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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -X DEUTSCHER TENNIS BUND (GERMAN TENNIS : FEDERATION), ROTHENBAUM SPORT GMBH, and : QATAR TENNIS FEDERATION, : : Plaintiffs, : : against : : ATP TOUR, INC., ETIENNE DE VILLIERS, : CHARLES PASARELL, GRAHAM PEARCE, JACCO : ELTINGH, PERRY ROGERS, and IGGY JOVANOVIC, : : Defendants. : --------------------------------------- X DEFENDANTS' TRIAL BRIEF ASHBY & GEDDES Philip Trainer, Jr. (I.D. #2788) Carolyn Hake (I.D. #3839) Tiffany Geyer Lydon (I.D. #3950) 500 Delaware Avenue, 8th Floor P.O. Box 1150 Wilmington, Delaware 19899 (302) 654-1888 [email protected] [email protected] [email protected] Attorneys for Defendants Of Counsel: Bradley I. Ruskin Colin A. Underwood Jennifer R. Scullion PROSKAUER ROSE LLP 1585 Broadway New York, NY 10036-8299 (212) 969-3000 Dated: June 2, 2008

C.A. No. 07-178-GMS

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TABLE OF CONTENTS TABLE OF AUTHORITIES .................................................................................................ii I. Nature of the Case ..........................................................................................................1

II. Contested Issues of Fact to be Established at Trial ........................................................3 III. ATP's Theory of Defense...............................................................................................3 A. ATP Has the Express Authority to Control the Tour Structure and Calendar ........3 B. Plaintiffs' Antitrust Claims......................................................................................3 1. 2. 3. ATP is a Single Enterprise ...............................................................................3 Plaintiffs Cannot Show Any "Antitrust Injury" ...............................................5 Plaintiffs Cannot Establish a Relevant Product Market, Defendants' Market Power, or Anticompetitive Effects ......................................................6

C. Plaintiffs' Fiduciary Duty Claims ...........................................................................8 1. 2. The Court Should Decide Plaintiffs' Fiduciary Duty Claims ..........................8 The Defendants Have Not Violated Any Fiduciary Duties..............................8

D. Plaintiffs' Tortious Interference Claims ..................................................................9 E. Plaintiffs' Conversion Claim...................................................................................10 IV. Summary and Significance of Outstanding Daubert Motions .......................................11 A. Plaintiffs' Antitrust Expert Andrew Zimbalist ........................................................11 B. Plaintiffs' Damages Expert Gary Kleinrichert ........................................................11 C. Plaintiffs' Delaware Law Expert Charles Elson......................................................12 V. Damages Issues and Bifurcation.....................................................................................12 A. The Uncertain Effect of Injunctive Relief in the Event of Finding of Liability......12 VI. Affirmative Defenses......................................................................................................13 A. Waiver, Acquiescence, Estoppel & Release............................................................13 VII. Defendants' Anticipated Motions for Directed Verdict .................................................15

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TABLE OF AUTHORITIES Cases Acierno v. Preit-Rubin, Inc., 1999 F.R.D. 157 (D. Del. 2001) ..................................................... 10 Allen-Myland, Inc. v. IBM, Corp., 33 F.3d 194 (3d Cir. 1994) ...................................................... 7 American Needle. v. New Orleans Saints, 496 F. Supp.2d 941 (N.D. Ill. 2007)............................ 4 Arnold v. Soc'y for Savings Bancorp, Inc., 678 A.2d 533 (Del. 1996) ........................................ 10 Aspen Advisors LLC v. UA Theatre Co., 861 A.2d 1251 (Del. 2002) ............................................ 9 Bakerman v. Sidney Frank Importing Co., 2006 WL 3927242 (Del. Ch. 2006).......................... 14 Benihana of Tokyo, Inc. v. Benihana, Inc., 891 A.2d 150 (Del. Ch. 2005), aff'd, 906 A.2d 114 (Del. 2006) .......................................................................................................... 9 Brown Shoe Co v. U.S., 370 U.S. 294 (1962) ................................................................................. 7 Brunswick Corp. v. Pueblo Bowl-O-Mat, 429 U.S. 477 (1977) ..................................................... 5 Cantor v. Perelman, 2006 WL 318666 (D. Del. 2006) .................................................................. 8 Carlton Investments v. TLC Beatrice Int'l Holdings, Inc., 1995 WL 694397 (Del. Ch. 1995) ................................................................................................................................. 10 Chicago Prof'l Sports v. NBA, 95 F.3d 593 (7th Cir. 1996)....................................................... 4, 5 Commerce National Ins. Serv., Inc. v. Buchler, 120 Fed. Appx. 414 (3d Cir. 2004) ................... 10 Continental Ins. Co. v. Rutledge & Co., 750 A.2d 1219 (Del. Ch. 2000) .................................... 14 Continental TV, Inc. v. GTE Sylvania, 433 U.S. 36 (1977) ............................................................ 6 Copperweld v. Independence Tube, 467 U.S. 752 (1984) .............................................................. 4 Dardovitch v. Haltzman, 190 F.3d 125 (3d Cir. 1999) ................................................................... 8 Exxon Shipping Co. v. Exxon Seamen's Union, 993 F.2d 357 (3d Cir. 1993)................................ 9 Forsythe v. ESC Fund Mgt. Co., 2007 WL 2982247 (Del. Ch. Oct. 9, 2007).............................. 13 Gilbert v. El Paso Co., 1988 WL 124325 (Del. Ch. Nov. 21, 1988), aff'd, 575 A.2d 1131 (Del. 1990) ................................................................................................................. 8 Granfinanciera, S.A. v. Nordberg, 492 U.S. 33 (1989) .................................................................. 8

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In re Hechinger Inv. Co. of Del., 327 B.R. 537 (D. Del. 2005)...................................................... 8 In re Wal-Mart Wage and Hour Employment Practices Litig., 490 F. Supp.2d 1091 (D. Nev. 2007) .................................................................................................................. 10 Int'l Ass'n of Heat and Frost Insulators and Asbestos Workers Local Union 42 v. Absolute Environmental Serv., Inc., 814 F. Supp. 392 (D. Del. 1993)............................. 10 Irwin & Leighton, Inc. v. W.M. Anderson Co., 532 A.2d 983 (Del. Ch. 1987) .............................. 9 Kentucky Speedway v. NASCAR, 2008 WL 113987 (E.D. Ky. Jan. 7, 2008)....................... 4, 6, 11 Kors v. Carey, 158 A.2d 136 (Del. Ch. 1960) ................................................................................ 8 Lokomotiv Yaroslavl v. NHL, 06 CV 9421 (S.D.N.Y. Nov. 15, 2006)........................................... 5 Madison Square Garden v. NHL, 2007 WL 3254421 (S.D.N.Y. 2007)......................................... 5 Mid-South Grizzlies v. NFL, 720 F.2d 772 (3d Cir. 1983) ............................................................. 6 Nevins v. Bryan, 885 A.2d 233 (Del. Ch. 2005) ........................................................................... 14 Peirson v. Clemens, Inc., 2005 U.S. Dist. LEXIS 4587 (D. Del. 2005) ....................................... 10 Res. Ventures Inc. v. Res. Mgmt. Int'l, Inc., 42 F. Supp.2d 423 (D. Del. 1999)........................... 10 Seabury v. PGA, 878 F. Supp. 771 (D. Md. 1994) ......................................................................... 4 Telxon Corp. v. Meyerson, 802 A.2d 257 (Del. 2002).................................................................... 9 Texaco. v. Dagher, 547 U.S. 1 (2006) ............................................................................................ 5 Toscano v. PGA, 258 F.3d 978 (9th Cir. 2001) .............................................................................. 4 Werner v. Miller Technology Mgt., L.P., 831 A.2d 318 (Del. Ch. 2003) ..................................... 13 Other Authorities Restatement (Second) of Torts § 222A (1965) ............................................................................. 10

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I.

