## Facts

- A governing body administered a men’s professional tennis circuit, including sanctioning tournaments and issuing rules on scheduling, eligibility, and participation.
- Volvo North America Corporation sponsored men’s professional tennis events; International Merchandising Corporation and ProServ, Inc. owned and produced tennis events, including independent “special events” outside the circuit.
- Plaintiffs alleged the governing body and its officials, acting with “insiders” tied to sanctioned tournaments and sponsorships, used circuit rules to restrict players from participating in non-sanctioned events.
- The alleged restraints included tying player eligibility, ranking points, and access to key tournaments to participation in sanctioned events, making it costly for players to appear in plaintiffs’ independent events.
- Plaintiffs claimed the rules reduced access to players’ services for independent events, forced plaintiffs to reduce the number and quality of such events, and decreased profitability.
- Plaintiffs asserted the conduct reduced output and increased prices in the markets for producing men’s professional tennis events and selling sponsorship rights.
- The district court dismissed the amended complaint’s principal counts under Rule 12(b)(6) for failure to state claims; plaintiffs appealed.

## Issues

1. Whether plaintiffs adequately alleged antitrust standing and antitrust injury for damages claims challenging the circuit’s rules.
2. Whether the amended complaint plausibly alleged a concerted restraint of trade under Sherman Act § 1 based on agreements implemented through the governing body’s rules.
3. Whether the amended complaint plausibly alleged monopolization or attempted monopolization under Sherman Act § 2 in the relevant markets.

## Decision

- The court vacated the dismissal of the principal federal antitrust claims and remanded for further proceedings.
- Plaintiffs sufficiently alleged antitrust injury at the pleading stage by claiming output-reducing restrictions that impaired their ability to stage independent events and obtain players’ services.
- Plaintiffs had antitrust standing because they alleged direct harm in the markets purportedly restrained and injury traceable to the challenged exclusionary rules.
- The complaint plausibly alleged § 1 concerted action by competing economic actors using the governing body as a vehicle to impose restrictive eligibility and scheduling rules.
- The complaint plausibly alleged § 2 claims by alleging control over critical inputs (including ranking points and access to players) and exclusionary rules that could maintain or attempt to obtain market power in event production and sponsorship.

## Legal Principles

- Antitrust injury requires harm of the type the antitrust laws seek to prevent and that flows from the allegedly unlawful conduct; allegations of reduced output and restricted access to essential inputs can satisfy this requirement at the pleading stage.
- A plaintiff may have antitrust standing when it participates in the restrained market and alleges direct injury traceable to the challenged restraints, even if the defendant characterizes the plaintiff as affiliated with the broader industry structure.
- Agreements implemented through a joint governing body can constitute concerted action under Sherman Act § 1 when competing actors collectively adopt rules that exclude or penalize rival events.
- Sherman Act § 2 claims may be adequately pleaded by alleging relevant markets, control over mechanisms that determine competitive access (such as ranking/eligibility systems), and exclusionary rules that plausibly foreclose rivals.
- On Rule 12(b)(6), courts accept well-pleaded factual allegations as true and generally do not resolve fact-intensive justifications for sports-league or joint-venture rules without a developed record.

## Conclusion

The Second Circuit held that the sponsors and event producers plausibly alleged antitrust injury and standing and stated Sherman Act §§ 1 and 2 claims based on rules that allegedly restricted player participation in non-sanctioned events; the dismissal was largely vacated and the case remanded for further proceedings.


Volvo N. Am. Corp. v. Men's Int'l Prof'l Tennis Council, 857 F.2d 55 (2d Cir. 1988)