Relevent Sports, LLC v. United States Soccer Federation, Inc.

Background

Relevent Sports, LLC sought to promote “Official Season International Soccer Game Events” in the United States. These games count toward the participating clubs’ official league or tournament records. Relevent alleged that the United States Soccer Federation, Inc. refused to sanction such games because FIFA had issued a directive stating that official league games must be played within the participating league’s home territory.

Relevent also alleged that the Federation had agreed with FIFA and other soccer organizations to restrict the number of official games held in the United States and to boycott leagues, clubs, and players involved in unsanctioned games. Relevent brought an antitrust claim under Section 1 of the Sherman Act and a tortious-interference claim concerning its business relationships.

The Federation moved to compel arbitration or, alternatively, to dismiss the complaint. It argued that Relevent was bound by an arbitration provision in FIFA’s Match Agent Regulations because Relevent acted through its FIFA-licensed match agent, Charlie Stillitano.

Arbitration ruling

The court held that Relevent was bound by the arbitration agreement. Although Relevent itself had not signed the agreement, Stillitano acted as Relevent’s agent, and Relevent could organize and seek approval for games only through him. Under agency principles, the court concluded that Stillitano’s agreement bound Relevent.

The court denied the motion to compel arbitration as to the antitrust claim. It concluded that FIFA’s arbitration body lacked authority to decide claims under United States antitrust law. The court therefore allowed the antitrust claim to remain in federal court for purposes of the ruling on the motion to dismiss.

The court granted the motion to compel arbitration as to Relevent’s tortious-interference claim. It found that this claim was a dispute between a match agent and a national association covered by the arbitration agreement. The court noted that arbitration might require additional procedural steps, including possible substitution of Stillitano as the opposing party, but it compelled arbitration in the first instance. Litigation regarding Count II was stayed, and the parties were ordered to provide joint quarterly updates about the arbitration.

Antitrust dismissal

A Section 1 Sherman Act claim requires facts plausibly showing an agreement among separate parties to restrain trade. The court held that Relevent had not adequately alleged either a vertical agreement between the Federation and FIFA or a horizontal agreement among the Federation and other soccer organizations.

Regarding the alleged vertical agreement, the court held that the Federation’s compliance with FIFA’s directive, without additional facts, did not show that the Federation had agreed with FIFA to restrict output. The court also found that Relevent’s allegations about a conspiracy among the Federation, FIFA, regional confederations, national associations, leagues, and teams were too general and did not identify who agreed with whom, what they agreed to do, or when they reached an agreement.

The court further held that similar compliance with the FIFA directive would not violate Section 1 if it resulted from independent decisions rather than an agreement, even if the conduct had anticompetitive effects. Because Relevent had not adequately alleged an agreement, the court granted the Federation’s motion to dismiss the antitrust claim.

The court also explained that, even if Relevent had adequately alleged an agreement, FIFA would be a necessary and indispensable party to any request for an injunction requiring official games to be approved. The court stated that joining FIFA would be infeasible because the complaint did not establish personal jurisdiction over FIFA, and a judgment without FIFA would not adequately resolve the dispute. The court did not need to decide the Federation’s separate arguments concerning a prior covenant not to sue or FIFA’s status as an indispensable party because it dismissed the antitrust claim for failure to state a claim.

Disposition

The court granted in part and denied in part the Federation’s motion to compel arbitration. It granted the motion as to the tortious-interference claim and denied it as to the antitrust claim. It granted the motion to dismiss the antitrust claim, dismissed Relevent’s complaint without prejudice, and permitted Relevent to move for leave to amend Count One by September 1, 2020. If Relevent did not seek leave to amend, it was required to show cause by that date why the entire case should not be dismissed without prejudice for lack of subject-matter jurisdiction. Judge Valerie Caproni directed the clerk to close the motion at docket entry 32.