Indiana, Pennsylvania
September 24, 2009
NEWS RELEASE
For Immediate release
On September 15, 2009, Judge Terrence McVerry of the Federal District Court for
the Western District of Pennsylvania issued an opinion dismissing Specialty Tires of
America’s and Race Tires America’s (STA) Complaint against Hoosier Racing Tire Corp.
and World Racing Group, Inc. (formerly Dirt Motorsports) for violations of the U.S. antitrust
laws. STA manufactures American Racer® racing tires and markets them through its
Race Tires America division. The complaint alleged, among other things, that Hoosier
used its monopoly power to foreclose competition for the sale of tires in dirt oval track
racing; that Hoosier conspired with sanctioning groups to restrain trade in the sale of such
tires; and that the intent of this conspiracy was to monopolize the market for dirt oval track
race tires.
The court dismissed STA’s Complaint without the benefit of a jury trial and without
considering the abundant evidence provided by STA of the exercise of monopoly power
by Hoosier, the foreclosure of competitors from the market, the barriers to competition
created by the defendants, and the collusive behavior of Hoosier and race sanctioning
groups. Instead, the court relied heavily on the appearance of “competitive” bidding,
instituted only after the lawsuit was filed, to assert that competition was present in the
market. The court, also, did not consider that the sanctioning companies were not tire
purchasers, that the racers and car owners were impacted by the higher prices resulting
from the defendants’ exclusionary conduct, and importantly, the court omitted
consideration of strong legal precedents condemning the use of exclusionary contracts to
monopolize, which describes defendants' conduct here.
STA and its racing division, Race Tires America, disagree with and are disappointed
by the action of the court in dismissing the company’s complaint, and intend to fully
consider and pursue all their legal options, including an appeal. The number of
market participants for tires for short track racing in the United States has declined
dramatically over the past ten years to the point where there exists only the dominant
supplier, Hoosier, and Race Tires America and Goodyear, the latter two companies each
with small shares of the market. With this decision, the court handed a company already
possessing monopoly power a critical tool for maintaining and expanding its stranglehold
on the sport of short track racing. In the future, with this decision, and without the benefit
of an actively competitive race tire market, race car drivers and owners, the true consumers
of race tires, can expect to pay higher prices, receive fewer choices, and be subject to
increasingly reduced quality and durability of tires.
The lawsuit brought by STA was not considered lightly nor was it inexpensive.
However, none of the costs incurred by STA in the litigation will be passed on to any of
our customers. The company continues to believe that market competition, not only for
race tires but also for other racing components, is the only way to assure that the sport
remains within the economical reach of both participants and spectators.
For further information, contact:
Thomas M. Schultz
General Counsel
Specialty Tires of America, Inc. and
Race Tires America, Inc.
4731 State Route 30
Greensburg, PA 15601
Email:
tschultz@polymerenterprises.net
