Newspapers need to use Open Records laws, Sunshine, to protect the public interest in zealous investigations of government wrongdoing
Newspapers elsewhere routinely take an active role in litigating and winning cases against government agencies that try to conceal records or hold secret meetings.
But not the St. Augustine Record. Not Morris Communications.
But Morris Communications did waste an estimated one million dollars of its subscribers and advertisers' hard-earned dollars on a fruitless antitrust lawsuit seeking "Real Time Golf Scores" (TM) owned by the PGA Tour. Morris hired Holland & Knight to bring the lawsuit, which was defended by Rogers, Towers and Skadden, Arps, Slate, Meagher & Flom, This complex litigation involved some 200 filings in U.S. District Court and an appeal to the Eleventh Circuit.
Don't take my word for it -- read the March 31, 2004 Eleventh Circuit Court of Appeals decision in Morris Communications, Inc. v. PGA Tour, Inc.:
http://www.ca11.uscourts.gov/opinions/ops/200310226.pdf
MORRIS COMMUNICATIONS CORP.,
a Georgia Corporation,
Plaintiff-Appellant,
versus
PGA TOUR, INC.,
Defendant-Appellee.
Appeals from the United States District Court
for the Middle District of Florida
(March 31, 2004)
Before EDMONDSON, Chief Judge, DUBINA and COX, Circuit Judges.
DUBINA, Circuit Judge:
Plaintiff-Appellant, Morris Communications Corp. (“Morris”), brought suit
against Defendant-Appellee PGA TOUR, Inc. (“PGA”), alleging that PGA
violated section 2 of the Sherman Act, codified at 15 U.S.C. § 2, by monopolizing
the markets for (1) the publication of compiled real-time golf scores on the
internet, and (2) the sale, or syndication of those scores. In addition, Morris
alleged that PGA further violated section 2 of the Sherman Act by refusing to deal
with Morris. The district court granted summary judgment in favor of PGA
because it found, inter alia, that PGA had a valid business justification for its
actions. For the reasons that follow, we affirm the judgment of the district court.
I. BACKGROUND
A. Facts
Morris is a media company that publishes print and electronic newspapers.
PGA is the sponsor of a series of professional golf tournaments throughout North
America known as the PGA Tour. In order to provide golf scores during its
tournaments, PGA has developed a Real-Time Scoring System (“RTSS”) that
allows PGA to monitor the play around the entire golf course. RTSS is an
elaborate electronic relay scoring system that relies on state-of-the-art computer
technology and equipment as well as dozens of trained workers and volunteers.
3
RTSS works as follows. During a PGA golf tournament, volunteers known
as walking scorers follow each group of golfers on the course and tabulate the
scores of each player at the end of each hole played. The scores are then collected
by other volunteers, known as hole reporters, located at each of the eighteen
greens on the golf course, who relay the scoring information to a remote
production truck staffed by PGA personnel. The scores of all participating golfers
are then processed at the remote production truck and transmitted to PGA’s
website, www.pgatour.com, as real-time golf scores, which are scores that are
transmitted electronically nearly contemporaneously to their actual occurrence on
the golf course. At the same time, the compiled scores are also transmitted to an
on-site media center where members of the media are able to access the scores.
The same information is also transmitted to various electronic leaderboards
located throughout the golf course. As their name suggests, the leaderboards
typically show only the top ten or fifteen players’ scores.
The nature of a PGA golf tournament makes it impossible for one person to
physically follow all the players at once. First, the average golf course spans
approximately 150 acres and various golfers play numerous holes simultaneously.
In addition, the PGA does not allow its invitees to use cell phones and hand-held
devices on the course because such devices might disrupt play. Therefore, the
1 Prior to 1999, credentialed members of the media could view scores in the media center and
then re-key them directly into their own computers for transmission to their company’s Internet
servers. The result was that competitors of pgatour.com, including Morris, were able to publish
real-time scores on their web sites as fast as or possibly faster than pgatour.com. Beginning in
January 1999, shortly after the PGA Tour entered into an exclusive syndication contract with
USA Today, it instituted [OLSR] applicable to all credentialed media invitees. Around the same
time, Morris began publishing scores from PGA Tour tournaments on its web sites and selling
them to third parties, and Morris appears to have been the PGA Tour’s only major competitor in
the syndication market.
Morris Communications Corp. v. PGA Tour, Inc., 235 F. Supp. 2d 1269, 1274 (M.D. Fla. 2002).
