A federal magistrate judge has ordered Saudi Arabia's Public Investment Fund to turn over documents and ruled that its governor, Yasir Al-Rumayyan, must sit for depositions by the PGA Tour's lawyers in the tour's ongoing legal battle with LIV Golf.
In the 58-page ruling, which was released by the U.S. District Court for Northern California on Thursday night, U.S. Magistrate Judge Susan van Keulen rejected arguments from PIF's lawyers that the fund and Al-Rumayyan were shielded from the tour's subpoenas on the grounds of sovereign immunity because they were agents of a foreign government.
The court rejected PIF's and Al-Rumayyan's claims of sovereign immunity and lack of jurisdiction and ruled that their conduct fell within the commercial exception to the Foreign Sovereign Immunity Act. The court also rejected their personal jurisdiction defenses because they allegedly "directed their activities at the United States."
"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," van Keulen wrote in the ruling. "PIF's actions are indisputably the type of activities by which a private party engages in trade and traffic or commerce. Accordingly, the court concludes that PIF has engaged in commercial activity."
Lawyers for PIF and Al-Rumayyan have indicated that they will ask a federal judge to review van Keulen's ruling. U.S. District Court Judge Beth Labson Freeman has scheduled a hearing for Feb. 24.
PIF and Al-Rumayyan had argued that they were merely investors in LIV Golf, which is being fronted by two-time Open Championship winner Greg Norman, and weren't involved in the day-to-day operations or recruitment of players. PIF has invested more than $2 billion in LIV Golf, which begins its second season in Mexico next week.
The PGA Tour's lawyers had argued that Al-Rumayyan personally recruited players and "played an active role in contract negotiations, and expressly approved each of the player contracts -- all while knowing that these deals would interfere with the players' tour contracts." In her ruling, van Keulen agreed with the PGA Tour.
"These carefully-worded and conclusory denials do not overcome the evidence concerning PIF's own commercial activities," the judge ruled.
If the PGA Tour is successful in obtaining discovery documents from PIF and in deposing Al-Rumayyan, it would offer a rare look into the sovereign wealth fund, which the Saudis have long tried to keep secret. It is purportedly worth $676 billion. At earlier hearings, lawyers for PIF and Al-Rumayyan argued that ordering discovery would be "pretty significant" because PIF is a major investor in the U.S.
On Aug. 3, 11 golfers, including Phil Mickelson and Bryson DeChambeau, filed a federal antitrust lawsuit against the PGA Tour, alleging that it was using its monopoly power to squash competition and was discouraging broadcasters, sponsors and other vendors from working with LIV Golf. Mickelson and seven other golfers later removed themselves as plaintiffs in the case. LIV Golf joined DeChambeau, Matt Jones and Peter Uihlein as the remaining plaintiffs.
The PGA Tour filed a countersuit against LIV Golf, alleging that it was interfering with the tour's contracts with its members. Last month, the PGA Tour filed a motion for leave to add PIF and Al-Rumayyan as defendants in its countersuit.
More than 30 PGA Tour members have moved to LIV Golf, lured away by guaranteed contracts worth as much as $200 million and the richest purses in men's golf history. Former major championship winners Brooks Koepka, Patrick Reed, Sergio Garcia, Dustin Johnson and Cameron Smith are among the players now competing in the LIV Golf League, which features 48 players on four-man teams competing in 54-hole tournaments with shotgun starts and no cuts.
Among the documents the PGA Tour lawyers are seeking are those related to the creation of LIV Golf; to the solicitation of golfers to join LIV, including negotiations with golfers and their agents; to the recruitment of any current or former PGA Tour employees; to money or any other benefits provided to current or past PGA Tour members; or to LIV Golf's business or strategic plans; also board minutes and materials related to the PGA Tour.