Nature of the Case ATP is a non-profit, Delaware membership organization. Its members are men's

professional tennis players and men's professional tennis tournaments. ATP operates a worldwide tennis tour (the "Tour") comprised of 63 tournaments in 30 countries. Players earn prize money and ATP "ranking points" through playing in ATP and non-ATP tournaments culminating in ATP's end-of-season championship tournament. (The four "Grand Slam" tournaments -- the Australian Open, the French Open, Wimbledon, and the U.S. Open -- are not part of the Tour, although they do count toward player rankings.)1 Plaintiffs operate a tournament in Hamburg, Germany. Plaintiffs chose to be ATP members and to operate the Hamburg tournament as part of the Tour -- and, therefore, to enjoy the benefits of being part of the Tour and to be subject to ATP's rules, Bylaws, and governance.2 This case fundamentally challenges what the Tour is and how it is to be governed. The Tour has three "tiers" of tournaments. ATP currently places Hamburg in the first tier, the "Masters," which comprises approximately 15% of the tournaments in the Tour. Beginning in 2009, however, Hamburg will be categorized in its second-highest tier. The two top tiers, which constitute ATP's "Championship Division," will comprise approximately the top third of the Tour. The Hamburg event, now scheduled for mid-May, will be scheduled in July. These changes, undertaken in full accordance with ATP's Bylaws and rules, are part of modifications to the Tour under what is known as ATP's "Brave New World" Plan. ATP As Plaintiffs have acknowledged, the yearly tennis calendar is for all intents and purposes dominated by the Grand Slams: ATP and other tennis organizations, such as the WTA, schedule their seasons and events around the dates of the Grand Slams. Additional non-ATP events that affect ATP's calendar are the annual Davis Cup tournaments and, in Olympic Years (such as 2008), the Olympic Games. ATP also takes into consideration the dates for other major sporting events in the various countries in which ATP tournaments take place.
2 1

Plaintiff QTF also operates an event in the third tier in Doha, Qatar, as well as the year-end championship of the WTA Tour and a WTA event in Berlin. -1-

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developed and adopted the Plan based on its experience in the marketplace, the demands of ATP's members, and research showing that ATP's consumers -- fans, broadcasters, and sponsors -- desired a quality, professional tennis product to compete in the modern sports and entertainment market. The basic features of the Plan are: (1) a more coherent tournament calendar, with logical progression from one event to the next; (2) a defined and recognizable "top tier" of events, featuring all of the top-ranked players; (3) increased prize money for players; (4) increased investment in tournaments and facilities; (5) expansion into the largely-untapped Asian market; (6) enhanced marketing and promotion of Tour events; and (7) improved handling of Tour media rights. Plaintiffs' case is essentially simple: they seek to retain permanently their preferred "top tier" status and "their" position on ATP's calendar. They make this demand without any regard for whether they merit that status or whether that schedule is sensible, or for the fact that if Plaintiffs get what they want, others by definition will not. And they mount this challenge notwithstanding the clear authority of ATP to determine both status and schedule. Plaintiffs ignore the question of whether their self-interest will harm the greater interests of the ATP members, the Tour, and the sport -- the interests that ATP and its Board of Directors must serve. Stripped of all distractions, Plaintiffs' lawsuit challenges the core right and authority of a professional sports league or circuit to structure and conduct its operations -- to determine where, when and what type of events are played, and where its players shall play, and to do so in a manner that responds to the competitive demands of the marketplace. Without such authority, ATP is nothing more -- and likely far less -- than a roster and a rulebook. Yet at the same time Plaintiffs challenge ATP's implementation of the Plan as anticompetitive and improper, they actively support (as they have since the inception of the ATP in 1990) an integrated circuit which

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organizes a system of tiered events, with centralized control over the calendar, and a system of ensuring player attendance. They simply want to get what they want for themselves by fiat, permanently, and have therefore sought injunctive relief restoring their top tier status and place in the calendar. At the same time, they seek damages that their own witnesses concede they have not yet suffered, and will not suffer if they obtain the equitable relief they request. II. Contested Issues of Fact to be Established at Trial The contested facts to be established by Defendants at trial are set forth in Exhibit 2(a)(2) of the final pretrial order, being filed concurrently herewith. III. ATP's Theory of Defense Plaintiffs' claims are contrary to fact, law, and common sense. To any objective eye, the Brave New World Plan is procompetitive, reasonable, and good for the Tour and the sport as a whole. Moreover, the Plan is exactly what any person would expect a sports league or circuit to do: organize, promote, brand, and control the season to provide fans, broadcasters, and sponsors with a desired, quality product. A. ATP Has the Express Authority to Control the Tour Structure and Calendar

Under ATP's Bylaws, tournament members are entitled to a slot on the ATP calendar, but ATP has sole discretion over the placement of events on the calendar and over the classification of tournaments within the overall Tour structure. Defendants will show at trial that Plaintiffs have expressly acknowledged ATP's authority in these matters in multiple, written agreements. Accordingly, Plaintiffs have no basis upon which to challenge ATP's exercise of that authority. B. Plaintiffs' Antitrust Claims 1. ATP is a Single Enterprise

The internal decisions of a unified business interest -- a "single entity" -- do not give rise to claims under Section 1 of the Sherman Act. Copperweld v. Independence Tube, 467 U.S.
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752 (1984). As the Seventh Circuit has explained in addressing whether the NBA could be liable under Section 1: [A]ntitrust law permits, indeed encourages, cooperation inside a business organization the better to facilitate competition between that organization and other producers. To say that participants in an organization may cooperate is to say that they may control what they make and how they sell it . . . . Chicago Prof'l Sports v. NBA, 95 F.3d 593, 598 (7th Cir. 1996) (hereafter, "Bulls II"). Despite any superficial independence or "competition," each member is interdependent on the others to produce a common product -- a marketable annual tour or season. Thus, Bulls II found that the NBA acts like a single entity in selling broadcast rights for league games despite internal "competition" among and "ownership" rights of league members. Id. at 600. The NFL and PGA have likewise been found to be integrated entities in certain instances. Am. Needle. v. New Orleans Saints, 496 F. Supp.2d 941, 944 (N.D. Ill. 2007) (NFL acts as single entity with respect to branded clothing); Seabury v. PGA, 878 F. Supp. 771 (D. Md. 1994) (PGA acts as integrated entity); see also Ky. Speedway v. NASCAR, 2008 WL 113987, at *1 (E.D. Ky. Jan. 7, 2008) (NASCAR is "a producer of a product" free under the antitrust laws to decide which racetracks will host which races) (attached as Exhibit A). The evidence will show that ATP, a non-stock corporation comprised of player and tournament members that have joined together to produce an annual professional tennis tour, is a "single entity". Even Plaintiffs' witnesses will concede that ATP tournament members do not "compete" either among themselves or with ATP itself. Indeed, the allocation of rights and obligations that may give the sense of limited interventure competition is solely the product of the organization's internal policy decisions in the first place. Nor does the fact that tournaments agree to accept and adhere to ATP's policies and rules suffice to establish an agreement for Section 1 purposes. Toscano v. PGA, 258 F.3d 978 (9th Cir. 2001) (dismissing antitrust claims;

