People v. Roth

• Decision Date: 02 April 1981
• Citation: 438 N.Y.S.2d 737,52 N.Y.2d 440,420 N.E.2d 929
• Parties: , 420 N.E.2d 929, 1981-1 Trade Cases P 64,026 The PEOPLE of the State of New York, Appellant, v. Samuel J. ROTH et al., Respondents.
• Court: New York Court of Appeals Court of Appeals

Page 737

438 N.Y.S.2d 737

52 N.Y.2d 440, 420 N.E.2d 929, 1981-1

Trade Cases P 64,026

The PEOPLE of the State of New York, Appellant, v. Samuel J. ROTH et al., Respondents.

Court of Appeals of New York.

April 2, 1981.

Robert Abrams, Atty. Gen. (Bonnie G. Wittner, Asst. Atty. Gen., and Shirley Adelson Siegel, Sol. Gen., of counsel), for appellant.

James M. O'Brien and Kevin J. Muntagh, Rockville Centre, for Frank Oliveto, respondent.

John J. Tigue, Jr., Elliot Silverman, New York City, John L. Kase, James O. Druker and Paula Schwartz Frome, Mineola, for Seth Kaufman, respondent.

Harvey Paticoff, New York City, for Joel Karen, respondent.

Irving Anolik, New York City, for Samuel J. Roth and others, respondents.

Jeffrey Weingard and Roy Broudny, New York City, for S. Peter Rovitz and another, respondents.

Taylor R. Briggs and Thomas G. Rohback, New York City, for the Medical Society of the State of New York, amicus curiae.

OPINION OF THE COURT

PER CURIAM.

Defendants, all of whom are licensed physicians, were indicted under the Donnelly Act, which prohibits "combinationwhereby * * * or the free exercise of any activity in the conduct of any business, trade or commerce or in the furnishing of any service * * * is or may be restrained" (General Business Law, § 340). Specifically, it was alleged that defendants had violated this statute by organizing a group boycott and concertedly refusing to furnish professional services to nonemergency workers' compensation and no-fault insurance patients. The boycott was ostensibly organized as a means of protesting the low fee schedules established by law for these plans.

Defendants promptly moved to dismiss the indictment, asserting, among other grounds, that combinations among licensed professionals involving the provision of professional services are exempt from the proscriptions of the Donnelly Act. County Court, 100 Misc.2d 542, 419 N.Y.S.2d 851, granted the motion after concluding that our decision in Matter of Freeman, 34 N.Y.2d 1, 355 N.Y.S.2d 336, 311 N.E.2d 480 mandated adoption of defendants' position. The Appellate Division unanimously affirmed without opinion, 74 A.D.2d 1008, 425 N.Y.S.2d 904. Because we agree that Matter of Freeman (supra) is dispositive of the issue presented by defendants' motion, we now affirm the decisions below.

In Freeman, we were asked to consider whether a minimum fee schedule adopted by a County Bar Association constituted a violation of the Donnelly Act. After examining the language and legislative history of the act, we held that it was simply not intended to apply to the legal profession (34 N.Y.2d, at p. 9, 355 N.Y.S.2d 336, 311 N.E.2d 480). Since we can discern no principled basis for distinguishing between the legal profession and the medical profession, at least for purposes of the Freeman rule, we are obliged to conclude that the medical profession is similarly insulated from liability under the Donnelly Act.

It has been suggested that the recent decision of the Supreme Court in Goldfarb v. Virginia State Bar, 421 U.S. 773, 95 S.Ct. 2004, 44 L.Ed.2d 572 requires a re-examination of our categorical ruling in the Freeman case. We cannot agree. The Goldfarb court merely held that the language and legislative history of the Federal antitrust laws did not support the conclusion that Congress intended to exempt the learned professions from the strictures of the Sherman Act (421 U.S. at pp. 786-788, 95 S.Ct. at p. 2013). As we noted in Freeman, the ruling of a Federal court interpreting a Federal Statute has no direct bearing upon a State court's analysis of an analogous provision enacted by the State Legislature (34 N.Y.2d, at p. 7, 355 N.Y.S.2d 336, 311 N.E.2d 480).

Of course, it could be argued that the Goldfarb analysis represents the more "modern" view of the relationship between the antitrust laws and the learned professions and that, accordingly, we should re-examine our own State antitrust statutes in light of that decision. Such an argument, however, cannot seriously be maintained in the face of the clear language in Freeman, which indicates that our decision in that case rested not upon general policy considerations, but rather upon a specific analysis of the legislative history underlying the Donnelly Act and the intent of our own State Legislature in enacting that statute. Inasmuch as nothing has occurred since Freeman was decided which would suggest that we were mistaken in that analysis, we can see no sound reason to abandon the Freeman rule merely because a Federal court has reached a different conclusion about an analogous Federal statute (cf. Monell v. New York City Dept. of Social Servs., 436 U.S. 658, 98 S.Ct. 2018, 56 L.Ed.2d 611, overruling Monroe v. Pape, 365 U.S. 167, 81 S.Ct. 473, 5 L.Ed.2d 492). ^*

Accordingly, the order of the Appellate Division should be affirmed.

