Response Brief for Defendants-Respondents

Transcription

1 Supreme Court, Appellate Division, Second Department, New York. Fernande PALTRE, Justine Miller and Ralph Limage, on behalf of themselves and all others similarly situated, Plaintiffs-Appellants, v. GENERAL MOTORS CORPORATION, General Motors of Canada, Ltd.; Ford Motor Company; Ford Motor Company of Canada, Ltd.; Toyota Motor Sales, U.S.A., Inc.; American Honda Motor Company, Inc.; Daimlerchrysler Corporation; Mercedes-benz Usa, LLC; Nissan North America, Inc.; Bmw of North America, LLC; and National Automobile Dealers Association, Defendants-Respondents, and Toyota Motor Corporation; Toyota Canada, Inc.; Honda Motor Company, Ltd.; Honda Canada, Inc.; Daimlerchrysler Aktiengesellschaft; Daimlerchrysler Canada, Inc.; Mercedes-Benz Canada, Inc.; Nissan Motor Company, Ltd.; Nissan Canada, Inc.; Bayerische Moteren Werke Aktiengesellschaft; Bmw Canada and Canadian Automobile Dealers Association, Defendants; Lisa Baade, on behalf of herself and all others similarly situated, Plaintiff- Defendants, v. General Motors Corporation, General Motors of Canada, Ltd.; Ford Motor Company; Ford Motor Company of Canada, Ltd.; Toyota Motor Sales, U.S.A., Inc.; American Honda Motor Company, Inc.; Daimlerchrysler Corporation; Mercedes-Benz Usa, LLC; Nissan North America, Inc.; Bmw of North America, LLC; and National Automobile Dealers Association, Defendants-Respondents, and Toyota Motor Corporation; Toyota Canada, Inc.; Honda Motor Company, Ltd.; Honda Canada, Inc.; Daimlerchrysler Aktiengesellschaft; Daimlerchrysler Canada, Inc.; Mercedes-Benz Canada, Inc.; Nissan Motor Company, Ltd., Nissan Canada, Inc.; Bmw Canada and Canadian Automobile Dealers Association, Defendants. Nos , January 24, Nassau County Clerk's Index Nos. 5014/03 and 3318/03 Response Brief for Defendants-Respondents Cleary Gottlieb Steen & Hamilton LLP, 2000 Pennsylvania Ave., N.W., Washington, DC 20006, (202) , Attorneys for Defendant-Respondent Toyota, Motor Sales, U.S.A., Inc. Weil Gotshal & Manges LLP, 1501 K Street, N.W., Suite 100, Washington, DC 20005, (202) , Attorneys for Defendants-Respondents, DaimlerChrysler Corp and Mercedes-Benz USA, LLC.

2 Gibson, Dunn & Crutcher LLP, 333 South Grand Avenue, Los Angeles, CA 90071, (213) , -and- 200 Park Avenue, New York, NY 10166, (212) , Attorneys for Defendant-Respondent Nissan, North America, Inc. Bingham Mccutchen LLP, 399 Park Avenue, New York, NY 10022, (212) , - and- 150 Federal Street, Boston, MA 02110, (617) , Attorneys for Defendant-Respondent BMW of North America. LLC. Kirkland & Ellis LLP, Citigroup Center, 153 East 53rd Street, New York, NY 10022, (212) , -and- 200 East Randolph Drive, Chicago, IL 60601, (312) , Attorneys for Defendants-Respondents, General Motors Corp. and General Motors of Canada, Ltd. Nixon Peabody LLP, 990 Stewart Avenue, Garden City, NY 11530, (516) , - and- Howrey Simon Arnold & White, LLP, 1299 Pennsylvania Avenue, N.W., Washington, DC , (202) , Attorneys for Defendants-Respondents, Ford Motor Co. and Ford Motor Co. of Canada, Ltd. Richards Spears Kibbe & Orbe, LLP, One World Financial Center, 29th Floor, New York, NY , (212) , -and- Keker & Van Nest, L.L.P., 710 Sansome Street, San Francisco, CA 94111, (415) , Attorneys for Defendant-Respondent, American Honda Motor Co., Inc. Kelly, Rode & Kelly, P.C., 330 Old Country Road, Suite 305, Mineola, NY 11501, -and- Stein Mitchell & Mezines, 1100 Connecticut Avenue, N.W., Washington, DC 20006, (202) , Attorneys for Defendant-Respondent North, American Dealers Association. TABLE OF AUTHORITIES... iii PRELIMINARY STATEMENT... 1 QUESTIONS PRESENTED... 3 COUNTERSTATEMENT OF THE CASE... 4 STANDARD OF REVIEW ON APPEAL... 7 ARGUMENT... 7 *i TABLE OF CONTENTS I. Because Treble Damages Are A Penalty And The Legislature Has Not Specifically Authorized Private Class Actions Under The Donnelly Act, Plaintiffs' Donnelly Act Claim Cannot Be Maintained As A Class Action... 7 A. Treble Damages Are A Penalty Within The Plain Meaning Of 901(b) New York courts have unanimously held that Donnelly Act treble damages are a penalty for purposes of 901 (b) As a matter of New York law, treble damages are a penalty Plaintiffs rely on cases that do not counter the New York law holding treble damages to be a penalty New York case law does not support plaintiffs' and amicus curiae's rationales for their position As a matter of plain language, treble damages are a penalty... 25

3 B. The Legislature Has Considered And Rejected Proposals To Specifically Authorize Private Class Actions Under The Donnelly Act, And The Courts May Not Override This Policy Judgment By not amending the relevant provisions of 901 (b) or the Donnelly Act, the Legislature showed its agreement with the courts' interpretation *ii 2. Legislators have introduced four bills to amend the Donnelly Act to allow private class actions that the full Legislature has never approved The 1998 Donnelly Act amendment does not expressly authorize class actions as 901(b) requires The Legislature and courts use terms for penalty or treble damages interchangeably The limited legislative history shows that the Donnelly Act's treble damages provision is a penalty under 901(b) II. Plaintiffs Have Failed To Plead Sufficiently The Elements Of A Consumer Protection Claim A. Antitrust Claims Are Not Per Se Consumer Protection Claims B. Plaintiffs' Specific Allegations Fail To Satisfy The Consumer Protection Act's Four Requirements The allegations are not deceptive because they do not allege a misrepresentation or omission to a consumer Defendants' alleged omission regarding price differentials is not misleading in a material way There is no causal connection between the alleged acts and the purported injury The allegations fail to state a deceptive act occurring in New York CONCLUSION CERTIFICATE OF COMPLIANCE ADDENDUM... Following Certificate of Compliance *iii TABLE OF AUTHORITIES STATE CASES 145 Kisco Ave. Corp. v. Dufner Enter., Inc., 604 N.Y.S.2d 963 (2d Dep't 1993)... 7 Andre Strishak & Assocs., P.C. v. Hewlett Packard Co., 752 N.Y.S.2d 400 (2d Dep't 2002) Asher v. Abbott Labs., 737 N.Y.S.2d 4 (1st Dep't 2002)... 10, 11, 13, 30 BLF Realty Holding Corp. v. Kasher, 747 N.Y.S.2d 457 (1st Dep't 2002)... 33

