Antitrust Law Daily Wrap Up, ANTITRUST—2d Cir.: Go New York tour bus operator’s new facts sidelined again as old, contradictory facts, (Mar 28, 2025)

By Justin Marcus Smith, J.D.

Go New York failed to distinguish either a monopoly or a conspiracy where its allegations about a putative new merger since the previous federal action were hopelessly muddled.

The federal district court in New York City properly dismissed renewed Go New York Tours, Inc.’s Sherman Act claims against Gray Line New York Tours, Inc. and Big Bus Tours Group Holdings Limited, affirmed the United States Court of Appeals in New York City. Dismissal was proper, even if res judicata did not pertain, because the merger allegations were self-contradictory. Essentially, Go New York failed to plead that a merger between Gray Line and Big Bus had taken place, and that meant Go New York’s amended complaint did not contain sufficient facts to state a claim for a monopoly under the Sherman Act. “Plus factors” failed because Big Bus was no longer operating tours and other “common motive” plus factor allegations were res judicata (Go New York Tours Inc. v. Gray Line New York Tours, Inc., No. 24-2392-cv (2d Cir. Mar. 27, 2025)).

Background. New York bus tour operator Go New York previously sued Gray Line New York Tours, Inc. and Big Bus Tours Group Holdings Limited alleging that the defendants conspired to persuade or coerce tourist attractions to refuse or withdraw from trade partnership agreements with Go New York to offer multi-attraction passes. The court in that earlier action dismissed the Go New York complaint for failure to state a claim under the Sherman Act. The court found direct evidence of a horizontal agreement was lacking, and the complaint failed to allege the necessary "plus factors" amounting to a horizontal conspiracy. The Second Circuit affirmed, and the U.S. Supreme Court later let that ruling stand.

In 2023, Go New York tours filed a new federal antitrust suit against Gray Line, but the federal district court in New York City dismissed for reasons of res judicata. The court held that new conduct alleged about “hop-on, hop off” sightseeing bus tours did not support a new cause of action for Sherman Act violations and an unfair competition claim. The district court found it implausible that the new facts, which allegedly occurred after the prior federal action, differed in any significant way from the old ones previously adjudicated on the merits. A state court action between the parties remains pending.

In the instant federal matter, Go New York Tours appealed. On appeal, the court applied de novo review to the district court’s dismissal for failure to state a claim.

Res judicata. The Second Circuit held the district court “correctly concluded” that res judicata barred Go New York’s attraction-pass claims. The court confirmed that the prior federal action involved the same parties and ended in an adjudication on the merits. Go New York also raised its attraction-pass claims in the prior action. The court noted the complaint alleged, “nearly verbatim,” the same facts alleged in the prior federal action: a conspiracy between Big Bus and Gray Line to pressure attractions not to do business with Go New York.

Go New York argued that res judicata should not apply because the alleged merger between Big Bus and Gray Line had not taken place when Go New York brought its other claims. The Second Circuit took issue that Go New York failed to argue that the later conduct could support a cause of action on its own. However, even on its own, the Second Circuit concluded the new conduct did not support a plausible claim for relief.

No claim. The Second Circuit held Go New York’s amended complaint did not contain sufficient facts to state a claim under the Sherman Act. First, the amended complaint did not allege a plausible merger or attempted merger due to internally inconsistent allegations. Go New York based its merger allegations on a Memorandum of Understanding (MOU) which, in Go New York’s stated view, effectively turned Gray Line and Big Bus into a single entity. However, the Second Circuit saw that the amended complaint also said the MOU contained trademark-licensing and ticket-sale arrangements, and there would be no need for such arrangements if there had been a merger. The Second Circuit found another contradiction insofar as the amended complaint said the MOU extended a pre-existing conspiracy. That did not make sense because there could not be a conspiracy involving a single entity.

The Second Circuit continued that the amended complaint also failed to allege a monopoly or attempted monopoly in violation of Sherman Act § 2 because that would require a single entity, but Go New York had not plausibly alleged that Big Bus and Gray line merged into a single entity.

Third, the amended complaint did not plausibly allege a conspiracy to restrain trade in violation of the Sherman Act § 1 because it merely offered conclusory facts about “other related agreements” and the MOU. The MOU also contradicted Go New York’s allegation that Big Bus and Gray Line agreed to fix prices to the extent the MOU provided that Big Bus “shall” continue to sell its products priced at its sole determination.

Last, the Second Circuit denied that Go New York alleged sufficient “plus factors” to support a conspiracy because Gray Line was no longer offering bus tours of its own. The rest of the Go New York “common motive” plus-factors were recycled allegations, about attraction-pass market exclusion incentives, barred by res judicata. The court concluded Go New York’s remaining arguments were without merit.

The Case is No. 24-2392-cv.

Judge: Chin, D.

Attorneys: Maurice Newmsark Ross (Barton LLP) for Go New York Tours Inc. Jonathan M. Jacobson (Wilson Sonsini Goodrich & Rosati, PC) for Gray Line New York Tours, Inc.

Companies: Go New York Tours Inc.; Gray Line New York Tours, Inc.

MainStory: TopStory Antitrust ConnecticutNews NewYorkNews VermontNews GCNNews