Dykema Secures Dismissal of City of Mackinac Island’s Antitrust Counterclaims Against Ferrys in Federal Litigation

Dykema, a leading national law firm, announced today that it helped secure dismissal of all federal and state antitrust counterclaims asserted by the City of Mackinac Island in ongoing litigation involving Shepler’s Inc. and Arnold Transit Company. In a detailed Opinion and Order, Judge Robert J. Jonker of the United States District Court for the Western District of Michigan ruled that the City lacks antitrust standing as a matter of law and denied the City’s motion to join Hoffmann Family Companies as a defendant.

The City had alleged that the acquisition of both ferry operators created monopolies in two markets—ferry transportation to and from Mackinac Island and long-term parking services in Mackinaw City and St. Ignace—in violation of federal and state antitrust laws. The Court rejected those claims in their entirety.

In its Opinion, the Court emphasized that “market share alone” is insufficient to establish liability under Sections 1 or 2 of the Sherman Act. The Court further explained that possession of monopoly power—even when coupled with alleged price increases—does not violate antitrust law absent exclusionary or anticompetitive conduct.

The Court found that the City failed to plead facts demonstrating that the ferry operators engaged in exclusionary conduct or foreclosed competition. Alleged barriers to entry, including dock access, parking ownership, and franchise requirements, were either preexisting, regulatory in nature, or not attributable to unlawful conduct. The Court also concluded that the City’s allegations of fare increases did not plausibly support an inference of predatory or anticompetitive pricing.

Critically, the Court held that the City failed to allege a cognizable antitrust injury. The City’s claimed harms—including reduced property values, diminished tax revenues, and increased costs—were deemed too indirect and collateral to constitute the type of injury the antitrust laws were designed to remedy. The Court further determined that the City could not plausibly characterize itself as a typical consumer plaintiff, noting its contractual and regulatory authority over ferry operators through franchise agreements and charter powers, including authority relating to rate regulation.

Because the Court concluded that the City lacked antitrust standing, it also denied the City’s motion to join Hoffmann Family Companies as a party.

While the antitrust claims have been dismissed, the City’s contract-based claims relating to franchise agreements remain pending.

The Dykema team representing the ferry operators includes Mark Magyar and Rick Aaron. Dykema served as Michigan counsel in the matter, working in close coordination as co-counsel with the litigation team at Blank Rome LLP led by William J. Dorsey and Jeremy A. Rist, with support from Deborah A. Skakel, Eric S. Tower, Gregory P. Cronin, and Paige F. Wahoff.