The version of the OLSR at issue here was instituted in January 2000.
2 PGA agreed that once the golf scores are posted on its website, they are in the public domain.
Id. at 1275 n.9.
4
only source of compiled golf scores for all tournament players is RTSS. Likewise,
the only physical location at which to obtain compiled golf scores is the media
center.
In order for media organizations to have access to the PGA media center,
they must obtain free press credentials from PGA. To obtain these credentials, all
media organizations must agree to follow PGA’s terms and conditions, including
PGA’s On-Line Service Regulations (“OLSR”). The OLSR require media
organizations to delay publication on their internet websites of scoring information
obtained by RTSS until the earliest of (1) thirty minutes after the actual occurrence
of the shot1 or (2) such information has become legally available in the public
domain, i.e. after the scores are posted on PGA’s official website,
www.pgatour.com.2 In addition, the OLSR prohibit credentialed media
3 “No scoring information may be used by, sold, given, distributed or otherwise transferred to,
any party other than the Credentialed Site in any manner whatsoever, without the prior written
consent of PGA TOUR.” [R. Vol. 1 at Tab 1, Exh. 4.]
4 Morris also alleged violations of Florida Deceptive and Unfair Trade Practices Act, Fla. Stat.
Ann. § 501.201 et seq., and tortious interference with contract. Morris has not appealed the
district court’s grant of summary judgment in favor of PGA on these claims.
5
organizations from selling, or syndicating, compiled scoring information obtained
in the media center to non-credentialed third-party internet website publishers
without first buying a license to do so from PGA.3
Morris contends that, as a result of the OLSR, PGA is the only entity able to
publish and sell real-time golf scores. Thus, Morris continues, PGA has an unfair
advantage in the publication and syndication of the scores. PGA counters that it
adopted the OLSR to preserve the value of its investment in creating and
developing RTSS and to promote the competitiveness of its own website.
Based on the allegedly illegal OLSR, Morris filed suit against PGA,
asserting four antitrust claims: (1) monopolization of the internet markets,
(2) unlawful refusal to deal, (3) monopoly leveraging, and (4) attempted
monopolization of the internet markets.4
B. Procedural History
After extensive pre-trial discovery, the parties filed cross-motions for
summary judgment on each claim. The district court granted PGA’s motion for
5 The district court did not, however, find that PGA had unlawfully monopolized or refused to
deal. To the contrary, the district court found that Morris failed to prove a § 2 claim of
monopolization as a matter of law, Morris Communications, 235 F. Supp. 2d at 1283; that the
media center was not an essential facility, id. at 1285; that PGA did not have unlawful intent to
harm competition or a competitor, id. at 1284, and thus did not unlawfully refuse to deal with
Morris, id. at 1285-86, engage in unlawful monopoly leveraging, id. at 1286, or unlawfully
attempt to monopolize, id.
6
summary judgment, finding that PGA had a valid business justification for its
OLSR because the OLSR prevented Morris from free-riding on PGA’s investment
in its costly RTSS. Accordingly, the district court found that PGA had not
violated the antitrust laws even if it operated a monopoly and refused to deal with
Morris.5
Subsequent to the granting of summary judgment in favor of PGA, Morris
filed a Rule 60 motion for relief from judgment on the ground that, following the
issuance of judgment in favor of PGA, PGA adopted new terms of service
(“TOS”) regarding www.pgatour.com in further violation of § 2 of the Sherman
Act. The new TOS prohibit anyone from using the information displayed on
www.pgatour.com for a commercial purpose without first buying a license from
PGA. The district court denied the motion, finding that the new TOS were beyond
the scope of the instant lawsuit, which addressed only PGA’s media credentialing
regulations and the OLSR. Accordingly, the district court found that Morris’s
challenge to the new TOS would be more aptly addressed in a separate lawsuit.
6 The arguments of Morris and its amici, who are various media organizations, entities, and
associations, focus largely on irrelevant copyright law and argue that facts, such as golf scores,
and compilations of facts are generally not a proper subject for copyright protection. While this
assertion is a correct statement of law, it has no bearing on whether the golf scores and
compilation of golf scores are the proprietary product of PGA’s RTSS. At oral argument, Morris
conceded that this is not a copyright case.
7
Morris timely and separately appealed the adverse summary judgment and
Rule 60 orders. This court consolidated the two appeals.
