-
Southern District Of New York Grants Motion To Dismiss Sherman Act Claims In Elite Swimming Case
12/17/2025On November 17, 2025, Judge Jesse Furman of the Southern District of New York granted defendants’ motion to dismiss Sherman Act claims relating to alleged exclusionary and monopolistic conduct in the elite swimming events and athlete services market. Enhanced US LLC v. World Aquatics, et al., No. 25-CV-7096 (JMF) (S.D.N.Y. Nov. 17, 2025).
Plaintiff, Enhanced US LLC, sued defendants, World Aquatics (an international governing body for aquatics), USA Swimming (United States World Aquatics National Member Federation), and the World Anti-Doping Agency (WADA), alleging that defendants violated Section 1 of the Sherman Act by conspiring to exclude plaintiff from competition in the markets for elite international swimming competitions and the services of elite international swimmers and violated Section 2 of the Sherman Act by monopolizing or attempting to monopolize elite swimming events and athletes’ services.
Plaintiff planned to stage international competitions featuring both “non-enhanced” and “enhanced” athletes who use performance-enhancing substances (most elite international swim competitions prohibit the use of performance enhancing substances). After plaintiff announced its inaugural 2026 Las Vegas competition, defendants publicly criticized the concept. World Aquatics also adopted By-Law 10, making athletes who participate in such events ineligible to participate in World Aquatics events or activities. Plaintiff alleged By-Law 10 and related statements made by and among defendants violated Sections 1 and 2 of the Sherman Act. Specifically, plaintiff argued WADA’s condemnations and lobbying, USA Swimming’s statements and an investigation of one of plaintiff’s coaches, and World Aquatics’ By-Law 10 collectively evidenced a conspiracy and exclusionary conduct that allegedly foreclosed plaintiff’s access to elite swimmers and support personnel.
To establish a claim under Sherman Act Section 1, a plaintiff must plausibly allege a contract, combination, or conspiracy, supported by direct evidence or parallel conduct and “plus factors.” The plus factors must provide additional facts and evidence that, taken together, indicate that collusion is more plausible than mere coincidence or independent self-interest. The court found that WADA’s and USA Swimming’s public condemnations, standing alone, were consistent with independent clean sport objectives and lacked any plus factors. Crucially, By-Law 10 applies only to World Aquatics events and expressly leaves national member federations, like USA Swimming, free to decide whether to adopt a similar policy for national competitions. Plaintiff conceded that USA Swimming did not adopt By-Law 10 nor had adopted a similar rule. The court distinguished the nonbinding structure of By-Law 10 from FIFA’s binding territorial game ban, which prohibited national soccer leagues from playing games outside their home territory for the purpose of restricting competition. Relevent Sports, LLC v. U.S. Soccer Fed’n, Inc., 61 F.4th 299 (2d Cir. 2023). There, the Second Circuit held that the plaintiff had plausibly alleged the existence of an agreement between FIFA and its U.S. member federation due to the compulsory nature of the restrictions. Here, however, without binding obligations on national member federations, the court determined that the complaint did not plausibly allege concerted action among defendants, and the Section 1 counts were dismissed.
To establish a claim under Sherman Act Section 2, a plaintiff must plead monopoly power (directly or indirectly) and willful acquisition or maintenance. Alternatively, a plaintiff must plead attempted monopolization which requires proof of specific intent to monopolize and a realistic prospect of attaining monopoly power. Plaintiff’s Section 2 claims also failed. For monopolization of the elite swimming events market, rather than rely on market shares, plaintiff, relied on direct evidence of exclusion via By-Law 10¬, claiming that By-Law 10 governed all elite international competitions and foreclosed plaintiff’s ability to recruit non-enhanced athletes and support staff. However, as established, By-Law 10 binds only World Aquatics’ own events. National member federations retain independent discretion to choose to implement a similar rule. As such, plaintiff’s contention that By-Law 10 exhibited monopoly power did not plausibly show market-wide exclusionary power since alternative non-bound opportunities existed.
Plaintiff also alleged that, on the purchasing side, World Aquatics had a monopsony in the labor market for elite swimmers in elite international swimming events. However, the court disagreed. By plaintiff’s own admission, World Aquatics does not host all competitions in the relevant market. Therefore, World Aquatics likewise cannot be the sole purchaser of elite swimmer’s services in the elite international swimming events market. Because plaintiff also failed to provide any other evidence of market power, it could not establish a monopsony for purchase of elite swimmers’ services.
The opinion underscores the gap between public condemnations and an actionable agreement among competitors under Section 1, where those statements may be consistent with unilateral self-interest. It also highlights the importance of the binding effect and scope of a rule in pleading concerted action. A nonbinding rule that on its face applies only to a specific sub-sector of a market will not readily support inferences of horizontal or vertical conspiracies within the broader market.
The court granted plaintiff leave to amend within thirty days.
