11th Circuit finds no foul play by golf-turf makers accused of monopoly

ATLANTA (CN) — Manufactures of a “one-of-a-kind” golf-putting turf were let off the hook Thursday as an 11th Circuit panel upheld the dismissal of claims that they had formed a monopoly.

In a unanimous opinion, the appeals court agreed that the lawsuit failed to provide sufficient evidence to show Polyloom Corporation of America and Challenger Turf possessed monopoly power or wrongfully ended its business relations with StarPro Greens.

After successfully patenting a putting cup, Daniel Selton and his distribution company, StarPro Greens, developed a synthetic putting surface called Master Putting Turf. Selton claimed the artificial putting surface was unique and distinct from other products due to its cross-stitched fibers and “stimp” value, which represents how fast golf balls roll on the putting surface.

In 2020, Challenger Turf agreed to manufacture the special putting turf and enticed StarPro to enter into a three-way arrangement with TenCate North America, also known as Polyloom Corporation of America, which would provide warehousing, cutting and shipment services.

This seemingly profitable business relationship turned sour for StarPro two years later, when its new partners decided to keep the turf for themselves and ceased producing it for the company.

StarPro argued this refusal to deal violated the Sherman Act, which outlaws anticompetitive business practices. The 11th Circuit said a refusal to deal is not unlawful unless it involves a monopoly power in the relevant market.

“As an initial matter, we have significant doubts that the appellants plausibly alleged there is a product market in master putting turf (‘MPT’) alone, separate from comparable golf putting turfs,” the circuit judges wrote in a per curiam opinion.

Challenger Turf and TenCate soon began selling the Master Putting Turf back to StarPro at a heavily inflated price. StarPro argued it was left with no alternative but to accept the higher price and purchase the product because its two former affiliates were the only producers of the distinctive turf.

Because other manufacturers capable of producing the same golf-putting turf exist, the court held that no such monopoly exists.

They wrote that StarPro acknowledged in its complaint that “North Georgia is replete with synthetic turf manufacturers that have the capabilities of manufacturing synthetic turf and associated synthetic border materials which includes synthetic lawn turf.”

“As the district court correctly explained, ‘any one of the myriad of synthetic turf manufacturers in the area could take business away from [Polyloom and Challenger] if those manufacturers chose to do so,’” the circuit judges wrote.

“That is all the more so because the complaint does not allege that there are any patents on MPT [Master Putting Turf] that would preclude entry of these other manufacturers into the market,” the panel added.

The panel was made up of U.S. Circuit Judges Jill Pryor and Adalberto Jordan, both Barack Obama appointees, as well as U.S. Circuit Judge Embry Kidd, who was appointed by Joe Biden.

The panel also did not revive StarPro’s other claims for breach of good faith, fair dealing and warranty.

This is because its complaint failed to plausibly show that it shared any risks, expenses, profits or losses, as opposed to operating within a traditional manufacturer-distributor relationship through which Challenger supplied the turf to StarPro at a specified cost per unit.

The company also argued that the Master Putting Turf it received was not the same product as it purchased and was substituted for a defective turf of reduced quality. Based on the poor performance of the putting turf, StarPro claimed its customers complained and it was forced to return or reject 70% of all sold products, with no reimbursement from the manufacturers.

But Selton inspected and accepted the delivered product and only notified Polyloom and Challenger Turf after it was sold and customers began complaining.

“Having failed to notify Polyloom and Challenger within a reasonable time after the appellants discovered the alleged breach, this claim was properly dismissed as well,” the circuit judges wrote.

Follow @Megwiththenews