Saudi Officials Must Testify in PGA Tour Suit, U.S. Judge Says
The PGA Tour has won the latest round in its California-based legal battle with LIV Golf, and the ramifications will be felt in Saudi Arabia.
U.S. District Judge Beth Labson Freeman issued two provisionally sealed orders on Tuesday in favor of the PGA Tour.
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First, she granted the PGA Tour’s request to conduct depositions of Public Investment Fund of the Kingdom of Saudi Arabia (PIF), which backs LIV Golf, and PIF’s governor, Yasir Othman Al-Rumayyan, in the U.S. instead of in Saudi Arabia.
Second, she denied PIF and Al-Rumayyan’s motion in opposition of U.S. Magistrate Judge Susan van Keulen’s authorizing the PGA Tour to subpoena PIF and Al-Rumayyan, requiring they testify at depositions, and share emails and other sensitive materials.
The details and explanations of Freeman’s orders are, as of this writing, under seal. A publicly accessible court filing only reveals how Freeman ruled. She also invited the parties to “meet and confer” and issue a joint request for redactions. They have until Friday at 12 p.m. PDT to do so.
The parties previously submitted briefs articulating their arguments.
In one brief, the PGA Tour argued it would “endanger the Tour and its counsel” to “be forced to take the Court-ordered discovery in Saudi Arabia, where perceived criticism of the government can be punished with years in prison.” The PGA Tour added that, “according to PIF and Mr. Al-Rumayyan, such discovery would violate Saudi Arabian law and expose the Tour and its counsel to imprisonment.”
The PGA Tour also stressed that Al-Rumayyan “regularly transacts business in New York” as a basis to insist that Al-Rumayyan “testifying in New York, San Francisco another mutually agreeable location in the United States” would be reasonable.
Judge Freeman sided with the PGA Tour on this issue. She overruled the magistrate judge, van Keulen, who found that PIF and Al-Rumayyan could require PGA Tour attorneys to travel to Riyadh, Saudi Arabia, to take their depositions.
Meanwhile, PIF and Al-Rumayyan have insisted that it would be a violation of the Foreign Sovereign Immunities Act (FSIA) to force them to testify. FSIA generally immunizes foreign governments and their officials from having to participate in U.S. litigation. Al-Rumayyan holds the Saudi rank of “minister” and is called by the honorific “His Excellency” in Saudi Arabia and in U.S. court documents. Judge van Keulen, however, reasoned that FSIA does not immunize PIF and Al-Rumayyan, because their relationship to LIV is mainly business or commercial rather than governmental. Judge Freeman evidently concurred.
The next phase of the litigation will present an interesting set of strategic decisions for the parties, with consequences that will go well beyond two pro golf leagues.
For instance, PIF officials and Al-Rumayyan could simply comply with a court order and sit for depositions—an approach that would avoid controversy but also prove risky. PGA Tour attorneys would ask them challenging questions, such as whether PIF’s business dealings are impacted by political and human rights-related criticisms of Crown Prince and Prime Minister Mohammed bin Salman. It’s unclear if PIF officials and Al-Rumayyan could truthfully answer such questions under penalty of perjury (a felony) while simultaneously complying with their political and loyalty obligations in Saudi Arabia. The testimony would also provide a roadmap for attorneys in other cases involving businesses in which PIF—which has about $676 billion in assets—has invested.
Alternatively, PIF and Al-Rumayyan could petition the U.S. Court of Appeals for the Ninth Circuit for what is known as an “interlocutory appeal,” meaning an appeal of a case before it is decided.
Interlocutory appeals are rarely granted, as appellate courts prefer to review a completed case rather than pieces of one. But rare isn’t never. In 2021, a district court judge in Pennsylvania certified an interlocutory appeal of Johnson v. NCAA, which centers on whether college athletes are employees under the Fair Labor Standards Act and which is now before the U.S. Court of Appeals for the Third Circuit.
PIF and Al-Rumayyan could also refuse to comply with discovery orders by not sitting for depositions and not sharing emails. They would avoid problems at home but spawn new problems in the U.S., because Judge Freeman would likely hold PIF and Al-Rumayyan in contempt of court for defying a federal judge’s order. PIF and Al-Rumayyan could then appeal their contempt designation to the Ninth Circuit.
There are significant downsides to that approach. First, PIF and Al-Rumayyan could lose their appeal and remain in contempt. Also, Judge Freeman could hold them in default on related legal matters, thus making it more likely the PGA Tour defeats LIV in the case. Finally, while in contempt of court, PIF and Al-Rumayyan could experience difficulty in obtaining a visa to enter the U.S., where court documents indicate they regularly conduct business.
The parties will appear before Judge Freeman via video conference on Friday. Given the slow pace of the litigation, she could be inclined to postpone the date of the trial, which is currently set to start on Jan. 8, 2024. Freeman has repeatedly warned the parties she has a very busy docket—which now includes Hubbard v. NCAA—and signaled that while their case is newsworthy and features celebrity athletes, it is not more important than her other cases. A delay could prove lengthy.
LIV’s legal issues aren’t only playing out in California. On Thursday, the UK arbitration service Sports Resolutions published a decision in favor of DP World Tour (European Tour) in its dispute with Ian Poulter, Justin Harding and other golfers. The golfers had challenged the legality of DP World Tour fining them £100,000 and suspending them for playing in LIV events last year without DP World Tour approval and in violation of DP World Tour regulations regarding conflicting tournaments. A three-person arbitration panel concluded that DP World Tour acted within its rights.
To be clear, the Sports Resolution decision is an arbitration award, not a court ruling, and was decided under UK law, not U.S. law. It is in no way binding on the U.S. court dispute involving LIV and the PGA Tour.
Yet the underlying dispute—a golf league enforcing regulations that golfers contractually assented to follow and that those golfers breached—is largely the same. The decision is also a business setback for LIV in in attempting to recruit and retain top talent, including those who wish to play in the Ryder Cup.
