{"id":37192,"date":"2024-12-25T23:18:25","date_gmt":"2024-12-26T07:18:25","guid":{"rendered":"https:\/\/www.markhamlawfirm.com\/mystaging\/?page_id=37192"},"modified":"2025-03-29T02:41:37","modified_gmt":"2025-03-29T09:41:37","slug":"californias-cartwright-act-by-william-markham-2024","status":"publish","type":"page","link":"https:\/\/www.markhamlawfirm.com\/mystaging\/law-articles\/californias-cartwright-act-by-william-markham-2024\/","title":{"rendered":"California&#8217;s Cartwright Act (By William Markham, \u00a9 2024)"},"content":{"rendered":"<p>[et_pb_section fb_built=&#8221;1&#8243; custom_padding_last_edited=&#8221;on|desktop&#8221; admin_label=&#8221;Top Image and Title Section&#8221; module_class=&#8221;inner-banner-sec&#8221; _builder_version=&#8221;4.27.4&#8243; background_image=&#8221;https:\/\/www.markhamlawfirm.com\/mystaging\/wp-content\/uploads\/2022\/02\/court-header-2.jpg&#8221; custom_padding=&#8221;120px||20px||false|false&#8221; custom_padding_tablet=&#8221;80px||20px||false|false&#8221; 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custom_css_main_element_last_edited=&#8221;on|desktop&#8221; sticky_enabled=&#8221;0&#8243;]<\/p>\n<h1>\u201cAn Overview of California\u2019s Cartwright Act\u201d (By William Markham, \u00a9 2024)<\/h1>\n<p>[\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=&#8221;1&#8243; admin_label=&#8221;Dynamic TOC Sidebar + Content&#8221; module_class=&#8221;content-sidebar-sec&#8221; _builder_version=&#8221;4.27.4&#8243; _module_preset=&#8221;default&#8221; custom_padding=&#8221;40px||60px||false|false&#8221; locked=&#8221;off&#8221; collapsed=&#8221;on&#8221; global_colors_info=&#8221;{}&#8221;][et_pb_row column_structure=&#8221;1_4,3_4&#8243; make_equal=&#8221;on&#8221; admin_label=&#8221;Dynamic TOC Sidebar + Main Text Part 2&#8243; _builder_version=&#8221;4.27.4&#8243; _module_preset=&#8221;default&#8221; custom_padding=&#8221;0px||0px||false|false&#8221; locked=&#8221;off&#8221; collapsed=&#8221;on&#8221; global_colors_info=&#8221;{}&#8221;][et_pb_column type=&#8221;1_4&#8243; module_class=&#8221;sidebar-col&#8221; _builder_version=&#8221;4.27.4&#8243; _module_preset=&#8221;default&#8221; global_colors_info=&#8221;{}&#8221;][et_pb_code admin_label=&#8221;Dynamic TOC Sidebar&#8221; _builder_version=&#8221;4.27.4&#8243; _module_preset=&#8221;default&#8221; global_colors_info=&#8221;{}&#8221;]<\/p>\n<div class=\"sidebar-wrap\"><\/div>\n<p>[\/et_pb_code][\/et_pb_column][et_pb_column type=&#8221;3_4&#8243; module_class=&#8221;sidebar-content-col&#8221; _builder_version=&#8221;4.27.4&#8243; _module_preset=&#8221;default&#8221; global_colors_info=&#8221;{}&#8221;][et_pb_text admin_label=&#8221;Main Text ,Part II&#8221; _builder_version=&#8221;4.27.4&#8243; _module_preset=&#8221;default&#8221; text_font=&#8221;||||||||&#8221; text_text_color=&#8221;#000000&#8243; text_font_size=&#8221;18px&#8221; header_2_font=&#8221;|700|||||||&#8221; header_2_text_align=&#8221;left&#8221; header_2_text_color=&#8221;#000000&#8243; header_2_line_height=&#8221;1.2em&#8221; header_3_font=&#8221;|700||on|||||&#8221; header_3_text_color=&#8221;#000000&#8243; header_3_font_size=&#8221;30px&#8221; header_2_text_align_tablet=&#8221;left&#8221; header_2_text_align_phone=&#8221;left&#8221; header_2_text_align_last_edited=&#8221;on|desktop&#8221; header_2_font_size_tablet=&#8221;&#8221; header_2_font_size_phone=&#8221;27px&#8221; header_2_font_size_last_edited=&#8221;on|desktop&#8221; text_orientation_tablet=&#8221;&#8221; text_orientation_phone=&#8221;&#8221; text_orientation_last_edited=&#8221;on|desktop&#8221; global_colors_info=&#8221;{}&#8221;]<\/p>\n<h2 id=\"1\">Introduction<\/h2>\n<p>California\u2019s principal antitrust law, the Cartwright Act (the \u201cAct\u201d), is codified at sections 16700\u201316770 of California\u2019s Business &amp; Professions Code. Broadly stated, the Act prohibits contracts, combinations, and conspiracies that unlawfully restrain trade in California.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_1');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_1');\" ><span id=\"footnote_plugin_tooltip_37192_1_1\" class=\"footnote_plugin_tooltip_text\">[1]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_1\" class=\"footnote_tooltip\">See Cal. Bus. &amp; Prof. Code \u00a7\u00a7 16720, 16726; SC Manufactured Homes, Inc. v. Liebert, 162 Cal. App. 4th 68, 84 (2008) (\u201cThe [Act] prohibits conspiracies that unreasonably restrain trade.\u201d);&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_1');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_1').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_1', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> The Act is usefully complemented by two related statutory schemes: California\u2019s sweeping law on non-compete covenants, which is codified in the Business &amp; Professions Code at sections 16600\u201316602.5, and California\u2019s Unfair Practices Act, which is codified in the same code at sections 17000\u201317101, and which proscribes certain kinds of price discrimination, predatory pricing, and group boycotts. Of note, the Unfair Practices Act affords treble damages and attorney&#8217;s fees to a prevailing plaintiff,<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_2');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_2');\" ><span id=\"footnote_plugin_tooltip_37192_1_2\" class=\"footnote_plugin_tooltip_text\">[2]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_2\" class=\"footnote_tooltip\"><em>See\u00a0<\/em>Cal. Bus. &amp; Prof. Code \u00a7 17082.<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_2').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_2', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> but only statutory costs of suit to a prevailing defendant.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_3');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_3');\" ><span id=\"footnote_plugin_tooltip_37192_1_3\" class=\"footnote_plugin_tooltip_text\">[3]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_3\" class=\"footnote_tooltip\"><em>See <\/em>Cal. Code Civ. Proc. \u00a7 1032.<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_3').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_3', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>As for the Act itself, it is expressly directed against \u201ccombinations in restraint of trade,\u201d but also applies to contracts and conspiracies that unduly restrain trade.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_4');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_4');\" ><span id=\"footnote_plugin_tooltip_37192_1_4\" class=\"footnote_plugin_tooltip_text\">[4]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_4\" class=\"footnote_tooltip\">See SC Manufactured Homes, Inc. v. Liebert, 162 Cal. App. 4th 68, 84 (2008) (\u201cThe [Act] prohibits conspiracies that unreasonably restrain trade.\u201d); Fisherman\u2019s Wharf Bay Cruise Corp. v.&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_4');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_4').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_4', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> Enacted in 1907, the Act was written to be enforced vigorously and provides strong inducements to this end. Among other things, it confers a private cause of action on natural persons and legal entities and offers generous civil remedies to induce them to expose unlawful restraints of trade and vindicate the public\u2019s interest in free markets by prosecuting well-founded claims for violations of the Act. Under the Act, a prevailing plaintiff may recover treble damages, reasonable attorney\u2019s fees, and costs of suit, as well as prejudgment interest, injunctive relief, and declaratory relief.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_5');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_5');\" ><span id=\"footnote_plugin_tooltip_37192_1_5\" class=\"footnote_plugin_tooltip_text\">[5]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_5\" class=\"footnote_tooltip\">See Cal. Bus. &amp; Prof. Code \u00a7 16750; Carver v. Chevron U.S.A., Inc., 119 Cal. App. 4th 498, 504 (2004) (\u201cThe public policy implicit in the unilateral fee\u2013shifting provision of section 16750,&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_5');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_5').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_5', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> A prevailing defendant, in contrast, can recoup only its statutory costs,<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_6');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_6');\" ><span id=\"footnote_plugin_tooltip_37192_1_6\" class=\"footnote_plugin_tooltip_text\">[6]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_6\" class=\"footnote_tooltip\"><em>See<\/em> Cal. Code Civ. Proc. \u00a7 1032.<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_6').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_6', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> unless the plaintiff\u2019s claim was patently frivolous\u2014a point that is discussed below in the section entitled \u201cAn Antitrust Defendant\u2019s Remedies.\u201d<\/p>\n<p>California\u2019s public authorities can bring civil claims for violations of either the Act itself or any similar provision of federal antitrust law. In particular, the Act authorizes California\u2019s Attorney General to bring such claims and seek the above civil remedies on behalf of the citizens of California, the State of California, or any of California\u2019s political subdivisions or public agencies.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_7');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_7');\" ><span id=\"footnote_plugin_tooltip_37192_1_7\" class=\"footnote_plugin_tooltip_text\">[7]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_7\" class=\"footnote_tooltip\"><em>See<\/em> Cal. Bus. &amp; Prof. Code \u00a7\u00a7 16750(c), 16760.<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_7').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_7', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> The Act also empowers the District Attorneys of California to bring the same kinds of actions within their districts.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_8');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_8');\" ><span id=\"footnote_plugin_tooltip_37192_1_8\" class=\"footnote_plugin_tooltip_text\">[8]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_8\" class=\"footnote_tooltip\"><em>See<\/em> Cal.Bus. &amp; Prof. Code \u00a7 16750(g).<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_8').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_8', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>The Act even authorizes California\u2019s Attorney General and District Attorneys to bring criminal prosecutions against offenders,<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_9');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_9');\" ><span id=\"footnote_plugin_tooltip_37192_1_9\" class=\"footnote_plugin_tooltip_text\">[9]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_9\" class=\"footnote_tooltip\"><em>See<\/em> Cal.Bus. &amp; Prof. Code \u00a7\u00a7 16754, 16755(a).<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_9').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_9', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> and it imposes stiff criminal penalties<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_10');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_10');\" ><span id=\"footnote_plugin_tooltip_37192_1_10\" class=\"footnote_plugin_tooltip_text\">[10]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_10\" class=\"footnote_tooltip\"><em>See<\/em> Cal.Bus. &amp; Prof. Code \u00a7 16755(a).<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_10').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_10', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script>, including prison terms of up to three years and very large fines, but criminal prosecutions under the Act have been seldom attempted and not at all during the past quarter-century. Expect that to change, as is explained below.<\/p>\n<p>Unlike federal antitrust law, the Act is directed only against trade restraints enforced by two or more independent economic actors.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_11');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_11');\" ><span id=\"footnote_plugin_tooltip_37192_1_11\" class=\"footnote_plugin_tooltip_text\">[11]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_11\" class=\"footnote_tooltip\">See In re Qualcomm Antitrust Litig., 292 F. Supp. 3d 948, 974 (N.D. Cal. 2017) (\u201cThe Cartwright Act proscribes \u2018a combination of capital, skill or acts by two or more persons\u2019 for an unlawful&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_11');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_11').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_11', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> It does not reach unilateral conduct or mergers and acquisitions (proposed or consummated).<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_12');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_12');\" ><span id=\"footnote_plugin_tooltip_37192_1_12\" class=\"footnote_plugin_tooltip_text\">[12]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_12\" class=\"footnote_tooltip\">See Asahi, 204 Cal. App. at 8 (\u201cThe Cartwright Act bans combinations, but single firm monopolization is not cognizable under the Cartwright Act.\u201d&#8221;); see also State of California ex rel. Van&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_12');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_12').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_12', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>On the other hand, the Act affords antitrust remedies to <em>indirect<\/em> purchasers, and classes of them, who are harmed by an unlawful conspiracy to fix prices, allocate a market, or commit any other violation of the Act.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_13');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_13');\" ><span id=\"footnote_plugin_tooltip_37192_1_13\" class=\"footnote_plugin_tooltip_text\">[13]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_13\" class=\"footnote_tooltip\">See Cal. Bus. &amp; Prof. Code \u00a7 16750(a); see also Stanislaus Food Prods. Co. v. USS-POSCO Indus., 782 F. Supp. 2d 1059, 1080 (E.D. Cal. 2011) (\u201cUnlike the federal Sherman Act, the Cartwright Act&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_13');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_13').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_13', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> In contrast, federal antitrust law does not permit an indirect purchaser to bring any such claim.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_14');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_14');\" ><span id=\"footnote_plugin_tooltip_37192_1_14\" class=\"footnote_plugin_tooltip_text\">[14]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_14\" class=\"footnote_tooltip\"><em>See<\/em> <em>Illinois Brick Co. v. Illinois<\/em>, 431 U.S. 720, 728 (1977) (holding that indirect purchasers cannot bring suit to challenge price-fixing conspiracies or other violations of federal antitrust law).<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_14').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_14', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>Case law during the past forty years also suggests a further divergence between federal and California laws on competition. Broadly speaking, the federal courts have greatly narrowed the reach of the common-law doctrines on restraint of trade during the era of <a href=\"https:\/\/www.markhamlawfirm.com\/mystaging\/law-articles\/how-the-consumer-welfare-standard-transformed-classical-antitrust-law\/\">\u201cconsumer-welfare\u201d jurisprudence<\/a>, but the California courts have not always followed these federal precedents and have taken pains to clarify that they are not bound to do so, since the Cartwright Act traces its origins to a more ambitious antitrust law that was adopted by some states, but not by Congress when it enacted the Sherman Act in 1890.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_15');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_15');\" ><span id=\"footnote_plugin_tooltip_37192_1_15\" class=\"footnote_plugin_tooltip_text\">[15]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_15\" class=\"footnote_tooltip\">See Cianci v. Superior Ct., 40 Cal. 3d 903, 919 (1985) (\u201cWhile no direct sources for the legislative history of the Cartwright Act exist, we may reasonably assume that the Legislature\u2019s intent&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_15');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_15').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_15', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> This point is examined more fully below.<\/p>\n<p>Nonetheless, federal antitrust law reaches various kinds of conduct that cannot be challenged under the Act, including the following matters:<\/p>\n<ul>\n<li>Unilateral conduct used by a monopolist to obtain, preserve, enlarge, or leverage a monopoly or near-monopoly in a properly defined relevant market, which can be challenged under section 2 of the Sherman Act (15 U.S.C. \u00a7 2).<\/li>\n<li>Commercial bribery and unlawful price discrimination that harms disfavored commercial buyers, both of which can be challenged under section 2 of the Clayton Act, as supplemented by the Robinson-Patman Act (15 U.S.C. \u00a7\u00a7 13\u201313c).<\/li>\n<li>Mergers and acquisitions that are likely to result in a substantial lessening of marketwide competition in a properly defined relevant market, which can be challenged under section 7 of the Clayton Act (15 U.S.C. \u00a7 18).<\/li>\n<li>Certain kinds of interlocking directorates, by which separate corporations become partly or wholly controlled by the same actors\u2014a circumstance that can be challenged under section 8 of the Clayton Act (15 U.S.C. \u00a7 19).<\/li>\n<\/ul>\n<div>\n<p>Other provisions of California\u2019s competition law reach some of these matters,<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_16');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_16');\" ><span id=\"footnote_plugin_tooltip_37192_1_16\" class=\"footnote_plugin_tooltip_text\">[16]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_16\" class=\"footnote_tooltip\">s<em>ee<\/em> Cal. Bus. &amp; Prof. Code \u00a7 16600 (non-compete covenants); \u00a7\u00a7 17000\u201317101 (certain kinds of price discrimination, predatory pricing, and commercial boycotts<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_16').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_16', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> but not anticompetitive mergers or any of the unilateral offenses proscribed by section 2 of the Sherman Act.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_17');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_17');\" ><span id=\"footnote_plugin_tooltip_37192_1_17\" class=\"footnote_plugin_tooltip_text\">[17]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_17\" class=\"footnote_tooltip\">Of note, an eminent former justice on the California Supreme Court, the late Stanley Mosk, memorably explained in a partly dissenting opinion why the Act should be construed to reach anticompetitive&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_17');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_17').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_17', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>Despite the Act\u2019s limited reach, plaintiffs might find that their claims for unlawful restraint of trade are often better received under the Act in California state court than they might be under section 1 of the Sherman Act in federal court, where many deserving claims fail under one or more of the restrictive doctrines that are part of the <a href=\"https:\/\/www.markhamlawfirm.com\/mystaging\/law-articles\/how-the-consumer-welfare-standard-transformed-classical-antitrust-law\/\">consumer-welfare canon<\/a>.<\/p>\n<p>Other practitioners with different aims might prefer instead to bring actions in federal court to have the Act limited in scope and reach by Congress\u2019s dormant powers under the Commerce Clause of the U.S. Constitution.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_18');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_18');\" ><span id=\"footnote_plugin_tooltip_37192_1_18\" class=\"footnote_plugin_tooltip_text\">[18]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_18\" class=\"footnote_tooltip\">See Selevan v. New York Thruway Auth., 584 F.3d 82, 90 (2d Cir. 2009) (\u201cIn implementing the Commerce Clause, the Supreme Court has adhered strictly to the principle that the right to engage in&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_18');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_18').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_18', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>The field is open for these challenges and more. This article, however, has only modest aspirations. It aims to provide a useful introductory overview of the Act and practical tips for practitioners.<\/p>\n<h2 id=\"2\">The Cartwright Act\u2019s Origins<\/h2>\n<p>Like all antitrust statutes, the Cartwright Act traces its origins to the common law on restraint of trade, which first emerged in England in the early 1600s.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_19');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_19');\" ><span id=\"footnote_plugin_tooltip_37192_1_19\" class=\"footnote_plugin_tooltip_text\">[19]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_19\" class=\"footnote_tooltip\">See United States v. E. C. Knight Co., 156 U.S. 1, 25 (1895) (\u201c[A] general restraint of trade has often resulted from combinations formed for the purpose of controlling prices by destroying the&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_19');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_19').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_19', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> Enacted in 1907, the Act closely resembles the original antitrust laws adopted by the federal government and many other states around the turn of the twentieth century (c. 1885 to 1914). Specifically, the Act largely borrows the wording of a draft version of the Sherman Act that Congress rejected, but various states adopted, including Texas and California.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_20');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_20');\" ><span id=\"footnote_plugin_tooltip_37192_1_20\" class=\"footnote_plugin_tooltip_text\">[20]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_20\" class=\"footnote_tooltip\">See generally State of California ex rel. Van de Kamp v. Texaco, Inc., 46 Cal. 3d 1147, 1153\u20131169 (1988) (extended explanation of these points with citations to numerous authorities) (superseded by&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_20');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_20').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_20', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> To understand the Act and its proper application, it is necessary to understand the common law on restraint of trade and the origins and evolution of American antitrust law. For a good start, I commend my readers to the original sources cited in the preceding two footnotes.<\/p>\n<p><em>Practice Pointer<\/em>: When briefing issues that arise under the Act, you should first look for guidance in the California decisions. If they provide insufficient guidance, or to supplement their guidance, you can cite to precedents established under section 1 of the Sherman Act (15 U.S.C. \u00a7 1), so long as you clarify that these federal precedents have only persuasive authority in cases that arise under the Act.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_21');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_21');\" ><span id=\"footnote_plugin_tooltip_37192_1_21\" class=\"footnote_plugin_tooltip_text\">[21]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_21\" class=\"footnote_tooltip\">See Cellular Plus, Inc. v. Superior Ct., 14 Cal. App. 4th 1224, 1240 (1993) (\u201cF]ederal cases interpreting the Sherman Act are applicable in construing our state laws. Accordingly, the appropriate&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_21');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_21').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_21', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<h2 id=\"14\"><strong>The Purpose and Underlying Policy of the Cartwright Act<\/strong><\/h2>\n<p>Despite its limited reach, the Act is an important bulwark in modern antitrust practice. Its intended and only proper aim is to protect the public from cartels, collusion by sellers (against their customers), collusion by buyers (against their suppliers), and dominant firms that use onerous contracts with their counterparties to corner markets and insulate themselves from competition.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_22');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_22');\" ><span id=\"footnote_plugin_tooltip_37192_1_22\" class=\"footnote_plugin_tooltip_text\">[22]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_22\" class=\"footnote_tooltip\">See Qualcomm, 292 F. Supp. 3d at 979 (\u201cThe California Supreme Court has held that the primary concern of the Cartwright Act is the elimination of restraints of trade and impairments of the free&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_22');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_22').