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Federal Court of Appeal denies appeal in proposed class action against hockey leagues

Thursday, August 18, 2022 @ 6:27 PM | By Elizabeth Raymer


The Federal Court of Appeal has denied a former Canadian junior hockey player’s appeal from a motion to strike his proposed class action claim, in which the appellant alleged an anti-competitive conspiracy amongst professional and major junior hockey leagues.

Kobe Mohr had brought the proposed class action, and in January 2021 the Federal Court, in reasons penned by Chief Justice Paul Crampton, granted the defendants’ motion to strike the representative plaintiff’s statement of claim and dismissed the plaintiff’s motion to amend.

In its Aug. 17 ruling in Mohr v. National Hockey League, 2022 FCA 145, “[t]he Court is seized with two questions of statutory interpretation,” wrote Justice Donald J. Rennie.

“In broad terms, section 45 of the Competition Act prohibits conspiracies, agreements or arrangements between competitors to fix or maintain prices, allocate markets or customers, or restrict markets for the production or supply of a product. If established, the anti-competitive effect of the agreement is presumed, giving rise to both criminal sanctions and civil remedies.”

Section 48 of the Act “addresses conspiracies or arrangements in the context of professional sport [and] prohibits agreements or arrangements which unreasonably limit the opportunities of a player to participate in professional sport, impose unreasonable terms on players, or unreasonably limit the ability of players to negotiate with and play with a team of their choice.”

The two key differences between conspiracies under sections 45 and 48 of the Act, the court explained, are that if established, a conspiracy under section 45 is deemed anti-competitive, while under section 48 “a court must take certain matters into account before determining that a conspiracy has been established.”

Section 48 “exempts certain agreements or arrangements made in the context of professional sport from the general prohibition against anti-competitive agreements in section 45 of the Competition Act,” the court noted.

The class proceeding commenced by the appellant alleged that the respondent hockey leagues “conspired, contrary to paragraphs 48(1)(a) and (b) [of the Act], to limit the opportunities of hockey players to play in Canadian major junior and professional hockey leagues, and sought damages for economic losses as a result of the alleged conspiracy.”

But “[t]he statement of claim, alleging as it does a conspiracy between leagues and between leagues and other organizations, has no reasonable prospect of success,” the court found.

“The prohibition on anti-competitive arrangements in section 48 is limited to arrangements or agreements between clubs or teams in the same league,” Justice Rennie wrote, with Justices David W. Stratas and Anne Mactavish in agreement.

“The proposed amended statement of claim, asserting as it does a conspiracy with respect to the purchase or acquisition of players’ services, also has no reasonable prospect of success,” he continued. “The prohibition in section 45 is restricted to agreements or arrangements with respect to the supply or sale of products.”

Although the appellate court agreed with the appellant that Federal Court Chief Justice Crampton had “erred in striking the claim on the basis that allegations did not relate exclusively to the matters in subsection 48(1),” it also found that those errors did not affect the outcome of the decision.”

The decision gave “guidance to courts going forward on motions to strike,” said Eric Lefebvre, a partner in Norton Rose Fulbright Canada LLP in Montreal who was lead counsel for several major junior hockey leagues in the appeal.

“They agreed with the Federal Court that it was plain and obvious that the claim and the proposed amended claim did not disclose a cause of action under either s. 45 or s. 48 of the Competition Act,” Lefebvre told The Lawyer’s Daily, and consequently had no chance of success.

Lefebvre also highlighted paragraphs 49 and 50 of the decision, in which the court noted that “Motions to strike serve an important screening or gatekeeping function. They are essential to effective and fair litigation and prevent unnecessary effort and expense being devoted to cases that have no reasonable prospect of success. This is particularly true in the context of class actions, where plaintiffs may have fundraised to cover their expenses and where they are relieved from paying costs when they are unsuccessful on interlocutory matters along the way.

“There is also a broad cost to access to justice," Justice Rennie continued. "The diversion of scarce judicial resources to cases which have no substance diverts time away from cases that require attention.”

In large urban centres, “there is a problem of resources in system to deal with all these claims,” Lefebvre said, and the Federal Court of Appeal highlighting the importance of allowing motions to strike statements of claim, pre-certification of a class action, is “of utmost importance.”

“They’ve put an emphasis on ‘scarce judicial resources,’ ” he said, adding that he hopes “it encourages courts to entertain motions to strike. This Federal Court of Appeal decision should embolden us to consider more” of them, which can be “the perfect tool” to eliminate class actions without merit before they are authorized, or certified.

“I do hope this will lead to courts considering motions to strike, pre-certification, more so than they have done in the past.”

Counsel for some parties were not immediately available for comment, or declined comment.

Edward J. Babin and Brendan Monahan of Babin Bessner Spry LLP represented the appellant Kobe Mohr.

Stephen J. Shamie, John C. Field, Sean M. Sells and Gabrielle Lemoine of Hicks Morley Hamilton Stewart Storie LLP and Linda Plumpton of Torys LLP acted for the respondent National Hockey League.

Jean-Michel Boudreau of IMK Avocats represented the American Hockey League.

Karine Chênevert and Alexander L. De Zordo of Borden Ladner Gervais LLP represented the respondent ECHL Inc.

Eric C. Lefebvre, Christopher A. Guerreiro and Erica Woolgar of Norton Rose Fulbright Canada LLP acted for the respondents Canadian Hockey League, Quebec Major Junior Hockey League Inc., Ontario Hockey League and Western Canada Hockey League.

Casey Halladay and Akiva Stern of McCarthy Tétrault LLP represented the respondent Hockey Canada.

If you have any information, story ideas or news tips for The Lawyer’s Daily on corporate-commercial law and related litigation, including class actions, please contact Elizabeth Raymer at elizabeth.raymer@lexisnexis.ca or 905-415-5888.