4 Biondi v. Beekman Hill House Apartment Corp., 94 N.Y.2d 659 (2000) Bliss v. Bliss, 66 N.Y.2d 382 (1985) Blumenthal v. Am. Soc'y of Travel Agents, Inc., Index No /76, 1977 WL (Sup. Ct. N.Y. County July 5, 1977)... 9, 10, 28 Bogartz v. Astor, 293 N.Y. 563 (1944)... 17, 18, 19, 22 Bracker v. Cohen, 612 N.Y.S.2d 113 (1st Dep't 1994) Burns v. Volkswagen of Am., Inc., 460 N.Y.S.2d 410 (Sup. Ct. Monroe County 1982), aff'd, 468 N.Y.S.2d 1017 (4th Dep't 1983) Cardinell v. Allstate Ins. Co., 754 N.Y.S.2d 777 (3d Dep't 2003) Carter v. Frito-Lay, Inc., 425 N.Y.S.2d 115 (1st Dep't 1980), aff'd, 52 N.Y.2d 994 (1981) Chlystun v. Kent, 586 N.Y.S.2d 410 (3d Dep't 1992) *iv Cox v. Lykes Bros., 237 N.Y. 376 (1924)... 17, 18, 22, Cox v. Microsoft Corp., 737 N.Y.S.2d 1 (1st Dep't 2002)... 10, 11, 12, 13, 20, 29, 30, 38 Cox v. Microsoft Corp., 778 N.Y.S.2d 147 (1st Dep't 2004)... 13, 40, 46 Donahue v. Ferolito, 786 N.Y.S.2d 153 (1st Dep't 2004) Engle v. Talarico, 33 N.Y.2d 237 (1973) Felice v. Delporte, 524 N.Y.S.2d 919 (4th Dep't 1988) Floyd v. N.Y. State Urban Dev. Corp., 343 N.Y.S.2d 493 (1st Dep't 1973) Friar v. Vanguard Holding Corp., 434 N.Y.S.2d 698 (2d Dep't 1980) Fults v. Munro, 202 N.Y. 34 (1911)... 2, 13 Gaidon v. Guardian Life Ins. Co. of Am., 94 N.Y.2d 330 (1999) Gale v. IBM Corp., 781 N.Y.S.2d 45 (2d Dep't 2004) Gannon v. Royal Props., 136 N.Y.S.2d 129, aff'd, 309 N.Y. 819 (1955)... 19, 20 Giovanniello v. Hispanic Media Group USA, Inc., 780 N.Y.S.2d 720 (Sup. Ct. Nassau County 2004)... 14, 35 Goshen v. Mut. Life Ins. Co. of N.Y., 98 N.Y.2d 314 (2002)... 42, 45, 47, 53, 54 Hamilton v. Third Ave. R.R. Co., 53 N.Y. 25 (1873) *v Hartford Accident & Indem. Co. v. Vill. of Hempstead, 48 N.Y.2d 218 (1979) Heights Assocs. v. Bautista, 683 N.Y.S.2d 372 (2d Dep't 1998)... 8, 12, 23, 24, 35 Hoffman v. Ryan, 422 N.Y.S.2d 288 (N.Y. Civ. Ct. N.Y. County 1979)...

5 14 Home Ins. Co. v. Am. Home Prod. Corp., 75 N.Y.2d 196 (1990) In re Chan v. N.Y. State Div. of Hous. & Cmty. Renewal, 616 N.Y.S.2d 251 (2d Dep't 1994) In re Kessel v. Dodd, 359 N.Y.S.2d 594 (2d Dep't 1974) Johnson v. Jamaica Hosp., 62 N.Y.2d 523 (1984) Klapak v. Pappas, 433 N.Y.S.2d 500 (2d Dep't 1980)... 14, 34 Knight-Ridder Broad., Inc. v. Greenberg, 570 N.Y.2d 151 (1987) Leider v. Ralfe, No. Civ. 3137(HB)(FM), 2004 WL (S.D.N.Y. July 30, 2004) Lennon v. Philip Morris Cos., 734 N.Y.S.2d 374 (Sup. Ct. N.Y. County 2001)... 10, 21, 22, 32, 33 Lerfald v. Gen. Motors Corp., No. CT , slip. op. (Minn. Dist. Ct. Nov. 7, 2003) Lyke v. Anderson, 541 N.Y.S.2d 817 (2d Dep't 1989)... 13, 15, 24 McGill v. Gen. Motors Corp., 647 N.Y.S.2d 209 (1st Dep't 1996) Meltzer v. Koenigsberg, 302 N.Y. 523 (1951) Meyer v. Guinta, 692 N.Y.S.2d 159 (2d Dep't 1999)... 7 *vi Mountain View Coach Lines, Inc. v. Storms, 476 N.Y.S.2d 918 (2d Dep't 1984) Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, N.A., 85 N.Y.2d 20 (1995)... 39, 47, 49, 50 People v. Glubo, 5 N.Y.2d 461 (1959) Potter v. Bierwirth, 157 N.Y.S. 25 (2d Dep't 1916) Pruitt v. Rockefeller Center Props., 574 N.Y.S.2d 672 (1st Dep't 1991) Pub. Serv. Mut. Ins. Co. v. Goldfarb, 53 N.Y.2d 392 (1981) Rental & Mgmt. Assocs., Inc. v. Hartford Ins. Co., 614 N.Y.S.2d 513 (1st Dep't 1994) Richardson v. Fiedler Roofing, Inc., 67 N.Y.2d 246 (1986)... 2 Ridge Meadows Homeowners Ass'n, Inc. v. Tara Dev. Co., 665 N.Y.S.2d 361 (4th Dep't 1997) Rosner v. Metro. Prop. & Liab. Ins. Co., 96 N.Y.2d 475 (2001) Rubin v. Nine West Group, Inc., No. 0763/99, 1999 WL (Sup. Ct. N.Y. County Nov. 3, 1999) Russo & Dubin v. Allied Maint. Corp., 407 N.Y.S.2d 617 (Sup. Ct. N.Y. County 1978)... 10, 28 Rutherford v. State of N.Y. Div. of Hous. and Cmty. Renewal, 4 Misc.3d