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_22', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>Here is a short explanation of this essential point. <span style=\"font-size: 18px; font-family: inherit;\">In any market, competing sellers are supposed to vie with one another to make sales to customers. Their competitive rivalry is supposed to protect customers from abuse. If a seller offers shoddy products or services, charges excessively high prices, or imposes onerous terms of sale, customers will eventually cease making purchases from it and look instead to purchase the same kinds of products or services from a rival who offers better products, more accommodating services, lower prices, and better terms of sale. In the same vein, sellers will naturally decline to serve a commercial buyer who is too stingy or unreasonably insists on onerous terms and conditions. Instead, sellers will prefer to sell their wares to more reasonable customers. Those are the <\/span><span style=\"font-size: 18px; font-family: inherit;\">natural protections of competitive rivalry in <a href=\"https:\/\/www.markhamlawfirm.com\/mystaging\/law-articles\/antitrust-and-free-markets-2024\/\">free markets<\/a>. Those protections are undermined when sellers or buyers in a market collude to increase or lower prices or to impose onerous terms of trade.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_23');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_23');\" ><span id=\"footnote_plugin_tooltip_37192_1_23\" class=\"footnote_plugin_tooltip_text\">[23]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_23\" class=\"footnote_tooltip\">See United States v. Aluminum Co. of Am. (\u201cAlcoa\u201d), 148 F.2d 416, 428 (2d Cir. 1945) (\u201c[T]he vice of restrictive contracts and of monopoly is really one, it is the denial to commerce of the&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_23');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_23').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_23', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/span><\/p>\n<p>Equally important, vigorous competition continuously impels sellers to improve their products and services not only to make more sales, but also to avoid being undersold or surpassed by rivals, who by their own efforts might find better ways to make the same products or might even develop new products that better perform the same functions. In short, competition keeps everyone on their toes and honest in their dealings with one another.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_24');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_24');\" ><span id=\"footnote_plugin_tooltip_37192_1_24\" class=\"footnote_plugin_tooltip_text\">[24]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_24\" class=\"footnote_tooltip\">See Alcoa, 148 F.2d at 427\u201329 (\u201cThe [Sherman] Act has wider purposes\u2026. Many people believe that possession of unchallenged economic power deadens initiative, discourages thrift and depresses&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_24');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_24').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_24', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>When direct competitors act in concert to insulate themselves from the pressures of competition, they deprive everyone of the benefits of free and open competition. The same occurs when a dominant firm prevails upon its counterparties to accept onerous contractual restrictions that hinder or prevent future competition between the dominant firm and its counterparties or others. Antitrust law therefore condemns contracts, combinations, and conspiracies directed against competitive interplay in our markets. That, at least, is the theory that lies behind all antitrust laws, including the Act.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_25');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_25');\" ><span id=\"footnote_plugin_tooltip_37192_1_25\" class=\"footnote_plugin_tooltip_text\">[25]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_25\" class=\"footnote_tooltip\"><em>See Line Material<\/em>, 333 U.S. at 309 (\u201c[O]ur economy is built largely upon competition in quality and prices.\u201d); <em>Alcoa<\/em>, 148 F.2d at 427\u201329 (explaining these points at length).<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_25').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_25', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script>\u00a0<\/p>\n<p>When litigating a case under the Act, you should <em>always<\/em> keep these considerations in mind. A plaintiff, who acts as a private attorney-general when litigating a claim under the Act, must show how the challenged combination has not merely harmed its own business, but also hindered or eliminated competitive interplay in a properly defined relevant market. Such harm will be presumed only when the offense constitutes a <em>per se<\/em> violation. Otherwise, the plaintiff carries the burden of showing how the defendant\u2019s challenged practices have harmed marketwide competition in a properly defined relevant market. Conversely, a defendant will always wish to extol the procompetitive benefits of its challenged practices, explaining how they allow it to improve its own offerings even if they incidentally disfavor one or more direct competitors. That is why antitrust defendants routinely argue that the plaintiff\u2019s claim is untrue, opportunistic, or a mere effort to invoke antitrust law to protect the plaintiff\u2019s inefficient operations from superior competition on the merits.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_26');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_26');\" ><span id=\"footnote_plugin_tooltip_37192_1_26\" class=\"footnote_plugin_tooltip_text\">[26]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_26\" class=\"footnote_tooltip\">See Asahi, 204 Cal. App. at 20 (\u201c[T]he Cartwright Act, like all antitrust laws, is about the protection of competition, not competitors.\u201d); Cel-Tech Commc\u2019ns, Inc. v. Los Angeles Cellular Tel.&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_26');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_26').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_26', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<h2 id=\"3\">Combinations in Restraint of Trade<\/h2>\n<p>Under the Act, a combination in restraint of trade (called an unlawful \u201ctrust\u201d) typically refers to a business practice that unduly hinders or prevents marketplace competition in California and is implemented by the concerted activity of two or more independent actors (as opposed to conduct implemented by a corporation and an affiliate that it controls).<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_27');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_27');\" ><span id=\"footnote_plugin_tooltip_37192_1_27\" class=\"footnote_plugin_tooltip_text\">[27]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_27\" class=\"footnote_tooltip\"><em>See<\/em> <em>Qualcomm<\/em>, 292 F. Supp. 3d at 974 (quoted above on this point).<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_27').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_27', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> Of note, the business practice itself or its anticompetitive effects must take place at least in substantial part in California.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_28');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_28');\" ><span id=\"footnote_plugin_tooltip_37192_1_28\" class=\"footnote_plugin_tooltip_text\">[28]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_28\" class=\"footnote_tooltip\">See AT &amp; T Mobility LLC v. AU Optronics Corp., 707 F.3d 1106, 1112\u201313 (9th Cir. 2013) (\u201cApplying California law to anticompetitive conduct undertaken within California [that results in harm&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_28');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_28').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_28', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script>\u00a0<\/p>\n<p>Certain kinds of combinations are deemed unlawful <em>per se<\/em>, while others are reviewed under more demanding standards, which are explained below.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_29');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_29');\" ><span id=\"footnote_plugin_tooltip_37192_1_29\" class=\"footnote_plugin_tooltip_text\">[29]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_29\" class=\"footnote_tooltip\">See Marsh v. Anesthesia Servs. Med. Grp., Inc., 200 Cal. App. 4th 480, 493 (2011) (\u201cThe Cartwright Act prohibits combinations in unreasonable restraint of trade. Certain restraints which lack&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_29');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_29').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_29', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> In theory, proving a <em>per se<\/em> violation of the Act requires little or no examination of any \u201crelevant market\u201d or the effect of the challenged conduct on competitive conditions in any such market.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_30');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_30');\" ><span id=\"footnote_plugin_tooltip_37192_1_30\" class=\"footnote_plugin_tooltip_text\">[30]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_30\" class=\"footnote_tooltip\">See Knevelbaard Dairies v. Kraft Foods, Inc., 232 F.3d 979, 986 (9th Cir. 2000) (\u201cWhen a per se violation such as horizontal price fixing has occurred, there is no need to define a relevant market&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_30');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_30').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_30', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> Even so, you should always consider and carefully plead the applicable relevant market or markets in any case that you bring under the Act, even if you allege only a <em>per se<\/em> violation, such as horizontal price-fixing.<\/p>\n<h2 id=\"4\"><em>Per Se<\/em> Violations of the Cartwright Act<\/h2>\n<p>Unlawful combinations under the Act above all concern the cardinal antitrust offenses, which are agreements or coordinated business practices by which two or more competitors do any of the following:<\/p>\n<ul>\n<li>Fix or coordinate their respective prices (price-fixing).<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_31');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_31');\" ><span id=\"footnote_plugin_tooltip_37192_1_31\" class=\"footnote_plugin_tooltip_text\">[31]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_31\" class=\"footnote_tooltip\"><em>See<\/em> <em>Marsh<\/em>, 200 Cal. App. 4th at 493.<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_31').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_31', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/li>\n<li>Allocate customers by name, location, type of contract, type of product, or another such category (horizontal market-allocation).<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_32');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_32');\" ><span id=\"footnote_plugin_tooltip_37192_1_32\" class=\"footnote_plugin_tooltip_text\">[32]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_32\" class=\"footnote_tooltip\"><em>See id<\/em>.<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_32').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_32', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/li>\n<li>Pre-arrange bidding for a contract or asset (bid-rigging).<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_33');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_33');\" ><span id=\"footnote_plugin_tooltip_37192_1_33\" class=\"footnote_plugin_tooltip_text\">[33]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_33\" class=\"footnote_tooltip\"><em>See id<\/em>.<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_33').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_33', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/li>\n<li>Refuse to provide key inputs or necessary commercial arrangements to one or more targeted businesses (horizontal group boycotts).<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_34');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_34');\" ><span id=\"footnote_plugin_tooltip_37192_1_34\" class=\"footnote_plugin_tooltip_text\">[34]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_34\" class=\"footnote_tooltip\"><em>See id<\/em>.<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_34').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_34', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/li>\n<\/ul>\n<p><em>Horizontal Price-Fixing. <\/em>Price-fixing is the ultimate antitrust offense. It occurs when two or more ostensible competitors enforce an express or implied agreement to raise or manipulate their prices to avoid price competition. In some instances, offenders literally fix (set) their respective prices. In others, they agree to respect price minimums; or agree to restrict output simultaneously so that customers confronted with scarcity will bid up their prices; or manipulate a pricing formula used to determine prices; or coordinate spot purchases to remove products from the market and thereby contrive scarcity and thereby force customers to bid up market prices; or resort to some other scheme or contrivance to force customers to pay more for their products than could be charged in a competitive market untainted by their collusion. That is price-fixing. It is the principal offense and a <em>per se<\/em> violation under the Act.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_35');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_35');\" ><span id=\"footnote_plugin_tooltip_37192_1_35\" class=\"footnote_plugin_tooltip_text\">[35]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_35\" class=\"footnote_tooltip\">See Knevelbaard, 232 F.3d at 986 (\u201cForemost in the category of per se violations is horizontal price-fixing among competitors&#8230;. Under both California and federal law, agreements [between&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_35');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_35').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_35', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p><em>Horizontal Market Allocation<\/em>. This offense occurs when two or more ostensible competitors enforce an express or implied agreement by which they allocate their sales to avert competition with one another. Horizontal market allocation can entail divvying up customers by name, territory (e.g., \u201cYou take all sales east of Main Street, and I will take all sales west of it.\u201d), contract size (e.g., \u201cYou take all jobs that cost more than $50,000, and I will take all those that cost less\u201d), specific products (e.g., \u201cYou sell all A-size widgets, and I will sell all B-size widgets\u201d), or some other such allocation. Horizontal market-allocation is treated as a <em>per se<\/em> offense under the Act.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_36');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_36');\" ><span id=\"footnote_plugin_tooltip_37192_1_36\" class=\"footnote_plugin_tooltip_text\">[36]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_36\" class=\"footnote_tooltip\">See In re Cipro Cases I &amp; II, 61 Cal. 4th 116, 148 (2015) (Under the Act, \u201cbusinesses may not engage in a horizontal allocation of markets, with would-be competitors dividing up territories or&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_36');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_36').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_36', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p><em>Bid-Rigging<\/em>. This offense occurs when ostensibly independent bidders for a contract or an asset arrange their bids or offers in advance so as to avert competitive bidding. Bid-rigging is likewise treated as a <em>per se<\/em> offense under the Act.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_37');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_37');\" ><span id=\"footnote_plugin_tooltip_37192_1_37\" class=\"footnote_plugin_tooltip_text\">[37]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_37\" class=\"footnote_tooltip\"><em>See Knevelbaard<\/em>, 232 F.3d at 986; Marsh, 200 Cal. App. 4th at 493.<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_37').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_37', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p><em>Horizontal Group Boycotts<\/em>. A group boycott refers to a business practice by which two or more businesses withhold necessary supplies or a necessary commercial facility from one or more targeted customers, thereby impeding or preventing the targets from competing for business in the affected market. A group boycott can refer to direct competitors that control supplies and use coordinated efforts to withhold them from an existing or potential rival. A group boycott can also refer to a dominant firm that prevails on its own suppliers to withhold necessary supplies or facilities from one or more of its rivals, thereby preventing or impeding them from competing against it.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_38');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_38');\" ><span id=\"footnote_plugin_tooltip_37192_1_38\" class=\"footnote_plugin_tooltip_text\">[38]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_38\" class=\"footnote_tooltip\">See Marsh, 200 Cal. App. 4th at 493; Freeman v. San Diego Ass\u2019n of Realtors, 77 Cal. App. 4th 171, 195 (1999) (\u201c[I]t is a violation of the antitrust laws for a group of competitors with separate&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_38');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_38').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_38', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> Under federal law, proving an unlawful group boycott is more difficult. To do so, a plaintiff must either make an elaborate rule-of-reason showing, or, at a minimum, prove all of the following points: (1) The boycotting companies control a resource, such as supplies, that the targeted company or companies require in order to remain viable competitors in a given line of commerce or market; (2) the boycotting companies act in concert to withhold this resource from the targets, which in consequence cannot remain viable competitors in the line of commerce or market; (3) the boycotting companies occupy a \u201cdominant\u201d position in the line of commerce or market; (4) the boycotting companies lack a necessary business justification for withholding the necessary resource from the targets; and (5) the boycott entails a horizontal arrangement made between direct competitors.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_39');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_39');\" ><span id=\"footnote_plugin_tooltip_37192_1_39\" class=\"footnote_plugin_tooltip_text\">[39]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_39\" class=\"footnote_tooltip\">See Hahn v. Oregon Physicians\u2019 Service, 860 F.2d 1501, 1509 (9th Cir. 1988) (setting forth the first three of the above four criteria); NYNEX Corp. v. Discon, Inc., 525 U.S. 128, 135 (1998)&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_39');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_39').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_39', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<h2 id=\"5\"><strong>Joint Ventures and the Doctrine of Ancillary Restraints<\/strong><\/h2>\n<p>Direct competitors often collaborate with one another in legitimate joint ventures, by which they aim to fulfill customers\u2019 requirements or improve their offerings. Antitrust law offers no reproach of any such venture. On the contrary, it encourages and extols collaborative efforts to innovate, make better products, and offer improved services in response to competitive pressures from other sellers.<\/p>\n<p>At the same time, antitrust law is rightly wary of endeavors jointly undertaken by two or more direct competitors. All too often, joint ventures entail business practices that can be plausibly challenged as price-fixing, market allocation, or some other unlawful combination under the Act. The controlling law in such a circumstance is well-settled. Namely, a practice used in a joint venture undertaken by two or more competitors can be challenged under the doctrine of ancillary restraints, which asks (1) whether the defendants\u2019 challenged practice facilitates the success of their collaboration; and, if so, (2) whether the practice is narrowly tailored for this purpose. If the answer to both queries is \u201cyes,\u201d the practice will almost certainly survive scrutiny and can be challenged, if at all, only under the difficult rule-of-reason standard. But if not, the practice can be condemned as a violation of the Act.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_40');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_40');\" ><span id=\"footnote_plugin_tooltip_37192_1_40\" class=\"footnote_plugin_tooltip_text\">[40]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_40\" class=\"footnote_tooltip\">See Med. Ctr. at Elizabeth Place, LLC v. Atrium Health Sys., 922 F.3d 713, 724\u201325 (6th Cir. 2019) (\u201cBecause joint ventures often have procompetitive efficiencies, when a joint venture is itself&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_40');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_40').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_40', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> In every instance, a \u201cnaked\u201d restraint of competition between independent competitors is always unlawful under the Act, even when it is buried in a contract that memorializes the terms and conditions of a legitimate joint venture. When two direct competitors agree not to compete in some way or other, their restraint is unlawful under the Act if its principal or only purpose is to protect the competitors from one another\u2019s competition. Any such restraint, no matter how clothed, is deemed a \u201cnaked\u201d restraint of trade, and as such it is unlawful under the Act.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_41');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_41');\" ><span id=\"footnote_plugin_tooltip_37192_1_41\" class=\"footnote_plugin_tooltip_text\">[41]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_41\" class=\"footnote_tooltip\">See Polk Bros. v. Forest City Enters., Inc., 776 F.2d 185, 188\u201389 (7th Cir. 1985) (naked restraints are horizontal covenants between competitors that exist merely to suppress competition; as such,&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_41');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_41').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_41', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<h2 id=\"6\"><strong>Vertical Arrangements That Can Unlawfully Restrain Trade\u00a0<\/strong><\/h2>\n<p>\u201cVertical restraints\u201d are contractual or course-of-dealing restrictions that companies impose on their suppliers, contractors, or customers. A vertical restraint can be found to violate the Act, but only if it is used in a way that lacks a redeeming justification and is likely to result in a substantial lessening of competition in a properly defined relevant market.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_42');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_42');\" ><span id=\"footnote_plugin_tooltip_37192_1_42\" class=\"footnote_plugin_tooltip_text\">[42]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_42\" class=\"footnote_tooltip\">See Theme Promotions, Inc. v. News Am. Mktg. FSI, 546 F.3d 991, 1000 (9th Cir. 2008) (\u201cCalifornia courts have determined that vertical restraints of trade &#8230; are not per se unreasonable but&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_42');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_42').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_42', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> In particular, the following kinds of vertical restraints can be deemed unlawful combinations under the Act, but only if they lack a redeeming justification and are accompanied by a proper showing of probable and significant harm to competitive interplay in a properly defined relevant market:<\/p>\n<ul>\n<li><em>Tying arrangements<\/em>, whereby a seller with market power over a &#8220;tying product&#8221; forces its customers to accept another kind of product (the tied product) when purchasing the tying product (e.g., &#8220;if you want to purchase our A widgets, which you require and cannot find from another seller, you must also buy our B widgets&#8221;). Some sellers with market power use tying arrangements that merely oblige their customers not to purchase the tied product from another seller. Tying arrangements can be accomplished by contract or product design (e.g., selling all A widgets only with separable B widgets attached to them), but proving a tie-in by product design is very difficult under the modern standards. Of note, tying arrangements used to be treated as <em>per se<\/em> violations under federal law, but now the very definition of an unlawful tying arrangement requires the plaintiff to show that the defendant has market power in the market for the tying product, so that the practice is a <em>per se<\/em> violation in name only, but for practical purposes is treated more like a rule-of-reason offense.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_43');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_43');\" ><span id=\"footnote_plugin_tooltip_37192_1_43\" class=\"footnote_plugin_tooltip_text\">[43]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_43\" class=\"footnote_tooltip\">See UAS Mgmt., Inc. v. Mater Misericordiae Hosp., 169 Cal. App. 4th 357, 366 (2009) (\u201cA tying arrangement typically involves a seller with monopoly or other extensive market power in a given&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_43');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_43').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_43', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/li>\n<li><em>Exclusive-dealing arrangements<\/em>, whereby a defendant with market power obliges its suppliers or customers to deal only with it and thereby forecloses a substantial part of all sales in the relevant market for an extended duration, so that no rival can establish a foothold, attain required economies of scale, or impose competitive discipline on the defendant.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_44');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_44');\" ><span id=\"footnote_plugin_tooltip_37192_1_44\" class=\"footnote_plugin_tooltip_text\">[44]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_44\" class=\"footnote_tooltip\">See Theme Promotions, 546 F.3d at 1001 (\u201c[E]xclusive dealing contracts may harm competition, but may also have the effect of enhancing competition. Under the rule of reason analysis, an exclusive&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_44');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_44').