United States District Court, E.D. New York
MEMORANDUM & ORDER
K. BRODIE UNITED STATES DISTRICT JUDGE.
North American Soccer League, LLC (“NASL” or
“Plaintiff”) filed the above-captioned action on
September 19, 2017, alleging violations of Section 1 and
Section 2 of the Sherman Antitrust Act. (Compl., Docket Entry
No. 1.) On September 20, 2017, Plaintiff moved for a
preliminary injunction, seeking a Division II designation for
the duration of this litigation. (Pl. Mot. for Prelim. Inj.
(“Pl. Mot.”), Docket Entry No. 3; Pl. Mem. in
Supp. of Pl. Mot. (“Pl. Mem.”), Docket Entry No.
3-1.) Defendant United States Soccer Federation, Inc.
(“USSF” or “Defendant”) opposed the
motion on October 16, 2017, and Plaintiff replied on October
23, 2017. (Def. Opp'n to Pl. Mot. (“Def.
Opp'n”), Docket Entry No. 27; Pl. Reply to Def.
Opp'n to Pl. Mot. (“Pl. Reply”), Docket Entry
No. 30.) The Court heard oral arguments on October 31,
2017. Although the Court finds that Plaintiff
has shown irreparable harm, that the balance of hardships
tips in its favor, and that an injunction would not harm the
public interest, because as set forth below, the Court finds
that Plaintiff has not made a clear showing of entitlement to
relief, the Court denies Plaintiff's motion for a
NASL is a men's professional soccer league located in the
United States and Canada. (Compl. ¶ 2.) NASL formed in 2009
when several teams broke away from the United Soccer Leagues,
another men's professional league, due to differing
visions. (Id. ¶ 77; Stefan Szymanski Decl. in
Supp. of Pl. Mot. (“Szymanski Decl.”) ¶ 76,
Docket Entry No. 3-3.) At that time, the United Soccer
Leagues consisted of two divisions, USL First and Second
Divisions (“USL-1” and “USL-2”
respectively). (Sunil K. Gulati Decl. in Supp. of Def.
Opp'n to Pl. Mot. (“Gulati Decl.”) ¶
113, Docket Entry No. 26-1.) After the formation of the NASL,
the remaining teams in the United Soccer Leagues later
created the current existing United Soccer League Pro
(“USL”). (Id.) From its inception, NASL
has been organized under a club-centric model with each
individual team retaining ownership and decision-making
power. (Compl. ¶¶ 9, 77.)
USSF is a non-profit, membership organization which serves as
the governing body for soccer in the United States.
(Id. ¶ 16; Pl. Mem. at 1.) USSF asserts that it
derives its authority to govern professional soccer from
Fédération Internationale de Football
Association (“FIFA”), a private international
soccer federation. (Compl. ¶¶ 16, 59.) USSF also
serves as the national governing body for U.S. Olympic and
amateur soccer under the Ted Stevens Olympic and Amateur
Sports Act (“Stevens Act”). (Id. ¶
59 n.3.) In both capacities, USSF's stated mission is to
“make soccer, in all its forms, a preeminent sport in
the United States and to continue the development of soccer
at all recreational and competitive levels.” (Steven R.
Peterson Decl. in Supp. of Def. Opp'n to Pl. Mot.
(“Peterson Decl.”) ¶ 44, Docket Entry No.
26-6.) The USSF membership is divided primarily into four
categories: (1) a Youth Council, representing the interests
of youth soccer; (2) an Adult Council, representing the
interests of amateur soccer; (3) a Professional Council,
representing the interests of professional leagues that are
members of USSF; and (4) an Athlete's Council,
representing soccer athletes. (Gulati Decl. ¶ 33.) These
four councils, along with a few other eligible voters, make
up the National Council, the legislative body of USSF.
(Id. ¶¶ 32-35.)
adopts, amends and applies the Professional League Standards
(“PLS”), a set of requirements for professional
soccer leagues seeking Division I, II, or III designation in
the United States. Similar to the structure of the National
Collegiate Athletic Association (“NCAA”),
Division I status is the most desirable. (See Pl.
Mem. at 2.) Division I status signifies the highest level of
competition and overall status, conferring several
competitive and financial benefits, including better
positioning in international competitions and higher-quality
sponsorships. (Compl. ¶¶ 41, 62- 63.) NASL asserts
that USSF adopted and applied the PLS in a discriminatory
manner as part of a conspiracy to entrench Major League
Soccer, LLC (“MLS”), a men's soccer league
with longstanding ties to Defendant, and USL as the sole
Division I and II soccer leagues in the United States,
respectively. (Id. ¶¶ 2, 4, 7, 23,
Development of MLS and ties to USSF
“football” or soccer has had a long, troubled
history in the United States. While USSF itself was initially
formed in 1913 in part in combination with the American
Football Association, an organization “compromised
principally of professional leagues and teams, ”
professional soccer leagues in the United States have failed
to maintain lasting success. (Gulati Decl. ¶¶ 48,
69.) Until the 1990s, there were numerous leagues and teams,
with the original North American Soccer League
(“Original NASL”) being most
prominent. (Id. ¶ 48; Compl. ¶
70.) Formed in 1968, the Original NASL folded in 1984,
leaving a void in top-tier professional soccer leagues in the
United States. (Compl. ¶ 70; Gulati Decl. ¶ 48.)
