NASL Braced for Lengthy Legal Battle but First Needs Immediate Win vs. U.S. Soccer
Litigation, traditionally and stereotypically, is a slog. It takes patience, commitment and money. And then more patience. It can be a war of attrition. Attorney Jeffrey Kessler has nearly 40 years of experience in complex litigation cases, many of which involved pro sports, and he expects his latest lawsuit involving the North American Soccer League and U.S. Soccer Federation to take a while as well—perhaps up to two years.
But the NASL doesn’t have two years, which is why every early ruling that might tilt toward its favor could make a significant contribution to the league’s survival. On Tuesday, it got such a ruling. After receiving proposals from both sides, Judge Margo Brodie of the U.S. District Court in Brooklyn opted to schedule a hearing on the NASL’s request for a preliminary injunction that would reinstate its second division sanctioning on October 31.
The NASL had asked for a October 18 hearing, while the USSF wanted to wait until the end of November for the parties to submit their briefs and then proceed “at the Court’s convenience as soon thereafter as possible.”
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In a statement filed to the court, New York Cosmos owner Rocco Commisso stressed the importance of the early hearing.
“Time is of the essence in obtaining judicial relief,” he wrote. “Without a preliminary injunction within one month (i.e., by mid-October 2017) … NASL clubs, including the Cosmos, face a serious risk of being unable to conduct necessary preparations for the 2018 season, such as renewing sponsorship and season-ticket holders, retaining players, and securing or renewing leases of stadiums to play in. In sum, if the USSF’s decision to strip the NASL of its Division II status is not reversed or enjoined by mid-October, the very existence of the NASL will be in jeopardy.”
It won’t happen in mid-October, but it also may not be much of a wait after that. The NASL didn’t receive its provisional D2 sanctioning for the 2017 season until early January, but it faces potential upheaval this winter and must keep the league as intact as possible. North Carolina FC and FC Edmonton are among those rumored to be on the way out. The first-year San Francisco Deltas are struggling financially but may be able to stick it out, while two expansion teams in California (Orange County, San Diego) already have signed up.
Commisso’s filing said there were eight clubs committed to playing next year and that the NASL is in talks with groups in New Orleans, Detroit and Atlanta, among others, about coming aboard. But all that depends on D2 status, he wrote, and it all must come together soon.
Under U.S. Soccer’s current standards, D2 leagues must field at least 12 teams.
Speaking to SI.com, Kessler said, “The timing works.”
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Winning the case in one or two years, while desirable, isn’t what’s required to keep the NASL afloat. For now, the NASL says it needs D2 sanctioning to survive. To thrive in the long run, it believes that U.S. Soccer’s division labels, which are based on market, stadium and ownership standards last revised in early 2014, must be eliminated in order to provide for a fair marketplace. The NASL isn’t seeking monetary damages, nor is it trying to bring down U.S. Soccer. It is, however, alleging a conspiracy among the USSF, MLS and the USL to eliminate the competitive threat the NASL represents by wielding the standards against it.
“The ultimate relief we are seeking is to get rid of what the USSF calls the professional league standards, which they use to prevent any competition ever happening against MLS. They invented this system and applied it, we believe, solely to protect MLS from competition. This system does not exist anywhere else in the world in any sport, including world football,” Kessler said.
The incumbent major leagues in the USA and Canada have faced competitive challenges. The NFL merged with the AFL but saw the USFL fail. Both the WHA and ABA sent multiple franchises to the NHL and NBA, respectively, before closing up shop. The NASL will argue that all those leagues were subject to market forces, not the standards of a private body that might have a financial interest in maintaining the status quo.
“In the United States, [it’s understood] that private parties don’t get together and regulate competition,” said Kessler, an antitrust veteran who’s represented all the major players’ unions in the USA and Canada (including the MLSPU in its 1996-2002 lawsuit against the league) as well as the U.S. women’s national team in its recent wage discrimination complaint against the USSF.
“If there’s a need to regulate the competition, the government does that. [But] the government hasn’t made a decision to do that,” he said. “You should not have private parties trying to decide who’s Division 1 and who’s not, particularly when they’re biased, non-neutral private parties.”
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The burden will fall to Kessler and the NASL to prove that U.S. Soccer is a non-neutral party. The USSF will argue that the standards, which have evolved over the past 20 years, were in place well before the NASL launched in 2011 and that they were needed to stabilize a market that saw far too many poorly-run, fly-by-night teams come and go.
The federation will point to the growth of the game under those standards and soccer’s unique challenges in a country where the sport struggled to find a foothold for decades. It likely will claim that the NASL is at fault for its failure to meet the criteria and that if eliminating the league was U.S. Soccer’s aim, it could have done so last winter instead of offering provisional sanctioning (the board, in fact, did so against the recommendation of the federation’s pro task force). The USSF has been willing to grant waivers in the past, but it saw no way forward for the NASL when making its decision in early September.
The NASL surely will be looking toward to the discovery phase, when communication among USSF, MLS and USL executives, as well as financial statements related to their partnership in Soccer United Marketing, come to light. Kessler will be hunting for the conspiratorial smoking gun. Meanwhile, the NASL needs to successfully argue that the division standards are arbitrary and anticompetitive and that it shouldn’t be up to the USSF, either willfully or as an unintended consequence of its policies, to determine winners and losers in the marketplace. It must demonstrate that the enforced stability required to get MLS off the ground in 1996 is a relic of a time when interest in American soccer was tepid. Now there’s demand.
“This is not a damages action,” Kessler said. “What we are seeking is to enjoin this system going forward, and the NASL will either do a great job and be successful or it won’t, just like MLS will either do a great job and be successful or it won’t. The marketplace will decide how this competition comes out. Nobody’s looking for any handouts.”
What the NASL looking for is a big, early win. It’s a league that has endeavored to overturn the status quo. Next month, it will seek to maintain it, however, in the form of that injunction. It would happily operate as a D2 league next year—with a few new clubs, it hopes—while the litigation plays out.
