PGA Tour, LIV Golfers Debate Trade Secrets in New Court Filings

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The PGA Tour and LIV golfers are at odds over whether the public—and journalists—should gain access to LIV player contracts, LIV tournament regulations and other potentially sensitive materials from the federal antitrust lawsuit brought by Phil Mickelson and 10 other LIV golfers.

The two sides recently filed briefs that offer dueling takes for the presiding judge, Beth Lasbon Freeman, to consider for sealing documents as trade secrets and related privacy classifications.

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Earlier this month, Freeman denied a motion for a restraining order that would have permitted three of the 11 golfers, Talor Gooch, Hudson Swafford and Matt Jones, to play in the FedEx Cup Playoffs. Attorneys for the golfers say they “voluntarily produced” copies of LIV player contracts, rules and regulations at the request of the Tour.

As those attorneys tell it, certain litigation documents should be sealed “because they contain highly confidential and business sensitive material that would harm (Gooch, Swafford and Jones’) financial prospects if made public.” Player contracts are portrayed as private and governed by confidentiality agreements, a framework described as “common in the context of sponsorship or independent contractor compensation agreements.”

The golfers also contend that disclosing the value and various features of their LIV deals could damage their ability to negotiate with “golf tournament providers in the future” and “reduce their ability to negotiate more lucrative sponsorship and advertisement deals.” They see unfairness if the public learns about their deals while other golfers can maintain privacy.

The golfers further object to unsealing LIC invitation rules on grounds those rules are “in their initial stages of development” and comprise “part of a developing business model.” The golfers worry that disclosure could undermine LIV and may allow “the PGA Tour or others” to harm the players filing suit and LIV, or sow confusion in the marketplace.

The core challenge for the golfers is that bringing a lawsuit, unlike pursuing arbitration, mediation or other private forums for dispute resolution, generally means accepting the public’s right to access court filings. Courts, funded by taxpayers, are public venues.

Attorneys for the PGA Tour stress that point. The Tour doesn’t object to Freeman sealing individually negotiated financial terms or redacting personal identification data. But it insists that LIV golfers’ privacy demands are so broad they could “set an untenable precedent that would make it difficult to litigate this case in a public forum.”

To that end, the Tour objects to censoring provisions in player agreements with LIV “that have nothing to do with [golfers’] compensation” or aren’t otherwise deserving of concealment. Those provisions include LIV golfers’ use of social media and products with logos when playing LIV events. They also concern apparel obligations, playing commitments for LIV events, opportunity to play in competing events, LIV’s ability to issue player fines or impose other remedies for breaking rules, the duration of LIV contracts and identity of LIV’s lawyers.

The Tour contends that much of what the golfers want sealed has already been disclosed by their attorneys in court, disclosed by journalists or lacks a recognized justification for privacy. For example, the Tour questions how LIV tournament rules and regulations could be considered trade secrets when LIV golfers haven’t treated Tour rules and regulations the same way. Golfers, the tour says, “cannot file a public complaint that repeatedly quotes from the Tour’s regulations and attaches them as an exhibit, while at the same time asking the Court to shield LIV’s corresponding regulations from public view as a purported trade secret.”

The Tour also insists that much of what the golfers seek to shield consists of materials “highly relevant to the core issues in the litigation”—which centers on LIV golfers’ contention that in exerting control over where and how elite golfers sell their services, the PGA Tour has violated antitrust law. The Tour’s attorneys say LIV contracts, which they maintain are more restrictive than tour contracts, “bear directly on plaintiffs’ antitrust claims” since they shed light on market competition.

Tour attorneys also cite the transcript for a hearing earlier this month when golfers’ attorneys asserted the Tour misunderstood or misstated provisions in LIV contracts and assured that Gooch, Swafford and Jones wouldn’t “show up in their LIV gear” at Tour events. “Now,” the Tour maintains, the golfers “seek to seal the provisions of the LIV agreements bearing on their counsel’s on-the-record statement.”

As Freeman considers the competing arguments on sealing, the case is headed for a lengthy trajectory. A nine-day jury trial is currently scheduled to begin on Jan. 8, 2024, at the Robert F. Peckham Federal Building and U.S. Court in San Jose. The trial date is subject to postponement, a real possibility here given that both sides have retained large and high-priced legal teams that will likely file numerous pretrial and discovery motions. The loser of the trial would likely appeal to the Ninth Circuit, setting off additional years of litigation. The two sides could settle out of court at any point.

It appears that LIV’s ascendency has already made the market for elite golfers’ services more competitive and dynamic. Last week, PGA Tour commissioner Jay Monahan pledged to increase compensation, prizes and other benefits for golfers, while the tour has joined Tiger Woods and Rory McIlroy in launching a tech-heavy league.

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