Antitrust Law Daily Wrap Up, ANTITRUST—D.P.R.: Sherman Act claims against FIFA get through; RICO claim against it blocked, (Dec 2, 2024)

By Patricia K. Ruiz, J.D.

FIFA moved to dismiss claims against it for lack of personal jurisdiction.

The U.S. District Court for the District of Puerto Rico granted in part and denied in part a motion to dismiss claims against the Federation Internationale de Football Association (FIFA) alleging anticompetitive conduct. The Puerto Rico Soccer League (PRSL) alleged FIFA engaged in a variety of anticompetitive agreements to prevent FIFA’s competitors from engaging in soccer tournaments in Puerto Rico. The court found exercising specific personal jurisdiction over FIFA as to PRSL’s Sherman Act claim would be reasonable but that PRSL failed to show its alleged Racketeer Influenced and Corrupt Organizations Act (RICO) and commonwealth-law violations arose from or were related to FIFA’s forum-related contacts (Puerto Rico Soccer League NFP, Corp. v. Federación Puertorriqueña De Futbol, No. 3:23-cv-01203-RAM (D.P.R. Nov. 25, 2024)).

Background. In April 2023, PRSL and news outlet Futbol Boricua, Inc. (“FBNET”), brought an antitrust suit against FPF, certain FPF directors (collectively, “FPF defendants”), and codefendants FIFA and the Confederation of North, Central America and Caribbean Association Football (“CONCACAF”). PRSL alleged the defendants engaged in a variety of anticompetitive agreements, including (1) an agreement to comply with FIFA policy prohibiting the sanctioning of any League tournament in Puerto Rico not conducted by FPF; (2) an agreement by FIFA and affiliates to boycott clubs and players that participate in League tournaments in Puerto Rico not sanctioned by FPF; and (3) an agreement between FPF and FIFA to sanction in a manner that restricts output in the relevant market enhancing the FPF competitive market position.

The plaintiffs alleged these putatively anticompetitive agreements excluded PRSL from the market and hurt consumers with tournament cancellations, but the defendants argued that none of the allegations indicated market harm. In January 2024, the court denied a PR Soccer League and FBNET request to enjoin FPF on an emergent basis. Then, in July 2024, the court denied a second FBNET motion for emergency injunctive relief to prevent FPF, FIFA, and CONCACAF from blocking FBNET’s access to FPF-sanctioned soccer matches and putatively violating FBNET’s rights under the First Amendment. In September 2023, the FPF defendants moved for dismissal. The court held that the PR Soccer League could proceed with its antitrust claims but dismissed its RICO and commonwealth-law claims with prejudice.

FIFA moved to dismiss the totality of PRSL’s claims against it—violations of section 1 of the Sherman Act and RICO, as well as tortious interference with a contract, abuse of process, and breach of fiduciary duty under Puerto Rico law—for lack of personal jurisdiction. The court incorporated by reference the October 2024 decision for purposes of FIFA’s motion.

General jurisdiction. PRSL did not dispute that FIFA has no office, mailing address, or phone number in Puerto Rico, nor did it dispute that FIFA is not registered to do business in Puerto Rico. Further, FIFA has no property interest, pay income taxes, hold accounts, keep books, or maintain records in Puerto Rico. The court then reviewed the “potpourri of FIFA contacts with Puerto Rico since 2002” and found that FIFA is not subject to general jurisdiction, as PRSL’s allegations made clear that FIFA’s contacts in Puerto Rico constitute only a small fraction of its activities as an organization.

Specific jurisdiction. The court next considered whether PRSL put forward sufficient facts to show FIFA is subject to specific jurisdiction. PRSL proffered multiple contacts between FIFA and Puerto Rico that directly relate to its allegations of anticompetitive conduct, and the court was satisfied that PRSL showed a nexus between their claims and FIFA’s forum-based activities, as FIFA’s tournament-participation enforcement was the mechanism that allegedly excluded PRSL from the market. Turning to purposeful availment, the court found FIFA “deliberately reached beyond its home” in at least two ways: first, in authorizing FPF as a local sanctioning authority in Puerto Rico; and, second, in its repeated contact with FPF to induce it to enforce FIFA policies. Thus, the court found PRSL met its burden of showing FIFA’s purposeful availment.

The court also determined that exercising personal jurisdiction would be reasonable, finding: (1) FIFA did not argue it would be burdened by litigating in Puerto Rico; (2) PRSL’s allegations of anticompetitive injury raised the specter of ongoing harm to consumers in the market for league tournaments in Puerto Rico, potentially dampening the output of tournaments played by top talent; (3) PRSL’s choice of forum should be afforded a degree of deference; (4) the interest of the interstate judicial system in obtaining efficient resolution of controversies points toward exercising jurisdiction in Puerto Rico, as the antitrust allegations could lead to the need for local experts to analyze the relevant Puerto Rico market; and (5) Puerto Rico has an interest in affording its citizens a convenient forum in which to bring their claims. The court denied FIFA’s motion to dismiss as it relates to personal jurisdiction with regard to the Sherman Act claim.

RICO and commonwealth-law claims. The court found PRSL’s showing of personal jurisdiction was insufficient as to their RICO and commonwealth-law claims, as PRSL failed to show the purported violations arose from or were related to FIFA’s forum-related contacts. The court dismissed with prejudice PRSL’s RICO and commonwealth-law claims against FIFA.

The Case is No. 3:23-cv-01203-RAM.

Judge: Marxuach, R.

Attorneys: Ibrahim Reyes (Reyes Lawyers, P.A.) for Puerto Rico Soccer League NFP, Corp. Alexandra C. Casellas-Cabrera (Adsuar Muniz Goyco Seda & Perez-Ochoa, PSC) for Ivan E. Rivera-Gutierrez. H. Christopher Boehning (Paul, Weiss, Rifkind, Wharton & Garrison LLP) for Federation Internationale De Football Association a/k/a FIFA.

Companies: Puerto Rico Soccer League NFP, Corp.; Federation Internationale De Football Association a/k/a FIFA

Cases: Antitrust PuertoRicoNews