FIFA Case Would Shift Trade Group Members’ Liability if Affirmed

A pending case before the US Supreme Court could resolve a circuit split about whether trade organization members could be liable for anticompetitive conduct simply based on that membership.

On Nov. 13, 2023, the Supreme Court requested the solicitor general’s position on a petition for certiorari filed by the US Soccer Federation from a Second Circuit decision finding that membership alone in a trade association is sufficient to state a plausible claim for conspiracy to violate the Sherman Act through use of trade association policies. The court most often follows the solicitor general’s recommendation about whether to take a case.

The Second Circuit’s decision found that trade association membership alone is sufficient for pleading purposes regardless if the association member participated in the adoption or explicitly agreed with the policy alleged to violate the antitrust laws.

US Soccer’s petition for certiorari is supported by amici briefs from the US Chamber of Commerce and the American Society of Association Executives. If the Supreme Court accepts this case, it’s likely to resolve a circuit split on the issue, and may have considerable effect on members of trade associations targeted for alleged anticompetitive activity.

The underlying allegations are based on a rule implemented in 2018 by the Federation International de Football Association, the official international governing body for professional soccer, which prohibits member soccer federations from sanctioning official soccer matches outside the federation’s home jurisdiction.

A US-based soccer events promoter alleges FIFA and its member soccer clubs, including the US Soccer Federation, conspired to violate Section I of the Sherman Act by dividing up the market for soccer games geographically among the members. FIFA allegedly conspired by issuing the rule prohibiting participation in non-FIFA sanctioned matches, and the member organizations by agreeing to abide by it.

The district court ruled that mere membership in the trade association, with nothing more, can’t constitute a plausible conspiracy to violate antitrust laws. The court held that the plaintiffs didn’t state a claim against US Soccer because they didn’t show active participation in the formulation or passage of the offending rule to pass muster for stating a claim.

The Second Circuit vacated and remanded, finding that, for purposes of a motion to dismiss, stating that US Soccer agreed to abide by the allegedly anticompetitive rules as a member is sufficient to plead an agreement to violate the antitrust laws.

There’s a circuit split on whether membership in a trade association alone, with nothing more, is sufficient to state a plausible claim for violations of the Sherman Act. The Third, Fourth, and Ninth Circuits say no; the D.C. and Second Circuits say yes.

Supreme Court resolution of this split would provide needed guidance on what standard applies at the pleading stage. Many antitrust theories involve rules implemented by trade associations, most of which are done with little to no involvement of the organization’s members.

For that reason, if the court were to accept the case and confirm the Second Circuit’s ruling, trade association members would be increasingly likely to face lawsuits alleging violations of antitrust laws for actions taken by trade associations on behalf of entire industries.

Many trade association rules are far afield from anything that could be construed as an illegal antitrust conspiracy. But those that limit or foreclose competition between association members on prices or customers, or those that limit areas or methods for competition, could give rise to viable Section I claims if the Second Circuit isn’t reversed.

On the other hand, if the Supreme Court were to accept the case and reject the Second Circuit’s ruling, then plaintiffs seeking to allege anticompetitive activity conducted through trade associations would likely have to allege facts showing actual involvement in and agreement to something more than an association’s rules to plead a plausible Section I claim against member organizations.

The solicitor general’s views reflecting current thinking at the Antitrust Division of the Justice Department and the Federal Trade Commission will undoubtedly play a role in whether the court wades into this controversial issue.

The Supreme Court is expected to decide this spring whether to hear the case, and it would likely hear oral argument this fall or winter.

The case is United States Soccer Federation, Inc. v. Relevent Sports, LLC, U.S., No. 23-120

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Jim Morsch is partner at Saul Ewing and focuses on insurance, antitrust, and commercial law disputes.

Jason McElroy is partner at Saul Ewing with focus on complex litigation in federal and state courts.

Write for Us: Author Guidelines