Case Name: John Marsich, Respondent, v. Eastman Kodak Company and Others, Appellants
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1935-04-18
Citations: 244 A.D. 295
Docket Number: 
Parties: John Marsich, Respondent, v. Eastman Kodak Company and Others, Appellants.
Judges: 
Reporter: Appellate Division Reports
Volume: 244
Pages: 295–299

Head Matter:
John Marsich, Respondent, v. Eastman Kodak Company and Others, Appellants.
Second Department,
April 18, 1935.
E. Willoughby Middleton, for the appellants.
David T. Smith [Nicholas A. Heymsfeld with him on the brief], for the respondent.

Opinion:
Per Curiam.
This action is by a photographic supplies dealer against a producer of photographic supplies and several dealers therein for damages as a consequence of their adherence to an agreement maintaining a price scale in respect of a single producer's products and claimed to be in violation of law and particularly in violatioD of section 340 of the General Business Law.
The allegations in paragraph fourteenth of the amended complaint are mere conclusions of law. The complaint is insufficient unless the other allegations of fact, to which the fourteenth para-i graph has reference, establish a violation of section 340 of the General Business Law, known as the Donnelly Anti-Trust Act. This view evolves the controlling question of substance, as to whether or not the contract pleaded violates the State statute.
A contract involving intrastate transactions, made by a single producer with a group of dealers for the maintenance of a price scale on its products and for the enforcement thereof by prohibiting dealers from selling to one who violates the price scale or who in turn sells to one who violates the price scale, does not conflict with the statute, is not illegal, and, therefore, affords no basis for a claim of damages by one claiming to be aggrieved thereby. (Walsh v. Dwight, 40 App. Div. 513 [1st Dept. 1899]; Locker v. American Tobacco Co., 121 App. Div. 443 [2d Dept. 1907]; affd., 195 N. Y. 565 [1909]; Park & Sons Co. v. Nat. Druggists' Assn., 54 App. Div. 223 [1st Dept. 1900]; affd., 175 N. Y. 1 [1903].) The case of Straus v. American Publishers' Assn. (85 App. Div. 446; affd., 177 N. Y. 473) is not to the contrary. An agreement was there involved between several producers or publishers and groups of dealers under which a price scale of the products of the several publishers was sought to be maintained. That is not this case. The scope of a State statute, especially in respect of intrastate matters, is to be determined by the State courts. The soundness of the economic theories embodied in such a statute is a legislative question, and courts may not obtrude their economic theories into a statute under the guise of interpreting it. What constitutes the common law of this State, in the light of which State statutes are to be interpreted, is to be determined by State court decisions.
The construction by State courts of a State statute is binding on the Federal courts, there being no Federal question involved, even though such courts disagree with the soundness of the interpretation. (Covington v. Kentucky, 173 U. S. 231; M'Keen v. Delancy's Lessee, 9 id. [5 Cranch] 22; Elmendorf v. Taylor, 23 U. S. [10 Wheat.] 152; Black, Interpretation of Laws [2d ed.], p. 620.)
A Federal decision contrary in principle is not. binding upon a State court in respect of a State statute or of a domestic doctrine not involving a Federal question. (People ex rel. Central Park, etc., R. R. Co. v. Willcox, 194 N. Y. 383, 386, per Cullen, Ch. J.; Johnston v. Compagnie Generate Transatlantique, 242 id. 381, 386, per Pound, J.; People ex rel. Rice v. Graves, 242 App. Div. 128.)
In considering the matter here involved, as was said in a similar situation, " We may eliminate the Federal Anti-Trust laws " (Barns v. Dairymen's League Co-operative Assn., Inc., 220 App. Div. 624, 635), and, as a consequence, the decisions thereunder. The enforcement of rights under such Federal statutes may be had in the Federal courts only. (Barns v. Dairymen's League Co-operative Assn., Inc., supra, p. 635; Eastman Kodak Co. v. Powers Film Products, Inc., 189 App. Div. 556, 560.)
Federal cases interpreting Federal statutes, or relating to interstate situations, are not controlling when there are State decisions relating to the State statute invoked which may, in some respects, place upon a State statute an interpretation different from that placed by the Federal courts upon a different though somewhat similar Federal statute.
If the Legislature deemed that the foregoing State decisions gave to the statute a meaning or scope different from that intended, it would have amended the statute so as to give it the effect intended if such different effect were similar in character to that given by the Federal decisions to the Federal Anti-Trust statute. In the face of these decisions the Legislature deliberately refrained from making any such amendment or change in the statute. The State decisions are controlling and the Federal decisions are not pertinent. " There should be submission to authority " which is controlling. (Hayes v. Hayes, 150 App. Div. 842, 844; affd., 208 N. Y. 600.)
The order denying the motion to dismiss the complaint as being insufficient in law should be reversed on the law, with ten dollars costs and disbursements, and the motion granted, with ten dollars costs.
Carswell, Scudder and Tompkins, JJ., concur; Davis, J., with whom Hagarty, J., concurs, reads for affirmance.