Judge Margo Brodie, US District Court for the Eastern District of New York, ruled last week that the North American Soccer League had not met all the conditions necessary to petition for a temporary injunction to allow them to retain their Division Two sanction from the United States Soccer Federation. Retaining the sanction at this juncture would have allowed the NASL to proceed with 2018 season planning and to adding up to eight new teams to the league.

The NASL charges in their lawsuit that the USSF, Major League Soccer and Soccer United Marketing were participating in a conspiracy to keep competitors or other leagues outside their network of influence from competing in professional soccer. The NASL sought preliminary relief for the duration of the lawsuit so that they might go ahead with the 2108 season, as well as permanent relief from the USSF’s ability to define what constitutes a Division 1, 2 or 3 league as it currently does through the Professional League Standards.

Judge Brodie’s decision rested on her conclusion that NASL counsel was requesting an involuntary injunction – which comes with far more stringent milestones to achieve. The NASL had framed their petition to be requesting the continuation of the current state – an injunction for the status quo.

Judge Brodie, having decided on the nature of the request, moved to test the NASL appeal on the four benchmarks required to meet granting an involuntary injunction. Her ruling indicates that three of the four milestones were met by the NASL, it failed to prove a likely occurrence of the fourth.

From Judge Brodie’s ruling:

“Although the Court finds that Plaintiff has shown [1] irreparable harm, [2] that the balance of hardships tips in its favor, and [3] that an injunction would not harm the public interest, because as set forth below, the Court finds that Plaintiff has not [4] made a clear showing of entitlement to relief, the Court denies Plaintiff’s motion for a preliminary injunction.”

“While there is evidence of a conflict of interest between Defendant and MLS, Plaintiff fails to present sufficient evidence of undue influence in the actual standard-setting process, i.e., the process pursuant to which the PLS is revised.”

 

The NASL released the following statement in response to the ruling:

We are very disappointed with the Court’s decision in denying our motion for a preliminary injunction. We remain steadfast in our pursuit of antitrust claims against the U.S. Soccer Federation and are confident that justice will ultimately be served. In light of the extreme harm this decision poses to the NASL and our teams, players, coaches and fans, we will immediately begin reviewing all of our legal options including the process for appealing today’s ruling.”

 

The NASL earlier this week filed an appeal to the Second Circuit Court in Foley Square, Manhattan. The NASL is likely to challenge Judge Brodie’s decision to use the involuntary injunction standards to determine whether relief was possible.

During the hearing, Jeffrey Kessler, NASL’s chief counsel, went at lengths to discern a distinction between ‘irreparable harm’ and ‘extreme harm’, both key words in the statute.

Were the case to be made that the NASL was experiencing ‘extreme’ harm, separate from irreparable, a lower standard would be used to determine relief. Kessler argued that one can experience irreparable harm that is not ‘extreme’; and that it is reasonable to link the attribute of ‘extreme’ to the event of ‘going out of business’. Judge Brodie’s ruling however, could find little precedent or guidance around defining ‘extreme’ in this manner, and some precedent around finding the words ‘irreparable’ and ‘extreme’ interchangeable. Note the use of the word ‘extreme’ in the NASL’s statement above, as it suggests challenging this finding by the judge will play a role in their appeal.

Following this appeal, the USSF petitioned the court to vacate their motion to dismiss the case, which was granted. The significance of this is possibly to play out the clock, as they retain their right to re-file, and consequently to set a schedule of filings plus the hearing later into the year. It also reduces the scope of any evidence or content that might be used in that appeal, I’m guessing? Hopefully one of our litigator-readers might confirm or deny. It would seem that the optimal point for negotiation for short-term game play would happen after the NASL survives the motion to dismiss and before discovery. The NASL’s chances of surviving a motion to dismiss, judging from the consensus of litigators willing to speak about it publicly, are better than the preliminary injunction or the appeal.

The briefing schedule for the appeal is:

  • November 13th: NASL’s brief is due
  • November 21st:  USSF’s response brief is due
  • December 11th: appeal will be heard sometime this week

What does this mean for the NASL and the Cosmos? No one knows for sure. Many conversations around NISA, either as a D2 or D3 (or both) league being a liferaft for NASL teams, are a popular conversation topic. Peter Wilt last week mused on twitter that NISA could still file for two separate leagues one for each division, but this presumably is not something you just throw at USSF without some forethought. It did not sound like there had been any. Then again, admitting up front that contingency plans were in place would be a detriment to the NASL’s case in its run-up to demonstrate irreparable harm. So the rumors and hope continues.

Another option is submitting an application for D3 sanction. This seems very unlikely, as it directly contradicts NASL testimony. While one assumes the USSF, with so many eyes on it now, wouldn’t say no to a half-completed D3 application from NASL, it doesn’t seem likely to get one.

I believe Rocco when he says he will take this case to the end. He has publicly expressed feeling wronged by the USSF and that he is ready to take this case to its conclusion. He has the resources, and the emotional investment. Also, while some NASL-specific fans might find this hard to hear, the league itself is not as important as an entity as it is a vehicle for changing the American soccer regulatory landscape. Some of the richer owners (perhaps not Jacksonville Armada’s) might consider leaving a team fallow for a period of time until the lawsuit completes. The NASL could go out of business, while a new league could be stood up relatively quickly in response to a new regulatory schema. Were the USSF’s mostly-unilateral ability to manage standards mitigated or broken, I imagine a great deal of interest would arise to circumvent the MLS/USSF chokehold on professional American soccer.

Cosmos Country however doesn’t want to see a fallow season. We want our Boys in Green take the pitch in 2018. For our sakes, and for all the families and other fans out there wanting to see their team play, I hope something happens before the year is out. I don’t want another Christmas Miracle, but fate finds our preferences, at best, amusing.

 

 

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