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acceptance by tournaments and sponsors of PGA rules on player eligibility, scheduling and other issues did not constitute "agreement" for purposes of Section 1). Even if Defendants cannot show that ATP should be considered a single entity for all purposes, it is nevertheless entitled to be considered a single enterprise with respect to carrying out its internal "core" functions -- e.g., how many "tiers" to have, how to define the "tiers," which tournaments to include in which "tier," and when to schedule its tournaments. Texaco. v. Dagher, 547 U.S. 1, 6 (2006) (agreement on price of joint venture's gasoline "not price fixing in the antitrust sense"); Lokomotiv Yaroslavl v. NHL, 06 CV 9421, slip op. at 86 (S.D.N.Y. Nov. 15, 2006) (NHL rules on negotiation for transfer of foreign players are "core activities of a joint venture . . . and thus, would not constitute a combination in restraint of trade" under Dagher) (attached as Exhibit B); see also Madison Square Garden v. NHL, 2007 WL 3254421 (S.D.N.Y. 2007) (NHL requirement for website uniformity "is a key element of the League's new growth strategy to enhance the NHL's `national brand' and to compete better against other sports and entertainment products and their websites"). Rather, as the Bulls II court held, "[c]ourts must respect a league's disposition of these issues, just as they respect contracts and decisions by a corporation's board of directors." 95 F.3d at 597. And here, unlike most sports leagues, the challenged conduct is in fact the decisions enacted by the corporation's Board of Directors. 2. Plaintiffs Cannot Show Any "Antitrust Injury"

A private antitrust plaintiff must prove "antitrust injury," meaning injury "of the type the antitrust laws were intended to prevent" and that "flows from that which makes defendants' acts unlawful" -- i.e., injury that reflects an "anticompetitive effect" or an "anticompetitive act". Brunswick Corp. v. Pueblo Bowl-O-Mat, 429 U.S. 477, 489 (1977). The antitrust laws "were enacted for the protection of competition, not competitors." Id. at 488 (emphasis in original).

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The evidence will show that any "injury" to Plaintiffs from Defendants' conduct is not an "antitrust" injury. First, the changes that ATP is making are permissible changes to "intrabrand" competition within ATP that are intended to and will facilitate ATP's ability to compete on an "interbrand" basis with other tennis, sports, and entertainment products. Any "injury" to Plaintiffs does not reflect any reduction in "interbrand" competition. See Continental TV, Inc. v. GTE Sylvania, 433 U.S. 36, 52 n.19 (1977) ("primary concern of antitrust law" is "interbrand," not "intrabrand," competition). If anything, Plaintiffs seek to maintain the benefits of Hamburg's intrabrand position vis á vis other ATP tournaments, having been granted these benefits within ATP's structure. Put most simply, the internal choice by ATP to select one member over another to be in its highest tier is not antitrust injury. See Mid-South Grizzlies v. NFL, 720 F.2d 772, 786-87 (3d Cir. 1983) (dismissing antitrust claims where "the action complained of produced no injury to competition."); Ky. Speedway, 2008 WL 113987. Finally, Plaintiffs cannot show how Defendants' conduct has reduced their own ability to "compete" in any relevant market. If Plaintiffs are correct that ATP has acted anticompetitively with respect to its member tournaments, that should, if anything, make it easier for Plaintiffs to compete against ATP for players, fans, broadcaster and sponsors. E.g., Mid-South Grizzlies, 720 F.2d at 787 ("the Grizzlies' exclusion from the league in no way restrained them from competing for players by forming a competitive league"). But fundamentally, Plaintiffs do not seek to compete with the alleged "cartel"; they just seek the perceived benefits of certain internal decisions of the organization. 3. Plaintiffs Cannot Establish a Relevant Product Market, Defendants' Market Power, or Anticompetitive Effects

In order to prevail on their antitrust claims, Plaintiffs must prove the existence of a relevant product market and relevant geographic market. "The outer boundaries of a product

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market are determined by the reasonable interchangeability of use or the cross-elasticity of demand between the product itself and substitutes for it." Brown Shoe Co v. U.S., 370 U.S. 294, 325 (1962); Allen-Myland, Inc. v. IBM, Corp., 33 F.3d 194, 207 (3d Cir. 1994). The evidence will show that Plaintiffs' proposed "relevant markets" are each flawed because they do not include all reasonably interchangeable or substitutable products. Plaintiffs' purported expert's methodology for defining the relevant markets is unsound and unreliable and should be rejected because it lacks any scientific basis.3 Instead, Defendants' expert will show that the relevant product market for antitrust purposes must at the very least include other sports and entertainment events and cannot be as limited as Plaintiffs suggest. Moreover, even if Plaintiffs were able to prove a proper relevant market, the evidence will show that Defendants do not have market power, nor can they show that anticompetitive effects substantially outweigh the Plan's procompetitive benefits. Assuming the relevant market is men's professional tennis -- which the evidence will show is far too narrow -- the Grand Slam events, not ATP, dominate the landscape: ATP is forced to schedule events around those tournaments, which draw the greatest attention of fans, broadcasters and sponsors worldwide. Further, the evidence will show, among other things, that the popularity of tennis in Germany has been declining, and that for multiple reasons the Hamburg tournament was less qualified to be placed in ATP's highest tier two weeks before the French Open. In the face of this reality, Plaintiffs' request that ATP protect their "traditional" event from market forces cannot be seen as procompetitive in any sense. Defendants will show that the ATP's restructuring is the antithesis of anticompetitive behavior. ATP's restructuring will: (a) maintain ATP's top tier at nine events; (b) enlarge the next tier and increase player commitments for that Defendants have moved to exclude the testimony of Plaintiffs' antitrust "expert" under Daubert, as discussed below.
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tier; (c) expand ATP's top tier events to the growing sports market in Asia; (d) increase the prize money offered to players at all levels; and (e) increase investments in infrastructure and marketing expenditures. C. Plaintiffs' Fiduciary Duty Claims 1. The Court Should Decide Plaintiffs' Fiduciary Duty Claims

