Second Circuit Affirms Rigorous Res Judicata Barrier to Re-Pleaded Antitrust Claims Based on Post-Litigation “Merger” Allegations

Commentary on Go N.Y. Tours Inc. v. Gray Line N.Y. Tours, Inc., 24-2392-cv (2d Cir. Mar. 27, 2025)

1. Introduction

The United States Court of Appeals for the Second Circuit, in a non-precedential summary order, has delivered a concise yet instructive ruling in Go N.Y. Tours Inc. v. Gray Line N.Y. Tours, Inc.. Although summary orders are formally non-precedential, this decision offers valuable guidance on two practical litigation hurdles:

1. Claim Preclusion (Res Judicata)—how a prior loss can bar a plaintiff from recycling or cosmetically repackaging antitrust theories, even when new factual events are pleaded; and
2. Plausibility Pleading under Twombly—the need for internally coherent, non-conclusory factual detail when alleging conspiracies, mergers, or monopolistic schemes.

The parties comprise long-standing competitors in New York City’s “hop-on, hop-off” bus tour and attraction-pass markets. After losing virtually identical Sherman Act claims in 2019—and having those dismissals affirmed in 2020—plaintiff Go N.Y. Tours (“Go NY”) returned to court in 2023, contending that a 2020 Memorandum of Understanding (“MOU”) between defendants Gray Line and Big Bus effected a merger that breathed fresh life into its antitrust grievances.

2. Summary of the Judgment

• Affirmed. The Second Circuit affirmed the district court’s Rule 12(b)(6) dismissal.
• Res Judicata Applied. All claims based on the attraction-pass conspiracy were barred because they had been litigated (or could have been) in the 2019 action.
• No Plausible New Claims. The alleged post-2020 “merger” could not salvage the case because:
  • The complaint’s own description of the MOU contradicted the existence of a merger (arm’s-length licensing agreements signal two separate entities, not one).
  • Absent a plausible single-entity merger, neither Section 1 (concerted action) nor Section 2 (monopolization) theories were adequately pleaded.
• Clayton Act & state-law claims. Those claims were deemed abandoned on appeal for lack of briefing.

3. Detailed Analysis

3.1 Precedents Cited and Their Influence

1. TechnoMarine SA v. Giftports, Inc., 758 F.3d 493 (2d Cir. 2014)
   • Clarified the three-part res judicata test.
   • The court borrowed TechnoMarine’s observation that later conduct can avoid preclusion only if it “can support a cause of action on its own.” Go NY failed this test because its new allegations were derivative of its old ones.
2. Storey v. Cello Holdings, 347 F.3d 370 (2d Cir. 2003)
   • Established that later-arising but factually similar conduct may still be barred. The panel cited Storey to emphasize that not every post-judgment fact set equals a new claim.
3. Mayor & City Council of Baltimore v. Citigroup, 709 F.3d 129 (2d Cir. 2013)
   • Provided the standard for Rule 12(b)(6) and “plus-factor” conspiracy pleading. The court used Baltimore to underscore that parallel conduct alone is insufficient without specific “plus factors.”
4. Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007)
   • The Supreme Court’s landmark plausibility case; referenced to reject Go NY’s conclusory allegations.
5. Volvo N. Am. Corp. v. Men’s Int’l Pro. Tennis Council, 857 F.2d 55 (2d Cir. 1988)
   • Cited for Section 2 monopolization elements—monopoly power or dangerous probability thereof.
6. Berrios v. N.Y.C. Housing Auth., 564 F.3d 130 (2d Cir. 2009)
   • Holds that a Rule 12(b)(6) dismissal is a final judgment on the merits for preclusion purposes.

