In the ongoing legal battle between the PGA Tour and LIV Golf, the tour recorded a significant legal victory relative to the scope of discovery.
In a decision made February 9 but only made public last Thursday afternoon in California, Magistrate Judge Susan van Keulen ruled that Saudi Arabia’s Public Investment Fund and its governor, Yasir Al-Rumayyan, must comply with subpoenas filed by the PGA Tour in August 2022 relating to LIV’s antitrust lawsuit against the tour. The subpoenas called for LIV’s representatives to produce documents and appear for depositions in the office of the PGA Tour’s counsel in New York.
Van Keulen wrote that “PIF is not a mere investor in LIV; it is the moving force behind the founding, funding, oversight and operation of LIV.” Hence, the PGA Tour is entitled to discovery from PIF and Al-Rumayyan.
The ruling remained under seal for a week as LIV and the PGA Tour squabbled over proposed redactions of confidential information. A redacted copy of the judge’s order can be found HERE.
This decision will no doubt be appealed and, according to one source close to the case, it could make its way to the U.S. Supreme Court. Should that occur, the January 8, 2024, scheduled start of the trial could be delayed for months.
In November 2022, the PIF and Al-Rumayyan sought to quash the subpoenas, citing numerous exemptions, notably Saudi sovereignty. A hearing was held before van Keulen in January, and the ruling was made last week.
The PIF sought to quash the subpoenas based on the Foreign Sovereign Immunities Act, which establishes criteria for exemption from U.S. court jurisdiction. The tour argued that PIF and Al-Rumayyan must comply with the subpoenas due to the commercial-activity exception to the 1976 law.
This decision will no doubt be appealed and, according to one source close to the case, it could make its way to the U.S. Supreme Court. Should that occur, the January 8, 2024, scheduled start of the trial could be delayed for months.
This ruling wades the legal skirmish into geopolitical waters because of its precedent-setting nature. “To accept jurisdiction here could set a dangerous precedent allowing PIF to be sued in U.S. courts any time one of its portfolio companies is involved in a dispute,” PIF lawyers wrote in the November filing.
LIV Golf is a relatively tiny investment by the $600 billion-plus PIF, one that was recently revealed to produce little, if any, revenue in 2022, its first year of operation. Should the judge’s order stand, that would result in the secretive PIF having to cooperate with the American judicial system, something the Saudis likely never contemplated and would deem to be unacceptable.
The case escalated in the past month when the tour sought to add PIF and Al-Rumayyan to its counterclaim to the original lawsuit filed in August 2022.