6 1029(A), 2004 WL (Sup. Ct. N.Y. County 2004) Shannon v. Introne, 436 N.Y.S.2d 337 (2nd Dep't 1981) Sheridan v. Tucker, 129 N.Y.S. 18 (4th Dep't 1911) *vii Sicolo v. Prudential Sav. Bank, 5 N.Y.2d 254 (1959)... 17, 19, 20, 22 State v. Town of Wallkill, 572 N.Y.S.2d 758 (3d Dep't 1991) Stutman v. Chem. Bank, 95 N.Y.2d 24 (2000)... 42, 47, 49, 50 Super Glue Corp. v. Avis Rent A Car Sys., Inc., 517 N.Y.S.2d 764 (2d Dep't 1987)... 13, 24 Walker v. Sheldon, 10 N.Y.2d 401 (1961) Wilson v. Gen. Motors Corp., No. L (N.J. Super. Ct. Oct. 3, 2003) FEDERAL CASES Ft. Bragg Ass'n of Educators, NEA v. Fed. Labor Relations Auth., 870 F.2d 698 (D.C. Cir. 1989) Hawaii v. Standard Oil Co., 405 U.S. 251 (1972) In re New Motor Vehicles Canadian Exp. Antitrust Litig., No. MDL Docket 1532 (D. Me. Dec 8, 2004) ("Parallel Federal Decision")... 39, 45, 46 Schneider v. Citicorp Mortgage, Inc., 982 F. Supp. 897 (E.D.N.Y. 1997) Sun Theatre Corp. v. RKO Radio Pictures, 213 F.2d 284 (7th Cir. 1954) Texas Indus., Inc. v. Radcliff Materials, Inc., 451 U.S. 630 (1981) U.S. v. Sorrell, 562 F.2d 227 (3d Cir. 1977) Weaver v. Chrysler Corp., 172 F.R.D. 96 (S.D.N.Y. 1997) *viii Wiener v. Unumprovident Corp., 202 F. Supp. 2d 1 16 (S.D.N.Y. 2002) STATE STATUTES Consumer Protection Act, N.Y. Gen. Bus. Law 349 et seq. (2004)... passim Donnelly Act, N.Y. Gen. Bus. Law 340 et seq. (2004)... passim N.Y. Const. art. IV N.Y. C.P.L.R. 901 (b) (2004)... passim N.Y. Stat. Law 232 (2004) N.Y. Stat. Law 234 (2004) N.Y. Stat. Law 363 (2004)... 33

7 Fed. R. Civ. P. 23 (2004) FEDERAL STATUTES Federal Trade Commission Act, 15 U.S.C. 45(a)(1) LEGISLATIVE HISTORY A , 2002 Assembly, 225 Sess. (N.Y. 2002) (never enacted) (available on Legislative Retrieval System) A. 5158, 2002 Assembly, 226th Sess. (N.Y. 2003) (never enacted) (available on Legislative Retrieval System) A. 4832, 1973 Assembly, 196th Sess. (NY. 1973), microformed on Legislative Bill Collection at N.Y. State Library (never enacted) *ix Bill Jacket, L.1975, c. 207, Report of Banking Law Committee, Business Law Committee and Committee on Civil Practice Law and Rules Bill Jacket, L. 1975, c. 207, Necessary Class Action Features Memo, M arch 4, Bill Jacket, L. 1975, c. 333, Budget Report on Bills, June 17, Bill Jacket, L. 1975, c. 333, Louis Lefkowitz, Attorney General, Memorandum for the Governor Re: Assembly 3546, June 20, Governor's Statement, 1975 N.Y. Laws Legis. Digest-Bill Summary for A (available on Legislative Retrieval System) Legis. Digest-Bill Summary for A (available on Legislative Retrieval System) N.Y. State Assembly Memorandum in Support of Legis. A. 5158, Feb. 25, 2003, Legislative Retrieval System N.Y. State Assembly Memorandum in Support of Legis. A , April 17, 2002, Legislative Retrieval System... 30, 31 OTHER AUTHORITIES Barron's Law Dictionary (3rd ed. 1991) Black's Law Dictionary (6th ed. 1991) Black's Law Dictionary (revised 4th ed. 1974) Carmody-Wait 2d New York Practice 2:283 (2004) Merriam-Webster Dictionary of Law (1996)... 26, 34 *x Joseph Moldavan, New York Creates a Private Right of Action to Combat Consumer Fraud: Caveat Venditor, 48 Brook. L. Rev. 509 (1983) N.Y. Practice Commercial Litig. in New York State Court (2003) Sutherland Statutes and Statutory Construction 48:

8 *1 PRELIMINARY STATEMENT In this multi-forum antitrust litigation, New York plaintiffsappellants ("plaintiffs") appeal the order of the court below largely granting defendants-respondents' ("defendants") motion to dismiss. In holding that New York law bars plaintiffs' class action antitrust claims, the lower court applied N.Y. C.P.L.R. 901 (b) (McKinney 2004) (" 901 (b)") and N.Y. Gen. Bus. Law 340 (2004) ("Donnelly Act") consistently with overwhelming New York state case law, the statutes' plain meanings and the legislative intent behind those statutes. Section 901(b) prohibits class actions based on claims to recover a statutory penalty. The Donnelly Act requires a treble damages remedy. The treble damages provision is a penalty because it punishes antitrust offenders beyond any actual injury caused and deters future violations. For thirty years, New York state courts have refused to certify Donnelly Act class actions because of the treble damages penalty provision. In 2002, 2003 and 2004, the Legislature expressly declined opportunities to overturn this line of decisions. Accordingly, the court below concluded that the treble damages provision was a penalty and applied the 901 (b) bar on class actions to plaintiffs' Donnelly Act claim. For the first time on appeal, plaintiffs argue that the court below and all other New York state courts that have addressed the application of 901 (b) to the *2 Donnelly Act are wrong. [FN1] Plaintiffs essentially ask this Court to grant a class action right under the Donnelly Act where the Legislature has expressly chosen not to do so. Plaintiffs present varying theories on the connection between treble damages and a penalty, arguing, alternatively, that a remedy is not a penalty if it requires "proof of injury," or that "a remedy for a private injury" is not a penalty, or that "punitive damages" are not a penalty or that anything denoted as "damages" is not a penalty. But plaintiffs' theorizing cannot overcome the common sense understanding that a "civil action to recover treble damages is penal in nature." Fults v. Munro, 202 N.Y. 34, 41 (1911). Statutes authorizing damages in an amount equal to the injury are set to compensate victims, but statutes mandating damages beyond the amount required to compensate victims are set to penalize and deter violators. It is on this common-sense basis that the court below, like every other New York state court to have addressed the application of 901 (b) to the Donnelly Act, concluded that treble damages are a penalty, thus barring Donnelly Act class action claims. FN1. As plaintiffs do here, panics may raise issues of statutory interpretation for the first time on appeal. Richardson v. Fiedler Roofing, Inc., 67 N.Y.2d 246, 250 (1986). The court below applied a similar straightforward analysis to plaintiffs' Consumer Protection Act claim. But contrary to plaintiffs' assertions, the court below did not dismiss their Consumer Protection Act claim merely because it is an antitrust claim. Instead, the court carefully examined each of plaintiffs' six *3 allegations and found that each failed to contain the four required elements of a Consumer Protection Act claim under N.Y. Gen. Bus. 349 (2004). The Consumer Protect Act requires that plaintiffs allege (1) a misrepresentation or omission to a consumer, (2) that was misleading in a material way, (3) that resulted in an injury to the consumer, and (4) that occurred in New York. None of plaintiffs' six allegations meets these requirements. Therefore, the court properly dismissed plaintiffs' Consumer Protection Act claim. QUESTIONS PRESENTED 1. Section 901 (b) prohibits class actions under a statute imposing a penalty. The Donnelly Act mandates a treble damages remedy. New York state courts unanimously have found this treble damages provision to be

