On March 29, 2017, United States District Judge Amos L. Mazzant dismissed a class action lawsuit against the Major League Soccer Players Union (Players Union), the exclusive bargaining representative of all MLS players, whereby the plaintiffs sought to recover training and solidarity fees.[1]  Under FIFA rules, training and solidarity fees are required to be paid to youth soccer clubs, by professional soccer clubs, for training players.[2]

The training fees are paid to the youth soccer club when a player signs his first contract to play professional soccer and the solidarity fees are paid to the youth soccer club when a player is “transferred to a professional soccer club in a different national association.”[3]   If a dispute arises regarding any of these fees, FIFA’S Dispute Resolution Chamber in Zurich, Switzerland, adjudicates such matters.[4]

The plaintiffs – the Dallas Texans; Crossfire Premiere of Redmond, Washington; and Sockers FC of Chicago – initiated administrative proceedings before the Dispute Resolution Chamber, seeking solidarity fees in connection to the transfer of their players, Clint Dempsey, Deandrew Yedlin, and Michael Bradley, respectively.[5]

Plaintiffs alleged that at a meeting between professional soccer leagues, the U.S. Soccer Federation, and the Players Union, the Executive Director of the Players Union, Bob Foose, “stated that any effort by [p]laintiffs to enforce training compensation or solidarity fees would violate federal antitrust law.”

The U.S. Soccer Federation cited Fraser v. MLS, which held that U.S. youth soccer clubs cannot collect such fees.[6]  The youth soccer clubs claimed that Fraser “does not apply to FIFA’s Regulations on the Status and Transfer of Players” and the U.S. Soccer Federation “appeared to accept their argument.”[7]

The plaintiffs further alleged that the Players Union “threatened to file an antitrust lawsuit against [p]laintiffs, the U.S. Soccer Federation, and others if the Dispute Resolution Chamber awarded [p]laintiffs training compensation or solidarity contributions.”[8]

The Players Union also said it would be “an act of antitrust” against its U.S. players of the youth soccer clubs, the U.S. Soccer Federation, and the professional soccer clubs to “agree to a domestic reward system within the [U.S.] to implement and enforce training compensation and solidarity fees, similar to the FIFA [Regulations on the Status and Transfer of Players].”[9]

On July 1, 2016, plaintiffs filed a class action complaint, seeking a declaration that the payment of training and solidarity fees does not violate antitrust laws and a declaration “that the implementation of a system of training compensation and solidarity fees for player transactions within the U.S. does not violate antitrust laws.”[10]  On November 3, 2016, the Players Union filed a motion to dismiss for lack of personal jurisdiction.

The District Court for the Eastern District of Texas sided with the Players Union, finding that plaintiffs did not “establish[] a prima facie case supporting general jurisdiction over the Players Union” because the Players Union’s contracts must be “viewed in light of its activities nationwide,” not merely by the fact that it meets with and represents players in Texas.[11]

The district court also found that it had no specific jurisdiction over the Players Union because the plaintiffs’ cause of action did not “grow[] out of or relate[] to a contact between the defendant and [Texas].”[12]

In a related proceeding on the same day, Judge Mazzant also granted the motion to dismiss for lack of personal jurisdiction of defendants Michael Bradley, Clint Dempsey, and Deandre Yedlin.[13]


Sources

[1] Dallas Texans Soccer Club v. Major League Soccer Players Union, No. 4:16-CV-00464, 2017 WL 1165662, at *1 (E.D. Tex. Mar. 29, 2017).

[2] Id.

[3] Id.

[4] Id.

[5] Id.

[6] Jorge Arangure Jr., Youth Clubs File Class Action Lawsuit Vs. MLS Players Union and Dempsey, Yedlin and Bradley, Vice Sports (July 1, 2016), https://sports.vice.com/en_us/article/youth-clubs-class-action-mls-players-union-dempsey-yedlin-bradley-solidarity-payments.

[7] Id.

[8] Dallas Texans Soccer Club, 2017 WL 1165662, at *1.

[9] Arangure, supra note 6.

[10] Id. at *2.

[11] Id. at *3.

[12] Id.

[13] Dallas Texans Soccer Club v. Major League Soccer Players Union, No. 4:16-CV-00464, 2017 WL 1174602, at *1 (E.D. Tex. Mar. 29, 2017).

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