1988, FIFA awarded USSF the right to host the 1994 FIFA World
Cup in the United States. (Gulati Decl. ¶ 50.) In
exchange, FIFA demanded that USSF “facilitate the
development of a sustainable first division outdoor
professional men's soccer team.” (Id.
¶ 50; Compl. ¶¶ 71-72.) With this mandate,
USSF eventually formed World Cup USA 94 (“USA
94”), a separate legal entity, which was tasked with
establishing first division professional soccer in the United
States. (Gulati ¶¶ 52-54.) After review of plans
submitted by three groups, the USSF Board of Directors (the
“Board”) selected Major League Professional
Soccer, Inc. (“MLPS”), an entity backed by Alan
I. Rothenberg, the then-President of USSF, to develop the
league. (Id. ¶¶ 54, 90; Compl.
¶¶ 71-74.) After the 1994 World Cup, MLPS was
reorganized into MLS. (Gulati Decl. ¶ 58.) With the help
of a five-million-dollar loan from the United States Soccer
Foundation, an entity created to manage the assets generated
from the 1994 World Cup, MLS began league play in 1996.
(Id. ¶¶ 56-59, 65; Compl. ¶ 74.)
Given soccer's lack of popularity in the United States,
USSF prioritized “stability and the avoidance of
consumer confusion” in helping MLS take hold. (Gulati
Decl. ¶ 64.) Thus, USSF made a conscious decision
“to not sanction any other league as a first division
(Division I) men's professional outdoor league until MLS
had finished its second full season in 1997 - to give it a
‘runway' of sorts.” (Id. ¶ 64.)
MLS began league play with ten teams in 1996 and has operated
continuously as a Division I league. (Id. ¶ 65;
Compl. ¶ 21.) In contrast to NASL, MLS began play under
a single-entity structure, reserving ownership and management
power in the league itself. (Compl. ¶ 75.)
USSF have also maintained a business relationship, most
notably through Soccer United Marketing (“SUM”),
the marketing affiliate for MLS. (Id. ¶¶
22, 32; Gulati Decl. ¶ 227.) In 2004, after
“negotiations that were conducted at arms-length, [and]
were lengthy and occasionally testy, ” USSF granted SUM
sponsorship and broadcast rights to the Men's and
Women's National Team games over which it
controls. (Gulati Decl. ¶ 229.) These rights
were then “bundle[d]” with MLS' rights to
obtain a much more lucrative sponsorship and broadcast deal
than MLS and Defendant could have gained standing alone.
(Id. ¶ 230.) SUM negotiated an eight-year, $720
million broadcasting agreement with ESPN in 2014 for
USSF's and MLS' joint package to run through 2022.
(Compl. ¶ 106.) In 2015, USSF extended its marketing
relationship with SUM for another eight-years. (Gulati Decl.
History of PLS and governance structure of USSF
were first developed in 1995, a year prior to MLS'
inaugural season. (Id. ¶¶ 74, 78.)
“The Division I PLS were adopted in 1995 and the
Division II and III PLS were adopted in 1996.”
(Id. ¶ 78.) The PLS were revised in 2008, 2010
(for only Division II) and in 2014. (Id. ¶ 78;
Szymanski Decl. ¶ 63.) There were also proposed changes
in 2015 that were never implemented due to objections by
NASL. (Gulati Decl. ¶ 78.)
2008, the Professional League Standard Task Force (the
“Standard Task Force”) has been responsible for
reviewing and proposing amendments to the PLS. (Id.
¶ 79.) The Standard Task Force is comprised of
individuals that USSF believes are “familiar with
professional soccer, ” excluding Board members and
others “then-associated with any professional
leagues.” (Id. ¶ 79.) The Standard Task
Force's recommendations are first submitted to the
“then-existing” professional leagues for review
and comment. (Id. ¶ 80.) After reviewing the
comments provided by the leagues, the Standard Task Force
provides the Board with a final set of proposed amendments.
(Id. ¶ 80.) The Board then reviews and votes on
the proposals, but excludes from voting all members who have
a “then-current relationship” with any
professional leagues. (Id. ¶ 81.)
at least 2009, USSF has required professional leagues to
apply annually for a divisional designation. (Id.
¶ 108.) As part of this process, the leagues must submit
an “annual report, ” including “the status
of compliance” with the PLS, requests and reasons for
any waivers if necessary, and a plan to fully comply.
(Id.) These reports and applications are submitted
to the Professional League Task Force (the “Application
Task Force”) for review. (Id. ¶ 109.)
After review, the Application Task Force submits its
recommendation for approval or denial to the Board.
(Id. ¶ 111.)
Board, which ultimately votes on amendments to and
applications of the PLS, consists of fifteen directors.