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_44', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/li>\n<li><em>Product-bundling<\/em>, whereby a seller with market power that sells many products gives large discounts on \u201cbundles\u201d of separate products, so long as the customer buys from the seller most or all of its requirements for each bundled product.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_45');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_45');\" ><span id=\"footnote_plugin_tooltip_37192_1_45\" class=\"footnote_plugin_tooltip_text\">[45]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_45\" class=\"footnote_tooltip\">See In Cascade Health Solutions v. PeaceHealth, 515 F.3d 883, 897 (9th Cir. 2008) (\u201c[B]undled discounts, while potentially procompetitive by offering bargains to consumers, can also pose the threat&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_45');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_45').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_45', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/li>\n<li><em>Standard-setting fraud<\/em><strong>,<\/strong> whereby (1) the defendant convinces a standard-setting organization to adopt its patented product or technology as a standard feature in an entire industry (e.g., the cellphone industry); (2) to this end, the defendant specifically and formally agrees to sell or license the product or technology to all comers on \u201cFRAND\u201d terms (i.e., terms and conditions that are \u201cfair, reasonable, and non-discriminatory\u201d); and (3) the defendant thereafter breaches its promise and refuses to sell or license the product or technology on commercially viable terms to any rival, or it sells or licenses the product or technology to its captive customers only at extortionate prices or on onerous terms and conditions that they would never accept in a competitive market.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_46');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_46');\" ><span id=\"footnote_plugin_tooltip_37192_1_46\" class=\"footnote_plugin_tooltip_text\">[46]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_46\" class=\"footnote_tooltip\">See Broadcom Corp. v. Qualcomm Inc., 501 F.3d 297, 314 (3d Cir. 2007) (\u201cWe hold that (1) in a consensus-oriented private standard-setting environment, (2) a patent holder\u2019s intentionally false&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_46');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_46').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_46', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/li>\n<li><em>Patent misuse<\/em>, whereby one or more patentees with market power use licensing agreements, cross-licensing agreements, or covenants not to sue in order to extend the duration or scope of their exclusive concessions beyond those conferred by the patents themselves.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_47');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_47');\" ><span id=\"footnote_plugin_tooltip_37192_1_47\" class=\"footnote_plugin_tooltip_text\">[47]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_47\" class=\"footnote_tooltip\">See Princo Corp. v. Int\u2019l Trade Comm\u2019n, 616 F.3d 1318, 1321 (Fed. Cir. 2010) (\u201c[T]he doctrine [of patent misuse] limits a patentee\u2019s right to impose conditions on a licensee that exceed the&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_47');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_47').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_47', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/li>\n<li><em>Most-favored pricing provisions<\/em> (sometimes called \u201cmost-favored nation\u201d clauses or \u201cMFNs\u201d), whereby (1) a defendant with market power requires its suppliers to give it the best prices or terms of sale that they offer to any other customer, and (2) the purpose or effect of the defendant\u2019s MFN is to inhibit competition on price or quality by preventing the defendant\u2019s rivals from offering better terms to suppliers in exchange for their lower prices.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_48');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_48');\" ><span id=\"footnote_plugin_tooltip_37192_1_48\" class=\"footnote_plugin_tooltip_text\">[48]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_48\" class=\"footnote_tooltip\">See United States v. Apple, Inc., 791 F.3d 290, 320 (2d Cir. 2015) (\u201cMFNs, though surely proper in many contexts, can be misused to anticompetitive ends in some cases.\u201d); Blue Cross &amp; Blue&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_48');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_48').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_48', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/li>\n<li><em>Countless other vertical business arrangements, <\/em>which defendants with market power use with their counterparties primarily to insulate themselves from competition rather than to improve their offerings.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_49');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_49');\" ><span id=\"footnote_plugin_tooltip_37192_1_49\" class=\"footnote_plugin_tooltip_text\">[49]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_49\" class=\"footnote_tooltip\"><em>See generally<\/em> Phillip Areeda &amp; Herbert Hovenkamp, <em>Antitrust Law: An Analysis of Antitrust Principles and Their Application<\/em> (Wolters Kluwer online, 2024), \u00b6\u00b6 1600\u20131823.<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_49').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_49', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script>\u00a0<\/li>\n<\/ul>\n<h2 id=\"7\"><strong>Contracts in Restraint of Trade<\/strong><\/h2>\n<p>The Act reaches contracts in restraint of trade and is directly complemented by <span style=\"font-size: 18px; font-family: inherit;\">California\u2019s statutes on non-compete covenants, which appear at sections 16600\u201316602.5 of California\u2019s Business &amp; Professions Code.<\/span><\/p>\n<p>First, contracts in restraint of trade can be challenged directly under the Act, which at a minimum codifies the common-law doctrines on restraint of trade.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_50');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_50');\" ><span id=\"footnote_plugin_tooltip_37192_1_50\" class=\"footnote_plugin_tooltip_text\">[50]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_50\" class=\"footnote_tooltip\">See Fisherman\u2019s Wharf, 114 Cal. App. 4th at 317 (\u201cThe Cartwright Act targets contracts in restraint of trade and promotes a free market by proscribing trusts.\u201d); Alfred M. Lewis, Inc. v.&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_50');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_50').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_50', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> <\/span><span style=\"font-family: inherit; font-size: 18px;\">The Act therefore reaches a defendant with market power that obliges its counterparty to accept unlawful non-compete covenants or other restrictions that impede competition and are not narrowly drafted merely to facilitate the successful performance of a joint-venture or transaction. The combination is formed by the defendant and its unwilling abettor (the counterparty). On this basis, the counterparty itself or other harmed parties can challenge the contract or business arrangement and obtain relief from the defendant under the Act.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_51');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_51');\" ><span id=\"footnote_plugin_tooltip_37192_1_51\" class=\"footnote_plugin_tooltip_text\">[51]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_51\" class=\"footnote_tooltip\">See Kolling v. Dow Jones &amp; Co., 137 Cal. App. 3d 709, 720 (1982) (\u201c[T]he \u2018conspiracy\u2019 or \u2018combination\u2019 necessary to support an antitrust action [under the Act] can be found where a&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_51');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_51').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_51', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/span><\/p>\n<p><span style=\"font-size: 18px; font-family: inherit;\">Second, section 16600 of California\u2019s Business &amp; Professions Code complements the Act by declaring null and void any contractual provision, however entitled, that operates in practice to impede or prevent a natural person or company from practicing a lawful trade or operating a lawful business in California.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_52');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_52');\" ><span id=\"footnote_plugin_tooltip_37192_1_52\" class=\"footnote_plugin_tooltip_text\">[52]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_52\" class=\"footnote_tooltip\">See Cal. Bus. &amp; Prof. Code \u00a7 16600 (subject to specific exceptions set forth at sections 16601\u201316602.5, \u201cevery contract by which anyone is restrained from engaging in a lawful profession,&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_52');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_52').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_52', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> There are limited statutory exceptions to section 16600, which appear at s<\/span><span style=\"font-family: inherit; font-size: 18px;\">ections 16601\u201316602.5. These exceptions codify longstanding common-law doctrines and permit sellers of a business, partnership stake, or membership stake in an LLC to accept certain limitations on their ability to compete against their former business, partnership, or LLC.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_53');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_53');\" ><span id=\"footnote_plugin_tooltip_37192_1_53\" class=\"footnote_plugin_tooltip_text\">[53]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_53\" class=\"footnote_tooltip\"><\/span><em style=\"font-family: inherit; font-size: 18px;\">See<\/em><span style=\"font-family: inherit; font-size: 18px;\"> Cal. Bus. &amp; Prof. Code \u00a7\u00a7 16601\u201316602.5.<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_53').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_53', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> Of note, a former, current, or prospective employee who is harmed by a violation of section 16600 can recover damages and attorney\u2019s fees under section 16600.5(e)(2).<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_54');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_54');\" ><span id=\"footnote_plugin_tooltip_37192_1_54\" class=\"footnote_plugin_tooltip_text\">[54]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_54\" class=\"footnote_tooltip\">See Cal. Bus. &amp; Prof. Code \u00a7 16600.5(e)(2) (\u201c&#8230;a prevailing employee, former employee, or prospective employee in an action based on a violation of this chapter shall be entitled to&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_54');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_54').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_54', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/span><span style=\"font-size: 18px; font-family: inherit;\"><\/span><\/p>\n<h2 id=\"16\"><strong>The Judicial Tests Used to Decide Claims under the Cartwright Act<\/strong><\/h2>\n<p>The Act condemns concerted conduct by two or more actors that unduly restrains marketplace competition. Conduct challenged under the Act is often treated in accordance with federal precedents established under a closely analogous federal law called section 1 of the Sherman Act (15 U.S.C. \u00a7 1) (\u201cSection 1\u201d). At a minimum, the federal precedents offer guidance and a suggested approach in the case at hand. A practitioner who brings or opposes a claim under the Act must therefore be well-versed in the law on restraint of trade developed under Section 1, as well as the common-law of restraint of trade, which gave rise to both Section 1 and the Act.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_55');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_55');\" ><span id=\"footnote_plugin_tooltip_37192_1_55\" class=\"footnote_plugin_tooltip_text\">[55]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_55\" class=\"footnote_tooltip\">See Marin Cnty. Bd. of Realtors, Inc. v. Palsson, 16 Cal. 3d 920, 925 (1976) (\u201cA long line of California cases has concluded that the Cartwright Act is patterned after the Sherman Act and both&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_55');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_55').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_55', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/span><\/p>\n<p>The federal courts in turn have developed a series of judicial tests for deciding whether a contract, combination, or conspiracy violates Section 1. These tests are best termed as follows: (1) <em>per se<\/em> condemnation; (2) quick-look condemnation; (3) condemnation or absolution under the structured rule of reason; and (4) quick-look absolution.<span><\/span><\/p>\n<p><span style=\"font-size: 18px; font-family: inherit;\"><em>Per Se Condemnation. <\/em>Since the enactment of the Sherman Act in 1890, the federal courts have always condemned certain practices, such as horizontal price-fixing, as unquestionable restraints of trade that, <em>as such<\/em>, violate Section 1. To prove that the defendants engaged in the alleged conduct is to prove their violation of section 1. The conduct, having been shown, is said to be unlawful <em>per se<\/em> under Section 1.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_56');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_56');\" ><span id=\"footnote_plugin_tooltip_37192_1_56\" class=\"footnote_plugin_tooltip_text\">[56]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_56\" class=\"footnote_tooltip\">See\u00a0Nat\u2019l Collegiate Athletic Ass\u2019n v. Bd. of Regents of Univ. of Oklahoma, 468 U.S. 85, 100 (1984) (\u201cHorizontal price fixing and output limitation are ordinarily condemned as a matter of law&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_56');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_56').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_56', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/span><\/p>\n<p>Historically, the federal courts treated all other alleged violations of Section 1 as \u201crule-of-reason\u201d offenses: to be found unlawful, a challenged contract or combination must have been shown to impose undue restrictions on competition in a distinct line of commerce. If so, the contract or combination could be condemned under an ill-defined, amorphous \u201crule of reason.\u201d<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_57');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_57');\" ><span id=\"footnote_plugin_tooltip_37192_1_57\" class=\"footnote_plugin_tooltip_text\">[57]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_57\" class=\"footnote_tooltip\">See\u00a0Nat\u2019l Soc. of Pro. Eng\u2019rs v. United States, 435 U.S. 679, 692 (1978) (\u201cThere are, thus, two complementary categories of antitrust analysis. In the first category are agreements whose&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_57');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_57').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_57', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/span><\/p>\n<p><em><span style=\"font-size: 18px; font-family: inherit;\">Quick-Look Condemnation. <\/span><\/em><span style=\"font-family: inherit; font-size: 18px;\">More recently, the federal courts have been willing to find violations of Section 1 under a \u201cquick-look\u201d standard, which applies to contracts and combinations that cannot be deemed unlawful <em>per se<\/em>, but nonetheless appear to be obviously anticompetitive in purpose and effect and therefore require little inquiry before being condemned as unlawful restraints of trade.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_58');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_58');\" ><span id=\"footnote_plugin_tooltip_37192_1_58\" class=\"footnote_plugin_tooltip_text\">[58]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_58\" class=\"footnote_tooltip\">See Law v. Nat\u2019l Collegiate Athletic Ass\u2019n, 134 F.3d 1010, 1020 (10th Cir. 1998) (a quick-look review is used when a trade restraint is not unlawful per se, but \u201chas obvious anticompetitive&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_58');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_58').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_58', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> <\/span><\/p>\n<p><span style=\"font-size: 18px; font-family: inherit;\"><em>The Structured Rule of Reason<\/em>. The federal courts have also <\/span><span style=\"font-size: 18px; font-family: inherit;\">adopted an elaborate three-part test for proving an offense under a \u201cstructured rule of reason,\u201d which was originally developed by Professors Areeda and Hovenkamp in their authoritative treatise on antitrust law, which is called <em>Antitrust Law: An Analysis of Antitrust Principles and Their Application<\/em> (available online on Wolters Kluwer\u2019s site).<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_59');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_59');\" ><span id=\"footnote_plugin_tooltip_37192_1_59\" class=\"footnote_plugin_tooltip_text\">[59]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_59\" class=\"footnote_tooltip\">See United States v. Am. Airlines Grp. Inc., 121 F.4th 209, 220 (1st Cir. 2024) (\u201cA rule-of-reason analysis requires a fact-specific assessment of the restraint\u2019s actual effect on competition.&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_59');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_59').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_59', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/span><\/p>\n<p><span style=\"font-size: 18px; font-family: inherit;\"><em>Quick-Look Absolution. <\/em>Most recently, the federal courts have declared that certain business practices can be deemed lawful after a \u201cquick look\u201d at them reveals that they cannot plausibly impair competitive interplay in a relevant market.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_60');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_60');\" ><span id=\"footnote_plugin_tooltip_37192_1_60\" class=\"footnote_plugin_tooltip_text\">[60]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_60\" class=\"footnote_tooltip\">See Nat\u2019l Collegiate Athletic Ass\u2019n v. Alston, 594 U.S. 69, 88 (2021) (\u201cAt one end of the spectrum, some restraints may be so obviously incapable of harming competition that they require little&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_60');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_60').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_60', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/span><\/p>\n<p><em>The Judicial Tests Serve as Guideposts, not Inflexible Rules<\/em>. The above standards for evaluating claims under Section 1 should not be treated as hard-and-fast rules that must be applied mechanically and without reflection. Rather, they constitute different possible ways to answer the same query\u2014which is whether a defendant\u2019s contracts, combinations, or concerted activity with others unduly restrains trade in a distinct line of commerce. That question typically turns on whether the challenged business practices are intended to improve the defendant\u2019s offerings or shield it from competitive pressures; if the latter, and if the challenged practices threaten to impair marketwide competition, they can be condemned as unlawful restraints of trade. <span style=\"font-size: 18px; font-family: inherit;\">The different standards\u2014<em>per se<\/em> condemnation, quick-look condemnation, the structured rule of reason, and quick-look absolution\u2014are meant only to help the courts to answer these essential queries.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_61');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_61');\" ><span id=\"footnote_plugin_tooltip_37192_1_61\" class=\"footnote_plugin_tooltip_text\">[61]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_61\" class=\"footnote_tooltip\">See California Dental Ass\u2019n v. F.T.C., 526 U.S. 756, 758 (1999) (\u201cThere is generally no categorical line between restraints giving rise to an intuitively obvious inference of anticompetitive&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_61');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_61').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_61', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/span><\/p>\n<p><em style=\"font-size: 18px; font-family: inherit;\">How the Structured Rule of Reason<\/em><span style=\"font-size: 18px; font-family: inherit;\"> <\/span><em style=\"font-size: 18px; font-family: inherit;\">Works<\/em><span style=\"font-size: 18px; font-family: inherit;\">. The structured rule of reason, being a little complicated, requires further explanation to be intelligible. To prove an offense under the structured rule of reason, a plaintiff must first carry its initial burden. To this end, the plaintiff must define a plausible relevant market, then show that two or more independent actors have formed a contract, combination, or conspiracy that is likely to result in reduced marketwide output, supracompetitive prices, inferior offerings, or the removal of distinct kinds of offerings from the market entirely. Any such anticompetitive outcome need not be immediate, but its tendency and eventual likelihood must be clear. <\/span><span style=\"font-size: 18px; font-family: inherit;\">To make this showing, the plaintiff can show that the challenged trade restraints are binding on a large percentage of sellers or transactions, or that the seller who imposes them has strong market power in the relevant market, and that the challenged trade restraints appear likely to impair interbrand competition rather than lower prices or improve the quality or variety of products or services in the market. <\/span><span style=\"font-size: 18px; font-family: inherit;\">If the plaintiff can make these showings, it has met its burden of proving a <em>prima facie<\/em> claim under the structured rule of reason.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_62');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_62');\" ><span id=\"footnote_plugin_tooltip_37192_1_62\" class=\"footnote_plugin_tooltip_text\">[62]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_62\" class=\"footnote_tooltip\">See Bhan v. NME Hosps., Inc., 929 F.2d 1404, 1413 (9th Cir. 1991) (\u201cTo meet his initial burden [for a rule-of-reason challenge under Section 1], plaintiff must show that the activity is the type&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_62');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_62').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_62', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/span><span style=\"font-size: 18px; font-family: inherit;\"><\/span><\/p>\n<p><span style=\"font-size: 18px; font-family: inherit;\">Once a plaintiff makes this <em>prima facie<\/em> showing, the burden passes to the defendant, which must justify its use of the challenged trade restraints, explaining why they improve its offerings without unduly restraining others from competing against it. The plaintiff can thereafter show that the defendant\u2019s pro-competitive justifications are a mere pretext, or that the defendant could readily accomplish its claimed pro-competitive aims by using far less restrictive business practices with its counterparties. The finder of fact must then decide on balance whether the challenged trade restraints are pro-competitive (and therefore lawful) or anticompetitive (and therefore unlawful under Section 1).<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_63');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_63');\" ><span id=\"footnote_plugin_tooltip_37192_1_63\" class=\"footnote_plugin_tooltip_text\">[63]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_63\" class=\"footnote_tooltip\">See\u00a0Bhan, 929 F.2d at 1413 (\u201cShould the plaintiff satisfy his initial burden, the defendant must offer evidence of pro-competitive effects. The plaintiff, driven to this point, must then try to&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_63');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_63').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_63', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/span><\/p>\n<p><span style=\"font-size: 18px; font-family: inherit;\"><em>The Modern Approach to Deciding Claims for Restraint of Trade. <\/em>Broadly speaking, t<\/span><span style=\"font-size: 18px; font-family: inherit;\">he following standards have emerged from the many cases that have arisen under Section 1, and these standards have persuasive authority in cases that arise under the Act:\u00a0<\/span><\/p>\n<ul>\n<li><span style=\"font-family: inherit; font-size: 18px;\">First, <em>per se<\/em> standards are used to condemn the cardinal sins of antitrust law: horizontal price-fixing, horizontal market allocation, bid-rigging, and certain kinds of group boycotts, as well as naked restraints of trade by which direct competitors suppress their own direct competition or exclude rivals.<\/span><\/li>\n<li><span style=\"font-family: inherit; font-size: 18px;\">Second, a quick-look approach can be used to condemn a dominant defendant\u2019s contractual and course-of dealing arrangements with others or a trade association\u2019s rules that (a) obviously impair competitive interplay in a line of commerce and (b) appear to lack a reasonable pro-competitive justification. <\/span><\/li>\n<li><span style=\"font-family: inherit; font-size: 18px;\">Third, a dominant defendant\u2019s contractual and course-of-dealing arrangements can be condemned after thorough review under the structured rule of reason when they apparently tend to restrain competitive interplay, but also have plausible pro-competitive justifications. <\/span><\/li>\n<li><span style=\"font-family: inherit; font-size: 18px;\">Lastly, joint-ventures and contractual arrangements that plainly aim to improve a defendant\u2019s offerings rather than impair competition can be quickly pronounced blameless after a mere \u201cquick look.