Appeals court rules against Kentucky Speedway in antitrust suit vs. NASCAR, ISC

Calling Kentucky Speedway a "jilted distributor'' and questioning the expert testimony on the track's side, the United States Court of Appeals for the Sixth District affirmed Friday a district courty's summary judgment for NASCAR and International Speedway Corp.

 

So, what does this all  mean? We'll see how the folks at Kentucky Speedway, LLC, react. Do they further pursue this matter and keep it in the courts or do they drop it? NASCAR has stated that as long as the case is in court, it won't consider a Cup date for Kentucky Speedway. Remember Bruton Smith's Speedway Motorsports Inc. owns the track and he wants to put a Cup date there as soon as possible.

 

Here's a statement from NASCAR on the decision:

 

"NASCAR is pleased with the court’s ruling, which supports our case, that like other sports such as the NFL, MLB and the NBA, NASCAR can host its events where it decides is best for the sport and its fans.  NASCAR has a great racing tradition at Kentucky Speedway featuring races in the NASCAR Nationwide Series and the NASCAR Camping World Truck Series and we look forward to racing there in 2010.  The 2010 NSCS schedule is set and we anticipate no changes.  As we’ve said all along, the current schedule would not be expanded for an additional race there.  However, we are happy to discuss alternatives with the track owners for 2011 and beyond as they relate to NASCAR’s realignment plans.”

 

Kentucky Speedway, LLC, (these are the previous owners of the track before selling to Speedway Motorsports Inc.,) blames its failure to obtain a Cup date on allegedly anticompetitive conduct by NASCAR and ISC and pointed to several alleged practices in its court documents. They claimed that NASCAR and ISC colluded to preventing Kentucky Speedway from getting a Cup date.

 

Kentucky Speedway, LLC noted that ISC and NASCAR worked together to obtain rights-of-first-refusal agreements from independent tracks "for little or no consideration.'' Such agreements allow ISC to be the first-in-line bidder for indepdent tracks in the owners wanted to sell. Kentucky also alleged that NASCAR wouldn't put a Cup date at Homestead until ISC purchased the track and that NASCAR threatened to pull out of Las Vegas if ISC could not purchase the facility. And Kentucky allged that ISC and SMI had agreed not to compete with each other for a track, entering into a joint venture, according to the claim, to purchase Dover Motorsports while Kentucky Speedway, LLC sought to purchase the compnay (Dover Motorsports has not been sold).

 

Kentucky Speedway, LLC filed suit against NASCAR and ISC in U.S. District Court of Eastern Kentucky in July 2005 alleging that NASCAR and ISC had violated sections of the Sherman Antitrust Act. Kentucky Speedway, LLC alleged unlawful monopolization of the sanctioning market by NASCAR, illegal conspiracy in restraint of trade by NASCAR and ISC, conspiracy to monopolize the hosting and sanctiong markets and attempted monoploization of the hosting market by ISC. In  Aug. 2007, NASCAR and ISC filed a joint motion for summary judgment. The district court granted the motion in Jan. 2008, holding that there was insufficient evidence supporting Kentucky Speedway, LLC's definitions of hosting and sanctioning markets because the reports and deposition testimony by its experts could not withstand scrutiny under the Supreme Court test laid out in Daubert v. Merrell Dow Pharmacuticals, Inc. (1993)

 

The Appeals docutment also stated that "the court concluded that (Kentucky  Speedway, LLC)'s suit was indistinguishable from a straightforward "jilted distributor'' case, meaning that (the company) could not survive summary judgment becuase (it) had failed to establish an antitrust injury.''

 

The court goes on to question the expert testimony on the side of Kentucky Speedway, LLC, noting the expert's report in determing injury did not follow a standard test recognized by the court, thus had not been tested or reviewed by peers.  As for some of the other allegations, the court writes:

 

"KYS has also failed to put forth persuasive evidence that NASCAR and ISC are colluding to drive KYS out of business, especially in light of the healthy source of revenue that KYS reaps from NASCAR continuing to sanction both the Craftsman Truck races and the Busch series at the KYS facility.

 

"Likewise, KYS’s contention that its inability to purchase an independent racetrack because NASCAR, ISC, and SMI have colluded against it is unsupported by the record. KYS does not appear to have been hampered in its efforts to bid for an independent track, and even if KYS should have won the bid, antitrust law does not require that sellers of independent tracks make good business decisions.''

 

Later, the court notes:

 

"We need not address these potential hurdles further, however, in light of our conclusion that the district court did not abuse its discretion in excluding the reports and deposition testimony of KYS’s experts Zimbalist and Leffler. Without having defined the relevant markets, KYS is simply unable to sustain its antitrust claims.''

 

 

 

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