(Id. ¶ 43.) The Board is comprised of a
cross-section of soccer interests in the United States,
including representatives of athletes, amateurs, and
professionals. (Id.) The National Council elects
three independent directors, in addition to the USSF
President and Vice President. (Id. ¶¶
43-44.) The professional leagues officially have two votes on
the Board in the form of the Chairman of the Professional
Council and one additional Professional Council delegate.
(Id. ¶ 43.) Given the voting structure of the
Professional Council, which considers the number of teams and
season attendance at games for each league, MLS has had the
voting power to control who represents the Professional
Council on the Board. (Compl. ¶ 17; Roger Pielke, Jr.
Decl. in Supp. of Pl. Mot. (“Pielke Decl.”)
¶¶ 32, 58, Docket Entry No. 30-25.) Plaintiff
asserts that MLS has thus controlled the official
recommendations made by the Professional Council to the Board
with regard to its divisional designation. (Compl. ¶
17.) Plaintiff also contends that given the personal ties
between USSF and MLS, the latter has been able to exert
influence on the Board in a more informal manner.
(Id. ¶¶ 18-19.)
Amendments to the PLS
operated in its original form from 1996 to 2008. (Gulati
Decl. ¶ 78.) In 2008, however, Sunil Gulati, the
then-USSF President, asked Burton Haimes, a Board member
elected by the Youth Council, to form the Standard Task Force
to “revisit” the standards. (Id. ¶
82.) After review, the Standard Task Force proposed
amendments to the “time zone requirement” which
had previously required Division I leagues to operate in at
least three time zones and Division II leagues to do so in at
least two time zones. (Id.) The proposed change
required the time zones be “in the continental United
States.” (Id.; Compl. ¶ 125.) The
proposal was adopted by the Board after review and comment by
the then-existing professional leagues. (Gulati Decl. ¶
2010, in response to the “issues created by NASL and
USL-1, ” Gulati appointed another Standard Task Force
to revisit the Division II PLS. (Id. ¶ 90.)
This time the Standard Task Force recommended that the
Division II PLS be revised to require “each team to
post a $750, 000 performance bond, with a league maximum of
$15 million, ” to cover the cost of a team's
operations in case it defaulted mid-season. (Id.
¶ 91.) The individual team bond could be reduced to
$500, 000 and the league maximum to $10 million if all the
teams agreed to make the bonds joint and several.
(Id.) These proposals were adopted by the Board.
(Id. ¶ 93.)
in “late 2012, ” USSF decided to take a more
“comprehensive review” of the PLS because
“the sport of soccer [had] beg[u]n to experience growth
and momentum.” (Id. ¶ 94; Steven Davidoff
Solomon Decl. in Supp. of Def. Opp'n to Pl. Mot.
(“Solomon Decl.”) ¶ 73, Docket Entry No.
26-7.) However, before changes were implemented, NASL
announced expansion plans in mid-2013. (Compl. ¶ 134.) A
few months later, on November 18, 2013, USSF officially
announced that it would be revising the PLS. (Id.)
While the Standard Task Force proposed a number of
amendments, those most relevant to this dispute are as
follows: (1) increasing the minimum number of teams from ten
to twelve, with fourteen required by year three in Division
I; (2) requiring teams to occupy three time zones in the
continental United States, specifically for the first time in
the Eastern, Central and Pacific time zones in Division I and
Division II (after six years in operation); and (3) requiring
each team to have a “principal owner” with an
individual net worth of at least $40 million dollars, in
addition to the existing $70 million combined net worth and
$1 million per-team performance bond
requirements. (Id. ¶¶ 136-43;
Gulati Decl. ¶ 96.) These proposals were provided to all
the then-existing professional leagues for review and
comment. (Gulati Decl. ¶ 97; Nov. 18, 2013 USSF Memo re:
PLS, annexed to Gulati Decl. as Ex. 9.) In response, Bill
Peterson, the then-Commissioner of NASL sent USSF a letter
focusing primarily on Division II PLS that were adopted in
2010, asking for a reduction in the performance bond
requirements for NASL teams and the league as a whole.
(Id. ¶ 98; Nov. 27, 2013 NASL Letter re: PLS,
annexed to Gulati Decl. as Ex. 10.) Without any further
comments from the NASL, the proposed amendments were adopted
by the Board on February 28, 2014. (Gulati Decl. ¶ 99;
Compl. ¶ 136.)
the amendments in 2014, Gulati and USSF believed more changes
were necessary as early as December 2014. (Compl. ¶ 147;
Gulati Decl. ¶ 101.) Gulati “expressed 
concern” that the grant of too many waivers “to
NWSL, NASL, and USL” were having a
negative impact on the credibility of the PLS. (Gulati Decl.
¶ 101.) Accordingly, Gulati “ask[ed] the Standard
Task Force to once again look at strengthening the
standards.” (Id.) But before any amendments
were proposed, NASL submitted a Division I application to
USSF for the first time on May 31, 2015. (Compl. ¶ 146.)
