Commercial Division Blog

Posted: February 21, 2015 / Categories Commercial, Unfair Competition, Antitrust

Fourth Department Analyzes Standard for Donnelly Act Claim

On February 13, 2015, the Fourth Department issued a decision in Radon Corp. of America, Inc. v. National Radon Safety Board, 2015 NY Slip Op. 01365, discussing the standard for a Donnelly Act claim.

In Radon Corp. of America, the Fourth Department reversed a trial court's grant of summary judgment to a defendant on a Donnelly Act claim, explaining:

A party asserting a violation of the Donnelly Act is required to (1) identify the relevant product market; (2) describe the nature and effects of the purported conspiracy; (3) allege how the economic impact of that conspiracy is to restrain trade in the market in question; and (4) show a conspiracy or reciprocal relationship between two or more entities. The Court of Appeals has recognized, however, that neither the Donnelly Act nor the Sherman Act, after which it was modeled, has been interpreted as prohibiting every agreement that has the effect of restraining trade, no matter how minimal. Instead, as construed by State and Federal courts, the antitrust laws prohibit only unreasonable restraints on trade. . . . .

We conclude with respect to the three remaining factors that there are triable issues of fact whether RTCA and NRSB engaged in concerted action that unreasonably restrained trade in New York's CRM-calibration market inasmuch as the individual defendants are employed in various capacities with RTCA and are also board members of NRSB, the entity responsible for formally adopting the policy that effectively prohibited plaintiff from performing CRM-calibration services in New York. Similarly, we note that NRSB's intra-entity contention is not dispositive because, here, plaintiff alleged a conspiracy between two distinct entities and there is an issue of fact whether RTCA is in competition with plaintiff.

Contrary to the further contention of the individual defendants, they are not entitled to summary judgment dismissing the fourth cause of action against them. Corporate officers can also be held liable in civil antitrust actions under the Donnelly Act, and there are triable issues of fact regarding their participation in the alleged corporate antitrust violations.

(Internal quotations and citations omitted) (emphasis added).