DiCello Levitt Achieves $43.5M Recovery and Other Relief To Unwind Anticompetitive Conduct in All Star Cheer Events Market.
In October 2023, DiCello Levitt and Co-Lead Counsel secured final approval of a settlement with Varsity Brands, other Varsity entities, and the United States All Star Federation (USASF) to resolve an antitrust class action over Varsity’s monopolization of the All Star Cheer events market. In the settlement, approved in full by the chief judge in the Western District of Tennessee, Varsity agreed to make cash payments totaling $43.5 million and consented to significant concessions aimed at curbing and unwinding its anticompetitive behavior.
The litigation, brought by All Star gyms and All Star event spectators, alleged that Varsity colluded with USASF, the All Star Cheer governing body that it founded in 2003, to monopolize the market for All Star Cheer events through various anticompetitive practices, including by systematically acquiring rival event companies, imposing exclusionary contracts and anticompetitive loyalty programs on All Star gyms, and using USASF to control bids to the sport’s key national championship.
Over the course of nearly three years of hard-fought litigation, our team helped secure the production of more than 1.7 million documents from defendants and third parties, produce 4,575 documents from plaintiffs’ files, take 32 fact depositions and defend eight plaintiff-witness depositions, exchange four lengthy expert reports and depose and defend experts, and engage in extensive motion practice concerning numerous discovery disputes. The resulting evidence showed how Varsity locked cheerleading gyms into exclusionary agreements that required those gyms to attend a certain number of Varsity events during the competition season, among other provisions.
Following a full-day, in-person mediation before an experienced mediator and extensive negotiations following the mediation, DiCello Levitt and co-counsel secured an agreement with Varsity to settle the case. In addition to the cash settlement fund, we achieved significant injunctive relief to curtail Varsity’s improper influence over the sport’s governing body, including stipulations that current Varsity board members will no longer be able to simultaneously serve on USASF’s board and that Varsity may not pay for the salaries or benefits of USASF employees and executives. In addition, no single cheerleading event producer, including Varsity, will be able to occupy more than one-third of the voting seats on USASF’s board nor comprise more than 40% of USASF’s sanctioning committee. Beyond that, Varsity may no longer require attendance at more than three Varsity All Star events during a single regular season as a condition of receiving its lowest tier of rebates or discounts.
“There is no question as to the skill and efficiency of Class Counsel,” U.S. District Judge Sheryl H. Lipman wrote in her order granting approval of the settlement. “Counsel for the [direct purchaser plaintiffs] have demonstrated their experience and capability in prosecuting antitrust class actions; they have dedicated millions of dollars and spent a significant amount of time in and out of the courtroom litigating on behalf of the proposed Settlement Classes for nearly three years.”
This settlement not only recovers significant damages for those who were harmed by Varsity’s anticompetitive conduct but also lays the groundwork to facilitate vigorous competition in the All Star Cheer events market.