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Continental Guest Services Corp. v. International Bus Services, Inc.
92 A.D.3d 570
N.Y. App. Div.
2012
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Background

  • 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)
Read the full case

Case Details

Case Name: Continental Guest Services Corp. v. International Bus Services, Inc.
Court Name: Appellate Division of the Supreme Court of the State of New York
Date Published: Feb 23, 2012
Citation: 92 A.D.3d 570
Court Abbreviation: N.Y. App. Div.