National Hockey League v. Plymouth Whalers Hockey

• Citation: 325 F.3d 712
• Decision Date: 02 April 2003
• Docket Number: No. 02-2066.,02-2066.
• Parties: NATIONAL HOCKEY LEAGUE PLAYERS' ASSOCIATION and Anthony Aquino, Plaintiffs-Appellees, v. PLYMOUTH WHALERS HOCKEY CLUB et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Sixth Circuit

325 F.3d 712

NATIONAL HOCKEY LEAGUE PLAYERS' ASSOCIATION and Anthony Aquino, Plaintiffs-Appellees, v. PLYMOUTH WHALERS HOCKEY CLUB et al., Defendants-Appellants.

No. 02-2066.

United States Court of Appeals, Sixth Circuit.

Argued: February 5, 2003.

Decided and Filed: April 2, 2003.

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Michael P. Conway (argued and briefed), Kelly C. Wilson (briefed), John R. McCambridge (briefed), John E. Bucheit (briefed), Grippo & Elden, Chicago, IL, William A. Sankbeil, Joanne G. Swanson, Kerr, Russell & Weber, Detroit, MI, for Plaintiffs-Appellees.

Stephen F. Wasinger (argued and briefed), Gregory D. Hanley (briefed), Wasinger, Kickham & Hanley, Royal Oak, MI, for Defendants-Appellants.

Before: GILMAN and GIBBONS, Circuit Judges; POLSTER, District Judge.^*

OPINION

GIBBONS, Circuit Judge.

Plaintiff-appellee National Hockey League Players' Association (NHLPA) brought this action in the United States District Court for the Eastern District of Michigan, alleging that the Ontario Hockey League (OHL) and all of its member teams conspired with the National Hockey League (NHL) to violate Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1. NHLPA sought declaratory judgment and injunctive relief on behalf of the hockey players it represents. NHLPA then moved for leave to amend the complaint to add Anthony Aquino as a plaintiff and also requested a preliminary injunction on his behalf. The district court granted NHLPA's motion to amend and issued a preliminary injunction. On November 4, 2002, this court stayed the preliminary injunction. Defendants-appellants, OHL and its member teams, appeal the district court's grant of the preliminary injunction. For the reasons set forth below, we reverse the district court's grant of the preliminary injunction.

I. FACTUAL AND PROCEDURAL HISTORY

The NHLPA, an unincorporated labor association organized under the laws of Ontario, is the exclusive collective bargaining representative for all current and future NHL hockey players. The OHL is one of three amateur hockey leagues that comprise the Canadian Hockey League (CHL). The OHL consists of twenty teams whose players range in age from sixteen to twenty. While the vast majority of the OHL clubs are located within Ontario, Canada, two of the teams are located in Michigan, and one team is located in Pennsylvania. According to appellees, the OHL is a major source of players for the NHL, and various financial and other agreements exist between the two organizations.

The OHL eligibility rules provide that each team may have only three twenty-year-old players, typically referred to as "overage" players. In addition to limiting the number of overage players, the OHL adopted a rule in August of 2000 under which any overage player signed by an OHL team must have been on a Canadian Hockey Association (CHA) or USA Hockey Player's Registration Certificate the previous season. This rule, commonly referred to as the Van Ryn Rule¹ (also referred to as "the Rule"), effectively prevents OHL teams from signing any twenty-year-old United States college hockey players because the National Collegiate Athletic Association (NCAA) does not allow individuals holding a CHA or USA Hockey Player's Registration Certificate to play hockey at an NCAA school.

Anthony Aquino is a twenty-year-old hockey player who has been affected by the Van Ryn Rule. At age sixteen, Aquino, a Canadian citizen, was drafted by an OHL team, the Owen Sound Attack. Instead of playing for the Attack, Aquino chose to attend Merrimack College in Massachusetts. Aquino began playing hockey at Merrimack during the 1999-2000 season and played for three seasons. In June 2001, Aquino was drafted by the Dallas Stars, an NHL hockey team. During the 2001-2002 season, the Attack traded its rights to Aquino to the Oshawa Generals, another OHL team. While attending Merrimack College, Aquino was placed on the Generals' "protected list," which prevented Aquino from negotiating or signing with any other team in the CHL.

