The following post is from Anonymous Attorney, a close friend of The Fried Egg and someone we’ve relied on for direction and edification as we’ve tried to navigate the legal complexities that occupy a newly prominent place in golf discourse. While she/he prefers to remain anonymous, we can attest she/he is credentialed with a law degree and a business degree from highly respected institutions, is a successful practicing attorney, and has no conflicts of interest as it relates to the LIV vs. PGA Tour fight. We thought Anonymous Attorney’s quick explainer would be a helpful and even entertaining recap of what happened in the most recent court battle and what it might mean for the rest of the war. Enjoy.
Some people believe, with great fervor, preposterous things that just happen to coincide with their self-interest. Professional golfers, it turns out, are prone to this type of thinking. Today’s example features three pro golfers who’ve received tens of million dollars filing an antitrust lawsuit alleging they are being prevented from making a living playing professional golf.
On Tuesday afternoon, Federal Judge Beth Freeman denied a Motion for Temporary Restraining Order (TRO) filed by Talor Gooch, Hudson Swafford, and Matt Jones. The players sought to play in the FedEx Cup, which their legal counsel unironically called the “Super Bowl of Golf.” The players allege that the PGA Tour is a monopoly and that they have no other viable alternative to ply their trade as professional golfers. The problem for Gooch, Swafford, and Jones is that they’ve accepted millions of dollars in guaranteed money to play for an actual competitor to the PGA Tour—the Saudi Arabian-funded LIV Golf circuit.
To obtain a TRO, the players had to prove that they suffered irreparable harm from failing to appear in the FedEx Cup. “Irreparable harm” means that they suffer some incalculable damage. If you can put a dollar figure on the damage, you don’t get a restraining order. This is mandatory. If you can be made whole by award money, you lose.
So it’s a terrible, terrible problem for Gooch, Swafford, and Jones that the following paragraph was included in their expert Dr. Jeffrey Leitzinger’s report:
“The costs would also include a loss of opportunities to earn ranking points, to earn entry into the Majors, and to earn retirement benefits. Given these added costs, many Tour members understandably would be very reluctant or altogether unwilling to participate in LIV golf events. It is no surprise then that many elite golfers that agreed to participate in LIV golf events required large upfront payments.”
Judge Freeman seized on Leitzinger’s report from the get-go. She asserted that this admission meant that the players themselves had already extracted large compensation from the risk of missing majors, retirement benefits, and world-ranking points. This is why LIV players are getting huge upfront money. If you have followed any moment of the LIV golf saga, you intuitively know this.
In short, the Court concluded that there is no risk of irreparable harm. If the players were able to figure out that they needed massive payments beforehand (and actually received them!), then a court would figure out damages later on, too.
Boy, that sounds like a big problem for the Plaintiffs’ legal theory. Is it?
Yes. This was not a good day for the Plaintiffs’ attorneys. In medicine, doctors live the cardinal rule “first, do no harm.” Lawyers have a similar rule: don’t plead yourself out of court. In some sense, the Plaintiffs’ expert sabotaged the motion from the start. And Judge Freeman chastised LIV’s legal counsel Gibson Dunn for submitting an “unrealistic” proposed TRO—and then submitting a corrected one after the PGA Tour’s deadline to file a response. Not great.
Worse yet, at one point in the legal argument, the players’ attorney admitted that the player contracts were structured so that their winnings were “recouped against the LIV contracts.” Woof. Several players had vehemently denied this on the record before, as well as LIV representatives.
Does this mean the case is over?
No. The Motion for Temporary Restraining Order was brought by only three players. Several other players, including Phil Mickelson, can continue their case for antitrust violations against the PGA Tour. The Court is likely to schedule a preliminary injunction trial in September, with the actual trial to proceed sometime next year or later.
What are the players chances in winning the rest of this lawsuit?
We asked a few attorneys what they thought the TRO denial meant. In the words of one other lawyer we spoke with:
“This case is going nowhere. It’s deader than a doornail. It’s clear the judge sees LIV as a viable competitor to the PGA Tour. The Leitzinger report says that players have voluntarily foregone the certainty associated with the PGA Tour, the FedEx Cup, and the coveted majors spots in exchange for upfront payments. That is evidence of a functioning marketplace—not monopolistic behavior.”
“The Plaintiffs kept referring to a letter Jay Monahan wrote as the ‘Monopoly Manifesto.’ Right at the end of the hearing, Judge Freeman said she really didn’t think it was an appropriate title and said the letter was standard corporate-speak. She might have tipped her hand a bit there. I would not be surprised if the LIV players withdrew their lawsuit to avoid more damaging rulings.”
Man, did anything go right for the LIV players?
Well, Judge Freeman did say she was concerned about the PGA Tour’s efforts to pressure vendors. And she also said that some of the LIV players’ facts sounded as though they could plausibly make claims. But there weren’t a whole lot of positives the Plaintiffs could draw from the hearing.
If this case gets dismissed or withdrawn, is that the end of LIV lawsuits
Possibly not. One lawyer we spoke with felt that the better case from LIV’s perspective was against the entities that make up the Official World Golf Ranking (OWGR). In some sense, the agreements between the PGA Tour and the OWGR members look like horizontal agreements to exclude new competitors and entrants in the professional-golf market. Maybe, we are told, it would be easier to legally attack those structures. But many of the same problems would still persist in that hypothetical lawsuit.
That sounds horrible. Is this going to get dumber?
- Coleman v. CIR, 791 F.2d 68, 69 (7th Cir. 1986)
- Judge Freeman is notorious for her disdain of footnotes. Several years ago, she ordered one law firm to rewrite its brief in a case to omit what she felt were unnecessary footnotes on every page. In fact, Judge Freeman’s standing order includes the express warning that “excessive footnotes will be disregarded.” Indeed, at one point during the hearing, the players’ counsel, Robert Walters, attempted to rely on an argument asserted in a footnote of their (lengthy) brief. Judge Freeman cautioned that “if it’s in a footnote, you know I’m not reading it.”
- We at The Fried Egg offer these players a bit of advice inspired by David Foster Wallace: “You will become way less concerned with what other people think of you when you realize how seldom they do.”
- Truly, this was a day filled with people saying preposterous things.
- Or rather, a monopsonist. A monopsonist is when one buyer controls the market for a good or service. Here, the allegation is that the PGA Tour is the only buyer that controls the market for pro golf services—an argument substantially undercut by LIV itself.
- We pause, momentarily, to note that Saudi Arabia is perhaps the world’s leading authority on anti-competitive conduct. Saudi Arabia is the de facto leader of the participants in the Organization of Petroleum Exporting Countries (OPEC). OPEC is a bona fide cartel created to reduce the global supply of oil in order to extract monopolist profits. Saudi Arabia is, strangely, exempt from liability under the Sherman Act because it is a foreign nation.
- Jeffrey Leitzinger’s report was a focal point of the hearing when compared to the report proffered by the PGA Tour’s expert Mark Israel. That is probably owing to Israel’s superior Illinois Wesleyan Economics education.
- This is often incorrectly attributed to the Hippocrates, a Greek physician who lived (approximately) in the fifth century BC. It turns out this actually dates to a 17th-century English physician named Thomas Syndenham.