USA – NEW YORK Trends and Developments Contributed by: Philip Iovieno, Kristen J. McAhren and Mark Singer, Cadwalader, Wickersham & Taft LLP
Cadwalader, Wickersham & Taft LLP 200 Liberty Street New York, NY 10281 USA Tel: +1 212 504 6000 Email: cwtinfo@cwt.com Web: www.cadwalader.com
New York’s Antitrust Legislation, the 2nd Circuit and Recent Competition Decisions In the United States, a private litigant’s choice of the court in which to bring a claim for violation of antitrust laws is an important decision. Rather than a single, unitary body, the antitrust laws in the United States are a mix of various federal and state laws, deliberately drafted to empower the courts to flexibly interpret and apply their principles to changing real-world markets. As such, different courts can and do present different interpretations of the antitrust laws. Private antitrust litigation in New York is primarily decided by the federal courts of the New York region, known as the 2nd Circuit. New York’s antitrust laws and legal framework The predominant antitrust law in private litigation is the federal Sherman Act, 15 US Code (USC), Sec - tion 1 et seq. In substance, the Sherman Act consists merely of two sentences. The first (“Section 1”) states that “[e]very 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.” (15 USC, Section 1.) The second (“Section 2”) penalises “[e]very per - son who shall monopolize, or attempt to monopo - lize, or combine to conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations.” (15 USC, Section 2.) The Sherman Act is interpreted to require a court to determine if a restraint is “unreasonable” under the circumstances, with con - spiracies among direct competitors generally granted a presumption of “per se” unreasonableness.
A separate law called the Clayton Act provides the federal courts jurisdiction over all private litigation brought under the Sherman Act. The Clayton Act seeks to incentivise private enforcement of the Sher - man Act in a number of ways, most significantly by directing courts to award triple the amount of any damages sustained to a successful plaintiff. (15 USC, Section 15.) The primary state antitrust law in New York is the Donnelly Act, NY Gen. Bus. Law, Section 340 (6). For purposes of private litigation, the Donnelly Act, in substance, largely mirrors Section 1 of the Sherman Act and broadly prohibits agreements in restraint of trade in or affecting the territory of the State of New York. It also provides that a litigant may recover tre - ble damages. The Donnelly Act does not contain a provision allowing for private litigation for single-firm monopolisation conduct analogous to Section 2 of the Sherman Act. The Donnelly Act’s private litigation provision was enacted to fill a gap in the coverage of Section 1 of the Sherman Act. The United States Supreme Court has determined that in most instances, only the first purchaser to whom an alleged conspirator directly sold goods or services may pursue a claim under the Sherman Act. The Donnelly Act, however, additionally allows litigation to be brought by so-called indirect purchasers – often consumers – who purchased from the first buyer or an intermediate buyer, such as a distributor or retailer, so long as their harm occurred in New York. These indirect purchasers must prove that any increased prices caused by an alleged anti - trust violation were passed down to them by the purchaser(s) above them in the supply chain.
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