By Joe Houchin
On the heels of the inaugural season of the International Swim League (ISL), a pair of parallel lawsuits against FINA will continue to move forward. On December 16, 2019, an order issued by the U.S. District Court for the Northern District of California denied FINA’s motion to dismiss the cases which were originally filed in December 2018. Additionally, amended complaints were filed by the plaintiffs on January 17, 2020, containing updated factual allegations against FINA including claims that FINA misappropriated ISL’s format by scheduling its own events with a similar prize format. FINA has three weeks to file an answer to the amended allegations.
The amended complaints allege that only upon filing of the initial lawsuits did FINA withdraw its threat of sanctions against swimmers and national governing bodies for associating with ISL. Plaintiffs go on to identify specific correspondence from FINA Executive Director Cornel Marculescu culminating in a June 5, 2018 letter where USA Swimming was pressured to break ties with ISL. According to the amended allegations, even though ISL unsuccessfully sought to partner with British Swimming and the Italian Swimming Federation, USA Swimming was seen by FINA as a key member federation and once they were influenced to end discussions with ISL, other federations predictably refused to lend their support.
Plaintiffs’ amended complaint additionally alleges that once the December 2018 ISL event was halted under pressure from FINA that FINA misappropriated ISL innovations by scheduling its own events mimicking the proposed ISL format. Although not specifically mentioned by name, the amended complaint references an event held from May 31 through June 1, 2018, in Indianapolis so it is safe to assume that plaintiffs are referring to the FINA Champions Swim Series as the copycat format. Plaintiffs acknowledge that following the filing of the initial lawsuit that FINA has indeed reversed course regarding the threatened sanctions, but contend that does not excuse the impermissible conduct.
Those tracking the litigation will remember that Americans Tom Shields and Michael Andrew along with Hungarian Katinka Hosszu brought a class action lawsuit against FINA alleging, among other claims, federal antitrust violations over FINA’s control of international competitions. The ISL filed a separate lawsuit for similar claims against FINA arising from the same conduct. The specific factual allegations contained in the complaints are detailed, but the distilled version of plaintiffs’ allegations are that FINA leverages its market dominance to control the terms of compensation and competition for elite level swimmers. In doing so, plaintiffs contend that FINA engages in impermissible anti-competitive conduct.
The dispute arises out of ISL’s original efforts to host an international competition in 2018 which was allegedly scuttled by FINA’s influence over various national governing bodies who were in talks with ISL to host the meet. FINA reportedly issued statements to member federations threatening sanctions for violation of FINA’s rules against unauthorized relations with a non- affiliated body. Subsequently, potential hosts for the planned December 2018 ISL event – including USA Swimming, British Swimming, and the Italian Swimming Federation – all declined to host the competition and the meet was cancelled resulting in lost appearance fees to athletes.
In responsive filings, FINA argues that clarification was provided on January 15, 2019 that swimmers choosing to participate in competitions staged by independent organizations like the ISL would not be in violation or sanctioned. Due to the clarification, FINA argued that the claims are moot; a contention the Court rejected. In a forty-four page Order, the Court ultimately denied FINA’s motions to dismiss the cases which will now proceed through a formal discovery process with trial scheduled in January 2022.
The future of professional swimming has shifted following the completion of the inaugural International Swim League season compared to when the lawsuit was filed in December 2018. Since then, the ISL concluded a three month season consisting of seven separate events involving more than 200 swimmers with more than $2.5 million awarded in prize money. Although not directly impacting the course of the case, the financial opportunities available to professional swimmers have improved since the cases were initiated. While the continued viability of the ISL is yet to be seen, FINA appears to have acquiesced to the existence of the ISL as an independent swim league and responded by increasing prize money to swimmers at FINA events.
The lawsuits are captioned Shields, et al. v. FINA, Case No. 18-cv-07393, and International Swimming League, Ltd. v. FINA, Case No. 18-cv-07394. Both cases are pending in the U.S. District Court for the Northern District of California.
ABOUT JOE HOUCHIN
Joe Houchin is a former collegiate swimmer and an attorney at Dysart Willis Houchin & Hubbard in Raleigh, North Carolina. The firm focuses on the areas of criminal defense, antitrust, and Title IX/student disciplinary investigations.