This past week, Law360 reported that U.S. Soccer Federation (USSF) executives filed a motion to dismiss in the North American Soccer League’s (NASL) suit in New York state courts. NASL filed suit in February alleging a breach of fiduciary duty and a purposeful scheme by USSF executives to undermine NASL while promoting the other major American soccer leagues, Major League Soccer and the United Soccer League. Part of the basis for the motion to dismiss was that there is a similar case already underway in the New York federal courts between NASL and the USSF.
This case expanded the case already in New York federal courts and named more than one dozen USSF executives as defendants. The major action this suit arises from is that the USSF demoted NASL from D-II to D-III prior to this year. Many of NASL’s sponsorship deals and players’ contracts require league to maintain a D-II standing for the contract to be enforced. This decision put all of these contracts, and the league as a whole, in jeopardy. The executives defended their actions in the memorandum that accompanied the motion to dismiss, stating that “[p]romoting soccer at all levels in the United States would be impossible if every decision to devote resources to one area of the game could prompt a lawsuit from another.”
At the end of February, NASL canceled its 2018 season following the Second Circuit’s decision not grant injunctive relief in NASL’s parallel antitrust suit. NASL was requesting an injunction be granted to reinstate the league’s D-II status for the 2018 season. As the case moves forward, the future of the league looks bleak.
LJ Sanchez is a Sports Highlight Contributor for the Harvard Journal of Sports and Entertainment Law and a current first year student at Harvard Law School (Class of 2020).