978-1285770178 Case Printout Case CPC-26-04 Part 1

Page 1

555 F.3d 1188, 2009-1 Trade Cases P 76,499

(Cite as: 555 F.3d 1188)

C.A.10 (Utah),2009.

Page 2

555 F.3d 1188, 2009-1 Trade Cases P 76,499

(Cite as: 555 F.3d 1188)

170B Federal Courts

sal stage refers not to whether the allegations are likely to be true, but rather, the court must assume them to be true.

Fed.Rules Civ.Proc.Rule 12(b)(6), 28 U.S.C.A.

[3] Federal Civil Procedure 170A 1772

but the factual allegations must be enough to raise a right to relief above the speculative level. Fed.Rules

Civ.Proc.Rule 12(b)(6), 28 U.S.C.A.

[4] Federal Civil Procedure 170A 1772

and not merely possible that the plaintiff is entitled to relief under the relevant law. Fed.Rules Civ.Proc.Rule

12(b)(6), 28 U.S.C.A.

[5] Antitrust and Trade Regulation 29T 620

Antitrust and Trade Regulation 29T 621

29T Antitrust and Trade Regulation

29TVII Monopolization

29TVII(A) In General

Page 3

555 F.3d 1188, 2009-1 Trade Cases P 76,499

(Cite as: 555 F.3d 1188)

relevant market and (2) the willful acquisition or maintenance of that power. Sherman Act, § 2, 15 U.S.C.A. § 2.

29Tk712 Elements in General

29Tk713 k. In General. Most Cited Cases

Antitrust and Trade Regulation 29T 714

Antitrust and Trade Regulation 29T 715

29T Antitrust and Trade Regulation

29TVIII Attempts to Monopolize

29TVIII(A) In General

[7] Antitrust and Trade Regulation 29T 650

29T Antitrust and Trade Regulation

29TVII Monopolization

29T Antitrust and Trade Regulation

29TVIII Attempts to Monopolize

29TVIII(B) Particular Industries or Businesses

29Tk746 k. Sports. Most Cited Cases

Page 4

555 F.3d 1188, 2009-1 Trade Cases P 76,499

(Cite as: 555 F.3d 1188)

market for destination skiers at resort, despite purchaser’s allegation of decline in volume of available rental skis and

increased price, since purchaser’s market definition implausibly singled out rental skis as small component of cluster

29T Antitrust and Trade Regulation

29TVII Monopolization

29TVII(C) Market Power; Market Share

29Tk643 Relevant Market

29Tk644 k. In General. Most Cited Cases

29T Antitrust and Trade Regulation

29TVI Antitrust Regulation in General

29TVI(D) Illegal Restraints or Other Misconduct

29Tk562 Refusals to Deal

29Tk563 k. In General. Most Cited Cases

29T Antitrust and Trade Regulation

29TVII Monopolization

29TVII(D) Illegal Restraints or Other Misconduct

29Tk657 Refusals to Deal

29Tk658 k. In General. Most Cited Cases

29T Antitrust and Trade Regulation

29TVII Monopolization

29TVII(E) Particular Industries or Businesses

29Tk696 k. Sports. Most Cited Cases

Covenantor’s approval of covenantee’s operation of competing ski rental businesses for prior 15 years at ski resort

Page 5

555 F.3d 1188, 2009-1 Trade Cases P 76,499

(Cite as: 555 F.3d 1188)

Act, prohibiting market monopolization, where covenantor‘s refusal to grant access to competitors was not anticom-

petitive to full destination ski experience market, rather than merely ski rental market, and covenantee was not un-

29TVI Antitrust Regulation in General

29TVI(B) Cartels, Combinations, Contracts, and Conspiracies in General

29Tk537 k. In General. Most Cited Cases

Sherman Act provision prohibiting restraints of trade that are accomplished through concerted action requires differ-

ent inquiry than Sherman Act provision prohibiting unilateral conduct but only when it rises to the more severe of-

29TVI(B) Cartels, Combinations, Contracts, and Conspiracies in General

29Tk537 k. In General. Most Cited Cases

Because the Sherman Act does not prohibit unreasonable restraints of trade as such, but only restraints effected by a

contract, combination, or conspiracy, the Act leaves untouched a single firm’s anticompetitive conduct that may be

indistinguishable in economic effect from the conduct of two firms subject to liability under Sherman Act restraint

Before McCONNELL, EBEL, and GORSUCH, Circuit Judges.

McCONNELL, Circuit Judge.

trust laws. We conclude that it did not.

