NEW YORK (Legal Newsline) – Two New York City tour bus companies have agreed to a $19 million settlement after class members claimed the businesses joined forces to run an illegal monopoly.
Twin America, which is a joint venture formed by Coach USA and CitySights, was formed in March 2009.
The defendants have agreed to pay $19 million, according to the settlement document filed May 20 in the U.S. District Court for the Southern District of New York.
The settlement agreement also provides that the class plaintiffs’ counsel may choose to submit an application to the court for distributions to them from the gross settlement fund for an award of attorneys’ fees or reimbursement of expenses incurred in connection with prosecuting the action.
An award of an incentive compensation to the class plaintiffs is not to exceed $20,000 for each class plaintiff for their efforts in prosecuting the case, according to the settlement document.
“The distribution plan…will allocate up to $20 as a recovery for each class member’s qualifying ticket purchase, reduced on a pro rata basis if the submitted claims exceed the net settlement fund,” the settlement document states.
The proposed settlement estimated that the class included roughly 3.9 million people.
The class members claim the joint venture, as well as other actions, violated the antitrust laws in a manner that caused consumers to pay an overcharge of $5 or more per ticket for the defendants’ hop-on, hop-off tours, according to the complaint, which was filed Jan. 31, 2013, in the U.S. District Court for the Southern District of New York.
The company was able to fix prices as much as 17 percent above the prior market rate after partnering, according to the complaint.
The U.S. Department of Justice and New York Attorney General Eric Schneiderman have also filed lawsuits against the companies.
“Since entering the agreement and ceasing the compete…defendants have successfully fixed the price of ‘hop-on, hop-off’ bus tours in New York City,” according to the complaint.
The Attorney General’s Office immediately sought to investigate the formation of the joint venture, but the defendants staved off the antitrust investigation by belatedly applying to the Surface Transportation Board for approval of the Twin America transaction, according to the suit.
“Such approval, if granted, would confer antitrust immunity,” the complaint stated. “The STB rejected defendants’ application, finding that the formation of Twin America ‘created an entity that dominates the market in which it competes and has the ability to raise rates or reduce service without sufficient competitive restraints.’”
The STB further found that the defendants’ fare increases demonstrated actual evidence of competitive harm and found that the defendants’ various explanations for the increased fares were all “undercut by the record.”
The plaintiffs are represented by William Christopher Carmody and Arun Subramanian of Susman Godfrey LLP and John Radice of Radice Law Firm.
Twin America, CitySights and CitySights Twin are represented by Michael P.A. Cohen of Paul Hastings LLP.
Coach USA and International Bus Services are represented by Andrew A. Ruffino and Thomas Barnett of Covington & Burling LLP.
Coach USA and City Sights both run open-topped, double-decker buses that take tourists to more than 40 stops, including Times Square, the Empire State Building and the World Trade Center site.
The case was assigned to District Judge Andrew L. Carter Jr.
U.S. District Court for the Southern District of New York case number: 1:13-cv-00711
From Legal Newsline: Kyla Asbury can be reached at email@example.com.