Professional Hockey Antitrust Litigation, In re, M

• Decision Date: 23 February 1976
• Docket Number: No. 74--162,No. M,No. 72--1995,No. 73--19,Nos. 74-2113--74-2118,M,72--1995,73--19,74--162,s. 74-2113--74-2118
• Citation: 531 F.2d 1188
• Parties: 1976-1 Trade Cases 60,747 In re PROFESSIONAL HOCKEY ANTITRUST LITIGATION. (D.C.D.L. 119) Appeal of METROPOLITAN HOCKEY CLUB, INC. and Golden Blades Hockey, Inc. (six cases). WORLD HOCKEY ASSOCIATION et al. (D.C. Civ.) v. NATIONAL HOCKEY LEAGUE et al. WORLD HOCKEY ASSOCIATION et al. (D.C. Civ.) v. NASSAU SPORTS, etc., et al. (two cases). NASSAU SPORTS, a limited partnership, (D.C. Civ.) v. Garry PETERS et al. and Golden Blades Hockey, Inc., Intervenor-Defendant (two cases).
• Court: U.S. Court of Appeals — Third Circuit

Page 1188

531 F.2d 1188

1976-1 Trade Cases 60,747

In re PROFESSIONAL HOCKEY ANTITRUST LITIGATION. (D.C. No. M.D.L. 119)

Appeal of METROPOLITAN HOCKEY CLUB, INC. and Golden Blades

Hockey, Inc. (six cases).

WORLD HOCKEY ASSOCIATION et al. (D.C. Civ. No. 72--1995) v. NATIONAL HOCKEY LEAGUE et al.

WORLD HOCKEY ASSOCIATION et al. (D.C. Civ. No. 73--19) v. NASSAU SPORTS, etc., et al. (two cases).

NASSAU SPORTS, a limited partnership, (D.C. Civ. No. 74--162) v. Garry PETERS et al. and Golden Blades Hockey, Inc., Intervenor-Defendant (two cases).

Nos. 74-2113--74-2118.

United States Court of Appeals, Third Circuit.

Argued May 15, 1975.

Decided Feb. 23, 1976.

Leonard W. Wagman, Michael C. Silberberg, Golenbock & Barell, New York City, Perry S. Bechtle, Alan M. Lerner, Cohen, Shapiro, Polisher, Shiekman & Cohen, Philadelphia, Pa., for plaintiffs-appellants Metropolitan Hockey Club, Inc. and Golden Blades Hockey, Inc.

Harry L. Shniderman, Bingham B. Leverich, Covington & Burling, Washington, D.C., for appellee National Hockey League.

Edwin P. Rome, Richard P. McElroy, Blank, Rome, Klaus & Comisky, Philadelphia, Pa., for all appellees except Nassau Sports.

Edward Bennett Williams, Harold Ungar, Richard M. Cooper, Williams, Connolly & Califano, Washington, D.C., for all appellees except National Hockey League, Atlanta Hockey, Inc. and Nassau Sports.

Morris R. Brooke, Drinker, Biddle & Reath, Philadelphia, Pa., for Nassau Sports.

Before STALEY, ROSENN and HUNTER, Circuit Judges.

OPINION OF THE COURT

STALEY, Circuit Judge.

This is an appeal from an order of the district court granting defendants' motion to dismiss the action with prejudice for failure to comply with the discovery provisions of the Federal Rules of Civil Procedure and with the court's related order. Appellants ask us to determine whether dismissal of their action was an abuse of discretion. Upon a thorough review of the record, we conclude that the district court did abuse its discretion by dismissing the case.

Before examining the facts, we find it essential and appropriate to outline the general background of this case.

In August 1972, the Philadelphia World Hockey Club, Inc. of the World Hockey Association (WHA) filed a broad-based antitrust suit against the Philadelphia Hockey Club, Inc., and other clubs comprising the National Hockey League (NHL). Subsequently, fifteen separate lawsuits were filed against the NHL. One of these actions, World Hockey Association v. National Hockey League, E.D.Pa., 351 F.Supp. 462, included the appellant, Metropolitan Hockey Club, Inc. (Metropolitan). All of the cases were consolidated in the Eastern District of Pennsylvania on October 10, 1972 in accordance with 28 U.S.C. §§ 1404(a) and 1407(a). In May 1973, Golden Blades Hockey, Inc. acquired all the assets of Metropolitan and agreed to prosecute and defend the antitrust actions in which Metropolitan was then involved.

In February 1974, the WHA and the NHL and their member teams--except Metropolitan and Golden Blades--reached a settlement of the antitrust suit. The settlement called for a dismissal of all respective claims against each other and the various individual defendants. However, the five actions to which Metropolitan and Golden Blades (jointly 'M-GB') were parties were continued.

