Argued: December 15, 2017
from a November 4, 2017 order of the United States District
Court for the Eastern District of New York (Brodie, J.).
American Soccer League, LLC ("NASL") appeals from
the denial of its motion for a preliminary injunction seeking
a Division II designation pending the resolution of its
antitrust case against the United States Soccer Foundation,
Inc. ("USSF"). We evaluate NASL's motion under
the heightened standard applicable to mandatory preliminary
injunctions. NASL has not demonstrated a clear likelihood of
success on the merits of its antitrust claim against USSF
under 15 U.S.C. § 1. Accordingly, we AFFIRM the order of
the District Court denying NASL's motion for a
preliminary injunction, and we REMAND the matter for further
proceedings on the merits of NASL's claims.
JEFFREY L. KESSLER, Winston & Strawn LLP, New York, NY
(David G. Feher, New York, NY; Steffen N. Johnson, Heather L.
Kafele, Christopher E. Mills, Washington, D.C., on the
brief), for Plaintiff- Appellant.
GREGORY G. GARRE, Latham & Watkins LLP, Washington, D.C.
(Lawrence E. Buterman, New York, NY; Christopher S. Yates,
San Francisco, CA, on the brief), for Defendant-Appellee.
Before: Parker, Wesley, and Chin, Circuit Judges.
WESLEY, CIRCUIT JUDGE.
the denial of its requested Division II designation for the
2018 season of men's professional soccer, the North
American Soccer League, LLC ("NASL") filed an
antitrust suit against the United States Soccer Federation,
Inc. ("USSF"). NASL also moved for a preliminary
injunction, seeking designation as a Division II league
pending resolution of the suit. This opinion addresses that
motion. We conclude NASL has not demonstrated a clear
likelihood of success on the merits of its antitrust claim
under the heightened standard applicable to mandatory
preliminary injunctions. Accordingly, we affirm the judgment
of the United States District Court for the Eastern District
of New York, N. Am. Soccer League, LLC v. U.S. Soccer
Fed'n, Inc. ("NASL"), No.
17-CV-05495, 2017 WL 5125771 (E.D.N.Y. Nov. 4, 2017) (Brodie,
J.), denying NASL's motion for a preliminary
regional governing body for soccer in the United States and
Canada, USSF designates leagues as Division I, II, or III
according to USSF's Professional League Standards (the
"Standards"). The Standards establish requirements
that a league must meet to gain a divisional designation-also
called a sanction-for a season of play. The more competitive
the division, the higher the bar. For example, the 2008
Standards required that a Division I league have a minimum of
ten teams distributed in at least three time zones; a
Division II league have a minimum of eight teams in at least
two time zones; and a Division III league have a minimum of
eight teams, with no time-zone requirement.
leagues apply to USSF to receive annual designations for the
upcoming season of play by submitting reports demonstrating
their compliance, or plans for compliance, with the
Standards. Leagues may submit requests for waivers from
compliance with the Standards' requirements. The USSF
Board votes on divisional designations after reviewing the
recommendations of USSF's Professional League Task Force
("Task Force"). The Board is composed of fifteen
directors, two of whom are chosen by the professional
same process applies for revising the Standards; the USSF
Board works in conjunction with a Professional League
Standards Task Force ("Standards Task
Force").Unchanged from 1996 to 2008, the Standards
for all divisions were revised in 2008 and 2014, and for only
Division II in 2010.
three most prominent men's professional soccer leagues
have historically occupied their respective divisions in
isolation. Major League Soccer, LLC ("MLS") has
been the only Division I men's soccer league since
MLS's start in 1995. NASL has existed since 2009 and has
operated as a Division II league since 2011. The United
Soccer Leagues, LLC ("USL") ordinarily has filled
the Division III slot. According to NASL, it long has
harbored aspirations to compete against MLS in Division I; in
contrast, USL has been content as an MLS feeder league.
