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Williams v. Citigroup

Appellate Division of the Supreme Court of New York, First Department · 2023 · Civil Procedure

Civil ProcedureSummary JudgmentAntitrustTortious InterferenceDonnelly Actsummary judgmentconcerted actionconscious commitment

Facts

Plaintiff, an experienced structured finance attorney, developed and patented a structure for airline specialty facility bonds used to finance construction of municipal airports. Defendants were underwriters of those bonds, and implementation of plaintiff's structure would also have required agreement from defendants' airline clients. Defendants submitted deposition testimony, emails, and expert reports showing that airline clients independently considered and rejected plaintiff's structure because of concerns about the time and expense involved compared with the potential benefit of a lower interest rate. The record also showed that JP Morgan and Goldman Sachs actively marketed plaintiff's structure to clients but were unsuccessful.

Issue

Whether defendants were entitled to summary judgment on plaintiff's Donnelly Act claim by showing no triable issue of concerted action or conspiracy to boycott plaintiff's bond structure, and whether plaintiff raised a triable issue on her tortious interference with prospective business advantage claims. The court also addressed whether the claim against Citigroup was time-barred.

Rule

To prove a conspiracy under the Donnelly Act, a plaintiff must show concerted action in the form of a conscious commitment to a common scheme designed to achieve an unlawful objective. When there is no direct evidence of conspiracy, the plaintiff must point to evidence that tends to exclude the possibility that the alleged conspirators were acting independently. A claim for tortious interference with prospective business advantage requires wrongful conduct by the defendant. A state-law claim properly commenced in federal court under 28 USC 1367(a) may receive tolling under 28 USC 1367(d), and a later state action may invoke CPLR 205(a) when the supplemental state claims were voluntarily dismissed without prejudice after filing the state action.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Nora Feld, a finance consultant in Chicago, devised a patented municipal-facility funding model and pitched it to four underwriting firms. Depositions from the firms and from their public-authority clients in Illinois show each client separately rejected the model because it would delay bond issuance and increase legal fees more than any likely interest-rate savings.

If Nora sues the firms under the Donnelly Act for conspiring to boycott her model, and she has no direct evidence of an agreement, which is the strongest basis for summary judgment for the firms?

Explanation. Absent direct evidence of conspiracy, the plaintiff must produce evidence tending to exclude the possibility that the alleged conspirators acted independently. Here, the testimony shows separate rejection for legitimate business reasons—delay and expense versus limited benefit—so no inference of concerted action in a conscious commitment to a common unlawful scheme arises.