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Race Tires America, Inc. v. Hoosier Racing Tire Corp.

May 30, 2008

RACE TIRES AMERICA, INC., A DIVISION OF SPECIALTY TIRES OF AMERICA, INC.; SPECIALTY TIRES OF AMERICA, INC.; SPECIALTY TIRES OF AMERICA ) (PENNSYLVANIA), INC.; AND SPECIALTY TIRES OF AMERICA (TENNESSEE), LLC, PLAINTIFFS,
v.
HOOSIER RACING TIRE CORP., AND DIRT MOTOR SPORTS, INC., D/B/A WORLD RACING GROUP, DEFENDANTS.



The opinion of the court was delivered by: Terrence F. McVerry United States District Court Judge

MEMORANDUM ORDER

Presently pending before the Court is the MOTION TO COMPEL INFORMATION AND DOCUMENTS IN RESPONSE TO WRITTEN DISCOVERY filed by Hoosier Racing Tire Corp. ("Hoosier"), with brief in support (Document Nos. 50 and 51), the BRIEF IN OPPOSITION filed by Plaintiffs (collectively referred to as "STA") (Sealed Document No. 55), and the REPLY BRIEF filed by Hoosier (Document No. 58).

Distilled to its essence, the current dispute involves the non-production of two (2) general categories of requested information: (i) STA documents for the time period "in the 1970s" up to January 1, 1995, wherein "STA proposed and encouraged race tracks and promoters to adopt spec tire or track rules"; and (ii) STA documents and information on "all types of tires."

STA argues that Hoosier's request for information dating back "to the 1970s" is not relevant "to the exclusive tire rules which are imposed on racer-consumers through Hoosier's exclusive contracts" and that requests for information on "all types of tires" is "far outside the realm of reasonable discovery and not based on any showing of reasonable interchangeability by race drivers-consumers." The arguments will be addressed seriatim.

A. STA Documents Dating Back to the 1970's

Hoosier has requested all contracts, agreements, drafts, bids, offers, proposals, communications, and other documents with or from race sanctioning companies, race track owners, race promoters, tire distributors, tire dealers, suppliers, racing drivers, driver teams, "other group[s] of racers," . . . from the 1970s until the present. STA has agreed to provide such documentation, subject to its general objections, which include limiting production to the "time period January 1, 1995 to present."

Hoosier posits two reasons why the STA pre-1995 documents and information are relevant and likely to lead to the discovery of admissible evidence. First, on STA's own website, STA claims to have formulated spec tire rules in the 1970s:

In the 1970's, Joe Jacobs, the developer of the race tire business that eventually became Race Tires America, proposed and encouraged race tracks and promoters to adopt spec tire or track tire rules. . . .

Initially, competition between tire suppliers was not impeded by spec tire rules. . . . Actually, spec tire rules enhanced competition because tire rule arrangements between tire suppliers and track promoters typically for the duration of a single season; tires were selected after objective tests were conducted using criteria established by a promoter or group of racers; and normally, because the dirt track racing industry was fragmented and without large rulemaking organizations, agreements covered only one or a small number of tracks.

However, in recent years, the purposes and effect of spec tire rules have changed. . . .

Hoosier's Memo., Exhibit C.

Second, in the early 1990's, STA and two of its distributors negotiated and won the bid to have its tires (then known under the name "McCreary") to be the spec tire for DIRT Motor Sports, Inc., d/b/a World Racing Group ("DMS") "on the strength of a huge $216,000 bid, almost doubling the offers from their competition." (See Ex. D.; article in Trackside about STA's successful spec tire bid for the 1994 season.)*fn1

Hoosier argues that STA has a long history and established model of selling tires pursuant to exclusive agreements and encouraging the promulgation of single tire manufacturing rules. Yet, in the instant litigation STA alleges that the exclusive agreements of Hoosier pursuant to single tire manufacturer rules violate antitrust laws. Therefore, according to Hoosier, the 1970s STA documents are relevant both to the denial of the claims alleged against Hoosier and to its affirmative defenses of laches, waiver, equitable estoppel, the statute of limitations, and an "in pari delicto" defense. Hoosier Br. at 10.

STA responds that its pre-1995 documents are beyond the statute of limitations and that the pre-1995 documents reflect the competitive market structure which existed thirty (30) years ago, not the competitive market structure which exists today. Further, STA argues that "[t]he 1995 time limit is rationally based on Plaintiffs' approximation of the time frame in which Hoosier began to obtain monopoly power and enter into conspiracies with major sanctioning companies to exclude all competitors from the dirt ...


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