A few weeks later, on June 24, 2015, the Standard Task Force
recommended a number of changes, the most relevant to this
dispute are as follows: (1) increasing the minimum team
requirement from twelve to sixteen for Division I; (2)
strengthening the market size requirement so that
seventy-five percent of the league's teams had to play in
metropolitan markets of at least 2, 000, 000 people, doubling
the previous 1, 000, 000 people requirement for Division I;
(3) increasing the combined net worth requirement from $70 to
$80 million per team for Division I; and (4) requiring each
league to present annual plans for expansion and growth.
(Id. ¶¶ 147-54; Gulati Decl. ¶ 104.)
In response to these proposed changes, NASL submitted a
letter that largely mirrors the Complaint in this dispute.
(Gulati Decl. ¶ 141; July 23, 2015 NASL Letter re: PLS,
annexed to Gulati Decl. as Ex. 18.) Following NASL's
letter, the amendments were never submitted to the Board and
never adopted. (Gulati Decl. ¶ 105.)
Challenges to the application of the PLS
has had designs to compete with MLS in Division I from the
very beginning of its existence. (See Compl.
¶¶ 126-27.) Despite such expectations, NASL first
applied for Division II sanctioning for the 2010 season after
breaking away from the United Soccer Leagues. (Id.
¶ 129; Gulati Decl. ¶ 114.) At the same time, the
teams remaining in USL-1 also applied for a Division II
designation. (Id.) The Application Task Force found
both applications lacking, including the failure of both
leagues to meet the minimum eight team requirement. (Gulati
Decl. ¶ 116.) Both leagues were thus denied an
independent Division II sanction for the 2010 season and
instead were allowed to compete jointly in 2010 as a USSF-run
league under a Division II designation. (Compl. ¶¶
applied for an independent Division II sanction for the 2011
season. (Gulati Decl. ¶ 118.) Despite NASL's failure
to comply with all of the PLS Division II requirements, the
Board approved the Application Task Force's
recommendation to grant NASL “provisional”
membership and sanction as a Division II league.
(Id.) This provisional status was revoked, however,
after questions arose regarding the financial viability of
several NASL teams. A month after USSF revoked NASL's
Division II designation, the NASL re-applied, despite failing
to comply with the PLS. (Id.) The Board again
granted NASL a “provisional” Division II status
for the 2011 season. (Id. ¶¶ 120, 125.)
During this time, USSF granted USL Division III status.
(Id. ¶ 119.)
2011, Plaintiff applied to change its
“provisional” Division II status to full
membership. Despite NASL's failure to comply with the
PLS, the Board adopted the Application Task Force's
recommendation to grant the application with various waivers.
(Id. ¶¶ 126-27; Compl. ¶ 134.) At the
same time, the Board re-sanctioned MLS as a Division I league
and USL as a Division III league, both without any waivers.
(Gulati Decl. ¶ 127.)
following year, in 2012, the Board again granted NASL's
application for Division II status with the necessary
waivers. (Id. ¶¶ 128-29.) At the same
time, the Board re-sanctioned MLS with a single waiver and
re-sanctioned USL without any waivers. (Id. ¶
129.) In contrast, in 2013, NASL's application was
granted without any waivers while MLS and USL were each
approved with the need for several team waivers.
(Id.) In 2014, the Board re-sanctioned MLS without
any waivers and sanctioned both NASL and USL with several
team waivers. (Id.)
31, 2015, NASL submitted its first and only application for
Division I status. (Compl. ¶ 146; Gulati Decl. ¶
137.) In its application, NASL asserted that it satisfied all
Division I standards except for those that it deemed
illegitimate and anticompetitive. (Compl. ¶ 146; Gulati
Decl. ¶ 138.) NASL thus requested waivers for the
requirements it did not meet. (Compl. ¶ 146.) On October
30, 2015, NASL sent a letter to USSF again reiterating its
request for a Division I sanction. (Gulati ¶ 149; Oct.
30, 2015 NASL Letter re: PLS and Division I Sanction, annexed
to Gulati Decl. as Ex. 24.) USSF responded on November 6,
2015 by stating that it would consider NASL's letter as a
request for necessary waivers to obtain a Division I
sanction. (Gulati Decl. ¶ 150.) NASL later requested an
opportunity to give a presentation to the Application Task
Force on the merits of its application, including the
illegitimacy of the parts of the PLS it did not meet,
eventually making its presentation on December 5, 2015.
(Id. ¶¶ 155-56; Nov. 23, 2015 NASL Letter
re: Application Task Force, annexed to Gulati Decl. as Ex.
30.) On January 13, 2016, the Board granted NASL the
opportunity to plead its case for Division I sanctioning to
the Board. (Id. ¶ 163.) At the same time as the
discussion over the PLS, the parties were also regularly
communicating about NASL's relationship with Traffic
Sports USA, Inc. (“Traffic Sports”), an entity
with “substantial ownership interest in the [NASL] as
well as a financial interest in several NASL teams.”
