PGA Tour can add LIV investors to countersuit

Golf

The PGA Tour can add Saudi Arabia’s Public Investment Fund (PIF) and its governor, Yasir Al-Rumayyan, as defendants in its countersuit against LIV Golf, a U.S. District Court judge ruled Tuesday night.

Judge Beth Labson Freeman of the Northern District of California granted the PGA Tour’s motion for leave to amend its counterclaim to add PIF and Al-Rumayyan as defendants in the countersuit, which alleges LIV Golf interfered with its contracts with players.

Attorneys representing Saudi Arabia’s sovereign wealth fund and Al-Rumayyan had argued a delay would cause harm to LIV Golf players who had been suspended by PGA Tour commissioner Jay Monahan for competing in LIV tournaments without conflicting-event releases.

“LIV argues instead that granting leave to amend would harm both the Player Plaintiffs and LIV by potentially delaying resolution of the case,” Freeman wrote in her ruling. “According to LIV, this potential delay could harm the Player Plaintiffs by preventing them from being able to earn a living in their chosen profession during the prime of their careers, and it could harm LIV by allowing the Tour’s alleged anticompetitive conduct to continue during the pendency of the case.

“While the Court is sensitive to the golfers’ need to earn a living during the pendency of the case, LIV has not identified how allowing the proposed amendment would cause any of the Plaintiffs undue difficulty in prosecuting their case. Moreover, LIV’s speculation that adding PIF and [Al-Rumayyan] to the Tour’s existing counterclaim will delay resolution of the case does not demonstrate undue prejudice.”

On Thursday, U.S. Magistrate Judge Susan van Keulen rejected arguments from PIF lawyers that the fund and Al-Rumayyan were shielded from the tour’s subpoenas on the grounds of sovereign immunity because they were agents of a foreign government.

The court rejected PIF’s and Al-Rumayyan’s claims of sovereign immunity and lack of jurisdiction and ruled that their conduct fell within the commercial exception to the Foreign Sovereign Immunities Act. The court also rejected their personal jurisdiction defenses because they allegedly “directed their activities at the United States.”

Lawyers for PIF and Al-Rumayyan have indicated that they will ask a federal judge to review van Keulen’s ruling. Freeman has scheduled a hearing for Friday.

Freeman concluded that any delay in the case, which is scheduled to begin trial in January, is due to PIF’s and Al-Rumayyan’s failure to comply with subpoenas.

“Any delay LIV attributes to this amended pleading is not likely to outlast the delay caused by the subpoena dispute over PIF and [Al-Rumayyan] discovery and LIV’s anticipated motion seeking review of Judge van Keulen’s order,” Freeman wrote.

PIF and Al-Rumayyan argued that they were merely investors in LIV Golf, which is being fronted by two-time Open Championship winner Greg Norman, and weren’t involved in the day-to-day operations or recruitment of players. PIF has invested more than $2 billion in LIV Golf, which begins its second season in Mexico on Friday.

PGA Tour lawyers argued that Al-Rumayyan personally recruited players and “played an active role in contract negotiations, and expressly approved each of the player contracts — all while knowing that these deals would interfere with the players’ tour contracts.”

On Aug. 3, 11 golfers, including Phil Mickelson and Bryson DeChambeau, filed a federal antitrust lawsuit against the PGA Tour, alleging that it was using its monopoly power to quash competition and was discouraging broadcasters, sponsors and other vendors from working with LIV Golf. Mickelson and seven other golfers later removed themselves as plaintiffs in the case. LIV Golf joined DeChambeau, Matt Jones and Peter Uihlein as the remaining plaintiffs.

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