II. STANDARDS OF REVIEW
This court reviews de novo whether the district court correctly granted
summary judgment in favor of PGA on all counts, applying the same standard that
governed the district court. Levinson v. Reliance Standard Life Ins. Co., 245 F.3d
1321, 1325 (11th Cir. 2001).
This court reviews whether the district court correctly denied Morris’s Rule
60 motion for abuse of discretion. See Bivens Gardens Office Bldg., Inc. v.
Barnett Banks of Fla., Inc., 140 F.3d 898, 905 (11th Cir. 1998).
III. ANALYSIS
Before discussing the antitrust issues in this case, it is important to note
what this case is not about. Contrary to the arguments of Morris and its amici
curiae, this case is not about copyright law,6 the Constitution, the First
7 In its argument for summary judgment in the district court, Morris stated that “this case is not a
First Amendment case . . . [i]t’s an antitrust case.” [R. Vol. 10 at pp. 8-9.]
8 As the district court stated at the hearing on the cross-motions for summary judgment, “all that
this court is interested in is the issues that you people bring to it. We’re not making advisory
opinions. And we don’t change the facts. The facts are what the facts are. And what [we] rule
on today may be a lot different than the case the two of you are involved in tomorrow.” [R. Vol.
10 at p. 106.]
9 At the hearing regarding the preliminary injunction, the district court asked counsel for PGA if
PGA would permit “Morris . . . to disseminate this information to its companies, its various news
companies, not charging them anything, just disseminating it”? Counsel for PGA responded:
There’s no problem because that to us is news coverage, and . . . [w]e eagerly, eagerly
invite and want the press to do their function, their normal function of gathering and
disseminating the news, and because it’s so important to us to have them do that, we told
Morris a year ago that we would allow them in the media center to sit there and re-key
right from there into their own website and any of their related companies as a matter of
news coverage, they could have those real-time scores right away for free. . . . The
problem comes in only when Morris wishes to go into another business, which they label
8
Amendment,7 or freedom of the press in news reporting. This case is a straightforward
antitrust case involving a product and a defendant’s assertion of a valid
business justification as its defense to anticompetitive actions, if any. Also
important to note is that this case is being decided based upon the facts presented,
not a hypothetical situation, no matter how probable its actualization.8
Accordingly, the only real issue before us is whether PGA’s restrictions and
prohibitions regarding Morris’s ability to sell compiled real-time golf scores to
third parties violates § 2 of the Sherman Act. We do not address Morris’s right of
access to and internal dissemination of compiled real-time golf-scores, as
permitted by the PGA.9
the news syndication business. . . . [I]t is not the business of gathering and disseminating
news. It is the business of selling a commercially valuable product that we have
developed and paid for and we ought to be the ones to sell that.
[R. Vol. 8 at pp. 34-36.]
10 Morris challenges the district court’s resolution of its monopolization and attempt to
monopolize claims. For the purposes of this case, the elements of the two offenses differ in only
one material respect: attempt to monopolize requires specific intent to achieve monopoly power.
See Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447, 456, 113 S. Ct. 884, 890-91, 122 L. Ed.
2d 247 (1993) (“[T]o demonstrate attempted monopolization a plaintiff must prove (1) that the
defendant has engaged in predatory or anticompetitive conduct with (2) a specific intent to
monopolize and (3) a dangerous probability of achieving monopoly power.”). Therefore, the
attempt claim in this case is more difficult to maintain and prove. Because Morris does not
withstand summary judgment on its monopolization claim, it cannot maintain its attempt claim.
Accordingly, we decline to discuss the attempt claim further.
9
A. Monopolization10
Section 2 of the Sherman Act provides that “[e]very person who shall
monopolize, or attempt to monopolize, . . . any part of the trade or commerce
among the several States, . . . shall be deemed guilty of a felony. . . .” 15 U.S.C.
§ 2. “The offense of monopoly under § 2 of the Sherman Act has two elements:
(1) the possession of monopoly power in the relevant market and (2) the willful
acquisition or maintenance of that power as distinguished from growth or
development as a consequence of a superior product, business acumen, or historic
accident.” United States v. Grinnell Corp., 384 U.S. 563, 570-71, 86 S. Ct. 1698,
1704, 16 L. Ed. 2d 778 (1966).