9 a penalty, because it punishes beyond mere compensation to reprimand and deter antitrust law offenders. Does 901(b)'s prohibition on class actions seeking a penalty bar a Donnelly Act class action because of its treble damages provision? The court below answered yes. 2. The Consumer Protection Act prohibits materially misleading misrepresentations or omissions made in New York to consumers that result in injury to consumers. Plaintiffs allege that defendants engaged in and enforced an antitrust conspiracy, but do not specifically allege any materially misleading misrepresentations or omissions made in New York to consumers that result in *4 consumers' injury. Should the Consumer Protection Act claim be dismissed when plaintiffs failed to allege the required elements? The court below answered yes. COUNTERSTATEMENT OF THE CASE These actions are but two of a large number of class action lawsuits filed in federal and state courts nationwide containing nearly identical allegations. As elsewhere, plaintiffs here allege an antitrust conspiracy among major automobile manufacturers and distributors based on defendants' policies regarding the export of new automobiles from Canada to the United States. There are twenty-six federal cases, which the Judicial Panel on Multidistrict Litigation has consolidated in the United States District Court for the District of Maine for pre-trial purposes. Proceedings also are active in fifty-four cases filed in ten states' courts. On February 28, 2003, plaintiff Paltre filed his complaint in Supreme Court, New York County. (Addendum ("Ad.") at 49.) [FN2] That same day, plaintiff Baade filed her complaint in Supreme Court, Nassau County. (Joint Appendix ("JA") at A-55.) Each plaintiff alleged violations of the Donnelly Act and the Consumer Protection Act; Baade additionally alleged an unjust enrichment claim. (JA at A ) A month later, Paltre filed a motion to voluntarily withdraw his complaint in New York County and refiled the same complaint in Nassau County. Pls.' *5 Motion for Voluntary Discontinuance of Class Action dated March 31, 2003 (Ad. at 74); Complaint for Paultre dated April 1, 2003 (JA at A-78) ("Paultre Compl."). FN2. For ease of reference, defendants have attached an addendum of materials that may not be readily available to the Court. Defendants' addendum begins on page 49 to follow plaintiffs' addendum consecutively. On July 30, 2003, defendants filed motions to dismiss Paltre's complaint. Among other arguments, defendants contended that Paltre's Donnelly Act claim was subject to 901(b)'s bar on class actions to recover statutory penalties. See Memo of Law in Support of Defs.' Joint Mot. to Dismiss dated July 30, 2003 at 5-7 (Ad. at ). In response, Paltre chose not to challenge defendants' argument concerning the impact of 901(b). Instead, he filed an amended complaint recasting his suit as one for only "actual damages, and not for treble damages or other exemplary relief or penalty." See Pls.' Amended Complaint ("Am. Compl.") dated Sept. 17, 2003 at 1 (introductory paragraph) (JA at A ) (emphasis added); see also id. at ("Plaintiffs do not seek treble damages, or any other award of statutory damages above their actual injuries."). Plaintiff Baade has not amended her original complaint, instead stipulating to stay her case and to be bound by decisions issued in the identical Paltre case. See Baade v Gen. Motors Corp., No (N.Y. Sup. Ct. Nassau County Feb. 4, 2004) (JA at A-53-54) (order granting stay). Baade later filed as a named plaintiff in the parallel federal multidistrict litigation. See In re Motor Vehicles Canadian Exp. Antitrust Litig., MDL No. 03-md P-H (D. Me. April 23, 2004)

10 (Second Am. Compl. 17) (Ad. at 76). Six months later, Baade withdrew *6 from the federal multidistrict litigation without explanation. See In re New Motor Vehicles, No. 03-md (D. Me. 2004) (Notice of Voluntary Dismissal of Plaintiff Baade's Claims dated Oct. 21, 2004) (Ad. at 112). On April 21, 2004, the Supreme Court (Warshawsky, J.) largely granted defendants' motions to dismiss and stay. The court dismissed the class action portion of plaintiffs' Donnelly Act claim, because 901(b) prohibits class action claims under statutes imposing a penalty, and the Donnelly Act's treble damages provision is a penalty. See Paltre v. Gen. Motors Corp., No /2003 (N.Y. Sup. Ct. Nassau County April 21, 2004) (JA at A-29) ("Decision Below"). The court below determined that the remedy plaintiffs "elect" is irrelevant to 901(b)'s bar on class actions under the Donnelly Act, which mandates the treble damages penalty. Id. (JA at A-30). The lower court also held that plaintiffs' allegations do not fall within the scope of the Consumer Protection Act. [FN3] Id. (JA at A-30-33). The court examined each of plaintiffs' six Consumer Protection Act allegations and determined that each failed to meet one of the Act's four requirements. The court found that some alleged acts were not misrepresentations or omissions to consumers, some did not *7 have the required materiality or causality, and some did not take place in New York. Id. FN3. The court below also dismissed Canadian defendants for lack of personal jurisdiction because plaintiffs failed to allege sufficient minimum contacts, dismissed plaintiffs' unjust enrichment claim because a written contract addressed the transaction at issue and plaintiffs did not transfer a benefit directly to defendants, and granted a stay in deference to the nearly identical federal multidistrict litigation. Id. at 6-12, (JA at A-22-28, A-33-34). Plaintiffs have not sought review of these rulings. See Brief for Plaintiffs-Appellants, dated Nov. 24, 2004, at ("Pls. Br."). STANDARD OF REVIEW ON APPEAL In reviewing a motion to dismiss under N.Y. C.P.L.R. 3211(a)(7), an appellate court accepts all of the factual allegations in the complaint as true and draws all inferences favorably to plaintiffs. 145 Kisco Ave. Corp. v. Dufner Enter., Inc., 604 N.Y.S.2d 963, 964 (2d Dep't 1993). But "factual claims which are flatly contradicted by the evidence" and "bare legal conclusion" are "not presumed to be true on a motion to dismiss for failure to state a claim." Meyer v. Guinta, 692 N.Y.S.2d 159, 161 (2d Dep't 1999). ARGUMENT I. Because Treble Damages Are A Penalty And The Legislature Has Not Specifically Authorized Private Class Actions Under The Donnelly Act, Plaintiffs' Donnelly Act Claim Cannot Be Maintained As A Class Action Section 901 (b) precludes class treatment for statutory claims to recover a penalty, unless the statute in question specifically authorizes a class action: Unless a statute creating or imposing a penalty, or a minimum measure of recovery specifically authorizes the recovery thereof in a class action, an action to recover a penalty, or minimum measure of recovery created or imposed by statute may not be maintained as a class action. C.P.L.R. 901(b) (2004).

