COMMONWEALTH ELECTRICAL INSPECTION SERVICES INC v. TOWN OF CLARENCE

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Supreme Court, Appellate Division, Fourth Department, New York.

Matter of COMMONWEALTH ELECTRICAL INSPECTION SERVICES, INC., and Patrick Cullinan, Petitioners-Appellants, v. TOWN OF CLARENCE, John Love, Ian McPherson, Thomas Sweeney, and Barbara Guida, in their Official Capacities as Council Members of Town Board of Town of Clarence, Daniel Herberger, in his Official Capacity as Town Supervisor of Town of Clarence, Town of Elma, Bill Cirocco, Dennis Powers, Dona Reid, and Sal Valvo, in their Official Capacities as Council Members of Town of Elma, and Audrey Murdoch, in her Official Capacity as Town Supervisor of Town of Elma, Respondents-Respondents.  (Appeal No. 1.)

Decided: April 30, 2004

PRESENT:  GREEN, J.P., WISNER, HURLBUTT, KEHOE, AND LAWTON, JJ. Anthony J. Emmi, Grand Island, for Petitioners-Appellants. Bennett, Di Filippo & Kurtzhalts, East Aurora (David S. Whittemore of Counsel), for Respondents-Respondents.

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 exclusive jurisdiction of the federal courts (see Marrese v. American Academy of Orthopaedic Surgeons, 470 U.S. 373, 379-380, 105 S.Ct. 1327, 84 L.Ed.2d 274, reh. denied 471 U.S. 1062, 105 S.Ct. 2127, 85 L.Ed.2d 491;  Freeman v. Bee Mach. Co., 319 U.S. 448, 452 n. 6, 63 S.Ct. 1146, 87 L.Ed. 1509, reh. denied 320 U.S. 809, 64 S.Ct. 27, 88 L.Ed. 489;  General Inv. Co. v. Lake Shore & Mich. S. Ry. Co., 260 U.S. 261, 286-288, 43 S.Ct. 106, 67 L.Ed. 244;  Simpson Elec. Corp. v. Leucadia, Inc., 72 N.Y.2d 450, 456-458, 534 N.Y.S.2d 152, 530 N.E.2d 860;  Capital Tel. Co. v. Pattersonville Tel. Co., 81 A.D.2d 970, 971, 439 N.Y.S.2d 759, affd. 56 N.Y.2d 11, 451 N.Y.S.2d 11, 436 N.E.2d 461;  Theatre Confections v. Andrea Theatres, 126 A.D.2d 969, 511 N.Y.S.2d 744).   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 N.Y.2d 714, 718, 658 N.Y.S.2d 205, 680 N.E.2d 578;  Matter of Reis v. Zimmer, 263 A.D.2d 136, 144, 700 N.Y.S.2d 609, amended 270 A.D.2d 968, 710 N.Y.S.2d 259;  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 A.D.2d 342, 343, 762 N.Y.S.2d 820, lv. denied 1 N.Y.3d 503, 775 N.Y.S.2d 780, 807 N.E.2d 893;  Pharmacists' Assn. of W. N.Y. v. Blue Cross of W. N.Y., 112 A.D.2d 728, 729, 492 N.Y.S.2d 221).  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 N.Y.2d 460, 464, 381 N.Y.S.2d 426, 344 N.E.2d 357;  see also Hall Heating Co. v. New York State Elec. & Gas Corp., 180 A.D.2d 957, 958, 580 N.Y.S.2d 528;  Pharmacists' Assn. of W. N.Y., 112 A.D.2d at 729, 492 N.Y.S.2d 221;  cf. Englert v. City of McKeesport, 872 F.2d 1144, 1149-1152, cert. denied 493 U.S. 851, 110 S.Ct. 149, 107 L.Ed.2d 108 [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 N.Y.2d at 464, 381 N.Y.S.2d 426, 344 N.E.2d 357).

In view of our determination, we do not address the parties' remaining contentions.

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

MEMORANDUM: