Kitchener Rangers v. The Michigan Daily

As I stated in the Introduction, I will occasionally discuss legal issues in hockey that are outside of the NHL. Today is one of those times.

As reported by Sunaya Sapurji of Yahoo! Sports Canada, the OHL’s Kitchener Rangers filed a statement of claim in Ontario Superior Court against University of Michigan student paper, The Michigan Daily, and reporter Matt Slovin (collectively, “TMD”).  The claim alleges that TMD defamed the Rangers by allegedly publishing a story stating that the Rangers offered player Jacob Trouba $200,000 in lieu of an education package to turn his back on his commitment to the University of Michigan and play for the Rangers. Trouba, who was drafted 9^th overall in the 2012 NHL Entry Draft by the Winnipeg Jets, was drafted by the Rangers in the third round of the 2010 OHL Entry draft but has spent the past two years playing on the US National Development team and has committed to the University of Michigan in the fall. The payment of $200,000 would be in contravention of the OHL’s rules regarding impermissible benefits to players.  The suit seeks $500,000 in general damages and an additional $500,000 in punitive damages.

There are three prominent legal issues that this lawsuit presents.  The first is whether the Rangers have properly alleged a claim for defamation. The second is whether the Ontario Superior Court will have jurisdiction over TMD. The third is whether t

While the answers to these questions seem fairly clear to me based on New York, and probably the rest of the United States, law, this case was brought in Canada, specifically in the province of Ontario.  Therefore, an examination of Ontario law is necessary.  With the limited resources available to me on Ontario law (basically what I can find on Google), I believe I have come up with the correct answers to both of these questions.  Fortunately, the rules regarding defamation are fairly similar to those with which I am accustomed.  However, I was very surprised to see how long-arm jurisdiction would likely be applied by the Ontario courts in this matter.

Defamation

My Black's Law Dictionary is probably in the same box as my Land Use Controls book, but I believe I can define defamation without it.  Defamation is a tort that involves a person’s reputation being harmed by a false statement being made to a third party.  A defamatory statement is a false statement made to a third party that damages the reputation of the person about whom the statement is made. Defamatory statements can be written or spoken. A written defamatory statement constitutes libel.  An oral defamatory statement constitutes slander.

In Ontario, defamatory statements are governed by the Libel and Slander Act (“LSA”).[1]  According to Section 2 of the LSA, “defamatory words in a newspaper or in a broadcast shall be deemed to be published and to constitute libel.”  This is just a restatement of the common law rule that libel applies to defamatory statements that are written. By contrast, slander applies to defamatory statements that are oral.  Because the allegedly defamatory statement was written, we will ignore slander and just focus on libel.

Generally, in America, for a plaintiff to have a viable claim for libel, the defendant must make a defamatory statement that specifically identifies the plaintiff in a publication. A “publication” only requires that the defendant reveal it to one person other than the plaintiff. The statement needs to be of the sort that will affect the plaintiff’s reputation. For libel, you do not need to prove actual damages. Specific jurisdictions within America might have slightly different rules, but generally, these are the rules in the majority of states. Based upon the research that I have done, Ontario law functions the same way as well, but with one very important difference, which I will discuss below.

There are four affirmative defenses to libel. They are 1) Truth, 2) Consent, 3) Qualified Privileges, and 4) Absolute Privileges. Truth means that if the defamatory statement is true, then plaintiff does not have a claim for libel.  Consent means that if the plaintiff gave the defendant express or implied consent to make the defamatory statement, then the plaintiff does not have a claim for libel. Qualified Privileges are reserved for circumstances where there is a public interest in promoting candor, for instance, a letter of recommendation or credit reporting. There are two requirements: 1) defendant must have a reasonable belief that the information is accurate, and 2) defendant must limit herself to things that are relevant. Absolute Privileges are granted based on the status of the defendant, i.e., spouses talking to each other, government officers in the course of their official duties.  Based on the facts available to us, only truth would be available for TMD as a defense, if and only if the statement can be shown by a preponderance of the evidence to be true.

Let’s apply all of this to the facts known to us about the lawsuit.  The Rangers allege that TMD made a statement that it offered a payment to Jacob Trouba that would be in contravention of the OHL’s rules, a statement that would tend to damage the Rangers’ reputation.  Furthermore, the statement specifically identified the Kitchener Rangers.  Finally, was published on TMD’s website, which was made available and accessed by third-parties.  Therefore, the Rangers have alleged a prima facie case of libel against TMD.

