USA – NEW YORK Trends and Developments Contributed by: Philip Iovieno, Kristen J. McAhren and Mark Singer, Cadwalader, Wickersham & Taft LLP
While New York state courts have jurisdiction over Donnelly Act claims, most private litigation brought under the Donnelly Act occurs in the federal courts. Several jurisdictional statutes give federal courts jurisdiction over the type of sizeable disputes typi - cally pursued under the Donnelly Act. In addition, federal courts may exercise supplemental jurisdiction over state law claims like those under the Donnelly Act where federal claims, such as under the Sherman Act, are also asserted. The Donnelly Act has been interpreted to prohibit class-action litigations in New York state courts but not in federal courts. (See, eg, Asher v Abbott Lab’ys, 290 A.D.2d 208 (1st Dep’t NY 2002) .) As a result, a common strategy used by class-action litigants pur - suing indirect purchaser claims is to (i) seek an injunc - tion under the Sherman Act to obtain federal question jurisdiction in a federal case, and (ii) simultaneously invoke the federal court’s supplemental jurisdiction over the Donnelly Act state law class action. The 2nd Circuit’s unique approach to antitrust leads to divergence from other courts The simplicity of the language used in both the Sher - man Act and the Donnelly Act means that the fed - eral courts have latitude in their interpretations. The main federal courts in the 2nd Circuit of the federal judicial system are those encompassed in the New York region, consisting of the United States Court of Appeals for the 2nd Circuit and the New York district courts under its jurisdiction: • the United States District Court for the Southern District of New York; • the United States District Court for the Eastern District of New York; • the United States District Court for the Northern District of New York; and • the United States District Court for the Western District of New York. The 2nd Circuit also covers district courts for the Dis - trict of Connecticut and the District of Vermont. The 2nd Circuit courts have long been recognised for their expertise in antitrust. At the 100th anniversary of the Sherman Act, the 2nd Circuit courts were noted as
having decided more antitrust cases than any other circuit courts. Hundreds of antitrust cases are cur - rently being litigated in New York, with the majority handled by the Southern District of New York in the borough of Manhattan, New York City, followed by the Eastern District of New York across the bridge in the borough of Brooklyn. Under the precedent of the 2nd Circuit Court of Appeals, these courts are known for a practical approach to antitrust analysis. This approach favours detailed and factual considerations of economic rela - tionships and consequences over bright-line rules and presumptions. This sophisticated but fact-intensive approach distinguishes the 2nd Circuit from many others and, in some cases, has led to long-standing conflicts or “splits” with other circuits in their inter - pretation of the Sherman Act and other antitrust laws. Notable splits involving the 2nd Circuit courts exist in diverse areas ranging from the interpretation of the Foreign Trade Antitrust Improvements Act (FTAIA) – a statute that governs the application of the Sherman Act to conduct outside the United States – to how to approach litigation in regulated industries. Numerous differences exist in the 2nd Circuit’s approach to anti - trust standing, which is a doctrine that considers who is the proper litigant to pursue an antitrust litigation. Moreover, the 2nd Circuit has numerous differences with other circuits in interpreting non-antitrust laws and procedural rules that often arise in antitrust litiga - tion, such as the proper means to examine potentially uninjured class members for purposes of certifying a class under the Federal Rules of Civil Procedure and how to approach certain foreign laws which seek to prohibit discovery or judgments from their territory. A notable split involving the 2nd Circuit that has gar - nered recent attention involves “conspiracy jurisdic - tion”. The 2nd Circuit courts will assert jurisdiction over a foreign defendant with no independent pres - ence or contacts with New York where it is alleged that the defendant participated in a conspiracy with at least one conspirator who did have such a presence or who acted in furtherance of the conspiracy in New York. (See Charles Schwab Corp. v Bank of America Corp., 833 F.3d 68 (2d Circuit 2018) ). While some circuits have followed this approach, others do not. In 2024,
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