• Third Circuit Creates "Bright-Line Rule" for Legality of Exclusive Contracts
  • August 12, 2010 | Authors: Douglas K. Dieterly; Donald E. Knebel; Kendall Millard; Deborah Pollack-Milgate; Lynn C. Tyler
  • Law Firms: Barnes & Thornburg LLP - South Bend Office ; Barnes & Thornburg LLP - Indianapolis Office
  • On July 23, 2010, the Third Circuit in Race Tires of America, Inc., et al. v. Hoosier Racing Tire Corp., et al., (Case No. 09-3989), affirmed the lower court’s summary judgment decision that exclusive, sole-source contracts between race tire supplier Hoosier Racing Tire (Hoosier) and organizations that sanction motorsports races did not violate the antitrust laws. The Court also provided a “bright-line rule” for assessing the legality of exclusive contracts, permitting such contracts in the sports context where the organization has in good faith decided it wants exclusivity, and freely enters an exclusive contract with a supplier, even if the supplier has a high market share. This ruling potentially impacts equipment rules and sole source contracts far beyond motorsports.