\u201d<\/span><\/li>\n<\/ul>\n<p><span style=\"font-size: 18px; font-family: inherit;\">That is the modern law under Section 1. Analogous standards are used to determine whether a monopolist\u2019s unilateral conduct violates section 2 of the Sherman Act (15 U.S.C. \u00a7 2).<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_64');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_64');\" ><span id=\"footnote_plugin_tooltip_37192_1_64\" class=\"footnote_plugin_tooltip_text\">[64]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_64\" class=\"footnote_tooltip\"><em>See<\/em> <em>United States v. Microsoft Corp<\/em>., 253 F.3d 34, 58\u201359 (D.C. Cir. 2001).<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_64').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_64', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> These same standards can be invoked for claims that arise under the Act.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_65');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_65');\" ><span id=\"footnote_plugin_tooltip_37192_1_65\" class=\"footnote_plugin_tooltip_text\">[65]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_65\" class=\"footnote_tooltip\"><em>See Marin Cnty. Bd. of Realtors, <\/em><span>16 Cal. 3d at 925.<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_65').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_65', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/span><\/span><\/p>\n<p><span style=\"font-size: 18px; font-family: inherit;\"><em>Expect Pro-Active Enforcement in the California Courts. <\/em>The California courts treat the above precepts and judicial tests as persuasive authority in cases that arise under the Act. But the California courts seem more willing to enforce the above standards in accordance with common-law doctrines on restraint of trade, while some federal jurists have seemed reluctant during the <a href=\"https:\/\/www.markhamlawfirm.com\/mystaging\/law-articles\/how-the-consumer-welfare-standard-transformed-classical-antitrust-law\/\">consumer-welfare era<\/a> to condemn even conduct that appears plainly anticompetitive in spirit, intended purpose, and likely or actual effect. Even so, the federal courts have been slowly reviving classical antitrust doctrines, and the pendulum, having swung so far away from classical antitrust during the consumer-welfare era, has finally begun to swing back towards more pro-active antitrust enforcement.\u00a0<\/span><\/p>\n<p>At all events, a plaintiff that brings a claim under the Act should usually be prepared to prove that the challenged combination or contract constitutes a violation under the structured rule of reason. Often, a plaintiff will allege in the alternative that the defendant\u2019s challenged practices are <em>per se<\/em> violations of the Act, or can be condemned after a <span style=\"font-family: inherit; font-size: 18px;\">\u201cquick look,\u201d <\/span>or should be condemned under the structured rule of reason. A plaintiff that has done its homework will be prepared to make all three showings before filing suit against a powerful defendant or cartel.<\/p>\n<h2 id=\"8\"><strong>Defining the Relevant Markets<\/strong><\/h2>\n<p>For most claims asserted under the Act, a plaintiff should or must define one or more relevant markets in which the defendant or defendants are said to have committed the alleged antitrust violation.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_66');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_66');\" ><span id=\"footnote_plugin_tooltip_37192_1_66\" class=\"footnote_plugin_tooltip_text\">[66]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_66\" class=\"footnote_tooltip\">See Theme, 546 F.3d at 1001 (to prove a rule-of-reason violation of the Act, the plaintiff usually \u201cmust first define the relevant market and then show that the defendant plays enough of a role in&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_66');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_66').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_66', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>Many antitrust cases largely turn on whether the plaintiff\u2019s proposed markets are sound and should be adopted: the question is whether the plaintiff\u2019s proposed market accurately describes a line of commerce that can be unlawfully restrained under the Act.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_67');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_67');\" ><span id=\"footnote_plugin_tooltip_37192_1_67\" class=\"footnote_plugin_tooltip_text\">[67]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_67\" class=\"footnote_tooltip\">See Fed. Trade Comm\u2019n v. Qualcomm Inc., 969 F.3d 974, 992 (9th Cir. 2020) (\u201cA threshold step in any antitrust case is to accurately define the relevant market, which refers to the area of&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_67');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_67').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_67', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>Never underestimate the importance of this task.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_68');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_68');\" ><span id=\"footnote_plugin_tooltip_37192_1_68\" class=\"footnote_plugin_tooltip_text\">[68]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_68\" class=\"footnote_tooltip\">See Dang, 964 F. Supp. 2d at (\u201cWhile the definition of a relevant market for antitrust purposes is typically a factual inquiry, certain legal principles govern the definition, and antitrust claims&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_68');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_68').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_68', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> Before filing a claim under the Act, you should (must) confer with an expert antitrust economist to help you to identify, analyze, and define the relevant markets in which the defendant or defendants have committed their challenged practices.<\/p>\n<p>A relevant market is an antitrust concept. There is rarely a \u201ccorrect\u201d market definition, but only a plausible one that accurately captures the underlying commercial realities, can withstand the defendant\u2019s objections, and is more convincing than the defendant\u2019s own proposed market definition (if the defendant offers one).<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_69');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_69');\" ><span id=\"footnote_plugin_tooltip_37192_1_69\" class=\"footnote_plugin_tooltip_text\">[69]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_69\" class=\"footnote_tooltip\">See United States v. Rockford Mem\u2019l Corp., 898 F.2d 1278, 1285 (7th Cir. 1990) (\u201cIt is always possible to take pot shots at a market definition (we have just taken one), and the defendants do so&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_69');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_69').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_69', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>Broadly speaking, a relevant market consists of a relevant product market and a relevant geographic market.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_70');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_70');\" ><span id=\"footnote_plugin_tooltip_37192_1_70\" class=\"footnote_plugin_tooltip_text\">[70]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_70\" class=\"footnote_tooltip\">See Fed. Trade Comm\u2019n v. Penn State Hershey Med. Ctr., 838 F.3d 327, 338 (3d Cir. 2016) (In antitrust cases, \u201c[t]he relevant market is defined in terms of two components: the product market and&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_70');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_70').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_70', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> A relevant product market, in turn, is the category of products or services that customers use or contemplate using to fulfill specified functions (e.g., cellophane wrapper, aluminum foil, wax paper, paper bags, plastic bags, and hard plastic containers for storing perishable food). A product market consists only of products that serve as reasonable substitutes for one another, or, as economists sometimes say, products that have a high cross-elasticity of demand, so that if the price of one such product increases in relation to the others, demand for the others increases.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_71');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_71');\" ><span id=\"footnote_plugin_tooltip_37192_1_71\" class=\"footnote_plugin_tooltip_text\">[71]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_71\" class=\"footnote_tooltip\">See Exxon, 51 Cal. App. 4th at 1682 (\u201cThe United States Supreme Court has declared that the relevant market is determined by considering \u2018commodities reasonably interchangeable by consumers for&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_71');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_71').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_71', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> A relevant geographic market is the region where customers look to purchase the relevant products or services, or, what is the same thing, where sellers compete to make sales to them.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_72');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_72');\" ><span id=\"footnote_plugin_tooltip_37192_1_72\" class=\"footnote_plugin_tooltip_text\">[72]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_72\" class=\"footnote_tooltip\">See Penn State Hershey, 838 F.3d at 338 (\u201cThe relevant geographic market is that area in which a potential buyer may rationally look for the goods or services he seeks. Determined within the&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_72');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_72').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_72', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>The courts, public antitrust enforcers, and the antitrust bar have worked out a series of complicated doctrines and economic tests for defining and opposing proposed relevant markets. The most important and widely adopted test is called the hypothetical monopolist test: it asks whether a hypothetical monopolist (a firm that makes all sales in a proposed market) could profitably impose a non-cost justified, substantial price hike for an extended duration. The shorthand term for such a price is a \u201cSSNIP\u201d\u2014i.e., a \u201cstatistically significant, non-transitory increase in price.\u201d If the hypothetical monopolist can profitably impose a SSNIP, then the proposed market is properly defined and should be used for purposes of antitrust review\u2014i.e., it accurately describes a line of commerce that can be unlawfully restrained or monopolized. If however customers would avert the monopolist\u2019s SSNIP by purchasing different kinds of products, or by purchasing the same kind of products from sellers located outside the market, it means that the market is too narrowly defined and does not constitute a relevant market for antitrust purposes. The hypothetical monopolist test should be performed to ascertain both the relevant product market and the relevant geographic market.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_73');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_73');\" ><span id=\"footnote_plugin_tooltip_37192_1_73\" class=\"footnote_plugin_tooltip_text\">[73]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_73\" class=\"footnote_tooltip\">See Penn State Hershey, 838 F.3d at 338 (\u201cA common method employed by courts and the FTC to determine the relevant geographic market is the hypothetical monopolist test. Under the Horizontal Merger&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_73');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_73').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_73', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>Do not attempt this experiment on your own (\u201cdon\u2019t try this at home\u201d). Practically speaking, expert testimony is required to support a proposed market definition. Your expert should excel at using plain English to clarify issues, not take pains to obscure his meaning hopelessly by uttering impenetrable jargon in response to all questions.<\/p>\n<p>Ultimately, a relevant market must describe the underlying commercial realities. What products or services does the defendant sell? What other products or services can be used instead for the same purposes? Who sells them? Who buys them? How and where are these products or services sold and delivered? Does the defendant face or fear meaningful competition from an existing competitor or a potential rival that might enter the market to compete against the defendant? In this environment, could a hypothetical monopolist profitably impose a SSNIP? Or would customers render a SNNIP unprofitable by turning to a different product or service or by purchasing the same product or service from some other seller located outside the proposed market?<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_74');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_74');\" ><span id=\"footnote_plugin_tooltip_37192_1_74\" class=\"footnote_plugin_tooltip_text\">[74]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_74\" class=\"footnote_tooltip\">See Eastman Kodak Co. v. Image Tech. Servs., Inc., 504 U.S. 451, 482 (1992) (\u201cThe proper market definition in this case can be determined only after a factual inquiry into the \u2018commercial&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_74');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_74').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_74', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>Once you have defined the relevant market, you have laid the foundation for showing how the defendants\u2019 business practices have undermined or substantially lessened competition in the market in a way that violates the Act.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_75');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_75');\" ><span id=\"footnote_plugin_tooltip_37192_1_75\" class=\"footnote_plugin_tooltip_text\">[75]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_75\" class=\"footnote_tooltip\">See Theme, 546 F.3d at 1002 (Under the Act, \u201c[a] relevant market is identified by considering commodities reasonably interchangeable by consumers for the same purposes. Put another way, the&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_75');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_75').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_75', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>Without a relevant market, you must depend on proving a <em>per se<\/em> violation, and if you cannot do so, your claim under the Act will fail.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_76');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_76');\" ><span id=\"footnote_plugin_tooltip_37192_1_76\" class=\"footnote_plugin_tooltip_text\">[76]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_76\" class=\"footnote_tooltip\">See In re Ins. Brokerage Antitrust Litig., 618 F.3d 300, 317 (3d Cir. 2010) (\u201cWhile pleading exclusively per se violations can lighten a plaintiff\u2019s litigation burdens, it is not a riskless&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_76');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_76').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_76', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<h2 id=\"9\"><strong>Antitrust Injury: a Limiting Doctrine<\/strong><\/h2>\n<p>A defendant\u2019s liability under the Act is subject a limiting doctrine known as the requirement of \u201cantitrust injury\u201d: namely, the plaintiff bears the burden of showing that an anticompetitive feature or consequence of the defendant\u2019s violation was a substantial cause of the plaintiff\u2019s losses.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_77');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_77');\" ><span id=\"footnote_plugin_tooltip_37192_1_77\" class=\"footnote_plugin_tooltip_text\">[77]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_77\" class=\"footnote_tooltip\">See Brunswick Corp. v. Pueblo Bowl\u2013O\u2013Mat, Inc., 429 U.S. 477, 489 (1977) (An antitrust injury is one that \u201cshould reflect the anticompetitive effect either of the violation or of&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_77');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_77').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_77', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>To make the required showing, a plaintiff-customer must demonstrate that, because of the defendant\u2019s violation of the Act, she paid higher prices, received inferior goods or services, or was deprived of a distinct product or service previously available in the market.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_78');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_78');\" ><span id=\"footnote_plugin_tooltip_37192_1_78\" class=\"footnote_plugin_tooltip_text\">[78]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_78\" class=\"footnote_tooltip\">See Clayworth v. Pfizer, Inc., 49 Cal. 4th 758, 787 (2010) (\u201c[I]n an antitrust price-fixing case, the presumptive measure of damages is the amount of the overcharge paid by the plaintiff.\u201d); Glen&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_78');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_78').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_78', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>A plaintiff-supplier can make the showing by demonstrating that it received lower prices because of the defendants\u2019 challenged conduct (e.g., because of the acts of a buyers\u2019 cartel).<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_79');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_79');\" ><span id=\"footnote_plugin_tooltip_37192_1_79\" class=\"footnote_plugin_tooltip_text\">[79]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_79\" class=\"footnote_tooltip\">See Knevelbaard, 232 F.3d at 988 (9th Cir. 2000) (Plaintiffs, who supplied milk to cheese producers, stated actionable antitrust injury under the Act by plausibly alleging that these producers had&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_79');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_79').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_79', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>A competitor (existing or potential) or other market participant can meet the requirement by showing that the defendant employed its challenged practices not to improve its own offerings, but instead to hinder or prevent one or more competitors from competing in the relevant market.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_80');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_80');\" ><span id=\"footnote_plugin_tooltip_37192_1_80\" class=\"footnote_plugin_tooltip_text\">[80]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_80\" class=\"footnote_tooltip\">See Catch Curve, Inc. v. Venali, Inc., 519 F. Supp. 2d 1028, 1035-36 (C.D. Cal. 2007) (A competitor suffers antitrust injury if the defendant uses wrongful exclusionary conduct to hinder or prevent&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_80');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_80').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_80', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>If a cagey plaintiff spots an arguable violation of the Act, he cannot challenge it unless it caused him \u201ccognizable antitrust injury.\u201d Speculative, remote, and tenuous claims typically result in dismissal on the pleadings or in summary judgment for the defendant after arduous discovery. A plaintiff must therefore assess at the outset whether the defendant\u2019s challenged conduct caused him to suffer antitrust injury. This is a threshold inquiry in any antitrust claim, including one brought under the Act.<\/p>\n<p>The specific test is whether the plaintiff\u2019s claimed losses were caused by an anticompetitive feature or consequence of the defendant\u2019s violation of the Act.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_81');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_81');\" ><span id=\"footnote_plugin_tooltip_37192_1_81\" class=\"footnote_plugin_tooltip_text\">[81]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_81\" class=\"footnote_tooltip\">See W. Penn Allegheny, 627 F.3d at 101 (\u201cThe antitrust-injury requirement helps ensure that the harm claimed by the plaintiff corresponds to the rationale for finding a violation of the antitrust&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_81');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_81').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_81', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<h2 id=\"10\"><strong>Civil and Criminal Penalties under the Cartwright Act<\/strong><\/h2>\n<p>In a suit under the Act, a prevailing plaintiff can obtain expansive declaratory and injunctive relief (including decrees of dissolution), treble damages, attorney\u2019s fees, and costs of suit, as well as prejudgment interest upon a showing that the defendant employed dilatory or abusive litigation tactics.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_82');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_82');\" ><span id=\"footnote_plugin_tooltip_37192_1_82\" class=\"footnote_plugin_tooltip_text\">[82]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_82\" class=\"footnote_tooltip\">See Cal. Bus. &amp; Prof. Code \u00a7\u00a7 16750(a), 16761; Borgeson v. Archer-Daniels Midland Co., 909 F. Supp. 709, 717 (C.D. Cal. 1995) (\u201cIn addition to establishing a public cause of action (enforced&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_82');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_82').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_82', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>The Act also authorizes California\u2019s Attorney General and District Attorneys to bring civil proceedings on behalf of the public, the State of California, or any political subdivision or public agency of California for any violation of the Act or a comparable federal law.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_83');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_83');\" ><span id=\"footnote_plugin_tooltip_37192_1_83\" class=\"footnote_plugin_tooltip_text\">[83]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_83\" class=\"footnote_tooltip\"><em>See <\/em>Cal. Bus. &amp; Prof. Code \u00a7\u00a7 16750(c)\u2013(g), 16754, 16760.<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_83').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_83', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> For civil violations, a public prosecutor can obtain the same remedies as a private litigant.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_84');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_84');\" ><span id=\"footnote_plugin_tooltip_37192_1_84\" class=\"footnote_plugin_tooltip_text\">[84]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_84\" class=\"footnote_tooltip\"><em>See <\/em>Cal. Bus. &amp; Prof. Code \u00a7 16750(a), (c).<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_84').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_84', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>In theory, the Act imposes stiff criminal penalties for violations, which include prison terms of up to three years for individuals as well criminal fines of either $1 million or double damages\/double disgorgement, whichever is greater.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_85');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_85');\" ><span id=\"footnote_plugin_tooltip_37192_1_85\" class=\"footnote_plugin_tooltip_text\">[85]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_85\" class=\"footnote_tooltip\">See Cal. Bus. &amp; Prof. Code \u00a7 16755(a).<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_85').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_85', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> These penalties have been deemed to satisfy the constitutional requirements of fair notice and due process.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_86');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_86');\" ><span id=\"footnote_plugin_tooltip_37192_1_86\" class=\"footnote_plugin_tooltip_text\">[86]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_86\" class=\"footnote_tooltip\"><em>See F. &amp; A. Ice Cream Co. v. Arden Farms Co.<\/em>, 98 F. Supp. 180, 190\u2013191 (S.D. Cal. 1951) (confirming this point).<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_86').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_86', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> <span style=\"font-size: 18px; font-family: inherit;\">In fact, California\u2019s public authorities have rarely pursued criminal prosecutions under the Act and have not done so at all during the past twenty-five years, but they retain the authority to do so. In March, 2024, the chief antitrust prosecutor at California\u2019s Department of Justice <a href=\"https:\/\/www.law360.com\/california\/articles\/1810754?utm_source=shared-articles&amp;utm_medium=email&amp;utm_campaign=shared-articles\">announced<\/a> that California\u2019s Attorney General would revive its authority to investigate and prosecute criminal violations of the Act.<\/span><\/p>\n<p><span style=\"font-size: 18px; font-family: inherit;\">Of note, <\/span><span style=\"font-size: 18px; font-family: inherit;\">federal authorities sometimes bring criminal prosecutions under a comparable provision of federal antitrust law, section 1 of the Sherman Act (15 U.S.C. \u00a7 1), but only for egregious instances of horizontal price-fixing, horizontal market-allocation, and bid-rigging.