North American Soccer League, LLC v. United States Soccer Federation, Inc.

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

NORTH AMERICAN SOCCER LEAGUE,

LLC, MEMORANDUM & ORDER

17-CV-5495 (HG)

Plaintiff,

v.

UNITED STATES SOCCER FEDERATION,

INC. and MAJOR LEAGUE SOCCER, LLC,

Defendants.

HECTOR GONZALEZ, United States District Judge:

The Court has now published the final jury instructions in this case. See ECF No. 531.

However, because one issue was subject to particular debate at the charge conference and due to

Plaintiff’s shifting positions, the Court writes only briefly to explain its reasoning with respect to

Instruction Nos. 16, 31, and 32.1 These instructions relate to one branch of Plaintiff’s Second

Count, which alleges that “Defendants [U.S. Soccer Federation (“USSF”) and Major League

Soccer (“MLS”)] and others have entered into a continuing agreement, combination, or

conspiracy with the specific intent of granting and maintaining for USL [United Soccer League]

a monopoly in the relevant market for [Division 2 (“D2”)] professional soccer leagues located in

the U.S. and Canada.” See ECF No. 57 ¶ 282 (Am. Compl.).2 The Court assumes the parties’

familiarity with the basic facts of this case at this late stage, but for context, USL, another soccer

league, is not a defendant. The instant issue concerns what Plaintiff must prove to establish

Defendants’ conspiracy liability in the D2 market under Section 2 of the Sherman Act. For the

1 These refer to the final instructions. At the time of the charge conference, these

corresponded to Instruction Nos. 19, 34, and 35, respectively.

2 At the pleadings stage, this was Plaintiff’s Third Count.

reasons explained below, the Court agrees with Defendants that Plaintiff must prove, consistent

with its near-uniform position throughout this case, that USL was a member of a trilateral

conspiracy with Defendants in order to establish D2 liability on this Count.

* * *

To frame the problem, it is helpful to look at the particular instructions at issue. The

Court will instruct the jury that “Plaintiff’s second count alleges . . . that Defendants conspired

with each other and with . . . USL . . . to monopolize the alleged relevant market for team

membership in a D[2] sanctioned league in the United States and Canada, in violation of

Section 2 of the Sherman Act.” See ECF No. 531 at 43 (Instruction No. 31) (emphasis added).3

Consistent with that description of Plaintiff’s allegation, the Court will also instruct the jury that

“[i]n order to find that MLS sought to achieve a D[2] monopoly for USL, you must find that

USL was also a member of the conspiracy.” See id. at 45 (Instruction No. 32). Importantly,

Plaintiff proposed to add the underlined language to the instruction. See ECF No. 507 at 1, 54.

It believed this language to be necessary because “[w]ithout [it], the instruction inaccurately

describes [Plaintiff]’s claim. [Plaintiff] alleges not only that Defendants conspired with USL,

but that the Defendants conspired with each other. In addition, without that language, the

instruction suggests that [Plaintiff] must prove that USL is a member of the conspiracy. As

NASL previously objected, this is inaccurate.” See id. at 26 n.3. But as the Court raised at the

charge conference, that argument did not track the proposed additional language, which

“necessarily requires a trilateral conspiracy.” Trial Tr. at 1768:9–10. Indeed, Plaintiff’s counsel

conceded that its own proposed language was “a little bit confusing.” Id. at 1767:15–16.

3 The Court refers to the pages assigned by the Electronic Case Files system (“ECF”).

Unless otherwise indicated, when quoting cases, all internal quotation marks, alteration marks,

emphases, footnotes, and citations are omitted.

Accordingly, Plaintiff also objected to the inclusion of the instruction requiring the jury to find

that USL was part of the D2 conspiracy. See ECF No. 507 at 56 n.24. However, as the Court

explained at the charge conference, and as the Court has now decided, that language is necessary

to put a “finer point on what [Plaintiff] already agreed to in terms of the instruction for the

element of the conspiracy.” See Trial Tr. at 1788:2–4.

The Court starts with the legal issue. Assuming neither Defendant competes in the D2

market and USL was not a member of the alleged conspiracy, can either Defendant be liable for

conspiring to have USL monopolize that market? This Court, like others, thinks not. See

Aquatherm Indus., Inc. v. Fla. Power & Light Co., 145 F.3d 1258, 1262 n.4 (11th Cir. 1998)

(“[N]o authority exists holding a defendant can conspire to monopolize a market in which it does

not compete.”); Little Rock Cardiology Clinic, P.A. v. Baptist Health, 573 F. Supp. 2d 1125,

1141 (E.D. Ark. 2008) (“No one can conspire to monopolize a market unless at least one of the

coconspirators competes in that market.”), aff’d, 591 F.3d 591 (8th Cir. 2009). Conceptually,

that is a sensible outcome. “The specific intent necessary to establish a conspiracy to

monopolize is the intent to enable or maintain a monopoly position in the relevant market.” See