11 *8 The Donnelly Act imposes a penalty- treble damages - but does not specifically authorize class actions by private parties: any person who shall sustain damages by reason of any violation of this section, shall recover three-fold the actual damages sustained thereby, as well as costs not exceeding ten thousand dollars, and reasonable attorneys' fees. N.Y. Gen. Bus. Law 340(5) (2004). Indeed, this state's courts have held time and time again that treble damages are a penalty: "Treble damages are not compensatory to the [plaintiffs] but like punitive damages generally are penal in nature and are designed to punish and deter proscribed or offensive conduct." Heights Assocs. v. Bautista, 683 N.Y.S.2d 372, 374 (2d Dep't 1998). Accordingly, the Donnelly Act falls squarely within 901 (b)'s proscription of class actions to recover statutory penalties. Nearly three decades of decisions at both the trial and appellate levels confirm that treble damages are a penalty within the meaning of 901(b). By its plain terms, the Donnelly Act authorizes plaintiffs to recover an amount far beyond "actual damages" and costs of litigation. Whatever label plaintiffs might wish to attach to this non-compensatory recovery, it remains a penalty both as a matter of ordinary English usage and as this State's courts have understood that term. And far from "specifically authorizing" private class action treatment, as necessary to avoid 901(b)'s bar, the Donnelly Act is entirely silent on this front - even while another provision of the act includes the required authorization for class actions by *9 the Attorney General. Moreover, the Legislature has repeatedly considered and rejected attempts to add specific statutory authorization for private class actions under the Donnelly Act. It has done so in the face of unbroken judicial authority holding that plaintiffs may not maintain private Donnelly Act claims as class actions. The Court should decline plaintiffs' invitation to break with almost thirty years of unanimous decisions and accomplish by judicial fiat what the Legislature has expressly declined to do. A. Treble Damages Are A Penalty Within The Plain Meaning Of 901(b) New York case law uniformly holds that treble damages, under the Donnelly Act as well as other statutes, are penalties for purposes of 901(b). The result could scarcely be otherwise, as the ordinary meaning of "penalty" encompasses treble damages. 1. New York courts have unanimously held that Donnelly Act treble damages are a penalty for purposes of 901(b). Every court to consider the issue has come to the same conclusion as the court below: because treble damages are a "penalty" within the meaning of 901(b), and because the Donnelly Act lacks the requisite statutory authorization, plaintiffs may not maintain private suits under the Donnelly Act as class actions. Just two years after the enactment of 901(b), the Supreme Court in Blumenthal v. Am. Soc'y of Travel Agents, Inc., Index No /76, 1977 WL * (Sup. Ct. N.Y. County July 5, 1977), rejected an attempt to certify a class alleging violation of the Donnelly Act, because its mandatory treble damages provision constituted a penalty: [P]laintiff is precluded by the very statute upon which he relies. An action under the Donnelly Act (General Business Law, Section 340, et seq.) may not be maintained as a class action since that statute imposes a penalty, treble damages. CPLR 901(b) specifically precludes a class action to recover a penalty.

12 Id. at *3. Blumenthal was followed by Russo & Dubin v. Allied Maintenance Corp., 407 N.Y.S.2d 617, 620 (Sup. Ct. N.Y. County 1978), in which the court reached an identical conclusion. ("CPLR Sec. 901(b) specifically bars a class action to recover a penalty. Under the Donnelly Act plaintiffs sought treble damages which are such a penalty."). Since that time, many New York courts at the appellate and trial level have found that the Donnelly Act's treble damages provision is a penalty for purposes of 901(b). See Asher v. Abbott Labs., 737 N.Y.S.2d 4, 4-5 (1st Dep't 2002) ("Private persons cannot bring a class action under the Donnelly Act because the treble damages remedy provided in General Business Law 340(5) is a 'penalty' within the meaning of CPLR 901 (b), the recovery of which in a class action is not specifically authorized and the imposition of which cannot be waived.") (citations omitted); Cox v. Microsoft Corp., 737 N.Y.S.2d 1, 2 (1st Dep't 2002) (same); Lennon v. Philip Morris Cos., 734 N.Y.S.2d 374, (Sup. Ct. N.Y. County * ) (concluding that the Donnelly Act's treble damages penalty and its silence on whether indirect purchasers can commence class actions precludes them); Rubin v. Nine West Group, Inc., No. 0763/99, 1999 WL , at *2-*4 (Sup. Ct. N.Y. County Nov. 3, 1999) ("[A] class action may not be maintained under the [Donnelly] Act."). Recently, in Asher v. Abbott Laboratories and Cox v. Microsoft Corp., the First Department held that the Donnelly Act's treble damages provision imposes a penalty within the meaning of 901(b). It did so, moreover, despite the contrary position urged by the Attorney General, who, as on this appeal, appeared as amicus curiae. [FN4] The court had little trouble concluding that treble damages under the Donnelly Act are penal in nature: FN4. See Cox, 737 N.Y.S.2d at 1 (case caption listing "Eliot Spitzer, Attorney General for the State of New York, Amicus Curiae"); Asher, 737 N.Y.S.2d 4 (same). Regarding Donnelly Act class actions, the Attorney General's amicus brief here only offers arguments already contained in plaintiffs' brief. Compare Brief for Amicus Curiae State of New York, dated Dec. 30, 2004, at 4-24 ("Amicus Br."), with Pls. Br Accordingly, defendants' brief responds simultaneously to both plaintiffs' and amicus curiae's positions regarding Donnelly Act class actions. The Attorney General's brief does not address the Consumer Protect Act portion of plaintiffs' appeal. See generally Amicus Br. The mandatory imposition of multiple damages for any statutory infraction renders this statute all the more punitive, removing both the necessity to demonstrate willfulness or bad faith and the discretion customarily vested in the court to determine the propriety of imposing a penalty under the particular circumstances of the action before it. *12 Cox, 737 N.Y.S.2d at 2; see also Asher, 737 N.Y.S.2d at 5 ("[[]t can be argued that a statute providing for an award of multiple damages without need to prove willfulness or bad faith is more punitive than one that does require such proof."). The First Department's conclusion is entitled to significant weight in this Court. See Mountain View Coach Lines, Inc. v. Storms, 476 N.Y.S.2d 918, 920 (2d Dep't 1984) (explaining that this Court "should accept the decisions of sister departments as persuasive"); Sheridan v. Tucker, 129 N.Y.S. 18, 20 (4th Dep't 1911) ("That uniformity of decision in this court may be fostered, if for no other reason, this branch of the court should, even in a doubtful case, accept as controlling the previous unanimous decision in another department, which is not otherwise authoritatively questioned."); Carmody-Wait 2d New York Practice 2:283 (2004). Accordingly, the Court should reject plaintiffs'

