Continental Guest Services Corp. v. International Bus Services, Inc.
92 A.D.3d 570
N.Y. App. Div.2012Background
- IBS and City Sights operated competing double-decker tours in NYC until forming Twin America, which controls 90% of the market; Big Taxi Tours was the sole nonparty competitor.
- Plaintiff operated hotel concierge desks at 43 NYC hotels, selling vouchers for the defendants’ tours and remitting voucher payments minus a commission after customers exchange for tickets.
- After Twin America formed, defendants cut plaintiff’s commission and shortened remittance period; plaintiff alleges threats to force it out to control hotel concierge desks.
- Plaintiff sues for monopolization and attempted monopolization in the Tour Bus Market and Ticket Sales Market, defining markets as hop-on/hop-off tours and hotel concierge ticket sales, respectively.
- The motion court dismissed the antitrust claims; the court later held plaintiff lacked standing in the Tour Bus Market and that the Ticket Sales Market lacked a plausible market definition and antitrust injury.
- The court also addressed that vertical control of distribution is presumptively legal and that repleading would not cure the deficiencies in the antitrust claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to challenge Tour Bus Market | Plaintiff asserts standing as the largest NYC hotel concierge operator affected by market conduct. | Plaintiff is not a consumer or competitor in the Tour Bus Market, so lacks standing. | Plaintiff lacks standing in the Tour Bus Market. |
| Definition of the Ticket Sales Market | Hotel concierge channel is a distinct market for ticket sales. | There are interchangeable channels (street vendors, Internet, visitor centers); hotel channel is not a separate market. | Ticket Sales Market not plausibly defined as a separate market. |
| Antitrust injury in the Ticket Sales Market | Defendants’ conduct injures plaintiff by reducing its role and future prospects. | Plaintiff is in competition with defendants in the concierge space; antitrust laws protect competition, not plaintiff as a competitor. | No antitrust injury; plaintiff cannot claim injury as a competitor in the market. |
| Vertical control and monopolization claims | Defendants’ control over distribution can foreclose competition and maintain monopoly. | Vertical control of distribution is presumptively legal absent market-wide anticompetitive effects. | Claims fail; vertical control alone does not show antitrust violation. |
| Repleading | Repleading could cure deficiencies to state an antitrust claim. | Repleading would not alter injuries or market realities. | Court properly denied repleading; injuries cannot be cured by repleading. |
Key Cases Cited
- Theatre Party Assoc., Inc. v. Shubert Org., Inc., 695 F. Supp. 150 (S.D.N.Y. 1988) (relevant to market definition and antitrust injury standards)
- Belfiore v. New York Times Co., 826 F.2d 177 (2d Cir. 1987) (market boundaries and submarkets principle)
- Brown Shoe Co. v United States, 370 U.S. 294 (1962) (submarket existence factors)
- E & L Consulting, Ltd. v Doman Indus. Ltd., 472 F.3d 23 (2d Cir. 2006) (vertical control of distribution not per se unlawful)
- Atlantic Richfield Co. v USA Petroleum Co., 495 U.S. 328 (1990) (antitrust injury requires injury from anti-competitive conduct)
- International Distrib. Ctrs., Inc. v Walsh Trucking Co., Inc., 812 F.2d 786 (2d Cir. 1987) (dangerous probability standard for attempted monopolization)
- Two Queens v Scoza, 296 A.D.2d 302 (2002) (private right of action in similar antitrust context)
- Associated Gen. Contractors of Cal., Inc. v. Carpenters, 459 U.S. 519 (U.S. 1983) (economic factors for submarket and private litigation considerations)
- Theatre Party Assoc., Inc. v Shubert Org., Inc., 695 F. Supp. 150 (S.D.N.Y. 1988) (submarket and market boundary considerations)