Long-arm Jurisdiction

However, there remains a pretty large procedural hurdle in the way of the Rangers. Specifically, they have to obtain jurisdiction over TMD in the Ontario court.  Because TMD resides outside of the province, they would have to be subject to Ontario’s long arm jurisdiction for the case to proceed in Ontario. 

Generally, for a court to have authority to adjudicate a case, it must have personal jurisdiction over the parties and subject matter jurisdiction over the dispute.  Generally a court has personal jurisdiction over a defendant when the action is properly filed, the defendant is properly served, and there is a proper basis of jurisdiction over the person or property in dispute.  The proper basis of jurisdiction over the person or property in dispute can be determined by any number of factors depending on the location of the lawsuit, including, but not limited to, presence in the jurisdiction, doing business in the jurisdiction, domicile in the jurisdiction, consent, non-resident motorist jurisdiction, and finally long-arm jurisdiction.  Because long-arm jurisdiction refers to personal jurisdiction, I will ignore subject matter jurisdiction.[2]

From what I understand, Ontarian long-arm jurisdiction had been fairly nebulous until just recently, when the Supreme Court of Canada issued decisions on three cases to clarify the test for determining long-arm jurisdiction. The Supreme Court of Canada limited the test to the following factors:

(a) the defendant is domiciled or resident in the province; 

(b) the defendant carries on business in the province; 

(c) the tort was committed in the province; or 

(d) a contract connected to the dispute was made in the province.[3]

We can quickly eliminate two of these factors. TMD is not domiciled or a resident of Ontario and the dispute does not arise out of a contract that was made in the province. 

Without having more information about TMD’s activities within Ontario as far as business operations, I cannot say conclusively whether TMD would be subject to jurisdiction within Ontario.  However, I believe it is a very fair assumption that TMD does not carry on any business within Ontario.  Perhaps the University of Michigan does, but it would very unlikely that its student newspaper does, and even less likely that a single reporter would as well.  Furthermore, the accessibility of the website in Canada would not be enough to establish carrying on of business. The Supreme Court of Canada stated that “the fact that a Web site can be accessed from the jurisdiction would not suffice to establish that the defendant is carrying on business there.”[4] So we can ignore this factor as well.

What the exercise of jurisdiction by Ontario Superior Court over TMD will hinge upon is whether the defamation was committed in the province.  The argument that will be made by the Rangers is that the web page upon which the defamatory statement was published was accessed by Ontarians, and as such, the tort was committed in the province.  In America, this argument would likely be unsuccessful, as we have what is referred to as the “single publication rule,” meaning that a website is only one publication and only in one location, not multiple publications whenever or wherever the website is accessed.

However, Canada seems to reject this rule.  While that appears to create a slippery slope under which a defendant can open himself up to liability everywhere,[5] an Ontario court has recently decided that it could assume jurisdiction over the plaintiff’s actions in libel against the foreign defendants who issued certain press releases and posted them on the foreign defendant company’s website.[6] The plaintiff, a former director of the defendant company, alleged that the press releases contained defamatory statements that were downloaded, read and republished in Ontario.[7]  Accordingly, it is likely that the Ontario Superior Court will exercise jurisdiction over the Rangers’ claim of defamation over TMD.

Would a Judgment Be Enforceable in the US?

Suppose the Rangers are successful in their lawsuit and obtain a judgment against TMD for defamation in Ontario. Would that judgment be enforceable where TMD are domiciled, presumably only in Michigan?

Only a short while ago, the answer would have probably been in the affirmative. However, in 2010, the US Congress passed a bill that President Obama signed into law called the Securing the Protection of Our Enduring and Established Constitutional Heritiage ("SPEECH") Act. The act was passed to counter what is known as "libel tourism." Basically, writers in the US, who have a broader right of free speech than pretty much any where else on the planet, were being sued in foreign jurisdictions with more stringent restrictions on speech. The most common example was the United Kingdom, where a suit for defamation requires that the defendant prove the statement made to be true, as opposed to in the United States, where the plaintiff carries the burden of proving the statement to be one that causes the reader to think that the declarant has a factual basis for the statement to be true. The SPEECH Act was specifically inspired by the case of the writer and academic, Rachel Ehrenfeld, who was sued by Khalid Bin Mahfouz in the United Kingdom over statements made in her 2003 book, Funding Evil. 

