People v. Dairylea Cooperative, Inc.

114 Misc. 2d 421, 452 N.Y.S.2d 282, 1982 N.Y. Misc. LEXIS 3492
CourtNew York Supreme Court
DecidedJune 1, 1982
StatusPublished
Cited by4 cases

This text of 114 Misc. 2d 421 (People v. Dairylea Cooperative, Inc.) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
People v. Dairylea Cooperative, Inc., 114 Misc. 2d 421, 452 N.Y.S.2d 282, 1982 N.Y. Misc. LEXIS 3492 (N.Y. Super. Ct. 1982).

Opinion

OPINION OF THE COURT

Joseph Di Fede, J.

Defendants, licensed milk dealers, corporate and proprietary, and individuals, directors and sales personnel, collectively move herein in the form of an omnibus motion seeking a wide variety of relief. The application to join herein by defendant Giuliano is granted.

The action is brought by the Attorney-General on behalf of the People of the State of New York pursuant to sections 340, 341 and 347 of article 22 of the General Business Law known popularly as the “Donnelly Anti-Trust Act”. Hereinafter referred to as the “Donnelly Act” for brevity. Section 340 thereof declares to be against public policy, illegal and void:

“[e]very contract, agreement, arrangement or combination whereby

“a monopoly in the conduct of any business, trade or commerce or in the furnishing of any service in this state, is or may be established or maintained, or whereby

“competition or the free exercise of any activity in the. conduct of any business, trade or commerce or in the furnishing of any service in this state is or may be restrained or whereby

“for the purpose of establishing or maintaining any such monopoly or unlawfully interfering with the free exercise of any activity in the conduct of any business, trade or commerce or in the furnishing of any service in this state any business, trade or commerce or the furnishing of any service is or may be restrained”.

[423]*423The Donnelly Act enacted in 1899 is written with a broad legal brush and was designed: “to destroy monopolies in the manufacture, production and sale in this state of commodities in common use, to prevent combinations in restraint of competition in the supply or price of such commodities, or in restraint of the free pursuit of any lawful business, trade or occupation.” (Matter of Davies, 168 NY 89, 101; Matter of Jackson, 57 Misc 1.)

Thus, prevention of restraint of trade and the creation of monopolies and the protection of the public against rigid, increased or, for that matter, artificially lowered prices of essential commodities through the suppression of competition is its objective. (Purofied Down Prods. Corp. v National Assn. of Bedding Mfrs., 201 Misc 149.)

The free and unfettered flow of commerce to permit the economic laws of the marketplace to determine the supply, demand and price of any commodity was the objective behind the enactment of the statute in the first instance.

What the Legislature determined to be against the public’s interest was the combining of dealers in any article in common use to advance the cost of such article by which competition in the supply or price thereof would be restricted; or, stated differently, the object of the statute was the prevention of restraint of trade and the creation of monopoly in articles of trade. The Donnelly Act is the “antitrust statute” of this State.

This indictment herein charges essentially that beginning sometime prior to 1967 and continuing through at least until 1981, the exact dates being unknown, in part within the County of Bronx and in part within other counties of the State of New York, defendants and (unindicted) coconspirators have knowingly and intentionally entered into and engaged in a combination, arrangement and conspiracy in unreasonable restraint of competition, business, trade and commerce, in the distribution of milk in this county and in other parts of the State.

That the substantial terms of the continuing agreement, understanding, reciprocal commitment and concert of action among the defendants and coconspirators is alleged as follows:

[424]*424“(a) to fix, raise, stabilize, and maintain the wholesale price of milk sold by the defendants and co-conspirators;

“(b) to fix, raise, stabilize and maintain the price of milk sold to consumers by retail customers of defendants and co-conspirators;

“(c) to divide and allocate retail customers among defendants and co-conspirators;

“(d) to restrain each defendant, co-conspirators and other milk dealers from soliciting or competing for retail customers of the other;

“(e) to coerce, persuade and induce retail customers of the defendants, co-conspirators and other milk dealers to fix, raise, stabilize and maintain the price of milk to consumers;

“(f) to coerce, persuade and induce other milk dealers to fix, raise, stabilize and maintain the wholesale price of milk and the price of milk sold to consumers by their retail customers.”

In paragraphs a through f of subdivision 10 of the indictment there is set forth as in furtherance of the alleged “combination, arrangement and conspiracy”, various actions which defendants and the coconspirators allegedly agreed to do and have done. Defendants move under item “5” of this motion to dismiss the indictment on the ground that it is insufficient on its face.

I find, however, that the allegations of the indictment measured against the provisions of section 340 of the General Business Law is legally insufficient on its face and the motion made on this ground is denied.

With respect to item “4” of the defendant’s motion, I find that nothing in the Donnelly Act itself exempts the milk industry as such from its provisions except for subdivision 3 of section 340, which provides that the: “provisions of this article shall not apply to cooperative associations, corporate or otherwise, of farmers, gardeners or dairymen”.

Defendants move under item “4” for dismissal on the ground that the conduct alleged constitutes an agreement with a co-operative association and that such conduct is therefore expressly exempt from the Donnelly Act by its provisions.

[425]*425The conclusion asserted is not in accord with this court’s interpretation of the co-operative exemption found in cited subdivision 3 of section 340 of the General Business Law.

Defendants strongly urge that because a former indicted defendant, Dairylea Cooperative, Inc., was alleged to have engaged in conduct violative of the Donnelly Act with other defendants, that all named defendants are thereby immunized from prosecution since their cited conduct was with a co-operative.

Although one court found the “cooperative dairymen’s exemption” under subdivision 3 of section 340 all-pervasive and protective of all parties with whom a dairymen’s co-operative may have dealt under that court’s interpretation of the statute (Margrove, Inc. v Up-State Milk Co-op., 79 Misc 2d 309), this court’s interpretation of that section is in accord with that expressed in the case of People v Wisch (58 Misc 2d 766, 771), which held that it was not the legislative intent to give such co-operatives, their officers and employees and third parties with whom they allegedly combined to violate the provision of section 340, license to do so. Rather the exemption was intended to protect and permit dairy co-operative associations and labor unions to function as such without fear that doing so might be viewed as violating the statute. It was not intended to protect carte blanche an act otherwise criminal and outside of that limited area of exemption. The argument made herein that the defendants allegedly having combined with a defendant who is a dairymen’s co-operative association are thereby protected through the stated exemption is rejected.

The Margrove

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Related

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Bluebook (online)
114 Misc. 2d 421, 452 N.Y.S.2d 282, 1982 N.Y. Misc. LEXIS 3492, Counsel Stack Legal Research, https://law.counselstack.com/opinion/people-v-dairylea-cooperative-inc-nysupct-1982.