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_87');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_87');\" ><span id=\"footnote_plugin_tooltip_37192_1_87\" class=\"footnote_plugin_tooltip_text\">[87]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_87\" class=\"footnote_tooltip\">See, e.g., United States v. Aiyer, 33 F.4th 97, 109 (2d Cir. 2022) (a recent, successful criminal prosecution for price-fixing and bid-rigging); see also U.S. Dept of Just., Just. Manual \u00a7 7-1.100&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_87');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_87').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_87', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> Nothing prevents California\u2019s prosecutors from doing the same for like violations of the Act.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_88');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_88');\" ><span id=\"footnote_plugin_tooltip_37192_1_88\" class=\"footnote_plugin_tooltip_text\">[88]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_88\" class=\"footnote_tooltip\"><em>See <\/em>Cal. Bus. &amp; Prof. Code \u00a7\u00a7 16750(c)\u2013(g), 16754, 16755(a).<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_88').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_88', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/span><\/p>\n<h2 id=\"11\"><strong>An Antitrust Defendant\u2019s Remedies<\/strong><\/h2>\n<p>In nearly all antitrust cases, a prevailing defendant merely averts liability and can recover only its taxable costs of suit, but not attorney\u2019s fees.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_89');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_89');\" ><span id=\"footnote_plugin_tooltip_37192_1_89\" class=\"footnote_plugin_tooltip_text\">[89]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_89\" class=\"footnote_tooltip\">See Cal. Bus. &amp; Prof. Code \u00a7\u00a7 16750(a); Carver, 119 Cal. App. 4th at 503 (\u201cThe Cartwright Act contains a unilateral fee\u2013shifting provision that allows an award of attorney fees to a&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_89');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_89').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_89', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p><em>Monetary Sanctions for Baseless Claims and Litigation Misconduct<\/em>. There is an exception to this rule: if a plaintiff asserts or continues litigating a claim under the Act without probable cause, or if the plaintiff uses bad-faith tactics when litigating his claim, the defendant can apply for monetary sanctions under California law if the case is litigated in California state court, or under federal law if the case is litigated in federal court.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_90');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_90');\" ><span id=\"footnote_plugin_tooltip_37192_1_90\" class=\"footnote_plugin_tooltip_text\">[90]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_90\" class=\"footnote_tooltip\">See Cal. Code Civ. Proc. \u00a7 128.5(a) (\u201cA trial court may order a party, the party\u2019s attorney, or both, to pay the reasonable expenses, including attorney\u2019s fees, incurred by another party as a&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_90');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_90').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_90', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> <span style=\"font-size: 18px; font-family: inherit;\">Motions for these kinds of sanctions should be made only in egregious cases.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_91');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_91');\" ><span id=\"footnote_plugin_tooltip_37192_1_91\" class=\"footnote_plugin_tooltip_text\">[91]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_91\" class=\"footnote_tooltip\">See Kumar v. Ramsey, 71 Cal. App. 5th 1110, 1120\u201321 (2021) (\u201cLike its federal counterpart &#8230; rule 11 of the Federal Rules of Civil Procedure, Code of Civil Procedure section 128.7 should be&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_91');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_91').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_91', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/span><\/p>\n<p><em>Sequel Suits for Malicious Prosecution<\/em>. When an antitrust claim is egregiously baseless, a successful defendant has a further remedy, which it can pursue after obtaining the dismissal of a claim that manifestly and obviously lacked merit. Under California law, a litigant that defeats a frivolous claim can bring a sequel suit for malicious prosecution and thereby recover damages and punitive damages. The principal compensatory damages in such a case are usually the attorney\u2019s fees that the plaintiff incurred to oppose the malicious litigant\u2019s baseless claim. In any sequel suit for malicious prosecution, the plaintiff must prove that (1) in the earlier suit, the malicious litigant or his attorney filed or maintained a claim under the Act \u201cwithout probable cause;\u201d (2) the claim was decided against the malicious litigant (or would have been if the malicious litigant had not dismissed the claim while a motion for its dismissal was pending); and (3) the malicious litigant or his attorney asserted the baseless claim for an improper purpose, such as procuring an unjustified settlement in exchange for dismissing the claim.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_92');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_92');\" ><span id=\"footnote_plugin_tooltip_37192_1_92\" class=\"footnote_plugin_tooltip_text\">[92]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_92\" class=\"footnote_tooltip\">See Bertero v. Nat\u2019l Gen. Corp., 13 Cal. 3d 43, 50 (1974) (\u201cTo establish a cause of action for the malicious prosecution of a civil proceeding, a plaintiff must plead and prove that the prior&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_92');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_92').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_92', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> In an action for malicious prosecution, malice can be inferred when the malicious litigant sought to obtain a valuable settlement in exchange for dismissing his baseless claim.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_93');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_93');\" ><span id=\"footnote_plugin_tooltip_37192_1_93\" class=\"footnote_plugin_tooltip_text\">[93]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_93\" class=\"footnote_tooltip\">See Albertson v. Raboff, 46 Cal. 2d 375, 383 (1956) (\u201cThe malice required in an action for malicious prosecution is not limited to actual hostility or ill will toward plaintiff but exists when the&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_93');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_93').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_93', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>In California, a claim for malicious prosecution is \u201cdisfavored\u201d and difficult to prove on policy grounds.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_94');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_94');\" ><span id=\"footnote_plugin_tooltip_37192_1_94\" class=\"footnote_plugin_tooltip_text\">[94]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_94\" class=\"footnote_tooltip\">See Jay v. Mahaffey, 218 Cal. App. 4th 1522, 1539 (2013) (\u201c[M]alicious prosecution is a disfavored action. The elements of malicious prosecution have historically been carefully circumscribed so&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_94');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_94').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_94', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> <span style=\"font-size: 18px; font-family: inherit;\">Broadly speaking, a claim for malicious prosecution can succeed only if the malicious litigant or his attorney obviously and demonstrably lacked probable cause either to bring the claim in the first place, or to continue litigating the claim after it was rendered untenable by unambiguous evidence.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_95');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_95');\" ><span id=\"footnote_plugin_tooltip_37192_1_95\" class=\"footnote_plugin_tooltip_text\">[95]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_95\" class=\"footnote_tooltip\">See Sycamore Ridge Apartments, LLC v. Naumann, 157 Cal. App. 4th 1385, 1402 (2007) (\u201cA litigant will lack probable cause for his action either if he relies upon facts which he has no reasonable&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_95');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_95').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_95', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/span><\/p>\n<h2 id=\"12\"><strong>The Limited Reach of the Cartwright Act<\/strong><\/h2>\n<p>The Act is limited to defendants who commit their challenged business practices at least in substantial part in California, as well as those whose practices cause substantial antitrust injury to plaintiffs located in California.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_96');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_96');\" ><span id=\"footnote_plugin_tooltip_37192_1_96\" class=\"footnote_plugin_tooltip_text\">[96]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_96\" class=\"footnote_tooltip\">See AT &amp; T Mobility, 707 F.3d at 1112\u201313 (\u201cApplying California law to anticompetitive conduct undertaken within California [that results in harm to consumers in another state] advances the&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_96');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_96').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_96', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> <span style=\"font-size: 18px; font-family: inherit;\">Given the breadth and importance of California\u2019s economy, the Act reaches a very broad swathe of American commerce, but unless the challenged conduct has a significant nexus to California, it does not fall within the purview of the Act.<\/span><\/p>\n<p>Also, the Act reaches only <em>concerted conduct<\/em> undertaken by two or more independent actors.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_97');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_97');\" ><span id=\"footnote_plugin_tooltip_37192_1_97\" class=\"footnote_plugin_tooltip_text\">[97]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_97\" class=\"footnote_tooltip\">See Qualcomm, 292 F. Supp. 3d at 974 (\u201cThe Cartwright Act proscribes \u2018a combination of capital, skill or acts by two or more persons\u2019 for an unlawful purpose. By its terms, the Act does not&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_97');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_97').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_97', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> The Act therefore does not govern a monopolist\u2019s unilateral conduct<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_98');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_98');\" ><span id=\"footnote_plugin_tooltip_37192_1_98\" class=\"footnote_plugin_tooltip_text\">[98]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_98\" class=\"footnote_tooltip\">S<em>ee<\/em>\u00a0<\/span><em>Dimidowich v. Bell &amp; Howell<\/em>, 803 F.2d 1473, 1478 (9th Cir. 1987), <em>opinion modified on denial of reh\u2019g<\/em>, 810 F.2d 1517 (9th Cir. 1987).<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_98').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_98', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> or <span style=\"font-size: 18px; font-family: inherit;\">anticompetitive mergers or acquisitions.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_99');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_99');\" ><span id=\"footnote_plugin_tooltip_37192_1_99\" class=\"footnote_plugin_tooltip_text\">[99]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_99\" class=\"footnote_tooltip\"><em>See Texaco<\/em>, 46 Cal. 3d at 1168.<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_99').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_99', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> Concerted conduct, however, includes contractual and course-of-dealing arrangements by which a defendant with market power prevails on its counterparties to accept anticompetitive restraints.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_100');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_100');\" ><span id=\"footnote_plugin_tooltip_37192_1_100\" class=\"footnote_plugin_tooltip_text\">[100]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_100\" class=\"footnote_tooltip\"><em>See <\/em><em style=\"font-size: 18px; font-family: inherit;\">Kolling<\/em>, 137 Cal. App. 3d at 720.<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_100').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_100', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/span><\/p>\n<h2 id=\"13\"><strong>How The Dormant Commerce Clause Limits the Cartwright Act<\/strong><\/h2>\n<p>The Act has not been preempted (supervened) expressly or impliedly by any federal law.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_101');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_101');\" ><span id=\"footnote_plugin_tooltip_37192_1_101\" class=\"footnote_plugin_tooltip_text\">[101]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_101\" class=\"footnote_tooltip\">See California v. ARC Am. Corp., 490 U.S. 93, 102 (1989) (\u201c[F]ederal antitrust laws do not pre-empt state law.\u201d); see also Redwood Theatres, Inc. v. Festival Enterprises, Inc., 908 F.2d 477, 480&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_101');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_101').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_101', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> But the Act\u2019s reach and enforcement must be limited so that it neither discriminates against interstate commerce (by favoring California commerce), nor imposes excessive burdens on interstate commerce.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_102');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_102');\" ><span id=\"footnote_plugin_tooltip_37192_1_102\" class=\"footnote_plugin_tooltip_text\">[102]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_102\" class=\"footnote_tooltip\">See Selevan, 584 F.3d at 90 (\u201cIn implementing the Commerce Clause, the Supreme Court has adhered strictly to the principle that the right to engage in interstate commerce is not the gift of a&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_102');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_102').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_102', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<h2 id=\"15\"><strong>How The Cartwright Act Differs From Federal Antitrust Law<\/strong><\/h2>\n<p><em>The Act Does Not Reach Unilateral Conduct. <\/em>As noted above, the Act forbids trade restraints of every variety enforced by two or more independent actors.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_103');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_103');\" ><span id=\"footnote_plugin_tooltip_37192_1_103\" class=\"footnote_plugin_tooltip_text\">[103]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_103\" class=\"footnote_tooltip\">See SC Manufactured Homes, 162 Cal. App. 4th at 84 (\u201cThe [Act] prohibits conspiracies that unreasonably restrain trade.\u201d); Asahi, 204 Cal. App. at 11 (2012) (\u201c[A]n indispensable element of any&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_103');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_103').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_103', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> <span style=\"font-size: 18px; font-family: inherit;\">The Act\u2019s prohibitions usefully encompass anticompetitive contractual provisions that a defendant wrongly imposes on a counterparty, including exclusive-dealing contracts and tying arrangements.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_104');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_104');\" ><span id=\"footnote_plugin_tooltip_37192_1_104\" class=\"footnote_plugin_tooltip_text\">[104]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_104\" class=\"footnote_tooltip\">See Fisherman\u2019s Wharf, 114 Cal. App. 4th at 317 (\u201cThe Cartwright Act targets contracts in restraint of trade and promotes a free market by proscribing trusts.\u201d); Kolling, 137 Cal. App. 3d at&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_104');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_104').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_104', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> <\/span><span style=\"font-size: 18px; font-family: inherit;\">In addition, the Act permits an indirect purchaser or class of indirect purchasers to seek redress for harm caused by wrongful combinations in restraint of trade, such as a sellers\u2019 conspiracy to fix prices or allocate markets.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_105');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_105');\" ><span id=\"footnote_plugin_tooltip_37192_1_105\" class=\"footnote_plugin_tooltip_text\">[105]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_105\" class=\"footnote_tooltip\">See Cal. Bus. &amp; Prof. Code \u00a7 16750(a); Stanislaus, 782 F. Supp. 2d at 1080 (\u201cUnlike the federal Sherman Act, the Cartwright Act grants indirect purchasers standing to sue, as well as direct&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_105');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_105').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_105', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/span><\/p>\n<p>That is as far as the Act goes.<\/p>\n<p>Unlike federal antitrust law, the Act does not reach either unilateral conduct committed by a monopolist or mergers and acquisitions that are likely to result in a substantial lessening of competition in a properly defined relevant market.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_106');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_106');\" ><span id=\"footnote_plugin_tooltip_37192_1_106\" class=\"footnote_plugin_tooltip_text\">[106]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_106\" class=\"footnote_tooltip\">See Texaco, 46 Cal. 3d at 1168 (the Act does not govern anticompetitive mergers or acquisitions); Qualcomm, 292 F. Supp. 3d at 974; (\u201cThe Cartwright Act proscribes \u2018a combination of capital,&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_106');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_106').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_106', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>The Act thus prohibits the same offenses as do section 1 of the Sherman Act (15 U.S.C. \u00a7 1) and section 3 of the Clayton Act (15 U.S.C. \u00a7 14), but it has had a more expansive application in actual cases (e.g., claims made by indirect purchasers). But the Act does not reach either the monopolization offenses governed by section 2 of the Sherman Act (15 U.S.C. \u00a7 2) or anticompetitive mergers and acquisitions that can be challenged under section 7 of the Clayton Act (15 U.S.C. \u00a7 18). Nor does the Act reach unlawful price discrimination or commercial bribery that can be challenged under the Robinson-Patman Act (15 U.S.C. \u00a7\u00a7 13\u201313c), although some kinds of price discrimination and predatory pricing can be challenged under California\u2019s Unfair Practices Act, which is codified at sections 17000\u201317101 of California\u2019s Business &amp; Professions Code.<\/p>\n<p><em>The Act Is Enforced More Expansively Against Concerted Conduct That Impedes Competition<\/em>. Perhaps the most important difference between the Act and analogous provisions of federal antitrust law lies in their differing interpretation in the modern era, when federal courts have largely embraced the <a href=\"https:\/\/www.markhamlawfirm.com\/mystaging\/law-articles\/how-the-consumer-welfare-standard-transformed-classical-antitrust-law\/\">very narrow reading<\/a> of the Sherman Act imposed by \u201cconsumer-welfare\u2019 jurisprudence. Indeed, the California Supreme Court recently re-affirmed that \u201cthe Cartwright Act is broader in range and deeper in reach than the Sherman Act.\u201d <span style=\"font-size: 18px; font-family: inherit;\"><em>In re Cipro Cases I &amp; II<\/em>, 61 Cal. 4th 116, 160 (2015) (quoting <em>Cianci,<\/em> 40 Cal.3d at p. 920). <\/span><\/p>\n<p><span style=\"font-size: 18px; font-family: inherit;\">More generally, the California courts have taken pains to confirm that <\/span><span style=\"font-size: 18px; font-family: inherit;\">precedents established under the Sherman Act have only persuasive or \u201cinstructive\u201d authority in cases that arise under the Act, so that the California courts are not confined by the restrictive doctrines favored by the federal courts in recent times.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_107');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_107');\" ><span id=\"footnote_plugin_tooltip_37192_1_107\" class=\"footnote_plugin_tooltip_text\">[107]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_107\" class=\"footnote_tooltip\"><em>See id<\/em>.<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_107').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_107', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> This point is not an unfounded contrivance. Rather, the Act is derived from an antitrust law adopted by Texas, which in turn traces its original wording to a proposed draft of the Sherman Act that was ultimately rejected by Congress. The Texas law and the draft bill that inspired it were supposed to be more sweeping and all-encompassing than the language ultimately used in the Sherman Act, but only as to those matters that they reached.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_108');\" onkeypress=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_108');\" ><span id=\"footnote_plugin_tooltip_37192_1_108\" class=\"footnote_plugin_tooltip_text\">[108]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_37192_1_108\" class=\"footnote_tooltip\">See Texaco, 46 Cal. 3d at 1153\u20131169 (extended explanation of these points with citations to numerous authorities); Cipro, 61 Cal. 4th at 142 (\u201cInterpretations of federal antitrust law are at most&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_37192_1('footnote_plugin_reference_37192_1_108');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_37192_1_108').tooltip({ tip: '#footnote_plugin_tooltip_text_37192_1_108', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> <\/span><span style=\"font-size: 18px; font-family: inherit;\">Here is how the California Supreme Court stated the matter in one of its landmark rulings on the Act:<\/span><\/p>\n<blockquote>\n<p>\u201cWhile no direct sources for the legislative history of the Cartwright Act exist, we may reasonably assume that the Legislature\u2019s intent was substantially similar to that of United States Senator John Reagan, who authored an unsuccessful bill offered as a substitute for what became the Sherman Act; the Cartwright Act is a near carbon copy of the Reagan bill. At the very least, the Sherman Act codified the common law. The Reagan bill was intended to reach further. The record of congressional debates reveals that the Reagan bill was designed not to narrow the scope of the Sherman Act but to broaden it.\u201d<br \/><strong><em>Cianci v. Superior Ct.<\/em>, 40 Cal. 3d 903, 919 (1985)\u00a0<\/strong><\/p>\n<\/blockquote>\n<p>This distinction matters. A skillful, diligent advocate who is well-versed in the doctrines of restraint of trade can bring challenges under the Act in California state court that might be rejected under the <a href=\"https:\/\/www.markhamlawfirm.com\/mystaging\/law-articles\/how-the-consumer-welfare-standard-transformed-classical-antitrust-law\/\">narrow consumer-welfare doctrines<\/a> that have been used since the late 1970s to decide and reject cases brought under section 1 of the Sherman Act.<\/p>\n<p>There is another important difference. Section 1 has been explained and applied in thousands of decisions as well as numerous learned treatises, including Areeda and Hovenkamp\u2019s authoritative treatise, <em>Antitrust Law: An Analysis of Antitrust Principles and Their Application<\/em> (now available online on Wolters Kluwer\u2019s site). In contrast, there is a dearth of case law on the Act. The existing law on point is perhaps best described as a hodgepodge of inconsistent decisions, written by jurists who seem perhaps to have talked past one another, and who have not yet reached a clear understanding of the full reach and meaning of the law. Skillful advocates can and should help to cure this gap, bearing in mind that California courts have not fully embraced the restrictive doctrines used to decide and reject countless antitrust cases in the modern era (c. 1975 to the present).<\/p>\n<p>Although the California courts acknowledge that antitrust law is intended to promote consumer welfare, they have not systematically embraced the full panoply of consumer-welfare doctrines that have greatly limited federal antitrust law since the late 1970s. Rather, the courts here appear to have reconciled the modern consumer-welfare doctrines with the Act\u2019s common-law roots. <span style=\"font-size: 18px; font-family: inherit;\">Here is how the California Supreme Court stated the matter in a landmark ruling in 1985:<\/span><\/p>\n<blockquote>\n<p>\u201cConsumer welfare is a principal, if not the sole, goal of antitrust laws. In other words, antitrust laws are designed primarily to aid the consumer. They rest on the premise that the unrestrained interaction of competitive forces will yield the best allocation of our economic resources, the lowest prices, the highest quality and the greatest material progress, while at the same time providing an environment conducive to the preservation of our democratic political and social institutions.