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LIV Golfers PGA Tour Antitrust Lawsuit Federal Court – Sportico.com

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A court hearing on Tuesday will mark the first US legal test of the emergence of LIV Golf and the PGA Tour’s efforts to counter its new rival.

Talor Gooch, Hudson Swafford and Matt Jones are three of 11 golfers who sued the PGA Tour last Wednesday, arguing that the Tour’s nearly two-year suspensions and $100,000 fines imposed on LIV golfers violate federal antitrust law. The Tour is described as an illegal monopsony, using unparalleled control over elite golfers to pay them less and exclude potential competitors. Gooch, Swafford and Jones separately filed a 35-page motion for a temporary restraining order (TRO). On Monday, lawyers for the Tour filed a 32-page brief opposing the motion. The Tour accuses the trio of having “manufactured” a legal emergency by waiting two months to sue, during which they “accepted millions of LIV”.

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If granted, the TRO would require the Tour to let golfers participate in the FedEx Cup Playoffs, a three-tournament competition that begins this week with the FedEx St. Jude Championship at TPC Southwind in Memphis. The hearing is scheduled for Tuesday at 1:00 p.m. PT before San Jose Federal Judge Beth Lasbon Freeman.

It is usually difficult for a party to get a TRO; the Department of Justice has described TROs as “extraordinary remedies” where the requesting party “must meet a heavy burden”. The three golfers must convince Judge Freeman that they will suffer irreparable harm – that is, an injury that money cannot later repair – if they are denied a chance to compete in the FedEx Cup . They must also establish a likelihood of winning on the merits and convince Freeman that an injunction would serve the public interest. That’s a lot to show for, and with the FedEx Cup starting this week, Freeman has a limited window to weigh the arguments.


Breaking Down LIV Golfers’ Three Arguments

The trio, whose lead attorney is antitrust expert Rachel Brass of Gibson Dunn & Crutcher, acknowledges that they have agreed to follow Tour regulations as part of their membership. These regulations, the motion admits, “expressly provide [commissioner Jay Monahan] the power to interpret and apply the regulations as it sees fit [and] discretionary authority over player discipline. But Gooch, Swafford and Jones say the disciplinary process prohibits arbitrary punishment, requires notice of disciplinary investigation and disciplinary action, and guarantees the ability to appeal. An appeal usually postpones the imposition of a suspension until the appeal is decided.

Here, the three golfers say, their suspensions were abruptly extended from March 31, 2023 to March 31, 2024 “when at that time they were already suspended by the Tour”. They claim the “rolling suspension scheme” of the Tour. . . works as an effective career ban,” and that the Tour failed to follow its own rules in imposing suspensions pending appeals.

The trio also claim that the Tour has applied its own rules inconsistently. “Never before,” the motion charges, “has the Tour imposed extended or lifetime bans on playing in concurrent events.” Instead, the Tour is described as “regularly granting permission to golfers to play with promoters” who are not considered “a competitive threat.” This alleged dynamic poses antitrust concerns, as Tour members are independent contractors and, unlike NFL, NBA, MLB and NHL players, they have not collectively negotiated eligibility rules. with their league. The motion cites age eligibility cases in the NBA (Spencer Haywood vs. NBA) and NWSL (Olivia Moultrie vs. NWSL) to argue that anti-competitive restraints on labor that is not in a bargaining relationship unreasonably restricts trade.

Golfers also maintain that the Tour stifles competition by serving as “the primary means for professional golfers to qualify for the Majors”. No other golf league “offers the Tour’s combination of large tournament prize money, opportunities to earn Official World Golf Ranking points, public exposure and endorsement deal prospects.” Golfers cite the antitrust cases of Ed O’Bannon and Shawne Alston to argue that the Tour’s unparalleled control over elite professional golf is analogous to the NCAA’s unparalleled control over elite college football and basketball.

Gooch, Swafford and Jones insist that the Tour is “artificially lowering player salaries”, a position they attempt to corroborate by claiming “in response to the entry of LIV Golf, the Tour announced salary increases players totaling over $235 million.” Once the Tour faces more competition, golfers tell him, he becomes more willing to pay market-based compensation. The trio describe LIV as more egalitarian, paying each participating golfer instead of limiting pay to those who make a tournament cut.

