Commercial Division Dismisses Claims Alleging Monopoly Control Over Waste Services Market in Capital Region

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In Cty. Waste & Recycling Serv., Inc. v. Twin Bridges Waste & Recycling, LLC,[1] Justice Platkin of the Albany County Commercial Division Court considered plaintiffs’ (County Waste and Recycling Service, Inc. (“County Waste”), Robert Wright Disposal, Inc. (“Wright Disposal”), and third-party defendants Waste Connections, Inc. and Waste Connections US, Inc. (“Waste Connections”)), joint motion under CPLR 3211(a)(7) and (8) to dismiss the Amended Counterclaims and Third-Party Complaint (“ACTC”) of defendant Twin Bridges Waste and Recycling, LLC (“Twin Bridges”).  Justice Platkin’s opinion touches on various issues concerning anti-competitive behavior in New York State, as well as personal jurisdiction.

Background

The parties in this action are waste/recycling collection and disposal service providers in the Albany region.  Plaintiffs County Waste and Wright Disposal allege that Twin Bridges made false statements when soliciting the business of their customers, wrongfully induced County Waste customers to breach their contracts, distributed flyers to Wright Disposal customers containing false statements, improperly interfered with the employment agreement of a former County Waste employee, and trespassed and damaged its property.  The complaint, which was filed in November 2020, alleges tortious interference with contract and prospective business relations; unfair competition; violations of the General Business Law; defamation; injurious falsehood; and trespass to chattels.  Plaintiffs have created a website about the litigation.

Twin Bridges served its answer in December 2020, together with a separate document alleging counterclaims against County Waste and Wright Disposal, and commencing a third-party action against Waste Connections.  Plaintiffs and Waste Connections moved to dismiss, and Twin Bridges filed its Amended Counterclaim and Third Party Complaint (“ACTC”), alleging that County Waste, Wright Disposal, and Waste Connections engaged in a sustained course of anticompetitive and tortious conduct directed at monopolizing Albany’s waste services market, including engaging in predatory pricing, restraining trade, and publishing false statements about Twin Bridges and its owner.  Twin Bridges’ first three counterclaims allege attempts to monopolize in violation of the Donnelly Act.  Twin Bridges also brought counterclaims for unfair competition, tortious interference with contract, tortious interference with prospective business relations, injurious falsehood, prima facie tort, and declaratory relief.  County Waste, Wright Disposal, and Waste Connections moved to dismiss the counterclaims and argued that the Court lacks personal jurisdiction over Waste Connections, Inc. and Waste Connections US, Inc., neither of which is a New York corporation.

Decision on Antitrust Counterclaims

The Court dismissed Twin Bridges’ antitrust counterclaims for failing to allege concerted action.  The Court noted that “unilateral action is insufficient to support a claimed violation of GBL § 340,” as “[a]n antitrust claim under the Donnelly Act must allege concerted action by two or more entities.”[2]  Moreover, the statutory requirement of a conspiracy or other reciprocal relationship of commitment cannot be met where, as here, the parties being sued are a parent and its wholly-owned subsidiary, as they are considered to be a single entity under antitrust principles.[3]

The Court held that Twin Bridges’ allegations that Waste Connections engaged in a sustained campaign of offering prices well below its appropriate measure of costs, and inserted automatic renewal provisions in contracts with customers, are not antitrust claims under the Donnelly Act as they only allege unilateral pricing decisions and that agreements or arrangements with customers do not satisfy the requirement of “concerted action.”[4]  Similarly, the Court held that Twin Bridges’ allegation that Waste Connections attempted to monopolize the market by unreasonably denying Twin Bridges access to Waste Connections' waste disposal facilities, which are allegedly the only such facilities in the region capable of accommodating the volume of waste and recycling collected by Twin Bridges, is also a unilateral action not subject to the Donnelly Act. Furthermore, the Court pointed out that Twin Bridges’ allegations only state that Waste Connections “told” other parties in the industry not to work with Twin Bridges or attempted to collude with these other parties, but such allegations “fall short of alleging the existence of any actual agreements, arrangements or other reciprocal relationships of commitment.”[5] 

