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Forbes v. Eagleson

September 10, 1999

DAVID S. FORBES, ET AL.
v.
R. ALAN EAGLESON, ET AL.



The opinion of the court was delivered by: O'Neill, J.

MEMORANDUM

The National Hockey League, the NHL Member Clubs, William Wirtz, and John Ziegler (the "NHL defendants") move to dismiss the fifth amended complaint or, in the alternative, for summary judgment. The basic question presented is whether plaintiff Douglas Smail has alleged any claim for injuries that is both timely and cognizable under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1962, 1964. I conclude he has not, and therefore will enter judgment for the NHL defendants on plaintiff's remaining claims against them.

I.

The original plaintiffs in this case, five former National Hockey League players, brought suit on behalf of a putative class of NHL players on November 7, 1995. In essence, they alleged that the NHL owners and management had colluded for decades with the players' labor representative, defendant R. Alan Eagleson, who was executive director of the NHL Players' Association (NHLPA) from 1967 through the end of 1991. See generally Forbes v. Eagleson, 19 F. Supp. 2d 352 (E.D. Pa. 1998). Allegedly, the NHL defendants conspired to give Eagleson certain plums, such as leadership of international hockey tournament events, which he used with their acquiescence to enrich himself and his family and friends, and Eagleson, in turn, betrayed the interests of the hockey players both in collective bargaining and in his day-to-day conduct of labor-management relations. The defendants' collusive conduct allegedly constituted a pattern of violations of the Labor-Management Relations (Taft-Hartley) Act, 29 U.S.C. § 186, and thus a pattern of racketeering acts in violation of RICO. See Forbes 19 F. Supp. 2d at 359-60.

The NHL moved for summary judgment on grounds that RICO's four-year statute of limitations had run on any claims accrued more than four years before plaintiffs filed suit (i.e., before November 7, 1991) because plaintiffs knew or should have known of defendants' alleged collusion by at least the fall of 1991. I agreed and granted partial summary judgment to the NHL defendants and Eagleson. *fn1 See id. I also dismissed plaintiffs' claims for injuries incurred within the limitations period for failure to state a claim upon which relief could be granted. Id. at 377. Plaintiffs then sought leave to amend their complaint to properly plead claims for injuries incurred after November 7, 1991, which I granted. See Forbes v. Eagleson, 183 F.R.D. 440 (E.D. Pa. 1998). As a result of my prior statute of limitations ruling, however, only plaintiff Douglas Smail could continue to press claims because he was the only one of the named plaintiffs who played in the NHL after November 1991.

II.

Defendants move to dismiss or for summary judgment. Because defendants' arguments are based on facts that do not appear in the complaint and both parties have attached to their briefs and relied upon material extraneous to the pleadings, I consider the motion as one for summary judgment. Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. Proc. 56(c). In resolving the motion, I view the evidence and all reasonable inferences to be drawn therefrom in favor of plaintiff as the non-moving party. See, e.g., Reitz v. County of Bucks, 125 F.3d 139, 143 (3d Cir. 1997).

I note that plaintiff asserts he needs discovery in order to respond to defendants' motion. (See Pls. Brief at 2). Specifically, he appears to argue that he needs some two decades worth of discovery to establish that defendants' 27-year conspiracy continued to cause damage to the players into the limitations period. (See Pls.' Brief at 4-5, 8-9; Pls.' Ex. D, Declaration of Roger G. Noll.) In my view this contention is patently lacking in merit and plaintiff does not need any discovery to address the merits of defendants' motion. Indeed, I proceed (as do defendants' arguments) on the assumption that plaintiff can establish that he continued to suffer damage into the limitations period. Specifically, as set forth further below, I assume that defendants' alleged 25 years of labor-management collusion resulted in a 1988 collective bargaining agreement that was not as good for the players as it should have been and, more generally, reduced both the baseline compensation levels (and bargaining positions) of the players and their bargaining strength, which in turn meant that subsequent collective bargains were not as good as for the players as they would have been but for that history of collusion. *fn2

III.

In the fifth amended complaint, Smail alleges that, within the limitations period and pursuant to defendants' on-going, decades-old conspiracy, Eagleson failed to adequately prepare the players' union for collective bargaining, failed to represent aggressively the players' interests in the day-to-day conduct of labor-management relations, and communicated with the NHL defendants both during and after he headed the union to undermine and embarrass the union and cause the NHL to take a hard-line position that may have contributed to the players' April 1992 strike. (Compl. ¶ 56.) As a result of these actions, Smail allegedly suffered injuries in that (1) the players would have gotten better benefits earlier and might have avoided the April strike altogether had Eagleson not encouraged the NHL to take a hard line and/or had he better prepared the union for collective bargaining negotiations in 1992; and (2) the players "continued to suffer suppressed compensation in subsequent years." (Amended Compl. ¶ 57.)

The record establishes the following additional undisputed facts. *fn3 The last collective bargaining agreement ("CBA") negotiated by defendant Eagleson was executed on June 1, 1988 and expired by its terms on September 15, 1991. As of January 1, 1991, Eagleson's employment with the NHLPA ended and Robert Goodenow took over as the union's executive director. After the 1988 collective bargain expired, the NHL and the NHLPA failed to agree to new terms and the 1991-92 season began without a new agreement. On April 1, 1992, days before the Stanley Cup playoffs were to begin, the players went out on a strike. Ten days later, on April 11, 1992, the NHL and the NHLPA reached an agreement on the major terms of a new agreement. The agreement was ultimately executed on January 21, 1993, but some provisions were made retroactive to September 16, 1991 (when the 1988 CBA expired), and the rest were retroactive to April 11, 1992.

On August 29, 1991, before the 1988 CBA had expired, plaintiff Smail signed a "Standard Player Contract" as an unrestricted free agent to play with the Quebec Nordiques for the 1991-92 season. The standard terms of the Standard Player Contract were governed by the 1988 CBA. Smail never missed a paycheck during the 1991-92 season as a result of the strike. His contract with the Nordiques expired on July 1, 1992, and on August 31, 1992, he signed a new Standard Player Contract with the Ottawa Senators. The terms of this contract, which expired on August 31, 1993, were governed by the new CBA negotiated by Goodenow. The 1992-93 season was Smail's last.

III.

Defendants' motion presents two primary questions. One is whether plaintiff has stated a claim for any "new and independent" injury within the limitations period. See generally Glessner v. Kenney, 952 F.2d 702, 707-08 (3rd Cir. 1991) (discussing "new and independent injury" requirement for separate accrual of RICO claims). The second is whether any such new and independent injuries are sufficiently causally related to defendants' alleged racketeering and sufficiently certain to be recoverable under RICO. See generally Steamfitters Local Union ...


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