Plaintiffs assert multiple claims for breach of fiduciary duty, but have requested no damages with respect to those claims. Accordingly, those claims should be heard and decided by the Court rather than the jury, as they are inherently equitable. See Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 42 (1989). "Actions for breach of fiduciary duty, historically speaking, are almost uniformly actions `in equity' -- carrying with them no right to a trial by jury." In re Hechinger Inv. Co. of Del., 327 B.R. 537, 544 (D. Del. 2005); see also Dardovitch v. Haltzman, 190 F.3d 125, 134 n.1 (3d Cir. 1999) (affirming denial of jury trial for breach of fiduciary duty claim); Cantor v. Perelman, 2006 WL 318666, *9 (D. Del. 2006) (claims seeking both legal and equitable relief should be "judged equitable"). 2. The Defendants Have Not Violated Any Fiduciary Duties

As officers and/or directors of ATP, the ATP Directors owe fiduciary duties to the corporation and to its membership. These duties are not owed to any specific individual members of the ATP Tour. Gilbert v. El Paso Co., 1988 WL 124325, at *9 (Del. Ch. Nov. 21, 1988), aff'd, 575 A.2d 1131 (Del. 1990); Kors v. Carey, 158 A.2d 136, 143 (Del. Ch. 1960). The ATP Director Defendants had a duty to perform their functions in good faith, in a manner they reasonably believed to be in the best interest of ATP, and with the care that ordinarily prudent persons would reasonably be expected to exercise in a like position under similar circumstances. This duty is met if the directors informed themselves of the material information reasonably available to them prior to making a business decision. Benihana of Tokyo, Inc. v. Benihana, Inc.,
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891 A.2d 150, 192 (Del. Ch. 2005), aff'd, 906 A.2d 114 (Del. 2006). Plaintiffs will be unable to prove a violation of this duty. Rather, the evidence will show that Defendants approved the Brave New World Plan after research from at least three outside consultants, input from all ATP constituencies, and countless meetings and debates. Although Plaintiffs claim that several ATP directors had improper financial interests in the implementation of the Brave New World Plan, the evidence will show an absence of selfdealing; moreover, any other asserted "interest" any director might have had was immaterial and/or unrelated to the Plan. See, e.g., Benihana, 891 A.2d at 174; (Del. Ch. 2005); Telxon Corp. v. Meyerson, 802 A.2d 257, 264 (Del. 2002). Likewise, Plaintiffs will be unable to prove a breach of the duty of loyalty claims based on the Defendants' purported intentional "violations of positive law." Such a claim, at a minimum, would require Plaintiffs to show that Defendants specifically intended that ATP would violate the antitrust laws (the only positive law set forth in Plaintiffs' proposed jury instructions), and that Plaintiffs were harmed by that violation. Exxon Shipping Co. v. Exxon Seamen's Union, 993 F.2d 357, 364 (3d Cir. 1993). Plaintiffs can offer no evidence of such intent on the part of any of the Defendants. Accordingly, Defendants are entitled to the presumption that they acted with sound business judgment. In all events, the Plan was designed to promote the interest of the Tour, and Plaintiffs' fiduciary duty claims should be rejected. D. Plaintiffs' Tortious Interference Claims

In order to prevail on any of their claims for tortious interference, Plaintiffs must, at a minimum, prove the existence of a contract or other business relationship with a third party that was breached or otherwise terminated as a result of Defendants' conduct. Aspen Advisors LLC v. UA Theatre Co., 861 A.2d 1251 (Del. 2002); Irwin & Leighton, Inc. v. W.M. Anderson Co., 532 A.2d 983 (Del. Ch. 1987); Commerce National Ins. Serv., Inc. v. Buchler, 120 Fed. Appx. 414,
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418 (3d Cir. 2004). Plaintiffs will be unable to carry this burden at trial, as they have not identified contracts with third parties that were breached or prospective contractual relationships that were interfered with as a result of Defendants' conduct and have offered no basis for calculating damages on these claims. In addition, Plaintiffs cannot maintain a tortious interference claim based on Defendants' purported interference with a contract to which ATP itself is a party. Int'l Ass'n of Heat and Frost Insulators and Asbestos Workers Local Union 42 v. Absolute Environmental Serv., Inc., 814 F. Supp. 392, 400 (D. Del. 1993). E. Plaintiffs' Conversion Claim

Conversion is the exercise of dominion over the property of another, in denial of his rights, or inconsistent with the owner's right to possession or control. Arnold v. Soc'y for Savings Bancorp, Inc., 678 A.2d 533, 536 (Del. 1996). Conversion may only apply where the act of dominion or control so seriously interferes with the owner's right to possession or control that the defendant has fully extinguished the value of the property. Restatement (Second) of Torts § 222A (1965). Moreover, a plaintiff cannot maintain a conversion claim for intangible property -- such as the rights Plaintiffs claim were converted here -- unless the intangible property relations are merged into a document. Peirson v. Clemens, Inc., 2005 U.S. Dist. LEXIS 4587, *7-8 (D. Del. 2005); Acierno v. Preit-Rubin, Inc., 1999 F.R.D. 157, 165 (D. Del. 2001); Res. Ventures Inc. v. Res. Mgmt. Int'l, Inc., 42 F. Supp.2d 423, 439 (D. Del. 1999); Carlton Investments v. TLC Beatrice Int'l Holdings, Inc., 1995 WL 694397, *16 (Del. Ch. 1995); see also In re Wal-Mart Wage and Hour Employment Practices Litig., 490 F. Supp.2d 1091, 1101 (D. Nev. 2007). For example, promissory notes, bonds, bills of exchange, stock share certificates, and insurance policies are all both property in and of themselves and also representative of a person's interest in other property. In re Wal-Mart, 490 F. Supp.2d at 110203. Plaintiffs' conversion claim should be dismissed as a matter of law because they assert that
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Defendants converted their rights as an ATP member, which are intangible property rights that are not merged into a document. In addition, the undisputed evidence will show that Plaintiffs' ATP membership has not been taken or destroyed by Defendants -- at most, Plaintiffs contend that their status as an ATP member tournament will be impaired under the Brave New World Plan, because their tournament will be in a different category, one sought by many other members and one higher than that enjoyed by the majority of ATP tournament members. IV. Summary and Significance of Outstanding Daubert Motions Defendants have filed motions to exclude the opinion testimony offered by all three of Plaintiffs' experts. The exclusion of any of these witnesses will substantially affect the issues to be addressed at trial. A. Plaintiffs' Antitrust Expert Andrew Zimbalist

Defendants have moved to exclude Zimbalist's opinions concerning the relevant antitrust markets because he used an unsound and unscientific methodology to define those markets. The methodology Zimbalist employed in this case was -- as he admitted under oath -- even less rigorous and involved less analysis than he used in another case in which his opinions were excluded on Daubert grounds. Ky. Speedway, 2008 WL 113987, at *4. Should the Court grant this motion, Plaintiffs will have no evidence at trial of relevant product or geographic markets, meaning that judgment should be entered dismissing their antitrust claims. B. Plaintiffs' Damages Expert Gary Kleinrichert

