Holabird Sports Discounters, a Maryland General Partnership,plaintiff-appellant, v. Tennis Tutor, Incorporated, a California Corporation,defendant-appellee,andprince Manufacturing, Incorporated, Party in Interest, 993 F.2d 228 (4th Cir. 1993)

OPINION

Holabird Sports Discounters ("Holabird") brings this appeal from an order of the district court granting summary judgment to Tennis Tutor, Incorporated ("TTI"), on Holabird's action under section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1. We affirm.

TTI manufactures a unique, portable, battery-operated tennis ball practice machine known as the Tennis Tutor. TTI markets Tennis Tutors primarily through a national network of 126 dealers. Holabird, a mail order sporting goods distributor, was one of TTI's dealers during 1989-90. The relationship between TTI and its dealers is governed in large part by a "Statement of Policy," which provides, inter alia, that " [TTI] will not sell, or will discontinue selling, Tennis Tutor ball machines to dealers who ... [a]dvertise the Tennis Tutor in any general circulation regional or national publication for less than suggested retail price, including call for price advertisements." J.A. at 151. This advertising restriction, which was independently formulated by appellee, does not prevent dealers from selling Tennis Tutors at whatever price they choose; instead, it only prohibits advertising the machines for sale at less than suggested retail price in regional or national publications. Advertising in local publications, direct mail flyers and catalogs, computer buying networks, and other media is not affected by the restriction. The purpose of TTI's advertising restriction is to maintain a healthy national distribution system through the prevention of "free-riding" by national mail order discount houses such as Holabird.¹ 

TTI terminated Holabird's dealership in September, 1990, upon learning that appellant had violated the advertising restriction by placing an advertisement in Tennis Magazine that requested readers to call for the price of Tennis Tutors. Subsequently, appellee took independent action to ensure that other dealers did not divert Tennis Tutors to Holabird without TTI's consent. Id. at 571, 646-47. On two other occasions, TTI unilaterally enforced the advertising restriction, in one instance informing a prospective Tennis Tutor dealer of a violation,²  and in the other apprising a dealer, which inadvertently had not been told of the restriction, that one of its advertisements violated TTI's policy. Both firms informed TTI that they would voluntarily comply with the advertising restriction in the future. Id. at 645-46.

On August 5, 1991, Holabird brought this action against TTI in district court, alleging that TTI's imposition and enforcement of the advertising restriction violated section 1 of the Sherman Act.³  After nearly one year of discovery, TTI moved for summary judgment. The district court granted the motion on October 30, 1992. Viewing the case in light of Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752 (1984), and this court's application of Monsanto in Parkway Gallery Furniture, Inc. v. Kittinger/Pennsylvania House Group, Inc., 878 F.2d 801 (4th Cir. 1989), the district court held that Holabird had failed to produce sufficient evidence that TTI had entered into a contract, conspiracy, or combination with any of its dealers through its adoption or enforcement of the advertising restriction or through its termination of Holabird. Because of Holabird's failure to establish this necessary element of its Sherman Act claim, the court concluded, TTI was entitled to judgment.

We have read the briefs, heard oral argument, and given full consideration to Holabird's contentions. Finding no error in the thorough opinion of the court below, Holabird Sports Discounters v. Tennis Tutor, Inc., Civil No. 91-2208-WN (D. Md. Oct. 30, 1992), and agreeing that, under Parkway Gallery, appellant failed to identify sufficient evidence tending to exclude the possibility that TTI and its dealers acted independently with regard to the advertising restriction, we affirm on the reasoning of the district court.

AFFIRMED