11 Morris challenges the district court’s resolution of its refusal to deal and monopoly leveraging
claims. For purposes of this case, the elements of the two claims are sufficiently similar to
warrant only one discussion. See Verizon Communications, Inc. v. Law Offices of Curtis V.
Trinko, LLP, 124 S. Ct. 872, 883 n.4 (2004) (“[L]everaging presupposes anticompetitive
conduct, which in this case could only be the refusal-to-deal claim we have rejected.”).
10
The first element, monopoly power, is the power to control prices in or to
exclude competition from the relevant market. United States v. E.I. du Pont de
Nemours & Co., 351 U.S. 377, 391, 76 S. Ct. 994, 1005, 100 L. Ed. 1264 (1956).
The second element requires predatory or exclusionary acts or practices that have
the effect of preventing or excluding competition within the relevant market. See
United States v. Microsoft, 253 F.3d 34, 58 (D.C. Cir. 2001). In order for a
practice to be exclusionary, “it must harm the competitive process and thereby
harm consumers.” Id. “[H]arm to one or more competitors will not suffice” for a
§ 2 violation. Id.; see also Consultants & Designers, Inc. v. Butler Serv. Group,
Inc., 720 F.2d 1553, 1562 (11th Cir. 1983) (“The relevant inquiry is not whether [a
company’s] present attempt to exclude adversely impacts competition but rather
whether its acquisition of the power to exclude competitors had a sufficiently
adverse impact on competition to constitute a [Sherman Act] violation.”).
B. Refusal to Deal11
Two theories exist upon which to predicate a unilateral refusal to deal
claim: (1) the intent test and (2) the essential facility test. Mid-Texas
12 In Bonner v. City of Prichard, 661 F.2d 1206, 1207-09 (11th Cir. 1981) (en banc), this court
adopted as binding precedent all Fifth Circuit decisions issued prior to October 1, 1981.
11
Communications Sys., Inc. v. AT&T, 615 F.2d 1372, 1387 n.12 (5th Cir. 1980).12
Under the intent test, it is unlawful for a monopolist to maintain or extend its
monopoly power by intentionally engaging in conduct that unnecessarily excludes
competitors and impairs competition. See id. at 1388; see also Eastman Kodak
Co. v. S. Photo Materials Co., 273 U.S. 359, 47 S. Ct. 400, 71 L. Ed. 684 (1927).
Under the essential facility test, a company that has exclusive control over a
facility essential to effective competition may not deny potential competitors
access to that facility on reasonable terms and conditions if to do so would create
or maintain monopoly power in the relevant market. Covad Communications Co.
v. BellSouth Corp., 299 F.3d 1272, 1285 (11th Cir. 2002), cert. granted and
judgment vacated on other grounds, 124 S. Ct. 1143 (2004); MCI
Communications Corp. v. AT&T, 708 F.2d 1081, 1132-33 (7th Cir. 1983); see also
Verizon Communications, Inc. v. Law Offices of Curtis V. Trinko, LLP, 124 S. Ct.
872, 881 (2004) (“The indispensable requirement for invoking the doctrine is the
unavailability of access to the ‘essential facilities’; where access exists, the
doctrine serves no purpose.”). The plaintiff has the burden of proving that the
12
defendant controls an essential facility that cannot be practically or economically
duplicated. See Covad Communications, 299 F.3d at 1285.
In the absence of any purpose to create or maintain a monopoly, however, a
company may deal or refuse to deal with whomever it pleases. Aspen Skiing Co. v.
Aspen Highlands Skiing Corp., 472 U.S. 585, 601-02, 105 S. Ct. 2847, 2857, 86 L.
Ed. 2d 467 (1985) (quoting United States v. Colgate & Co., 250 U.S. 300, 307, 39
S. Ct. 465, 468, 63 L. Ed. 992 (1919)). Even a company with monopoly power has
no general duty to cooperate with its business rivals and may refuse to deal with
them if valid business reasons exist for such refusal. See Mid-Texas
Communications, 615 F.2d at 1388.
Ordinarily, when determining whether a defendant has violated § 2 of the
Sherman Act, we first determine the relevant market and then decide whether the
defendant possessed monopoly power in that market. In this case, however, we do
not pursue such an inquiry because we agree with the district court that even if
PGA possessed monopoly power in the relevant market, Morris’s § 2 claims
cannot prevail because PGA has a valid business justification for its actions.
Therefore, even if PGA is monopolistic, and even if PGA refused to deal with
Morris, it has not violated § 2 of the Sherman Act.