Defendants seek to exclude the damages opinions offered by Kleinrichert on the grounds that (1) he failed to connect the damages he believes Plaintiffs will suffer with the particular alleged "bad acts" of Defendants; (2) he calculated damages based on a "but for" world in which Plaintiffs would enjoy the benefits of the very conduct they challenge as anticompetitive; and
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(3) his valuation model is unscientific and unreliable in that he used a supposed "benchmark" transaction without any analysis of whether the tournament at issue there was in fact comparable to Plaintiffs' tournament. Given that Plaintiffs' other witnesses have admitted that they have no knowledge or opinions concerning any damages suffered by Plaintiffs, excluding Kleinrichert's opinions would leave Plaintiffs with no testimony at all on the amount of their damages. C. Plaintiffs' Delaware Law Expert Charles Elson

Finally, Defendants have moved to exclude the opinion testimony proffered by Elson on the grounds that the witness improperly attempts to usurp the role of the Court in articulating the legal standards applicable to Plaintiffs' fiduciary duty claims, and made absolutely no attempt to apply his view of the law to any of the facts of this case. Excluding Elson from the trial would properly leave it to the Court to instruct the jury on these issues. V. Damages Issues and Bifurcation A. The Uncertain Effect of Injunctive Relief in the Event of Finding of Liability

Plaintiffs in this case have sought both permanent injunctive relief against Defendants' purported misconduct and damages on their antitrust and tortious interference claims. The only damages identified by Plaintiffs' witnesses have been damages that Plaintiffs claim they will suffer in the event that the Brave New World Plan is implemented as currently anticipated and beginning in 2009 the Hamburg tournament is reclassified and scheduled in July. Essentially, Plaintiffs' damages theories all stem from the idea that whatever value their tournament has now will be totally eliminated in 2009 under the Brave New World Plan. If Plaintiffs prevail on liability, and if the Court grants relief enjoining the Brave New World Plan, that relief would preclude any loss of value, and hence eliminate any damage to Plaintiffs. If Plaintiffs prevail on liability but the Court declines to enjoin the Brave New World Plan in its entirety, further

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proceedings would then be necessary to determine Plaintiffs' damages in light of the liability finding and the scope of injunctive relief. Accordingly, Defendants have moved to bifurcate trial of this action into separate liability and damages phases, with the damages phase to proceed only after a finding of liability and the Court's determination on the proper scope of injunctive relief. Bifurcation would be efficient because even if liability were found, the damages phase might be unnecessary and would at a minimum be affected by the cope of injunctive relief. Indeed, Defendants have affirmatively pressed to ensure that this case could be tried before the 2009 tournament season, specifically for the purpose of obtaining a determination concerning the propriety of the Brave New World Plan in advance of its actual implementation.4 VI. Affirmative Defenses A. Waiver, Acquiescence, Estoppel & Release

Delaware courts have defined "waiver," in the context of a fiduciary duty claim, as "the voluntary and intentional relinquishment of a known right." Forsythe v. ESC Fund Mgt. Co., 2007 WL 2982247, at *16 (Del. Ch. Oct. 9, 2007). Claims have been deemed waived where the challenged actions have been fully disclosed to the complaining party. Id. ("in some instances, disclosure . . . may preclude a claim for breach of the duty of loyalty"). "It is well established that a stockholder cannot complain of corporate action in which, with full knowledge of all the facts, he or she has concurred." Werner v. Miller Technology Mgt., L.P., 831 A.2d 318, 334 (Del. Ch. 2003). The evidence at trial will show that Defendants at all times sought to apprise ATP member tournaments of decisions affecting the Tour structure, calendar and scheduling, and
4

In fact, given the wholly unsupported nature of Plaintiffs' damage calculations, even if the jury were to find liability and the Court were for some reason to deny Plaintiffs' request for injunctive relief, Defendants would be in position themselves to consider changing their plans to modify or eliminate those things found to be improper, reducing or avoiding all damages. - 13 -

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that Plaintiffs actively encouraged ATP to approve many of the policies and plans at issue in this case. Their claims for breach of fiduciary duty should therefore be deemed to have been waived. "[A]cquiescence arises where a complainant has full knowledge of his rights and the material facts and (1) remains inactive for a considerable time; (2) freely does what amounts to recognition of the complained of act; or (3) acts in a manner inconsistent with the subsequent repudiation, which leads the other party to believe the act has been approved." Bakerman v. Sidney Frank Importing Co., 2006 WL 3927242, at *17 (Del. Ch. 2006) (internal quotations omitted). "Under this doctrine, one who has full knowledge of and accepts the benefits of a transaction may be denied equitable relief if he or she thereafter attacks the same transaction." Continental Ins. Co. v. Rutledge & Co., 750 A.2d 1219, 1240 (Del. Ch. 2000). "If the plaintiffs knew of the questionable behavior and did not previously challenge it, while simultaneously accepting a benefit from the now challenged behavior, then a Court will find that the plaintiffs acquiesced to the wrongdoing and will bar a claim against the alleged wrongdoer." Id. at 124041. The evidence at trial will show that for many years Plaintiffs have accepted the benefits of ATP's policies and practices and of being classified as a highest tier tournament, and should not now be permitted to attack those same policies and practices. The doctrine of equitable estoppel may be invoked "when a party by his conduct intentionally or unintentionally leads another, in reliance upon that conduct, to change position to his detriment." To establish estoppel it must be shown that the party claiming estoppel (1) lacked knowledge or the means of obtaining knowledge of the facts in question; (2) relied on the conduct of the party against whom estoppel is claimed; and (3) suffered a prejudicial change of position as a result of his reliance. Nevins v. Bryan, 885 A.2d 233, 249 (Del. Ch. 2005) (director who was removed as member of the board, was estopped from challenging validity of

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new director election). The evidence will show that Defendants relied on Plaintiffs' support of ATP's policies and practices rules over the years without knowing that Plaintiffs would later assert that those very acts were unlawful. Finally, Plaintiffs expressly released Defendants from liability pursuant to enforceable provisions in ATP's Certificate of Incorporation and its Bylaws. Those releases should be enforced and Plaintiffs' claims against the individual director Defendants should be dismissed. VII. Defendants' Anticipated Motions for Directed Verdict Subject to the evidence presented at trial, Defendants currently anticipate seeking a directed verdict or judgment as a matter of law on the grounds that no reasonable jury could find: 1. That ATP has violated Section 1 of the Sherman Act because it is a single enterprise. 2. That Plaintiffs have antitrust standing to challenge Defendants' conduct. 3. That Plaintiffs have suffered antitrust injury as a result of Defendants' conduct. 4. That Plaintiffs have proven any relevant product market. 5. That Plaintiffs have proven a relevant geographic market for any relevant product market(s) proven by Plaintiffs. 6. That Defendants have market power in any relevant product and geographic market(s) proven by Plaintiffs. 7. That Defendants are not entitled to the presumption that they acted with sound business judgment. 8. That the Defendants caused ATP to violate the antitrust laws. 9. That Plaintiffs have proven any contracts with third parties that were breached as a result of Defendants' conduct. 10. That Plaintiffs have proven any prospective business relationships that were breached or terminated as a result of Defendants' conduct. 11. That Plaintiffs have proven any recoverable damages arising out of Defendants' conduct. 12. That Plaintiffs' ATP membership rights are properly the subject of a conversion claim.

