Jones v. PGA Tour, Inc., 22-cv-04486-BLF

CourtUnited States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
Writing for the CourtBKTH LABSON FREEMAN, DISTRICT JUDGE
PartiesMATT JONES, BRYSON DECHAMBEAU, PETER UIHLEIN, and LIVE GOLF, INC., Plaintiffs, v. PGA TOUR, INC., Defendant. PGA TOUR, INC., Counterclaimant, v. LIV GOLF, INC., PUBLIC INVESTMENT FUND OF THE KINGDOM OF SAUDI ARABIA, and HIS EXCELLENCY YASIR OTHMAN AL-RUMAYYAN, Counterdefendants.
Docket Number22-cv-04486-BLF
Decision Date03 April 2023

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MATT JONES, BRYSON DECHAMBEAU, PETER UIHLEIN, and LIVE GOLF, INC., Plaintiffs,
v.

PGA TOUR, INC., Defendant.

PGA TOUR, INC., Counterclaimant,
v.

LIV GOLF, INC., PUBLIC INVESTMENT FUND OF THE KINGDOM OF SAUDI ARABIA, and HIS EXCELLENCY YASIR OTHMAN AL-RUMAYYAN, Counterdefendants.

No. 22-cv-04486-BLF

United States District Court, N.D. California, San Jose Division

April 3, 2023


ORDER DENYING THE PUBLIC INVESTMENT FUND OF THE KINGDOM OF SAUDI ARABIA AND HIS EXCELLENCY YASIR OTHMAN AL-RUMAYYAN'S MOTION FOR RELIEF FROM MAGISTRATE JUDGE'S ORDER ON DISPOSITIVE MOTION

[Re: ECF 306]

BKTH LABSON FREEMAN, DISTRICT JUDGE

The Public Investment Fund of the Kingdom of Saudi Arabia (“PIF”) and its Governor, His Excellency Yasir Othman Al-Rumayyan (“HE Al-Rumayyan”), seek relief from a magistrate judge's order addressing subpoenas served on them by Defendant/Counterclaimant PGA TOUR, Inc. (“TOUR”). PIF and HE Al-Rumayyan recently have been named as counterdefendants in this suit, but they were non-parties when served with the subpoenas and when the magistrate judge issued the ruling at issue here. The subpoenas called for PIF and HE Al-Rumayyan to appear for deposition and produce documents at the New York City office of TOUR's counsel. PIF and HE

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Al-Rumayyan objected to the subpoenas, after which TOUR moved to compel compliance with the subpoenas and PIF and HE Al-Rumayyan moved to quash the subpoenas.

In a 58-page order issued February 9, 2023 (“the Order”), the magistrate judge quashed the deposition portions of the subpoenas based solely on TOUR's failure to tender required witness fees, without prejudice to re-service of the subpoenas with the witness fees. See Order at 58, ECF 380. The magistrate judge otherwise denied the motion to quash. See id.

PIF and HE Al-Rumayyan seek relief from the Order under Federal Rule of Civil Procedure 72(b), governing district court review of a magistrate judge's recommended disposition of dispositive matters. See Mot., ECF 306. Specifically, PIF and HE Al-Rumayyan ask the Court to determine de novo whether the subpoenas should be quashed based on sovereign and common law immunities, lack of personal jurisdiction, and principles of international comity. See Id. Ultimately, PIF and HE Al-Rumayyan ask the Court to vacate the magistrate judge's Order and to quash the subpoenas in their entirety. The Kingdom of Saudi Arabia has submitted an amicus brief in support of the motion. See Amicus Br., ECF 313.

In response, TOUR asserts that the Order is nondispositive and thus subject to review under the clearly erroneous or contrary to law standard of Federal Rule of Civil Procedure 72(a), not the de novo standard of Rule 72(b). However, TOUR asserts that under either standard the Court should find that the magistrate judge properly denied the motion to quash on all grounds other than the failure to tender witness fees.

The Court finds the motion to be suitable for decision without oral argument. See Civ. L.R. 7-1(b). The Court also finds in appropriate to resolve the motion under the de novo standard set forth in Rule 72(b). The Court DENIES the motion for the reasons discussed below.

I. BACKGROUND

Complaint and First Amended Complaint

This action was filed on August 3, 2022 by a number of professional golfers asserting antitrust violations and related claims against TOUR. See Compl., ECF 1. The operative first amended complaint (“FAC”) was filed shortly thereafter, adding LIV Golf, Inc. (“LIV”) as a plaintiff. See FAC, ECF 83. The FAC alleges that TOUR is “an entrenched monopolist with a

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vice-grip on professional golf,” and that LIV is a new entrant to the market as the sponsor of a new golf league. See id. ¶¶ 1, 101-08.

According to Plaintiffs, TOUR has acted unlawfully to preserve its monopoly power by restricting elite golfers' ability to participate in LIV golf events. See FAC ¶ 2. TOUR allegedly has threatened to impose suspensions and lifetime bans on golfers who participate in a single LIV event. See id. ¶¶ 3-5. The FAC asserts claims for violation of state and federal antitrust laws, breach of contract, tortious interference with contract, and tortious interference with prospective business relationships. See id. ¶¶ 310-88.

