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July 11, 1979

DOMINICUS AMERICANA BOHIO, a Limited Partnership, Dominicus Americana Cabana, a Limited Partnership, Four Worlds "B", a Limited Partnership, Four Worlds Marketing Co. Ltd., a Grand Cayman Corporation, Laguna, S.A., a Dominican Republic Corporation, Dominicus Americana, S.A., a Dominican Republic Corporation, Four Worlds Marketing Co. Inc., a Delaware Corporation, Dominicus Americana Development and Construction, S.A., Dominicus Americana Marketing, S.A., Dominicus Americana Management Co., S.A., all Dominican Republic Corporations, Dominicus Americana Development and Construction Company, Inc., Dominicus Americana Marketing Company, Inc., both Delaware Corporations, and M. Wayne Fuller, Individually,
GULF & WESTERN INDUSTRIES, INC., a Delaware Corporation, Dominican Tourist Information Center, Inc., a New York Corporation, Costa Sur Dominicana, S.A., Corporacion De Hoteles, S.A., both Dominican Republic Corporations, and "Johnor Jane Does"1-5 and/or "Does Co. or Inc." 1-5, fictitious designations for parties, the actual identities of which presently are unknown, Defendants

The opinion of the court was delivered by: CARTER

This case involves the alleged monopolization of tourist facilities in the La Romana section of the Dominican Republic. The plaintiffs include one individual and a number of corporations, all affiliated in an endeavor to establish hotel and condominium accommodations there. Plaintiffs allege that they were hindered in these efforts by the illegal acts of the defendants, who own and operate existing tourist facilities in La Romana. The defendants are Gulf & Western Industries, Inc. ("G & W"), a number of its subsidiaries, and the Dominican Tourist Information Center. Plaintiffs assert causes of action under Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 & 2, as well as pendant common law claims of slander and unfair competition. They seek treble damages and injunctive relief prohibiting future unlawful activity by the defendants. The defendants now move to dismiss the complaint and plaintiffs have cross-moved for partial summary judgment. Both motions are premature and both are denied.


 Since approximately 1971, G & W has owned and operated a tourist resort called the Costa Sur Complex in the La Romana area. In the same year Wayne Fuller, on behalf of the other plaintiffs, began to assemble nearby property in order to create a tourist facility named Dominicus Americana. Part of that project, the Club Dominicus, is now in operation. However, plaintiffs claim that the development of the entire facility has been delayed and disrupted by G & W, which purportedly covets the plaintiffs' beach front property and hopes to squeeze out its potential competitors.

 The supposed impetus for G & W's anticompetitive actions was a statement by its chairman, Charles G. Bluhdorn. When he first saw the plaintiffs' beach front property while flying over it in a helicopter, Bluhdorn allegedly said, "Oh my God, we should have it." Plaintiffs claim that G & W has manifested this desire in a variety of ways. First, G & W allegedly interfered with construction of the Dominicus facility by preventing plaintiffs from using marina facilities in the La Romana area. According to the plaintiffs, they had obtained official approval to use a marina and had improved and expanded it. However, supposedly acting on the baseless complaints of G & W employees, a government official ordered that the marina facility be destroyed. Although this order was never carried out, its effect was to impede construction of the Dominicus facility.

 Other allegations also involve G & W's alleged influencing of governmental action. For example, at G & W's behest, the Dominican government began in 1973 to study the possibility of creating a national park in the La Romana region. G & W purportedly encouraged and sponsored the creation of a special commission that recommended the expropriation of private land including that owned by plaintiffs. The Dominican government issued a decree endorsing the commission's proposal, but this decree was rescinded shortly thereafter when the government discovered that it involved confiscation of the Dominicus property.

 Another claim concerns G & W's actions in relocating a roadway that was to serve the Dominicus complex. Plaintiffs assert that the Dominican Department of Public Works had planned construction of an oceanfront road and bridge that would connect the city of La Romana with the Dominicus property. However, after a G & W engineer had proposed relocation of the road inland and G & W had agreed to assume the construction costs, the government abandoned the more direct beachfront route. Moreover, plaintiffs allege that G & W then deliberately delayed completion of the road in order to inhibit access to the Dominicus facility.

 Plaintiffs also allege more direct anticompetitive actions by G & W employees. For example, plaintiffs claim that agents of G & W interfered with the transportation of necessary equipment and supplies to the Dominicus construction area by blockading the public road. Similarly, they allege that G & W encouraged local private transportation companies to boycott the Dominicus project. Plaintiffs also aver that G & W promoted and financed meritless litigation designed to cloud title to the land on which the facilities were being built. All of these tactics have purportedly delayed completion of the project.

