Shields v. Federation Internationale De Natation

Background

The plaintiffs are professional swimmers Thomas A. Shields, Michael C. Andrew, and Katinka Hosszú. They brought federal antitrust claims under Sections 1 and 2 of the Sherman Act and a state-law claim for tortious interference with prospective economic relations against the Fédération Internationale de Natation, or FINA. They alleged that FINA used its control over Olympic swimming and qualifying events to restrict relationships with swimming competitions that FINA did not approve, including events organized by the International Swimming League, and threatened sanctions against swimmers and national federations.

The plaintiffs sought to represent swimmers who signed contracts to participate in International Swimming League events from January 1, 2018, through the date of trial. They proposed both an injunction class under Federal Rule of Civil Procedure 23(b)(2) and damages subclasses under Rule 23(b)(3). The requested injunction would prohibit FINA from unlawfully interfering with outside swimming competitions or sanctioning swimmers and member federations for participating in them.

Rule 23(a) analysis

The court found that the proposed class satisfied numerosity because it included more than 200 swimmers, making it impractical to join everyone individually. It also found commonality and typicality because the claims presented shared questions about whether FINA’s communications and conduct were anticompetitive, whether FINA monopolized or attempted to monopolize relevant markets, and whether the conduct injured competition and the swimmers.

The court reached different conclusions on adequacy of representation. For the proposed damages class, it found that the structure of International Swimming League competitions created fundamental conflicts among class members. A swimmer’s prize money could depend on whether she was selected to compete, her performance, her club’s performance, and the performance of other swimmers and clubs. Each swimmer therefore could have to argue that other class members would not have earned the same money. The plaintiffs had not proposed a damages method that would fairly allocate the alleged lost compensation among all swimmers.

The court also found that the funding of the plaintiffs’ case by International Swimming League founder Konstantin Grigorishin created a risk that the plaintiffs would be influenced by International Swimming League’s interests, which were not fully aligned with the damages class. The court considered Andrew and Hosszú’s ownership interests in International Swimming League club teams another adequacy concern, but concluded that those interests did not alone disqualify the three plaintiffs from representing the damages class because Shields was not a club owner.

For the injunction class, the court found no comparable conflict. The compensation structure did not affect whether swimmers shared an interest in stopping alleged interference with outside competitions. The court also found that Andrew and Hosszú’s ownership interests did not meaningfully distinguish their interests concerning injunctive relief, which would affect them in their capacity as swimmers. The court concluded that the plaintiffs and Winston & Strawn could adequately represent the injunction class.

Rule 23(b)(3) damages class

The court separately analyzed predominance and superiority for the proposed damages class. It found that common questions concerned whether FINA violated the antitrust laws and whether FINA’s conduct caused International Swimming League events, prize money, and appearance fees to be reduced. But determining which swimmers would have received money in a hypothetical world without FINA’s conduct would require individualized proof about each swimmer’s selection, performance, and club results.

The court also found that a class action was not the superior method for resolving the damages claims. The individualized and conflicting questions about injury and damages would make the case difficult to manage, and the court found no apparent efficiency gain from treating it as a class action. These findings provided additional reasons not to certify the damages class.

Rulings on the motions

The court GRANTED in part and DENIED in part the motion for class certification. It GRANTED the motion to certify the Rule 23(b)(2) injunction class and DENIED the motion to certify the Rule 23(b)(3) damages class. Winston & Strawn LLP was appointed as class counsel for the injunction class.

The court DENIED FINA’s motion to file supplemental materials. It also GRANTED in part and DENIED in part the parties’ administrative motions to file documents under seal, determining that some materials containing compensation, personal financial, business-plan, revenue, contract-negotiation, privilege-log, or settlement information were sealable, while other materials were not sealable because the required showing or filing was missing. The order stated that this disposition resolved the listed docket entries and scheduled a further case-management conference.