Corporate & Securities Law

Antitrust and the Ski Resort

By David Fischer

Last month (blame the holidays for our lack of diligence in posting about this), Judge Moon of the United States District Court for the Western District of Virginia denied a motion to dismiss the antitrust complaint brought by a real estate company against a ski resort. The decision is interesting. According to the opinion:

The Wintergreen Resort [”Wintergreen”] is an 11,000 acre facility [offering] skiing, golf, tennis and other recreational activities, as well as conference facilities, retail outlets, and restaurants. The resort also contains more than 3000 residential properties in two locations ….

The core of MAR?s complaint alleges that [Wintergreen and WRPP, a local real estate company] entered into … agreements grant[ing] exclusive rights to operate a real estate sales office at Wintergreen [and the exclusive right to place advertising on Wintergreen?s website and on resort property.

…

Plaintiff alleges that these contracts resulted in anticompetitive harm to consumers by restricting access to the Wintergreen and Nelson County real estate markets, thus allowing WRPP to charge supra-competitive commissions. MAR asserts that the right to operate a sales office within the Mountain Inn [the Wintergreen report’s main lodge] and place advertising on the Wintergreen website and resort grounds gives WRPP … an unreasonable advantage over competitors. The presumed advantage flows primarily from the location of WRPP in the Mountain Inn. MAR asserts that the majority of buyers or residential properties are also visitors to the resort who are likely to pass by the Mountain Inn and see WRPP?s office. Plaintiff argues that WRPP?s superior access to these potential “leads” allows them to charge higher commissions than MAR and other competitors.

…

Taking the facts pled as true, MAR has alleged facts sufficient to state a claim under the antitrust laws. Plaintiff has alleged relevant product and geographic markets??real estate services within Wintergreen Resort and Nelson County. Plaintiff has also alleged anticompetitive harm to consumers and supported this claim with data showing price discrepancies between WRPP and its competitors. Finally, Plaintiff has alleged that the illegal conduct has harmed its business. It has buttressed that claim with data showing a decline in market share. At this stage of the litigation that is all that is required of Plaintiff.

If I owned commercial/retail property, I would be less than thrilled.

Full post as published by Antitrust Review on January 12, 2008 (boomark / email).