(Id. ¶¶ 124, 144.) Traffic Sports had been
indicted for “racketeering, conspiracy, money
laundering and fraud” a few days before NASL had
submitted its Division I application. (Id.) After
discussion and negotiation on both issues, the Board finally
voted to reject NASL's Division I application on March 8,
2016. (Id. ¶¶ 169-70.) The
Board had previously already approved Division II sanctioning
for NASL with the necessary waivers on December 6, 2015.
(Id. ¶ 158.)
2015, NASL only requested a Division II sanction in 2016,
seeking three waivers. (Id. ¶ 185; Compl.
¶ 179.) NASL had suffered several setbacks in 2016,
including the defection of several teams to the USL, and
financial difficulty for others. (Gulati Decl.
¶¶ 176, 180-81.) There was concern that NASL would
struggle to field an eight team league for 2017.
(Id. ¶¶ 180, 189.) Given these issues,
representatives for the NASL requested that the Board delay
its consideration of the divisional status of the NASL.
(Id. ¶ 187.) Due to these and other concerns,
the Application Task Force recommended that NASL's
application for Division II status be rejected. (Id.
¶ 195; Compl. ¶ 179.) During this time, the
Application Task Force also recommended that USL's
Division II application be rejected. (Gulati Decl. ¶
195.) Despite these recommendations, the Board voted to grant
both leagues a provisional sanction for Division II subject
to several conditions, including a showing of improvement.
(Id. ¶ 203; Compl. ¶¶ 180-81.)
August of 2017, both Plaintiff and USL submitted their
applications to the Application Task Force for 2018
sanctioning. (Gulati Decl. ¶ 207; Letter re: 2018
Division II Application (“2018 Application
Letter”), annexed to Gulati Decl. as Ex. 55; Compl.
¶ 183.) NASL's application sought two waivers for
(1) the minimum team requirement and (2) the time zone
requirement to have teams in the Eastern, Central and Pacific
time zones. (Compl. ¶¶ 183-85.) NASL alleged that
it was in “advanced discussions” with various
potential ownership groups. (Gulati Decl. ¶ 208.)
However, NASL did not provide much detail as to these
discussions and conceded that two of its eight existing teams
had not committed to return, (id.; 2018 Application
Letter annexed to Gulati Decl. as Ex. 55.), and Defendant
later discovered that the North Carolina team had been
wavering in its commitment. (Id.) USL also requested
waivers but its requests were
“team-specific.” (Id. ¶ 210.)
Following a presentation by NASL on September 1, 2017, the
Board voted to deny NASL Division II status for 2018.
(Id. ¶ 221; Compl. ¶ 186.) In contrast,
the Board gave USL thirty days to strengthen its application,
potentially with the help of as many as twenty
waivers. (Gulati Dec. ¶ 221; Compl. ¶
187.) Both decisions were communicated to the respective
leagues on September 3, 2017. (Compl. ¶ 186; Gulati
Decl. ¶ 222.)
Standard of Review
preliminary injunction is an extraordinary remedy never
awarded as of right.” Winter v. Natural Res. Def.
Council, Inc., 555 U.S. 7, 24 (2008). The purpose of a
preliminary injunction is to “preserve the relative
positions of the parties until a trial on the merits can be
held.” Univ. of Texas v. Camenisch, 451 U.S.
390, 395 (1981). “A party seeking a preliminary
injunction must ordinarily establish (1) irreparable
harm'; (2) ‘either (a) a likelihood of success on
the merits, or (b) sufficiently serious questions going to
the merits of its claims to make them fair ground for
litigation, plus a balance of the hardships tipping decidedly
in favor of the moving party'; [(3) that the balance of
hardships tips in its favor]; and () ‘that a
preliminary injunction is in the public interest.'”
New York ex rel. Schneiderman v. Actavis PLC, 787
F.3d 638, 650 (2d Cir. 2015), cert. dismissed sub nom.
Allergan PLC v. New York ex. rel. Schneiderman, 136
S.Ct. 581 (2015) (citation omitted); Benihana, Inc. v.
Benihana of Tokyo, LLC, 784 F.3d 887, 895 (2d Cir.
2015). However, a heightened standard is appropriate where:
“(i) an injunction is ‘mandatory, ' or (ii)
the injunction ‘will provide the movant with
substantially all the relief sought and that relief cannot be
undone even if the defendant prevails at a trial on the
merits.'” New York ex rel. Schneiderman,
787 F.3d at 650 (citation omitted). A mandatory
injunction may be granted “only upon a clear showing
that the moving party is entitled to the relief requested, or
where extreme or very serious damage will result from a
denial of preliminary relief.” Tom Doherty Assocs.,
Inc. v. Saban Entm't, Inc., 60 F.3d 27, 34 (2d Cir.
1995) (citation omitted).
the heightened standard applies because Plaintiff requests a
mandatory injunction seeking to “alter rather than
maintain the status quo.” New York Civil
Liberties Union v. New York City Transit Auth., 684 F.3d
286, 294 (2d Cir. 2012). Defendant's divisional
designation is granted on an annual basis. (Gulati Decl.
