962 F.3d 968
7th Cir.2020Background
- USA Hockey oversees organized amateur hockey; the Amateur Hockey Association of Illinois (the Association) has governed hockey in Illinois since 1975.
- Black Bear Sports Group owns Illinois rinks and sought to sponsor a Tier II team using Center Ice Arena, but the Association limits team sponsors to 501(c)(3) nonprofit entities.
- Black Bear sued under §2 of the Sherman Act, alleging monopolization and seeking admission as a member (and damages), rather than dissolution or freer competition.
- The district court dismissed for lack of Article III standing, reasoning Black Bear had not exhausted internal Association remedies (had not applied for membership/exception).
- The Seventh Circuit held the Sherman Act claim implausible because antitrust law cannot be used to force admission to a cartel; it also rejected a categorical private-exhaustion requirement but concluded the federal claim was not viable and remanded state-law claims to state court.
- A separate appeal over denial of a motion to supplement the record was dismissed for lack of appellate jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Article III standing / exhaustion of internal remedies | Black Bear contends it suffers an ongoing injury because it cannot sponsor a team and need not exhaust Association processes first | Association (and district court) argue Black Bear must seek admission or an exception before suing | Court: No constitutional exhaustion requirement; Black Bear need not futilely apply, so lack of an application alone does not defeat standing |
| Viability of Sherman §2 claim (antitrust injury) | Black Bear asserts the Association monopolizes sponsorship and seeks admission plus damages | Association argues antitrust law cannot be used to compel entry into a cartel or to rearrange cartel profits | |
| --- | ---: | --- | --- |
| Held on Sherman §2 claim | Black Bear's requested relief (forcing membership to share monopoly profits) is not a cognizable antitrust injury; claim is implausible/frivolous | ||
| Supplemental jurisdiction over state-law claims | Black Bear invoked supplemental jurisdiction for state antitrust and private-club claims | Association urged dismissal of federal case and, implicitly, dismissal of supplemental claims | Court: Dismiss federal claim; decline to exercise supplemental jurisdiction over state-law claims and send them to state court |
| Appealability of denial to supplement record | Black Bear sought review of district court's refusal to add a document to the record | Association maintains that the procedural order is not separately appealable | Court: Denied separate appealability; dismissed that appeal for lack of appellate jurisdiction |
Key Cases Cited
- Four Corners Nephrology Associates, P.C. v. Mercy Medical Center, 582 F.3d 1216 (10th Cir. 2009) (plaintiffs cannot use antitrust laws to join a cartel)
- Daniel v. American Board of Emergency Medicine, 428 F.3d 408 (2d Cir. 2005) (challenge to denial of entry into professional board does not present antitrust injury when relief would be cartel membership)
- Stamatakis Industries, Inc. v. King, 965 F.2d 469 (7th Cir. 1992) (antitrust protects consumers, not producers from cartel arrangements)
- Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477 (U.S. 1977) (antitrust standing requires antitrust injury)
- Reapers Hockey Ass'n, Inc. v. Amateur Hockey Ass'n Illinois, Inc., 412 F. Supp. 3d 941 (N.D. Ill. 2019) (similar suit rejecting lost cartel profits as antitrust injury)
- Patsy v. Board of Regents, 457 U.S. 496 (U.S. 1982) (exhaustion of administrative remedies is not required where statute does not mandate it)
- Jones v. Bock, 549 U.S. 199 (U.S. 2007) (where statutory exhaustion exists it is an affirmative defense, not a pleading requirement)
- Van Daele v. Vinci, 51 Ill.2d 389 (Ill. 1972) (state law gives private associations leeway in enforcing and interpreting membership rules)
- Finn v. Beverly Country Club, 289 Ill. App. 3d 565 (Ill. App. Ct. 1997) (courts afford considerable deference to private club governance)