Williams v. CitiGroup, Inc.

2021 NY Slip Op 32171(U)

LINDA WILLIAMS, Plaintiff, v. CITIGROUP, INC., CITI GROUP GLOBAL MARKETS, INC., JP MORGAN SECURITIES, INC., JP MORGAN CHASE & CO., GOLDMAN SACHS & CO., Defendant.

Index No. 650481/2010

Supreme Court, New York County

October 27, 2021

Unpublished Opinion

PRESENT: HON. MELISSA CRANE Justice

DECISION + ORDER ON MOTION

MELISS A. CRANE, J.S.C.

The following e-filed documents, listed by NYSCEF document number (Motion 020) 590, 591, 592, 593, 594, 595, 596, 597, 598 599, 600, 601, 602, 603, 604, 605, 606, 607, 608, 609, 610 611, 612, 613, 614, 615, 616, 617, 618, 619, 620, 621, 622 623, 624, 625, 626, 627, 628, 629, 630, 631, 632, 633, 634, 635, 636, 637, 638, 639, 640, 641, 642, 643, 644, 645, 646, 647, 648, 649, 650, 651, 652, 653, 654, 655, 656, 657, 658, 659, 660, 661, 662, 663, 664, 665, 666, 667, 668, 669, 670, 671, 672, 673, 674, 675, 676, 685, 686, 687, 688, 689, 690, 691, 692, 693, 694, 695, 696, 697, 698, 699, 700, 701, 702, 703, 704, 705, 706, 707, 708, 709, 710, 711, 712, 713, 714, 715, 716, 717, 718, 719, 720, 721, 722, 723, 724, 725, 726, 727, 728, 729, 730, 731, 732, 733, 734, 735, 736, 737, 738, 739, 740, 741, 742, 743, 744, 745, 746, 747, 748, 749, 750, 751, 752, 753, 754, 755, 756, 757, 758, 759, 760, 761, 762, 763, 764, 765, 766, 767, 768, 769, 770, 771, 772, 773, 774, 775, 776, 777, 778, 779, 780, 781, 782, 783, 784, 785, 786, 787, 788, 789, 790, 791, 792, 793, 794, 795, 796, 797, 798, 799, 800, 801, 802, 803, 804, 805, 806, 807, 808, 809, 810, 811, 812, 813, 814, 815, 816, 817, 818, 819, 820, 821, 822, 823, 824, 825, 826, 827, 828, 829, 830, 831, 832, 833, 834, 835, 836, 837, 838, 839, 840, 841, 842, 843, 844, 845, 846, 847, 848, 849, 850, 851, 852, 853, 854, 855, 856, 857, 858, 859, 860, 861, 862, 863, 864, 865, 866, 867, 868, 869, 870, 871, 872, 873, 874, 875, 876, 877, 878, 879, 880, 881, 882, 883, 884, 885, 886, 887, 888, 889, 890, 891, 892, 893, 894, 895, 896, 897, 898, 899, 900, 901, 902, 903, 904, 905, 906, 907, 908, 909, 910, 911, 912, 913, 914, 915, 916, 917, 918, 919, 920, 921, 922, 923, 924, 925, 926, 927, 928, 929, 930, 931, 932, 933, 934, 935, 936, 937, 938, 939, 940, 941, 942, 943, 944, 945, 946, 947, 948, 949, 950, 951, 952, 953, 954, 955, 956, 957, 958, 959, 960, 961, 962, 963, 964, 965, 966, 967, 968, 969, 970, 971, 972, 973, 974, 975, 976, 977, 978, 979, 980, 981, 982, 983, 984, 985, 986, 987, 988, 989, 990, 991, 992, 993, 994, 995, 996, 997, 998, 999, 1000, 1001, 1002, 1003, 1004, 1005, 1006, 1007, 1008, 1009, 1010, 1011, 1012, 1013, 1014, 1015, 1016, 1017, 1018, 1019, 1020, 1021, 1022, 1023, 1024, 1025, 1026, 1027, 1028, 1029, 1030, 1031, 1032, 1033, 1034, 1035, 1036, 1037, 1038, 1039, 1040, 1041, 1042, 1043, 1044, 1045, 1046, 1047, 1048, 1049, 1050, 1051, 1052, 1053, 1054, 1055, 1056, 1057, 1058, 1059, 1060, 1061, 1062, 1063, 1064, 1065, 1066, 1067, 1068, 1069, 1070, 1071, 1072, 1073, 1074, 1075, 1076, 1077, 1078, 1079, 1080, 1081, 1082, 1083, 1084, 1085, 1086, 1087, 1089, 1090, 1091, 1092, 1093, 1094, 1095, 1096, 1097, 1098, 1099, 1100, 1101, 1102, 1103, 1104, 1105, 1106, 1107, 1108, 1109, 1110, 1111, 1112, 1113, 1114, 1115, 1116, 1117, 1118, 1119, 1120, 1121, 1122, 1123, 1124, 1125, 1126, 1127, 1128, 1129, 1130, 1131, 1132, 1133, 1134, 1135, 1136, 1137, 1138, 1139, 1140, 1141, 1142, 1143, 1144, 1145, 1146, 1147, 1148, 1149, 1150, 1151, 1152, 1153, 1154, 1155, 1156, 1157, 1158, 1159, 1160, 1161, 1162, 1163, 1164, 1165, 1166, 1167, 1168, 1169, 1170, 1171, 1172, 1173, 1174, 1175, 1176, 1177, 1178, 1179, 1180, 1181, 1182, 1183, 1184, 1185, 1186, 1187, 1188, 1189, 1190, 1191, 1192, 1193, 1194, 1195, 1196, 1197, 1198, 1199, 1200, 1201, 1202, 1203, 1204, 1205, 1206, 1207, 1208, 1209, 1210, 1211, 1212, 1213, 1214, 1215, 1216, 1217, 1218, 1219, 1220, 1221, 1222, 1223, 1224, 1225, 1226, 1227, 1228, 1229, 1230, 1231, 1232, 1233, 1234, 1235, 1236, 1237, 1238, 1239, 1240, 1241, 1242, 1243, 1244, 1245, 1246 were read on this motion to/for SUMMARY JUDGMENT(AFTER JOINDER .

