## Facts

- The PGA Tour, Inc. promulgated a rule barring golf clubs with square or “U-shaped” grooves and allowing only “V-shaped” grooves.
- Karsten Manufacturing Corporation made PING Eye 2 irons, all using U-shaped grooves; the clubs were top-selling and widely used by professionals and amateurs.
- Eight PGA Tour professionals used PING Eye 2 clubs and challenged the rule; Karsten funded their litigation.
- The USGA had amended its rules in 1984 to permit U-shaped grooves, after which Karsten developed and marketed its U-groove clubs; Tour players began using them in 1985.
- The PGA adopted a groove restriction stricter than prevailing USGA specifications, citing concerns that U-grooves reduced the skill component of the game.
- Plaintiffs sued under federal antitrust and state law and sought a preliminary injunction to prevent enforcement of the rule during litigation.
- After an evidentiary hearing, the district court preliminarily enjoined enforcement; the PGA appealed.

## Issues

1. Whether the district court abused its discretion in finding plaintiffs showed probable success on the merits, or serious questions going to the merits, of their Sherman Act § 1 and related claims challenging the groove ban.
2. Whether the district court clearly erred in finding plaintiffs would suffer irreparable harm absent preliminary relief.
3. Whether the balance of hardships and the public interest supported preserving the pre-rule status quo pending trial.

## Decision

- The Ninth Circuit affirmed the preliminary injunction.
- The court held the district court did not abuse its discretion in concluding plaintiffs raised serious antitrust questions sufficient for preliminary relief.
- The court held the district court’s findings of irreparable harm to Karsten’s business reputation and to players’ competitive opportunities were not clearly erroneous.
- The court agreed that the balance of hardships and the public interest favored maintaining existing conditions pending a full trial rather than allowing immediate enforcement of the ban.

## Legal Principles

- A preliminary injunction may issue when a plaintiff shows either (a) probable success on the merits and a possibility of irreparable injury, or (b) serious questions going to the merits and a balance of hardships tipping sharply in the plaintiff’s favor.
- Appellate review of a preliminary injunction is for abuse of discretion; underlying factual findings are reviewed for clear error and legal conclusions de novo.
- Rules adopted by a sports-governing entity that affect equipment markets may be subject to Sherman Act § 1 scrutiny where evidence supports an inference of concerted action by market participants and potential anticompetitive effects.
- Reputational injury, loss of goodwill, and harms to professional competitive opportunities can constitute irreparable harm when they are difficult to quantify and not readily remediable by later damages.
- Preserving the status quo pending trial may be warranted when immediate enforcement risks market disruption while substantial antitrust questions remain unresolved.

## Conclusion

The Ninth Circuit upheld a preliminary injunction blocking enforcement of the PGA’s U-groove ban because the plaintiffs raised substantial antitrust questions and demonstrated irreparable harms that outweighed the PGA’s asserted need to implement the rule before a full adjudication on the merits.


Gilder v. PGA Tour, Inc., 936 F.2d 417 (9th Cir. 1991)