In one of its rare opinions in the antitrust field and the first ever by Chief Judge Jonathan Lippman, the Court of Appeals recently clarified important points about the Donnelly Act regarding the pleading of a claim under the “rule of reason” and the limited extraterritorial scope of the statute. The court’s approach in Global Reinsurance Corp. v. Equitas Ltd., ___ N.Y.2d ___, 2012 WL 995268 (March 27, 2012), may also give defense counsel a basis to encourage the lower courts to more closely scrutinize the pleading of Donnelly Act claims in the future.
Background
The dispute arose in the esoteric business of retrocessionary reinsurance, which is essentially reinsurance for reinsurers, spreading a risk among a third level of underwriters. Lloyd’s of London, which filed an amicus brief in the case, issued through its independent syndicates substantial policies for retrocessional coverage of “non-life” risks such as environmental, asbestos, and catastrophic. Many of the policies are of the “long tail” variety, meaning that claims surface long after the policy period.