3.2 Court’s Legal Reasoning

The panel employed a two-step logic track:

1. Claim Preclusion.
   The prior 2019 dismissal “with prejudice” satisfied the first two TechnoMarine prongs (final judgment + identical parties).
   Prong 3—same or could-have-been-raised claims—was met because:
   • The new complaint “nearly verbatim” repeated the attraction-pass conspiracy facts.
   • The supposed 2020 “merger” did not constitute “later conduct” capable of grounding an independent cause of action; it merely repackaged the same exclusionary narrative.
2. Plausibility of Remaining Allegations.
   Even assuming the merger claims survived preclusion, the court found them facially implausible:
   • Internal Inconsistency. A single entity cannot simultaneously conspire with itself; yet the complaint alleged both a merger (single entity) and an ongoing conspiracy (multiple entities).
   • Text of MOU Contradictions. The MOU’s provisions—independent pricing, trademark licensing—signal separate economic actors.
   • Absence of “Plus Factors.” Any common motive was speculative; Gray Line, having stopped its own tours, lacked incentive to fix prices on Big Bus’s behalf.
   • Section 2 Deficiency. Monopoly power requires one firm, but no plausible single-firm identity was shown.

3.3 Potential Impact of the Judgment

Although summary orders lack formal precedential weight, practitioners within the Second Circuit—and nationwide—should heed several practical implications:

• High Bar for Serial Antitrust Plaintiffs. Parties seeking to re-litigate failed antitrust theories must tether new complaints to genuinely new and independently actionable conduct.
• “Merger” Allegations Scrutinized. Courts will dissect transactional documents (such as MOUs) to test whether a bona fide merger occurred or whether the plaintiff is indulging in label-based pleading.
• Internal Consistency Matters. Contradictory pleading (merger + conspiracy) is self-defeating.
• Res Judicata as Early-Stage Weapon. The decision confirms that claim preclusion is fair game on a Rule 12(b)(6) motion if the prior record is judicially noticeable.
• Guidance for Drafting MOUs. From a transactional standpoint, firms can reduce antitrust risk by including clear language showing pricing independence, thereby undermining allegations of joint price-fixing.

4. Complex Concepts Simplified

Res Judicata (Claim Preclusion)

A doctrine preventing a party from re-litigating a claim (or any claim arising from the same “transaction or occurrence”) after a final judgment on the merits. Think of it as “one bite at the apple.”

Plausibility Standard (Twombly/Iqbal)

Pleadings must contain enough factual matter—beyond labels or conclusions—to make the claim “plausible,” i.e., more than speculative yet less than probable.

Single-Entity Doctrine

Under Copperweld v. Independence Tube, a parent company and its wholly-owned subsidiary are incapable of conspiring under Section 1 because they are economically unified. Here, Go NY alleged a merger, attempting to invoke Copperweld, but contradicted itself by simultaneously pleading conspiracy.

“Plus Factors”

Circumstantial indicators—e.g., motive to conspire, acts against self-interest, communications—used to convert parallel conduct into an inference of concerted action.

Sherman Act §§ 1 & 2

Section 1 prohibits contracts or conspiracies “in restraint of trade” (requires at least two actors). Section 2 prohibits monopolization or attempts to monopolize by a single firm.

5. Conclusion

The Second Circuit’s affirmance in Go N.Y. Tours Inc. v. Gray Line N.Y. Tours underscores two evergreen litigation lessons: claim preclusion is a formidable early-stage defense, and plausible, self-consistent factual detail is indispensable in complex antitrust pleading. Plaintiffs cannot resuscitate previously dismissed claims by draping them in the garb of later-dated transactions that neither change the competitive landscape nor withstand internal scrutiny. For practitioners, the case serves as a reminder to:

• Conduct rigorous pre-filing analyses of prior judgments to assess res judicata risk.
• Craft factual narratives that are coherent and squarely tied to new, independently actionable conduct.
• Expect courts to scrutinize underlying transactional documents; plaintiffs must either plead around them or attach substantive excerpts that actually support their theory.

In the broader antitrust context, this decision reinforces the judiciary’s gatekeeping function—keeping speculative or repetitive claims out of prolonged discovery—in line with the policy objectives behind Twombly and its progeny.