NY State AG Sues Toggenburg Mountain Owner For Closing Ski Area

NY State AG Sues Toggenburg Mountain Owner For Closing Ski Area

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NY State AG Sues Toggenburg Mountain Owner For Closing Ski Area

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“Monopolies are not a game. They harm consumers, drive up prices, and limit workers’ opportunities. Intermountain’s greedy behavior left skiers out in the cold all so they could line their own pockets and be on top of the ski market.”– Letitia James, State of New York’s Attorney General.

The acquisition and closure of Toggenburg Mountain in New York last year was very suspect. The move was intended to direct customers to the other mountains that Intermountain owned: Song Mountain and Labrador Mountain. It went back on the market this year, but many of the critical infastructure pieces were removed, and a deed restriction doesn’t allow it to operate as a ski area again. Last Friday, the Attorney General’s Office of New York responded by pressing a lawsuit against Intermountain.

John Meier, who owns Green Peak Mountain Resort and sold Toggenburg to Intermountain, was forced to sign a non-compete agreement with Intermountain. This non-compete agreement meant they couldn’t acquire/operate a nearby ski area within thirty miles of the closed ski area for five years, and couldn’t hire anyone from Toggenburg for five years. Meier has been fined $195,000 and is cooperating with the investigation.

With this added detail to the situation, it has become clear that Intermountain was trying to create a ski area monopoly around the Syracuse region. Letita James’ goal is to have Intermountain sell one of its properties to have actual competition in the region. You can read the full lawsuit here.

Peter Harris, who is the President of Intermountain, said the following to Syracuse.com | The Post-Standard:

“We have been committed to providing Central New York with the best skiing and snowboarding value possible for more than 20 years. Through the purchase of Toggenburg, we sought to combine and upgrade ski facility assets to help ensure a long-term, sustainable combination of high-quality skiing and snowboarding in the region.

Central New York’s population has declined steadily since 1980. Like every other industry, consolidation has occurred based on population and demand. Skiers who formerly traveled to Toggenburg now have access to a broader array of better-equipped facilities and amenities which can be sustained and supported.”

The official statement from the New York Attorney General’s office is below.

Attorney General James Takes Action Against Central New York Ski Resorts for Unfair and Illegal Practices

AG James Sues Intermountain for Buying Competitor and Shutting It Down to Reduce Competition

Greek Peak Mountain Owner to Pay $195,000 for Illegal Noncompete Agreements

NEW YORK – New York Attorney General Letitia James today took two actions to stop unlawful and monopolistic business practices by ski resort operators in Central New York. Attorney General James is suing Intermountain Management (Intermountain) for buying its main competitor, Toggenburg Mountain, then shutting it down to direct skiers to its own ski mountains. In addition, Attorney General James today ended an illegal agreement between the owner of Greek Peak Mountain (Greek Peak), John H. Meier, and Intermountain that prohibited Mr. Meier from competing with Intermountain or hiring any of its employees. As a result of a settlement with the Office of the Attorney General (OAG), Mr. Meier is required to pay $195,000 to the state and will cooperate with the litigation against Intermountain.

“Intermountain tried to freeze out competitors to increase its profits and dominate the region’s ski market. Today we are taking action to end these illegal arrangements and protect workers, skiers, and consumers,” said Attorney General James. “Monopolies are not a game. They harm consumers, drive up prices, and limit workers’ opportunities. Intermountain’s greedy behavior left skiers out in the cold all so they could line their own pockets and be on top of the ski market. Illegal and unfair practices by businesses big and small will not be tolerated by my office.”

In August 2021, John Meier, operator of Greek Peak Mountain, sold Toggenburg Mountain — a mainstay for Syracuse-area skiers and snowboarders — to its main competitor, Intermountain. Intermountain owns and operates the only other two ski resorts in the Syracuse area, Labrador and Song Mountains. The OAG lawsuit alleges that Intermountain only purchased Toggenburg to shut out competition, which was made clear when it immediately closed Toggenburg and announced that Toggenburg would not reopen for the upcoming season.

Instead of continuing to operate Toggenburg, Intermountain suggested its customers drive to Labrador or Song Mountain so that Intermountain could capture the additional sales. Intermountain also publicly announced that it would insert a deed restriction barring future buyers from using Toggenburg as a ski resort ever again, thereby asserting itself as the only ski operator in the Syracuse area.

The lawsuit alleges that Intermountain partners Peter Harris and Richard Sykes collaborated on the anticompetitive scheme to buy Toggenburg and establish their monopoly for years, approaching Mr. Meier repeatedly, inviting him to drinks at private social clubs, meals at local restaurants, and even staging a “faux buy” where they approached Mr. Meier through a third party. When Mr. Meier finally agreed to sell, Intermountain’s owners required him to agree that he would not compete with any of the Intermountain ski resorts, including Labrador and Song Mountains, for five years.

The non-compete agreement prohibited Mr. Meier from hiring any of Intermountain’s employees, from janitorial staff to ski lift operators, in what is known as a “no-poach” provision. No-poach agreements and provisions reduce competition for employees and disrupt normal wage-setting mechanisms, harming workers. The OAG’s investigation did not identify any reason for the no-poach provision and determined that its inclusion was unlawful. In addition to the agreement with Intermountain, Mr. Meier had entered into similar agreements with his former partner, Marc Stemerman, and E. James Hickey. The agreement with Mr. Stemerman contained a no-poach provision, and the agreement with Mr. Hickey had a geographic restriction that barred Mr. Hickey from competing within a 70-mile radius around Toggenburg. Ultimately, these illegal agreements harmed workers’ mobility and career choices.

The OAG ended these illegal agreements and Mr. Meier will pay $195,000 to the state, which is the amount he was paid by Intermountain for the agreement. Mr. Meier is also required to cooperate with OAG’s litigation against Intermountain.

As part of the lawsuit against Intermountain, Attorney General James is seeking to require Intermountain to sell one of its resorts and rescind its illegal non-compete agreement. In addition, Attorney General James is seeking monetary relief for the ill-gotten gains from Toggenburg customers forced to move to Intermountain, and civil penalties for Intermountain’s unfair and illegal business practices.

This matter and litigation are being handled by Assistant Attorneys General Benjamin J. Cole and Tal M. Elmatad of the Antitrust Bureau, under the supervision of Deputy Bureau Chief Amy McFarlane and Bureau Chief Elinor Hoffmann. The Antitrust Bureau is a part of the Division for Economic Justice, which is led by Chief Deputy Attorney General Chris D’Angelo and overseen by First Deputy Attorney General Jennifer Levy.

Image Credits: Toggenburg Ski Patrol, CANAAN REALTY/Realtor.comSkimap.org

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