\u201d<\/p>\n<p><strong><em>Cianci v. Superior Ct., <\/em>40 Cal. 3d 903, 918\u201319 (1985)<\/strong><\/p>\n<\/blockquote>\n<h2>Conclusion<\/h2>\n<p>As a practitioner of antitrust law for the length of my career, I urge you to examine the foregoing passage and allow it to serve as your guiding light in all cases that you bring under the Act. Lastly, and most important, I hope that this article and its references provide helpful guidance on the Act and the law on restraint of trade. Good luck to all of you in your cases, except those in which we might oppose one another!<\/p>\n<p>By <a href=\"https:\/\/www.markhamlawfirm.com\/mystaging\/our-team\/markham-antitrust-lawyer\/\" target=\"_blank\" rel=\"noopener noreferrer\">William Markham<\/a> (\u00a9 2024).<\/p>\n<\/div>\n<p>[\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n<div class=\"speaker-mute footnotes_reference_container\"> <div class=\"footnote_container_prepare\"><p><span role=\"button\" tabindex=\"0\" class=\"footnote_reference_container_label pointer\" onclick=\"footnote_expand_collapse_reference_container_37192_1();\">References<\/span><span role=\"button\" tabindex=\"0\" class=\"footnote_reference_container_collapse_button\" style=\"display: none;\" onclick=\"footnote_expand_collapse_reference_container_37192_1();\">[<a id=\"footnote_reference_container_collapse_button_37192_1\">+<\/a>]<\/span><\/p><\/div> <div id=\"footnote_references_container_37192_1\" style=\"\"><table class=\"footnotes_table footnote-reference-container\"><caption class=\"accessibility\">References<\/caption> <tbody> \r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_1\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_1');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>1<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See<\/em> Cal. Bus. &amp; Prof. Code \u00a7\u00a7 16720, 16726; <em>SC Manufactured Homes, Inc. v. Liebert<\/em>, 162 Cal. App. 4th 68, 84 (2008) (\u201cThe [Act] prohibits conspiracies that unreasonably restrain trade.\u201d); <em>Fisherman\u2019s Wharf Bay Cruise Corp. v. Superior Ct. of San Francisco<\/em>, 114 Cal. App. 4th 309, 317 (2003) (\u201cThe Cartwright Act targets contracts in restraint of trade and promotes a free market by proscribing trusts.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_2\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_2');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>2<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See\u00a0<\/em>Cal. Bus. &amp; Prof. Code \u00a7 17082.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_3\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_3');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>3<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See <\/em>Cal. Code Civ. Proc. \u00a7 1032.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_4\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_4');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>4<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See<\/em> <em>SC Manufactured Homes, Inc. v. Liebert<\/em>, 162 Cal. App. 4th 68, 84 (2008) (\u201cThe [Act] prohibits conspiracies that unreasonably restrain trade.\u201d); <em>Fisherman\u2019s Wharf Bay Cruise Corp. v. Superior Ct. of San Francisco<\/em>, 114 Cal. App. 4th 309, 317 (2003) (\u201cThe Cartwright Act targets contracts in restraint of trade and promotes a free market by proscribing trusts.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_5\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_5');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>5<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See<\/em> Cal. Bus. &amp; Prof. Code \u00a7 16750; <em>Carver v. Chevron U.S.A., Inc<\/em>., 119 Cal. App. 4th 498, 504 (2004) (\u201cThe public policy implicit in the unilateral fee\u2013shifting provision of section 16750, subdivision (a) is to encourage injured parties to broadly and effectively enforce the Cartwright Act in situations where they otherwise would not find it economical to sue. The Legislature clearly intended to give special treatment to antitrust claims under the Cartwright Act by creating this one-way fee-shifting right for a successful plaintiff but not for a defendant who successfully defends such a claim.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_6\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_6');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>6<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See<\/em> Cal. Code Civ. Proc. \u00a7 1032.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_7\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_7');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>7<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See<\/em> Cal. Bus. &amp; Prof. Code \u00a7\u00a7 16750(c), 16760.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_8\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_8');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>8<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See<\/em> Cal.Bus. &amp; Prof. Code \u00a7 16750(g).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_9\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_9');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>9<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See<\/em> Cal.Bus. &amp; Prof. Code \u00a7\u00a7 16754, 16755(a).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_10\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_10');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>10<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See<\/em> Cal.Bus. &amp; Prof. Code \u00a7 16755(a).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_11\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_11');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>11<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See<\/em> <em>In re Qualcomm Antitrust Litig.<\/em>, 292 F. Supp. 3d 948, 974 (N.D. Cal. 2017) (\u201cThe Cartwright Act proscribes \u2018a combination of capital, skill or acts by two or more persons\u2019 for an unlawful purpose. By its terms, the Act does not cover \u2018wrongful conduct on the part of a single entity.\u2019\u201d) (quoting <em>Bondi v. Jewels by Edwar, Ltd.<\/em>, 267 Cal. App.2d 672, 678 (1968)); <em>Asahi Kasei Pharma Corp. v. CoTherix, Inc.<\/em>, 204 Cal. App. 4th 1, 11 (2012) (\u201c[A]n indispensable element of any action under the Cartwright Act is proof of a \u2018combination of resources of two or more independent interests for the purpose of restraining commerce and preventing market competition.\u2019\u201d) (quoting <em>G.H.I.I. v. MTS, Inc.<\/em>, 147 Cal. App.3d 256, 266 (1983)).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_12\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_12');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>12<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Asahi<\/em>, 204 Cal. App. at 8 (\u201cThe Cartwright Act bans combinations, but single firm monopolization is not cognizable under the Cartwright Act.\u201d&#8221;); <em>see also <\/em><em>State of California ex rel. Van de Kamp v. Texaco, Inc.<\/em>, 46 Cal. 3d 1147, 1168\u201369 (1988) (an allegedly anticompetitive merger or acquisition cannot be challenged under the Act).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_13\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_13');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>13<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See<\/em> Cal. Bus. &amp; Prof. Code \u00a7 16750(a); <em>see also Stanislaus Food Prods. Co. v. USS-POSCO Indus.<\/em>, 782 F. Supp. 2d 1059, 1080 (E.D. Cal. 2011) (\u201cUnlike the federal Sherman Act, the Cartwright Act grants indirect purchasers standing to sue, as well as direct purchasers.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_14\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_14');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>14<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See<\/em> <em>Illinois Brick Co. v. Illinois<\/em>, 431 U.S. 720, 728 (1977) (holding that indirect purchasers cannot bring suit to challenge price-fixing conspiracies or other violations of federal antitrust law).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_15\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_15');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>15<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See <\/em><em>Cianci v. Superior Ct.<\/em>, 40 Cal. 3d 903, 919 (1985) (\u201cWhile no direct sources for the legislative history of the Cartwright Act exist, we may reasonably assume that the Legislature\u2019s intent was substantially similar to that of United States Senator John Reagan, who authored an unsuccessful bill offered as a substitute for what became the Sherman Act; the Cartwright Act is a near carbon copy of the Reagan bill. At the very least, the Sherman Act codified the common law. The Reagan bill was intended to reach further. The record of congressional debates reveals that the Reagan bill was designed not to narrow the scope of the Sherman Act but to broaden it.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_16\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_16');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>16<\/a><\/th> <td class=\"footnote_plugin_text\">s<em>ee<\/em> Cal. Bus. &amp; Prof. Code \u00a7 16600 (non-compete covenants); \u00a7\u00a7 17000\u201317101 (certain kinds of price discrimination, predatory pricing, and commercial boycotts<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_17\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_17');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>17<\/a><\/th> <td class=\"footnote_plugin_text\">Of note, a<span style=\"font-size: 18px; font-family: inherit;\">n eminent former justice on the California Supreme Court, the late Stanley Mosk, memorably explained in a partly dissenting opinion why the Act should be construed to reach anticompetitive mergers and acquisitions. <\/span><em style=\"font-size: 18px; font-family: inherit;\">See <\/em><em>Texaco, <\/em>46 Cal. 3d at 1170\u20131192 (Mosk, J., concurring in part, dissenting in part). Justice Mosk\u2019s interpretation, I believe, is substantively correct on all points and strongly supported by <em>all<\/em> of the following: (1) a proper reading of the common-law doctrines on restraint of trade that gave rise to the Act in the first place; (2) the Act\u2019s own legislative history; and (3) basic precepts of statutory construction and English grammar. An adept antitrust practitioner might wish to raise the matter and urge the California Supreme Court to revisit its jurisprudence and adopt Justice Mosk\u2019s interpretation, by which the Act would rightly reach anticompetitive mergers and acquisitions. Regardless, Justice Mosk\u2019s separate opinion in <em>Texaco<\/em> is required reading for any practitioner who contemplates bringing a claim under the Act.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_18\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_18');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>18<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See<\/em> <em>Selevan v. New York Thruway Auth.<\/em>, 584 F.3d 82, 90 (2d Cir. 2009) (\u201cIn implementing the Commerce Clause, the Supreme Court has adhered strictly to the principle that the right to engage in interstate commerce is not the gift of a state, and that a state cannot regulate or restrain it. It flows from this principle that the negative or dormant implication of the Commerce Clause prohibits state taxation or regulation that discriminates against or unduly burdens interstate commerce and thereby impedes free private trade in the national marketplace.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_19\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_19');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>19<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See<\/em> <em>United States v. E. C. Knight Co<\/em>., 156 U.S. 1, 25 (1895) (\u201c[A] general restraint of trade has often resulted from combinations formed for the purpose of controlling prices by destroying the opportunity of buyers and sellers to deal with each other upon the basis of fair, open, free competition. Combinations of this character \u2026 have always been condemned as illegal because of their necessary tendency to restrain trade. Such combinations are against common right, and are crimes against the public.\u201d) (Harlan, J., dissenting on other grounds); Sir William Erle, C.J., Court of Common Pleas, <em>Law Relating to Trade Unions<\/em> 5-7 (1869) (\u201cRestraint of trade, according to a general principle of the common law, is unlawful\u2026. [A]t common law every person has individually, and the public also have collectively, a right to require that the course of trade should be kept free from unreasonable obstruction\u2026. [T]he right to a free course for trade is of great importance to commerce and productive industry, and has been carefully maintained by those who have administered the common law.\u201d); <em>United States v. Addyston Pipe &amp; Steel Co.<\/em>, 85 F. 271, 279 (6th Cir. 1898), <em>aff\u2019d after modification on other ground<\/em> 175 U.S. 211 (1899) (\u201cFrom early times it was the policy of Englishmen to encourage trade in England, and to discourage those voluntary restraints which tradesmen were often induced to impose on themselves by contract.\u201d); <em>Mitchel v. Reynolds<\/em>, 1 P.Wms. 181, 190 (1711) (Parker, C.J.) (\u201cThe mischief which may arise from [restraints of trade are] (1) to the party by the loss of his livelihood and the subsistence of his family; (2) to the public by depriving it of an [sic] useful member. Another reason is the great abuses these voluntary restraints are liable to; as, for instance, from corporations who are perpetually laboring for exclusive advantages in trade, and to reduce it into as few hands as possible.\u201d); <em>see<\/em> <em>also<\/em> Statute of Monopolies, Trin. 44 Eliz. lib. 11, f. 84, 85 (Subject to limited exceptions, \u201call grants of monopolies are against the ancient and fundamentall laws of this kingdome.\u201d); <em>Standard Oil Co. of New Jersey v. United States<\/em>, 221 U.S. 1, 52\u201357 (1911) (referring to the history of monopolies in England, and explaining that state and federal courts in the United States generally deemed unauthorized monopolies to be \u201codious\u201d to the law); <em>United States v. Line Material Co.<\/em>, 333 U.S. 287, 308 (1948) (\u201cPublic policy has condemned monopolies for centuries.\u201d) (citing <em>The Case of Monopolies (Darcy v. Allein)<\/em> 11 Co.Rep. 84-b).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_20\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_20');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>20<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See<\/em> <em>generally State of California ex rel. Van de Kamp v. Texaco, Inc.<\/em>, 46 Cal. 3d 1147, 1153\u20131169 (1988) (extended explanation of these points with citations to numerous authorities) (superseded by statute on other grounds as stated in <em>Stop Youth Addiction, Inc. v. Lucky Stores, Inc.<\/em>, 17 Cal.4th 553, 570 (1998)); <em>see also<\/em> <em>Cianci<\/em>, 40 Cal. 3d at 919.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_21\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_21');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>21<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See<\/em> <em>Cellular Plus, Inc. v. Superior Ct.<\/em>, 14 Cal. App. 4th 1224, 1240 (1993) (\u201cF]ederal cases interpreting the Sherman Act are applicable in construing our state laws. Accordingly, the appropriate use of federal cases interpreting the Sherman Act is as an aid in interpreting our own Cartwright Act.\u201d); <em>Fisherman\u2019s Wharf<\/em>, 114 Cal. App. 4th at 334 (\u201cSince the Cartwright Act and the federal Sherman Act share similar language and objectives, California courts often look to federal precedents under the Sherman Act for guidance.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_22\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_22');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>22<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Qualcomm<\/em>, 292 F. Supp. 3d at 979 (\u201cThe California Supreme Court has held that the primary concern of the Cartwright Act is the elimination of restraints of trade and impairments of the free market.\u201d); <em>Clayworth v. Pfizer, Inc.<\/em>, 49 Cal. 4th 758, 783 (2010) (\u201cFrom its inception, the Cartwright Act has always been focused on the punishment of violators for the larger purpose of promoting free competition&#8230;. The main purpose of the anti-trust laws is to protect the public from monopolies and restraints of trade&#8230;.\u201d); <em>GreenCycle Paint, Inc. v. PaintCare, Inc.<\/em>, 250 F. Supp. 3d 438, 446 (N.D. Cal. 2017) (\u201cThe purpose of the Cartwright Act is to prevent any action which has as its purpose or effect an unreasonable restraint of trade.\u201d) (emphasis in original); <em>Corwin v. L.A. Newspaper Serv. Bureau, Inc.<\/em>, 22 Cal.3d 302, 314 (1978) (same).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_23\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_23');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>23<\/a><\/th> <td class=\"footnote_plugin_text\"><\/span><em style=\"font-size: 18px; font-family: inherit;\">See United States v. Aluminum Co. of Am. (\u201cAlcoa\u201d)<\/em><span style=\"font-size: 18px; font-family: inherit;\">, 148 F.2d 416, 428 (2d Cir. 1945) (\u201c[T]he vice of restrictive contracts and of monopoly is really one, it is the denial to commerce of the supposed protection of competition.\u201d); <\/span><em style=\"font-size: 18px; font-family: inherit;\">N. Pac. Ry. Co. v. United States<\/em><span style=\"font-size: 18px; font-family: inherit;\">, 356 U.S. 1, 4\u20135 (1958) (\u201cThe Sherman Act was designed to be a comprehensive charter of economic liberty aimed at preserving free and unfettered competition as the rule of trade. It rests on the premise that the unrestrained interaction of competitive forces will yield the best allocation of our economic resources, the lowest prices, the highest quality and the greatest material progress, while at the same time providing an environment conductive to the preservation of our democratic political and social institutions. But even were that premise open to question, the policy unequivocally laid down by the Act is competition.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_24\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_24');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>24<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Alcoa<\/em>, 148 F.2d at 427\u201329 (\u201cThe [Sherman] Act has wider purposes\u2026. Many people believe that possession of unchallenged economic power deadens initiative, discourages thrift and depresses energy; that immunity from competition is a narcotic, and rivalry is a stimulant, to industrial progress; that the spur of constant stress is necessary to counteract an inevitable disposition to let well enough alone. Such people believe that competitors, versed in the craft as no consumer can be, will be quick to detect opportunities for saving and new shifts in production, and be eager to profit by them.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_25\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_25');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>25<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Line Material<\/em>, 333 U.S. at 309 (\u201c[O]ur economy is built largely upon competition in quality and prices.\u201d); <em>Alcoa<\/em>, 148 F.2d at 427\u201329 (explaining these points at length).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_26\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_26');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>26<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Asahi<\/em>, 204 Cal. App. at 20 (\u201c[T]he Cartwright Act, like all antitrust laws, is about the protection of competition, not competitors.\u201d); C<em>el-Tech Commc\u2019ns, Inc. v. Los Angeles Cellular Tel. Co.<\/em>, 20 Cal. 4th 163, 186 (1999) (\u201c[A]ntitrust laws were enacted for the protection of competition, not competitors.\u201d) (quoting <em>Cargill, Inc. v. Monfort of Colorado, Inc.<\/em>, 479 U.S. 104, 115 (1986)).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_27\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_27');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>27<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See<\/em> <em>Qualcomm<\/em>, 292 F. Supp. 3d at 974 (quoted above on this point).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_28\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_28');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>28<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See AT &amp; T Mobility LLC v. AU Optronics Corp.<\/em>, 707 F.3d 1106, 1112\u201313 (9th Cir. 2013) (\u201cApplying California law to anticompetitive conduct undertaken within California [that results in harm to consumers in another state] advances the Cartwright Act\u2019s overarching goals of maximizing effective deterrence of antitrust violations, enforcing the state\u2019s antitrust laws against those violations that do occur, and ensuring disgorgement of any ill-gotten proceeds.\u201d); <em>see also Allstate Ins. Co. v. Hague<\/em>, 449 U.S. 302, 312\u201313 (1981) (\u201cFor a State\u2019s substantive law to be selected in a constitutionally permissible manner, that State must have a significant contact or significant aggregation of contacts, creating state interests, such that choice of its law is neither arbitrary nor fundamentally unfair.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_29\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_29');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>29<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See<\/em> <em>Marsh v. Anesthesia Servs. Med. Grp., Inc.<\/em>, 200 Cal. App. 4th 480, 493 (2011) (\u201cThe Cartwright Act prohibits combinations in unreasonable restraint of trade. Certain restraints which lack redeeming virtue are conclusively presumed to be unreasonable and illegal, and constitute a <em>per se<\/em> illegal practice. For example, a horizontal combination (an anticompetitive agreement among competitors who are at the same level of distribution) is ordinarily illegal per se. Likewise, market division, and certain types of group boycotts are unlawful per se.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_30\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_30');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>30<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See<\/em> <em>Knevelbaard Dairies v. Kraft Foods, Inc.<\/em>, 232 F.3d 979, 986 (9th Cir. 2000) (\u201cWhen a <em>per se<\/em> violation such as horizontal price fixing has occurred, there is no need to define a relevant market or to show that the defendants had power within the market. The California Supreme Court has held, under the Cartwright Act, that competitors who agree to fix prices are liable under the <em>per se<\/em> rule \u2018[e]ven though the members of the price-fixing group were in no position to control the market.\u2019\u201d) (quoting <em>Mailand v. Burckle<\/em>, 20 Cal.3d 367, 376 (1978)).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_31\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_31');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>31<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See<\/em> <em>Marsh<\/em>, 200 Cal. App. 4th at 493.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_32\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_32');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>32<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See id<\/em>.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_33\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_33');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>33<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See id<\/em>.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_34\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_34');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>34<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See id<\/em>.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_35\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_35');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>35<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Knevelbaard<\/em>, 232 F.3d at 986 (\u201cForemost in the category of <em>per se<\/em> violations is horizontal price-fixing among competitors&#8230;. Under both California and federal law, agreements [between direct competitors] fixing or tampering with prices are illegal per se.\u201d) (quoting <em>Oakland\u2013Alameda County Builders Exch. v. F.P. Lathrop Constr. Co<\/em>., 4 Cal.3d 354, 363 (1971)).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_36\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_36');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>36<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See In re Cipro Cases I &amp; II<\/em>, 61 Cal. 4th 116, 148 (2015) (Under the Act, \u201cbusinesses may not engage in a horizontal allocation of markets, with would-be competitors dividing up territories or customers. Such allocations afford each participant an enclave free from the danger of outside incursions, in which to exercise monopoly power and extract monopoly premiums.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_37\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_37');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>37<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Knevelbaard<\/em>, 232 F.3d at 986; Marsh, 200 Cal. App. 4th at 493.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_38\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_38');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>38<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Marsh<\/em>, 200 Cal. App. 4th at 493; <em>Freeman v. San Diego Ass\u2019n of Realtors<\/em>, 77 Cal. App. 4th 171, 195 (1999) (\u201c[I]t is a violation of the antitrust laws for a group of competitors with separate and independent economic interests, or a single competitor with sufficient leverage, to force another to boycott a competitor at the same level of distribution.