 Two of plaintiffs' allegations involve interference by G & W with plaintiffs' efforts to attract tourists to the Dominicus resort. First, plaintiffs allege that G & W employees convinced local officials to prohibit charter flights from landing at the La Romana Airport if they were transporting guests to the Dominicus complex. At the same time, authorities purportedly permitted similar planes carrying visitors to G & W's CostaSur complex to land. Second, plaintiffs claim that the Dominican Tourist Information Center, a nominally neutral organization sanctioned by the Dominican government, steered tourists away from Dominicus and encouraged them to visit CostaSur. The Center accomplished this by misrepresenting the nature of the Dominicus complex, excluding Dominicus representatives from promotional seminars, and giving the false impression that Dominicus was in fact owned by G & W.

 A number of less specific anticompetitive actions are also alleged. The Dominican Ministry of Tourism, now headed by a former G & W official, supposedly delayed approval for a number of the steps involved in construction of the Dominicus facility in order to give the CostaSur project a competitive advantage. In addition, G & W employees are said to have slandered plaintiff Wayne Fuller in order to damage the reputation of the businesses with which he is associated. Finally, plaintiffs allege that defendants corrupted and intimidated both government officials and private individuals in furtherance of their anticompetitive goals.

 Legal Arguments

 The defendants' omnibus motion advances a number of grounds for dismissing the entire complaint. First, G & W contends that Dominicus has not averred and cannot demonstrate that the acts alleged place a substantial burden on interstate commerce sufficient to support jurisdiction under the antitrust laws. G & W goes on to argue that even if a minimal effect on the foreign commerce of the United States can be shown, the major impact of the allegedly illegal acts is on the economy of the Dominican Republic. Therefore the defendants urge that as a matter of international comity this court should abstain from taking jurisdiction.

 According to G & W, the act of state doctrine constitutes a second basis for dismissing this action. G & W characterizes the complaint as claiming that defendants improperly influenced officials of the Dominican Republic to take actions detrimental to plaintiffs. Such governmental actions, however, are said to be immune from judicial scrutiny. Moreover, G & W argues that even if the plaintiffs are not directly challenging the validity of the governmental acts, they must nevertheless prove that their damages resulted directly from Sherman Act violations, and this would require an analysis of the motivation of the government officials which the act of state doctrine forbids. Although G & W concedes that some of its alleged illegal acts may not be protected by the doctrine, it nevertheless urges that those allegations involving governmental acts be stricken from the complaint.

 G & W next argues that the plaintiffs' definition of the relevant market as "the provision of the first-class transient or permanent tourist and recreation facilities . . . in the City of La Romana and its environs" is fatally defective. According to G & W, tourists seeking a vacation at a beach resort would consider facilities throughout the Caribbean, Florida, and parts of Mexico and South America. Since the defendants could not possibly monopolize tourist facilities in this broadly defined market, the complaint should be dismissed.

 G & W also makes a series of more limited arguments, the first being that many of the plaintiffs do not have standing to sue under the antitrust laws. Defendants claim that most of the plaintiff corporations are affected only indirectly by the acts of the defendants and are therefore not within the target area of any of the alleged antitrust violations. These plaintiffs with only an attenuated interest in the litigation include owners of the Dominicus land that do not actually operate any facilities, subcontractors that had arranged to provide goods and services to the facilities, and construction companies that allegedly lost profits or were unable to make public offerings of securities because of delays in the project. In addition, G & W claims that all of the damages claimed by the plaintiffs are too speculative to warrant relief under the antitrust laws because the Dominicus project was not sufficiently close to realization.

 Two defendants, CostaSur Dominicana, S.A. and Corporacion de Hoteles, S.A., move to be dismissed from the action on the ground that the court lacks personal jurisdiction over them. They are Dominican corporations that claim to transact no business in New York. The mere allegation that they engaged in a conspiracy with the other defendants is an insufficient basis for asserting jurisdiction over them since they are not alleged to have committed any acts in furtherance of the conspiracy in New York.

 G & W next contends that the allegations of fraud, corruption and conspiracy contained in the complaint should be stricken for failure to plead them with sufficient specificity. This argument is based on Rule 9(b), F.R.Civ.P., which requires such charges to be set forth with particularity and supported by factual detail.

 Finally, the Dominican Tourist Information Center argues that the charge that it engaged in a conspiracy with G & W must be dismissed, since plaintiffs have alleged that the Center is in fact a subsidiary of G & W. The Center urges ...

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