Dallas Texans Soccer Club et al v. Major League Soccer Players Union et al

Filing 39

MEMORANDUM OPINION AND ORDER re 12 MOTION to Dismiss for Lack of Jurisdiction filed by Michael Bradley, DeAndre Yedlin, Clint Dempsey. The Motion of Defendants Michael Bradley, Clint Dempsey, and Deandre Yedlin to Dismiss for Lack of Personal Jurisdiction (Dkt. #12) is hereby GRANTED and Plaintiffs claims against Defendant Players are hereby DISMISSED. Signed by Judge Amos L. Mazzant, III on 3/29/17. (cm, )

United States District Court
EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION

DALLAS TEXANS SOCCER CLUB,
CROSSFIRE FOUNDATION, INC.,
SOCKERS FC CHICAGO, LLC
v.
MAJOR LEAGUE SOCCER PLAYERS
UNION, CLINT DEMPSEY, DEANDRE
YEDLIN, MICHAEL BRADLEY

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Civil Action No. 4:16-CV-00464
Judge Mazzant

MEMORANDUM OPINION AND ORDER
Pending before the Court is the Motion of Defendants Michael Bradley, Clint Dempsey,
and Deandre Yedlin to Dismiss for Lack of Personal Jurisdiction (Dkt. #12). Having considered
the pleadings, the Court finds the motion should be granted.
BACKGROUND
Plaintiffs are three youth soccer clubs located in the United States. Each youth soccer club
is associated with the United States Soccer Federation, Inc. (the “U.S. Soccer Federation”), which
is a Federation Internationale de Football Association (“FIFA”) national association member.
FIFA national association members must adopt FIFA rules and regulations, except when
compliance with a specific FIFA rule is illegal under national law.
Under FIFA rules, professional soccer clubs must pay youth soccer clubs that trained
players certain fees, called training compensation and solidarity fees. When a player signs his or
her first contract with a professional soccer club in a different national association, the professional
soccer club must pay the youth club training compensation. When a player is transferred to a
professional soccer club in a different national association, the professional soccer club acquiring
the player must pay the youth club a solidarity fee. Disputes over the payment of training

compensation and solidarity fees are adjudicated by FIFA’s Dispute Resolution Chamber in
Zurich, Switzerland.
Plaintiffs initiated administrative proceedings before the Dispute Resolution Chamber
seeking either training compensation or solidarity fees in connection with the signing or transfer
of players Plaintiffs trained. Specifically, Plaintiff Dallas Texans Soccer Club (the “Dallas
Texans”) trained Defendant Clint Dempsey and is seeking a solidarity fee in connection with
Dempsey’s transfer to Major League Soccer, LLC from the Football Association of the United
Kingdom. Plaintiff Crossfire Foundation Inc. (“Crossfire”) trained Defendant Deandre Yedlin and
is seeking a solidarity fee in connection with Yedlin’s transfer to the Football Association of the
United Kingdom from Major League Soccer, LLC.

Plaintiff Sockers FC Chicago, LLC

(“Sockers”) trained Defendant Michael Bradley and is seeking a solidarity fee in connection with
Bradley’s transfer to Major League Soccer, LLC from the Italian Football Federation. Plaintiff
Sockers also trained Eric Pothast and is seeking training compensation in connection with his
signing with Angelholms FF of the Swedish Football Association.
Defendant Major League Soccer Players Union (the “Players Union”) is the exclusive
collective bargaining representative of all players selected to play in Major League Soccer, LLC.
The Players Union is not a party to the contracts between Major League Soccer, LLC and
international teams that would give rise to Plaintiffs claims for training compensation and
solidarity fees. The Players Union represents fifty-nine players in Texas, including at least twentyone players from the Dallas Texans.

The Players Union has two union representatives

continuously present in Texas and sends employees to meet with players in Texas. The Players
Union is an unincorporated association with offices in Bethesda, Maryland.