In re Zinc Antitrust Litig., 155 F. Supp. 3d 337, 383 (S.D.N.Y. 2016). Of course, as with all

conspiracies, “proof of success or impending success is irrelevant.” See Int’l Distrib. Ctrs., Inc.

v. Walsh Trucking Co., 812 F.2d 786, 795 n.8 (2d Cir. 1987). But “the relevant market and the

likelihood of its monopolization may have a significant bearing on whether the requisite specific

intent to monopolize is present.” See In re Zinc, 155 F. Supp. 3d at 382. Because “[i]t is

axiomatic that a firm cannot monopolize a market in which it does not compete,” RxUSA

Wholesale, Inc. v. Alcon Lab’ys, Inc., 661 F. Supp. 2d 218, 227 (E.D.N.Y. 2009), aff’d, 391

F. App’x 59 (2d Cir. 2010), there is no way that that firm could monopolize such a market.

Specific intent is therefore lacking, as the alleged relevant market is as foreign to non-competing

co-conspirators as a non-existent market. See Emigra Grp., LLC v. Fragomen, Del Rey, Bernsen

& Loewy, LLP, 612 F. Supp. 2d 330, 363 (S.D.N.Y. 2009) (finding a lack of evidence that

defendants “enjoy[ed], or ha[d] any realistic hope of gaining, monopoly power in” a broadly

defined market “fatal” to plaintiff’s conspiracy claim, and comparing this to a conspiracy to

monopolize a non-existent relevant market, which “one cannot monopolize”).

Plaintiff resists this conclusion by pointing to Discon, Inc. v. NYNEX Corp., 93 F.3d 1055

(2d Cir. 1996), vacated on irrelevant grounds, 525 U.S. 125 (1998). In that case, plaintiff

alleged that several defendants, successors to AT&T, conspired with non-party AT&T to

eliminate it from the market for the removal of obsolete telephone equipment. Id. at 1057–58.

In reversing the district court’s dismissal of the conspiracy to monopolize claim, the Second

Circuit explained that “to be liable for conspiracy to monopolize, it is not necessary that the

[successor] Defendants compete directly in the market for removal services. A defendant may

be liable for conspiracy to monopolize where it agrees with another firm to assist that firm in its

attempt to monopolize the relevant market.” Id. at 1062. Plaintiff also points the Court to Volvo

North America Corp. v. Men’s International Professional Tennis Council, 857 F.2d 55 (2d Cir.

1988). In that case, plaintiffs claimed that fellow members of an alleged tennis cartel, namely

MIPTC, which sanctioned professional tennis events, conspired to monopolize the market for

men’s professional tennis in a variety of ways. Id. at 58–60, 67–68. In other words, plaintiffs

sought to challenge as anticompetitive rules of the sanctioning organization to which they

belonged. Id. at 68. In a very brief discussion, the Second Circuit concluded that plaintiffs

stated a claim for conspiracy to monopolize. Id. at 74.

The problem for Plaintiff is that these cases, neither of which is directly on point, do not

support its maximalist view that none of the alleged co-conspirators (i.e., Defendants here) needs

to compete in the alleged relevant market. See ECF No. 507 at 26 n.3; Trial Tr. at 1775:2–5,

1789:2–8. Even if a firm need not compete “directly” in the alleged relevant market to be

subject to Section 2 conspiracy liability, the precedent cited by Plaintiff assumes that that firm

illegally “agrees” with some other entity, irrespective of its status as a defendant, that does

compete in the relevant market. See Discon, 93 F.3d at 1062.4

At the charge conference, Plaintiff largely pivoted away from its most aggressive position

and argued that Defendant MLS actually did compete in the D2 market because MLS teams

competed in the USL. See Trial Tr. at 1777:16–1778:4; see also ECF No. 513-1 at 10 n.13 (Pl.’s

Proposed Verdict Sheet) (“Further, MLS participated in the D2 market through its partnership

with USL and its reserve teams competing in USL.”). That theory is nowhere to be found in the

Amended Complaint. See, e.g., ECF No. 57 ¶ 283 (“Defendants and others have engaged in

concerted action, including numerous overt acts described above, with the specific intent of

obtaining and maintaining such monopoly power for MLS and USL in their respective relevant

markets . . . . (emphasis added)). To be sure, in opposition to summary judgment, Plaintiff

argued that it alleged “a conspiracy between MLS and USSF to monopolize the D2 market

through the partisan application of the [sanctioning] Standards process to protect MLS’s minor

league, USL, from any competition, with the ultimate MLS goal of having a monopoly ‘MLS-

4 The Court separately notes that Plaintiff’s reference to Volvo is vague, focusing on one

challenged rule and stating that “MIPTC itself did not compete in the alleged relevant markets.”