13
C. Valid Business Justification as a Defense
“The Sherman Act is . . . the ‘Magna Carta of free enterprise,’ but it does
not give judges carte blanche to insist that a monopolist alter its way of doing
business whenever some other approach might yield greater competition.”
Verizon Communications, 124 S. Ct. at 883 (internal quotations omitted). To the
contrary, “Section 2 of the Sherman Act . . . seeks merely to prevent unlawful
monopolization” and unlawful refusals to deal. Id.
Unlawful monopoly power requires anticompetitive conduct, which is
“conduct without a legitimate business purpose that makes sense only because it
eliminates competition.” Gen. Indus. Corp. v. Hartz Mountain Corp., 810 F.2d
795, 804 (8th Cir. 1987); see also Lepage’s Inc. v. 3M, 324 F.3d 141, 153-54 (3rd
Cir. 2003) (discussing Conwood Co., L.P. v. United States Tobacco Co., 290 F.3d
768 (6th Cir. 2002), cert. denied, 537 U.S. 1148 (2003)). Likewise, refusal to deal
that is designed to protect or further the legitimate business purposes of a
defendant does not violate the antitrust laws, even if that refusal injures
competition. See Aspen Skiing, 472 U.S. at 604, 105 S. Ct. at 2858; see also
NYNEX Corp. v. Discon, Inc., 525 U.S. 128, 137, 119 S. Ct. 493, 499, 142 L. Ed.
2d 510 (1998) (citing Brooke Group Ltd. v. Brown & Williamson Tobacco Corp.,
509 U.S. 209, 225, 113 S. Ct. 2578, 2589, 125 L. Ed. 2d 168 (1993)), for the
14
proposition that “[e]ven an act of pure malice by one business competitor against
another does not, without more, state a claim under the federal antitrust laws”);
United States Football League v. National Football League, 842 F.2d 1335, 1360
(2d Cir. 1988) (concluding that no § 2 liability existed where network’s actions
were based on desire “to obtain $736 million in rights fees, not to exclude
competitors”).
Once the defendant has met its burden to show its valid business
justification, the burden shifts to the plaintiff to show that the proffered business
justification is pretextual. See U.S. Anchor Mfg., Inc. v. Rule Indus., Inc., 7 F.3d
986, 1002 (11th Cir. 1993); see also Image Technical Servs., Inc. v. Eastman
Kodak Co., 125 F.3d 1195, 1212 (9th Cir. 1997).
In this case, PGA met its business justification burden by showing that it
seeks to prevent Morris from “free-riding” on PGA’s RTSS technology. See
Cont’l T.V., Inc. v. GTE Sylvania Inc., 433 U.S. 36, 55, 97 S. Ct. 2549, 2560, 53 L.
Ed. 2d 568 (1977) (stating that prevention of “free-riding” by competitors is a
legitimate business purpose); Consultants & Designers, 720 F.2d at 1559
(concluding that defendant “had a legitimate interest in protecting from
opportunistic appropriation its investment in acquiring the information necessary
to carry on its business”). To achieve its business purpose, PGA has refused to
13 Morris also argues that PGA is not allowed to put restrictions on the dissemination of the
compiled golf scores once they reach the media center because PGA did not previously put any
restrictions on their dissemination. This argument is unpersuasive. PGA has a right to control its
property interest in its RTSS and the compiled golf scores, which are the product of RTSS,
regardless of its past practices. As the district court stated: “what [PGA] say[s] the delay should
be and what delay [PGA] can legally impose are two different things perhaps.” [R. Vol. 10 at p.
104.] The lack of prior restrictions is merely indicative of PGA’s symbiotic relationship with the
media.
14 Morris stated in the district court that it was “not disputing that [PGA] may have a property
right.” [R. Vol. 10 at p. 93.] As counsel for PGA stated at the hearing on the preliminary
injunction: “without this elaborate, comprehensive system there wouldn’t be real-time scores that
Morris would like to sell to third parties. It just wouldn’t be there because these don’t exist in
the air.” [R. Vol. 8 at p. 31.]
