Update July 2010: The Third Circuit has affirmed holding that “[t]he Sherman Act does not forbid sanctioning bodies and other sports-related organizations from freely (i.e., without any coercion or improper interference) adopting exclusive equipment requirements, so long as such organizations otherwise possess, in good faith, sufficient pro-competitive or business justifications for their actions.” The court justified its ruling on the ground that sanctioning bodies have no interest in creating monopoly supply chains and that poor decisions will lead to competitive loses.
Update October 2009: Specialty Tires has stated an intent to appeal the grant of summary judgment against it.
InRace Tires America Inc., Specialty Tires of America Inc. et al. v. Hoosier Racing Tire, Western District of Pennsylvania Judge Terrence F. McVerry has thrown out an antitrust lawsuit accusing Hoosier Racing Tire Corp. of conspiring with a major dirt track racing organization to create a monopoly in the market for specialized tires, holding that plaintiff Specialty Tires of America, Inc., failed to provide evidence demonstrating its losses were the result of an unlawful act. In its lawsuit Specialty Tires alleged that 1) Hoosier and co-defendant Dirt Motor Sports Inc. have significant market share in the dirt oval race track and race tire sale markets; and 2) Hoosier promulgated a “Hoosier-only” tire for its sanctioned events in exchange for payment from Dirt Motor. In his opinion Judge McVerry pointed out that 1) while defendant racing organization is the largest in the U.S., it has two major competitors; and 2) sanctioning bodies generally do not buy tires themselves, but rather establish the parameters of the type of tire that may be used in a race, and Specialty Tires itself has supported single tire rules and has engaged in an unsuccessful bidding competition with Hoosier for the years 2008 to 2010. Therefore, the only injury Specialty Tires has sustained is exclusion, which is “the inevitable result of competition for exclusive contracts.”