StarPro, Greens, Inc. and Daniel Selton sued Polyloom Corporation of America and Challenger Turf, Inc. in the Northern District of Georgia, alleging monopolization and attempted monopolization under Section 2 of the Sherman Act, breach of the duty of good faith and loyalty based on an alleged partnership, and breach of warranty. The district court dismissed the case under Rule 12(b)(6) for failure to state a claim. The plaintiffs appealed, challenging the dismissal of their antitrust claims and the state law claims regarding the partnership and warranty.
The Eleventh Circuit affirmed the dismissal of the Sherman Act claims, noting that a unilateral refusal to deal is generally not unlawful. To survive a motion to dismiss, the plaintiffs needed to plausibly allege that the defendants possessed monopoly power in a relevant market. The court found the complaint failed to define a relevant product market for 'master putting turf' (MPT) separate from other golf putting turfs. The court reasoned that allegations of higher price or unique attributes do not establish a distinct market without evidence of reasonable interchangeability or cross-elasticity of demand. Furthermore, even assuming a market existed, the complaint alleged the presence of other manufacturers capable of entering the market, negating any inference of monopoly power or a dangerous probability of achieving it. Regarding the state law claims, the court found the plaintiffs failed to allege a partnership because the complaint did not show an agreement to share risks, expenses, or profits; the relationship appeared to be a standard manufacturer-distributor arrangement. Finally, the breach of warranty claim failed because the plaintiffs accepted the nonconforming goods and did not notify the sellers of the defects within a reasonable time after discovery, as required by Georgia law.
The dismissal of the antitrust claims stands, reinforcing the high pleading standard required to prove monopoly power in refusal-to-deal cases. The ruling clarifies that product uniqueness alone does not create a separate antitrust market. The breach of warranty claim is barred for parties who accept goods without timely notice of defects, emphasizing the strict notice requirements under Georgia's Uniform Commercial Code. The case is remanded to the district court with instructions to dismiss the remaining claims.
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