¶ 108.) Although designated as a Division II league for
2017, Plaintiff has already been denied Division II status
for 2018. (Compl. ¶ 186; Gulati Decl. ¶ 222.)
Plaintiff's requested relief would disrupt the status quo
by effectively requiring Defendant to reverse its previous
denial. With or without court intervention, Plaintiff
required Defendant to act affirmatively in its favor to
receive any designation in 2018. See also Jessup
v. Am. Kennel Club, Inc., 862 F.Supp. 1122, 1128
(S.D.N.Y. 1994) (applying heightened standard for mandatory
injunctions where plaintiff sought to restore former
standards). Under these circumstances, Plaintiff's
request is more analogous to a request for reinstatement of
previously terminated benefits. See, e.g., Lawrence v.
Town of Brookhaven Dep't of Hous., Cmty. Dev. &
Intergovernmental Affairs, No. 07-CV-2243, 2007 WL
4591845, at *6 (E.D.N.Y. Dec. 26, 2007) (holding request to
“continue” previously terminated Section 8
benefits to be a mandatory injunction) aff'd,
393 Fed.Appx. 791 (2d Cir. 2010); Union Cosmetic Castle,
Inc. v. Amorepacific Cosmetics USA, Inc., 454 F.Supp.2d
62, 68 (E.D.N.Y. 2006) (finding reinstatement of previously
terminated business relationships with plaintiffs would
constitute mandatory injunction); Brown v. New York City
Health & Hosps. Corp., No. 96-CV-0156, 1996 WL
68558, at *2 (E.D.N.Y. Feb. 5, 1996) (finding request to
reinstate plaintiffs to prior positions to be a request for
harm is “the single most important prerequisite for the
issuance of a preliminary injunction, ” requiring the
movant to show such injury is “likely” before the
other elements may be considered. Faiveley Transp.
Malmo AB v. Wabtec Corp., 559 F.3d 110, 118 (2d Cir.
2009) (citation omitted); Rodriguez ex rel. Rodriguez v.
DeBuono, 175 F.3d 227, 234 (2d Cir. 1999). To establish
irreparable harm, “[p]laintiffs must demonstrate that
absent a preliminary injunction they will suffer an injury
that is neither remote nor speculative, but actual and
imminent, and one that cannot be remedied if a court waits
until the end of trial to resolve the harm.”
Id. (citation omitted). Absent “extraordinary
circumstances, ” injunctions are also unavailable where
there is an “adequate remedy at law, such as money
damages. Id. (citation omitted). Courts have
“found irreparable harm where a party is threatened
with the loss of a business, ” particularly when the
“very viability” of the business is at risk.
Tom Doherty, 60 F.3d at 37-38.
asserts several theories as to the irreparable harm it will
suffer. First, Plaintiff alleges that it will likely cease to
exist absent injunctive relief. (Pl. Mem. at 16.) In support,
several current team owners have submitted declarations
attesting to Plaintiff's dire circumstances.
(See Riccardo Silva Reply Decl. in Supp. of Pl. Mot.
(“Silva Decl.”) ¶¶ 4-5, 8, 11, Docket
Entry No. 30-21; Capriotti II Reply Decl. in Supp. of Pl.
Mot. (“Capriotti II Decl.”) ¶¶ 4-5, 8,
11, Docket Entry No. 30-22; Robert J. Watkins Reply Decl. in
Supp. of Pl. Mot. (“Watkins Decl.”) ¶¶
4-5, 8, 11, Docket Entry No. 30-23.) The owners allege that
Division III status is fundamentally at odds with the
Plaintiff's business model. (See Silva Decl.
¶ 8; Capriotti II Decl. ¶ 8; Watkins Decl. ¶
8.) Division III status allegedly does not provide sufficient
revenues to continue operations “in a manner consistent
with [Plaintiff's] plans, ” likely leading to the
departure or closure of several teams. (See Silva
Decl. ¶ 8; Capriotti II Decl. ¶ 8; Watkins Decl.
¶ 8; Rocco B. Commisso Decl. in Supp. of Pl. Mot.
(“Commisso Decl.”) ¶ 26, Entry Docket No.
3-2; Pl. Reply in Supp. of Pl. Mot. (“Pl. Reply”)
3, Docket Entry No. 30.)
disagrees and claims that the “USL has shown that a
league can not only survive, but thrive, as a Division III
league.” (Def. Opp'n at 24.) Plaintiff asserts that
USL's success as a Division III league may be
attributable to factors that are inapplicable to NASL,
including a “reserve-league relationship with
MLS.” (Pl. Reply at 4.) Further, Defendant
asserts throughout the record that Plaintiff has been on
shaky financial ground. (See Gulati Decl.
¶¶ 172, 180-81). In addition, Defendant itself
acknowledges the importance of its divisional designations.
(See Compl. ¶ 63; Def. Opp'n at 25
(discussing importance of maintaining credibility of
the PLS)); October 31, 2017 Hr'g Tr. 53:13
(“Certainly a sanction is beneficial.”).
