## Facts

- Consumers used Priceline.com’s “Name Your Own Price” (NYOP) service to bid for hotel rooms by selecting location, dates, and minimum star rating without knowing the specific hotel in advance.
- Plaintiffs alleged Priceline would accept a bid only after locating a room it could supply at a lower cost than the bid, then charged the consumer the bid price, booked the room at the lower price, and kept the difference as profit.
- Plaintiffs alleged Priceline did not disclose that accepted bids typically exceeded what Priceline paid the hotel and that Priceline retained the spread.
- Plaintiffs characterized Priceline as functioning like a travel agent for NYOP users and claimed Priceline had fiduciary duties to seek the lowest available price and to disclose its margin.
- Plaintiffs brought a putative class action asserting (1) breach of fiduciary duty, (2) breach of contract, and (3) violation of the Connecticut Unfair Trade Practices Act (CUTPA); they conceded the contract and CUTPA theories were wholly dependent on the fiduciary-duty theory.
- The district court dismissed the amended complaint under Rule 12(b)(6), holding Priceline was not a fiduciary of NYOP users; plaintiffs appealed.

## Issues

1. Whether NYOP users plausibly alleged an agency or fiduciary relationship with Priceline that imposed duties to disclose Priceline’s profit spread and to obtain the lowest available hotel price.
2. If no fiduciary relationship existed, whether the derivative breach of contract and CUTPA claims necessarily failed.

## Decision

- The Second Circuit affirmed dismissal of the amended complaint.
- The court held plaintiffs failed, as a matter of law, to plead an agency or fiduciary relationship between Priceline and NYOP users.
- Because no fiduciary duty existed, Priceline had no duty to disclose the spread or to secure the lowest available price.
- Given plaintiffs’ concession that the contract and CUTPA claims depended on the fiduciary-duty theory, those claims also failed.

## Legal Principles

- Under Connecticut agency law, an agency relationship requires mutual consent that one party will act on the other’s behalf and subject to the other’s control.
- A retail-type transaction in which a seller accepts a consumer’s offer and fulfills it on its own terms generally does not create an agency or fiduciary relationship, even if the seller earns a margin between its costs and the consumer’s price.
- Marketing suggesting bargaining or deal-seeking does not, without facts showing consumer control or manifested intent to act primarily for the consumer’s benefit, convert an arm’s-length seller into a fiduciary.
- When pleaded contract and statutory unfair-trade claims are expressly derivative of a fiduciary-duty theory, failure to plead a fiduciary relationship is dispositive of those claims as alleged.

## Conclusion

The court treated NYOP as an arm’s-length retail sale of a reservation rather than a principal–agent arrangement, so Priceline owed no fiduciary duty to disclose its profit spread or to pursue the lowest available hotel rate, and the dependent contract and CUTPA claims were properly dismissed.


Johnson v. Priceline.com, Inc., 711 F.3d 271 (2d Cir. 2013)