LIV Golf’s Saudi Backers Ordered to Turn Over Information in PGA Tour Suit

It was a claim that highlighted the money—and some of the controversy—behind the new golf circuit that has upended the sport, and drawn the rivals into an array of bruising legal and political fights. 

Magistrate Judge Susan van Keulen, in the U.S. District Court of Northern District of California, rejected the argument in an order that was made Feb. 9, but which remained under seal as LIV and the PGA Tour fought over proposed redactions of confidential information. A redacted copy of the order was included in a filing released late Thursday. 

“The Court DENIES the motion of PIF to quash the subpoena directed to PIF on the grounds of sovereign immunity because it finds that PIF’s conduct falls within the commercial activity exception to the Foreign Sovereign Immunity Act,” the order says. The judge also rejected other arguments made by the PIF and Al-Rumayyan to avoid being deposed, but said they could ask to sit for the depositions at a place of the Tour’s choosing in Riyadh, Saudi Arabia.

LIV, in a court filing, had already indicated objections to the ruling before it had been unsealed. A spokeswoman for LIV declined to comment. 

“It is plain that PIF is not a mere investor in LIV; it is the moving force behind the founding, funding, oversight and operation of LIV,” the ruling says. “PIF’s actions are indisputably the type of actions by which a private party engages in trade and traffic or commerce.” 

LIV has accused the PGA Tour of using its monopoly power in an attempt to squash a nascent rival, in violation of antitrust law, and secretly attempting to stoke controversy around its Saudi connections. “The Tour has damaged LIV’s brand, driven up its costs by hundreds of millions of dollars, and driven down revenues to virtually zero,” LIV’s lawyers argued in a recent filing.

The Tour has countered that LIV has harmed it by interfering with its players and contracts, and that LIV has struggled not because of the Tour’s actions, but because of public distaste for Saudi Arabia’s human rights record. Tour lawyers have also already sought to add the PIF as a direct defendant in their counterclaim. 

A 1976 U.S. law, the Foreign Sovereign Immunities Act, insulates foreign governments from some types of U.S. litigation–although not in suits about “a commercial activity.” 

At a hearing on the question earlier in January, lawyers representing the Tour said that the sovereign wealth fund owns 93 percent of the circuit, that the fund founded LIV under Al-Rumayyan’s instructions, and assumes all financial risk to the project because it is funding 100 percent of it. 

Those lawyers also offered examples of Al-Rumayyan’s close involvement in LIV matters that are important to the Tour’s suit against the circuit, including a weekly meeting they said he had about the circuit, an action tracker created by LIV on the issues in front of him on the circuit’s operations, and an email Al-Rumayyan sent about a delay in a golfers’ scores being displayed. 

Elliot Peters, for the Tour, also described a text message from Al-Rumayyan to golfer Bryson DeChambeau about DeChambeau signing on with LIV, and an email exchange with sports agent Casey Wasserman about golfers he represented. In addition, Peters referred to Al-Rumayyan contacting a broadcasting executive in pursuit of a broadcasting agreement, PIF using its portfolio companies to connect LIV with potential sponsors, and a photo of Al-Rumayyan with golfers at a LIV event.

“This isn’t what a government does. This is what somebody that is running a golf league does,” Peters said in court. “LIV is pretty much a shell and the financial consequences, be they good or bad of the investment, flow through to PIF.” 

“It’s obvious what we want. We want information about negotiations, we want information about negotiations with players, broadcasters, sponsors, the plans for the league, the intentions of setting up LIV, efforts to undermine the PGA Tour,” Peters said later. 

Lawyers for the sovereign wealth fund and Al-Rumayyan had told the judge that LIV and PIF were separate entities, and that the examples cited by the Tour’s lawyers as proof of Al-Rumayyan’s close involvement were merely those of a typical investor. 

“I don’t think the top official, the primary investor of a company, saying that it’s a major talent, thanks for joining, glad you’re coming aboard, is the legal equivalent toward the factual equivalent of negotiating a contract,” said John Bash, representing PIF and Al-Rumayyan, of the DeChambeau communications. 

“This is leagues away from contract negotiations. It says nothing about that. it’s making connections,” Bash said of the Wasserman email. 

Lawyers arguing for the PIF also pointed to the diplomatic sensitivities of demanding documents from members of the Saudi government. 

“The second point I wanted to make was just to underscore how significant an order ordering discovery against PIF or Mr. Al-Rumayyan would be diplomatically. I just wanted to put the shoe on the other foot for a moment,” Bash said.

He went on to compare the situation to what might have happened after the U.S. auto industry bailout. 

“The analogous situation here is that if there was a design defect case in Riyadh, and a court in Riyadh said, ‘you know what, the United States Treasury is the majority shareholder of this auto company and so I’m going to issue an order demanding that the Treasury produce confidential, perhaps classified documents,’ … that’s the equivalent diplomatically.”