15
grant Morris access to PGA tournaments unless Morris agrees not to sell the
product of PGA’s proprietary RTSS – compiled real-time golf scores – to noncredentialed
third-party internet publishers. Morris responds that it has a right to
sell such product notwithstanding that RTSS was developed and paid for, and is
operated by, PGA.13 We disagree with Morris. The compiled real-time golf scores
acquired through RTSS are not a product that Morris has a right to sell because
they are a derivative product of RTSS, which PGA owns exclusively.14 We agree
with the district court that PGA “has a right to sell or license its product,
championship golf, and its derivative product, [compiled] golf scores, on the
Internet in the same way the [PGA] currently sells its rights to television
broadcasting stations.” Morris Communication Corp. v. PGA Tour, Inc., 235 F.
Supp. 2d 1269, 1282 (M.D. Fla. 2002).
16
If Morris wishes to sell PGA’s product, it must first purchase it from PGA.
See Consultants & Designers, 720 F.2d at 1559 (explaining that plaintiff did not
have the right to abrogate defendant’s property interest). Section 2 of the Sherman
Act does not require PGA to give its product freely to its competitors. See
Seagood Trading Corp. v. Jerrico, Inc., 924 F.2d 1555, 1573 (11th Cir. 1991)
(stating that it “is not a function of the antitrust laws” to equip plaintiffs with
defendants’ competitive advantages). PGA is willing to sell its product to its
competitors, including Morris, thereby allowing credentialed media organizations
like Morris to syndicate compiled real-time golf scores after paying a licensing fee
to PGA. Accordingly, we conclude from the record that PGA has satisfied its
burden to show a valid business justification.
D. Business Justification Is Not Pretextual
Because PGA has met its burden of showing that its asserted business
justification is valid, the burden shifts to Morris to allege facts that support an
inference that the proffered justification is merely pretextual, thereby establishing
genuine issues of material fact. U.S. Anchor Mfg., 7 F.3d at 1002; see also Image
Technical Servs., 125 F.3d at 1212. Morris argues that PGA’s only justification
for its refusal to deal with Morris on Morris’s terms is economic and such sole
motivation is not a valid business justification; thus, PGA’s justification is
17
pretextual. See LePage’s, 324 F.3d at 163 (“[D]efendant’s assertion that it acted
in furtherance of its economic interests does not constitute the type of business
justification that is an acceptable defense to § 2 monopolization.”).
Morris supports its argument with a series of cases which are fundamentally
distinguishable from this case. In the cases upon which Morris relies, the
plaintiffs alleging antitrust violations had created with their own work and efforts,
or purchased with their own money, their very own products that defendants
prohibited them from selling. See, e.g., Eastman Kodak Co. v. Image Technical
Servs., Inc., 504 U.S. 451, 485, 112 S. Ct. 2072, 2092, 119 L. Ed. 2d 265 (1992)
(plaintiffs “invest substantially . . . in parts inventory”); Aspen Skiing, 472 U.S. at
587-88, 105 S. Ct. at 2850 (plaintiff developed and maintained its own
competitive ski resort and ski packages); Lorain Journal Co. v. United States, 342
U.S. 143, 149-50, 72 S. Ct. 181, 184-85, 96 L. Ed. 162 (1951) (injured competitor
trying to sell its radio air time for advertisements); Int’l News Serv. v. Associated
Press, 248 U.S. 215, 221, 39 S. Ct. 68, 69, 63 L. Ed. 211 (1918) (plaintiff “gathers
in all parts of the world, by means of various instrumentalities of its own, by
exchange with its members, and by other appropriate means, news and intelligence
of current and recent events of interest to newspaper readers”); LePage’s, 324 F.3d
at 144 (plaintiff selling its own transparent tape); Microsoft Corp., 253 F.3d at 63
18
(injured competitors deterred from selling their own computers and browsers);
Nat’l Basketball Ass’n v. Motorola, Inc., 105 F.3d 841, 854 (2d Cir. 1997)
(analyzing free-riding issues and noting that plaintiff did not free-ride because it
used its own efforts to conduct business); U.S. Anchor Mfg., 7 F.3d at 990
(plaintiff manufactures and supplies anchors); Trans Sport, Inc. v. Starter
Sportswear, Inc., 964 F.2d 186, 187 (2d Cir. 1992) (plaintiffs purchased product
from defendants).
Morris refers to this distinction as PGA’s “sweat of the brow” defense and
correctly states that it is not a defense in a copyright case. Feist Pulb’ns, Inc. v.
Rural Tel. Serv. Co., Inc., 499 U.S. 340, 359-60, 111 S. Ct. 1282, 1295, 113 L. Ed.
