The U.S. Supreme Court’s recent decision in Shady Grove Orthopedic Associates, P.A. v. Allstate Insurance Co., —S.Ct.—, 2010 WL 1222272 (March 31, 2010) (“Shady Grove“) is another chapter in an ironic tale of unintended consequences. The story involves a federal law (CAFA, the Class Action Fairness Act of 2005), enacted to rein in state based class actions that ironically set the stage for a Supreme Court decision that will permit class actions under New York state’s antitrust statute, the Donnelly Act (act), where such suits had previously been prohibited.

As a result, the Supreme Court has inadvertently, through CAFA, accomplished what the New York state Legislature tried but failed to do, vindicating the Donnelly Act’s purpose and that of a 1998 amendment to the act creating standing for indirect purchasers.

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