Write to Louise Radnofsky at louise.radnofsky@wsj.com and Andrew Beaton at andrew.beaton@wsj.com

It was a claim that highlighted the money—and some of the controversy—behind the new golf circuit that has upended the sport, and drawn the rivals into an array of bruising legal and political fights. 

Magistrate Judge Susan van Keulen, in the U.S. District Court of Northern District of California, rejected the argument in an order that was made Feb. 9, but which remained under seal as LIV and the PGA Tour fought over proposed redactions of confidential information. A redacted copy of the order was included in a filing released late Thursday. 

“The Court DENIES the motion of PIF to quash the subpoena directed to PIF on the grounds of sovereign immunity because it finds that PIF’s conduct falls within the commercial activity exception to the Foreign Sovereign Immunity Act,” the order says. The judge also rejected other arguments made by the PIF and Al-Rumayyan to avoid being deposed, but said they could ask to sit for the depositions at a place of the Tour’s choosing in Riyadh, Saudi Arabia.

LIV, in a court filing, had already indicated objections to the ruling before it had been unsealed. A spokeswoman for LIV declined to comment. 

“It is plain that PIF is not a mere investor in LIV; it is the moving force behind the founding, funding, oversight and operation of LIV,” the ruling says. “PIF’s actions are indisputably the type of actions by which a private party engages in trade and traffic or commerce.” 

LIV has accused the PGA Tour of using its monopoly power in an attempt to squash a nascent rival, in violation of antitrust law, and secretly attempting to stoke controversy around its Saudi connections. “The Tour has damaged LIV’s brand, driven up its costs by hundreds of millions of dollars, and driven down revenues to virtually zero,” LIV’s lawyers argued in a recent filing.

The Tour has countered that LIV has harmed it by interfering with its players and contracts, and that LIV has struggled not because of the Tour’s actions, but because of public distaste for Saudi Arabia’s human rights record. Tour lawyers have also already sought to add the PIF as a direct defendant in their counterclaim. 

A 1976 U.S. law, the Foreign Sovereign Immunities Act, insulates foreign governments from some types of U.S. litigation–although not in suits about “a commercial activity.” 

At a hearing on the question earlier in January, lawyers representing the Tour said that the sovereign wealth fund owns 93 percent of the circuit, that the fund founded LIV under Al-Rumayyan’s instructions, and assumes all financial risk to the project because it is funding 100 percent of it. 

Those lawyers also offered examples of Al-Rumayyan’s close involvement in LIV matters that are important to the Tour’s suit against the circuit, including a weekly meeting they said he had about the circuit, an action tracker created by LIV on the issues in front of him on the circuit’s operations, and an email Al-Rumayyan sent about a delay in a golfers’ scores being displayed. 

Elliot Peters, for the Tour, also described a text message from Al-Rumayyan to golfer Bryson DeChambeau about DeChambeau signing on with LIV, and an email exchange with sports agent Casey Wasserman about golfers he represented. In addition, Peters referred to Al-Rumayyan contacting a broadcasting executive in pursuit of a broadcasting agreement, PIF using its portfolio companies to connect LIV with potential sponsors, and a photo of Al-Rumayyan with golfers at a LIV event.

“This isn’t what a government does. This is what somebody that is running a golf league does,” Peters said in court. “LIV is pretty much a shell and the financial consequences, be they good or bad of the investment, flow through to PIF.” 

“It’s obvious what we want. We want information about negotiations, we want information about negotiations with players, broadcasters, sponsors, the plans for the league, the intentions of setting up LIV, efforts to undermine the PGA Tour,” Peters said later. 

Lawyers for the sovereign wealth fund and Al-Rumayyan had told the judge that LIV and PIF were separate entities, and that the examples cited by the Tour’s lawyers as proof of Al-Rumayyan’s close involvement were merely those of a typical investor. 

“I don’t think the top official, the primary investor of a company, saying that it’s a major talent, thanks for joining, glad you’re coming aboard, is the legal equivalent toward the factual equivalent of negotiating a contract,” said John Bash, representing PIF and Al-Rumayyan, of the DeChambeau communications. 

“This is leagues away from contract negotiations. It says nothing about that. it’s making connections,” Bash said of the Wasserman email. 

Lawyers arguing for the PIF also pointed to the diplomatic sensitivities of demanding documents from members of the Saudi government. 

“The second point I wanted to make was just to underscore how significant an order ordering discovery against PIF or Mr. Al-Rumayyan would be diplomatically. I just wanted to put the shoe on the other foot for a moment,” Bash said.

He went on to compare the situation to what might have happened after the U.S. auto industry bailout. 

“The analogous situation here is that if there was a design defect case in Riyadh, and a court in Riyadh said, ‘you know what, the United States Treasury is the majority shareholder of this auto company and so I’m going to issue an order demanding that the Treasury produce confidential, perhaps classified documents,’ … that’s the equivalent diplomatically.”

Write to Louise Radnofsky at louise.radnofsky@wsj.com and Andrew Beaton at andrew.beaton@wsj.com