Reference no: EM131473315

Question: Full Draw Productions, an archery trade show promoter, held its first Bowhunting Trade Show (BTS) in 1990. At the time, it was the only merchandise mart devoted solely to archery equipment. Archery manufacturers and distributors purchased exhibition space, and dealers paid a fee to attend. The same year, Full Draw entered into a five-year agreement with AMMO, a trade association, in which Full Draw paid AMMO 10 percent of its BTS gross revenues in exchange for AMMO's endorsement of the show. In 1994, AMMO tried to increase this fee to 30 percent. AMMO also discussed buying the BTS from Full Draw and threatened to boycott the BTS unless Full Draw sold the show to AMMO on the terms offered by AMMO. AMMO and Full Draw did not reach an agreement. In 1995, AMMO decided that it would present its own archery trade show, to be held one week after the 1997 BTS. Several archery manufacturers and distributors, a publishing company, and a representative for archery manufacturers (the defendants) had supported and participated in AMMO's actions against Full Draw to date. The defendants decided to boycott the BTS to eliminate it as a competitor to AMMO's new trade show. The defendants allegedly:

(1) advertised that they would attend only the AMMO trade show in 1997;

(2) informed others at the 1996 BTS that they would attend only the AMMO show the following year;

(3) persuaded others to boycott the BTS and attend only the AMMO show by repeatedly stating that key manufacturers and distributors would not attend the 1997 BTS and that the BTS would be a failure and probably not even occur;

(4) created a "climate of fear of retribution and loss of business" for attending the BTS and retaliated against businesses that did attend the 1997 BTS;

(5) agreed among themselves and caused other AMMO members to agree not to attend the 1997 BTS; and

(6) actually boycotted the 1997 BTS. The 1997 BTS failed financially and was eliminated as a competitor to future AMMO shows, leaving AMMO as the only supplier in the market of archery trade shows in the United States.

Full Draw sued the defendants, claiming a violation of the Sherman Act. The district court dismissed Full Draw's antitrust claims, noting that Full Draw had alleged that the defendants' actions had driven it out of business, but had not alleged that those acts caused harm to consumers or competition: and this is unsurprising where Defendants are many of the relevant consumers and their acts increased, albeit temporarily, competition. By definition, it would seem that where a majority of consumers believe that a monopoly producer is not performing adequately and decide to provide an alternative for themselves and other consumers, there can be no antitrust injury, particularly where, as here, there have been no allegations that harm was caused to any other consumers (e.g., the other exhibitors or the attendees of the shows) by reduced output or increased prices. Full Draw has appealed. How should the appellate court rule? Is the trial court's analysis correct and persuasive? Why, or why not?