LIV Golf’s antitrust lawsuit against the PGA Tour is now playing out in two federal courts.
On Wednesday, attorneys for the PGA Tour filed a motion to dismiss in the U.S. Court of Appeals for the Ninth Circuit. The PGA Tour argues that the Public Investment Fund of Saudi Arabia (PIF) and PIF’s governor, Yasir Othman Al-Rumayyan, must comply with subpoenas in New York City and that the Ninth Circuit lacks jurisdiction to review the matter at this time.
The PGA Tour’s filing responds to an appeal by PIF and Al-Rumayyan, who maintain that Freeman (and earlier, U.S. Magistrate Judge Susan van Keulen) incorrectly applied the law—specifically the Foreign Sovereign Immunities Act (FSIA). In certain situations, FSIA exempts officials of foreign governments from U.S. litigation.
PIF and Al-Rumayyan, who holds the rank of “minister” in Saudi Arabia, assert they qualify for FSIA immunity given their professional relationship to the Saudi government. They also contend that though appellate courts usually hear appeals only after a final judgment by a trial court, there are exceptions for a matter so time-sensitive that it warrants an earlier review.
The PGA Tour disagrees. It argues that in the context of LIV, PIF and Al-Rumayyan are acting in pursuit of business, not governmental, objectives. The PGA Tour also contends that the Ninth Circuit lacks jurisdiction to hear this appeal at this time. There is no precedent in the Ninth Circuit, the PGA Tour claims, for a review of a trial court’s discovery (subpoena) order, and that cases cited by LIV are not appeals of discovery orders.
The PGA Tour acknowledges that PIF and Al-Rumayyan could appeal later in the litigation. PIF and Al-Rumayyan could move to dismiss the PGA Tour’s counterclaims for tortious interference (PGA Tour argues LIV induced PGA Tour golfers to breach their contracts). Or, if PIF and Al-Rumayyan refuse to comply with the subpoenas and if Judge Freeman then holds them in contempt, PIF and Al-Rumayyan could appeal.
Although LIV and the PGA Tour headline this litigation, much of the debate now concerns PIF and Al-Rumayyan. The PGA Tour insists they possess critical knowledge about how LIV came to be, including the recruitment of PGA Tour golfers and negotiating with agents and prospective broadcast partners. Additionally, there’s little debate that PIF financially supports LIV and plays an instrumental role in its decision-making, though the parties disagree on how much. If the PGA Tour is unable to question PIF and Al-Rumayyan under oath and review their emails, it believes it would be denied a fair chance in court.
Whether the Ninth Circuit concludes it has jurisdiction to hear the appeal and, if so, how it would then decide the appeal will be crucial developments. If PIF and Al-Rumayyan remain required to participate, LIV’s case would be significantly impacted by what they say under oath and what evidence they share. But if the Ninth Circuit sees the matter along the lines of PIF and Al-Rumayyan, that would deliver a blow to the PGA Tour. Adding a further layer of complexity, whichever side loses at the Ninth Circuit could petition the U.S. Supreme Court.
Timing also matters. LIV has maintained the case should proceed as quickly as possible so that it can more effectively compete with the PGA Tour, but the more convoluted the case becomes, the slower the timeline. Whether LIV will wait out what might become a multiyear case is uncertain.