419 F.3d 462 (6th Cir. 2005), 04-1173, National Hockey League Players Ass'n. v. Plymouth Whalers Hockey Club

• Citation: 419 F.3d 462
• Party Name: NATIONAL HOCKEY LEAGUE PLAYERS ASSOCIATION, et al., Plaintiffs-Appellants, v. PLYMOUTH WHALERS HOCKEY CLUB, et al., Defendants-Appellees.
• Case Date: August 15, 2005
• Court: United States Courts of Appeals, U.S. Court of Appeals — Sixth Circuit

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419 F.3d 462 (6th Cir. 2005)

NATIONAL HOCKEY LEAGUE PLAYERS ASSOCIATION, et al., Plaintiffs-Appellants,

v.

PLYMOUTH WHALERS HOCKEY CLUB, et al., Defendants-Appellees.

No. 04-1173.

United States Court of Appeals, Sixth Circuit.

August 15, 2005

Argued: Feb. 4, 2005.

Appeal from the United States District Court for the Eastern District of Michigan at Detroit. No. 01-70968—Victoria A. Roberts, District Judge.

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COUNSEL

ARGUED:

Michael P. Conway, GRIPPO & ELDEN LLC, Chicago, Illinois, for Appellants.

Stephen F. Wasinger, WASINGER, KICKHAM & HANLEY, Royal Oak, Michigan, for Appellees.

ON BRIEF:

John E. Bucheit, John R. McCambridge,

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GRIPPO & ELDEN LLC, Chicago, Illinois, for Appellants.

Stephen F. Wasinger, Gregory D. Hanley, WASINGER, KICKHAM & HANLEY, Royal Oak, Michigan, for Appellees.

Before: SILER, COLE, and CLAY, Circuit Judges.

OPINION

CLAY, Circuit Judge.

Plaintiffs, the National Hockey League Players Association ("NHLPA"), Anthony Aquino ("Aquino"), and Edward Caron ("Caron") appeal the dismissal, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, of their suit under the Sherman Antitrust Act, 15 U.S.C. § 1, against Defendants, the Ontario Hockey League ("OHL"), its member Clubs, and its Commissioner, David Branch ("Branch").

This case is before this Court for the second time. In 2003, we reversed the district court's grant of a preliminary injunction to Plaintiffs, on the ground that Plaintiffs had failed to identify a relevant market as required under the Sherman Act. Nat'l Hockey League Players Ass 'n v. Plymouth Whalers Hockey Club ("NHLPA I"), 325 F.3d 712, 714-17 (6th Cir. 2003). Plaintiffs filed a second amended complaint in an attempt to cure the defects identified by this Court in NHLPA I. The Plymouth Whalers Hockey Club, et al. district court found these efforts unpersuasive, and dismissed Plaintiffs'suit for failure to state a claim upon which relief could be granted. For the reasons that follow, we AFFIRM the order of the district court.

BACKGROUND

I. Substantive Facts

Many of the facts set forth below were included in this Court's factual discussion in NHLPA I. We reiterate them here because of their importance to our determination of the claims at issue in this appeal.

The Ontario Hockey League ("OHL") consists of twenty teams, with players aged sixteen to twenty. Two of the teams are located in Michigan, one is in Pennsylvania, and the remaining teams are based in Ontario, Canada. The OHL, along with the Western Hockey League and the Quebec Major Junior Hockey League, form the "Major Junior Leagues" of the Canadian Hockey League ("CHL"). The Major Junior Leagues constitute one of the three major sources of players in the National Hockey League's ("NHL") entry draft; the others are European leagues and American colleges and high schools.

OHL eligibility rules permit each team to carry only three twenty-year-old, or "overage," players. Additionally, under the OHL's Rule 7.4, which is at the heart of this case, no overage player can be signed by an OHL team unless he was previously on a Canadian Hockey Association ("CHA") or USA Hockey Player's Registration the previous season. The National College Athletic Association ("NCAA") does not permit players holding either type of registration to play at a NCAA school. These two rules - the OHL rule requiring overage players to have a been on a CHA or USA Hockey Registration, and the NCAA rule barring players with either of those registrations - combine to prevent OHL teams from signing any twenty-year-old NCAA players, because such a player would not have been permitted by the NCAA to have obtained the registration required by the OHL of twenty-year-old players.

Rule 7.4 is commonly referred to as the "Van Ryn Rule." Mike Van Ryn ("Van Ryn") was a University of Michigan hockey player when he was drafted by the New Jersey Devils, an NHL team, in June 1998. Pursuant to the Collective Bargaining Agreement ("CBA")

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between the NHL and the NHLPA, the Devils thus obtained the rights to Van Ryn for one year, at which point, if the Devils failed to sign Van Ryn, he would become an unrestricted free agent. Under the terms of the CBA, ¹ those rights would only be extended past one year if Van Ryn remained in NCAA competition, or went to play for a non-affiliated hockey league.

