Relevent Sports, LLC v. U.S. Soccer Fed'n

RELEVENT SPORTS, LLC, Plaintiff, v. UNITED STATES SOCCER FEDERATION, INC., Defendant.

19-CV-8359 (VEC)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

July 20, 2020

OPINION AND ORDER

VALERIE CAPRONI, United States District Judge:

This action stems from Plaintiff's desire to promote Official Season International Soccer Game Events ("Official Games") in the United States. Plaintiff alleges that its attempts to promote these Official Games have been thwarted by Defendant's refusal to sanction them. Specifically, Plaintiff alleges that Defendant has entered into an agreement with the Fédération Internationale de Football Association ("FIFA") and other regional confederations and national associations to refuse to sanction Official Games in the United States and to boycott professional leagues, clubs, and players that participate in unsanctioned Official Games. Defendant moves to compel arbitration or in the alternative to dismiss the complaint. Dkt. 32. For the following reasons, Defendant's motion is GRANTED in part and DENIED in part.

BACKGROUND

The Fédération Internationale de Football Association ("FIFA") is the international federation and world governing body of soccer. Compl., Dkt. 31 ¶ 27. It administers soccer worldwide through its statutes, regulations, and directives. Id. Beneath FIFA organizationally are six regional confederations that oversee soccer at the continental level and assist FIFA in carrying out its regulations. Id. ¶ 29. The Confederation of North, Central and Caribbean Association Football ("CONCACAF") is the regional confederation governing North American soccer. Id. ¶ 30. Beneath the six regional confederations are over two hundred national associations, each of which is authorized to represent FIFA as the governing body for soccer at the national level. Id. ¶¶ 29-31. The United States Soccer Federation ("USSF") is the FIFA-recognized national association for administering and overseeing soccer in the United States. Id. ¶ 31. USSF is a member of CONCACAF. Id. ¶ 30. Pursuant to the authority granted to the United States Olympic Committee by the Ted Stevens Olympic and Amateur Sports Act, 36 U.S.C. § 220501 et seq. (1998), USSF is also the recognized national governing body for soccer in the United States. Id. ¶ 22.

As FIFA's recognized national association for soccer in the United States, USSF has the authority to sanction, on behalf of FIFA, "Official Season International Soccer Game Events" ("Official Games") and "Friendly Games" held in the United States. Id. ¶¶ 31, 33. Official Games are soccer matches that count towards the competing clubs' official league or tournament records; they can be between foreign countries' men's national teams, foreign professional men's soccer clubs, or foreign professional men's soccer clubs and U.S. professional men's soccer clubs. Id. ¶¶ 3-4. By contrast, friendly matches are not part of an official regular season league schedule or an official tournament; in other words, they do not count towards a club's official record. Id.

It is a violation of FIFA statutes for a soccer club to play in the United States without USSF's sanction; USSF has agreed to notify FIFA of any international game that is played in the United States without its sanction. Id. ¶ 33. In addition to obtaining a sanction from USSF, third-party promoters, such as Plaintiff, seeking to organize a game must also obtain approval from (i) each team's national association(s); (ii) each team's regional confederation(s); and (iii) the host country's regional confederation. Buterman Decl., Dkt. 34 Ex. 2, Art. 72 § 2; Ex. 4, Art.6 § 2, Art. 8 § 2; see Compl. ¶ 59. FIFA's approval is also required for certain types of games.¹ Any player who competes in an unsanctioned game risks being deemed ineligible to participate in FIFA-sanctioned competitions, including the FIFA World Cup. Compl. ¶ 60.

Promoters such as Plaintiff may only seek a sanction or organize a game through a FIFA-licensed match agent. Id. ¶ 117; Def. Mem. of Law, Dkt. 33 at 6. The match agent must be a natural person and agree to FIFA's Match Agents Regulations. Buterman Decl., Ex. 3, Arts. 1-3, 6. Plaintiff's match agent is Charlie Stillitano ("Stillitano"). Def. Mem. of Law, Dkt. 33 at 2; Pl. Opp., Dkt. 35 at 9, 13. Through Stillitano, Plaintiff has organized and promoted numerous friendly games in the United States.² See id; Compl. ¶¶ 14-15.

