Polk Bros., Inc. v. Forest City Enterprises, Inc.
United States Court of Appeals for the Seventh Circuit
776 F.2d 185 (7th Cir. 1985)
Polk Bros. (plaintiff) and Forest City Enterprises (defendant) built a shared retail location housing both companies' complementary stores (appliances/home furnishings and building materials, respectively), agreeing not to compete with each other's core products; years later, after a change in Forest's management, Forest considered the non-compete agreement invalid, prompting Polk to sue for an injunction enforcing it. The district court found the agreement a per se antitrust violation for dividing markets, and the court of appeals confirmed rejection of the injunction on that basis.
Whether the rule of reason is the proper test for assessing the legality of trade restraints that are ancillary to larger cooperative endeavors with pro-competitive justifications.