Pospisil v. ATP Tour, Inc.

Background

Professional tennis players and the Professional Tennis Players Association brought a proposed class action against ATP Tour, Inc. (ATP), WTA Tour, Inc., the International Tennis Federation Ltd., and the International Tennis Integrity Agency Ltd. The complaint alleges that the defendants violated federal antitrust laws by fixing player compensation, restricting players’ participation in competing tours and tournaments, limiting competition from other tournament operators, and abusing anti-doping and anti-corruption programs. The complaint asserts claims under Sections 1 and 2 of the Sherman Act and a state common-law unjust-enrichment claim.

Before the proposed class was certified, the plaintiffs asked for relief under Federal Rule of Civil Procedure 23(d). They alleged that ATP officials had contacted potential class members to oppose the lawsuit, had sought signatures on a statement saying players did not support the litigation, and had communicated or helped spread concerns that players could lose compensation, pensions, or benefits because of the lawsuit. The plaintiffs requested restrictions on communications by all defendants, disclosure of prior communications, preservation of communications, and permission to send a corrective statement.

Court’s analysis

Rule 23(d) permits a court to supervise communications with potential class members when communications may be misleading, coercive, or harmful to the fairness of a class action. The court emphasized that any restriction must be based on specific findings and must limit speech no more than necessary.

The court found that ATP-member players were vulnerable to economic pressure. It described ATP as a membership organization that organizes and administers men’s professional tennis tournaments and controls rules, rankings, tournament eligibility, and certain benefits. The court also noted ATP bylaws allowing the Board to take action against a member who acts contrary to ATP’s best interests, as well as rules concerning eligibility for benefits and litigation costs. The court found that these circumstances could make players fear economic or professional consequences for supporting the lawsuit.

The court found that ATP, through Board member Luben Pampoulov, had approached two players at the Miami Open about a position statement saying that the signers were not Professional Tennis Players Association members and did not support the lawsuit. ATP conceded that Pampoulov approached the players but disputed that he pressured or threatened them. The court gave little weight to evidence that ATP officials had specifically threatened to reduce players’ wages or pensions, because much of that evidence was hearsay or not based on firsthand knowledge.

Even so, the court concluded that ATP’s conduct could reasonably have appeared coercive or misleading. It found that asking players to sign a statement opposing the lawsuit could discourage participation and could cause players to misunderstand whether signing affected their legal rights. The court also found that the statement’s wording could mislead players into thinking that not belonging to the Professional Tennis Players Association affected their ability to participate in the case. The court stated that ATP’s subjective intent did not resolve the risk created by the relationship between ATP and its members.

Relief granted and denied

The court granted in part and denied in part the plaintiffs’ motion. It granted relief only as to ATP, not all defendants. The court ordered that:

- ATP may not directly or indirectly retaliate, or threaten retaliation, against an ATP-member potential class member for considering or deciding to participate in the lawsuit. - ATP must distribute the court’s corrective notice to all potential class members who are ATP members. The notice must explain that the lawsuit exists, that signing ATP’s position statement did not waive any right to participate and has no legal effect on potential-class-member status, and that ATP is prohibited from retaliation or threats of retaliation. - ATP must preserve communications related to its efforts to communicate with players about the litigation. - ATP must file a letter confirming distribution of the corrective notice within seven business days of the order.

The court denied the broader request to prohibit ATP from communicating with players about any aspect of their participation in the case. It also denied the request requiring ATP to disclose all prior communications with potential class members. The court concluded that those requests were not narrowly tailored and that the evidence did not establish a specific act or threat of retaliation by an ATP representative. The Clerk of Court was directed to terminate the plaintiffs’ motion.