Decision on Unfair Competition, Tortious Interference, Injurious Falsehoods, and Prima Facie Tort Counterclaims

The Court denied the branch of plaintiffs’ motion seeking to dismiss Twin Bridges’ unfair competition counterclaim, as it is a “broad and flexible” doctrine that could potentially cover Twin Bridges’ allegation that plaintiffs intentionally deceived the public by disseminating and publishing falsehoods about Twin Bridges to confuse customers and appropriate its business and commercial advantage.[6]

The Court also denied the branch of plaintiffs’ motion seeking to dismiss Twin Bridges’ tortious interference with prospective business advantage counterclaim, finding that because the allegations in the counterclaim could constitute criminal violations of the Sherman Act, Twin Bridges had sufficiently alleged that plaintiffs had acted wrongfully, despite the fact that federal courts have exclusive jurisdiction over Sherman Act claims.[7]  The Court nonetheless dismissed Twin Bridges’ tortious interference with contract counterclaim on the grounds that it failed to actually allege any contracts that were breached due to plaintiffs’ interference, thus failing to satisfy the first element of a tortious interference with contract claim.[8]

The Court similarly denied the motion to dismiss Twin Bridges’ injurious falsehood claim, which arises from a letter authored by the owner of Wright Disposal to potential customers stating that Twin Bridges’ owner had been indicted for defrauding a landfill in the region by falsifying weight tickets.  The Court found Twin Bridges adequately alleged the letter was a false and defamatory statement about its business, published with malice, and was the proximate cause of reputational harm.[9]   Although the Court expressed skepticism that Twin Bridges had adequately pled special damages, which are necessary to sustain a claim for injurious falsehood, it held that based on a liberal construction of the counterclaim, Twin Bridges had sufficiently alleged a claim for commercial defamation and therefore denied the motion as to this cause of action.[10] 

Finally, the Court dismissed Twin Bridge’s prima facie tort allegations for failing to allege special damages with the requisite particularity, noting that this cause of action is not meant to function as an overly broad “catch-all” under New York law.[11]  

Decision on Personal Jurisdiction

Plaintiffs also sought to dismiss the third-party complaint against Waste Connections for lack of personal jurisdiction, since neither entity is incorporated or headquartered in New York.  The Court noted that Twin Bridges bears the ultimate burden of demonstrating the statutory and due process prerequisites for the Court to exercise personal jurisdiction over Waste Connections, but that at this stage in the litigation, Twin Bridges must only show that it has made a “‘sufficient start’ at demonstrating jurisdiction to warrant discovery.”[12]  

While the Court found that Twin Bridges failed to allege that the Court had general jurisdiction over Waste Connections, it ultimately held that the allegations were adequate to provide a “sufficient start” in demonstrating long-arm jurisdiction under CPLR 302(a), such that limited jurisdictional discovery pursuant to CPLR 3211(d) was warranted.[13]


[1] 72 Misc. 3d 1217(A), 2021 WL 3611979 (N.Y. Sup. Ct. Albany Cty. 2021).

[2] Id. at *3,  citing Hall Heating Co. v New York State Elec. & Gas Corp., 180 A.D.2d 957, 958 (3d Dept 1992) and Global Reins. Corp.-U.S. Branch v Equitas Ltd., 18 N.Y.3d 722, 731 (2012). 

[3] Id., citing North Atl. Utils. v Keyspan Corp., 307 A.D.2d 342, 343 (1st Dep’t 2003).

[4] Id. at *4.

[5] Id. at *6.

[6] Id. at *7-8.

[7] Id. at *10.

[8] Id. at *8-9. 

[9] Id. at *11-13. 

[10] Id. at *13.

[11] Id. at *14. 

[12] Id. at *14, citing Peterson v. Spartan Indus., Inc., 33 N.Y.2d 463, 467 (1974). 

[13] Id. at *18.

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