The FIFA Directive

In 2018, Plaintiff announced that it intended to host an Official Game in Miami between two La Liga teams, FC Barcelona and Girona. Compl. ¶¶ 18, 85. In response, FIFA's President, Gianni Infantino, expressed doubt whether FIFA would permit an Official Game to occur outside the teams' home territory. Id. ¶ 85. As a result, the Spanish national association ("RFEF"), CONCACAF, and USSF sought guidance from FIFA on whether the game could occur in the United States, rather than in Spain. Id. ¶ 86. In October 2018, the FIFA Council issued a directive prohibiting the staging of official season games outside of the participant league'shome country (the "FIFA Directive").³ Id. ¶¶ 8, 84, 86, 100. The directive is consistent with FIFA's statutes that require Official Games to take place in the league's home territory absent "exceptional circumstances."⁴ See Buterman Decl. Ex. 2, Art. 73. In order to maintain their status in FIFA, all confederations, national associations, leagues, clubs, and players must comply with FIFA directives; failure to do so may result in expulsion or discipline. Compl. ¶¶ 32, 60, 100; Buterman Decl. Ex. 2, Art. 14. Accordingly, following the announcement of the FIFA Directive, FC Barcelona withdrew its commitment to participate in the match Plaintiff proposed to sponsor in Miami.⁵ Compl. ¶ 93; Def. Mem. of Law, Dkt. 33 at 21 n.25.

In March 2019, Plaintiff, through its match agent Mr. Stillitano, submitted a sanctioning application to USSF, seeking approval to host an Official Game between two Ecuadorian clubs in Miami. Compl. ¶¶ 95-96. Prior to submitting the application to USSF, Plaintiff obtained approval from Ecuador's governing regional confederation, the Ecuadorian national association, and the participating teams' league. Id. ¶ 96. In April 2019, USSF denied Plaintiff's application, explaining that sanctioning the match would violate the FIFA directive prohibiting the staging of Official Games outside the clubs' home territory. Id. ¶ 99.

Plaintiff alleges that USSF's denial of its sanctioning application reflects an anticompetitive agreement with FIFA to limit the output of Official Games in the United States by refusing to sanction Official Games outside of the teams' home territory. See id. ¶¶ 124-33. Plaintiff further claims that USSF entered into an anticompetitive agreement with FIFA and "horizontally competing" regional confederations and national associations to boycott professional leagues, clubs, and players that participate in Official Games without a USSF sanction. Id; Pl. Opp., Dkt. 35 at 1, 39. Finally, Plaintiff alleges that USSF unlawfully exercises its sanctioning authority to enhance the competitive market position of USSF's economic partner, Soccer United Marketing ("SUM"). Compl. ¶ 127. Plaintiff asserts a separate tort claim, alleging that USSF interfered with its existing and prospective business relationships. Id. ¶¶ 134-147.

USSF moves to compel arbitration, or in the alternative, to dismiss Plaintiff's complaint, arguing that Plaintiff's claims are barred by the parties' prior covenant not to sue, that FIFA is an indispensable party, and that Plaintiff has failed to state an antitrust claim. See Dkt. 33.

DISCUSSION

I. Defendant's Motion to Compel Arbitration

USSF argues, in the first instance, that this action is subject to mandatory arbitration. Def. Mem. of Law, Dkt. 33 at 11-15. Specifically, USSF claims that Plaintiff is bound by the terms of the FIFA Match Agent Regulations, which require that any "dispute between a match agent and a national association" be submitted to the "FIFA Players' Status Committee for consideration and resolution." Buterman Decl., Ex. 3, Art. 22. Plaintiff argues, inter alia, that it is not bound by the Arbitration Agreement and that, even if it were, FIFA's arbitral body lacks jurisdiction to rule on its claims. Pl. Opp., Dkt. 35 at 9-13. Although the Court finds that Plaintiff is bound by the Arbitration Agreement, it agrees that FIFA lacks jurisdiction to decidePlaintiff's antitrust claim. Plaintiff's tortious interference claim, however, is subject to mandatory arbitration. Accordingly, Defendant's motion to compel arbitration is granted in part and denied in part.

A. Legal Framework

Section 2 of the Federal Arbitration Act provides that a written agreement to arbitrate "shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2. Section 2 manifests "a liberal federal policy favoring arbitration agreements." Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983). Any "doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration." Id. at 24-25.

B. Plaintiff is Bound By the Arbitration Agreement

Plaintiff does not dispute that Mr. Stillitano agreed to the terms of the FIFA Match Agents Regulations; instead Plaintiff argues that it is not bound by the arbitration clause because it itself is not a party to the Agreement. Pl. Opp., Dkt. 35 at 13. The Court disagrees. As noted supra, promoters, such as Plaintiff, can only seek sanctions and organize matches through a FIFA-licensed match agent. Buterman Decl. Ex. 3, Art. 2. In other words, Plaintiff can only act through Mr. Stillitano; all of its sanctioning applications to USSF have been and must be submitted through him. See Compl. ¶ 95; Def. Mem. of Law at 11. Accordingly, under ordinary principles of agency law, Stillitano functions as Plaintiff's agent and binds Plaintiff to the agreements that ...