Commonwealth Electrical Inspection Services, Inc. v. Town of Clarence

Majority

p. 1185

In the Matter of Commonwealth Electrical Inspection Services, Inc., et al., Appellants, v Town of Clarence et al., Respondents.

(Appeal No. 1.)

[776 NYS2d 687]

Appeal from a judgment (denominated order) of the Supreme Court, Erie County (Robert E. Whelan, J.), entered December 5, 2002 in a proceeding pursuant to CPLR article 78. The judgment granted respondents’ motion for summary judgment dismissing the petition.

It is hereby ordered that the judgment so appealed from be and the same hereby is unanimously affirmed without costs.

Memorandum: Petitioners commenced this CPLR article 78 proceeding seeking to invalidate certain actions undertaken by two municipalities on the ground that the actions violated federal and state antitrust law. Petitioners appeal from a judgment granting the motion of respondents for summary judgment dismissing the petition on the merits and with prejudice. In addition, Supreme Court in its written decision concluded “that respondents are [permitted] to enact such ordinances as are necessary to limit electrical inspection and certification services to a single entity such as the New York Board of Fire Underwriters.”

We conclude that the court properly granted that part of respondents’ motion for summary judgment dismissing the petition insofar as it alleges a violation of federal antitrust law, but for a different reason. Federal antitrust claims are within the

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exclusive jurisdiction of the federal courts (see Marrese v American Academy of Orthopaedic Surgeons, 470 US 373 , 379-380 [1985], reh denied 471 US 1062 [1985]; Freeman v Bee Mach. Co., 319 US 448 , 451 n 6 [1943], reh denied 320 US 809 [1943]; General Inv. Co. v Lake Shore & Mich. S. Ry. Co., 260 US 261 , 286-288 [1922]; Simpson Elec. Corp. v Leucadia, Inc., 72 NY2d 450 , 456-458 [1988]; Capital Tel. Co. v Pattersonville Tel. Co., 81 AD2d 970 , 971 [1981], affd 56 NY2d 11 [1982]; Theatre Confections v Andrea Theatres, 126 AD2d 969 [1987]). Although the issue was not raised by the litigants or addressed by the court, we address the exclusively federal nature of the claim sua sponte inasmuch as it goes to the subject matter jurisdiction of the court (see Matter of Fry v Village of Tarrytown, 89 NY2d 714 , 718 [1997]; Matter of Reis v Zimmer, 263 AD2d 136 , 144 [1999], amended 270 AD2d 968 [2000]; see generally CPLR 3211 [a] [2]).

We further conclude that the court properly granted that part of respondents’ motion for summary judgment dismissing the petition insofar as it alleges a violation of state antitrust law, known as the Donnelly Act (General Business Law § 340 et seq.), but again for a different reason. Petitioners have failed to state a cause of action for violation of the Donnelly Act (see CPLR 3211 [a] [7]; North Atl. Util, v Keyspan Corp., 307 AD2d 342 , 343 [2003], lv denied 1 NY3d 503 [2003]; Pharmacists’ Assn. of W. N.Y. v Blue Cross of W. N.Y., 112 AD2d 728 , 729 [1985]). General Business Law § 340 (1) provides that “[e]very contract, agreement, arrangement or combination” is illegal and void insofar as it establishes and maintains a monopoly or restrains competition or trade. We conclude that the action taken by each of the municipalities in this case, consisting of the enactment of a particular ordinance, was purely unilateral and thus was not accomplished by means of the essential statutorily proscribed “contract, agreement, arrangement or combination” (id.; see State of New York v Mobil Oil Corp., 38 NY2d 460 , 464 [1976]; see also Hall Heating Co. v New York State Elec. & Gas Corp., 180 AD2d 957 , 958 [1992]; Pharmacists’ Assn, of W. N.Y., 112 AD2d at 729 ; cf. Englert v City of McKeesport, 872 F2d 1144 , 1149-1152 [1989], cert denied 493 US 851 [1989] [interpreting analogous provisions of federal antitrust law in circumstances identical to those at bar]). We note that the statutory term “arrangement,” like the statutory terms “contract,” “agreement,” and “combination,” refers to bilateral conduct and does not connote “a one-sided practice” such as that challenged by petitioners in this case (Mobil Oil Corp., 38 NY2d at 464 ).

In view of our determination, we do not address the parties’

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remaining contentions. Present—Green, J.E, Wisner, Hurlbutt, Kehoe and Lawton, JJ.

Cases cited

Marrese v. American Academy of Orthopaedic Surgeons 470 US 373 SCOTUS 1985-03-04 at 379-380 p. 1186
Freeman v. Bee Machine Co. 319 US 448 SCOTUS 1943-06-01 at 451 p. 1186
General Investment Co. v. Lake Shore & Michigan Southern Railway Co. 260 US 261 SCOTUS 1922-11-27 at 286-288 p. 1186
Simpson Electric Corp. v. Leucadia, Inc. 72 NY2d 450 N.Y. 1988-10-25 at 456-458 p. 1186
Capital Telephone Co. v. Pattersonville Telephone Co. 81 AD2d 970 N.Y. App. Div. 1981-05-21 at 971 p. 1186
Capital Telephone Co. v. Pattersonville Telephone Co. 56 NY2d 11 N.Y. 1982-05-13 p. 1186
Theatre Confections, Inc. v. Andrea Theatres, Inc. 126 AD2d 969 N.Y. App. Div. 1987-01-23 p. 1186
Fry v. Village of Tarrytown 89 NY2d 714 N.Y. 1997-03-27 at 718 p. 1186
Reis v. Zimmer 263 AD2d 136 N.Y. App. Div. 1999-12-30 at 144 p. 1186
North Atlantic Utilities, Inc. v. Keyspan Corp. 307 AD2d 342 N.Y. App. Div. 2003-07-28 at 343 p. 1186
Pharmacists' Ass'n of Western New York, Inc. v. Blue Cross of Western New York, Inc. 112 AD2d 728 N.Y. App. Div. 1985-07-12 at 729 p. 1186
State v. Mobil Oil Corp. 38 NY2d 460 N.Y. 1976-01-06 at 464 p. 1186
Hall Heating Co. v. New York State Electric & Gas Corp. 180 AD2d 957 N.Y. App. Div. 1992-02-20 at 958 p. 1186

Statutes and regulations cited

General Business Law p. 1186