13 invitation to stake out new ground on a question that has long been well settled. 2. As a matter of New York law, treble damages are a penalty. This unbroken line of authority under the Donnelly Act is consistent with New York law on treble damages more generally. Under New York law, "[i]t has long been recognized that a provision for the trebling of damages is penal and subject to strict construction." Cox, 737 N.Y.S.2d at 2. Indeed, this restrictive attitude toward trebling has been a hallmark of this Court's jurisprudence. See Heights Assocs. v. Bautista, 683 N.Y.S.2d 372, 374 (2d Dep't 1998) ("Treble *13 damages are not compensatory to the [plaintiffs] but like punitive damages generally are penal in nature and are designed to punish and deter proscribed or offensive conduct."); Lyke v. Anderson, 541 N.Y.S.2d 817, 823, 825 (2d Dep't 1989) ("Multiple damages statutes are penal in nature" because they "are designed to punish and deter."); Potter v. Bierwirth, 157 N.Y.S. 25, 28 (2d Dep't 1916) (finding that a "motion for treble damages" is based on "a penal statute, and therefore is to be strictly construed"). Not surprisingly, therefore, this and other New York courts have consistently held that 901(b) bars class actions for treble damages under the Consumer Protection Act. See, e.g., Super Glue Corp. v. Avis Rent A Car Sys., Inc., 517 N.Y.S.2d 764, 767 (2d Dep't 1987); Cox v. Microsoft Corp., 778 N.Y.S.2d 147, 149 (1st Dep't 2004); Ridge Meadows Homeowners Ass'n, Inc. v. Tara Dev. Co., 665 N.Y.S.2d 361, 361 (4th Dep't 1997); Bums v. Volkswagen of Am., Inc., 460 N.Y.S.2d 410, 413 (Sup. Ct. Monroe County 1982), aff'd, 468 N.Y.S.2d 1017 (4th Dep't 1983). [FN5] FN5. While these decisions held that the Consumer Protection Act's treble damages provision imposed a penalty under 901(b), they allowed plaintiffs to waive treble damages to evade that prohibition. But plaintiffs cannot choose to waive treble damages under the Donnelly Act: while treble damages are discretionary under the Consumer Protection Act, treble damages are mandatory under the Donnelly Act. See Asher, 737 N.Y.S.2d at 4; Cox, 737 N.Y.S.2d at 2. In any event, on appeal plaintiffs have abandoned their attempt to waive the Donnelly Act's treble damages remedy. See Pls. Br. at 19 n.4. In fact, over and over, in a variety of contexts, New York courts have characterized treble damages as a penalty. See e.g., Fults v. Munro, 202 N.Y. 34, *14 41 (1911) (explaining that, in civil forcible entry cases, recovery of treble damages is "penal in nature"); In re Chan v. N.Y. State Div. of Hous. & Cmty. Renewal, 616 N.Y.S.2d 251, 251 (2d Dep't 1994) (referring to the "penalty of treble damages" imposed by statute); Rental & Mgmt. Assocs., Inc. v. Hartford Ins. Co., 614 N.Y.S.2d 513, 513 (1st Dep't 1994) (holding that treble damages are "penal in nature" because they are similar to common law punitive damages); Giovanniello v. Hispanic Media Group USA, Inc., 780 N.Y.S.2d 720, 722 (Sup. Ct. Nassau County 2004) (holding that "the allowance of treble damages under the [Telephone Consumer Protection Act] is punitive in nature and constitutes a penalty. New York courts have historically concluded that treble damages are punitive in nature."); Rutherford v. State of N.Y. Div. of Hous. and Cmty. Renewal, 4 Misc.3d 1029(A), 2004 WL , at *4 (Sup. Ct. N.Y. County 2004) (explaining a law that "entitle[s] the tenant to treble damages... as a penalty"); Hoffman v. Ryan, 422 N.Y.S.2d 288, (N.Y. Civ. Ct. N.Y. County 1979) (describing a punitive damages provision that imposed a quadruple penalty). These cases have recognized that, unlike compensatory damages, [FN6] treble damages are penalties because they provide recovery in excess of compensatory damages to punish statutory offenders and to serve as a

