New Class Action Lawsuit Alleges Coach USA, City Sights Formed “Hop-On, Hop-Off” NYC Bus Tour Monopoly to Raise Tourist Prices

National law firm, Parker Waichman LLP; Duncan Firm, P.A.; and the Law Offices of Jim Bartolemei just filed a class action lawsuit alleging that Twin America LLC—a joint venture formed by Coach USA and City Sights LLC—formed a monopoly to dominate the “hop-on, hop-off” bus tours market in New York City. The lawsuit is being filed on behalf of New York City tourists who purchased tickets to these tours and alleges that tour prices were artificially inflated as a result of the defendants’ violation of antitrust laws.

The lawsuit, which was filed on December 17th in the U.S. District Court for the Southern District of New York (Case No. 12-CIV-9175), alleges that Coach USA and City Sights, LLC formed a monopoly to dominate the vast majority of the market and inflate prices for tourists and consumers. Twin America, LLC, Coach USA, Inc., International Bus Services, Inc., City Sights LLC, and City Sights Twin, LLC have been named as defendants in this lawsuit.

According to the lawsuit, over two million visitors travel to New York City and spend more than $100 million on these popular “hop-on, hop-off” bus tours. These guided tours take place in open-topped, double-decker buses that travel to a number of stops throughout Manhattan, including Times Square, the Empire State Building, and the World Trade Center site. Consumers who buy tour tickets may hop on or off the buses at any of the stops as they see fit over the course of their ticket, which is typically for one day.

The lawsuit states that prior to 2008, Coach USA and City Sights LLC were competitors in this market; however, the suit alleges that Coach eventually tired of competition from City Sights and entered negotiations in 2008. The two companies formed Twin America, LLC. The lawsuit alleges that the Twin America joint venture was formed to permanently and unlawfully end any competition, allowing the defendants to dominate 99 percent of the market while increasing the prices by 10 percent. The joint venture split management rights 50-50 while profits were divided 60-40 in Coach’s favor, according to the lawsuit.

The lawsuit also alleges that the defendants attempted to avoid antitrust review. According to the complaint, the defendants failed to obtain approval from the federal Surface Transportation Board (STB) before operating Twin America in March 2009. STB approval is needed when a transaction involves a change in control of an interstate motor carrier.

The defendants were subpoenaed by the New York State Attorney General’s Office concerning the operation of Twin America in summer 2009. Thereafter, the defendants applied for STB; the agency rejected their application in 2011 stating that Twin America is “a combined entity that possesses excessive market power and has the ability to raise rates without competitive restraint and otherwise conduct its operations to the detriment of consumers.”

The class action lawsuit is being filed on behalf of two Tennessee residents who purchased a ticket for a hop-on, hop-off bus tour operated by the defendants and all others similarly situated. The lawsuit alleges that the ticket price was artificially inflated by the defendants and resulted in harm to the plaintiffs.

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