projected growth rates? Why does USSF specifically ignore soccer "quality"? This isn't Wall Street, this is sports. but somehow in this country we're happy to disenfranchise teams and their fans for essentially poliitcal reasons.

  5. Bob Ashpole replied, February 28, 2018 at 12:25 a.m.

    R2 Dad: The USSF does not exist to reward fans.

    The purpose of the USSF is stated in USSF By Law 102. It is not a fan organization. It would still exist if there were no fans at all since only it's professional league members depend directly and indirectly on fans for revenues. Millions of participants play without "fan" support. USSF's purpose is to promote the sport and provide for development of players, coaches, officials, and administrators. 
     

  6. R2 Dad replied, February 28, 2018 at 2:39 p.m.

    eats shoots and leaves.

    edit:
    San Francisco Deltas finally sold out Kezar and won the league--they (and their fans) should be rewarded by USSF and encouraged to grow, not punished because they're affiliated with the "wrong" league.

    Ironically, USSF's purpose is supposed to promote the sport, but they only seem to be able to promote MLS/SUM/FIFA. That was the resounding feedback from the election--the sport is much bigger than just MLS and the Nats, and should be treated as such.

  7. Jeff Callan, February 25, 2018 at 11:45 a.m.

    I don't understand why NASL, if it is viable as a league, doesn't continue playing regardless of what "division" it is assigned by US Soccer.  There is no pro-rel currently, so what difference does it make what "division" your league is in?  If the league was viable, just go play.  Who cares if they call you Division 5?  The division designation without pro-rel is meaningless.  Go put a good product on the field.  Get advertisers and get fans to buy tickets.  If you do those things you can be successful regardless of what "division" you are in.  Divisions are meaningless until we have pro-rel like a real soccer-playing country.

  8. Bob Ashpole replied, February 26, 2018 at 1:35 a.m.

    Why would you say "if". NASL's litigation position is that the league is not viable without a waiver of the Division 2 minimum requirements. Which they don't have. NASL has consistently failed to meet the minimum Division 2 requirements. 

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