The Supreme Court of Canada has agreed to step up to the plate and hear a case involving a dispute over a forum selection clause between a North American professional baseball league and one of its teams.
The dispute between the now-defunct Ottawa Rapidz and the Canadian American Association of Professional Baseball Ltd. began during the 2008 season, when the Can-Am League team played its games from a stadium owned by the City of Ottawa. During the season the team notified the league it would not be able to continue into the next season, after suffering $1 million in losses.
The team applied under league protocols for a voluntary withdrawal based on financial hardship. But the league’s board of directors denied that attempt, opting instead to revoke the team’s membership and draw down a $200,000 letter of credit the team had been forced to post.
Rapidz Baseball and its affiliated companies — including Momentous.ca Corp. — swung back with a lawsuit against the league, its principles, and the city. The defendants battled back with a motion to stay or dismiss the action, based on a lack of jurisdiction pursuant to choice of forum and arbitration clauses in the league’s bylaws. They argued that all disputes with the league were to be resolved in the state of North Carolina, and include arbitration.
The team has two strikes against it, with both the Ontario Superior Court and Ontario Court of Appeal ruling in the league’s favour. However, at the Court of Appeal, Justice John Laskin ruled the team could assert its specific claims against Miles Wolff, commissioner of the league, in Ontario.
“Wolff has already sued the plaintiffs in Ontario on his guarantee and indemnity,” wrote Laskin, on behalf of justices Eileen Gillese and Russell Juriansz. “The plaintiffs could assert their claims against him personally by counter-claiming that action. Or, they could redraft their statement of claim to take out their allegations against Wolff personally, and incorporate them in a new statement of claim.”
At the same time, the appeal court said Rapidz could also pursue separate litigation against the City of Ottawa in Ontario courts. That would simply require a redrafting of the claim to deal with the primary allegation that the city backed out of its agreement on a long-term lease of the stadium.
Court observers expect a barrage of applications to the court over the provision of hot dogs and beer during the SCC hearing.