Concord Associates, L.P. v. Entertainment Properties Trust, EPT Concord, LLC., 031816 FED2, 13-3933-cv

Docket Nº:13-3933-cv
Opinion Judge:HALL, CIRCUIT JUDGE.
Party Name:Concord Associates, L.P., Concord Raceway Corporation, Concord Kiamesha Casino, LLC, Concord Kiamesha Capital Corp., Concord Resort, LLC, Concord Kiamesha, LLC, Concord Kiamesha Hotel, LLC, Plaintiffs-Appellants, v. Entertainment Properties Trust, EPT Concord, LLC, EPT Concord II, LLC, Empire Resorts, Inc., Monticello Raceway Management, Inc., ...
Attorney:Scott A. Martin, (James I. Serota & Carmen Beauchamp Ciparick, on the brief), Greenberg Traurig, LLP, New York, New York, and Alfred E. Donnellan, DelBello Donnellan Weingarten Wise & Wiederkehr, L.L.P., White Plains, NY, for Plaintiffs-Appellants Concord Associates, L.P., Concord Raceway Corpora...
Judge Panel:Before: Jacobs, Pooler, and Hall, Circuit Judges.
Case Date:March 18, 2016
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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Concord Associates, L.P., Concord Raceway Corporation, Concord Kiamesha Casino, LLC, Concord Kiamesha Capital Corp., Concord Resort, LLC, Concord Kiamesha, LLC, Concord Kiamesha Hotel, LLC, Plaintiffs-Appellants,

v.

Entertainment Properties Trust, EPT Concord, LLC, EPT Concord II, LLC, Empire Resorts, Inc., Monticello Raceway Management, Inc., Genting New York LLC, John Does 1-5, Kien Huat Realty III Limited, Defendants-Appellees.

No. 13-3933-cv

United States Court of Appeals, Second Circuit

March 18, 2016

Argued: April 29, 2015

Appeal from the United States District Court for the Southern District of New York (Ramos, J.) granting defendants' motions to dismiss claims of violations of the Sherman Act, 15 U.S.C. §§ 1 & 2, and denying plaintiffs' motion for reconsideration. In order to state a claim for a Sherman Act violation, a plaintiff must allege an antitrust injury, define the relevant geographic market, and allege conduct in violation of antitrust laws. The District Court found, with respect to the Sherman Act claims, that the plaintiffs' proposed geographic and product markets were not sufficiently plausible to survive a motion to dismiss. We agree and hold that the plaintiffs fail to state a claim for violations of the Sherman Act and, accordingly, AFFIRM the District Court's dismissal of the complaint.

Scott A. Martin, (James I. Serota & Carmen Beauchamp Ciparick, on the brief), Greenberg Traurig, LLP, New York, New York, and Alfred E. Donnellan, DelBello Donnellan Weingarten Wise & Wiederkehr, L.L.P., White Plains, NY, for Plaintiffs-Appellants Concord Associates, L.P., Concord Raceway Corporation, Concord Kiamesha Casino, LLC, Concord Kiamesha Capital Corp., Concord Resort, LLC, Concord Kiamesha, LLC and Concord Kiamesha Hotel, LLC.

Moses Silverman (Joshua D. Kaye, Jason L. Meizlish, & Elana R. Beale, on the brief), Paul, Weiss, Rifkind, Wharton & Garrison LLP, New York, New York, for Defendants-Appellees Empire Resorts, Inc. and Monticello Raceway Management, Inc.

Y. David Scharf, (Kristin T. Roy, & Gayle Pollack, on the brief) Morrison Cohen LLP, New York, New York, for Defendant-Appellee Entertainment Properties Trust, EPT Concord, LLC, and EPT Concord II, LLC.

Howard Zelbo (Leah Brannon, on the brief), Cleary Gottlieb Steen & Hamilton LLP, New York, NY, for Defendants-Appellees Kien Huat Realty III Limited and Genting New York LLC.

Before: Jacobs, Pooler, and Hall, Circuit Judges.

HALL, CIRCUIT JUDGE.

Plaintiffs-Appellants are seven entities who are collectively attempting to develop a casino-resort complex in the Catskills region of New York State. Defendants-Appellees are three groups of investors and business owners with an interest in the casino industry and horse racing in the Catskills who, the plaintiffs claim, entered into an anti-competitive scheme to obstruct the plaintiffs' resort development project. Underlying this antitrust dispute is a threshold question that is ultimately dispositive of this appeal: For the purposes of an antitrust claim, whether the plaintiffs have alleged a plausible relevant geographic market for their casino-related products and services.

Facts and Procedural History

The facts of this case, which we view in the light most favorable to the plaintiffs, are set out in the district court's Order and Opinion in detail and are briefly summarized as follows. The plaintiffs, including Concord Associates, L.P. ("Concord Associates"), Concord Raceway Corporation, Concord Kiamesha Capital Corporation, Concord Resort, LLC ("Concord Resort"), Concord Kiamesha, LLC, and Concord Kiamesha Hotel, LLC, are collectively attempting to develop a casino gambling resort and race track known as the New Concord Casino Resort at the site of the former Concord Resort Hotel, located in the Catskills Mountains in Thompson, New York. The defendants, including Entertainment Properties Trust, EPT Concord, LLC, and EPT Concord II, LLC (collectively, "EPT"); Empire Resorts, Inc. and Monticello Raceway Management, Inc. (collectively "Empire"); Kien Huat Realty III Limited ("Kien Huat Realty"); Genting New York LLC and John Doe entities 1–5 (collectively "Genting" or "Genting defendants"), are real estate developers and casino and gambling facility operators.

The plaintiffs intend to develop racing and casino gambling facilities, known as "racinos, " on two adjoining properties, including 140 acres at the site of the Concord Resort Hotel, which was once a world-famous vacation destination for visitors to the Catskills Mountains until its closing and bankruptcy in 1998, and also 1, 500 acres of adjacent land containing golf courses, residential properties, and vacant land. In 1999, plaintiff Concord Associates purchased these land parcels from the Concord Resort Hotel bankruptcy estate. In furtherance of their development efforts, the plaintiffs have conducted an environmental review, obtained necessary preliminary licensing approvals and development permits, and performed substantial work at the construction site.

In June 2010, as part of a legal settlement intended to resolve several lawsuits between defendant EPT and plaintiff Concord Associates, the plaintiffs transferred the 1, 500 acre parcel to defendant EPT Concord II. Under the settlement, the plaintiffs retained the right for exclusive use and exploitation of the property, including the right to develop the proposed resort. Accordingly, Concord Associates entered into an agreement with EPT Concord II that specifically reserved the right for the plaintiffs to lease a tract for a "racino" on the property along with additional easements, leases, and other rights related to development of the property. In addition, the terms included a restrictive covenant pursuant to which EPT Concord II agreed that its successors or assignees would not own or operate any competing casino, racino, racing or gaming facility on the property.

In addition to entering the agreement with EPT Concord II, the plaintiffs entered into a...

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