People v. Roth, 52 N.Y.2d 440 (1981)
The learned professions, including medicine, are exempt from the prohibitions of New York’s Donnelly Act, which restricts combinations that restrain trade or competition.
Summary
Licensed physicians were indicted under the Donnelly Act for organizing a group boycott by refusing services to workers’ compensation and no-fault insurance patients, protesting low fee schedules. The defendants moved to dismiss, claiming an exemption for licensed professionals providing professional services. The County Court granted the motion, relying on Matter of Freeman, and the Appellate Division affirmed. The New York Court of Appeals affirmed, holding that the medical profession is insulated from liability under the Donnelly Act, consistent with the exemption previously established for the legal profession in Matter of Freeman.
Facts
Defendants, all licensed physicians, organized a group boycott. They collectively refused to provide professional medical services to patients covered by workers’ compensation and no-fault insurance plans. The physicians organized the boycott to protest the low fee schedules established by law for these insurance plans. The State indicted the physicians under the Donnelly Act, alleging that their concerted refusal to treat these patients constituted an illegal restraint of trade.
Procedural History
The defendants moved to dismiss the indictment in County Court, arguing that the Donnelly Act did not apply to combinations among licensed professionals providing professional services. The County Court granted the motion to dismiss, relying on the Court of Appeals decision in Matter of Freeman. The Appellate Division unanimously affirmed the County Court’s decision without opinion. The People appealed to the New York Court of Appeals.
Issue(s)
Whether the Donnelly Act, which prohibits combinations restraining trade or competition, applies to the medical profession, specifically to a boycott organized by physicians to protest low fee schedules for workers’ compensation and no-fault insurance patients.
Holding
Yes, because, consistent with its holding in Matter of Freeman, the Court of Appeals determined that the Donnelly Act was not intended to apply to the learned professions; thus, the medical profession is insulated from liability under the act.
Court’s Reasoning
The Court of Appeals relied heavily on its prior decision in Matter of Freeman, which held that the Donnelly Act did not apply to the legal profession. The court found no principled basis to distinguish between the legal and medical professions for purposes of the Freeman rule. The court rejected the argument that the U.S. Supreme Court’s decision in Goldfarb v. Virginia State Bar, which held that the legal profession was not exempt from federal antitrust laws, required a re-examination of Freeman. The court emphasized that Freeman was based on a specific analysis of the legislative history of the Donnelly Act and the intent of the New York State Legislature, not on general policy considerations. The court stated, “the ruling of a Federal court interpreting a Federal statute has no direct bearing upon a State court’s analysis of an analogous provision enacted by the State Legislature.” The court explicitly stated it was aware of the federal district court’s decision in Goldfarb when deciding Freeman but declined to follow it. The court concluded that because nothing had occurred since Freeman to suggest that its analysis of the legislative history of the Donnelly Act was mistaken, there was no reason to abandon the Freeman rule. The court emphasized that its decision in Freeman “rested not upon general policy considerations, but rather upon a specific analysis of the legislative history underlying the Donnelly Act and the intent of our own State Legislature in enacting that statute.”