Rodeo Associations Fail To Wrangle Each Other In First Round Of Antitrust Class Action: District Court Denies Plaintiffs' Preliminary Injunction And Defendants' Motion To Dismiss

An upstart rodeo association, created and owned by professional rodeo cowboys, challenged that its competitor's bylaws aimed at the new association and its participants constituted agreements that unreasonably restrain trade and monopolize the market in violation of Sections 1 and 2 of the Sherman Act. Last week, a district court denied Plaintiffs' preliminary injunction motion to block the enforcement of those bylaws. The district court also denied Defendants' motion to dismiss on the new association's Section 2 claim. The Elite Rodeo Association vs. Professional Rodeo Cowboys Association, No. 3-15-cv-03609 (N.D. Tex. Feb. 4, 2016). The district court found that Plaintiffs failed to establish that (i) the allegedly anticompetitive bylaws were likely to cause irreparable harm, (ii) Defendants' board was capable of conspiring even though it was not comprised predominantly of competitors; and (iii) Defendants had the power to exclude competitors from the market. In reaching that conclusion, the district court had to address and distinguish a host of arguably applicable sports antitrust cases.

Background

The Professional Rodeo Cowboys Association, Inc. ("PRCA"), a not-for-profit membership organization, is North America's most prestigious rodeo sanctioning body. The PRCA develops rodeo rules and procedures, and contracts with rodeo organizing committees to sanction and support multiple-event rodeos. It is an open membership organization—competitors who register and pay entry fees can compete in the PRCA-sanctioned rodeos.

Early last year, several of the PRCA's most successful and famous contestants formed the Elite Rodeo Association ("ERA"), a member-owned for-profit rodeo association. The ERA was created as an alternative to the PRCA for several reasons, including (i) to provide competitors more certainty about the size of prizes, (ii) to establish rodeo schedules that increase competitors' ability to obtain sponsors, and (iii) to reduce the duration of the rodeo season. The ERA's inaugural season is scheduled to begin in March 2016, and the association has already obtained substantial financial sponsorship.

Last September, ERA members announced their intent to prioritize ERA's 2016 season, while still competing in PRCA rodeos. Then in October, the PRCA enacted two new bylaws at a closed emergency board meeting that state:

Any person applying for PRCA membership who is an officer, board member, employee, or has an ownership or financial...