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Johnson v. Priceline.com, Inc.

United States Court of Appeals for the Second Circuit
711 F.3d 271 (2013)


Facts

Lee Johnson and Joey Marie Kelly (plaintiffs) used Priceline.com, Inc.’s (defendant) “Name Your Own Price” tool, which allows customers to specify a location, dates, minimum stars, and price but not a specific hotel. The website advises that “if Priceline accepts your price,” it will select a hotel meeting the specifications and book a room. In almost all transactions, Priceline will not accept a bid unless it locates a room in its proprietary inventory at a price lower than the customer’s bid. If it does, Priceline accepts the bid, then the customer adds billing details and clicks “book now.” Priceline books the room, charges the customer the bid price, pays the hotel the cheaper price, and keeps the difference. Only then is the hotel’s name revealed. Johnson and Kelly claimed that keeping the difference as a secret profit instead of procuring a room at the lowest price available was a breach of contract and fiduciary duty and a deceptive trade practice. The trial court dismissed, finding that Priceline owed no fiduciary duty of disclosure. Johnson and Kelly appealed, arguing Priceline owed a duty of disclosure as an agent.

Rule of Law

Issue

Holding and Reasoning (Raggi, J.)

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