Johnson v. Priceline.com
U.S. COURT OF APPEALS, SECOND CIRCUIT
Judge Reena Raggi
Priceline.com's "Name Your Own Price" service invites consumers to "bid" for hotel rooms. Plaintiffs alleged breaches of contract and fiduciary duty, and violation of Connecticut's Unfair Trade Practices Act over Priceline's alleged nondisclosure that a successful bid generally exceeds the amount Priceline pays the hotel, with Priceline keeping the difference as profit. District court found Priceline not a fiduciary of "Name Your Own Price" consumers. It did not act as a travel agent, but provided a reservation in an arm's length transaction not characterized by a relationship of trust. Second Circuit affirmed. Under Macomber v. Travelers Property & Casualty, plaintiffs failed to allege an agency relationship with "Name Your Own Price" users. Once Priceline accepts a bid, it is bound to provide the desired accommodation at the stated sum. However, the customer retains no authority over the manner in, or price for, which the reservation will be procured. Thus neither the bid nor its acceptance gives rise to a fiduciary duty to disclose. Citing Hi-Ho Tower v. Com-Tronics, the circuit found the fact that only Priceline has access to both its algorithm and its inventory of discounted hotel rooms does not otherwise create a fiduciary relationship.