I. Background

Deer Valley is one of three resorts in the vicinity of Park City, Utah. Many–indeed, “the vast majority,” according to

the Complaint, ¶ 25-of Deer Valley’s patrons are destination skiers who fly into Salt Lake City and then take a forty–

Page 6

555 F.3d 1188, 2009-1 Trade Cases P 76,499

(Cite as: 555 F.3d 1188)

five minute bus or shuttle ride to the resort. The resort itself is divided into two areas: the base area, located at the

bottom of the mountain, and the ritzier mid-mountain village, located halfway up the slope. DVRC has always been

the sole provider of ski rentals at the base area, but at the mid-mountain village, Christy and Cole Sports have oper-

ated rental facilities; DVRC itself opened a mid-mountain ski rental facility in 2005.

year, though, DVRC gave Bulrich permission to rent skis in return for 15% of the rental revenue. When Bul-

rich*1191 merged with another company in 1994 and formed Christy Sports, LLC, Christy continued to operate the

rental business. According to the complaint, Christy stopped paying DVRC 15% of its rental revenue in 1995,

though the reason for this change is unknown. Christy rented skis at the Deer Valley mid-mountain village with no

objection from DVRC until 2005. During that time, DVRC was the sole purveyor of rental skis at the base area but

own lodgers. This leaves that majority of skiers who fly into Salt Lake City and then shuttle to Deer Valley with few

choices: they can carry unwieldy ski equipment onto the plane,FN1 take a shuttle into Park City and hunt for cheaper

ski rentals in town, or rent from the more conveniently located DVRC location. Christy predicts, not improbably,

that most consumers will choose the third option.

FN1. We decline Christy’s request to take judicial notice of newspaper stories reporting that airlines have

Christy argues that DVRC’s decision to begin enforcing its restrictive covenant is an attempt to monopolize the mar-

ket of ski rentals available to destination skiers in Deer Valley, or, alternatively, to the destination skiers in the mid-

mountain village itself. It alleges that by eliminating its competitors, DVRC will be able to increase prices and re-

duce output, thus harming consumers. The complaint states that the number of skis available for rental mid–

mountain will decline by 620 pairs, and the price will increase by at least twenty-two to thirty-two percent.

1078 (10th Cir.2007). In doing so, we ask whether there is “plausibility in [the] complaint.” Bell Atlantic Corp. v.

Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1970, 167 L.Ed.2d 929 (2007). The complaint “does not need detailed fac-

tual allegations,” id. at 1964, but the “[f]actual allegations must be enough to raise a right to relief above the specu-

Page 7

555 F.3d 1188, 2009-1 Trade Cases P 76,499

(Cite as: 555 F.3d 1188)

lative level.” Id. at 1965. When, in Twombly, the Supreme Court emphasized the need for plausibility in the com-

plaint rather than “wholly conclusory statement[s],” id. at 1966-67, it warned particularly of the high costs and fre-

quent abuses associated with antitrust discovery. Id. at 1959 (“It is one thing to be cautious before dismissing an

antitrust complaint in advance of discovery, but quite another to forget that proceeding to antitrust discovery can be

expensive.”) (internal citations omitted). The concept of “plausibility” at the dismissal stage refers not to whether

*1192 the allegations are likely to be true; the court must assume them to be true. The question is whether, if the

384 U.S. 563, 570-71, 86 S.Ct. 1698, 16 L.Ed.2d 778 (1966). Similarly, an attempt claim must show “(1) that the

defendant has engaged in predatory or anticompetitive conduct with (2) a specific intent to monopolize and (3) a

dangerous probability of achieving monopoly power,” with the third element requiring “consider[ation] [of] the rel-

evant market and the defendant’s ability to lessen or destroy competition in that market.” Spectrum Sports, Inc. v.

McQuillan, 506 U.S. 447, 456, 113 S.Ct. 884, 122 L.Ed.2d 247 (1993). Under both types of § 2 claims Christy must

skiers at Deer Valley, or alternatively at Deer Valley’s mid-mountain village-is too small to constitute a market for

antitrust purposes, in light of the proximity of a number of ski rental outlets in Park City, just down the road. For

purposes of analyzing the complaint, however, we find it not implausible that destination skiers who arrive at the

resort by bus or shuttle will find it sufficiently inconvenient to travel into town to rent skis that a successful monopo-

list over ski rental at Deer Valley could charge supracompetitive prices. The question, we believe, is not whether

right not to sell the property at issue at all; it could have operated its own ski rental facilities at mid-mountain as it

did at the base, without allowing competitors to enter the business. None of this would have violated the antitrust

laws. Such an arrangement would not have diminished competition; on the contrary, by creating a resort and provid-

ing all the services ancillary to it, DVRC increased competition in the ski industry as a whole. The defendant argues

that the analysis is the same when it allows an outside ski rental provider to operate for a period of time, and later

in the ski rental business for destination skiers at Deer Valley (or, alternatively, at mid-mountain), and will result in

lowered output and higher prices for ski rentals, as compared to the situation before DVRC withdrew its consent.

We begin our analysis with DVRC’s original decision to impose the restrictive covenant.