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United States Court of Appeals for the Second Circuit
December 4, 2012, Argued; March 27, 2013, Decided
Docket No. 12-1744-cv
[*273] Reena Raggi, Circuit Judge:
Plaintiffs Lee [**2] Johnson and Joey Marie Kelly initiated this putative class action in the United States District Court for the District of Connecticut (Janet Bond Arterton, Judge), against defendant Priceline.com, Inc. ("Priceline"), seeking compensatory, punitive, and equitable relief for alleged breaches of fiduciary duty and contract, as well as a violation of Connecticut's Unfair Trade Practices Act ("CUTPA"), see Conn. Gen. Stat. § 42-110b, all arising from Priceline's alleged failure to disclose to users of its "Name Your Own Price" booking service that a successful bid for a hotel room will generally exceed the amount Priceline itself compensates the hotel vendor, with Priceline retaining the difference as profit. In appealing from a judgment of dismissal, plaintiffs now submit that the district court erred in concluding that, as a matter of law, Priceline did not stand in a fiduciary relationship to users of its Name Your Own Price service, without which there was no obligation to make this disclosure. Like the district court, we conclude that plaintiffs fail as a matter of law to plead a fiduciary relationship and, accordingly, affirm the challenged judgment.2
The following facts are derived from plaintiffs' amended class action complaint, as supplemented by materials integral to that pleading and matters susceptible to judicial notice. See, e.g., Roth v. Jennings, 489 F.3d 499, 509-10 (2d Cir. 2007).
A. Priceline's "Name Your Own Price" Service
Priceline, a Delaware corporation with headquarters in Norwalk, Connecticut, is a leading online retail vendor of travel accommodations, including hotel rooms, airfare, rental cars, and vacation packages. Priceline employs three business models to offer consumers hotel room reservations through the Priceline.com website. The first two models, which are not at issue here, allow the consumer to purchase a room at a particular hotel and at a particular advertised price set by Priceline. Under the "agency" model, Priceline books a room for a consumer at a hotel chosen by the consumer and charges the hotel a fee for its service. Under the "merchant" model, hotels provide Priceline [**4] with prices they will accept for bookings; Priceline offers consumers rooms at these hotels for a somewhat higher rate and retains the difference as its profit. At issue here is a third model, marketed to consumers as the Name Your Own Price service, [*274] which invites consumers to "bid" for hotel rooms.
A consumer who uses the Name Your Own Price service does not specify a particular hotel. Rather, the consumer indicates the date for which he seeks a hotel reservation, the desired neighborhood or geographic area for the hotel within the destination city (e.g., Times Square or Upper East Side in New York City), and the minimum "star" quality acceptable for the hotel. After setting these parameters, the consumer places his "bid," reflecting the amount (absent taxes and fees) that he is willing to pay for a hotel satisfying the chosen criteria. The consumer is advised that "[i]f Priceline accepts your price," it will book a reservation for him at a hotel "with an equal or higher star level than you requested." Priceline.com website disclosure, "Important Information," J.A. 163. The consumer then reviews the total charge (which adds estimated taxes and a service fee to the bid price) and enters [**5] payment information before clicking "book now." At that point, Priceline uses an algorithm to search a proprietary inventory of discounted hotel rooms for a matching accommodation and, usually within a minute, reports to the consumer whether his bid was accepted and, if so, the identity of the hotel where a reservation has been booked.
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
711 F.3d 271 *; 2013 U.S. App. LEXIS 6146 **; 2013 WL 1223326
LEE E. JOHNSON, JOEY MARIE KELLY, on behalf of themselves and all others similarly situated, Plaintiffs-Appellants, v. PRICELINE.COM, INC., Defendant-Appellee.
Prior History: [**1] On appeal from a judgment of the United States District Court for the District of Connecticut (Arterton, J.), dismissing state law claims for breaches of fiduciary duty and contract, as well as unfair trade practices, plaintiffs challenge the determination that, as a matter of law, defendant Priceline.com is not a fiduciary of consumers who use its "Name Your Own Price" booking service.
Kelly v. Priceline.com Inc., 2012 U.S. Dist. LEXIS 45285 (D. Conn., Mar. 30, 2012)
hotel, bid, customer, consumers, reservation, fiduciary duty, plaintiffs', fiduciary, retains, agency relationship, hotel room, disclose, district court, procured, fiduciary relationship, accommodations, disclosure, discounted, parties, travel agent, contractual, service provider, matter of law, advertised, auction, desired, travel
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