14 warning to others. See *15 Home Ins. Co. v. Am. Home Prod. Corp., 75 N.Y.2d 196, 203 (1990) (reasoning that "punitive damages are intended to act as a deterrent to the offender and to serve as a warning to others") (citation omitted); Pub. Serv. Mut. Ins. Co. v. Goldfarb, 53 N.Y.2d 392, 400 (1981) (stating that punitive damages are "a punishment for intentional wrongdoing"); Hartford Accident & Indem. Co. v. Vill. of Hempstead, 48 N.Y.2d 218, 226 (1979) (explaining that the purpose of punitive damages "is to punish and deter others from acting similarly"); Hamilton v. Third Ave. R.R. Co., 53 N.Y. 25, 28 (1873) (explaining exemplary damages are "something beyond actual compensation to the plaintiff" and "something in addition to full compensation"); Lyke v. Anderson, 541 N.Y.S.2d 817, 823, 825 (2d Dep't 1989) ("Multiple damages statutes are penal in nature" because they "are designed to punish and deter."). [FN7] Therefore, treble damages are properly considered a penalty, because their purpose is to penalize the offending party beyond what is required to compensate plaintiffs, to punish and deter offenders. FN6. The purpose of compensatory damages is "to compensate the person injured," not "to punish to wrongdoer." Johnson N.Y.2d 523, 536 (1984); see also Klapak v. Pappas, 433 N.Y.S.2d 500, 501 (2d Dep't 1980) ("punitive damages are penal in their nature and are different, both in nature and purpose, from compensatory damages") (citation omitted). FN7. Exemplary damages are particularly fitting in situations where the wrongdoers "deliberately and coolly engage in a far-flung fraudulent scheme, systematically conducted for profit."... v. Sheldon, 10 N.Y.2d 401, 406 (1961). In these situations, compensatory damages have little deterrent effect because compensatory damages "would require the offender to do no more than return the money which he had taken from the plaintiff." Id. "It stands to reason that the chances of deterring [the wrongdoer] are materially increased by subjecting him to the payment of punitive damages." Id. Indeed, Paltre plaintiffs' own actions demonstrate their tacit understanding that treble damages are not compensatory but penal. Plaintiffs' original complaint sought treble damages for their class action Donnelly Act claim. Paultre Compl. *16 B (JA at A-101). In seeking to dismiss the class action, defendants explained that the treble damages remedy is a penalty, which renders the Donnelly Act class action claim impermissible under 901(b). Memo of Law in Support of Defs.' Joint Mot. to Dismiss at 5-7 (Ad. at ). Plaintiffs later amended their complaint to request only actual damages under the Donnelly Act in a blatant attempt to circumvent 901 (b). Am. Compl (JA at A ). [FN8] In their amended complaint, plaintiffs draw a strict line between actual damages (i.e. compensatory damages) and treble damages (i.e. penalties). Id. 110 (JA at A-122) ("Plaintiffs do not seek treble damages, or any other award of statutory damages above their actual injuries."). Indeed, plaintiffs explicitly refer to treble damages as a penalty in their amended complaint, as they seek "actual damages, and not [] treble damages or other exemplary relief or penalty." Id. at 1 (JA at A-102) (emphasis added). For plaintiffs now to deny, for the first time on appeal, [FN9] that treble damages are a penalty contradicts their own actions and statements below, including the operative complaint in this action. FN8. The court below determined that plaintiffs' "election" of remedy is irrelevant to 901(b)'s bar on class actions under the Donnelly Act, and plaintiffs "do not appeal" this determination. Pls. Br. at 19 n.4. But defendants reject plaintiffs' proposal that their complaint be read to seek treble damages. See id. Plaintiffs may effectuate such a change only by formally amending their complaint. See N.Y. C.P.L.R. 3025(b) (2004).

15 FN9. While plaintiffs argued below that the court should ignore the First Department's decisions holding that treble damages are the Donnelly Act's mandatory remedy, plaintiffs never asked the court to reject the First Department's determination that 901(b) bars Donnelly Act class action because its treble damages provision is a penalty. See Pls. Mem. in Opp. to the Joint Mot. to Dismiss or in the Alternative to Stay, dated Nov. 17, 2003, at 5-7 (Ad. at 326). Indeed, nowhere in their briefing below did plaintiffs even mention 901(b) or use the word "penalty" regarding the Donnelly Act. See generally id. *17 3. Plaintiffs rely on cases that do not counter the New York law holding treble damages to be a penalty. To support their premise that multiple damages remedies are compensatory, not penal, plaintiffs and amicus curiae attempt to extract from three cases characteristics that separate treble damages from penalties. See Pls. Br. at (citing Cox v. Lykes Bros., 237 N.Y. 376, 379 (1924); Bogartz v. Astor, 293 N.Y. 563, 565 (1944); Sicolo v. Prudential Sav. Bank, 5 N.Y.2d 254, (1959)); Amicus Br. at 5-9, 12, Plaintiffs and amicus curiae contend: (1) a penalty does not require proof of injury, while treble damages do; and (2) a penalty is a sanction for a "public wrong," while treble damages remedy private actions. Pls. Br. at 22-30; Amicus Br. at 5-9. But far from supporting these theories, the cases on which plaintiffs rely actually confirm the extent to which treble damages are commonly regarded as penal under New York law. In each instance, the decisions plaintiffs cite recognized that multiple damages generally are considered a penalty, but found that the specific statute at issue either defined the multiple damages otherwise or rendered the question of whether the award was penal moot. Furthermore, plaintiffs' and amicus curiae's theories are inconsistent with the prior holdings of this Court. In Cox v. Lykes Bros., the Court of Appeals decided that a double damages remedy under a federal statute was not a penalty because express language in the statute stated that the remedy should be treated as compensatory. Lykes Bros., 237 *18 N.Y. 376 at 379. At issue in Lykes Bros. was whether a federal statute's double compensation award for late payment of seamen's wages constituted a penalty. Id. at While the Court of Appeals recognized that double compensation is normally in "the class of penalties," the statute's language "expressly" mandated that "the extra compensation, when due, shall be recoverable as wages," therefore rendering the double award under the federal seaman's statute as entirely compensatory. Id. (citation omitted). Unlike the federal statute in Lykes Bros., the Donnelly Act contains no express language mandating that its treble damages provision be treated as compensatory and not penal. Thus, the interpretation of federal seaman's compensation law found in Lykes Bros. is inapplicable here. In Bogartz v. Astor, the court determined that the nature of an award, be it penal or compensatory, did not affect the case's outcome because the statute's plain language rendered the question moot. Bogartz, 293 N.Y. at 566. There, a minor had received "double compensation" for a work-related injury under a workman's compensation statute requiring an insurer and an employer each to pay full compensation to a minor employee. Id. at 564. The minor later received a settlement in a third party action regarding the same injury. Id. at The workman's compensation statute permitted the employer to file a lien against the settlement for the amount the settlement mitigated the minor's injury, and the employer did so. Id. at 565. The lower court decided that the amount the *19 employer had to pay was "in the nature of a penalty which... ought under all circumstances [] be bore by the employer, and therefore did not permit the lien." Id. But the Court of Appeals examined the statute's plain language, and found no statutory exception from the provision permitting the employer to file a lien against third

