Man in violation of privacy law

Breaking news and expert analysis on legal and compliance issues

[Back To Home][Back To Archives]

From Antitrust Law Daily, March 17, 2015

Government challenge to New York tour bus JV resolved with divestitures, disgorgement

By Jeffrey May, J.D.

The parties to a New York City tour bus joint venture have agreed to settle a federal/state enforcement action challenging the joint venture on antitrust grounds. In December 2012, the U.S. Department of Justice Antitrust Division and the New York Attorney General's Office filed a complaint in the federal district court in New York City, alleging that the joint venture (JV) violated Section 7 of the Clayton Act, Section 1 of the Sherman Act, and Section 340 of the New York Donnelly Act. Late yesterday, the government announced a settlement with Coach USA Inc., City Sights LLC and their joint venture, Twin America LLC, to remedy competitive concerns in the New York City hop-on, hop-off bus tour market (U.S. v. Twin America, LLC, Civil Action No. 12-cv-8989 (ALC) (GWG)).

Hop-on, hop-off bus tours combine sightseeing and transportation by providing tourists with a professionally-guided tour of New York City, while giving them the ability to “hop off” the tour bus at various locations to further explore attractions of interest and later “hop on” another bus to continue along the tour route using the same ticket. The tours are offered on open-top double-decker buses, which enable passengers to view New York City's attractions and neighborhoods from a heightened vantage point, the Department of Justice explained.

The 2009 JV created the “sole player” in the market for hop-on, hop-off bus tours, the government alleged, ending competition between Coach and City Sights. Since 2012, there have been some new entrants in the market, the government noted. However, they have been unable to obtain bus stop authorizations from the New York City Department of Transportation (NYCDOT) at or sufficiently close to top attractions. NYCDOT is the city agency in charge of managing bus stop authorizations, which are required for hop-on, hop-off operators to load and unload passengers.

Under the terms of the proposed consent decree, the defendants have agreed to relinquish all of the City Sights Manhattan bus stop authorizations to the NYCDOT by May 1, 2015. Access to these bus stop authorizations should make it easier for rivals to meaningfully compete with Twin America, according to the government. In addition, the defendants must disgorge $7.5 million in ill-gotten profits allegedly obtained from the operation of their illegal joint venture. The $7.5 million in disgorgement is in addition to the defendants' agreement to pay $19 million to a class of consumers to settle related private litigation brought after the filing of the government’s complaint.

Compliance program, notification requirements. Coach and Twin America must establish antitrust compliance programs and provide the government with advance notice of any future acquisition in the New York City hop-on hop-off bus tour market that is not otherwise reportable under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act). The formation of Twin America was not subject to the HSR Act.

Spoliation. Coach USA also has agreed to reimburse the United States $250,000 in attorney fees and costs in a separate filing, in order to resolve claims that the Coach defendants spoliated evidence and failed to meet their document preservation obligations. The costs resulted from an investigation prompted by the government’s receipt of an anonymous e-mail from a non-party that raised questions about conduct during discovery and preservation of documents.

The settlement is the product of long-running negotiations. Trial had been set for later this month before the parties adjourned the trial date to facilitate settlement discussions. The proposed consent decree requires the approval of the federal district court.

New York Attorney General's reaction. In a statement released yesterday, New York Attorney General Eric T. Schneiderman said that the settlement “allows competition to thrive once again, and ensures that these companies did not profit from operating an unlawful and anticompetitive joint venture.”

Attorneys: Sarah Wagner for U.S. Department of Justice Antitrust Division. Eric J. Stock for State of New York Attorney General's Office. Michael P.A. Cohen (Paul Hastings LLP) for Twin America, LLC, CitySights LLC, and City Sights Twin, LLC. Thomas O. Barnett (Covington & Burling LLP) for Coach USA, Inc. and International Bus Services, Inc.

Companies: Twin America, LLC, Coach USA, Inc., International Bus Services, Inc., Citysights LLC, City Sights Twin, LLC

MainStory: TopStory AcquisitionsMergers Antitrust AntitrustDivisionNews

Antitrust Law Daily

Introducing Wolters Kluwer Antitrust Law Daily — a daily reporting service created by attorneys, for attorneys — providing same-day coverage of breaking news, court decisions, legislation, and regulatory activity.

A complete daily report of the news that affects your world

  • View full summaries of federal and state court decisions.
  • Access full text of legislative and regulatory developments.
  • Customize your daily email by topic and/or jurisdiction.
  • Search archives for stories of interest.

Not just news — the right news

  • Get expert analysis written by subject matter specialists—created by attorneys for attorneys.
  • Track law firms and organizations in the headlines with our new “Who’s in the News” feature.
  • Promote your firm with our new reprint policy.

24/7 access for a 24/7 world

  • Forward information with special copyright permissions, encouraging collaboration between counsel and colleagues.
  • Save time with mobile apps for your BlackBerry, iPhone, iPad, Android, or Kindle.
  • Access all links from any mobile device without being prompted for user name and password.