Reference no: EM131473290

Question: GREGORY v. FORT BRIDGER RENDEZVOUS ASS'N, 448 F.3D 1195 (10TH CIR. 2006)

FACTS The Fort Bridger Rendezvous Association (FBRA) hosts an annual event (the "Rendezvous") at which participants reenact an annual gathering held by local fur traders from 1825 to 1840. Activities include shooting, archery and knife-throwing competitions, and "traders" who sell accurate replicas of pre-1840s merchandise. The event is the largest of this type in the region, and attracts up to 50,000 visitors. The FBRA has about 90 members, about half of whom are traders at the Rendezvous. A trader does not have to be a member of the FBRA to participate. The FBRA monitors traders' goods for authenticity and has a system for issuing permits to traders. Space for traders is limited and there are more applicants than permits available. The Gregorys are traders, but not FBRA members. The Gregorys had exhibited at the Rendezvous for several years, but relations between the Gregorys and the FBRA deteriorated and became contentious. In 2002, the Gregorys were denied a permit to participate. The Gregorys filed suit, alleging, among other things, that the FBRA engaged in a horizontal group boycott by refusing to permit them to sell their goods at the Rendezvous.

The trial court granted summary judgment to FBRA on both claims, and the Gregorys appealed. DECISION The appellate court affirmed the trial court's decision. The Gregorys had argued that by excluding them from the 2002 Rendezvous, the FBRA had engaged in a horizontal "group boycott," which they contended was per se illegal under Section 1 of the Sherman Act. The appellate court found that there is a presumption in favor of applying the rule of reason to boycott cases. The per se rule is appropriately applied only to a boycott that "facially appears to be one that would always or almost always tend to restrict competition and decrease output" Although the per se rule has been applied to a few group boycotts, those cases generally have involved firms with market power who boycotted suppliers or customers in order to deter them from doing business with a competitor. The court noted that traders other than the Gregorys had also been denied space at the 2002 Rendezvous, for a variety of reasons.

Mere denial of a space does not therefore necessarily imply anticompetitive animus. Moreover, denial of space to one trader opens up space for another trader and so overall does not have a predominantly anticompetitive effect. The court went on to note that although the FBRA's behavior was not per se illegal, it should also be evaluated under the rule of reason. Because the purpose of the antitrust laws is to protect the public, the FBRA's conduct had to be judged in terms of its effect upon consumers, not upon competitors. The Gregorys had not argued that the denial of a permit for the 2002 Rendezvous violated the rule of reason test, and in fact, the denial of a permit to the Gregorys allowed a different trader to receive a permit and participate, which would indicate no detrimental effect on consumers. A plaintiff does not meet its burden under the rule of reason test when the challenged behavior by the defendant merely results in "a reshuffling of competitors with no detrimental effect on competition." Thus, the appellate court affirmed the trial court's grant of summary judgment to the defendants.