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On May 24, 2016, Plaintiffs, the Players Union, the U.S. Soccer Federation, and
professional soccer leagues met in Chicago, Illinois, to discuss a training compensation and
solidarity fee system for U.S. youth clubs. Plaintiffs allege that during this meeting, Bob Foose,
the Executive Director of the Players Union, stated that any effort by Plaintiffs to enforce training
compensation or solidarity fees would violate antitrust law.

Plaintiffs also allege that a

representative from Major League Soccer, LLC alerted U.S. youth club representatives that the
Players Union threatened to file an antitrust lawsuit against Plaintiffs, the U.S. Soccer Federation,
and others if the Dispute Resolution Chamber awarded Plaintiffs training compensation or
solidarity contributions.
On July 1, 2016, Plaintiffs filed a Class Action Complaint for Declaratory Relief against
the Players Union, Dempsey, Yedlin, Bradley, and all those similarly situated (Dkt. #1). Plaintiffs
seek a declaration that any U.S. youth club’s receipt of training compensation or solidarity fees
does not violate antitrust laws. Plaintiffs also seek a declaration that the implementation of a
system of training compensation and solidarity fees for player transactions within the U.S. does
not violate antitrust laws.
On November 3, 2016, the Defendant Players filed the pending motion to dismiss for lack
of personal jurisdiction (Dkt. #12). On December 1, 2016, Plaintiffs filed a response (Dkt. #24).
The Defendant Players filed a reply on December 21, 2016 (Dkt. #35).
LEGAL STANDARD
Federal Rule of Civil Procedure 12(b)(2) requires a court to dismiss a claim if the court
does not have personal jurisdiction over the defendant. Fed. R. Civ. P. 12(b)(2). After a nonresident defendant files a motion to dismiss for lack of personal jurisdiction, the party seeking to
invoke the court’s jurisdiction must “present sufficient facts as to make out only a prima facie case

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supporting jurisdiction.” Alpine View Co. v. Atlas Copco AB, 205 F.3d 208, 215 (5th Cir. 2000).
When considering the motion to dismiss, the court must accept as true the plaintiff’s
uncontroverted allegations and resolve factual conflicts in favor of the plaintiff. Id.
A federal court may exercise personal jurisdiction over a nonresident defendant if (1) the
forum state's long-arm statute confers personal jurisdiction over that defendant, and (2) the
exercise of personal jurisdiction comports with the due process clause of the Fourteenth
Amendment. Int’l Energy Ventures Mgmt., L.L.C. v. United Energy Grp., Ltd., 818 F.3d 193, 212
(5th Cir. 2016). Because the Texas long-arm statute extends as far as constitutional due process
permits, a court only needs to determine whether a suit in Texas is consistent with the due process
clause of the Fourteenth Amendment. Id. The due process clause requires that a court exercise
personal jurisdiction over a nonresident defendant only if the defendant has “certain minimum
contacts with [the forum state] such that the maintenance of the suit does not offend traditional
notions of fair play and substantial justice.” Id. (citing Int’l Shoe Co. v. Washington, 326 U.S. 310,
316 (1945)). Minimum contacts with a forum state can be satisfied by contacts that give rise to
either general jurisdiction or specific jurisdiction.

Wilson v. Belin, 20 F.3d 644, 647

(5th Cir. 1994).
ANALYSIS
General Jurisdiction
Plaintiffs do not dispute that the Court lacks general jurisdiction over Defendants Dempsey,
Yedlin, and Bradley (“Defendant Players”) (Dkt. #24 at p. 2). Defendant Players are not Texas
residents and occasionally play soccer matches in Texas as part of their jobs with Major League
Soccer, LLC. The Court will only determine whether it has specific jurisdiction over Defendant
Players.

