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A federal judge dismissed LIV Golf’s claims for immunity, ruling that its Saudi Arabian benefactors must be exposed, release relevant information and make affidavits. The ruling marks a significant victory for the PGA Tour in its legal battle with LIV Golf and could have repercussions beyond the antitrust case that has divided the golfing world.
The Saudi Public Investment Fund had dismissed the PGA Tour’s discovery efforts and LIV Golf argued that the U.S. District Court for the Northern District of California had no jurisdiction over the fund, and its governor Yasir al-Rumayyan said the fund was an “organ and integral part of the Kingdom of Saudi Arabia” and thus protected by the Foreign Sovereign Immunity Act.
US Judge Susan van Keulen disagreed. The FSIA ensures that every foreign state “is immune from the jurisdiction of the courts of the United States,” with some exceptions. In a 58-page statement unsealed late Thursday night, van Keulen noted that the “commercial activities exception” applies because “PIF’s conduct in the formation, funding, oversight and operation of a professional golf league, LIV , is a commercial activity”.
A LIV Golf spokesman did not immediately respond to a request for comment. LIV Golf has already indicated in court filings its intention to appeal the injunction, previously warning the court that disclosure of the fund and al-Rumayyan would have implications beyond this case.
“Accepting jurisdiction here could set a dangerous precedent that would allow PIF to be sued in US courts if one of its portfolio companies is involved in litigation,” LIV Golf’s attorneys said in a filing.
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The public investment fund has total assets of $676 billion, of which $40 billion are held in U.S. companies, including Uber, Meta, Microsoft, Zoom, Starbucks, Amazon, LIV Golf revealed in court filings and Walmart.
LIV Golf has attempted to differentiate its financial support from its actual operations, as neither the fund nor al-Rumayyan are parties to the lawsuit. His attorneys claim that “PIF only provides top-level oversight, not the ‘extreme control’ of day-to-day operations required to attribute subsidiary contacts to a foreign owner.”
The judge joined the PGA Tour in essentially arguing that LIV and the mutual fund are one and the same. While LIV Golf says the fund does not directly own LIV Golf, the judge’s order sets out the complicated ownership tree. LIV Golf is technically owned by a UK-based company called LIV Golf Holdings, which in turn is owned by another company called LIV Golf investment is. The PIF is the majority owner of LIV Golf Investments.
“It is clear that PIF is not a mere investor in LIV,” the judge wrote, “…PIF’s actions are undeniably the type of actions by which a private party engages in commerce and trade or commerce.”
The antitrust case began last August with 11 plaintiffs led by Phil Mickelson, who alleged the tour engaged in anti-competitive behavior when LIV Golf got underway. Most of the LIV golfers have dropped out and the case is now being led by LIV Golf and golfers Bryson DeChambeau, Matt Jones and Peter Uihlein.
In September, the PGA Tour countersued, saying LIV Golf engaged in tort to recruit golfers already signed to the Tour. The PGA Tour is attempting to add the PIF and al-Rumayyan as defendants to its counterclaim, but the judge has yet to make a decision on those efforts.
In a January filing, the Tour said that “recently produced documents confirm that PIF and Mr. Al-Rumayyan played an active and central role in orchestrating these violations for their own benefit and are equally liable for the harm done to the TOUR.” became.”
It said the Fund and al-Rumayyan exercised “near-absolute authority over LIV,” that al-Rumayyan “personally recruited” players under contract with the PGA Tour and “played an active role in contract negotiations, expressly approving each of the player contracts.” “
A PGA Tour spokesman declined to comment on the judge’s order Friday.
While LIV Golf CEO Greg Norman was the public face of LIV Golf, al-Rumayyan was portrayed as the one controlling the wallets. He is Minister in the Kingdom of Saudi Arabia and Chairman of Aramco, the Kingdom’s state oil company. He is also close to Crown Prince Mohammed bin Salman.
Al-Rumayyan was a regular presence at LIV Golf events during the start-up’s inaugural season last year. He even played a few holes alongside former President Donald Trump, Dustin Johnson and DeChambeau during a practice round of the tournament, held at Trump’s New Jersey Golf Club in July.
The tour initially served as subpoenas for al-Rumayyan and the fund in September, and the two sides went back and forth over the terms and scope of the tour’s requests for several months. After failing to reach an agreement, the judge held a hearing on the matter on January 13. Van Keulen’s order was filed on February 9th. It was unsealed Thursday night, with portions redacted.
LIV Golf’s lawyers had previously warned the court that subjecting al-Rumayyan and the fund to discovery could be problematic and could have unforeseen diplomatic ramifications.
“There is a particular outrage that can create diplomatic tension when it comes to personally bringing a foreign official … to court,” John Bash, an attorney representing the fund and al-Rumayyan, said in court at a hearing last month.
Attorney Carolyn Lamm, who also represents the fund, told the court that an adverse ruling could also affect Saudi Arabia’s business ties in the United States. “There really is a significant risk that this could create tension,” she said, according to a transcript of the hearing, “in relation to future investments.”
Legal experts say judges are extra cautious about bringing sovereigns before US courts because of all the diplomatic complications.
“Federal law intentionally makes it difficult to sue a sovereign or his ministers,” said a lawyer specializing in international law who has litigated against the Saudi kingdom, asking for anonymity to speak openly about a case which he is not involved. “That’s on purpose. The idea is: there are too many political problems arising. …This opinion is unusual in that one cannot normally overcome all the hurdles to get to this point; one of them will stop you. But in this case, the magistrate seems to have really set out the reasoning, and it reads quite reasonably.”
The trial is set to begin in January 2024, although both sides have asked the court to reconsider the case’s timeline and allow more time for the trial to be prepared.