16:59, September 25 86 0 law.com

2017-09-25 16:59:04
Winston, Latham Prepare for Pitched Battle Over US Soccer

Jeffrey Kessler, a veteran litigator in the sports arena, has filed his long-awaited antitrust suitagainst the governing body for soccer in the U.S.

The move against the U.S. Soccer Federation by the high-powered Winston & Strawn partner’s client, the North American Soccer League, took the form of a 71-page complaint filed on Sept. 19 in a federal district court in Brooklyn, New York. It had been at least two years in the making.

In September 2015, shortly after securing a key court win for New England Patriots quarterback Tom BradyKessler spoke publicly about the NASL’s desire to compete with Major League Soccer, the top professional soccer league in North America, for sponsorship and marketing dollars. But the NASL’s aspirations had been repeatedly thwarted by the USSF, Kessler said at the time, due to arbitrary and anticompetitive standards the organization set that allegedly disadvantaged his client.

Earlier this month, the Chicago-based USSF declined to extend second division status to the NASL after the eight-team league failed to field 12 franchises, a requirement by the USSF in granting second-tier status to pro soccer leagues operating in the U.S. The U.S. soccer system, like others abroad, is organized into divisions. In January, the USSF had granted an exemption to the NASL that allowed the league to share second division status with the United Soccer League. In the interim, the USSF sought to negotiate new benchmarks for constructing the country’s complex soccer pyramid.

Kessler told The American Lawyer that he is seeking a preliminary injunction to maintain the second division status quo for the NASL, which is looking to add two new teams next year in San Diego and Orange County, California. Getting such an injunction is critical to the NASL’s survival, said Kessler, noting that without it players will leave their current clubs and sponsors will abandon the league and its teams. (One NASL franchise is Puerto Rico FC, a San Juan-based team owned since 2015 by New York Knicks star Carmelo Anthony—as it happens, the National Basketball Players Association is another key Kessler sports client.)

In the long run, Kessler said the ultimate relief being sought by the NASL is an end to the three-tier certification program for structuring soccer leagues in the U.S. The system has been cited by critics as bolstering MLS and quashing competition by not allowing for promotion and relegation, a process used in many foreign soccer leagues for teams to ascend and descend to higher and lower divisions based on their performance on the pitch. Kessler and the New York-based NASL believe that the USSF, the governing body for all of U.S. soccer, has only the interests of one league at heart.

“The whole premise for the USSF regulating professional soccer is without any legitimate basis,” Kessler said. “There’s no comparable structure in the U.S. in professional sports at all. And there is no comparable structure around the world in what they call football and we call soccer. This is a unique system developed by the USSF to protect Major League Soccer and eliminate the NASL from being a competitor at the highest division level.”

Kessler (pictured right) noted that after the USSF denied the NASL’s bid for first division status in 2015, the league lost some teams, with one franchise joining the top-tier MLS and others moving to the Tampa-based USL, a rival second division league that has a cordial relationship with MLS. The exodus of those teams forced the NASL to seek an exemption from the USSF, Kessler said. He added that the USSF has set standards that don’t try and promote competition in soccer, but instead protect MLS, with which it has close ties.

As an example, Kessler claimed that if the USSF sought to implement its U.S. first division standards worldwide, the English Premier League, the world’s wealthiest, would not be able to qualify by its benchmarks, such as having teams in three different time zones playing in stadiums with a capacity of no less than 15,000 seats. Kessler said that for most of its own existence, New York-based MLS has sought and received certain exemptions from the USSF.

Kessler, who has handled a number of landmark sports antitrust battles, has also faced off before against the USSF, having been retained in 2016 by five members of the U.S. women’s national soccer team (USWNST) for a wage discrimination complaint filed with the U.S. Equal Employment Opportunity Commission against the organization. (The USWNT parted ways in December 2016 with its former leader, Dallas lawyer Richard Nichols, and earlier this year hired Mady Gilson from Washington, D.C.’s Bredhoff & Kaiser to resume labor negotiations with the USSF.)

When asked about the NASL’s antitrust suit, the USSF told The American Lawyer that it does not comment on pending litigation. Rob Kaler, the organization’s COO and general counsel, did not return a request for comment on the matter. On Friday, Latham & Watkins antitrust litigation partner Lawrence Buterman in New York entered an appearance for the USSF in the case.

Latham has longstanding ties to the USSF, whose most recent federal tax filing shows that it paidmore than $3.2 million to the firm for legal services in 2015-16. The registered nonprofit is led by Sunil Gulati, a longtime U.S. soccer executive who was once called “the single most important person in the development of soccer in this country” by former USSF president and retired Latham partner Alan Rothenberg, who also helped create MLS in the mid-1990s.

Former Latham associate Mark Abbott, who worked for Rothenberg at the firm, now serves as president and deputy commissioner of MLS, a fact noted by the NASL in its antitrust complaint against the USSF. JoAnn Neale, chief administrative and social responsibility officer at MLS, is another former Latham associate.

As for Gulati, whose term as USSF president is set to expire in 2018, he will reportedly face a challenger for that role in Steven Gans, a Boston-based partner at Prince Lobel Tye. Gans confirmed to The Washington Post earlier this month that he will indeed run against Gulati next year. (Gulati once served as president of Kraft Soccer Properties, the entity that owns MLS’ New England Revolution, until he left that role in late 2011.)

The NASL, a successor to a now-defunct league whose current iteration launched in 2011, has struggled over the past year with a number of financial and legal issues. In May, New York lawyer Aaron Davidson, a former president of Traffic Sports USA and ex-chairman of the NASL’s board of governors, was suspended from practicing law after admitting to bribing soccer officials at FIFA, the scandal-plagued governing body for global soccer.

The NASL’s Ottawa Fury and Tampa Bay Rowdies announced in late 2016 that they would leave the league for the rival USL, as other NASL franchises folded in Fort Lauderdale and Oklahoma City. The NASL, which has previously used Dorsey & Whitney for litigation and trademark work, is currently embroiled in a dispute with the former owners of the Fort Lauderdale team, whose assets were sold for a mere $5,100 in June.

Another current franchise in Edmonton is continuing to play in the NASL, despite its owner having acknowledged that he attended meetings for a new soccer league being planned in Canada. In January, the NASL named a new interim commissioner in Rishi Sehgal, a former Goodwin Procter associate who had served as the league’s director of business development and legal affairs. Over the next few months, Sehgal sought to stabilize the NASL.

The league received a key lifeline in February when its flagship team, the iconic New York Cosmos, were bought by media executive Rocco Commisso. Mayer Brown partner Amr Aly, a former Cosmos player who was also once a member of the U.S. men’s national soccer team, advised Commisso on the deal, according to SI.com. Earlier this week, Commisso said that soccer in the U.S. had become “too politicized.”

Miami FC, currently at the top of the NASL standingsannounced in August that it had hired Spanish firm Roca Junyent and Zurich’s Nater Dallafior to take the NASL’s quest to install a promotion and relegation system in the U.S. to the Court of Arbitration for Sport.

As for Kessler, who two years ago this month was named co-executive chairman of Winston & Strawn alongside longtime litigator Dan Webb (recently named one of The American Lawyer’s Lifetime Achievers), he is working on the NASL case with sports law co-chair David Feher and associates Mark Rizik Jr. and Isabelle Mercier-Dalphond.