Theatre Confections, Inc. v. Andrea Theatres, Inc.

• Decision Date: 23 January 1987
• Citation: 126 A.D.2d 969,511 N.Y.S.2d 744
• Parties: , 1987-1 Trade Cases P 67,434 THEATRE CONFECTIONS, INC., Respondent, v. ANDREA THEATRES, INC., and E.B. Cinema Corp., Appellants.
• Court: New York Supreme Court — Appellate Division

Page 744

511 N.Y.S.2d 744

126 A.D.2d 969, 1987-1 Trade Cases P 67,434

THEATRE CONFECTIONS, INC., Respondent, v. ANDREA THEATRES, INC., and E.B. Cinema Corp., Appellants.

Supreme Court, Appellate Division,

Fourth Department.

Jan. 23, 1987.

Rosenberg & Tulis by Allan Mayefsky, New York City, for appellants.

Nixon, Hargrave, Devans & Doyle by Margaret Clemons, Rochester, for respondent.

Before DOERR, J.P., and DENMAN, GREEN, PINE, and BALIO, JJ.

MEMORANDUM:

It was an abuse of discretion for Special Term to deny defendants' application, pursuant to C.P.L.R. 2201, for a stay of this state action pending resolution of a federal action commenced by defendants against plaintiff. At issue in both actions is the validity of the agreements which plaintiff seeks to enforce in the state action. Defendants contend that these agreements violate federal antitrust laws. This is an issue over which the federal court has exclusive jurisdiction (see, 15 U.S.C. § 15; Vendo Co. v. Lektro-Vend. Corp., 433 U.S. 623, 632, 97 S.Ct. 2881, 2888, 53 L.Ed.2d 1009; Banana Distributors, Inc. v. United Fruit Co., 269 F.2d 790, 793 (2nd Cir.1959)). Where, as here, alleged violations of antitrust laws arise directly out of the contract provisions sought to be enforced in the state action, a state court will not enforce the contract if found to be illegal under federal law (see, Kaiser Steel Corp. v. Mullins, 455 U.S. 72, 102 S.Ct. 851, 70 L.Ed.2d 833; Continental Wall Paper Company v. Louis Voight & Sons Company, 212 U.S. 227, 29 S.Ct. 280, 53 L.Ed. 486; Big Top Stores v. Ardsley Toy Shoppe, 64 Misc.2d 894, 905, 315 N.Y.S.2d 897, affd 36 A.D.2d 582, 318 N.Y.S.2d 924; cf. Kelly v. Kosuga, 358 U.S. 516, 518-521, 79 S.Ct. 429, 430-432, 3 L.Ed.2d 475; Eastman Kodak Co. v. GAF Corp., 71 A.D.2d 833, 419 N.Y.S.2d 372). Since the issue of the legality of the agreements is central, not collateral, to resolution of the state action, considerations of comity, orderly procedure, and judicial economy demand that the federal action be tried first (see, General Aniline & Film Corp. v. Bayer Co., Inc., 305 N.Y. 479, 485, 113 N.E.2d 844; Barron v. Bluhdorn, 68 A.D.2d 809, 414 N.Y.S.2d 15; Barnes v. Peat, Marwick, Mitchell & Co., 42 A.D.2d 15, 344 N.Y.S.2d 645; Research Corp. v. Singer-Gen. Precision, Inc., 36 A.D.2d 987, 320 N.Y.S.2d 818).

Order unanimously reversed on the law without costs and motion granted.