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ASHBY & GEDDES /s/ Tiffany Geyer Lydon ________________________ Philip Trainer, Jr. (I.D. #2788) Carolyn S. Hake (I.D. #3839) Tiffany Geyer Lydon (I.D. #3950) 500 Delaware Avenue, 8th Floor P.O. Box 1150 Wilmington, Delaware 19899 (302) 654-1888 [email protected] [email protected] [email protected] Attorneys for Defendants Of Counsel: Bradley I. Ruskin Colin A. Underwood Jennifer R. Scullion Julie A. Tirella PROSKAUER ROSE LLP 1585 Broadway New York, NY 10036-8299 (212) 969-3000 Dated: June 2, 2008

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EXHIBIT A

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KentuckySpeedway, LLC v. National Ass'n of Stock Car Auto Racing, Inc. E.D.Ky.,2008. KENTUCKYSPEEDWAY, LLC, Plaintiff v. NATIONAL ASSOCIATION OF STOCK CAR AUTO RACING, INC., a/k/a NASCAR and International Speedway Corporation, Defendants. Civil Action No. 05-138 (WOB). Jan. 7, 2008. Arthur R. Miller, Harvard Law School, Cambridge, MA, Daniel J. Walker, Justin A. Nelson, Susman Godfrey, LLP, Seattle, WA, Fay E. Stilz, James Rubin Cummins, Paul M. DeMarco, Stanley M. Chesley, Waite, Schneider, Bayless & Chesley Co., LPA, W.B. Markovits, Markovits & Greiwe Co., LPA, Cincinnati, OH, Michael P. Fritz, Susman Godfrey, LLP, Dallas, TX, Stephen D. Susman, Vineet Bhatia, Susman Godfrey, L.L.P., Houston, TX, Mark D. Guilfoyle, Deters, Benzinger & Lavelle, P.S.C., Crestview Hills, KY, for Plaintiff. David Boies, Helen M. Maher, Jack A. Wilson, Olav A. Haazen, Boies, Schiller & Flexner LLP, Armonk, NY, Kate Ruggieri, Timothy A. Karpoff, Boies, Schiller & Flexner LLP, New York, NY, Kimberly S. Amrine, Matthew C. Blickensderfer, Frost Brown Todd LLC, G. Jack Donson, Jr., Taft, Stettinius & Hollister, LLP, Cincinnati, OH, sheryl G. Snyder, Frost Brown Todd LLC, Louisville, KY, Stuart H. Singer, Boies, Schiller & Flexner, LLP, Fort Lauderdale, FL, Guy I. Wade, III, Kenneth C. Meixelsperger, Kristin R. Turner, Rodney Acker, Scott P. Drake, Fulbright & Jaworski L.L.P., Dallas, TX, Robert B. Craig, Taft, Stettinius & Hollister, LLP, Covington, KY, for Defendants. OPINION AND ORDER WILLIAM O. BERTELSMAN, District Judge. I. INTRODUCTION *1 This is an antitrust action by the owner of a local auto-racing track (Plaintiff Kentucky Speedway, LLC, hereinafter referred to as Speedway) against a

promoter of stock car racing (Defendant National Association of Stock Car Racing, Inc., hereinafter referred to as NASCAR) and an affiliated corporation (Defendant International Speedway Corporation, hereinafter referred to as ISC). ISC operates certain stock car race tracks across the United States. NASCAR promotes ("sanctions") several series of stock car races: NEXTEL, Busch, the Craftsman Truck Series, as well as several local series. This case concerns the sanctioning (licensing) of NASCAR'S NEXTEL series, which may be thought of as the World Series or Superbowl of stock car racing. NEXTEL races are in high demand and are excellent revenue producers. NASCAR sanctions 36 such races. It offers 19 of these races to its affiliate, ISC, at its 12 tracks. The remainder are sanctioned at other tracks. But NASCAR refuses to allow Plaintiff Speedway to host a NEXTEL race.FN1(Doc. # 225, Defs.' Mem. in Supp. of Summ. J. 10.) Although there are literally thousands of pages of briefs and exhibits that have been filed herein, this is all this case is essentially about. Speedway alleges violations of the Sherman Act § 1, 15 U.S.C. § 1 (conspiracy in restraint of trade), and § 2, 15 U.S.C. § 2 (attempt to monopolize). After an adequate period for discovery, Defendants filed a Joint Motion for Summary Judgment. (Doc. # 225.) Responses and replies were duly filed. (Docs. # 272 & # 277.) FN1. The court will assume that Speedway is fully qualified to host such a race, as well as give Speedway the benefit of all factual inferences. After careful consideration and a thorough review of the record, and granting Speedway the benefit of the doubt on all reasonable inferences therefrom, the court concludes that Speedway has failed to make out its case. Summary judgment on both claims is therefore appropriate. II. ANALYSIS The above highly-truncated statement of facts is all that is necessary to understand this case, because it is essentially a "jilted distributor" case. As the

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following discussion illustrates, a producer of a product is free under current antitrust laws to select its distributors FN2 and to refuse to deal with would-be distributors, no matter how worthy or deserving they may be. Even more fundamentally, in order to establish both its antitrust claims, Speedway was required to prove relevant markets through qualified expert testimony as part of its prima facie case. This it failed to do, after being given a sufficient opportunity. Thus, summary judgment is appropriate. FN2. In this context, the term "distributor" includes both wholesalers and retailers. A. The Summary Judgment Standard Recently, the Sixth Circuit had occasion to discuss the standards for summary judgment in an antitrust case: The District Court construed the Supreme Court's trilogy of Matsushita, Anderson, and Celotex to have "in the aggregate, lowered the movant's burden in seeking summary judgment."(J.A. 44). We respectfully disagree. The Supreme Court observed that summary judgment is appropriate where the antitrust claim "simply makes no economic sense," Eastman Kodak Co. v. Image Tech. Servs., Inc., 504 U.S. 451, 467, 112 S.Ct. 2072, 119 L.Ed.2d 265 (1992), or "[w]here the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party...."Matsushita Elect. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (citations omitted). The Supreme Court "has preferred to resolve antitrust claims on a case-by-case basis, focusing on the `particular facts disclosed by the record.' " Eastman Kodak Co., 504 U.S. at 467, 112 S.Ct. 2072 (quoting Maple Flooring Mfrs. Ass'n v. United States, 268 U.S. 563, 579, 45 S.Ct. 578, 69 L.Ed. 1093 (1925)). Moreover, as the Supreme Court explained, Matsushita does not increase the non-movant's burden on a motion for summary judgment. "Matsushita demands only that the nonmoving party's inferences be reasonable in order to reach a jury...." Kodak, 504 U.S. at 468, 112 S.Ct. 2072. *2Spirit Airlines, Inc. v. Northwest Airlines, Inc., 431 F.3d 917, 930-31 (6th Cir.2005).