Golfers identify several categories of harm they would suffer if they did not have the chance to play in the FedEx Cup. They would be denied the chance to qualify for the 2023 Majors and rack up points to qualify for other ‘top tier tournaments’. Gooch, Swafford and Jones also cite loss of revenue opportunity and “irreparable loss to customer base, reputation and brand”. The relative brevity of a professional athlete’s career is also relevant, according to the trio, since “even a short-term player suspension” inflicts damage. To this end, they cite the Haywood NBA case in which a court found that an ineligible player could “suffer an irreparable injury” in the form of deterioration in “physical condition, skill and coordination”. caused by the absence of “high-level competition”. Golfers further insist that consumers and golf fans are better off seeing a more competitive playing field in the FedEx Cup.

To boost their business, the trio highlights Gilder vs. PGA Tour, where golfers successfully won a TRO against a Tour rule that banned clubs with U-shaped grooves. The United States Court of Appeals for the Ninth Circuit found that golfers losing their choice of club could negatively impact their game and, in turn, cause these golfers irreparable harm as they become less likely to qualify for tournaments. Gooch, Swafford and Jones argue that suspensions are even more damaging since they “prevent complainants from playing”.

Breaking down the PGA Tour rebuttals

The Tour has retained a top legal team, including Elliot Peters, a former federal prosecutor who successfully defended Lance Armstrong against False Claims Act allegations, and a trio of senior Skadden Arps attorneys: Patrick Fitzgerald, who in the 2000s successfully sued Scooter Libby. (chief of staff to Vice President Dick Cheney) in the Plame case, and Anthony Dreyer and Karen Lent, both of whom have long represented major professional leagues in intellectual property and antitrust cases.

The Tour briefing points out that Gooch, Swafford and Jones were suspended on June 9, then “sat” to go to court until just before the start of the FedEx Cup. The Tour therefore paints golfers as self-engineering, an unnecessary emergency that Judge Freeman and the justice system must resolve.

The Tour also points out that the golfers knowingly breached their contractual obligations to the Tour to “accept multi-million dollar payments” which the Tour denounces as “a bunch of money provided by LIV.” The Tour then wonders why there is a crisis when four of the other 11 complaining golfers are also qualified to play in the FedEx Cup but, unlike Gooch, Swafford and Jones, are not seeking TROs.

The Tour further insists that the human rights interests of the American public weigh against granting a TRO. “LIV”, accuses the brief, “is not a rational economic player, in fair competition to start a golf circuit. He is willing to lose billions of dollars to take advantage of plaintiffs and the sport of golf to “sportswash” the Saudi government’s deplorable reputation for human rights abuses.

Additionally, the Tour disputes the golfers’ procedurally based claim that the Tour broke its own rules. The Tour points out that its regulations “empower the commissioner to immediately suspend serial offenders like TRO complainants, and to uphold those suspensions for their ongoing violations pending their appeals.” According to the Tour, all three golfers have voluntarily agreed to play under Tour rules, which are neither new nor hidden and which explicitly give Monahan discretion, including the right to immediately suspend a member’s playing privileges until at the end of the disciplinary process.

The Tour also returns the independent contractor’s argument about golfers, noting that golfers can leave the Tour at any time, without violating a non-competition clause or otherwise; several other golfers, including Dustin Johnson and Sergio Garcia, have done just that. The Tour points out that Gooch, Swafford and Jones chose, alone, to join a rival league in exchange for more money. The Tour also cites case law where courts have allowed sports leagues, including non-union ones like the US Tennis Association, to deny their players the ability to play in other leagues.

Likewise, the Tour uses LIV’s promise of success against the idea that the Tour can be described as a monopsony. “In its first year alone,” the brief exclaims, “LIV has built a Tour that directly competes with the PGA TOUR, has more financial resources than the TOUR, and offers more guaranteed money to players than round.” This begs the question, if the Tour truly dominates the elite golf market, why are golfers being paid more and guaranteed to play LIV?

Finally, the Tour dismisses claims of irreparable harm as ignoring the requirement that such harm cannot be repaired with money. The Tour says the alleged damages are “fundamentally economic” as they relate to income, endorsements and other money-related matters. The Tour also singles out TRO cases where the athlete cannot play to note that “the plaintiffs themselves argue that they can still compete at an elite level at LIV golf tournaments.”

Judge Freeman could indicate at the end of the hearing how she will decide. Although she’s keeping the parties guessing, she’ll probably issue a written order within a few days. The loser could attempt to appeal their decision to the Ninth Circuit, but appellate courts generally refuse to hear what are called “interlocutory appeals,” that is, appeals before a case is decided on the merits. Chances are Freeman will have the final say on whether Gooch, Swafford and Jones will play in the FedEx Cup.

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