Answer and Counterclaim

TOUR filed an answer to the FAC on September 28, 2022, along with a counterclaim against LIV for tortious interference with contract. See Answer & Countercl., ECF 108. The counterclaim alleges that LIV has interfered with TOUR's contractual relationships with golfers by, among other things, paying them to breach their contracts with TOUR and funding this lawsuit against TOUR. See id. ¶¶ 56-62. The counterclaim also alleges that LIV is wholly owned and overseen by PIF, the Saudi sovereign wealth fund, which holds more than $500 billion in assets. See id. ¶¶ 6, 19.

On February 23, 2023, the Tour amended its counterclaim to add PIF and HE Al-Rumayyan as counterdefendants and to add a claim for inducing breach of contract. See Answer & Am'd Countercl., ECF 289.

Subpoenas

TOUR served subpoenas on PIF and HE Al-Rumayyan, then non-parties, requiring them to appear for deposition and produce documents at the New York City office of TOUR's counsel. See Subpoenas, Dooley Decl. Exs. 6 & 7, ECF 148-2. As noted above, PIF is the Public Investment Fund of the Kingdom of Saudi Arabia. See HE Al-Rumayyan Decl. ¶ 1, ECF 166-5. HE Al-Rumayyan is the Governor of PIF, holds the rank of Minister in the Kingdom of Saudi Arabia, and resides in Saudi Arabia. See id. ¶¶ 1-3. PIF and HE Al-Rumayyan served responses and objections to the subpoenas. See Reponses & Objs., Dooley Decl. Exs. 36 & 37, ECF 148-5.

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Motion to Compel Compliance and Motion to Quash

In October 2022, TOUR filed a motion to compel compliance with the subpoenas in the United States District Court for the Southern District of New York, which opened a miscellaneous case. By stipulation of TOUR, PIF, and HE Al-Rumayyan, the miscellaneous case was transferred to this Court. See PGA TOUR, Inc. v. Public Investment Fund of the Kingdom of Saudi Arabia, et al., No. 22-mc-80336-BLF. At the direction of the magistrate judge, TOUR refiled its motion to compel compliance in the present case. See Mot. to Compel, ECF 148. PIF and HE Al-Rumayyan then filed a motion to quash the subpoenas. See Mot. to Quash, ECF 166.

The motion to quash asserted among other things that PIF has sovereign immunity, HE Al-Rumayyan has common law immunity, the Court lacks personal jurisdiction over PIF and HE Al-Rumayyan, and enforcing the subpoenas would violate principles of international comity. See Mot. to Quash, ECF 166. The motion to quash also asserted that the subpoenas were deficient under Federal Rule of Civil Procedure 45 because they called for compliance outside the 100-mile limit of Rule 45(c), TOUR failed to tender witness fees as required by Rule 45(b), and the subpoenas were unduly burdensome under Rule 45(d). See id.

Magistrate Judge's Order

The magistrate judge quashed the deposition portions of the subpoenas based solely on TOUR's failure to tender witness fees, without prejudice to re-service of the subpoenas with witness fees. See Order at 58. The magistrate judge otherwise denied the motion to quash. See id. However, the magistrate judge modified the subpoenas to give PIF and HE Al-Rumayyan the option to change the place of compliance from New York City to Riyadh, Saudi Arabia. See Id. The magistrate judge also modified the categories of documents requested in the subpoenas to alleviate any undue burden on PIF and HE Al-Rumayyan. See id.

The Order indicated that “[t]he Court's rulings on the motion to quash filed by PIF and Mr. Al-Rumayyan also address the arguments made in PGA's motion to compel.” Order at 58.

Motions for Relief from Magistrate Judge's Order

On February 28, 2023, PIF and HE Al-Rumayyan filed the present motion for relief from the Order.

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II. LEGAL STANDARD

As noted above, the parties disagree on the legal standard this Court should apply to the present motion. PIF and HE Al-Rumayyan ask the Court to apply the de novo standard set forth in Federal Rule of Civil Procedure 72(b), while TOUR asks the Court to apply the more deferential clearly erroneous or contrary to law standard set forth in Federal Rule of Civil Procedure 72(a).

“Section 636(b)(1) and its procedural counterpart, Federal Rule of Civil Procedure 72, create a distinction between non-dispositive pretrial motions that may be referred to a magistrate judge for a decision and case-dispositive motions that may be referred only for evidentiary hearing, proposed findings, and recommendations to the district court unless the parties agree otherwise.” CPC Pat. Techs. Pty Ltd. v. Apple, Inc., 34 F.4th 801, 803-04 (9th Cir. 2022) (internal quotation marks and citation omitted). “When a magistrate judge rules on a non-dispositive matter, a district judge may reconsider that ruling only if it is clearly erroneous or contrary to law.” Id. at 804 (internal quotation marks and citations omitted). “But when a magistrate judge issues a report and recommendation on a dispositive matter, a district judge must make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made.” Id. (internal quotation marks and citations omitted).

The Ninth Circuit has “adopted a functional approach that looks to the effect of the motion, in order to determine whether it is properly characterized as dispositive or non-dispositive of a claim or defense of a party.” CPC Pat., 34 F.4th at 807 (quotation marks and citation omitted). “A decision that effectively denies the ultimate relief sought by a party or disposes of any claims or defenses is dispositive.” Id. (internal quotation marks and citation omitted). Applying this approach, the Court concludes that the magistrate judge's...

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