In Matsushita Electric Industrial Co. v. Zenith Radio Corp., the Court elaborated on the factual showing that a plaintiff must make to survive summary judgment, emphasizing that "the issue of fact must be `genuine.' " 475 U.S. 574, 586 (1986) (citingFed. R. Civ. Proc. 56(c), (e)). The Court further observed that the party opposing a grant of summary judgment "must do more than simply show that there is some metaphysical doubt as to the material facts." Id. Further, "[w]here the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no `genuine issue for trial.' " Id. at 587 (citing First National Bank of Arizona v. Cities Service Co., 391 U.S. 253, 289, 88 S.Ct. 1575, 1592 (1968)). Matsushita instructs that if the plaintiff's claims simply make "no economic sense," it must come forward with "more persuasive evidence." Id. As the Sixth Circuit observed in Spirit Airlines,"if the [plaintiff's] expert provides a reliable and reasonable opinion with factual support, summary judgment is inappropriate."Spirit Airlines, 431 F.3d at 931. As the discussion below illustrates, in this court's view there was a total failure of proof of any relevant market in this case and, thus, of any "reliable and reasonable opinion with factual support," because Plaintiff's expert opinions did not pass Daubert analysis. Without proof of relevant markets, Speedway's theories make no economic sense. Thus, summary judgment is appropriate. Cf. Street v. J.C. Bradford Co., 886 F.2d 1472, 1476-81 (6th Cir.1989) (reviewing the progression of Supreme Court decisions marking a return to the original purpose of summary judgments as an effective procedural device in federal court litigation, including complex cases). B. Speedway's Expert Testimony Fails the Daubert Test An essential component of Speedway's theories is the definition of a relevant product market or markets. Speedway postulates two relevant markets: a sanctioning market for the NEXTEL race and a hosting market for the same race. Speedway relies on the expert report and deposition testimony of Professor Andrew Zimbalist for evidence of the existence of these markets. Zimbalist's theories have been challenged by

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Defendants in Daubert motions.FN3(Docs. # 219 & # 256.) FN3. The court will assume for the purpose of this analysis that Zimbalist possesses adequate credentials. The opinions of plaintiff's other expert, Keith Leffler, are based on Zimbalist's market analysis. In its decision in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), the Supreme Court of the United States placed significant restrictions on the use of a "hired gun" expert. The previous standard had (at least in practice) roughly been: if the expert witness knows more about the subject than the jury, he or she should be permitted to testify. Daubert established a far-sweeping new approach. The standards set by Daubert were later incorporated into Federal Rule of Evidence 702, which reads: *3 If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise, if (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case. Fed.R.Evid. 702. The trial court must act as a "gatekeeper" to ensure that unreliable expert testimony is excluded from evidence. Daubert, 509 U.S. at 592-94. Daubert enumerated several factors which are relevant to assessing an expert's testimony: .... (1) whether a "theory or technique ... can be (and has been) tested;" (2) whether the theory "has been subjected to peer review and publication;" (3) whether there is a high "known or potential rate of error" and whether there are "standards controlling the technique's operation;" and (4) whether the theory or technique enjoys "general acceptance" within the scientific community. Daubert, 509 U.S.

at 592-94;Nelson v. Tennessee Gas Pipeline Co., 243 F.3d 244, 251 n. 5 (6th Cir.2001). The Sixth Circuit further examines an expert's opinion by reviewing its context: whether the opinion naturally and directly grows out of research previously conducted independently of the litigation in question, or whether the expert developed the opinion just for the purpose of testifying, which does not offer the same objective proof that the research comports with the dictates of good science. See Mike's Train House v. Lionel, LLC, 472 F.3d 398, 408 (6th Cir.2006) ("We have been suspicious of methodologies created for the purpose of litigation"); Nelson, 243 F.3d at 252 (magistrate justified in considering fact that expert's study was conducted and opinions were formed merely for purposes of litigation); Turpin v. Merrell Dow Pharms., Inc., 959 F.2d 1349, 1352 (6th Cir.1992) ( "expert witnesses are not necessarily always unbiased scientists" because "they are paid by one side for their testimony"); see also Early v. Toyota Motor Corp., 486 F.Supp.2d 633, 637 n. 2 (E .D. Ky.2007); Johnson v. Manitowac Boom Trucks, Inc., 406 F.Supp.2d 852, 860 (M.D.Tenn.2005); aff'd,484 F.3d 426, 434 (6th Cir.2007). Plaintiff bears the burden of proof as to the admissibility of the opinions of any experts it offers. See Allison v. McGhan Med. Corp., 184 F.3d 1300, 1306 (11th Cir.1999). (Doc. # 219, Defs.' Jt. Mot. for Order to Limit the Expert Test. of Andrew Zimbalist with Attached Mem. in Supp. 5, 6.) Definition of the relevant market(s) in this kind of case must be accomplished by expert testimony which meets the Daubert /Rule 702 criteria. It is obvious that Zimbalist's analysis fails this test. The critical factor for the analysis is "cross-elasticity of demand" between the product itself and substitutes for it." Brown Shoe Co. v. United States, 370 U.S. 294, 325 (1962). *4 All parties agree that the Justice Department's "merger guidelines test" is an accepted means of analyzing the interchangeability of a product and its substitutes. See Nilavar v. Mercy Health Sys.-Western Ohio, 244 Fed. Appx. 690, 698 (6th Cir.2007) (unpublished decision) (discussing the merger guidelines test). This test assesses whether the producer or seller of the product can raise its prices

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by a small amount (typically 5% is used) and still make money. That is: if such a price rise were implemented, would the consumers go elsewhere? Zimbalist did not apply this test, but rather used his own version of it for this litigation. See Zimbalist Report, pp. 4, 9 ff. Zimbalist's approach, however, does not meet the Daubert criteria. It has not been tested; has not been subjected to peer review and publication; there are no standards controlling it; and there is no showing that it enjoys general acceptance within the scientific community. Further, it was produced solely for this litigation. Defendants argue that Zimbalist should at least have used other sports, FN4 and possibly other means of entertainment in general, as possible substitutes for attendance at or television viewing of a NEXTEL race. The court agrees with this argument. The record reflects that the admission price to a NEXTEL race is approximately $85.FN5Considering parking and the probable purchase of refreshments, the cost to a family of four would be about $400. Yet, no studies were done to determine whether such a family might patronize a Bengals or Reds game or some other sports event, instead of a NEXTEL race, if that cost were to be raised by $20 (5%). FN4. Prof. Zimbalist considered only the Busch NASCAR race as a possible substitution for a NEXTEL race. Even then, his comparison of the markets for the two races was flawed, as pointed out in Defendants' papers. FN5. Zimbalist report, p. 25. Rather, Zimbalist has assumed that this race stands alone as a form of entertainment and has formulated his own hybrid FN6 test based on this assumption. Where, as here, an expert offers an opinion that is based on a combination of two methodologies, each methodology must meet the Daubert criteria, and the combined methodology must meet those criteria also. The remarks of the circuit court in Elcock v. Kmart Corp. are pertinent: FN6. I.e., partially the Justice Department test and partially his own.