Between February and June 1973, both the WHA and the NHL parties served numerous discovery requests upon each other. Apparently, the WHA was delinquent in responding to the NHL interrogatories and NHL complained that some of the responses were inadequate and fell short of any good faith compliance. ¹ At a pre-trial conference and hearing on June 7, 1973, the district court directed the parties to negotiate to resolve their discovery disputes and report back to the court by June 25 regarding any discovery disputes that remained. On June 25, counsel for all parties wrote the court requesting additional time to negotiate their discovery problems. These discovery negotiations, as well as the settlement negotiations, continued through summer into the fall. By a series of stipulations, the parties postponed the deadline for completion of discovery to and including November 30, 1973. That fall, the court advised all parties that the case should be set for trial on March 18, 1974.

On February 19, 1974, all the NHL clubs and all the WHA clubs, except M-GB, agreed to settle their respective claims against one another and various individual defendants in each of the fifteen actions. A consent decree was entered by the court at that time terminating the litigation as to all plaintiffs other than M-GB. Until the settlement entered into on February 19, 1974, lead counsel for the plaintiffs was the law firm of Harold Kohn, P.A. Each WHA team had its own general counsel, but responsibility for overall management of plaintiff's litigation was the Kohn firm.

On February 20, 1974, the day after the consent decree, Golenbock & Barell, now in charge of the litigation for M-GB, and counsel for the NHL met with the judge to determine the final pre-trial schedule. At this conference, the court apprised the parties that March 18, 1974 was still the trial date and that all parties should do whatever necessary so that the trial would start on the announced date. Appellant at this time was attempting to gain access to files held by Harold Kohn, counsel for the WHA, in order to proceed with discovery. Kohn claimed a lien on the files for unpaid services and costs of approximately one million dollars and refused to release the files to M-GB until he was paid. At a pre-trial conference on February 26, 1974, the court entered an order recognizing a lien in favor of the Kohn firm on 'all papers relating to and arising out of this litigation and now under their control.' The order also required M-GB to pay or post sufficient surety to satisfy in excess of $50,000 of the lien, holding that it 'could be obligated to pay the total legal fees and related costs expended by WHA . . . (which) could approximate one million dollars.' The effect of the order was to leave M-GB without copies of pleadings, orders, and other crucial documents pertaining to discovery.

At the February 26 conference, the court also considered M-GB's motion for a continuance of the March 18 trial date and granted it by extending the trial date to April 1 or April 8. The court then requested the parties to agree on a pre-trial schedule. Counsel for M-GB at this time agreed to answer defendants' interrogatories in two weeks, by March 11, 1974. At the time of this commitment, M-GB asserts that its counsel had not seen a 114-page set of interrogatories with multiple subparts aggregating 1,150 questions and did not realize the inherent difficulty in supplying answers.

The following morning, February 27, defendants began a series of depositions of every officer, director, and major shareholder of M-GB. Counsel for M-GB at conference with the court that afternoon strenuously protested defendants' intention to take simultaneous deposition, pleading that 'I will never be able to answer (the interrogatories) by March 11th if I have to do that, and it is not fair and it isn't due process.' The court rejected M-GB's plea and ordered simultaneous depositions to commence two days later on March 1, 1974.

On March 11, answers to defendants' interrogatories had not been filed. Counsel for M-GB wrote a letter to the court requesting an extension of time until March 18 to answer the interrogatories. On March 13, the NHL moved to dismiss the action for M-GB's failure to answer. A hearing was held the next day, and the court denied defendants' motion to dismiss, giving M-GB until March 18 to supply answers to the interrogatories and extending the trial date to April 15, 1974.

M-GB timely submitted their answers to the interrogatories on March 18. At a pretrial conference on March 19, NHL informed the court that it intended to file a motion to compel supplementary answers. At this same conference, the court advised the parties that the trial date was to be extended from April 15 to September 16, 1974. On March 21, the NHL filed its motion compelling supplementary answers to certain interrogatories because it considered previous responses to be inadequate. This motion sought information regarding M-GB's capital structure. M-GB alleged that answers could not be given because the financial records necessary to provide answers were unavailable because they were in the possession of accountants and law-yers who had invoked liens on them. The motion also sought supplemental answers to fifty-six of the 1,150 interrogatories which involved computation of damages and requested that M-GB attribute specific damages including loss of profits to particular acts of the defendant that were monopolistic. Defendants' motion was argued on March 25, 1974, and on April 12, 1974, the court rendered its decision compelling supplemental answers.

In its order directing supplemental answers, the court also set forth six guidelines and three deadlines for providing these answers. It is this order that appellants contend caused them confusion in 'targeting' the wrong date and led to the dismissal of the action. A substantial number of answers were to be filed by April 29, 1974. Another set of interrogatories, which M-GB claimed it could not answer because of inadequate discovery, was to be answered no later than July 25, 1974. A third set of interrogatories, the fifty-six dealing with M-GB's damage claims, was to be supplemented by June 14, 1974.

On April 24, M-GB sought an extension of the April 29 deadline because the district court clerk's office, under the press of other court business, was unable to timely reproduce several hundred documents required in connection with the supplemental answers. The court extended the deadline to May 6. M-GB timely filed these answers on May 6. Included in these answers was some information pertinent to the interrogatories relating...