The Tenth Circuit today affirmed dismissal of an antitrust complaint that challenged a "destination" ski resort's sudden decision to start enforcing a restrictive covenant. The covenant entitled the resort to bar land buyers from engaging in commerce at the resort.
The Deer Valley resort — amidst the Wasatch Mountains in the Beehive State — sold patches of land in 1990 or so. Christy and Cole Sports operated ski rental facilities on their patches. But in 2005 the resort invoked its rights under the restrictive covenant and directed Christy and Cole Sports to cease and desist the rental operations. The resort, you see, wanted to open its own ski kiosk in the same area and didn't want the competition.
The district court dismissed the case, and a unanimous panel of the Tenth Circuit okayed the order. Christy Sports, LLC v. Deer Valley Resort Co., Ltd., No. 07-4198 (10th Cir. Feb. 18, 2009). The part of the opinion Blawgletter sorta understands has to do with defining the relevant antitrust market. The court held that the relevant market consists not of people who want to rent skis but of people who desire to go to a destination ski resort. Disney World doesn't have to allow outside vendors to sell ice cream in the Magic Kingdom; Madison Square Garden needn't permit hot dog peddlers from 42nd Street hawk buns and weenies inside the arena; and a destination ski resort don't gotta suffer competition from interloping equipment rental firms.
Now for the baffling part, which seemingly addresses (and rejects) the plaintiffs-appellants' argument that they didn't have to prove a relevant market anyways:
Although Christy insists that it has shown anticompetitive effects by its allegations of a decline in quantity and increase in price of rental skis at the mid-mountain village, this is just a repackaging of the argument rejected above. A resort operator's ability to reserve to itself the operation of ancillary businesses within the resort is not dependent on the quantity of output being as high or the price being as low as they would be if there were competition from third parties within the resort. It depends, instead, on either the proposition that a market that involves only one component of an interrelated package of services is not a relevant market for purposes of the Sherman Act or that it is not anticompetitive conduct for a resort owner to refuse to invite competitors to supply ancillary services within its resort. The fact (even if it is a fact, as the complaint alleges) that fewer skis will be available for rental and that prices for rental skis will be higher, does not refute either of these legal propositions.
Christy Sports, slip op. at 21-22.
We suppose Their Honors meant that Christy Sports and Cole Sports did, in fact, have to allege and establish the relevant market. But, on our life, we can't decipher the court's explanation of why. "A resort operator's ability to" stop competition in ski rentals "depends" either on "the proposition that a market that involves only one component of an interrelated package of services is not a relevant market . . . or [on the proposition] that it is not anticompetitive conduct for a resort owner" to stop competition in ski rentals.
By which we imagine the court intends that a ski resort operator can stop ski rental competition if (a) competition for ski rentals doesn't define the relevant market or (b) stopping ski rental competition doesn't count as anticompetitive conduct.
It seems tautological to us.