Defendant thus understands that a drop in divisional status
may indeed “deal a death blow to the
NASL.” (See Compl. ¶ 10.) Given
the likely total loss of its business, Plaintiff has
established irreparable harm. See also Galvin v. New York
Racing Ass'n, 70 F.Supp.2d 163, 170 (E.D.N.Y. 1988)
(“But the loss of business need not be total, so long
as it is so great as to seriously compromise the
company's ability to continue in its current
form.”), aff'd sub nom. Galvin v. New York
Racing Ass'n, Inc. (NYRA), 166 F.3d 1200 (2d Cir.
Plaintiff also asserts that it will lose the interest of
potential investors. (Pl. Mem. at 16.) In support of this
argument, Plaintiff submitted letters of intent from six
potential new teams interested in joining the NASL in 2018.
(Letters of Intent, annexed to Rocco B. Commisso Reply Decl.
in Supp. of Pl. Mot. (“Commisso Reply Decl.”),
Docket Entry No. 32, as Exs. B-G.) All six letters of intent
expressly condition their commitment on Plaintiff retaining
Division II status. Based on these contingent commitments,
Plaintiff has demonstrated irreparable harm on the basis of
potential loss of investors. See Levinson v. Cello Music
& Film Sys., Inc., 199 F.3d 1322 (2d Cir. 1999)
(discussing possibility of irreparable harm if
“potential investors” had been deterred by the
uncertainty caused by the issue in dispute); N. Am.
Soccer League v. Nat'l Football League, 465 F.Supp.
665, 672 (S.D.N.Y. 1979) (finding irreparable harm in part
due to “chilling effect . . . upon potential new
investors”). The loss of potential investors also
supports Plaintiff's showing of irreparable harm based on
total loss of business. Part of the reason Plaintiff pursued
these teams is to stabilize its league structure.
Clear showing of entitlement to relief
Sherman antitrust section 1 standard
1 of the Sherman Act prohibits “[e]very contract,
combination . . . or conspiracy” that
unreasonably restraints trade. 15 U.S.C.A.
§ 1; United States v. Apple, Inc., 791 F.3d
290, 320-21 (2d Cir. 2015) (“Although the Sherman Act,
by its terms, prohibits every agreement ‘in restraint
of trade, ' [the Supreme] Court has long recognized that
Congress intended to outlaw only unreasonable
restraints.”) (citing State Oil Co. v. Khan,
522 U.S. 3, 10 (1997), cert. denied, 136 S.Ct. 1376
(2016)). Thus, to succeed on a Section 1 claim, “a
plaintiff must prove that the common scheme designed by the
conspirators ‘constituted an unreasonable restraint of
trade either per se or under the rule of reason.'”
Apple, 791 F.3d at 321 (citation omitted). Courts
“presumptively” apply the rule of reason which
requires consideration of “all of the circumstances of
a case” in deciding whether the challenged practice
violates Section 1. See Texaco Inc. v. Dagher, 547
U.S. 1, 5 (2006); Cont'l T. V., Inc. v. GTE Sylvania
Inc., 433 U.S. 36, 49-50 (1977). “Per se rules of
illegality are appropriate only when they relate to conduct
that is manifestly anticompetitive.” Cont'l
T.V., 433 U.S. at 50. Given their potential for
“significant procompetitive benefits, ”
standard-setting by private associations are typically
evaluated under the rule of reason. Allied Tube &
Conduit Corp. v. Indian Head, Inc., 486 U.S. 492, 501
(1988). Here, Plaintiff concedes that a variation of the rule
of reason should apply. (See Pl. Mem. at 19-23.) The
Court, however, first addresses the threshold inquiry of the
existence of a concerted action. See Am. Needle, Inc. v.
Nat'l Football League, 560 U.S. 183, 191 (2010)
(“[A]n arrangement must embody concerted action in
order to be a ‘contract, combination . . . or
conspiracy'” under [Section] 1”).
conspiracy in violation of Section 1 requires proof of
“a conscious commitment to a common scheme designed to
achieve an unlawful objective” demonstrated by
“direct or circumstantial evidence that tends to
exclude the possibility of independent action by the
[parties].'” Monsanto Co. v. Spray-Rite Serv.
Corp., 465 U.S. 752, 768 (1984). While evidence of
“parallel conduct can be probative . . . [of] an
antitrust conspiracy, ” such evidence “alone will
not suffice.” Apex Oil Co. v. DiMauro, 822
F.2d 246, 253 (2d Cir. 1987). “Accordingly,  a
plaintiff must show the existence of additional
circumstances, often referred to as plus factors, which, when
viewed in conjunction with the parallel acts, can serve to
allow a fact-finder to infer a conspiracy.”
Apple, 791 F.3d at 315 (citation and internal
quotation marks omitted). “These ‘plus
factors' may include: a common motive to conspire,
evidence that shows that the parallel acts were against the
apparent individual economic self-interest of the alleged
conspirators, and evidence of a high level of interfirm
communications.” Mayor of Baltimore, Md. v.