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Specific Jurisdiction
The Defendant Players argue the Court does not have specific jurisdiction over them and
move for dismissal under Rule 12(b)(2).
Specific jurisdiction exists when the plaintiff alleges a cause of action that grows out of or
relates to a contact between the defendant and the forum state. Helicopteros Nacionales de Colom.,
S.A. v. Hall, 466 U.S. at 414 n.8. A single act by a defendant may establish specific jurisdiction if
the act in the forum state is substantially related to the suit. See Moncrief Oil Int’l v. OAO Gazprom,
481 F.3d 309, 311 (5th Cir. 2007).
The Fifth Circuit follows a three-step analysis in determining whether a court has specific
personal jurisdiction: “(1) whether the defendant has minimum contacts with the forum state, i.e.,
whether it purposely directed its activities toward the forum state or purposefully availed itself of
the privileges of conducting activities there; (2) whether the plaintiff's cause of action arises out of
or results from the defendant’s forum-related contacts; and (3) whether the exercise of personal
jurisdiction is fair and reasonable.” McFadin v. Gerber, 587 F.3d 753, 759 (5th Cir. 2009) (quoting
Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266, 271 (5th Cir. 2006)).
“If the plaintiff successfully satisfies the first two prongs, the burden shifts to the defendant
to defeat jurisdiction by showing that its exercise would be unfair or unreasonable.” Seiferth, 472
F.3d at 271. In this inquiry, the Court examines five factors: (1) the burden on the nonresident
defendant; (2) the forum state’s interests; (3) the plaintiff's interest in securing relief; (4) the
interest of the interstate judicial system in the efficient administration of justice; and (5) the shared
interest of the several states in furthering fundamental social policies. Burger King v. Rudzewicz,
471 U.S. 462, 477 (1985). “It is rare to say the assertion of jurisdiction is unfair after minimum

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contacts have been shown.” McFadin, 587 F.3d at 760 (quoting Wien Air Alaska, Inc. v. Brandt,
195 F.3d 208, 215 (5th Cir. 1999)).
Plaintiffs argue that the Defendant Players purposely availed themselves of the state of
Texas by allowing the Players Union to threaten antitrust litigation against Plaintiffs. Plaintiffs
allege that the Players Union “on behalf of, and along with the individual Defendants” threatened
to bring an antitrust suit against U.S. youth clubs (Dkt. #1 at p. 3). Plaintiffs further allege that a
Major League Soccer, LLC representative stated the suit would be brought “in conjunction with
the player affected by the [Dispute Resolution Chamber]” (Dkt. #1 at p. 15).
Defendant Players argue that the Court lacks specific jurisdiction over them because “the
basis for plaintiffs’ declaratory judgment action are alleged statements made by the Players
Union’s Executive Director, Bob Foose, and a representative of [Major League Soccer, LLC].”
(Dkt. #12 at p. 12). Defendant Players argue these statements cannot be attributed to them because
they did not give the Players Union authority to act on their behalf and the Players Union
representative did not hold himself out as the Player Defendants’ agent.
The Court does not need to determine whether an agency relationship existed between the
Player Defendants and the Players Union. Even if the Players Union threat of litigation could be
attributed to the Defendant Players, the threat of litigation does not establish specific jurisdiction
over the defendant in a declaratory judgment action. See Xtera Communs., Inc. v. TPACK A/S,
2010 WL 4118803 (E.D. Tex. Sept. 1, 2010) (dismissing claim for declaratory relief for lack of
personal jurisdiction because “demands for payment sent to Texas were the result of the unilateral
action of the plaintiffs”); Thousand Trails, Inc. v. Foxwood Hill Prop. Owners Ass'n, 1999 WL
172322 (N.D. Tex. Mar. 22, 1999) (“the vast majority of the courts have held that the nonresident
defendant’s action in sending a demand letter to the plaintiff is insufficient to create personal

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jurisdiction.”). The Court dismissed the claims against the Players Union for this same reason.
Plaintiffs concede that the Player Defendants did not purposely direct their activities toward Texas
in any other way. The Court therefore lacks personal jurisdiction over the Player Defendants.

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CONCLUSION
It is therefore ORDERED that the Motion of Defendants Michael Bradley, Clint Dempsey,
and Deandre Yedlin to Dismiss for Lack of Personal Jurisdiction (Dkt. #12) is hereby GRANTED
and Plaintiffs’ claims against Defendant Players are hereby DISMISSED.

SIGNED this 29th day of March, 2017.

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AMOS L. MAZZANT
UNITED STATES DISTRICT JUDGE

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