A federal judge from the District of Minnesota has denied a hockey league’s bid for a preliminary injunction, which would have prevented a rival league from adopting a rule that barred its players from participating in other hockey leagues while playing for one of its teams.
Central to the court’s ruling was that plaintiff Minnesota Made Hockey, Inc. failed to show it would suffer irreparable harm if the rule was enforced.
The court set the stage for its analysis by first exploring the structure of amateur athletics in the United States, and Minnesota in particular.
“All amateur sports in which the United States competes internationally are organized under a cascading system of regulation — the head of this system is the United States Olympic Committee (USOC),” wrote the court. “Each sport is governed by a National Governing Body (NGB). Congress authorized this structure when it passed the Amateur Sports Act (ASA) in 1978. Congress’ purpose for the structure and oversight of amateur sports as governed by the ASA included (of relevance):
“to establish national goals for amateur athletic activities and encourage the attainment of those goals;
“to coordinate and develop amateur athletic activity in the United States, directly related to international amateur athletic competition, to foster productive working relationships among sports-related organizations;
“to promote and encourage physical fitness and public participation in amateur athletic activities;
“to assist organizations and persons concerned with sports in the development of amateur athletic programs for amateur athletes . . . .”
The NGB for hockey is USA Hockey. Amateur hockey in Minnesota is controlled by USA Hockey-affiliate Minnesota Hockey. Minnesota Hockey is further divided into 13 geographic district associations. District 6 controls the South and West metro areas of the Twin Cities, and is itself a cooperative group of 13 independent youth hockey associations.
Plaintiff Minnesota Made Hockey operates a for-profit hockey program in the same geographic area as District 6. It offers a variety of youth hockey programming services including skate training, speed training, stick handling, passing and shooting, checking, offensive/defensive strategies, team training, and league and tournament team services.
In July of 2010, District 6 adopted a rule, whereby “a player registered with District 6 may not register or play hockey with any other organization, association or team during the winter hockey season, including playoffs. If a player is found to be registered or playing with another team, the District Director will determine, in their sole discretion, what sanction shall be assessed which may include, without limitation, suspension for the remainder of the District 6 winter hockey season, including playoffs. This rule does not impact any hockey clinics or outside activities including but not limited to Boy Scouts, Girl Scouts, Religious events, birthday parties, etc. This rule strictly applies to league play.”
After several players and coaches left the plaintiff’s programs because of the new rule, the plaintiff sought a preliminary injunction to enjoin enforcement of the rule alleging “tortious interference with prospective business relations; tortious interference with existing contractual relations;” and violations of state and federal antitrust statutes.
To obtain a preliminary injunction, a party must show, among other things, “the threat of irreparable harm.”
As evidence of this, the plaintiff alleged “the loss of current customers, as well as the loss of reputation and consumer goodwill, as a result of District 6’s outside league rule.” The defendants, meanwhile, argued that “a preliminary injunction is not necessary since their own internal grievance policy is so prolonged that a player would likely not face discipline for violation of the rule during the hockey season.”
The Court found that the plaintiff’s request for a preliminary injunction “failed to demonstrate irreparable harm for several reasons. First, the loss of players from one season of play is a calculable financial loss. Second, the fact that the plaintiff has filed this lawsuit is likely known to those players who have chosen to leave the plaintiff’s leagues, or can be communicated to them, so as to preserve the players as potential customers in the next season. Third, the slow-moving grievance policy means that no individual player is likely to lose eligibility to play in District 6 during the coming season. As a result, the Court does not find that the type of harm demonstrated by plaintiff warrants the ‘extraordinary and drastic remedy’ of a preliminary injunction. Mazurek, 520 U.S. at 972.”
However, the court did find “merit in many of the plaintiff’s claims,” namely those involving violations of antitrust laws.
“In sum, the plaintiff has proven the existence of a relevant product and geographic market, the power of the defendants over that market, and their maintenance of that power through anti-competitive means. Therefore, the Court finds that plaintiff has demonstrated a likelihood of success on the merits of its monopolization claim.”
Minnesota Made Hockey, INC., v. Minnesota Hockey, INC. et al.; D. Minn.; Civil No. 10-3884 (JRT/JJK); 2011 U.S. Dist. LEXIS 537, 1/4/11
Attorneys of Record: (for plaintiff) Jason E. Engkjer, Jenna T. Burfeind and Michael C. Glover, KALINA WILLS GISVOLD & CLARK, PLLP, Minneapolis, MN. (for defendants) Robert L. DeMay and Andrew Davis, LEONARD STREET AND DEINARD, PA, Minneapolis, MN Janine M. Luhtala, Jonathan C. Marquet and Mark R. Whitmore, BASSFORD REMELE, PA, Minneapolis, MN.