Remember earlier how I said US and Ontarian defamation law differed in one very important way? That difference comes when the defamatory statement is made about matters of public concern. United States law draws a distinction for matters of public concern. Two new elements are added to the proof of the defamation claim. First, the plaintiff must prove that the statement is actually false. Second, the plaintiff must prove that the statement was made with fault. Where the plaintiff is a public figure, the plaintiff must show the statements were made intentionally or recklessly. Where the plaintiff is a private figure, the plaintiff must show that the statement was made negligently.  The Kitchener Rangers would qualify as what is known as a "limited-purpose public-figure" because they have injected themselves into a particular public controversy, and as such, they would be held to the actual malice standard.

A federal district court in Florida has already used the SPEECH Act to hold that an Ontarian judgment for defamation was not enforceable in the United States citing this exact distinction.  In Investorshub.com v. Mina Mar Group, Inc., the court found that Canadian law does not offer as much protection as the First Amendment. Specifically, the Court stated that 

For example, the First Amendment requires that a defamation plaintiff who is either a public official or public figure must prove that the defendant made the defamatory statement with actual malice, meaning that the defendant either knew the statement was false or acted with reckless disregard to the statement’s truth or falsity. See New York Times Co. v. Sullivan, 376 U.S. 254, 84 S. Ct. 710, 111 L. Ed. 2d 686 (1964); Curtis Publ’g Co. v. Butts, 388 U.S. 130, 87 S. Ct 1975, 18 L. Ed. 2d 1094 (1967). The Canadian Supreme Court has specifically refused to adopt the Sullivan actual malice standards for Canadian defamation actions. See Hill v. Church of Scientology, [1995] 2 S.C.R. 1130 (Can.) (stating that Court will not adopt Sullivan standard in Canada).

Therefore, absent a specific finding by the Ontarian Court that the statement was made with actual knowledge of falsity or with reckless disregard to the statement's truth or falsity, the judgment would not be enforceable in the United States.  Such a specific finding would be unlikely by the Ontarian court because it would be unnecessary for the purposes of reaching a verdict.  Finally, even if such a specific finding were made, it is unclear that the courts in the United States would still not recognize the judgment based upon the SPEECH Act.

The Verdict: The Kitchener Rangers may very well win their case in Ontario.  The problem is they probably won't have any remedy available to enforce the damage award in the United States. So unless The Michigan Daily or Matt Slovin have some property or assets in Canada, it will just be a Pyrrhic victory. The Kitchener Rangers, if they actually intended to recover money, should have filed suit in the United States.

So what do you think about all of this? What do you think about jurisdictional issues for defamation law. What do you think about the SPEECH Act? Do you think the Kitchener Rangers actually intended to collect any damages in their suit, and if not, what was their purpose for filing?

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[1] R.S.O. 1990, c. L.12. I apologize if my Canadian citation is incorrect, but I can only offer what I have found through my limited research. Speaking of which, most of the information I have found on the subjects of Ontarian defamation and long arm jurisdiction can be found at
Susan E. White, A Primer on the Law of Defamation in Ontario, 2007, Charity Law Bulletin No. 125, Carters Professional Corporation, http://www.carters.ca/pub/bulletin/charity/2007/chylb125.htm#end; and
Laura Stefan & Robert Wisner, Restraining the Long Arm of Ontario Courts: Supreme Court of Canada Clarifies Private International Law, 2012, http://www.mcmillan.ca/restraining-the-long-arm-of-Ontario-courts-Supreme-Court-of-Canada-clarifies-private-international-law.
[2] Without confirming by looking at Ontario court rules, I am fairly confident in saying that Ontario Superior Court has subject matter jurisdiction over this claim
[3] Club Resorts Ltd. v. Van Breda, 2012 SCC 17 (2012).
[4] Id.

[5] Perhaps it’s just my bias as an American, but I don’t like the Canadian rule.

[6] Black v. Breeden, 2010 ONCA 547 (2009).

[7] Id.