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Polk Bros., Inc. v. Forest City Enterprises, Inc.

776 F.2D 185 (7TH CIR. 1985)

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Polk Bros., Inc. v. Forest City Enterprises, Inc.

United States Court of Appeals for the Seventh Circuit

776 F.2D 185 (7TH CIR. 1985)

Facts

In 1972, Polk Bros., Inc. (Polk) (plaintiff), reached an agreement with Forest City Enterprises, Inc. (Forest) (defendant), to build a retail location on property owned by Polk that would be large enough to accommodate stores for both Polk and Forest. Polk sold appliances and home furnishings, while Forest sold building materials, such as lumber and tools. The cooperative endeavor aimed to take advantage of the complementary nature of each company’s products. However, there were some concerns over competition, and each company agreed not to compete with certain core products offered by the other. Several years after the stores opened, Forest changed management and no longer wanted to be held to the non-compete agreement. Polk brought suit after learning that Forest considered the non-compete agreement to be invalid and sought an injunction to enforce the agreement. The district court found the agreement to constitute market dividing in a per se antitrust violation. The court of appeals confirmed the district court’s rejection of the injunction, and Polk appealed on the issue of whether the agreement was properly categorized as a per se antitrust violation.

Rule of Law

Issue

Holding and Reasoning (Easterbrook, J.)

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