See ECF No. 507 at 26 n.3. Defendants disagree with that as a factual matter. See Trial Tr. at

1777:4–6. Although Volvo does not precisely state the contours of the alleged Section 2

conspiracy, at a minimum, it does not support the bold proposition that no co-conspirator needs

to compete in the alleged relevant market. See Volvo, 857 F.2d at 74.

run D2.’” See ECF No. 289 at 53–55. With respect to MLS, that is most naturally read as an

alter ego theory of liability: MLS is USL, so MLS also competed in the D2 market. But the

Amended Complaint makes no such allegation. Cf. In re Zinc, 155 F. Supp. 3d at 381 (for

Section 2 claim, declining to pierce the corporate veil “[i]n the absence of allegations that [the

parent company] failed to comply with corporate formalities”). And if Plaintiff is actually trying

to allege a theory of “shared monopoly” in D2 between two distinct entities, it has never

articulated that position, nor pointed to authority sustaining it in the Section 2 conspiracy

context. See id. at 382–83.

Most importantly, the current instructions are most consistent with Plaintiff’s near-

uniform position throughout this case. In addition to its proposed additional language making

clear that there was an alleged trilateral conspiracy, see supra at 2–3, Plaintiff initially proposed

the following language for a preliminary jury instruction: “NASL alleges that U.S. Soccer

Federation and Major League Soccer conspired with each other, and with another soccer entity,

to exclude NASL and other soccer leagues from competing in certain markets involving top-tier

and second-tier men’s professional soccer leagues located in the United States and Canada.” See

ECF No. 471 at 9.5 Critically, although that instruction was mostly jointly composed, Plaintiff

proposed to unilaterally add the italicized language. See id. at 2, 9. Then, in the first proposed

final instruction, Plaintiff proposed that same formulation: “NASL’s second count alleges that

U.S. Soccer Federation and Major League Soccer conspired with each other, and another soccer

entity, to monopolize relevant markets for top-tier and second-tier men’s professional soccer

5 Further, it is worth observing that this language captures both Plaintiff’s Section 1 and

Section 2 theories of liability. The jury instructions reflect this position for both Sections 1 and

2, see ECF No. 531 at 22 (Instruction No. 16); id. at 26 (Instruction No. 19), notwithstanding

Plaintiff’s argument, raised for the first time yesterday, that it intended something different for

Section 1, too, see Trial Tr. at 2593:24–2594:9.

leagues in the United States and Canada, in violation of Section 2 of the Sherman Act.” See ECF

No. 474 at 5, 89 (emphasis added). As the foregoing makes clear, USL is the only other relevant

soccer entity in this case. See Trial Tr. at 1772:12–16.

There is more. In pre-trial motion practice, Plaintiff argued that a letter from USL should

be admitted under Rule 801(d)(2)(E) because it was a statement of a “party’s co-conspirator

(USL).” See ECF No. 500-12 at 1. At trial, in its opening statement, Plaintiff’s counsel

explained to the jury that “now we hit the second part of the conspiracy, which is that MLS and

USL become joined now.” See Trial Tr. at 257:6–7. And even at the charge conference,

Plaintiff’s counsel described USL as a co-conspirator: “I think we are entitled to prevail under

the law even if we prove that only two of the three alleged conspirators participated.” See Trial

Tr. at 1775:2–5 (emphasis added).

In sum, the Court will not allow Plaintiff to confuse the issues by springing a new theory

of its case onto the jury and Defendants this late in the game. See id. at 1774:23–1775:1. And it

will certainly not permit Plaintiff to seek instructions plainly inconsistent with charge language it

has submitted three times to the Court and its consistent position throughout this case. After all,

Plaintiff “respectfully request[ed] that the Court defer to [it] with respect to its own allegations”

in crafting instructions, contending that “Defendants can challenge the sufficiency of NASL’s

evidence at trial.” ECF No. 471 at 9 n.12. The jury will decide if Defendants have adequately

done that, but allowing Plaintiff to shape-shift out of its own position after the close of evidence

would pull the rug out from under Defendants, and the Court will not condone it. See K.R. v.

Sch. Dist. of Phila., No. 06-cv-2388, 2008 WL 5397533, at *4 (E.D. Pa. Dec. 26, 2008) (denying

plaintiffs’ Rule 59 motion and concluding that the Court did not err by declining to give a jury

instruction on a “theory of liability . . . made for the first time only five days prior to trial”),

aff’d, 373 F. App’x 204 (3d Cir. 2010); Kinsel v. BMW of N. Am., No. 20-cv-08296, 2024 WL

113305, at *7 (D. Ariz. Jan. 10, 2024) (“hold[ing] [p]laintiff to her representations and

preclud[ing] any jury instructions on” a certain theory of liability not reflected in plaintiff’s

briefing on jury instructions).

SO ORDERED.

/s/ Hector Gonzalez

HECTOR GONZALEZ

United States District Judge

Dated: Brooklyn, New York

January 31, 2025