Aspen Skiing Co. v. Aspen Highlands Skiing Corp.

Facts

Aspen is a destination ski resort with a great reputation. Between 1945 and 1960, private investors independently developed three major facilities for downhill skiing: Aspen Mountain (Ajax), 2 Aspen Highlands (Highlands), 3 and Buttermilk. 4 A fourth mountain, Snowmass, opened in 1967. Between 1958 and 1964, three independent companies operated Ajax, Highlands, and Buttermilk. In the early years, each company offered its own day or half-day tickets for use of its mountain. In 1962, the three competitors introduced an interchangeable ticket. The 6-day, all-Aspen ticket provided convenience to the vast majority of skiers who visited the resort for weekly periods but preferred to remain flexible about what mountain they might ski each day during the visit. The revenues from the sale of the 3-area coupon books were distributed in accordance with the number of coupons collected at each mountain.  In 1964, Buttermilk was purchased by D. D began offering 2-area, 6- or 7-day tickets featuring Ajax and Buttermilk in competition with the 3-area, 6-coupon booklet. The all-Aspen ticket did not sell as well as D's multiarea ticket until Snowmass opened in 1967. Thereafter, the all-Aspen coupon booklet began to outsell d's ticket featuring only its mountains. Coupon booklets were discontinued and an 'around the neck' all-Aspen ticket was developed. Lift operators at monitored usage of the ticket in the 1971-1972 season by recording the ticket numbers of persons going onto the slopes of that mountain. P officials periodically met with D officials to review the figures recorded and to distribute revenues based on that count. The 4-area ticket returned in the 1973-1974 season with a new method of allocating revenues based on usage. Lift operators punched the ticket when the skier first sought access to the mountain each day. A random-sample survey was commissioned to determine how many skiers with the 4-area ticket used each mountain, and the parties allocated revenues from the ticket sales in accordance with the survey's results. P's share of the revenues from the ticket was 17.5% in 1973-1974, 18.5% in 1974-1975, 16.8% in 1975-1976, and 13.2% in 1976-1977. By 1977, multiarea tickets accounted for nearly 35% of the total market. For the 1977-1978 season, D offered to continue the all-Aspen ticket only if P would accept a 13.2% fixed share of the ticket's revenues. P wanted to continue to divide revenues on the basis of actual usage. P eventually accepted a fixed percentage of 15% for the 1977-1978 season. D had reinstated its 3-area, 6-day ticket during the 1977-1978 season, but that ticket had been outsold by the 4-area, 6-day ticket nearly two to one. D offered P a 4-area ticket provided if it would agree to receive a 12.5% fixed percentage of the revenue. D refused to consider any counterproposals, and P rejected the offer of the fixed percentage. D promoted its 3-mountain ticket with national advertising strongly implying to people that there were only 3 ski mountains in the area. D also refused to sell P any lift tickets, either at the tour operator's discount or at retail. P's share of the market for downhill skiing services in Aspen declined steadily after the 4-area ticket based on usage was abolished in 1977.  P filed a complaint alleging that D had monopolized the market for downhill skiing services at Aspen in violation of § 2 of the Sherman Act, and prayed for treble damages. In her instructions to the jury, the District Judge explained that the offense of monopolization under § 2 of the Sherman Act has two elements: (1) the possession of monopoly power in a relevant market, and (2) the willful acquisition, maintenance, or use of that power by anticompetitive or exclusionary means or for anticompetitive or exclusionary purposes. On the second element, the jury was instructed that it had to consider whether 'D willfully acquired, maintained, or used that power by anticompetitive or exclusionary means or for anticompetitive or exclusionary purposes.' D was found guilty, and the appeals court affirmed. The Supreme Court granted certiorari. D contends that even a firm with monopoly power has no duty to engage in joint marketing with a competitor, that a violation of § 2 cannot be established without evidence of substantial exclusionary conduct, and that none of its activities can be characterized as exclusionary. D also contends that the Court of Appeals incorrectly relied on the 'essential facilities' doctrine and that an 'anticompetitive intent' does not transform nonexclusionary conduct into monopolization. P claims it is not necessary to rely on the 'essential facilities' doctrine in order to affirm the judgment.

Issues

Rule of Law

Holding and Decision

Legal Analysis

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