Shields v. Fed'n Internationale De Natation

649 F.Supp.3d 904

Thomas A. SHIELDS, et al., Plaintiffs, v. FEDERATION INTERNATIONALE DE NATATION, Defendant.

International Swimming League, Ltd., Plaintiff, v. Federation Internationale de Natation, Defendant.

Case No. 18-cv-07393-JSC

Case No. 18-cv-07394-JSC

United States District Court, N.D. California

Signed January 6, 2023

Brette Tannenbaum, Pro Hac Vice, Paul, Weiss, Rifkind, Wharton & Garrison LLP, New York, NY, Neil A. Goteiner, Erik Christopher Olson, Hilary Caryn Krase, Farella Braun & Martel LLP, San Francisco, CA, Randall Scott Luskey, Meredith Richardson Dearborn, Paul, Weiss, Rifkind, Wharton & Garrison LLP, San Francisco, CA, William A. Isaacson, Pro Hac Vice, Paul, Weiss, Rifkind, Wharton & Garrison LLP, Washington, DC, for Plaintiff International Swimming League, Ltd.

Jeanifer Ellen Parsigian, Winston and Strawn LLP, San Francisco, CA, Erik

Christopher Olson, Neil A. Goteiner, Hilary Caryn Krase, Farella Braun + Martel LLP, San Francisco, CA, Jeffrey L. Kessler, Pro Hac Vice, Johanna Hudgens, Pro Hac Vice, Winston & Strawn LLP, New York, NY, for Plaintiffs Thomas A. Shields, Michael C. Andrew, Katinka Hosszu.

Christopher S. Yates, Daniel Murray Wall, Aaron T. Chiu, Colleen Elise Heyler, Latham & Watkins LLP, San Francisco, CA, for Defendant.

ORDER RE: MOTIONS FOR SUMMARY JUDGMENT

Re: Case No. 18-cv-07393-JSC, Dkt. Nos. 316, 317, 318, 320, 321, 325, 326, 327, 333, 334, 337, 340, 346, 347, 351, 352; Case No. 18-cv-07394-JSC, Dkt. Nos. 355, 356, 357, 358, 359, 363, 364, 368, 370, 371, 377, 383, 384, 387, 390, 393, 399, 408, 409.

JACQUELINE SCOTT CORLEY, United States District Judge

Thomas A. Shields, Michael C. Andrew, and Katinka Hosszú (the individual "Plaintiffs") are professional swimmers who bring federal antitrust claims and a state law tort claim against the Fédération Internationale de Natation ("FINA"), related to FINA's control over international swimming competitions. (Dkt. No. 83.)¹ Plaintiffs represent a Rule 23(b)(2) injunctive relief class and seek damages on their own behalf. (Dkt. No. 299.) In a related case, the International Swimming League, Ltd. ("ISL"), a rival organizer of swimming competitions and buyer of swimmers' services, brings its own federal antitrust claims and state law tort claim against FINA. (Case No. 18-cv-07394-JSC, Dkt. No. 100.)

Before the Court are FINA's motions for summary judgment against Plaintiffs and ISL, (Dkt. No. 321; Case No. 18-cv-07394-JSC, Dkt. No. 364); Plaintiffs' and ISL's joint motion for summary judgment against FINA, (Dkt. No. 325; Case No. 18-cv-07394-JSC, Dkt. No. 371); and related motions to file under seal, (Dkt. Nos. 317, 318, 320, 326, 327, 333, 334, 337, 340, 346, 347, 351, 352; Case No. 18-cv-07394-JSC, Dkt. Nos. 363, 368, 370, 377, 383, 384, 387, 390, 393, 399, 400, 408, 409). Having carefully considered the briefing, and with the benefit of oral argument on October 20, 2022, the Court GRANTS FINA's motions for summary judgment, DENIES Plaintiffs' and ISL's joint motion for summary judgment, and disposes of the sealing motions below.

BACKGROUND

FINA is a Swiss organization recognized by the International Olympic Committee as the governing body for international and Olympic aquatic sports: swimming, open water swimming, diving, high diving, water polo, artistic swimming, and masters. (Dkt. No. 322 ¶¶ 7-8, 11.) FINA develops rules for aquatic sports, keeps world records, holds and sanctions international competitions, and manages aquatics competitions at the Olympics. (Id. ¶¶ 8-10.) FINA sets the qualifying criteria for swimmers to participate in the Olympics and recognizes only qualifying times from competitions held or sanctioned by FINA. (Dkt. No. 329-76 at 23 (By Law ("BL") 9.3.6.4); Dkt. No. 329-75 at 3 (General Rule ("GR") 1.1).)

FINA's members are 209 national federations. (Dkt. No. 322 ¶ 12.) Its governance structure includes the Bureau (25 members), the Executive (8 members), and the General Congress (two voting delegates from each of 209 member federations). (Dkt. No. 329-3 at 10 (Constitution ("C") 13); Dkt. No. 322 ¶¶ 16-19.) Member federations must comply with FINA rules, ensure their swimmers comply with FINA rules, and enforce penalties levied by FINA against swimmers and other member federations. (Dkt. No. 329-74 at 4 (C 3.12), 7 (C 8.2.1-6), 10 (C 12.5); Dkt. No. 329-75 at 5 (GR 4.5); Dkt. No. 87 ¶ 43; Dkt. No. 322 ¶ 14.) Member federations may designate "national governing bod[ies]" specific to a sport. (Dkt. No. 329-3 at 6 (C 7.1, 7.2, 7.6).) For example, United States Aquatic Sports, Inc. is the American member federation and USA Swimming, Inc. is the American governing body for swimming, although USA Swimming has operated as the de facto American member federation. (Dkt. No. 323 ¶ 5.)