JONES, Judge (concurring).

I agree that there should be an affirmance but not on the ground that the alleged conduct of defendant physicians does not fall within the proscription of the Donnelly Act (General Business Law, § 340). In my view, while at least certain activities of members of the medical and other professions should now be held to come within the embrace of our State statute, constitutional principles preclude the prosecution of the physicians charged in this instance.

I am impelled to dissent from the conclusion that the Donnelly Act is inapplicable because I think the majority ignores that basal legislative intent disclosed in the history of the 1957 revision of that statute as identified and underscored in our decision in State of New York v. Mobil Oil Corp., 38 N.Y.2d 460, 381 N.Y.S.2d 426, 344 N.E.2d 357, as well as the now controlling significance of the decision of the United States Supreme Court in Goldfarb v. Virginia State Bar, 421 U.S. 773, 95 S.Ct. 2004, 44 L.Ed.2d 572. I recognize that in Matter of Freeman, 34 N.Y.2d 1, 355 N.Y.S.2d 336, 311 N.E.2d 480 our court, after a careful examination of the language and legislative history of our State statute, concluded in 1974 that the legal profession was exempt from any application of the Donnelly Act. I also perceive no significant legal difference between the medical profession and the legal profession for present purposes. But acknowledgment of these two propositions does not dictate the disposition of the appeal now before us. At the time of our decision in Freeman there had been no final, authoritative decision as to whether the Federal antitrust laws applied to the professions. After the Supreme Court's decision in Goldfarb in 1975, however, it is clear that the professions are not wholly exempt from the Federal antitrust laws.

What is now known as the Donnelly Act was initially adopted in 1893. Our present focus, however, must be on the major revision of the statute enacted in 1958; the statute today is virtually the product of the 1957 redrafting based in large part on a report of the Special Committee to Study the New York Antitrust Laws of the New York State Bar Association. A reading of its report can leave no doubt that it was the intention of that committee that our Donnelly Act should be considered the mirror counterpart of the Federal Sherman Act and that interpretations of the former were to be guided largely by interpretations and applications of the latter. Portions of the committee's report ¹ are illustrative. For instance, at p. 10: "The changes which we advocate are designed merely to simplify and not to alter in any respect the coverage and meaning of the statute save to make clear that it relates to all subjects of commerce, or in other words, that it embraces the same economic activities as the Sherman Act." (Emphasis in original.) Not only is it evident that the drafters intended the State courts to consider Federal antitrust principles as they existed in 1957, it is equally clear that they intended and expected that the Donnelly Act would be interpreted compatibly with future interpretations of the Sherman Act. Indeed, the special committee stated that expectation as one of the reasons it considered it unnecessary to substitute the wording of the Sherman Act for the diction of the Donnelly Act. ²

Subsequent to our decision in Freeman, we explicitly recognized this principle of counterpart conformity (State of New York v. Mobil Oil Corp., 38 N.Y.2d 460, 463, 381 N.Y.S.2d 426, 344 N.E.2d 357, supra ; see, also, Matter of Aimcee Wholesale Corp. 21 N.Y.2d 621, 626, 289 N.Y.S.2d 968, 237 N.E.2d 223). It was the dissent in Mobil Oil which unsuccessfully contended for an independent construction of our State statute. While it would unquestionably lie within the competence of our State Legislature to adopt antitrust proscriptions at variance, large or small, with the provisions of the Federal statutes, there is no ground to conclude that such was in fact the intention of the Legislature nor has any rational elucidation been advanced in this instance for any such disparity. Indeed, with the continual constriction of the areas of commercial activity held to be of intrastate dimension only and the increasing Federal-State nexus in both the provision and the financing of medical care services, no sound reason is perceived for the application of differing antitrust standards under State and Federal statutes; sound reason would dictate parallel application of the two similar statutes.

Respect for the basic requirement of parallel statutory construction did not dictate any particular result when Freeman was before us. At the time of that appeal there had been no definitive decision with respect to the application of the Sherman Act to the professions. ³ Now there has been. ⁴ This is not, as the majority would characterize it, an instance in which "the ruling of a Federal court interpreting a Federal statute has no direct bearing upon a State court's analysis of an analogous provision enacted by the State Legislature" (majority opn. at p. 447,...