Jones v. PGA Tour, Inc.

Background

The plaintiffs, including Matt Jones, Bryson DeChambeau, Peter Uihlein, and LIV Golf, Inc., brought antitrust and related claims against PGA TOUR, Inc. The PGA Tour later filed a counterclaim against LIV alleging tortious interference with contract and amended that counterclaim to add the Public Investment Fund of the Kingdom of Saudi Arabia (PIF) and His Excellency Yasir Othman Al-Rumayyan as counterdefendants.

Before PIF and HE Al-Rumayyan became counterdefendants, the PGA Tour served subpoenas requiring them to appear for depositions and produce documents at the New York City office of the PGA Tour’s counsel. PIF and HE Al-Rumayyan moved to quash the subpoenas, arguing, among other things, that PIF had sovereign immunity, HE Al-Rumayyan had common-law foreign-official immunity, the court lacked personal jurisdiction, and international comity principles weighed against enforcement. They also challenged the subpoenas under Federal Rule of Civil Procedure 45.

The magistrate judge quashed the deposition portions solely because the PGA Tour had not tendered the required witness fees, while allowing re-service with those fees. The magistrate judge otherwise denied the motion to quash, but modified the subpoenas to permit compliance in Riyadh, Saudi Arabia, and narrowed the document requests to reduce burden.

Review standard

The district court treated the magistrate judge’s order as a nonbinding recommendation on a dispositive matter and reviewed the specific objections de novo, meaning independently and without deference. The court did not conduct a wholesale new review of every issue because only specific objections trigger that review.

PIF’s sovereign immunity

The Foreign Sovereign Immunities Act generally protects foreign states and their agencies from jurisdiction in United States courts unless a statutory exception applies. The court agreed with the magistrate judge that PIF qualified as a foreign state for purposes of the Act, but that the commercial-activity exception applied.

The relevant exception covers acts outside the United States connected to commercial activity that cause a direct effect in the United States. The court concluded that PIF’s activities in founding, funding, overseeing, and operating LIV were substantial commercial acts that directly affected the United States. The court relied on evidence that PIF helped create a competing professional golf league in the United States and provided financial incentives for golfers to enter exclusive contracts with LIV, affecting the PGA Tour’s contractual relationships.

The court rejected PIF’s argument that the analysis had to focus on the “gravamen” of the claims. It explained that this requirement applies to a different part of the commercial-activity exception, while the provision at issue focuses on whether the foreign conduct caused a direct effect in the United States. The court also rejected PIF’s request to limit discovery on a claim-by-claim basis and concluded that the commercial-activity exception applied to both the main action and the counterclaim.

HE Al-Rumayyan’s immunity

The court rejected HE Al-Rumayyan’s claim of common-law conduct-based immunity. Although the magistrate judge found that he met the three factors for that form of immunity, the magistrate judge also concluded that his conduct fell within a commercial-activity exception. The district court agreed that an official acting for a sovereign cannot claim immunity when the sovereign itself is not immune because of its commercial activity.

The district court also found an independent reason to reject immunity: HE Al-Rumayyan did not satisfy the requirement that exercising jurisdiction would enforce a rule of law against Saudi Arabia. The court explained that this requirement can apply when a judgment would bind the foreign state, draw on its treasury, force it to take specific action, or concern solely political acts. Those circumstances were not present because the PGA Tour sought information about a golf league.

Personal jurisdiction

The court upheld the magistrate judge’s conclusion that PIF and HE Al-Rumayyan had sufficient minimum contacts with the United States. The court found that each had purposefully directed activities toward the United States related to establishing, funding, overseeing, and operating LIV, and that the claims and counterclaim related to those contacts. The court rejected the argument that the magistrate judge improperly attributed LIV’s conduct to PIF or failed to analyze PIF’s and HE Al-Rumayyan’s contacts separately.

Supplemental Saudi-law materials

The magistrate judge had denied a request for additional briefing and materials concerning Saudi law because the request came after an unjustified delay. The district court agreed that the magistrate judge did not err in excluding the materials on that ground. The district court nevertheless reviewed the materials itself and considered them in evaluating the international-comity arguments.

International comity

International comity is the consideration given to another country’s laws and interests when deciding whether to enforce a United States discovery request. Applying the factors used by the Ninth Circuit, the court concluded that comity did not require quashing the narrowed subpoenas. The requested information was directly relevant, was not all available from LIV, and concerned golf-related commercial activity in the United States. The court found that PIF and HE Al-Rumayyan had not shown that disclosure under the subpoenas would threaten national security or expose them to criminal enforcement under Saudi law.

The court also concluded that United States interests were significant because PIF intended to benefit from the United States market by launching a professional golf league involving United States-based players and tournaments and competing with the PGA Tour.

Service agreement and disposition

The court rejected the objection that the magistrate judge lacked authority to permit the PGA Tour to re-serve the subpoenas with witness fees under the existing service agreement. PIF and HE Al-Rumayyan had not cited legal authority showing that the magistrate judge lacked that discretion.

The order states: “PIF and HE Al-Rumayyan’s motion for relief from the magistrate judge’s Order DENIED.” The order also terminated docket entry 306. The magistrate judge’s earlier ruling therefore remained in effect, including the quashing of the deposition portions based on missing witness fees, the ability to re-serve those portions with the fees, and the modified document and compliance provisions.