State v. Mobil Oil Corp.

allowed a claim for restraint of trade similar to a tying arrangement to proceed under the Donnelly Act, saying (pp. 127—128): “ Such a business practice bears a superficial resemblance to a tying arrangement which, by inhibiting competition in the market- place, is unreasonable and illegal. (See Northern Pac. Ry. Co. v. United States, 356 U. S. 1 ; Fortner Enterprises v. United States Steel, 394 U. S. 495 , 507.” and again (pp. 128-129): “But the mere fact that the challenged practice may not be deemed a tie-in' does not automatically immunize it from attack under the Donnelly Act. Even though the defendant’s promotional activity is not illegal as a matter of law, it may still be unlawful if it can be shown to have actually restrained competition. (Cf. United States v. Griffith, 334 U. S. 100 , 107 et seq.) Therefore, despite our reservations concerning the sufficiency of the second cause of action, we are reluctant to foreclose the plaintiff from an opportunity of factually demonstrating illegality in a comprehensive rule of reason inquiry (see, e.g., Standard Oil Co. v. United States, 283 U. S. 163 , 179; Chicago Bd. of Trade v. United States, 246 U. S. 231 , 238-239), especially since there will, in any event, be a trial on the merits of the first cause of action. Since, then, it does no violence to the plaintiff’s pleading to permit proof at the trial of possible anticompetitive effects, if any, of the defendant’s promotional plan, the motion to strike the second count of the complaint was properly denied.” Chief Judge Breitel (then Judge Breitel) in his dissent, while approaching the matter from a different view, in considering whether a tie-in sale may constitute a Sherman Act violation, acknowledged that the Federal courts have so held, but went on to say (p. 131) : “ Be that as it may, it does not necessarily follow that New York courts will or should give their similar statute the same interpretation. They have not before this, and there is no compulsion, logical or otherwise, that they do so.” In sum, the State of New York should not be foreclosed in the application of its strong public policy in favor of free competition (Matter of Aimcee Wholesale Corp. [Tomar Prods.], 21 N Y 2d 621 , 625, 626), by historical claims that the Sherman Act was limited and needed amendments to reach a wide range of possible trade regulatory devices to prevent restraint of trade. The New York Law was originally enacted in 1897. In its current reach to prevent restraint of competition, it contains language broader in scope than the Sherman Act. Section 1 of the Sherman Act provides as follows: “ Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared -to be illegal”. Subdivision 1 of section 340 of the General Business Law, the Donnelly Act, provides as follows: “1. Every contract, agreement, arrangement or combination whereby A monopoly in the conduct of any business, trade or commerce or in the furnishing of any service in this state, is or may be established or maintained, or whereby Competition or the free exercise of any activity in the conduct of any business, trade or commerce or in the furnishing of any service in this state is or may be restrained or whereby For the purpose of establishing or maintaining any such monopoly or unlawfully interfering with the free exercise of any activity in the conduct of any business, trade or commerce or in the furnishing of any service in this state any business, trade or commerce or the furnishing of any service is or may be restrained, is hereby declared to be against public policy, illegal and void.” A cursory reading will show that in the State law not only a contract or combination is involved, but also any agreement or arrangement. It was originally considered to be “little more than a codification of the common law upon the subject” (Matter of Davies, 168 N. Y. 89 , 101). As to the common law: “The law of New York early limited arrangements between business persons which tended

to control the flow of goods and services, and prices.” (See 1 State Antitrust Laws, Marketing Laws Survey [Works Progress Admin., U. S. Govt. Print. Off., 1940], p. 495.) See, also, Park & Sons Co. v. National Wholesale Druggists' Assn., 175 N. Y. 1 .) In other words, the New York law is not limited by the Sherman Act interpretations. Many State antitrust laws are similar to the Sherman Act in language and some are more specific. (Competition and Monopoly by Mark S. Massel [Brookings Institution, 1962], ch. 3, n. 253.) Further, the allegations of the complaint as to serious detriment to competition and the public, might cover situations contemplated in section 3 of the RobinsonPatman Act. As was said in page 201 of the Report of the Attorney-General’s National Committee to Study the Antitrust Laws (March 31,1955) (Cochairmen Stanely N. Barnes and S. Chesterfield Oppenheim): “Predatory price slashing obviously constitutes an attempt to monopolize, already rendered a crime by Section 2 of the Sherman Act”. Therefore, the Sherman Act area is or could be encompassed. Certainly, inasmuch as other causes of action of the complaint go on to trial, these causes should also be considered on the merits, and I would affirm. (Columbia Gas of N. Y. v. New York State Elec. & Gas Corp., 28 N Y 2d 117 , 128, supra.)