International Swimming League Wins Ninth Circuit Reversal of Summary Judgment Decision in Antitrust Action Against World Aquatics

Paul, Weiss won a significant appeal for our client International Swimming League (ISL) when the Ninth Circuit reversed the trial court's summary judgment decision dismissing ISL's antitrust lawsuit against World Aquatics (formerly known as Fédération Internationale de Natation), the international sports federation administering international competitions in water sports.

ISL, a professional swimming league with a team-based format, filed suit in 2018 in the Northern District of California, claiming that World Aquatics and national federations conspired in a group boycott to block ISL from entering the market, that World Aquatics maintained monopoly and monopsony power through anticompetitive conduct, and that it interfered with ISL's economic relationships. ISL brought claims under the Sherman Act as well as a claim of tortious interference. In January 2023, U.S. District Judge Jacqueline Corley granted the defendant's motion for summary judgment.

We appealed, arguing that the lower court misunderstood and misapplied binding precedent to carve out a "sports" exception to the rules governing horizontal group boycotts; deviated from decades of precedent concerning the ability of antirust plaintiffs to prove anticompetitive effects through direct evidence; and failed to credit evidence concerning market definition from the market participants themselves after improperly denying the appellants the opportunity to present an expert report on the subject, among other arguments.

The Ninth Circuit panel agreed with most of our arguments on behalf of ISL, reversing and remanding the case for further proceedings. It held that awarding summary judgment to the defendant was improper because we had created a triable issue around whether World Aquatics' rules constituted a per se unlawful group boycott by preventing member federations and swimmers from doing business with ISL without risking "draconian sanctions"; that the district court erred in concluding that a rule of reason analysis-which examines the positive and negative effects of an agreement under the Sherman Act within a properly defined antitrust market-was necessary, because courts lack experience with "the rules of a governing body for international and Olympic sports"; and that even if it were, we had raised a triable dispute under the rule of reason, despite lacking an expert on market definition, through direct evidence of anticompetitive effects. The panel also found that the district court abused its discretion by refusing to certify the class in a consolidated case brought by three professional swimmer plaintiffs, among other findings.

The Paul, Weiss team includes litigation partners William Isaacson, Meredith Dearborn, Brette Tannenbaum and Randy Luskey.