National Hockey League Players Association v. Plymouth Whalers Hockey Club
177 L.R.R.M. (BNA) 3129, 2005 U.S. App. LEXIS 17134, 419 F.3d 462 (2005)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
To state a claim for an unreasonable restraint of trade under the Sherman Act's rule of reason, a plaintiff must show that the defendant's challenged conduct, and not some other independent factor, is the cause of the alleged anti-competitive effects in a relevant market.
Facts:
- The Ontario Hockey League (OHL), a major junior hockey league for players aged 16-20, limits its teams to three 20-year-old 'overage' players.
- NCAA hockey player Mike Van Ryn was drafted by the NHL's New Jersey Devils.
- After his NCAA career, Van Ryn played one season in the OHL. Under the rules of the NHL's Collective Bargaining Agreement (CBA), this action allowed his contractual rights with the Devils to expire, making him an unrestricted free agent.
- Van Ryn subsequently signed a lucrative contract with a different NHL team, the St. Louis Blues.
- Shortly after an arbitrator validated Van Ryn's free agency, the OHL adopted Rule 7.4 (the 'Van Ryn Rule').
- The Van Ryn Rule requires overage players to have held a specific type of registration (CHA or USA Hockey) in the previous season.
- NCAA regulations prohibit its players from holding these specific registrations, which in combination with the OHL rule, effectively bars 20-year-old NCAA players from playing in the OHL.
- Anthony Aquino and Edward Caron, both 20-year-old NCAA players, were prevented by the Van Ryn Rule from playing in the OHL and attempting to follow Van Ryn's path to NHL free agency.
Procedural Posture:
- The National Hockey League Players Association (NHLPA) sued the Ontario Hockey League (OHL) and others in the U.S. District Court for the Eastern District of Michigan.
- The district court granted the NHLPA's motion for a preliminary injunction on behalf of plaintiff Anthony Aquino.
- Defendants (OHL et al.), the appellants here, appealed the grant of the preliminary injunction to the U.S. Court of Appeals for the Sixth Circuit.
- In a prior decision (NHLPA I), the Sixth Circuit reversed the injunction, finding plaintiffs had failed to define a relevant market, and remanded the case to the district court.
- On remand, plaintiffs filed a second amended complaint, adding plaintiff Edward Caron.
- Defendants filed a motion to dismiss the second amended complaint for failure to state a claim under Fed. R. Civ. P. 12(b)(6).
- The district court granted the defendants' motion to dismiss.
- Plaintiffs (NHLPA, Aquino, and Caron), the appellants here, appealed the dismissal to the U.S. Court of Appeals for the Sixth Circuit.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does a junior hockey league's eligibility rule that effectively prevents 20-year-old NCAA players from joining the league constitute an unreasonable restraint of trade in violation of the Sherman Act, where the alleged anti-competitive harm is the preclusion of a path to free agency governed by a separate professional league's collective bargaining agreement?
Opinions:
Majority - Clay, Circuit Judge
No. The OHL's eligibility rule does not constitute an unreasonable restraint of trade because the plaintiffs failed to show that the rule caused the alleged anti-competitive effects. Under the rule of reason analysis, plaintiffs must demonstrate significant anti-competitive effects within a relevant market. Although the court found that the 'market for sixteen- to twenty-year-old hockey players in North America' was a relevant market, it concluded that plaintiffs failed to show the Van Ryn Rule caused any cognizable anti-competitive harm. The claim that the rule diminishes the quality of play is a harm to athletic, not economic, competition and is not protected by antitrust laws. The primary alleged harm—that certain players are prevented from becoming NHL free agents—is not caused by the OHL's rule, but rather by the terms of the NHL's Collective Bargaining Agreement (CBA), which dictates the pathways to free agency. Because the CBA, not the Van Ryn Rule, is the direct cause of the alleged injury, the antitrust claim against the OHL fails.
Analysis:
This decision reinforces the critical importance of causation in antitrust litigation, especially within the complex, interrelated world of sports leagues. It establishes that a defendant's rule is not liable for antitrust violations if the resulting anti-competitive harm is more directly attributable to a separate, independent legal instrument, such as another league's collective bargaining agreement. This holding makes it more difficult for plaintiffs to challenge league eligibility rules based on their indirect effects on player compensation or mobility in other leagues, thereby protecting leagues' autonomy in setting their internal rules.
