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IN RE EUROPEAN RAIL PASS ANTITRUST LITIGATION

September 21, 2001

IN RE EUROPEAN RAIL PASS ANTITRUST LITIGATION THIS DOCUMENT RELATES TO: ALL CASES.


The opinion of the court was delivered by: William C. Conner, Senior District Judge.

  OPINION AND ORDER

Plaintiffs Hisa Travel Service, 10-N-10 Travel, Inc. and Panorama Travel, Inc., on behalf of themselves and other members of the class consisting of United States travel agents, bring this class action against defendants Rail Europe Group, Inc. ("REG"), a Delaware corporation, and DERTOUR America, Inc., f/k/a DER Travel Service, Inc. ("DER"), a California corporation, pursuant to Section 1 of the Sherman Act, 15 U.S.C. § 1, alleging a combination and conspiracy in unreasonable restraint of trade and commerce. Defendants now move to dismiss the Amended Consolidated Class Action Complaint pursuant to FED. R. CIV. P. 12(b)(6) and, in the alternative, move for a more definite statement pursuant to FED. R. CIV. P. 12(e). For the reasons stated hereinafter, defendants' motions are denied.

BACKGROUND

The Amended Complaint alleges the following:

Defendants are "major wholesalers" of travel services that include, inter alia, European Rail Passes, which permit train travel within participating European countries. (¶¶ 5, 20.) The European Rail Passes include both single and multi-country passes, such as the Eurail Pass and the Europass. (¶ 5.) Plaintiffs are United States travel agents who are paid commissions by defendants for selling the European Rail Passes. (¶¶ 5, 20.) The majority of the European Rail Passes sold in the United States are sold through travel agents. (¶ 21.)

In mid-1997, Heinz Wesner, president of DER (¶ 23), and Barbara Schmidt, a corporate officer of DER, agreed with certain corporate officers of REG to lower the commissions paid to travel agents who sold European Rail Passes. (¶ 22.) Thereafter, defendants learned that the United States Department of Justice was investigating them, prompting Wesner to schedule a meeting between the two defendants to discuss how to conceal the price-fixing scheme. (¶ 23.) Wesner urged the parties to admit that they discussed price fixing of minor importance, but to deny any allegation that they agreed to fix the amount of commissions paid to the travel agents. (Id.) In May 1999, DER shredded documents that, upon plaintiffs' information and belief, evidenced the conspiracy. (¶ 24.)

Plaintiffs allege that defendants' acts have had the following effects:

(a) competition in the commissions payable to travel agents for the sale of European Rail Passes by defendant[s] . . . has been restrained, suppressed and eliminated throughout the United States;
(b) commissions payable to travel agents for the sale of European Rail Passes by defendants . . . have been fixed, maintained and stabilized at artificially low and noncompetitive levels throughout the United States; and
(c) travel agents paid upon commission for the sales of European Rail Passes from defendants . . . have been deprived of the benefit of free and open competition.

(¶ 33.) Plaintiffs allege that they received lower commissions for the sale of European Rail Passes than they would have received in the absence of the conspiracy between defendants. (¶ 34.)

DISCUSSION

I. Motion to Dismiss Standard

On a motion to dismiss brought pursuant to FED. R. CIV. P. 12(b)(6), the Court must accept as true all of the well pleaded facts and consider those facts in the light most favorable to the plaintiff. See Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974), overruled on other grounds, Davis v. Scherer, 468 U.S. 183, 104 S.Ct. 3012, 82 L.Ed.2d 139 (1984); Hertz Corp. v. City of New York, 1 F.3d 121, 125 (2d Cir. 1993). On such a motion, the issue is "whether the claimant is entitled to offer evidence to support the claims." Scheuer, 416 U.S. at 236, 94 S.Ct. 1683. A complaint should not be dismissed for failure to state a claim "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Padavan v. United States, 82 F.3d 23, 26 (2d Cir. 1996) (quoting Hughes v. Rowe, 449 U.S. 5, 10, 101 S.Ct. 173, 66 L.Ed.2d 163 (1980)). Generally, "[c]onclusory allegations or legal conclusions masquerading as factual conclusions will not suffice to prevent a motion to dismiss." 2 JAMES WM. MOORE ET AL., MOORE'S FEDERAL PRACTICE ยง 12.34[1][b] (3d ed. 1997); see also Hirsch v. Arthur Andersen ...


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