FINA keeps a calendar of international competitions, the asserted purpose of which is to prevent scheduling conflicts, to ensure swimmers have many opportunities to compete, and to apply FINA rules consistently. (Dkt. No. 322 ¶¶ 20-21.) FINA holds its own international competitions, which are automatically included on its calendar and conducted according to FINA's rules. (Id. ¶ 25.) Member federations may also hold international competitions on their own or in partnership with independent organizations. (Id. ¶ 52.) To do so, they must seek FINA's approval six months in advance. (Dkt. No. 329-76 at 87 (BL 12.3); Dkt. No. 322 ¶¶ 25-26.) If FINA approves and sanctions the competition, it is included on FINA's calendar and the results can potentially be used for Olympic qualification. (Dkt. No. 322 ¶¶ 33, 52.) FINA has no approval authority over (1) intra-national competitions in which swimmers and clubs do not represent a member federation, or (2) international competitions held by independent organizations without involvement from FINA or its member federations.² (Dkt. No. 329-76 at 87 (BL 12.1, 12.3); Dkt. No. 322 ¶¶ 30, 32; Dkt. No. 323 ¶¶ 18-23.)

In 2017, ISL sought to enter the market for international swimming competitions and compete with FINA. (Dkt. No. 329-14; Dkt. No. 329-15 at 9-11; Dkt. No. 329-16 at 7-9.) ISL approached FINA to discuss sanctioning ISL's competitions, but the two did not reach an agreement. (Dkt. No. 329-15 at 11-14.)

In 2018, ISL began negotiating with member federations, including USA Swimming, British Swimming, and the Italian Swimming Federation, to host international competitions in partnership with ISL. (Dkt. No. 320-13 at 4; Dkt. No. 320-18 at 3; Dkt. No. 329-22 at 2; Dkt. No. 329-23 at 2; Dkt. No. 329-30 at 3; Dkt. Nos. 329-26, 329-56, 329-57.) In June 2018, FINA sent a memorandum to all member federations about "a so-called international competition 'International Swimming League,' which FINA does not recognise":

We recommend and require that our National Federations respect and apply [ ] FINA Rules, including: . . .

• BL 12.3 "All Continental and regional Organisations and Member[ ] Federations shall seek approval from FINA for any International Competition to be organised or sanctioned by them.["]

• C 7.5 "Each Member shall acknowledge in its national rules that FINA is the only recognized body in the world which governs Aquatics internationally".

• C 8.2.1 "All members are obliged to support FINA in its efforts to achieve its objectives".

• GR 4.1 "No affiliated Member shall have any kind of relationship with a non-affiliated or suspended body".

. . . For the sake of clarification, [ISL] is neither recognised by nor affiliated to FINA. Further, FINA has neither sanctioned the competitions organised by this entity, nor approved their sanction by other FINA bodies . . . .

Consequently, the competitions of [ISL] are not FINA sanctioned nor FINA approved. They are not part of the international calendar. The results and record achieved in these competitions are not and will not be recognised.

FINA will assess the development of this matter and will consider art. GR 4 and BL 12, as and where appropriate.

We hope this will help all FINA [member federations] to have a clear and mutual understanding of FINA's competence and jurisdiction in respect to international competitions. It is in the interest of all Members and other organisations of the FINA Family to maintain a proper structure of the sport, securing development at all levels and ensuring safe, proper and equal conditions for the competitors in all FINA aquatic disciplines.

(Dkt. No. 329-35 (emphasis added).)

As reflected in the memo, in 2018 GR 4.1 prohibited member federations from having "any kind of relationship with a non-affiliated or suspended body" unless, as set forth in GR 4.4, FINA authorized the relationship. (Dkt. No. 329-4 at 5.) At the same time, GR 4.5 provided that any "individual or group" violating GR 4 "shall" be "suspended by the affiliated Member [federation] for a minimum period of one year, up to a maximum period of two years." (Id.; see Dkt. No. 329-38 at 2 (USA Swimming specifically noting GR 4.5 in response to June 2018 memo citing GR 4); Dkt. No. 320-6 at 12-13 (July 2018 FINA Executive meeting noting GR 4.5 in discussion of ISL).) After FINA's June 2018 memo, several member federations stopped negotiating with ISL. (Dkt. No. 320-20 at 2 ("[W]anted to update you on ISL . . . . British Swimming won[']t be staging an event this year — because of the FINA situation."); Dkt. No. 329-37 at 2 ("before USA Swimming can commit to taking part, we need to get an assurance from ISL and from FINA (in writing) that FINA is on board"); Dkt. No. 329-39 at 2 (British Swimming "can't afford to take risks with our core purpose of delivering medals at the Olympic Games").)

The Italian Swimming Federation continued negotiating with ISL about a December 2018 event in Turin. In October 2018, FINA sent another memo to member federations:

[T]he competition to be held in Torino (Italy) on 20th - 21st December 2018 is not recognised by FINA.

Based on the interpretation of FINA Rule BL 12.3 confirmed by the FINA Bureau, this competition is an International

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