Yet again, New York Attorney General Eliot Spitzer has reached for a potent state law to change national business practices.

In the past, Mr. Spitzer has cited the state’s Martin Act – essentially New York’s brand of securities laws – to target conflicts of interest on Wall Street and improper sales of mutual funds. But, last week, when Mr. Spitzer announced bid-rigging charges against insurance broker Marsh & McLennan Cos. and implicated much of the insurance industry along the way, he turned to the 111-year-old Donnelly Act as a basis for his claims.

Donnelly comprises eight sections of New York business law, all dealing with antitrust protection. Passed three years after the federal Sherman Act – which to this day remains the granddaddy of U.S. competition law – Donnelly is one of a class of laws attorneys call the “Baby Shermans,” or the states’ efforts to preserve business competition.

In most respects, Donnelly and Sherman differ little. However, Donnelly specifically targets practices like bid-rigging – the heart of the insurance matter – price-fixing, illegal boycotts, and tying arrangements by companies.

It also brings the specter of felony charges, with fines up to $1 million for a corporation and $100,000 for an individual.

By using Donnelly, in combination with Martin, Mr. Spitzer can bring criminal charges (though he filed a civil lawsuit against Marsh) and collect fines without having to bother with federal law, lawyers say.

“Obviously being able to bring a criminal action, even if only on behalf of that state, is powerful stuff,” said Richard M. Steuer, a partner who handles antitrust matters at Mayer, Brown, Rowe & Maw in Washington. “Any criminal action has to be taken very seriously.”

Mr. Spitzer often has been disdainful of taking a federal route – mostly because he has said federal regulators sat by and allowed abuses like the Wall Street research scandal to happen. Along the way, and often to the dismay of his targets, Mr. Spitzer has shown that state law can get him pretty far indeed, even when the issues transcend New York state.

“If you think back at what Mr. Spitzer has done in the other cases, he addressed high-profile nationwide practices, but has challenged them for violating the laws of the state of New York,” Mr. Steuer said.

It isn’t uncommon for states to use their own anti-competition laws, antitrust experts said.

“Historically we’ve seen state AGs use their “Baby Sherman” acts to enforce the antitrust laws to fill a void created by the absence or lessening of federal enforcement,” said John J. Rosenthal, a partner at Howrey Simon Arnold & White LLP in Washington, D.C. Rosenthal successfully defended against an antitrust action in the early 1990s brought under the Donnelly Act, involving the right of Anheuser-Busch Cos. to use exclusive territories for distribution. Other “Baby Shermans” could mean that more states get into Mr. Spitzer’s act. Massachusetts, for example, became aggressive with New York when it came to targeting improper mutual-fund sales practices.