By Michael Lewis
NEW YORK — If you were expecting any new revelations from the North American Soccer League’s request for a reversal of an earlier decision in appellate court Friday, you would have been disappointed.
Both sides gave familiar arguments in the appeal hearing of the league’s bid to obtain a preliminary injunction against the U.S. Soccer Federation that rescinded its Division II status, in the U.S. Court of Appeals for the Second Circuit.
The NASL wants to overturn a ruling by Judge Margo K. Brodie in the U.S. District Court in the Eastern District of New York in November so it could continue as a Division II league in 2018. If not, the NASL claims it will go out of business.
It was not immediately known when the court would issue a ruling, although since this was an expedited hearing, as requested by the NASL, it would not be surprising if one is filed prior to Christmas.
Both sides had 10 minutes to state their cases in Courtroom 1703 at the Thurgood Marshall US Courthouse in Manhattan.
Judge Denny Chin was the most interested of the three judges, asking the majority of questions. Barrington D. Parker and Richard C. Wesley were the other judges.
Attorney Jeffrey Kessler, representing the NASL, reiterated his argument from the first hearing, that the league would suffer “the most extreme form of irreparable harm” if a preliminary injunction was not granted.
Gregory Garre, the lead USSF attorney who is a partner with Latham & Watkins, later responded, saying that it “makes no sense.”
“U.S. Soccer has gone out of its way seven of the last eight seasons to give them waivers,” he added, referring to the Division II standards.
“There was no way to try to drive the NASL out of business.”
As he did in the original hearing, Kessler, co-executive chairman of Winston & Strawn LLP, claimed there was a conflict of interest between Major League Soccer, Soccer United Marketing, MLS’s marketing arm and the federation.
Without a discovery process, it would be a difficult thing to prove.
During his rebuttal toward the end of the hearing, Kessler cited a quote from MLS commissioner Don Garber two days ago that “hundreds of millions of dollars go to MLS, USSF from SUM.”
Chin asked whether the quote was on the record, whether in the papers that the NASL filed. Kessler replied no.
Later, Garre argued otherwise. “No money flowed MLS to the USSF under this agreement,” he said.
Chin noted that that the federation was being “fairly lenient” over the years with its NASL sanctioning, adding that the United Soccer League had grown to nearly 30 teams.
“They got more waivers,” Kessler replied. “In the beginning these standards were entrenched to help MLS.”
Chin later stated: “You’re asking us to rewrite the standards.”
To which Kessler responded: “If they do the same waivers [for the NASL], we continue. We get to survive. Otherwise, we get driven out of existence.”
He added: “Let the consumers decide if a league with five or eight teams isn’t good enough.”
When Chin brought up that the NASL was on the verge of shutting down. Garre countered that if the league shows irreparable damage it would have to show likely success. He noted in his filing about Brodie’s decision that “a potential loss is not a likely loss.”
Garre, a former U.S Solicitor General, said the NASL’s arguments had “four fatal flaws.”
Due to questioning and the limited 10 minutes, Garre could not get to all fatal flaws. He did not that members of the U.S. Board of Directors who had ties to professional soccer recused themselves from the sanctioning vote in September.
When he spoke of the SUM agreement, Garre noted that it was in place before the NASL was created.
Interestingly, the fact that all leagues go through sanctioning on an annual basis was never brought up.
In his closing argument, Garre said “the only way to rule for the NASL in this case was to rule for the radical re-conception of the anti-trust laws.”
In his closing argument during a one-minute rebuttal, Kessler said, used facts from his opening statements.
“It comes down to will they drive us out of business,” he said, adding that four club owners claimed it will and that the league had six letters of intent from teams that want to join the league.
“Your honor, the fate of our clients [is] in your hands.”
Early in the hearing Chin mistakenly called Major League Soccer MSL, but given all of the acronym that were bandied about during the hearing, switching letters by accident could be expected.
As per courthouse rules, visitors were not allowed to bring cellphones or recording devices into the court room. There also were no clocks on the wall.
The three judges sat at the front of the room. For visitors and interested observers, a television set was situated on the left-side of the room. The screen was divided into four screens with the three judges and whichever attorney was talking.
There also was a countdown clock for when each attorney gave his argument amid questioning from the judges. After their allotted time expired, it became a count-up clock.
Afterwards, NASL interim commissioner Rishi Sehgal issued a statement.
“Today, we made our case for relief to the Second Circuit Court of Appeals, and we are thankful to have had our day in court,” he said. “We are hopeful that we will obtain a ruling that will protect soccer for all and maintain the opportunities that the NASL provides to players, coaches, referees and fans across the country.”