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_39\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_39');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>39<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Hahn v. Oregon Physicians\u2019 Service,<\/em> 860 F.2d 1501, 1509 (9th Cir. 1988) (setting forth the first three of the above four criteria); <em>NYNEX Corp. v. Discon, Inc.<\/em>, 525 U.S. 128, 135 (1998) (indicating that the <em>per se<\/em> rule against group boycotts applies only when it entails a horizontal arrangement made by direct competitors); <em>Northwest Wholesale Stationers, Inc. v. Pacific Stationery and Printing Co.<\/em>, 472 U.S. 284, 294 (1985) (a group boycott is unlawful <em>per se<\/em> when it has \u201cinvolved joint efforts by a firm or firms to disadvantage competitors by either directly denying or persuading or coercing suppliers or customers to deny relationships the competitors need in the competitive struggle.\u201d) (quoting L. Sullivan, <em>Law of Antitrust<\/em> at 261-62 (1977)); <em>see also Klor\u2019s, Inc. v. Broadway-Hale Stores, Inc.<\/em>, 359 U.S. 207, 212-14 (1959) (a group boycott organized at behest of dominant retailer and enforced by its suppliers against a targeted retailer was held to be unlawful <em>per se<\/em> under section 1 of the Sherman Act).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_40\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_40');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>40<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Med. Ctr. at Elizabeth Place, LLC v. Atrium Health Sys.<\/em>, 922 F.3d 713, 724\u201325 (6th Cir. 2019) (\u201cBecause joint ventures often have procompetitive efficiencies, when a joint venture is itself challenged as anticompetitive, that claim is reviewed under the rule of reason. But when the conduct of the joint venture is challenged, the relationship of the challenged conduct to the joint venture is analyzed to see if the conduct is reasonably related to the joint venture\u2019s procompetitive features (and therefore should be judged under the rule of reason), or is a naked restraint lurking beneath the veneer of a legitimate joint venture (and therefore deserves <em>per se<\/em> condemnation)\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_41\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_41');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>41<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Polk Bros. v. Forest City Enters., Inc.<\/em>, 776 F.2d 185, 188\u201389 (7th Cir. 1985) (naked restraints are horizontal covenants between competitors that exist merely to suppress competition; as such, they are unlawful per se; ancillary restraints are horizontal covenants between competitors that restrain their competition, but exist to facilitate \u201ca larger endeavor whose success they promote;\u201d as such, they are reviewed under the rule of reason).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_42\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_42');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>42<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Theme Promotions, Inc. v. News Am. Mktg. FSI<\/em>, 546 F.3d 991, 1000 (9th Cir. 2008) (\u201cCalifornia courts have determined that vertical restraints of trade &#8230; are not <em>per se<\/em> unreasonable but instead are subject to a \u2018rule of reason\u2019 analysis.\u201d); <em>Flagship Theatres of Palm Desert, LLC v. Century Theatres, Inc<\/em>., 55 Cal. App. 5th 381, 406\u201307 (2020) (\u201cThe California Supreme Court has not yet addressed the general treatment of vertical restraints under the Cartwright Act, nor has it considered exclusive dealing or vertical group boycott claims more specifically. But California Courts of Appeal generally analyze vertical restraints under the rule of reason.\u201d) (providing numerous citations to other California decisions).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_43\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_43');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>43<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See UAS Mgmt., Inc. v. Mater Misericordiae Hosp.,<\/em> 169 Cal. App. 4th 357, 366 (2009) (\u201cA tying arrangement typically involves a seller with monopoly or other extensive market power in a given product, who then refuses to sell that product unless the buyer buys (or agrees not to buy from seller&#8217;s competitor) a separate product over which the seller does not have extensive independent market power. Such arrangements are unlawful unless their effect on commerce is de minimis.\u201d); <em>Packaging Sys., Inc. v. PRC-Desoto Int\u2019l, Inc.<\/em>, 268 F. Supp. 3d 1071, 1083 (C.D. Cal. 2017) (\u201cA tying arrangement is a device used by a seller with market power in one product market to extend its market power to a distinct product market. To accomplish this objective, the seller conditions the sale of one product (the tying product) on the buyer\u2019s purchase of a second product (the tied product). Tying arrangements are forbidden on the theory that, if the seller has market power over the tying product, the seller can leverage this market power through tying arrangements to exclude other sellers of the tied product. Both Section 1 of the Sherman Act and the Cartwright Act prohibit illegal tying arrangements, and the elements of a \u00a7 1 tying claim for the most part mirror that of the Cartwright Act. For a tying claim to suffer <em>per se<\/em> condemnation, a plaintiff must prove: (1) that the defendant tied together the sale of two distinct products or services; (2) that the defendant possesses enough economic power in the tying product market to coerce its customers into purchasing the tied product; and (3) that the tying arrangement affects a not insubstantial volume of commerce in the tied product market.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_44\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_44');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>44<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Theme Promotions<\/em>, 546 F.3d at 1001 (\u201c[E]xclusive dealing contracts may harm competition, but may also have the effect of enhancing competition. Under the rule of reason analysis, an exclusive dealing contract is proscribed when it is probable that performance of the contract will foreclose competition in a substantial share of the affected line of commerce.\u201d); <em>Fisherman\u2019s Wharf<\/em>, 114 Cal. App. 4th at 335 (\u201cIn California, exclusive dealing arrangements are not deemed illegal <em>per se<\/em>. They may provide an incentive for the marketing of new products and a guarantee of quality-control distribution. They are proscribed when it is probable that performance of the contract will foreclose competition in a substantial share of the affected line of commerce. Consequently, a determination of illegality is tested under a rule of reason and requires knowledge and analysis of the line of commerce, the market area, and the affected share of the relevant market.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_45\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_45');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>45<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See In Cascade Health Solutions v. PeaceHealth<\/em>, 515 F.3d 883, 897 (9th Cir. 2008) (\u201c[B]undled discounts, while potentially procompetitive by offering bargains to consumers, can also pose the threat of anticompetitive impact by excluding less diversified but more efficient producers.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_46\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_46');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>46<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Broadcom Corp. v. Qualcomm Inc<\/em>., 501 F.3d 297, 314 (3d Cir. 2007) (\u201cWe hold that (1) in a consensus-oriented private standard-setting environment, (2) a patent holder\u2019s intentionally false promise to license essential proprietary technology on FRAND terms, (3) coupled with an SDO\u2019s reliance on that promise when including the technology in a standard, and (4) the patent holder\u2019s subsequent breach of that promise, is actionable anticompetitive conduct.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_47\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_47');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>47<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Princo Corp. v. Int\u2019l Trade Comm\u2019n<\/em>, 616 F.3d 1318, 1321 (Fed. Cir. 2010) (\u201c[T]he doctrine [of patent misuse] limits a patentee\u2019s right to impose conditions on a licensee that exceed the scope of the patent right\u201d); id., 616 F.3d at 1327 (\u201c[T]he basic rule of patent misuse: that the patentee may exploit his patent but may not use it to acquire a monopoly not embraced in the patent.\u201d); <em>see also United States v. Singer Mfg. Co.<\/em>, 374 U.S. 174, 196\u201397 (1963) (\u201c[T]he possession of a valid patent or patents does not give the patentee any exemption from the provisions of the Sherman Act beyond the limits of the patent monopoly. By aggregating patents in one control, the holder of the patents cannot escape the prohibitions of the Sherman Act. That Act imposes strict limitations on the concerted activities in which patent owners may lawfully engage, and those limitations have been exceeded in this case [in which defendants pooled their patents and enforced them for their mutual benefit and so as to exclude targeted competitors from their respective markets.]\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_48\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_48');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>48<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See United States v. Apple, Inc.<\/em>, 791 F.3d 290, 320 (2d Cir. 2015) (\u201cMFNs, though surely proper in many contexts, can be misused to anticompetitive ends in some cases.\u201d); <em>Blue Cross &amp; Blue Shield United of Wis. v. Marshfield Clinic<\/em>, 65 F.3d 1406, 1415 (7th Cir.1995) (same); <em>see, e.g., Starr v. Sony BMG Music Ent.<\/em>, 592 F.3d 314, 324 (2d Cir. 2010) (defendants\u2019 concealment of most-favored pricing provisions suggested that defendants had colluded unlawfully to avert price competition); <em>Fed. Trade Comm\u2019n v. Amazon.com, Inc.<\/em>, No. 2:23-CV-01495-JHC, 2024 WL 4448815, at *6 (W.D. Wash. Sept. 30, 2024) (\u201cPlaintiffs adequately allege that Amazon\u2019s anti-discounting practices stifle price competition. Specifically, they aver that Amazon\u2019s actions that prevent third-party sellers from offering discounts on other sites are anticompetitive because they foreclose price competition from those sellers elsewhere.\u201d); <em>see generally<\/em> Jonathan B. Baker, \u201cVertical Restraints with Horizontal Consequences: Competitive Effects of \u201cMost\u2013Favored\u2013Customer\u201d Clauses,\u201d 64 Antitrust L.J. 517, 520\u201321 (1996); Jonathan B. Baker &amp; Judith A. Chevalier, \u201cThe Competitive Consequences of Most\u2013Favored\u2013Nation Provisions,\u201d Antitrust, Spring 2013, passim.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_49\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_49');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>49<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See generally<\/em> Phillip Areeda &amp; Herbert Hovenkamp, <em>Antitrust Law: An Analysis of Antitrust Principles and Their Application<\/em> (Wolters Kluwer online, 2024), \u00b6\u00b6 1600\u20131823.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_50\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_50');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>50<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See<\/em> <em>Fisherman\u2019s Wharf<\/em>, 114 Cal. App. 4th at 317 (\u201cThe Cartwright Act targets contracts in restraint of trade and promotes a free market by proscribing trusts.\u201d); <em>Alfred M. Lewis, Inc. v. Warehousemen, Teamsters, Chauffeurs &amp; Helpers Loc. Union No. 542<\/em>, 163 Cal. App. 2d 771, 783 (1958) (Under the Act, \u201c<span style=\"font-size: 18px; font-family: inherit;\">[a] prohibited combination comes into being through an agreement of two or more persons for the purpose of restraining trade or preventing competition.\u201d). <\/span><span style=\"font-size: 18px; font-family: inherit;\">At common law, a contract in restraint of trade was one by which a covenantee (e.g., a master tradesman) obliged a covenantor (e.g., an apprentice) to accept excessive restraints on his ability to compete against the covenantee, particularly after ceasing to perform work for the covenantee. Such restraints were deemed void and therefore unenforceable if they were found to be \u201cgeneral\u201d\u2014i.e., insufficiently narrow in scope or duration.(((<em>See Addyston<\/em>, 85 F. at 279 (\u201cFrom early times it was the policy of Englishmen to encourage trade in England, and to discourage those voluntary restraints which tradesmen were often induced to impose on themselves by contract. Courts recognized this public policy by refusing to enforce stipulations of this character. The objections to such restraints were mainly two. One was that by such contracts a man disabled himself from earning a livelihood&#8230;. The other was that such restraints tended to give the covenantee, the beneficiary of such restraints, a monopoly of the trade, from which he had thus excluded one competitor, and by the same mean might exclude others.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_51\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_51');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>51<\/a><\/th> <td class=\"footnote_plugin_text\"><\/span><em style=\"font-family: inherit; font-size: 18px;\">See<\/em><span style=\"font-family: inherit; font-size: 18px;\"> <\/span><em style=\"font-family: inherit; font-size: 18px;\">Kolling v. Dow Jones &amp; Co.<\/em><span style=\"font-family: inherit; font-size: 18px;\">, 137 Cal. App. 3d 709, 720 (1982) (\u201c[T]he \u2018conspiracy\u2019 or \u2018combination\u2019 necessary to support an antitrust action [under the Act] can be found where a supplier or producer, by coercive conduct, imposes restraints to which distributors involuntarily adhere. If a single trader pressures customers or dealers into adhering to resale price maintenance, territorial restrictions, exclusive dealing arrangements or illegal tie-ins, an unlawful combination is established, irrespective of any monopoly or conspiracy, and despite the recognized right of a producer to determine with whom it will deal.\u201d); <\/span><em style=\"font-family: inherit; font-size: 18px;\">Qualcomm<\/em><span style=\"font-family: inherit; font-size: 18px;\">, 292 F. Supp. 3d at 974 (same).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_52\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_52');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>52<\/a><\/th> <td class=\"footnote_plugin_text\"><em style=\"font-size: 18px; font-family: inherit;\">See<\/em> Cal. Bus. &amp; Prof. Code \u00a7 16600 (subject to specific exceptions set forth at sections 16601\u201316602.5, \u201cevery contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.\u201d); <em style=\"font-size: 18px; font-family: inherit;\">Edwards v. Arthur Andersen LLP<\/em>, 44 Cal. 4th 937, 945 (2008) (\u201cToday in California, covenants not to compete are void, subject to several exceptions.\u201d); <em style=\"font-size: 18px; font-family: inherit;\">Ixchel Pharma, LLC v. Biogen, Inc.<\/em>, 9 Cal. 5th 1130, 1149 (2020) (\u201c[S]ection 16600 applies to business contracts.\u201d);\u00a0<em style=\"font-size: 18px; font-family: inherit;\">AMN Healthcare, Inc. v. Aya Healthcare Servs., Inc.<\/em>, 28 Cal. App. 5th 923, 935\u201336 (2018) (\u201cSection 16600 expresses California\u2019s strong public policy of protecting the right of its citizens to pursue any lawful employment and enterprise of their choice. California courts have consistently affirmed that section 16600 evinces a settled legislative policy in favor of open competition and employee mobility. The interests of the employee in his or her own mobility and betterment are deemed paramount to the competitive business interests of the employers, where neither the employee nor his or her new employer has committed any illegal act accompanying the employment change.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_53\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_53');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>53<\/a><\/th> <td class=\"footnote_plugin_text\"><\/span><em style=\"font-family: inherit; font-size: 18px;\">See<\/em><span style=\"font-family: inherit; font-size: 18px;\"> Cal. Bus. &amp; Prof. Code \u00a7\u00a7 16601\u201316602.5.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_54\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_54');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>54<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See<\/em> Cal. Bus. &amp; Prof. Code \u00a7 16600.5(e)(2) (\u201c&#8230;a prevailing employee, former employee, or prospective employee in an action based on a violation of this chapter shall be entitled to recover reasonable attorney\u2019s fees and costs.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_55\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_55');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>55<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Marin Cnty. Bd. of Realtors, Inc. v. Palsson<\/em><span>, 16 Cal. 3d 920, 925 (1976) (\u201cA long line of California cases has concluded that the Cartwright Act is patterned after the Sherman Act and both statutes have their roots in the common law. Consequently, federal cases interpreting the Sherman Act are applicable to problems arising under the Cartwright Act.\u201d) (giving numerous citations to support this proposition).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_56\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_56');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>56<\/a><\/th> <td class=\"footnote_plugin_text\"><\/span><em style=\"font-size: 18px; font-family: inherit;\">See\u00a0Nat\u2019l Collegiate Athletic Ass\u2019n v. Bd. of Regents of Univ. of Oklahoma<\/em><span style=\"font-size: 18px; font-family: inherit;\">, 468 U.S. 85, 100 (1984) (\u201c<\/span><span style=\"font-size: 18px; font-family: inherit;\">Horizontal price fixing and output limitation are ordinarily condemned as a matter of law under an illegal <em>per se<\/em> approach because the probability that these practices are anticompetitive is so high; a <em>per se<\/em> rule is applied when the practice facially appears to be one that would always or almost always tend to restrict competition and decrease output. In such circumstances a restraint is presumed unreasonable without inquiry into the particular market context in which it is found.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_57\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_57');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>57<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See\u00a0Nat\u2019l Soc. of Pro. Eng\u2019rs v. United States<\/em>, 435 U.S. 679, 692 (1978) (\u201c<span style=\"font-size: 18px; font-family: inherit;\">There are, thus, two complementary categories of antitrust analysis. In the first category are agreements whose nature and necessary effect are so plainly anticompetitive that no elaborate study of the industry is needed to establish their illegality\u2014they are \u2018illegal per se.\u2019 In the second category are agreements whose competitive effect can only be evaluated by analyzing the facts peculiar to the business, the history of the restraint, and the reasons why it was imposed.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_58\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_58');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>58<\/a><\/th> <td class=\"footnote_plugin_text\"><\/span><em style=\"font-family: inherit; font-size: 18px;\">See Law v. Nat\u2019l Collegiate Athletic Ass\u2019n<\/em><span style=\"font-family: inherit; font-size: 18px;\">, 134 F.3d 1010, 1020 (10th Cir. 1998) (a quick-look review is used when a trade restraint is not unlawful per se, but \u201chas obvious anticompetitive effects,\u201d in which case the court need not conduct a market analysis and can directly decide \u201cwhether the procompetitive justifications advanced for the restraint outweigh the anticompetitive effects.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_59\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_59');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>59<\/a><\/th> <td class=\"footnote_plugin_text\"><\/span><em style=\"font-size: 18px; font-family: inherit;\">See <\/em><i style=\"font-size: 18px; font-family: inherit;\">United States v. Am. Airlines Grp. Inc.<\/i><span style=\"font-size: 18px; font-family: inherit;\">, 121 F.4th 209, 220 (1st Cir. 2024) (\u201c<\/span><span style=\"font-size: 18px; font-family: inherit;\">A <\/span><span class=\"co_concept_35_38 co_concept_35_48 MultiColor--default\" id=\"co_term_8778\" style=\"font-size: 18px; font-family: inherit;\">rule<\/span><span style=\"font-size: 18px; font-family: inherit;\">-of-<\/span><span class=\"co_concept_43_48 co_concept_35_48 MultiColor--default\" id=\"co_term_8780\" style=\"font-size: 18px; font-family: inherit;\">reason<\/span><span style=\"font-size: 18px; font-family: inherit;\"> analysis requires a fact-specific assessment of the restraint\u2019s actual effect on competition. <\/span><span style=\"font-size: 18px; font-family: inherit;\">Under the <\/span><span class=\"co_concept_35_38 co_concept_35_48 MultiColor--default\" id=\"co_term_8806\" style=\"font-size: 18px; font-family: inherit;\">rule<\/span><span style=\"font-size: 18px; font-family: inherit;\"> of <\/span><span class=\"co_concept_43_48 co_concept_35_48 MultiColor--default\" id=\"co_term_8808\" style=\"font-size: 18px; font-family: inherit;\">reason\u2019s<\/span><span style=\"font-size: 18px; font-family: inherit;\"> three-step burden-shifting framework, the plaintiff must first make a showing that the restraint has a substantial anticompetitive effect, which can be proven directly or indirectly. <\/span><span style=\"font-size: 18px; font-family: inherit;\">If the plaintiff carries that burden, the burden shifts to the defendant to show a procompetitive rationale for the restraint. <\/span><span style=\"font-size: 18px; font-family: inherit;\">And if the defendant makes this showing, then the burden shifts back to the plaintiff to demonstrate that the procompetitive efficiencies could be reasonably achieved through less anticompetitive means,<\/span><span style=\"font-size: 18px; font-family: inherit;\"> or that on balance, the restraint\u2019s harms outweigh its benefits<\/span><span style=\"font-size: 18px; font-family: inherit;\">.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_60\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_60');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>60<\/a><\/th> <td class=\"footnote_plugin_text\"><\/span><em style=\"font-size: 18px; font-family: inherit;\">See <\/em><i style=\"font-size: 18px; font-family: inherit;\">Nat\u2019l Collegiate Athletic Ass\u2019n v. Alston<\/i><span style=\"font-size: 18px; font-family: inherit;\">, 594 U.S. 69, 88 (2021) (\u201c<\/span><span style=\"font-size: 18px; font-family: inherit;\">At one end of the spectrum, some restraints may be so obviously incapable of harming competition that they require little scrutiny.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_61\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_61');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>61<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See <\/em><\/span><i style=\"font-size: 18px; font-family: inherit;\">California Dental Ass\u2019n v. F.T.C.<\/i><span style=\"font-size: 18px; font-family: inherit;\">, 526 U.S. 756, 758 (1999) (\u201c<\/span><span style=\"font-size: 18px; font-family: inherit;\">There is generally no categorical line between restraints giving rise to an intuitively obvious inference of anticompetitive effect and those that call for more detailed treatment. <\/span><span style=\"font-size: 18px; font-family: inherit;\">What is required is an enquiry <\/span><span class=\"co_concept_19_22\" id=\"co_term_2252\" style=\"font-size: 18px; font-family: inherit;\"><span id=\"co_term_2252_0\">meet<\/span><\/span><span style=\"font-size: 18px; font-family: inherit;\"> for the case, looking to a restraint\u2019s circumstances, details, and logic.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_62\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_62');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>62<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Bhan v. NME Hosps., Inc<\/em>., 929 F.2d 1404, 1413 (9th Cir. 1991) (\u201cTo meet his initial burden [for a rule-of-reason challenge under Section 1], plaintiff must show that the activity is the type that restrains trade and that the restraint is likely to be of significant magnitude. Ordinarily, a plaintiff to do this must delineate a relevant market and show that the defendant plays enough of a role in that market to impair competition significantly.\u201d); <em>Spanish Broad. Sys. of Fla., Inc. v. Clear Channel Commc\u2019ns, Inc.<\/em>, 376 F.3d 1065, 1072 (11th Cir. 2004) (A plaintiff can meet its initial burden under Section 1 by showing that \u201cthe [challenged] behavior had the potential for genuine adverse effects on competition.\u201d); <em>FTC v. Indiana Fed\u2019n of Dentists<\/em>, 476 U.S. 447, 460\u201361 (1986) (In Section 1 cases, \u201cthe purpose of the inquiries into market definition and market power is to determine whether an arrangement has the potential for genuine adverse effects on competition\u201d); <em>Eichorn v. AT &amp; T Corp<\/em>., 248 F.3d 131, 144\u201345 (3d Cir. 2001) (\u201cUnder the rule of reason, we look at the totality of the circumstances surrounding an alleged anti-competitive activity. &#8230; In applying this test, we examine the competitive significance of the alleged restraint to determine whether it has an anti-competitive effect on the market and is an unreasonable restraint on trade.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_63\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_63');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>63<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See\u00a0<\/em><\/span><em>Bhan<\/em>, 929 F.2d at 1413 (\u201c<span style=\"font-size: 18px; font-family: inherit;\">Should the plaintiff satisfy his initial burden, the defendant must offer evidence of pro-competitive effects. The plaintiff, driven to this point, must then try to show that any legitimate objectives can be achieved in a substantially less restrictive manner. Finally, the court must weigh the harms and benefits to determine if the behavior is reasonable on balance.