Citigroup, Inc., 709 F.3d 129, 136 (2d Cir. 2013)
(citation omitted). “[T]hese plus factors are neither
exhaustive nor exclusive, but rather illustrative of the type
of circumstances which, when combined with parallel behavior,
might permit a jury to infer the existence of an
agreement.” Id. at 136 n.6.
first claims that the adoption and changes to the PLS are
express agreements in and of themselves sufficient to satisfy
the concerted action prong of Section 1. (See
Pl. Reply at 4-5 (“[T]he USSF Standards Task Force
agree upon new Standards, and the USSF's Board members
then vote (and thus agree) on whether to promulgate
them.”); see also Compl. ¶ 16
(“When these members act together with USSF to enact
Professional League Standards, they are entering into
contracts, combinations and conspiracies as those terms are
defined under the Sherman Act.”).)
Allied Tube & Conduit Corp. v. Indian Head,
Inc., 486 U.S. 492, 500 (1988), provides some support
that any standard promulgated by a private standard-setting
organization is inherently “an implicit agreement not
to trade, ” the Second Circuit has cautioned that
“every action by a trade association is not concerted
action by [its] members.” AD/SAT, Div. of Skylight,
Inc. v. Associated Press, 181 F.3d 216, 234 (2d Cir.
1999). “Consistent votes, ” absent additional
evidence, is best viewed as “parallel conduct . . .
equally consistent with legal behavior.” SD3,
LLC v. Black & Decker (U.S.) Inc., 801 F.3d 412,
437 (4th Cir. 2015), as amended on reh'g in part
(Oct. 29, 2015), cert. denied, 136 S.Ct. 2485
(2016); see also Jessup, 862 F.Supp. at 1129
(observing the weakness of antitrust claims where the
plaintiff failed to “identify or refer to specific acts
or activities suggesting any illegal agreement or concerted
action by Defendants” to revise the challenged
standard); Golden Bridge Tech., Inc. v. Motorola,
Inc., 547 F.3d 266, 273 (5th Cir. 2008) (citing
Consol. Metal Prods., Inc. v. Am. Petroleum Inst.,
846 F.2d 284, 293-94 (5th Cir. 1988), for proposition
“that though a trade association naturally involves
collective action by competitors, it is not by its nature a
very least, Plaintiff must provide evidence that there was an
agreement to agree to vote a particular way,
compromising each individual Board member's
independence. See Indian Head, Inc. v.
Allied Tube & Conduit Corp., 817 F.2d 938, 941 (2d
Cir. 1987) (finding that the defendants
“admitted[ly] . . . agreed” to oppose
the plaintiff's proposal by “subverting the
consensu[s] standard rules and procedures” of the
rule-making association) (emphasis added) aff'd,
486 U.S. 492 (1988); see also Klickads, Inc. v. Real
Estate Bd. of New York, Inc., No. 04-CV-8042, 2007 WL
2254721, at *4 (S.D.N.Y. Aug. 6, 2007) (whether defendants
“consciously committed themselves” “to
exclude plaintiff” through trade association rules and
decisions a question of fact for jury) adhered to on
denial of reconsideration sub nom. Klickads, Inc. v. Real
Estate Bd. of New York, No. 04-CV-8042, 2007 WL 2981422
(S.D.N.Y. Oct. 9, 2007). Plaintiff fails to provide any such
Plaintiff offers circumstantial evidence in support of a
concerted action. See Ross v. Citigroup, Inc., 630
Fed.Appx. 79, 82 (2d Cir. 2015), as corrected (Nov.
24, 2015) (holding that conspiracies “m[ay] be proven
though ‘inferences that may fairly be drawn from the
behavior of the alleged conspirators.'”) (citation
omitted). Viewing the votes on the adoption and amendments of
the standard as “parallel conduct, ”
Plaintiff's circumstantial evidence is assessed as
potential “plus factors.” To make its
case, Plaintiff relies on an alleged conflict of interest
arising from Defendant's relationship with SUM, the
alleged arbitrary adoption, amendment, and application of the
PLS, including most notably the initial decision to make MLS
the only Division I league. (See Pl. Reply at 5-7.)
PLS revision process
there is ample 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. See Anderson News, L.L.C. v. Am. Media,
Inc., 123 F.Supp.3d 478, 500 (S.D.N.Y. 2015)
(“Motive to conspire may be inferred where the parallel
‘action taken [by defendants] had the effect of
creating a likelihood of increased profits.'”)
(citation omitted). To discredit the adequacy of the current
procedures, Plaintiff points to, among other things, MLS'
dominance of the Professional Council, an alleged loophole
for “affiliated” member entities like MLS in the
Defendant's Conflict of Interest Policy, and the
continuing formal and informal influence of individuals with
ties to MLS. (Pielke Decl. ¶¶ 32, 45-47,
51, 54, 55-58) Plaintiff also asserts that Defendant's
ties to MLS through SUM are an overarching influence on
“any Board members, whether or not affiliated with MLS,
” in their decision-making related to the ...