Kmart does not dispute that the Fields and Gamboa approaches are accepted methodologies in the vocational rehabilitation fields; what it does challenge is Copemann's combination method. Each approach, taken in isolation, may very well contain sufficient analytical rigor to be deemed reliable. However, we are inclined to view Copemann's admittedly novel synthesis of the two methodologies as nothing more than a hodgepodge of the Fields and Gamboa approaches, permitting Copemann to offer a subjective judgment about the extent of Elcock's vocational disability in the guise of a reliable expert opinion. Elcock, 233 F.3d 734, 748 (3d Cir.2000). Therefore, the defense motions to exclude Professor Zimbalist's and Professor Leffler's testimony must be granted. It follows that Plaintiff is left without proof of any relevant product or geographic market. Accordingly, its claims based on both sections of the Sherman Act must fail. C. General Discussion 1. Proof of Relevant Markets Required *5 Speedway undertakes to prove relevant market(s) to establish either or both of its Sherman Act claims. (Doc. # 272, Pl.'s Mem. in Resp. to Summ. J. 4, n. 63.) Therefore, its failure to do so, as set out above, is fatal to both claims. However, Speedway also argues that it has adduced "significant evidence of competitive harm" and, therefore, does not need to prove the relevant markets. See F.T.C. v. Ind. Fed'n of Dentists, 476 U.S. 447, 458-61 (1986). In the view of this court, Speedway's evidence is not significant enough to trigger this principle. Indiana Federation of Dentists itself involved horizontal restraints and appears to have been limited to such and was so characterized by the Court in California Dental Ass'n v. F.T.C., 526 U.S. 756, 770 (1999). Nor is the principle applicable, even if there are some horizontal restraints among ISC and other tracks, where as here the relevant market is not "readily apparent." Worldwide Basketball & Sport Tours, Inc. v. NCAA, 388 F.3d 955, 961 (6th Cir.2004), cert. denied,546 U.S. 813 (2005). As in Worldwide Basketball: .... Far from being a case in which "an observer with even a rudimentary understanding of

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economics could conclude that the arrangements in question would have an anticompetitive effect on customers and markets," id. (emphasis added), here the relevant market is not readily apparent and the Plaintiffs have failed to adequately define a relevant market, thereby making it impossible to assess the effect of [the challenged NCAA rule] on customers rather than merely on competitors.While it is true that "the rule of reason can sometimes be applied in the twinkling of an eye,"Bd. of Regents, 468 U.S. at 109 n. 39, 104 S.Ct. 2948 (quoting P. Areeda, The "Rule of Reason" in Antitrust Analysis: General Issues 3738 (Federal Judicial Center, June 1981) (parenthetical omitted)), this abbreviated or "quicklook" analysis may only be done where the contours of the market and, where relevant, submarket, are sufficiently well-known or defined to permit the court to ascertain without the aid of extensive market analysis whether the challenged practice impairs competition.Under the "quicklook" approach, extensive market and crosselasticity analysis is not necessarily required, but where, as here, the precise product market is neither obvious nor undisputed, the failure to account for market alternatives and to analyze the dynamics of consumer choice simply will not suffice.The district court therefore erred in applying a quick-look analysis. Id. at 961 (emphasis added). 2. Vertical Restraints and "Jilted Distributors" Further, Speedway cannot show an antitrust injury or any actionable anticompetitive behavior. This is because any preference NASCAR shows for favoring ISC tracks is vertical in nature. The opinion of the court in Care Heating & Cooling, Inc. v. American Standard, Inc., 427 F.3d 1008 (6th Cir.2005),FN7 is directly in point on Speedway's Sherman Act § 1 claims (anticompetitive conspiracy). This is a "classic `jilted distributor' " FN8 case. In the view of this court, Speedway's claims fall squarely within this category. FN7. Speedway cites Care Heating & Cooling in support of its argument that it should not be required to prove the relevant market(s). That case, however, emphasized

that such proof is, in fact, required in situations such as this one involving vertical restraints of trade. See Care Heating & Cooling, 427 F.3d at 1012-13. FN8.See Crane & Shovel Sales Corp. v. Bucyrus-Erie Co., 854 F.2d 802, 810 (6th Cir.1988). *6 In Care Heating & Cooling, a retail heating and air conditioning company (Care) sued American Standard, d/b/a Trane, because Trane had rejected Care as an approved contractor. Id. at 1011.The plaintiff alleged that Trane was conspiring with an approved distributor to prevent plaintiff from competing with the approved distributor. Id. This scenario is virtually identical with Speedway's claims here. The district court granted motions to dismiss on the pleadings, and the Sixth Circuit affirmed. Id. First, the appellate court held that the "rule of reason must be applied" because a vertical restraint was involved. Id. at 1013-14.In language also applicable to the case at bar, the Care Heating & Cooling court observed: Here, Care complains that Trane's refusal to add it to the list of approved contractors resulted from a continuing agreement between Trane and Buckeye to prevent Care from expanding its business and competing with Buckeye. Such an agreement, between the manufacturer, Trane, and one of its distributors, Buckeye, satisfies the test for a vertical restraint on trade. The district court correctly noted that this conduct is per se legal, because a " `manufacturer has a right to select its customers and refuse to sell its goods to anyone, for reasons sufficient to itself.' " Dunn & Mavis, Inc. v. Nu-Car Driveaway, Inc., 691 F.2d 241, 243 (6th Cir.1982) (citations omitted). Trane need not provide justification for its refusal to approve Care. Rather, Care is required to establish the unreasonableness of the alleged trade restraint. NHL Players' Ass'n, 325 F.3d at 718. Id. at 1013 (emphasis added). The Care Heating & Cooling court then went on to delineate the elements of a Sherman Act § 1 "rule of reason" claim:

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Rule of reason analysis requires the plaintiff to prove (1) that the defendant(s) contracted, combined, or conspired; (2) that such contract produced adverse anticompetitive effects; (3) within relevant product and geographic markets; (4) that the objects of and conduct resulting from the contract were illegal; and (5) that the contract was a proximate cause of plaintiff's injury. Int'l Logistics Group, Ltd. v. Chrysler Corp., 884 F.2d 904, 907 (6th Cir.1989)(citing Crane v. Shovel Sales Corp., 854 F.2d at 805). ..... Care, however, does not fare as well with respect to the second, fourth, and fifth prongs of the rule of reason test. Regarding the second prong, because the Sherman Act was intended to protect competition and the market as a whole, not individual competitors, NHL Players' Ass'n, 325 F.3d at 720 (citing Atlantic Richfield Co. v. USA Petroleum Co., 495 U.S. 328, 338, 110 S.Ct. 1884, 109 L.Ed.2d 333 (1990)), the foundation of an antitrust claim is the alleged adverse effect on the market. Care is unable to establish any adverse effect on the market FN9 as a whole. Although Care alleges that it was unable to secure a contract with Joshua Homes, and that Trane's agreement with Buckeye prevented Care from expanding its business to compete with Buckeye, these results affected Care alone.Individual injury, without accompanying market-wide injury, does not fall within the protections of the Sherman Act. See Dunn