Opinion ID: 403391
Heading Depth: 3
Heading Rank: 1

Heading: Applicability of Exclusive-Dealing Case Law

Text: 33 Sportservice argues that its contract with Finley is not a typical exclusive-dealing arrangement, thus questioning the district court's use of exclusive-dealing antitrust case law, specifically, Tampa Electric, supra, in evaluating its section 1 violations. It argues that the case law is inapposite because Tampa Electric and other exclusive-dealing cases involve questions of the propriety of the exclusivity per se of arrangements, while the exclusivity of the arrangement involved in Sportservice's concession franchises is not an issue in this case. The problem with using the exclusive-dealing cases, Sportservice continues, is that the district court in this case found a violation solely on the basis of the length of the contract with Finley, not its exclusivity. This argument is devoid of merit. 34 First, this court sanctioned the use of the tests started in Tampa Electric Co. v. Nashville Coal Co., 365 U.S. 320, 81 S.Ct. 623, 5 L.Ed.2d 580 (1961), an exclusive-dealing case, to determine whether Sportservice's conduct evidenced a violation of section 1 of the Sherman Act. See 512 F.2d at 1275. Sportservice raised no contention on remand with this determination, and Sportservice's argument on this appeal does not persuade us to deviate from the instructions we gave the district court in Finley I. The focus of the tests in Tampa Electric is to first find a relevant market and then assess whether competition has been foreclosed in a substantial share of the relevant market. The purpose of the tests clearly is to determine the anticompetitive effects of exclusive-dealing arrangements. The tests are therefore applicable whether the specific issue involves exclusivity per se, or whether it involves, as in this case, the methods used to procure exclusive contracts and the nature and extent of the anticompetitive influence of these contracts on a substantial share of the relevant market. 35 Second, we do not confine our analysis to only the Finley-Sportservice contract, see section III.B2, infra, nor do we confine it to the finding of unreasonable contract length. As pointed out, the district court found a section 1 violation from Sportservice's market share and its conduct in achieving that share through the use of unreasonably long concession franchise agreements, follow-the-franchise clauses, and predatory cash loans and advances. Sportservice oversimplifies the district court's rulings by arguing that it simply holds contracts of greater than ten years' duration to be a violation of section 1. We affirm the district court's conclusion that a section 1 violation was presented by the evidence for all of the reasons expressed by the district court, not simply that the contracts were too long. For the above reasons, Sportservice's attempt to distinguish the facts of this case from the other exclusive-dealing cases fails.