Opinion ID: 791481
Heading Depth: 2
Heading Rank: 4

Heading: Plaintiffs' Claim of a Conspiracy Between the OHL and the NHL

Text: 52 Count II of Plaintiffs' second amended complaint alleges that Defendants conspired with the NHL to implement the Van Ryn Rule, with resultant anti-competitive effects, in violation of the Sherman Act. Although we conclude that Plaintiffs sufficiently alleged the existence of an agreement between the NHL and the OHL, this claim ultimately fails for the same reason that Plaintiffs' claim under Count I fails: Plaintiffs cannot show that the Van Ryn Rule is the cause of the alleged anti-competitive effects. 53 To succeed on their conspiracy claim, Plaintiffs must allege sufficient facts to support the existence of an agreement between the NHL and the OHL. This Court has held that circumstantial evidence can support a conspiracy claim, so long as the evidence is not equally consistent with independent conduct. Re/Max Int'l, Inc. v. Realty One, Inc., 173 F.3d 995, 1009 (6th Cir.1999). Factors to consider in weighing circumstantial evidence of a conspiracy claim are: (1) whether the defendants' actions, if taken independently, would be contrary to their economic self-interest; (2) whether the defendants have been uniform in their actions; (3) whether the defendants have exchanged or have had the opportunity to exchange information relative to the alleged conspiracy; (4) and whether the defendants have a common motive to conspire. Id. (citing Wallace v. Bank of Bartlett, 55 F.3d 1166, 1168 (6th Cir.1995)). A showing that the defendants' actions, taken independently, would be contrary to their economic self-interest will ordinarily tend to exclude the likelihood of independent conduct. Id. 54 In light of the liberal pleading rules, which require a court considering a 12(b)(6) motion to accept all factual allegations in the complaint as true and construe them in the light most favorable to the plaintiff, Ricco v. Potter, 377 F.3d 599, 602 (6th Cir.2004) (citations omitted), we conclude that the district court erred in determining that Plaintiffs had failed to allege facts sufficient to support the existence of an agreement between the OHL and the NHL. This conclusion is based on our analysis of the allegations in the complaint relating to each of the factors to be considered in weighing circumstantial evidence of a conspiracy. 55 First, on the question of whether the defendants' action would be contrary to their economic self-interest if taken separately, Plaintiffs allege that the OHL has admitted that the Van Ryn Rule negatively impacts player quality, because it prevents OHL Clubs from signing talented twenty-year-old NCAA players. While diminished athletic competition in the OHL would not have an adverse impact on the market for player services in the OHL (because player salaries are fixed), Plaintiffs reasonably assert that it does adversely affect the economic success of the OHL and its marketing of its product. Defendants argue that the OHL's eligibility rules allow the OHL to offer a different type of competition for an audience that enjoys watching developing young players, thereby helping create the product which the OHL markets. Def. Brief at 22. This may well be true, but at this stage of the litigation, the Court is required to make all reasonable inferences in favor of Plaintiffs. We find it not only reasonable but self-evident that better players provide a better product. 56 Second, Defendants' behavior in implementing the Van Ryn Rule could be interpreted as inconsistent with evidence presented by Plaintiff that Defendants earlier embraced the presence of overage NCAA players. Plaintiffs allege that after Van Ryn joined the OHL, the League Commissioner announced that the presence of a player of his caliber in the OHL would be of great benefit to his team and the league as a whole. It is at least odd that a rule designed to prevent such players from joining the league subsequently would be adopted. 57 Third, Plaintiffs have offered detailed allegations regarding the relationship between the OHL and the NHL which, if believed, would support a finding that officials of the two leagues had the opportunity to exchange information relative to the alleged conspiracy. Re/Max, 173 F.3d at 1009. 58 Finally, Plaintiffs have alleged that the NHL had a strong interest in blocking the OHL as a path to free agency for its future players, and that the NHL exerts considerable financial influence over the OHL, resulting in a common motive to conspire. Id. at 1009. These factual allegations, if believed, could support a finding that the NHL and OHL conspired to implement the Van Ryn Rule. 59 Of course, our inquiry does not end there. Plaintiffs still must show that the object of the conspiracy was a violation of the antitrust laws. In this regard, they make precisely the same argument that failed with respect to their claim under Count I: that the Van Ryn Rule causes players not to be able to achieve free agency in the NHL, with resultant anti-competitive effects. For the reasons discussed in the previous section of this opinion, Plaintiffs' argument must again fail. The Van Ryn Rule, whether adopted by conspiracy between the member clubs of the OHL or by conspiracy between the OHL and the NHL, does not cause the anti-competitive effects alleged by Plaintiffs. We therefore affirm the district court's dismissal of Count II of the complaint.