Gibson v. Cendyn Group, LLC

Summary

The Ninth Circuit affirmed the dismissal with prejudice of a putative antitrust class action against Cendyn Group, hotel operators, and related entities. The court held that plaintiffs failed to plausibly allege that individual licensing agreements for revenue-management software restrained competition in the market for Las Vegas Strip hotel-room rentals under Section 1 of the Sherman Act. The court did not address the dismissed hub-and-spoke claim because plaintiffs abandoned that portion of their appeal.

Holdings

1. Plaintiffs failed to plausibly allege that the individual licensing agreements restrained trade in the market for hotel-room rentals on the Las Vegas Strip. The agreements did not affect the hotels' competitive incentives or restrain their ability to compete in that market.
2. Plaintiffs could not convert the number of individual licensing agreements into an actionable aggregate restraint. Count 2 contained no factual allegation of a horizontal conspiracy among the hotels, and the challenged agreements did not individually restrain competition.
3. The district court did not need to apply the rule of reason because plaintiffs failed at the threshold to allege a restraint of trade in the relevant market.

Questions Presented

1. Whether plaintiffs plausibly alleged that individual licensing agreements between Cendyn and competing Las Vegas Strip hotels restrained trade in the relevant market under Section 1 of the Sherman Act.
2. Whether the alleged collection of individual licensing agreements could be evaluated in the aggregate to establish a Section 1 violation.
3. Whether the district court was required to apply the rule of reason before dismissing the complaint.

Disposition

affirmed