often pays to be at the top, of course, and MLS has enjoyed
competitive benefits as the top-tier league since its
inception. Indeed, USSF, when establishing men's soccer
in the United States, decided "to not sanction any other
league as a [Division I] men's professional outdoor
league until MLS had finished its second full season in
1997-to give it a 'runway' of sorts." Gulati
Decl. ¶ 64. MLS's top-tier status has economic
benefit as well. MLS and USSF have a "business
relationship" through which Soccer United Market
("SUM"), a marketing company, has the rights to
"bundle[d]" MLS and USSF sponsorship and
broadcasting rights. Compl. ¶ 107; Gulati Decl. ¶
the other leagues, NASL annually applies to USSF for a
divisional designation. It operated as a Division II league
for the 2011-2017 seasons, receiving compliance waivers for
all but one season. Although NASL made a play for a Division
I designation for 2016, its application was denied, and NASL
operated as a Division II league (with waivers) for that
season. For the 2018 season, NASL applied for a Division II
designation, requesting waivers for the minimum-team and
time-zone requirements. The USSF Board rejected NASL's
Division II application but gave NASL additional time to file
for Division III status. NASL filed suit instead.
contends that USSF conspired with its membership and related
entities in adopting, amending, and applying its Standards in
an anticompetitive manner to preclude NASL and other leagues
from competing with MLS in the Division I market.
See 15 U.S.C. §§ 1-2. NASL requests
preliminary injunctive relief in the form of a Division II
league designation and permanent relief enjoining USSF from
promulgating the Standards to separate leagues into
motion for a preliminary injunction is tied to its
allegations in the first count of its Complaint-that USSF
violated 15 U.S.C. § 1 through a conspiracy to restrain
competition. NASL asked the District Court for a preliminary
injunction allowing it to operate as a Division II league. In
a 49-page decision, the district court made detailed findings
of fact and conclusions of law before concluding that NASL
had not made a clear showing of entitlement to relief and
denying the preliminary injunction. NASL, No.
17-CV-05495, 2017 WL 5125771, at *1, *21. NASL appeals,
arguing the District Court abused its discretion in applying
the preliminary injunction standard and in finding that NASL
had not sufficiently showed its clear likelihood of success
on the merits of its § 1 antitrust claim.
Court reviews a district court's legal rulings de
novo and its ultimate denial of a preliminary injunction
for abuse of discretion. McCreary Cty. v. Am. Civil
Liberties Union of Ky., 545 U.S. 844, 867 (2005);
Almontaser v. N.Y.C. Dep't of Educ., 519 F.3d
505, 508 (2d Cir. 2008). "A district court abuses its
discretion when it rests its decision on a clearly erroneous
finding of fact or makes an error of law."
Almontaser, 519 F.3d at 508.
Applicable Standard for the Preliminary Injunction
refer to preliminary injunctions as prohibitory or mandatory.
Prohibitory injunctions maintain the status quo pending
resolution of the case; mandatory injunctions alter
Tom Doherty Assocs., Inc. v. Saban Entm't, Inc.,
60 F.3d 27, 34 (2d Cir. 1995) (internal citation omitted). A
party seeking a preliminary injunction must show (1)
irreparable harm; (2) either a likelihood of success on the
merits or both serious questions on the merits and a balance
of hardships decidedly favoring the moving party; and (3)
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). Because mandatory injunctions
disrupt the status quo, a party seeking one must meet a
heightened legal standard by showing "a clear or
substantial likelihood of success on the merits."
N.Y. Civil Liberties Union v. N.Y.C. Transit Auth.,
684 F.3d 286, 294 (2d Cir. 2012) (internal quotation marks
omitted). The District Court concluded that NASL was seeking
a mandatory injunction and imposed the heightened standard.
NASL, No. 17-CV-05495, 2017 WL 5125771, at *7. NASL
argues that using the heightened standard was error.
the proposed injunction's effect on the status quo drives
the standard, we must ascertain the status quo- that is,
"the last actual, peaceable uncontested status which
preceded the pending controversy." Mastrio v.
Sebelius, 768 F.3d 116, 120 (2d Cir. 2014) (per curiam)
(quoting LaRouche v. Kezer, 20 F.3d 68, 74 n.7 (2d
Cir. 1994)). Before this litigation, USSF would
regularly evaluate NASL's applications and determine
NASL's divisional designation. The relationship of annual
application, assessment, and sanction determination ...