16 party awards, and that whether or not the double compensation was a penalty that the employer ought to bear, "such is the plain requirement of the statute and that is the end of the controversy." Id. at 566. Accordingly, Bogartz does not stand for the proposition that multiple damages are not a penalty; it holds only that categorizing an award as "compensatory" or "penal" is irrelevant to the final determination in that case. Finally, plaintiffs cite Sicolo v. Prudential Savings Bank for the proposition that a minimum damages remedy is not a penalty for purposes of the Statute of Limitations. Sicolo, 5 N.Y.2d at At issue was whether the Statute of Limitations barred a fireman's claim, filed four years after an accident, under a fireman's injury statute that had as its remedy a minimum recovery of " 'not less than one thousand dollars.' " Id. at 257. Under the Statute, actions for penalties had a three-year limitation, while actions not for penalties had a six-year limitation. Id. In holding that a minimum recovery is not a penalty, the Court recognized that it was at odds with its previous holding in Gannon v. Royal Properties, 136 N.Y.S.2d 129, aff'd, 309 N.Y. 819 (1955), in which the Court held that the *20 fireman's injury statute was penal because the statute "in one sense the recovery 'penalizes' the violator of a safety law." Sicolo, 5 N.Y.2d at The Court then distinguished Gannon because "the Gannon case had nothing to do with the Statute of Limitations." Id. at 259. Accordingly, reading Gannon and Sicolo together, the Court of Appeals recognized that in the context of the Statute of Limitations, a minimum recovery is not a penalty, but outside the realm of the Statute of Limitations, a minimum recovery is a penalty. As the present case has nothing to do with the Statute of Limitations, Gannon would suggest that a minimum recovery is a penalty for purposes of 901(b). [FN10] FN10. Even if Sicolo stands for the proposition that a minimum recovery is never a penalty, that decision has no bearing on this case. Section 901(b) bars class actions under statutes imposing either "a penalty" or "a minimum measure of recovery." C.P.L.R. 901(b). As the Donnelly Act imposes treble damages (a penalty), and not a minimum amount of recovery, whether minimum damages are a penalty is irrelevant here. The amicus curiae's reliance on Pruitt v. Rockefeller Center Props., 574 N.Y.S.2d 672 (1st Dep't 1991), which explains that a minimum recovery is not related to actual damages incurred, Amicus Br. at 5, is similarly irrelevant. As to plaintiffs' and amicus curiae's arguments from federal case law, plaintiffs and amicus curiae miss the mark in the face of overwhelming state-law authority. See Pls. Br. at 28-30; Amicus Br. at 8-9, (arguing that "the most pertinent authorities are those arising under the federal antitrust laws"). As the First Department explained in rejecting similar arguments in Cox v. Microsoft Corp., Plaintiffs reliance upon Federal authority is unwarranted. Federal case law... is largely irrelevant to a peculiarly local question such as whether the New York State Legislature considers multiple *21 damages provisions to be punitive or compensatory. In drafting CPLR 901(b), the Legislature must be deemed to have chosen its language with reference to New York law, not its Federal counterpart. 737 N.Y.S.2d 1 at 2; see also Leider v. Ralfe, No. Civ. 3137(HB)(FM), 2004 WL , at *3 (S.D.N.Y. July 30, 2004) (explaining "[t]he New York and federal courts do not agree on the proper characterization of an antitrust treble damages remedy"); Lennon v. Philip Morris Cos., 734 N.Y.S.2d 374, 380 (Sup. Ct. N.Y. County 2001) (describing plaintiffs' reliance upon federal antitrust law as a "fundamental defect" and explaining that federal case law "does not contemplate, and therefore, fails to demonstrate, how a treble damages action can bypass CPLR 901

17 [b]'s prohibition"). New York state law and policy control because the federal class action rule, Fed. R. Civ. P. 23 (2004), does not contain a prohibition against class actions to recover a penalty. [FN11] Because New York state law and policy differ from the federal statute, a New York court is bound to follow state authority. *22 Lennon, 734 N.Y.S.2d at 380. Therefore, plaintiffs' and amicus curiae's federal case law that is contrary to New York case law should be granted little weight. [FN12] FN11. Thus, plaintiffs' and amicus curiae's argument that there is no difference between the Donnelly Act and the federal Sherman Act that would justify interpreting them differently, Pls. Br. at 27 n.9, Amicus Br. at 12-14, misses the point. There is a difference between 901 and the federal class action rules that warrants distinct interpretations: 901 bars class actions under statutes imposing a penalty, and Federal Rule 23 does not. It is this difference in the application of class action rules that bars a Donnelly Act class action but not its federal counterpart. FN12. Additionally, some federal case law supports the proposition that treble damages under antitrust laws are a penalty.?? 451 U.S. 630, 639 (1981) (explaining that "[t]he very idea of treble damages [under the Clayton Act] reveals an intent to punish past, and to deter future, unlawful conduct, not to ameliorate the liability of wrongdoers"); Sun Theatre Corp. v. RKO Radio Pictures, 213 F.2d 284, 287 (7th Cir. 1954) (referring to the Clayton Act's treble damages provision as "penal in nature"). 4. New York case law does not support plaintiffs' and amicus curiae's rationales for their position. Plaintiffs and amicus curiae go to great lengths to read ironclad tests into the three Court of Appeals opinions above, supposedly distinguishing between penalties and treble damages based on whether the remedy requires a "proof of injury" and whether the action is "public" or "private." See Pls. Br. at 22-30; Amicus Br. at 5-6. But the case law does not support these purported bases for distinction. Contrary to plaintiffs' suggestion that Lykes Bros. and Bogartz stand for the proposition that statutory remedies requiring a proof of injury are not penalties, these decisions do not even mention a proof of injury requirement, let alone distinguish a double compensation remedy from a penalty because the remedy required proof of injury. Compare Pls. Br. at 22-25, with Lykes Bros., 237 N.Y. at and Bogartz, 293 N.Y. at And while Sicolo briefly mentions these distinctions in dicta, as explained above Sicolo explicitly states that courts should analyze penalties differently for the Statute of Limitations than for statutes generally, and limited its holding accordingly. Sicolo, 5 N.Y.2d at *23 (explaining that the "words 'penalty or forfeiture' when used in a Statute of Limitations" do not refer to remedies "redressing a private injury" and that precedent holding otherwise "had nothing to do with the Statute of Limitations"). Moreover, plaintiffs' and amicus curiae's theory that remedies for public injuries are penalties while remedies for private injuries are compensatory directly conflicts with their theory that plaintiffs serve as "private attorneys general" under the Donnelly Act. Plaintiffs and amicus curiae contend that the purpose of an antitrust class action is to enable plaintiffs to serve as " 'private attorneys general.' " Pls. Br. at 39 (quoting Hawaii v. Standard Oil Co., 405 U.S. 251, 262 (1972)), Amicus Br. at 3 (same). Under this theory, these private attorneys general would protect "the free-enterprise system" which "depends on strong competition for its health and vigor." Hawaii, 405 U.S. at 262. Accordingly, as private attorneys general enforcing the antitrust laws for the betterment of the free-enterprise system, plaintiffs' antitrust action remedy redresses a public injury, thus