Aquino decided against returning to Merrimack for a fourth season. After deciding not to return to Merrimack, Aquino believed that he had two options for working toward a career in the NHL. Aquino could attempt to sign with and play for the team that drafted him, the Stars. Signing with the Stars, however, would result in his becoming a restricted agent with that team for the next eleven years. In the alternative, Aquino could play in the CHL, most likely for the Generals, an OHL team, for one year as an overage player, which would allow him to become a free agent in 2003. The Van Ryn Rule, however, currently prevents Aquino from playing for the Generals. While the NHL drafts many players from the OHL, which mirrors the style of play, rules, practice and game schedule of the NHL, players are also drafted from American colleges and high schools, Canadian Junior leagues, American Junior Leagues, minor professional leagues, "midget" leagues, and international leagues. While the parties disagree about Aquino's options for becoming an unrestricted free agent, Aquino's position is that playing for the Generals is the only route to becoming an unrestricted free agent. His position is that, assuming he could join a professional league other than the NHL or the CHL, he would fall into "defected" status, causing the Stars to hold his exclusive rights in perpetuity.

On March 12, 2001, appellee NHLPA brought this action alleging that, in adopting the Van Ryn Rule, the OHL and its member teams conspired with the NHL in violation of Section 1 of the Sherman Act. The original complaint sought declaratory and injunctive relief on behalf of present and future NHL players. On May 16, 2001, appellants moved to dismiss on the grounds of forum non conveniens and lack of personal jurisdiction.² The district court denied appellants' motion to dismiss. Nat'l Hockey League Players' Ass'n v. Plymouth Whalers Hockey Club et al., 166 F.Supp.2d 1155 (E.D.Mich.2001). On July 18, 2002, appellees moved to add Anthony Aquino as a plaintiff and requested a preliminary injunction on his behalf.

On August 30, 2002, the district court granted NHLPA's request to amend the complaint to add Aquino as a plaintiff and granted a preliminary injunction ordering the OHL to refrain from applying the Van Ryn Rule, which prohibits any OHL team from considering or hiring Aquino. This timely appeal followed.

After filing their appeal, appellants submitted a motion to stay the preliminary injunction pending disposition of the appeal. On November 4, 2002, a panel of this court granted appellants' motion for a stay and ordered an expedited appeal. The case was assigned to this panel and placed on the oral argument calendar for February 5, 2003. Appellees then filed a motion seeking reconsideration and requesting that the court lift the stay. This panel denied the motion for reconsideration and deferred ruling on the issues surrounding the preliminary injunction until after oral argument.

II. ANALYSIS

A. Foreign Trade Antitrust Improvements Act

Appellants first argue that this court lacks subject matter jurisdiction over Aquino's antitrust claims because these claims are barred by the Foreign Trade Antitrust Improvements Act (FTAIA), 15 U.S.C. § 6a, which limits the extraterritorial application of the Sherman Act. In ruling on appellees' motion to amend, the district court determined that the FTAIA did not prohibit the court from exercising jurisdiction over Aquino's antitrust claims because Aquino adequately alleged that the Van Ryn Rule is an unreasonable restraint of trade and that the Rule significantly affects United States commerce. Appellants now argue not only that the FTAIA bars Aquino's antitrust claims, but also that the bar to Aquino's antitrust claims deprived the district court of jurisdiction to issue an injunction. Appellants base the argument that the district court lacked jurisdiction to enjoin application of the Rule on a contention that the NHLPA did not demonstrate any right to a preliminary injunction on its own behalf.

Appellants' argument fails for two reasons. First, the district court's jurisdiction to issue an injunction was not dependent on the viability of Aquino's claims. In denying the motion to dismiss, the district court determined that the NHLPA had standing to seek injunctive relief on behalf of present and future NHL players. The motion for a preliminary injunction specifically noted that the NHLPA sought relief on behalf of Aquino if he was not added as a party. Consequently, even if the FTAIA bars Aquino's claims, the NHLPA's claim for injunctive relief on his behalf and on behalf of other players remains. Second, in the district court appellants raised the argument that the FTAIA barred Aquino's claims in response to the motion to amend. We appropriately consider the issue only in the context in which it was raised in the district court. See Estate of Quirk v. C.I.R., 928 F.2d 751, 758 (6th Cir.1991). Yet, the district court's grant of the motion to amend is not an appealable interlocutory order under 28 U.S.C. § 1292. Thus, an appeal of the FTAIA issue is not properly before the court.

B. Preliminary Injunction

We review a lower court's decision to grant a preliminary injunction for abuse of discretion. In re DeLorean Motor Co., 755 F.2d 1223, 1228 (6th Cir.1985). The district court's determination will be disturbed only if the district court relied upon clearly erroneous findings of fact, improperly applied the governing law, or used an erroneous legal standard. Nightclubs, Inc. v. City of Paducah, 202 F.3d 884, 888 (6th Cir.2000) (quoting Connection Distrib. Co. v. Reno, 154 F.3d 281, 288 (6th Cir.1998)). When considering a motion for preliminary injunction, the district court should consider four factors: (1) whether the moving party has a strong likelihood of success on the merits; (2) whether the moving party will suffer irreparable injury without the...