Upon the foregoing documents, it is

In this action to recover damages for violation of the Donnelly Act (General Business Law § 340), defendants move for summary judgment dismissing the complaint. For the following reasons, the court grants the motion.

BACKGROUND

Plaintiff an attorney specializing in structured finance, alleges that in the spring of 2005, she developed an innovative Airline Special Facility Bond ("ASFB") structure for financing the construction and renovation of municipal airport terminals in the United States (plaintiff's structure). According to plaintiff, her structure is superior to that of traditional ASFBs because it ties the credit rating of ASFBs to passenger demand for the terminal, rather than to the credit rating of the airline leasing the facility. Plaintiff's structure, if implemented, would achieve a better credit rating and consequently lower interest rates (Joint Statement of Undisputed Material Facts at ¶¶ 7, 17 [NYSCEF Doc. No. 674]). Unlike traditional ASFBs, plaintiff's structure utilizes a "bankruptcy-remote special purpose entity" ("SPE") in place of the airline to lease the terminal (id. at ¶ 18). The SPE in turn sub-leases the terminal to the airline and assigns the rental payments it receives from the airline to the issuing municipality. That entity would then use those payments to pay the bondholders (id. at ¶ 19).

Defendants Citigroup, Inc. and Citigroup Global Markets, Inc. (together "Citi"), JP

Morgan Securities, Inc. and JP Morgan Chase & Co. (together "JP Morgan"), and Goldman Sachs & Co. ("Goldman Sachs") are investment banks who compete to underwrite ASFBs (id. at ¶ 6). In June 2005 while plaintiff was employed as an equity partner at Pillsbury Winthrop Shaw Pittman ("Pillsbury"), she and her colleagues introduced plaintiff's structure to Citi (id. at ¶ 29). Plaintiff alleges that Neil Attermann, a Citi executive responsible for advising airlines and underwriting airline bonds, responded favorably to the proposal. However, Citi ultimately chose not to market her structure (id. at ¶ 29; Second Amended Complaint at ¶¶ 76-83 [Doc. No. 329]). According to plaintiff, Citi chose not to do so because plaintiff's structure could have a negative impact on Citi's overall profits (Second Amended Complaint at ¶ 78 [Doc. No. 329]). She asserts that Citi went so far as firing a senior employee because of his long-standing relationship with her and his active promotion of her structure (id. at ¶ 79). According to plaintiff, it was necessary to fire this employee "to minimize any internal questions as [Citi] suddenly abandoned and then moved to block anyone else from pursuing the implementation of the innovative structure Plaintiff had developed" (id.).

Plaintiff contends that following Citi's "abrupt refusal" to market her structure to its airline and airport clients, plaintiff presented the structure to other investment banks, including JP Morgan and Goldman Sachs (id. at ¶ 87). JP Morgan and Goldman Sachs "instantly recognized the superiority" of her structure and "promptly and energetically" began recommending it to their major airline clients (id.). However, according to plaintiff, JP Morgan and Goldman Sachs refused to continue marketing her structure because of an agreement they made with Citi not to do so. She contends they also terminated or transferred employees who supported implementing the structure.

Plaintiff alleges that she was forced to resign from Pillsbury in March 2006 and, although she later obtained a position at Greenberg Traurig ("Greenberg") in June 2006, Greenberg terminated her employment in May 2007 (id. at ¶ 105). Plaintiff asserts that both terminations were the result of Citi demanding that these law firms participate in a boycott of her structure by severing their relationships with her.

Plaintiff asserts that through economic coercion, defendants also secured the participation of Banc of America Securities ("BAS"), American Airlines, and the Port Authority of New York and New Jersey (the "Port Authority") in the boycott. Plaintiff alleges that no bonds have been issued or refinanced using her structure because of the boycott, .

In this action, plaintiff seeks to recover damages for a violation of General Business Law § 340, commonly known as the Donnelly Act, predicated upon defendants' alleged antitrust conspiracy to boycott the use of her structure (id. at ¶¶ 139-159). According to the second amended complaint ("complaint"), defendants, utilizing the traditional ASFB structure, dominate the market for underwriting these bonds and reap far greater profits from both the proprietary trading of traditionally structured ASFBs in the secondary market and from the sale of derivative products linked to these bonds. These profits, the complaint asserts, are driven by the high taxexempt interest rates and market volatility that plague traditionally structured ASFBs. Plaintiff alleges that defendants, to preserve these benefits as well as certain profits made by some of defendants' large institutional clients, acted in concert to boycott plaintiff's structure and to coerce other participants in the ASFB market to join in the boycott. Plaintiff alleges defendants did so despite the tremendous cost savings plaintiff's structure could have provided their airline and municipal airport clients.

Plaintiff asserts defendants knew that airlines would realize the full extent of cost savings plaintiff's structure could provide, which would result in her structure's universal adoption. The purpose of defendants' "conspiratorial boycott" was to ensure that plaintiff's structure would never be used, thereby making certain that all ASFBs would "instead continue to be structured in the same old (and now antiquated) manner they have been for...