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A.B.T. SIGHTSEEING TOURS, INC. v. GRAY LINE NEW YO

June 2, 1965

A.B.T. SIGHTSEEING TOURS, INC., Blue Line Sightseeing Tours, Inc., American Sightseeing Lines, Inc., Times Square Sightseeing Lines, Inc., Plaintiffs,
v.
GRAY LINE NEW YORK YOURS, CORP., Defendant



The opinion of the court was delivered by: BONSAL

Plaintiffs Blue Line Sightseeing Tours, Inc., (Blue Line), American Sightseeing Lines, Inc., and Times Square Sightseeing Lines, Inc. (Times Square) are New York corporations engaged in conducting sightseeing bus tours and related tourist services in the metropolitan New York area within the confines of the State of New York. Plaintiff A.B.T. Sightseeing Tours, Inc., a New York corporation, is a holding company organized in 1960 when Blue Line and Times Square were combined into one operating organization.

Defendant, Gray Line New York Tours, Corp., is a New York corporation engaged in conducting sightseeing bus tours and other related tourist services in the metropolitan New York area within the confines of the State of New York.

In their complaint plaintiffs charge the defendant with violations of Sections 1 and 2 of the Sherman Act (15 U.S.C. §§ 1 and 2) and Section 7 of the Clayton Act (15 U.S.C. § 18), and seek to recover treble damages allegedly sustained by them by reason of defendant's alleged violations of the Sherman Act.

 Jurisdiction is claimed under 15 U.S.C. §§ 15, 22 and 26.

 As a second cause of action, plaintiffs charge defendant with violation of Section 340 of the New York General Business Law, McKinney's Consol.Laws, c. 20, and claim jurisdiction under the doctrine of pendant jurisdiction.

 Defendant has moved pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure for an order dismissing plaintiffs' first cause of action on the ground that it fails to state a claim upon which relief can be granted, and pursuant to 12(b)(1) of the Fed.R.Civ.P. for an order dismissing the second cause of action on the ground of lack of jurisdiction over the subject matter. By way of alternative relief, defendant moves pursuant to Rule 12(f) of the Fed.R.Civ.P. for an order striking certain parts of the complaint, and pursuant to Rule 12(b)(1) of the Fed.R.Civ.P. for an order staying this action pending hearing and determination by the Interstate Commerce Commission.

 For the purposes of the motion, the allegations in the complaint must be accepted as true. The principal violations alleged are as follows:

 (a) that defendant has entered into 'unlawful written or tacit' exclusive dealing arrangements with substantially all of the 'important' hotels and motels which refer customers to sightseeing bus companies and thereby obtains at least 90% Of the hotel-referred sightseeing bus tour clientele in the city (Complaint, par. 19; hereinafter all paragraph references are to the complaint);

 (b) that defendant has a 'written or tacit' agreement with the Sheraton organization whereby that organization requires all its hotels to exclusively deal with defendant on referral business (par. 20);

 (c) that defendant entered into similar 'written or tacit' exclusive dealing arrangements on referral business with the Empire State Building, Eastern Greyhound Lines, Simon & Schuster, Inc., American Express Co. and others not named (par. 21);

 (d) that defendant induced the nightclubs, Sammy's Bowery Follies and the Village Barn, and other nightclubs not now known to plaintiffs, to deal exclusively with defendant and to refuse to deal with plaintiffs (par. 22);

 (e) that defendant refused to allow plaintiffs to act as its agent in selling nightclub tours (par. 23);

 (f) that defendant either acquired Manhattan Sightseeing Bus Tours, Inc. (Manhattan Tours), plaintiffs' 'primary competitor' in the obtaining of business furnished by cornermen, or entered into an exclusive dealing agreement with Manhattan Tours under which the latter acts as an exclusive agent for defendant in soliciting business through 'cornermen' (pars. 25-29);

 (g) that Manhattan Tours dominates the Sightseeing Guides Union and that defendant has entered into a combination with that union pursuant to which the union has settled disputes on numerous occasions by arbitrarily assigning disputed corners to cornermen who solicit business for Manhattan Tours, thereby increasing the amount of business ...


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