What you need to know about the CHL civil suit certification hearing

Sportsnet's Gare Joyce talks about the pending CHL lawsuit and the ramifications it will have on the Junior Hockey world if it goes in favour of the players.

Lawyers for the plaintiffs continued their arguments for certification of a class action in the civil suit against the Canadian Hockey League, the Western Hockey League and its member teams in Calgary today.

The defendants’ lawyers are expected to begin their rebuttal this afternoon or on Friday.
It has taken more than a year to get this far in the case of Lukas Walter et al vs the WHL, CHL et al and, really, the judge’s decision on certification might not even be the halfway point in the proceedings if he finds in the affirmative. Or it might be an end if he’s not swayed by the plaintiff’s argument for the application of the Class Proceedings Act.

Further, even if the judge finds that Walter et al can continue to pursue damages in a class action, it’s no given that they’ll come away with a windfall in back wages for the seasons they logged playing major-junior hockey.

Okay, you can be forgiven if your eyes are glazing. The timeline on this story evokes Bleak House, Dickens’s darkest novel, an account of an unending court case that destroys everyone with the exception of the lawyers.

Here’s what you need to know in a nutshell version. We’ll go scenario by scenario.

One: The judge doesn’t find merit for the plaintiffs’ arguments for certification of a class action.

You can expect everyone to go home and for this to be an imbroglio that matters not a whit. Mind you, Walter, a 24-year-old native of Langley, B.C. and the representative plaintiff for a group of 400 players and former players, would be free to continue his case that he was an employee of the Tri-City Americans and not simply an amateur athlete, thus deserving of minimum wage at the very least.

He could go down swinging, but then again, it wouldn’t be a cost- or time-effective exercise—even if the Charney Lawyers, the class-action specialists representing Walter, were to work pro bono. Hundreds of hours of lawyers’ time and expenses to recover back pay for two seasons in which he played 117 games, scoring one goal with four assists for Tri-City … maybe as a piece of performance art or theatre of the absurd, but that’s about it. Maybe the Ontario court hearing Sam Berg et al vs The CHL, the Ontario Hockey League and its member teams might hand down an affirmative decision on certification of a class-action. Ditto a Quebec court hearing the same arguments in a civil action against the CHL, The Quebec Major Junior Hockey League and its teams. Those cases would still be hanging out there but to what end has Walter case would have much-to-do signifying nothing much at all.

Two: The judge finds merit in the plaintiffs’ arguments and certifies a class action.

The case proceeds and the tension mounts. So does the temptation to read too much into the judge’s decision in favour of the plaintiffs. It’s fair to say that certification constitutes a win for the plaintiffs, but you would be reading too much into the decision if you presumed that the plaintiffs were “winning” or “playing with a lead” or “poised to rout” the leagues and the teams.

According to lawyers who handle class-action cases, the bar for class certification isn’t set so terribly high. Certification of a class action shouldn’t be mistaken for, say, certification of a union or guild. The lawyers for the plaintiffs have two very different arguments to make and the argument for a class action (all of those who have signed on and others in his profile have a shared interest) is very different than the argument for damages in pay wrongfully withheld (all those in the class action were employees rather than players). Proving the former is independent from proving the latter.

The plaintiffs’ lawyers prevailed on the matter of the unsealing of the defendants’ financial records and this has opened up some questions about compensation for team employees, directors and the like—that the devil would be in the line-item details was a matter anticipated in a feature that appeared on this website a couple of weeks ago. And no doubt that some of the numbers on the teams’ books will raise eyebrows—certainly the reported $1.5-million paid out in management fees by the Red Deer Rebels will require some explaining.

The cries of hardship that echoed from the CHL side comes in a clearer context and it will likely lead to doubts about the defendants’ claim that most CHL teams are just trying to break even and fail to do so in a given year. Nonetheless, even if a judge takes a leap and buys into the idea that the leagues and teams are for-profit businesses, it will take another leap to categorize the players as employees. And it would take a record-setting triple jump to start to quantify appropriate damages in any finding for the plaintiffs.

It has been reported that CHL president and OHL commissioner David Branch did not disclose the details of the league’s financial arrangements with the NHL in court, but in fact it was the agreement that wasn’t entered into evidence—the leagues’ and teams’ financial statements entered into evidence did reflect the monies paid out to the CHL in transfer fees from the NHL.

Branch and the lawyers for both sides were in court Thursday and did not return calls. Ronald Smith, a forensic accountant who reviewed the CHL and WHL financial documents, declined to comment on the case.

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