Lieff Cabraser Civil Justice Blog
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Plaintiffs Defeat Motion to Dismiss Lawsuit Alleging FINA International Swim Organization Uses Market Dominance to Extract Enormous Revenues from World’s Best Swimmers

On January 21, 2020, U.S. Magistrate Judge Jacqueline Scott Corley issued an order denying the motion of defendant international swim organization Fédération Internationale de Natation (“FINA”) to dismiss the lawsuit alleging that FINA leverages its market dominance to extract – and largely keep for itself – enormous revenues from the labor of the world’s best swimmers.

Originally filed in December 2018, the lawsuit was brought on behalf of a pair of top U.S. swimmers and a top Hungarian swimmer who together filed a class-action lawsuit against FINA, the international organization that controls access to the Olympic Games and World Championships, over its threats to ban swimmers from the Olympic Games if they compete in events that FINA does not pre-approve.

The Order denied defendant’s motions to dismiss the case, and noted that plaintiffs will be amending their complaints “to more fully allege the Court’s jurisdiction, more specifically detail FINA’s unlawful conduct, and to explain how FINA’s post-suit conduct…relates to FINA’s anticompetitive scheme.”

Read a copy of the January 21, 2020 Order.

On behalf of elite swimmers around the world, the plaintiffs charged FINA with unlawfully restraining competition in the market for top-tier international swimming competitions. Their lawsuit follows FINA’s crackdown against a two-day competition that a new professional league planned to sponsor in Turin, Italy, in late December 2018. Organizers were forced to cancel that meet after FINA said it would ban from the Olympics any swimmer who swam in it. As result, swimmers lost the chance to compete for more prize money and were blocked from earning appearance fees.

The popularity of competitive swimming has soared over the last decade. Its athletes believe a professional league, that will compensate its best athletes and better reward them for a lifetime’s worth of hard training and sacrifice, is long overdue.

Tom Shields, an Olympic gold medalist who, along with FINA World Champion swimmer Michael Andrew and Olympic gold medalist Katinka Hosszú, is a lead plaintiff in the proposed class-action lawsuit, said he joined the suit because he has dreamed for years of seeing the sport expand to include a professional league. “We are closer now than ever before to making that dream come true,” he said. “But that dream is being blocked by FINA.”

In a simultaneous filing, the International Swimming League (“ISL”) separately sued FINA for its anticompetitive conduct. The ISL was responsible for coordinating the Turin event that FINA blocked, and it has plans to roll out a series of matches in 2019 featuring approximately 300 of the world’s best swimmers.

“Governing bodies and commercial enterprise co-exist in other sports and even work together for the betterment of the sport. But FINA’s priorities just are not aligned with those of the swimmers, and as a result the sport has not been allowed to evolve with the times,” ISL CEO Ali Khan said. “The ISL deserves a chance to offer swimmers more opportunity to compete and earn a living, and the swimmers deserve not to be shackled to FINA’s whim. And the laws here and in Europe require that ISL has that chance.”

Driven in significant part by swimming’s growing popularity, FINA earned about $118 million in gross revenues from all aquatics events in 2016 and 2017. It paid only 12.5 percent, less than one-sixth part, of that amount to athletes in the form of prize money.

“Very few select swimmers make a living swimming, while FINA is making a killing,” said Andrew, who in 2013 became the youngest swimmer to go pro. “FINA’s main consideration is not for swimmers. FINA set our sport back into the dark ages by blocking ISL’s request. They can co-exist.”

The class-action lawsuit is Shields, et al. v. FINA, Case No. 18-cv-07393. ISL’s lawsuit is International Swimming League, Ltd. v. FINA, Case No. 18-cv-07394. Both suits are pending in the U.S. District Court for the Northern District of California.