MACKINAC ISLAND — A federal judge has dismissed antitrust claims brought by the City of Mackinac Island against its two primary ferry providers, ruling the city lacks the legal standing to sue the companies for operating a monopoly.
The decision, issued Feb. 20, 2026, finds that the city functions as a regulator rather than a typical consumer and failed to prove that Hoffman Family Companies engaged in anticompetitive behavior after purchasing both Shepler’s Inc. and Arnold Transit Company.
The legal battle began after Hoffman Family Companies, a private equity firm, acquired Shepler’s in 2022 and the Mackinac Island Ferry Company in 2024.
The acquisitions gave Hoffman control more than 100% of the ferry service and roughly 85% of the long-term parking market used by more than one million tourists who visit the island annually. The city attempted to regulate fares under its franchise agreements, leading to a series of lawsuits over market dominance and ticket pricing.
U.S. District Judge Robert J. Jonker issued the decision, which also denied the city’s request to add Hoffman Family Companies as a party to the lawsuit. “Antitrust standing is a threshold, pleading stage inquiry,” Jonker wrote in the opinion. “If the complaint by its terms fails to establish this requirement, the district court must dismiss the case as a matter of law.”
The court found the city failed to demonstrate that the ferry companies engaged in exclusionary conduct. While the city alleged that ticket prices rose by $2 for the 2025 season, the court noted this increase was less than the Consumer Price Index changes over the same period. Adult round-trip tickets currently cost $37 for Arnold Transit and $38 for Shepler’s. According to the court, these rates reflect increased operational costs rather than predatory pricing.
The city argued that Hoffman’s control over dock space and parking created insurmountable barriers for competitors. Hoffman owns more than 116 parcels of land, including 51 buildings and 6,500 parking spaces. However, the court noted that a third party recently opened a new parking lot near the docks in Mackinaw City, suggesting the market had not been foreclosed.
Furthermore, any barriers created by franchise fees are of the city’s own making, as an ordinance requires operators to split an annual fee that has grown to $821,664.
The ruling also addressed the corporate relationship between the two ferry lines.
Chris Shepler, the CEO of Shepler’s, has previously stated that the companies are “all one company” and “a single franchise.”
Jenny Gezella, the president of Hoffman Marine, supported this unified approach in previous public statements.
“Star Line tickets will be accepted at Shepler’s,” Gezella said. “As a family of companies, a ticket is a ticket. If you cannot get on at Star Line, bring it over to Shepler’s, and we will get you on the boat.”
Judge Jonker ruled that because the companies are managed as a single enterprise under Hoffman, they cannot “conspire” with one another under federal antitrust laws.
The city, which represents a year-round population of approximately 583 residents, had argued that the “lock-step” price increases proved a conspiracy. The court disagreed, stating that possessing a monopoly and charging high prices are not, by themselves, violations of the Sherman Antitrust Act.
The city’s separate claim for breach of contract remains active and is moving toward trial. This dispute centers on Section 9 of the existing Franchise Agreements, which the city believes allows it to unilaterally set fares when competition is absent.
The current agreements are scheduled to expire in June 2027.
Judge Jonker noted that the parties must negotiate new terms soon or “risk disrupting ferry service to the Island.”