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New York State

People v. Tempur-Pedic Intl., Inc., 2012 NY Slip Op 3557 (1st Dept. May 8, 2012)

Background:  The New York State Attorney General filed a petition based on NY General Business Law § 369-a seeking to enjoin Tempur-Pedic from entering resale price maintenance agreements with its retailers. 

Outcome:  In affirming the dismissal of the petition, the Appellate Division, First Department held that: (1) § 369-a does not make resale price maintenance agreements illegal as a matter of law; (2) the alleged agreements between Tempur-Pedic and its retailers pertain to advertising only, and such an agreement cannot be the subject of a vertical resale price maintenance claim because it does not restrain resale prices; and (3) there was not sufficient evidence adduced to support the existence of a resale price maintenance agreement. 

Continental Guest Servs. Corp. v. Battery Park Hotel Mgmt., LLC, 92 A.D.3d 570 (1st Dept. Feb. 23, 2012)

Background:  Defendants, two competing double-decker sightseeing tour buses in New York City, formed Twin America, which controlled 90% of the double-decker sightseeing tour buses in New York City.  Plaintiff, the largest operator of hotel concierge desks in New York City and the largest source of ticket sales for double-decker sightseeing tour buses in New York City, alleged that defendants conspired to monopolize the ticket sales market by vertically controlling distribution of their tickets, taking over hotel concierge desks previously operated by plaintiff, and reducing plaintiff’s commission percentage and time to remit payment. 

Outcome:  In affirming the trial court’s dismissal of plaintiff’s Donnelly Act claims, the Appellate Division, First Department held that a manufacturer’s control of the distribution of its own product is presumptively legal and not a violation of the antitrust laws because it “does not provide any monopolistic benefit that defendants do not already enjoy.”