Montgomery v. Travel

Background

Kayla Montgomery sued Peek Travel, Inc. on behalf of herself and a proposed class. She alleged that Peek operated online ticketing systems for New York attractions and charged consumers fees without clearly disclosing the tickets’ total cost. Montgomery alleged that, in January 2023, she bought four Museum of Ice Cream tickets for $144 and paid $44.40 in taxes and fees, including $31.62 that she claimed were ancillary fees rather than taxes required by state or local law.

Montgomery asserted claims under New York Arts and Cultural Affairs Law § 25.07(4), alleging that Peek failed to disclose the total ticket cost, and under New York General Business Law § 349, alleging deceptive business practices. She sought damages and injunctive relief for herself and proposed a class covering consumers who bought tickets through Peek for attractions located in New York State.

Peek moved to dismiss under Federal Rule of Civil Procedure 12(b)(1), which addresses subject-matter jurisdiction, and Rule 12(b)(6), which addresses whether a complaint plausibly states a legal claim. Peek also challenged Montgomery’s standing and her ability to serve as the proposed class representative.

Standing

The court held that Montgomery had standing to challenge fees charged for Museum of Ice Cream tickets. She alleged that she personally bought tickets through Peek’s website and paid an unlawful fee. The court found that this alleged financial loss was enough to establish an injury for federal standing purposes.

The court also held that Montgomery had standing to challenge Peek’s similar fee practices involving other New York attractions, including Color Factory, Intermersive, and Artechouse. Although Montgomery alleged that she purchased tickets only for the Museum of Ice Cream, the court found that the alleged hidden-fee practices implicated the same concerns across the proposed class.

The court cautioned that standing did not establish that Montgomery’s claims were typical of the proposed class or that the class satisfied the other requirements for certification under Federal Rule of Civil Procedure 23. The court stated that Peek could raise those issues at the appropriate time.

Color Factory Settlement

The court held that a 2024 class-action settlement involving the Color Factory barred damages claims concerning Color Factory tickets. That settlement released claims relating to the collection and retention of fees in connection with electronic ticket sales during the relevant period. The released parties included the Color Factory’s representatives and sales or customer-service agents.

The court rejected Montgomery’s argument that the settlement did not cover Peek. It found that her allegations described a single fee charged to customers rather than separate fees collected by Peek and the Color Factory. The court also concluded that Peek was covered as a sales agent because it operated the Color Factory’s ticketing system and processed ticket transactions on the Color Factory’s behalf.

The court therefore concluded that damages claims tied to Color Factory ticket purchases were barred by the settlement and had to be dismissed.

Class-Representative Challenge

The court rejected Peek’s challenge to Montgomery’s ability to represent the proposed class. It treated the challenge as an effort to strike the class allegations, rather than as a decision on whether the class ultimately satisfied Rule 23.

The court reasoned that the proposed class covered consumers regardless of where they lived but was limited to fees paid through Peek for attractions located in New York State. At the pleading stage, the court concluded that New York law would apply to the class’s claims because the attractions were located in New York and the ultimate purpose of the transactions—entry to those attractions—occurred there. The court therefore rejected Peek’s argument that differences among state laws required striking the class allegations.

Disposition

The court granted in part and denied in part Peek’s motion to dismiss. It dismissed Montgomery’s claims for injunctive relief and her claims for damages tied to Color Factory ticket sales. The opinion states that Montgomery did not oppose dismissal of the injunctive-relief claims, so the court did not analyze Peek’s arguments concerning that relief.

The court lifted the stay of discovery for claims tied to the attractions mentioned in the complaint but kept the stay in place for other attractions pending class certification. It directed the parties to submit, within 14 days, a joint letter proposing a schedule for class-certification and summary-judgment motions.