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Motorsports Racing Plus, Inc. v. Arctic Cat Sales

July 24, 2003

MOTORSPORTS RACING PLUS, INC., PETITIONER, AND MEYER, J. APPELLANT,
v.
ARCTIC CAT SALES, INC., RESPONDENT, POLARIS SALES, INC., RESPONDENT, BOMBARDIER MOTOR CORPORATION OF AMERICA, A DELAWARE CORPORATION, RESPONDENT, YAMAHA MOTOR CORPORATION, A CALIFORNIA CORPORATION, RESPONDENT, INTERNATIONAL SNOWMOBILE RACING, A WISCONSIN CORPORATION, RESPONDENT, INTERNATIONAL SNOWMOBILE MANUFACTURERS ASSOCIATION, A MICHIGAN CORPORATION, RESPONDENT.



SYLLABUS BY THE COURT

The former owner of a business, who claims that customers of the business conspired with the purchaser to damage the business and to force the sale of the business at a substantial discount, has standing to bring antitrust and other commercial tort claims against the customers.

Reversed and remanded to the court of appeals.

Heard, considered, and decided by the court en banc.

The opinion of the court was delivered by: Hanson, Justice

OPINION

Appellant Motorsports Racing Plus, Inc. (MRP) filed suit against the respondents, several snowmobile manufacturers and their trade association (Manufacturers), alleging antitrust violations and commercial torts. The district court determined that MRP had standing to bring the suit but granted summary judgment dismissing it because MRP had failed to present sufficient evidence to show injury in fact caused by Manufacturers. The court of appeals reversed the district court's determination on standing and remanded with directions to order summary judgment for Manufacturers on the issue of standing. We reverse the court of appeals on the issue of standing and remand to that court for further proceedings.

MRP is a Minnesota company that developed and operated a snowmobile racing circuit in the United States. The peak of MRP's business occurred in January 1998 when MRP reached an agreement with cable sports network ESPN to televise MRP's races as part of ESPN's Winter X-Games. Respondents are snowmobile manufacturers whose products gained exposure on MRP's racing circuit.

Around the time of the 1998 Winter X-Games, two contract agents of MRP, Joe Duncan and Scott O'Malley, twice offered to buy MRP from its owner, Jerome Dillon. Duncan and O'Malley had provided marketing services to MRP and were instrumental in the growth of the business and securing the relationship with ESPN. Dillon declined to sell. In March 1998, Duncan and O'Malley started their own snowmobile racing circuit, the World Snowmobile Association (WSA). ESPN immediately terminated its agreement to televise MRP races and negotiated an agreement with WSA to organize races for the 1999 Winter X-Games.

MRP's revenues dropped precipitously after it lost its agreement with ESPN. In July 1998, MRP sold the snowmobile racing circuit portion of its business to WSA under an Agreement to Acquire Snowmobile Racing Program (Agreement). As required by a non-competition clause that was part of the Agreement, MRP has been out of snowmobile racing since then.

Two provisions of the Agreement have received attention in this litigation. The first defined the assets being sold as follows:

1.1 "Assets" shall mean Snowmobile Racing Program, and all right to promote, sanction and operate MRP race dates; information regarding racers, officials, sponsors and site officials, including all electronic database information; all permits, all sponsor rights and any intangibles and goodwill related to the Snowmobile Racing Program, and race dates identified on Exhibit A.

(Emphasis added.) The second contained MRP's representation as follows:

6.6 Litigation. There are no claims, actions, suits, proceedings, or investigations (whether or not purportedly on behalf of Seller) pending or threatened against or affecting Seller or the Assets * * *. There is no reasonable basis for any claim, action, suit, proceeding, or investigation against or affecting Seller or the Assets.

(Emphasis added.)

MRP's complaint alleged that the defection of Duncan and O'Malley, the formation of WSA and the agreement between WSA and ESPN were all engineered pursuant to a conspiracy between Manufacturers, Duncan and O'Malley; that the conspirators' "motivation was simple: they believed they could pay less in advertising and sponsorship and increase their sales if they collectively controlled their own snocross racing circuit, built with the experience, background and contacts of the two former MRP representatives"; and that Manufacturers' actions violated Minnesota antitrust law and ...


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