Troy Koenig, Plaintiff and former member of the USA Hockey organization, took the defendant organization to court as representative of a class of members who were injured by USA Hockey’s decision in 2008 to cut short its 2008 membership year, allegedly denying full benefits to paying members for the full promised 12 months.
In the latest developments in the case, Koenig moved to amend his pleadings to join a new named plaintiff, Nicholas Bush, and to add 67 individual named members of USA Hockey as defendants. USA Hockey allowed the first joinder unopposed, but vehemently opposed the second.
The Ohio district court granted Koenig’s first request, but denied his attempt to add the defendants to the case. One major factor that the court considered in denying the motion to add the defendants was the amount of time the case had already been proceeding (over a year), and the prejudice that it would work against both parties if the court allowed them to be joined this late in the lawsuit. The others are discussed below.
“If joined as parties to this case,” the court stated, “the 67 USA Hockey directors would not be defendants for all purposes. Count one of the proposed amended complaint pleads a claim for breach of contract, and there is no allegation that any of the directors were parties to the contract at issue, which was made between USA Hockey and its members.”
Count two of the plaintiff’s motion, however, alleged a violation of the Ohio Consumer Sales Practices Act by the 67 defendants. USA Hockey advanced three reasons why the court should not grant the motion. “[(1)] it argues that these defendants could have been joined when the case was initially filed and that the delay in proposing their joinder is a factor which favors denying the motion…; [(2)] it argues that the joinder would be prejudicial because it would unduly complicate the case, require the case schedule to be revised to accommodate the individual interests of the additional defendants, and raise significant issues concerning personal jurisdiction; [and (3)] disagreeing with plaintiff, USA Hockey asserts that the amendment would be futile because the proposed amended complaint does not state a valid claim against the individual directors of USA Hockey under the Consumer Sales Practices Act.”
USA Hockey attempted to disclaim liability for its individual directors under the Volunteer Protection Act, an argument that the court found unpersuasive. “If the Court were able to conclude that this Act applies…[it] could provide a clear basis for viewing the proposed amendment as futile,” the court stated. It continued, “However, the Court concludes that, despite the fact that there is a fair probability that the Act applies here, that determination cannot be made in this context.”
The court continued its analysis of the futility of the Plaintiff’s amendment. “The other issue which could be raised in a motion to dismiss, and which therefore enters into the inquiry as to the utility or futility of the offered amendment, is whether the proposed amended complaint states a claim against the individual directors of USA Hockey under the Ohio Consumer Sales Practices Act.”
“Two things should be stressed about the Court’s analysis of this issue in the context of this ruling. First, the Court has confined its inquiry to the alleged actions of the directors in connection with the offer of the 2009 membership. USA Hockey itself is alleged to engaged in additional acts and practices in connection with the offer of the 2008 membership, and those actions, which the proposed complaint does not attribute to the directors named in that complaint, are therefore not addressed here.
Second, the Court is not making a definitive ruling that the proposed amended complaint does not state a viable claim against the directors (or USA Hockey) under the OCSPA even as it relates to the 2009 membership offer…. Rather, the Court is simply assessing the likelihood that the proposed amended complaint would, as it relates to the claims against the directors, survive such a motion. The Court thinks it unlikely, and therefore concludes that this factor weighs strongly against allowing the amendment.”
Turning to the issue of adding the 67 defendants and whether or not the Ohio district court would have personal jurisdiction over them if they allowed them to be joined, the court opined: “At the very least, a difficult question would arise as to how the traditional test for personal jurisdiction set forth in decisions like Burger King Corp. v. Rudzewicz, 471 U.S. 462, 105 S. Ct. 2174, 85 L. Ed. 2d 528 (1985) and International Shoe Co. v. Washington, 326 U.S. 310, 66 S. Ct. 154, 90 L. Ed. 95 (1945) would be applied here, and whether, even if any individual director’s act of voting on the 2009 membership year proposal could form the basis for individual liability, that act can qualify as the “purposeful availment” of the privilege of acting in Ohio, and whether other factors, such as interstate comity and how foreseeable it was that these directors could be sued in Ohio for their actions, would render the exercise of personal jurisdiction unreasonable even if minimum contacts had been established. See Burger King, 471 U.S. at 476-77; see also Balance Dynamics Corp. v. Schmitt Industries, Inc., 204 F.3d 683, 688-89 (6th Cir. 2000).”
Finally, the Court stated that it “does not believe that the plaintiff will be prejudiced by disallowing the amendment. The relief sought from the individual directors is identical to the relief sought from USA Hockey, and there is no suggestion on this record that USA Hockey would be unwilling or unable to provide such relief should the Court order it to do so. Consequently, the Court’s conclusion is that it is a better exercise of discretion… to deny this particular motion.”
Troy Koenig, et al. v. USA Hockey, Inc.; S.D. Ohio; Case No. 2:09-cv-1097, 2010 U.S. Dist. LEXIS 118908; 11/9/10
Attorneys of Record: (for plaintiff) Todd H Neuman, LEAD ATTORNEY, Rick L Ashton, Allen Kuehnle Stovall & Neuman LLP, Columbus, OH. (for defendant) John Edward Haller, LEAD ATTORNEY, Shumaker Loop & Kendrick, Columbus, OH; Colin C Deihl, Jacy Tyler Jasmer Rock, PRO HAC VICE, Faegre & Benson LLP, Denver, CO; Scott R Branam, Shumaker, Loop, & Kendrick, LLP, Columbus, OH.