Van Ryn remained in NCAA competition at the University of Michigan for one year following the draft, which extended the Devils' rights to him for one year. He then signed with the Sarnia Sting, an OHL club. The OHL is affiliated with the NHL, and therefore, the Devils' rights to Van Ryn were not extended by Van Ryn's signing with the Sting. Van Ryn thus became an unrestricted free agent in June 2000, and signed a three-year contract with the NHL's St. Louis Blues. Had Van Ryn not played in an affiliated league for the year during which the Devils had exclusive rights to him, his only path to free agency would have been to sit out for the season.

The Devils, with the support of the NHL, attempted to declare Van Ryn a "defected player" ineligible for free agency, but an arbitrator rej ected this effort. Within two months of the arbitration decision and Van Ryn's signing with the Blues, the OHL adopted the "Van Ryn Rule." Unsurprisingly, Plaintiffs regard the adoption of the rule as an attempt to prevent other NCAA players from achieving free agency via the route traveled by Van Ryn. Defendants dispute this motive, and note that a rule similar to the Van Ryn Rule, which prevented overage players from playing in the OHL if they had not played there as nineteen-year-olds, was in effect from 1992 to 1998. David Branch, the OHL Commissioner, has stated that the rule was implemented because, given that "the opportunities for overage players are obviously limited by OHL rules, it seemed fitting and appropriate to include those players who had given the OHL their time and talent over a number of years and to exclude those who had not done so."

Defendants also point out that former NCAA players who will not turn twenty before December 31 of any season may play in the OHL. However, pursuant to Section 8.4 of the CBA, players generally must be at least nineteen years old to be selected in the NHL Entry Draft. Thus, few NCAA players who have been drafted by an NHL team will be able to sign with an OHL team and follow the path taken by Mike Van Ryn to unrestricted free agency.

Plaintiffs Anthony Aquino ("Aquino") and Edward Caron ("Caron"), were, at the time the complaint was filed, twenty-year-old NCAA hockey players who aspired to play in the NHL. Both players contend that the Van Ryn Rule precluded them from achieving unrestricted free agency and the financial rewards it can confer. Aquino was drafted by the Owen Sound Attack, an OHL team, at age sixteen. He chose to play instead at Merrimack College in Massachusetts, and remained at Merrimack for three seasons. The Sound Attack later traded its rights to Aquino to another OHL team, the Oshawa Generals. In June 2001, Aquino was drafted by the Dallas Stars of the NHL. Aquino desired to play in the OHL during the 2002-2003

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season, and did in fact play for the Generals briefly after the district court issued a preliminary injunction barring enforcement of the Van Ryn Rule and until that injunction was stayed by this Court in NHLPA I. Aquino ultimately signed an NHL contract with the Atlanta Thrashers. Caron similarly argues that he sought to play in the OHL in 2002-2003, and that he would have signed an OHL contract but for the Van Ryn Rule.

II. Procedural History

Plaintiff NHLPA, an unincorporated labor association and the exclusive collective bargaining representative for all current and future NHL hockey players, filed a complaint in the United States District Court for the Eastern District of Michigan on March 12, 2001, seeking declaratory and injunctive relief on behalf of present and future NHL players. Defendants moved to dismiss the suit on the grounds of forum non conveniens and lack of personal jurisdiction. The district court denied appellants' motion to dismiss. Nat 7 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, the NHLPA moved to amend the complaint to add Aquino as a plaintiff and requested a preliminary injunction, barring enforcement of the Van Ryn Rule, on his behalf. Both motions were granted on August 30, 2002. Defendants appealed the grant of the preliminary injunction to this Court, which stayed the injunction on November 4, 2002, and then reversed and remanded the case to the district court.

On remand, Plaintiffs filed a second amended complaint, which added Caron as a plaintiff and incorporated additional allegations in an attempt to address this Court's opinion in NHLPA I. Defendants, arguing that Plaintiffs had not succeeded in curing the defects identified by this Court's decision, moved to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6). The Plymouth Whalers Hockey Club, et al. district court granted that motion and entered judgment in favor of Defendants on December 30, 2003. Notice of this appeal was filed on January 20, 2004.

DISCUSSION

I. Standard of Review

This Court conducts de novo review of a district court's dismissal of a complaint under Federal Rule of Civil Procedure 12(b)(6). PR Diamonds, Inc. v. Chandler, 364 F.3d 671, 680 (6th Cir. 2004) (citing Valassis Communications v. Aetna Cas. & Sur. Co., 97 F.3d 870, 873 (6th Cir. 1996)).

In considering whether a complaint fails to state a claim upon which relief can be granted, this Court construes "'the complaint in the light most favorable to the plaintiff, accept[s] all factual allegations [of the plaintiff] as true, and...