Go New York Tours Inc. v. Gray Line New York Tours, Inc.

Background

Go New York Tours, Inc. operates hop-on, hop-off bus tours and sells passes bundling admission to New York City attractions. It alleged that Gray Line New York Tours, Inc., Twin America, LLC, Sightseeing Pass LLC, Big Bus-related companies, and Go City-related companies engaged in agreements or coordinated conduct that restricted competition in the tour-bus and multi-attraction-pass markets. The alleged conduct included excluding Go New York from relationships with tourist attractions and other business partners, fixing or coordinating prices, and combining or coordinating Gray Line’s and Big Bus’s operations.

The complaint relied in part on a memorandum of understanding signed in August 2020. Under that agreement, as described by the court, Gray Line would sell Big Bus tickets for tours operated by Big Bus, and Big Bus would license intellectual property for that resale. Go New York characterized the agreement and other alleged arrangements as evidence of a merger and of an existing conspiracy.

Go New York had previously sued the same defendants in a related federal proceeding. The earlier case included Sherman Act antitrust claims and an unfair-competition claim based on similar allegations involving the New York tour-bus and attraction-pass markets. The earlier court dismissed the Sherman Act claims with prejudice. The Second Circuit affirmed that dismissal, and the Supreme Court denied Go New York’s request for review.

Motions and claims

The defendants moved under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint states a legally sufficient claim. The four foreign defendants—Big Bus Tours Group Limited, Big Bus Tours Limited, Leisure Pass Group Holdings Limited, and Leisure Pass Group Limited—separately moved under Rule 12(b)(2) for dismissal based on lack of personal jurisdiction, meaning they argued the court lacked authority over them.

The amended complaint asserted seven causes of action: monopolization, attempted monopolization, and conspiracy to monopolize under Sherman Act § 2; unreasonable restraint of trade under Sherman Act § 1; an allegedly anticompetitive merger under Clayton Act § 7; unreasonable restraint of trade under New York’s Donnelly Act; and unfair competition under New York common law. The complaint also referenced Clayton Act § 4, which concerns treble-damages remedies, but the court did not separately analyze that provision.

Court’s analysis

The court held that claim preclusion—also called res judicata—barred the Sherman Act claims and the common-law unfair-competition claim. Claim preclusion generally prevents a party from bringing a later case based on the same claim or the same core set of operative facts after a final judgment. Go New York did not dispute that the earlier proceeding involved the same parties and was finally decided by a court with authority to decide it. The dispute was whether the claims in the new case were different because they relied partly on the 2020 memorandum of understanding and other later agreements.

The court concluded that the later allegations did not create a new claim. It found that the memorandum of understanding did not plausibly describe a merger, price-fixing agreement, or agreement concerning third-party attractions. The court also found that the alleged later operating agreements were described only in conclusory terms, without their terms, parties, dates, or subject matter. In addition, the court found that the new complaint repeated nearly identical allegations concerning the same nine attractions and the same alleged effort to prevent Go New York from competing. The court therefore concluded that the new case involved the same core facts as the earlier proceeding.

The court separately dismissed the Clayton Act § 7 merger claim without prejudice. It found that the memorandum of understanding, trademark cross-licenses, use of certain bus stops, and alleged allocation of revenue or commissions did not plausibly show that Gray Line and Big Bus had entered into a merger or acquisition agreement. The court declined to dismiss this claim with prejudice because Go New York had not previously brought a Clayton Act § 7 claim and this was the first ruling identifying the specific defects in that claim.

The court also dismissed the Donnelly Act claim without prejudice. Because it dismissed all claims over which it had original federal jurisdiction, the court declined to exercise supplemental jurisdiction over the remaining state-law antitrust claim. Supplemental jurisdiction is the court’s discretionary authority to hear related state-law claims in the same case as federal claims.

Disposition

The court granted the defendants’ motion to dismiss the complaint. The Sherman Act claims and unfair-competition claim were barred by claim preclusion. The Clayton Act § 7 claim and Donnelly Act claim were dismissed without prejudice. The foreign defendants’ motion to dismiss for lack of personal jurisdiction was denied as moot because the complaint was dismissed on other grounds. The clerk was directed to terminate the motions and close the case.