2d 358 (1991) (concluding that “sweat of the brow” is no defense in a copyright
case). [Appellant Br. at 53-55.] This well-established rule of copyright law is
irrelevant, however, in this antitrust case. The “sweat of the brow” product, to
which Morris (and the district court) refer, is no different than, for example, the
interconnection services in Verizon Communications, 124 S. Ct. at 876, the job
shoppers in Consultants & Designers, 720 F.2d at 1555, and the sports jackets in
Starter Sportswear, 964 F.2d at 187.
Moreover, even if we overlook the fundamental and dispositive distinction
between this case and the cases cited by Morris, the case law supports summary
19
judgment in favor of PGA. See Verizon Communications, 124 S. Ct. at 879
(“Aspen Skiing is at or near the outer boundary of § 2 liability”); Aspen Skiing, 472
U.S. at 593-94, 105 S. Ct. at 2852-53 (defendant refused to accommodate and
cooperate with plaintiff, refused to sell its product to plaintiff, and acted contrary
to its own economic interests in order to eliminate plaintiff); Otter Tail Power Co.
v. United States, 410 U.S. 366, 370-72, 93 S. Ct. 1022, 1026-27, 35 L. Ed. 2d 359
(1973) (defendant was already in the business of selling a service to certain
customers and refused to sell the same service to certain other customers); Lorain
Journal, 342 U.S. at 148-49, 72 S. Ct. at 183-84 (defendant refused to sell to
plaintiff in violation of the Sherman Act); Starter Sportswear, 964 F.2d at 189-91
(holding, in a factually analogous case, that defendant had valid business
justification for refusal to deal); Fishman v. Estate of Wirtz, 807 F.2d 520, 562
(7th Cir. 1986) (holding defendant liable under § 2 for refusing to lease Chicago
Stadium to plaintiff).
The relevant law supports our conclusion that Morris’s argument is
unavailing and does not show that PGA’s business justification is pretextual. The
prevention of free-riding, which is an inherently economic motivation, provides a
valid business justification on the facts presented here. Accordingly, Morris has
not raised any issues of material fact and summary judgment in favor of PGA was
20
proper. See Int’l Railways of Cent. Am. v. United Brands Co., 532 F.2d 231, 239-
40 (2d Cir.), cert. denied, 429 U.S. 835 (1976) (stating that proof of a company’s
reasonable steps to preserve its business interests does not, without more, raise a
genuine issue of material fact under § 2).
E. Morris’s Rule 60(b) motion
Relief pursuant to Rule 60(b)(2) is appropriate only if the moving party
offers newly discovered evidence that could alter the outcome of the trial. See
Wilson v. Thompson, 638 F.2d 801, 804 (11th Cir. 1981); Fed. R. Civ. Pro.
60(b)(2). Because we review the district court’s decision for abuse of discretion,
“it is not enough that a grant of the motion might have been permissible or
warranted.” Fackelman v. Bell, 564 F.2d 734, 736 (5th Cir. 1977). After
reviewing the record, we conclude that the district court did not err in finding that
the new TOS evidence would have failed to alter the outcome of the trial in light
of PGA’s valid business justification for its regulations. Accordingly, we hold the
district court did not abuse its discretion when it denied the Rule 60 motion.
IV. CONCLUSION
Contrary to Morris’s argument regarding copyright law, this case is not
about copyright and the district court did not find the golf scores to be trade
15 “The [PGA]’s property right does not come from copyright law, as copyright law does not
protect factual information, like golf scores.” Morris Communications, 235 F. Supp. 2d at 1281.
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secrets.15 The district court correctly found that a company – even a monopolist
company – that expends time and money to create a valuable product does not
violate the antitrust laws when it declines to provide that product to its competitors
for free. PGA has accommodated Morris at every step along the way, has agreed
to sell its product to Morris, and has acted appropriately to protect its economic
interests and investments. Yet Morris demands that it be given access to the
product of PGA’s proprietary RTSS, without compensating PGA, so that Morris
can then sell that product to others for a fee. That is the classic example of “freeriding,”
the prevention of which, under antitrust law, constitutes a legitimate procompetitive
reason for imposing a restriction. For the foregoing reasons, we
affirm the district court’s grant of summary judgment in favor of PGA and the
district court’s order denying Morris’s Rule 60(b) motion.
AFFIRMED.
http://www.ca11.uscourts.gov/opinions/ops/200310226.pdf
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