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_64\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_64');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>64<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See<\/em> <em>United States v. Microsoft Corp<\/em>., 253 F.3d 34, 58\u201359 (D.C. Cir. 2001).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_65\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_65');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>65<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Marin Cnty. Bd. of Realtors, <\/em><span>16 Cal. 3d at 925.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_66\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_66');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>66<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See<\/em> <em>Theme<\/em>, 546 F.3d at 1001 (to prove a rule-of-reason violation of the Act, the plaintiff usually \u201cmust first define the relevant market and then show that the defendant plays enough of a role in the market to impair competition significantly.\u201d); <em>Exxon Corp. v. Superior Ct.<\/em>, 51 Cal. App. 4th 1672, 1681 (1997) (to prevail on rule-of-reason claim under the Act, a plaintiff must \u201cmake the required showing of a substantially adverse effect on competition in the relevant market.\u201d); <em>Dang v. San Francisco Forty Niners<\/em>, 964 F. Supp. 2d 1097, 1104 (N.D. Cal. 2013) (\u201cIn order to state a valid antitrust claim [under the Act or the Sherman Act], a plaintiff must allege that the defendant has market power within a legally cognizable relevant market.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_67\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_67');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>67<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Fed. Trade Comm\u2019n v. Qualcomm Inc<\/em>., 969 F.3d 974, 992 (9th Cir. 2020) (\u201cA threshold step in any antitrust case is to accurately define the relevant market, which refers to the area of effective competition. Courts usually cannot properly apply the rule of reason without an accurate definition of the relevant market. Otherwise, there is no way to measure the defendant\u2019s ability to lessen or destroy competition.\u201d); <em>Image Tech. Servs., Inc. v. Eastman Kodak Co<\/em>., 125 F.3d 1195, 1202 (9th Cir. 1997) (\u201cThe relevant market is the field in which meaningful competition is said to exist.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_68\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_68');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>68<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Dang<\/em>, 964 F. Supp. 2d at (\u201cWhile the definition of a relevant market for antitrust purposes is typically a factual inquiry, certain legal principles govern the definition, and antitrust claims may be dismissed under Rule 12(b)(6) if the plaintiff&#8217;s relevant market definition is facially unsustainable.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_69\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_69');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>69<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See United States v. Rockford Mem\u2019l Corp.<\/em>, 898 F.2d 1278, 1285 (7th Cir. 1990) (\u201cIt is always possible to take pot shots at a market definition (we have just taken one), and the defendants do so with vigor and panache. Their own proposal, however, is ridiculous\u2014a ten-county area in which it is assumed (without any evidence and contrary to common sense) that Rockford residents, or third-party payors, will be searching out small, obscure hospitals in remote rural areas if the prices charged by the hospitals in Rockford rise above competitive levels. Forced to choose between two imperfect market definitions, the defendants\u2019 and the district judge\u2019s (the latter a considerable expansion of the government\u2019s tiny proposed market) &#8230; we choose the less imperfect, the district judge\u2019s.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_70\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_70');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>70<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Fed. Trade Comm\u2019n v. Penn State Hershey Med. Ctr.<\/em>, 838 F.3d 327, 338 (3d Cir. 2016) (In antitrust cases, \u201c[t]he relevant market is defined in terms of two components: the product market and the geographic market.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_71\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_71');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>71<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Exxon<\/em>, 51 Cal. App. 4th at 1682 (\u201cThe United States Supreme Court has declared that the relevant market is determined by considering \u2018commodities reasonably interchangeable by consumers for the same purposes.\u2019 Or, in other words, the relevant market is composed of products that have reasonable interchangeability for the purpose for which they are produced.\u201d) (quoting <em>United States v. E.I. duPont de Nemours &amp; Co.<\/em>, 351 U.S. 377, 395 (1956)); <em>Thurman Indus., Inc. v. Pay &#8216;N Pak Stores, Inc.<\/em>, 875 F.2d 1369, 1374 (9th Cir. 1989) (\u201c[A] product market is typically defined to include the pool of goods or services that qualify as economic substitutes because they enjoy reasonable interchangeability of use and cross-elasticity of demand.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_72\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_72');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>72<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Penn State Hershey<\/em>, 838 F.3d at 338 (\u201cThe relevant geographic market is that area in which a potential buyer may rationally look for the goods or services he seeks. Determined within the specific context of each case, a market\u2019s geographic scope must correspond to the commercial realities of the industry being considered and be economically significant.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_73\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_73');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>73<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Penn State Hershey<\/em>, 838 F.3d at 338 (\u201cA common method employed by courts and the FTC to determine the relevant geographic market is the hypothetical monopolist test. Under the Horizontal Merger Guidelines issued by the U.S. Department of Justice&#8217;s Antitrust Division and the FTC, if a hypothetical monopolist could impose a small but significant non-transitory increase in price (\u2018SSNIP\u2019) in the proposed market, the market is properly defined. If, however, consumers would respond to a SSNIP by purchasing the product from outside the proposed market, thereby making the SSNIP unprofitable, the proposed market definition is too narrow.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_74\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_74');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>74<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Eastman Kodak Co. v. Image Tech. Servs., Inc.<\/em>, 504 U.S. 451, 482 (1992) (\u201cThe proper market definition in this case can be determined only after a factual inquiry into the \u2018commercial realities&#8217; faced by consumers.\u201d) (quotation marks in original).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_75\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_75');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>75<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Theme<\/em>, 546 F.3d at 1002 (Under the Act, \u201c[a] relevant market is identified by considering commodities reasonably interchangeable by consumers for the same purposes. Put another way, the relevant market includes all sellers or producers who have actual or potential ability to deprive each other of significant levels of business.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_76\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_76');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>76<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See In re Ins. Brokerage Antitrust Litig.<\/em>, 618 F.3d 300, 317 (3d Cir. 2010) (\u201cWhile pleading exclusively <em>per se<\/em> violations can lighten a plaintiff\u2019s litigation burdens, it is not a riskless strategy. If the court determines that the restraint at issue is sufficiently different from the per se archetypes to require application of the rule of reason, the plaintiff\u2019s claims will be dismissed.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_77\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_77');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>77<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Brunswick Corp. v. Pueblo Bowl\u2013O\u2013Mat, Inc.<\/em>, 429 U.S. 477, 489 (1977) (An antitrust injury is one that \u201cshould reflect the anticompetitive effect either of the violation or of anticompetitive acts made possible by the violation.\u201d); <em>Rebel Oil Co. v. Atl. Richfield Co.<\/em>, 51 F.3d 1421, 1433 (9th Cir. 1995) (The doctrine of antitrust injury requires a private plaintiff to \u201cprove that his loss flows from an anticompetitive aspect or effect of the defendant\u2019s behavior&#8230;.\u201d); <em>Atl. Richfield Co. v. USA Petroleum Co.<\/em>, 495 U.S. 328, 344 (1990) (\u201cThe antitrust injury requirement ensures that a plaintiff can recover only if the loss stems from a competition-reducing aspect or effect of the defendant\u2019s behavior.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_78\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_78');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>78<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Clayworth v. Pfizer, Inc.<\/em>, 49 Cal. 4th 758, 787 (2010) (\u201c[I]n an antitrust price-fixing case, the presumptive measure of damages is the amount of the overcharge paid by the plaintiff.\u201d); <em>Glen Holly Ent., Inc. v. Tektronix, Inc.<\/em>, 352 F.3d 367, 374 (9th Cir. 2003) (\u201cThe [challenged] agreement detrimentally changed the market make-up and limited consumers\u2019 choice to one source of output. One form of antitrust injury is coercive activity that prevents its victims from making free choices between market alternatives.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_79\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_79');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>79<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Knevelbaard<\/em>, 232 F.3d at 988 (9th Cir. 2000) (Plaintiffs, who supplied milk to cheese producers, stated actionable antitrust injury under the Act by plausibly alleging that these producers had colluded to depress the prices that they paid for plaintiffs\u2019 milk).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_80\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_80');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>80<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Catch Curve, Inc. v. Venali, Inc.<\/em>, 519 F. Supp. 2d 1028, 1035-36 (C.D. Cal. 2007) (A competitor suffers antitrust injury if the defendant uses wrongful exclusionary conduct to hinder or prevent it from competing, so that the defendant can acquire or preserve market power); <em>see also W. Penn Allegheny Health Sys., Inc. v. UPMC<\/em>, 627 F.3d 85, 102 (3d Cir. 2010) (An antitrust injury occurs to a competitor or other market participant when its \u201cinjuries are the means by which the defendants seek to achieve their anticompetitive end.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_81\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_81');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>81<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See W. Penn Allegheny<\/em>, 627 F.3d at 101 (\u201cThe antitrust-injury requirement helps ensure that the harm claimed by the plaintiff corresponds to the rationale for finding a violation of the antitrust laws in the first place&#8230;.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_82\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_82');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>82<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See<\/em> Cal. Bus. &amp; Prof. Code \u00a7\u00a7 16750(a), 16761; <em>Borgeson v. Archer-Daniels Midland Co<\/em>., 909 F. Supp. 709, 717 (C.D. Cal. 1995) (\u201cIn addition to establishing a public cause of action (enforced by the State Attorney General), the Cartwright Act gives a private right to sue for damages and treble damages to each person who suffers harm.\u201d); <em>Carver v. Chevron U.S.A., Inc<\/em>., 119 Cal. App. 4th 498, 504 (2004) (\u201cThe public policy implicit in the unilateral fee\u2013shifting provision of section 16750, subdivision (a) is to encourage injured parties to broadly and effectively enforce the Cartwright Act in situations where they otherwise would not find it economical to sue. The Legislature clearly intended to give special treatment to antitrust claims under the Cartwright Act by creating this one-way fee-shifting right for a successful plaintiff but not for a defendant who successfully defends such a claim.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_83\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_83');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>83<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See <\/em>Cal. Bus. &amp; Prof. Code \u00a7\u00a7 16750(c)\u2013(g), 16754, 16760.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_84\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_84');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>84<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See <\/em>Cal. Bus. &amp; Prof. Code \u00a7 16750(a), (c).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_85\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_85');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>85<\/a><\/th> <td class=\"footnote_plugin_text\">See Cal. Bus. &amp; Prof. Code \u00a7 16755(a).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_86\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_86');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>86<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See F. &amp; A. Ice Cream Co. v. Arden Farms Co.<\/em>, 98 F. Supp. 180, 190\u2013191 (S.D. Cal. 1951) (confirming this point).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_87\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_87');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>87<\/a><\/th> <td class=\"footnote_plugin_text\"><\/span><em style=\"font-size: 18px; font-family: inherit;\">See, e.g., United States v. Aiyer<\/em><span style=\"font-size: 18px; font-family: inherit;\">, 33 F.4th 97, 109 (2d Cir. 2022) (a recent, successful criminal prosecution for price-fixing and bid-rigging); <\/span><em style=\"font-size: 18px; font-family: inherit;\">see also <\/em><span style=\"font-size: 18px; font-family: inherit;\"><em>U.S. Dept of Just., Just. Manual<\/em> \u00a7 7-1.100 (2020) (\u201cWhen it comes to enforcement, the Division\u2019s policy, in general, is to proceed by criminal investigation and prosecution in cases involving horizontal, \u2018per se\u2019 unlawful agreements such as price fixing, bid rigging, and market allocation.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_88\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_88');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>88<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See <\/em>Cal. Bus. &amp; Prof. Code \u00a7\u00a7 16750(c)\u2013(g), 16754, 16755(a).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_89\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_89');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>89<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See<\/em> Cal. Bus. &amp; Prof. Code \u00a7\u00a7 16750(a); <em>Carver<\/em>, 119 Cal. App. 4th at 503 (\u201cThe Cartwright Act contains a unilateral fee\u2013shifting provision that allows an award of attorney fees to a prevailing plaintiff but not to a prevailing defendant.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_90\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_90');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>90<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See<\/em> Cal. Code Civ. Proc. \u00a7 128.5(a) (\u201cA trial court may order a party, the party\u2019s attorney, or both, to pay the reasonable expenses, including attorney\u2019s fees, incurred by another party as a result of actions or tactics, made in bad faith, that are frivolous or solely intended to cause unnecessary delay.\u201d); Fed. R. Civ. P. 11 (subjects plaintiff\u2019s attorney or a pro se plaintiff to sanctions for making claims or other court submissions in bad faith); Cal. Code Civ. Proc. \u00a7 128.7 (directly analogous to Fed. R. Civ. P. 11).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_91\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_91');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>91<\/a><\/th> <td class=\"footnote_plugin_text\"><\/span><em style=\"font-size: 18px; font-family: inherit;\">See Kumar v. Ramsey<\/em><span style=\"font-size: 18px; font-family: inherit;\">, 71 Cal. App. 5th 1110, 1120\u201321 (2021) (\u201cLike its federal counterpart &#8230; rule 11 of the Federal Rules of Civil Procedure, Code of Civil Procedure section 128.7 should be utilized only in the rare and exceptional case where the action is clearly frivolous, legally unreasonable or without legal foundation, or brought for an improper purpose. Because our adversary system requires that attorneys and litigants be provided substantial breathing room to develop and assert factual and legal arguments, section 128.7 sanctions should not be routinely or easily awarded even for a claim that is arguably frivolous, and instead should be made with restraint.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_92\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_92');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>92<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Bertero v. Nat\u2019l Gen. Corp.<\/em>, 13 Cal. 3d 43, 50 (1974) (\u201cTo establish a cause of action for the malicious prosecution of a civil proceeding, a plaintiff must plead and prove that the prior action (1) was commenced by or at the direction of the defendant and was pursued to a legal termination in his, plaintiff\u2019s favor; (2) was brought without probable cause; and (3) was initiated with malice.\u201d); <em>Zamos v. Stroud<\/em>, 32 Cal. 4th 958, 970 (2004) (An attorney can be held liable for malicious prosecution when he files an untenable claim or continues \u201cto prosecute a lawsuit discovered to lack probable cause.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_93\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_93');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>93<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Albertson v. Raboff<\/em>, 46 Cal. 2d 375, 383 (1956) (\u201cThe malice required in an action for malicious prosecution is not limited to actual hostility or ill will toward plaintiff but exists when the proceedings are instituted primarily for an improper purpose&#8230;. [T]he principal situations in which the civil proceedings are initiated for an improper purpose [include] &#8230; proceedings &#8230; initiated for the purpose of forcing a settlement which has no relation to the merits of the claim.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_94\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_94');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>94<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Jay v. Mahaffey<\/em>, 218 Cal. App. 4th 1522, 1539 (2013) (\u201c[M]alicious prosecution is a disfavored action. The elements of malicious prosecution have historically been carefully circumscribed so that litigants with potentially valid claims will not be deterred from bringing their claims to court by the prospect of a subsequent malicious prosecution claim.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_95\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_95');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>95<\/a><\/th> <td class=\"footnote_plugin_text\"><\/span><em style=\"font-size: 18px; font-family: inherit;\">See Sycamore Ridge Apartments, LLC v. Naumann<\/em><span style=\"font-size: 18px; font-family: inherit;\">, 157 Cal. App. 4th 1385, 1402 (2007) (\u201cA litigant will lack probable cause for his action either if he relies upon facts which he has no reasonable cause to believe to be true, or if he seeks recovery upon a legal theory which is untenable under the facts known to him.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_96\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_96');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>96<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See AT &amp; T Mobility<\/em>, 707 F.3d at 1112\u201313 (\u201cApplying California law to anticompetitive conduct undertaken within California [that results in harm to consumers in another state] advances the Cartwright Act\u2019s overarching goals of maximizing effective deterrence of antitrust violations, enforcing the state\u2019s antitrust laws against those violations that do occur, and ensuring disgorgement of any ill-gotten proceeds.\u201d); <em>see also Allstate<\/em>, 449 U.S. at 312\u201313 (\u201cFor a State\u2019s substantive law to be selected in a constitutionally permissible manner, that State must have a significant contact or significant aggregation of contacts, creating state interests, such that choice of its law is neither arbitrary nor fundamentally unfair.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_97\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_97');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>97<\/a><\/th> <td class=\"footnote_plugin_text\"><em style=\"font-size: 18px; font-family: inherit;\">See Qualcomm<\/em><span style=\"font-size: 18px; font-family: inherit;\">, 292 F. Supp. 3d at 974 (\u201cThe Cartwright Act proscribes \u2018a combination of capital, skill or acts by two or more persons\u2019 for an unlawful purpose. By its terms, the Act does not cover \u2018wrongful conduct on the part of a single entity.\u2019\u201d) (quoting <\/span><em style=\"font-size: 18px; font-family: inherit;\">Bondi<\/em><span style=\"font-size: 18px; font-family: inherit;\">, 267 Cal. App.2d at 678); <\/span><em style=\"font-size: 18px; font-family: inherit;\">Asahi<\/em><span style=\"font-size: 18px; font-family: inherit;\">, 204 Cal. App. at 11 (\u201c[A]n indispensable element of any action under the Cartwright Act is proof of a \u2018combination of resources of two or more independent interests for the purpose of restraining commerce and preventing market competition.\u2019\u201d) (quoting <\/span><em style=\"font-size: 18px; font-family: inherit;\">G.H.I.I<\/em><span style=\"font-size: 18px; font-family: inherit;\">., 147 Cal. App.3d at 266).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_98\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_98');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>98<\/a><\/th> <td class=\"footnote_plugin_text\">S<em>ee<\/em>\u00a0<\/span><em>Dimidowich v. Bell &amp; Howell<\/em>, 803 F.2d 1473, 1478 (9th Cir. 1987), <em>opinion modified on denial of reh\u2019g<\/em>, 810 F.2d 1517 (9th Cir. 1987).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_99\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_99');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>99<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Texaco<\/em>, 46 Cal. 3d at 1168.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_100\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_100');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>100<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See <\/em><em style=\"font-size: 18px; font-family: inherit;\">Kolling<\/em>, 137 Cal. App. 3d at 720.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_101\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_101');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>101<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See California v. ARC Am. Corp.<\/em>, 490 U.S. 93, 102 (1989) (\u201c[F]ederal antitrust laws do not pre-empt state law.\u201d); <em>see also Redwood Theatres, Inc. v. Festival Enterprises, Inc.<\/em>, 908 F.2d 477, 480 (9th Cir. 1990) (\u201cCalifornia courts have held that the Cartwright Act applies to transactions in interstate commerce.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_102\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_102');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>102<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Selevan<\/em>, 584 F.3d at 90 (\u201cIn implementing the Commerce Clause, the Supreme Court has adhered strictly to the principle that the right to engage in interstate commerce is not the gift of a state, and that a state cannot regulate or restrain it. It flows from this principle that the negative or dormant implication of the Commerce Clause [of the U.S. Constitution] prohibits state taxation or regulation that discriminates against or unduly burdens interstate commerce and thereby impedes free private trade in the national marketplace.\u201d); <em>Quik Payday, Inc. v. Stork<\/em>, 549 F.3d 1302, 1307 (10th Cir. 2008) (\u201cThe Supreme Court long has recognized that the affirmative grant of authority to Congress to regulate interstate commerce also encompasses an implicit or \u2018dormant\u2019 limitation on the authority of the States to enact legislation affecting interstate commerce. State statutes may violate the dormant limitation in three ways: First, a statute that clearly discriminates against interstate commerce in favor of intrastate commerce is virtually invalid <em>per se<\/em> and can survive only if the discrimination is demonstrably justified by a valid factor unrelated to economic protectionism. Second, if the statute does not discriminate against interstate commerce, it will nevertheless be invalidated under the Pike balancing test if it imposes a burden on interstate commerce incommensurate with the local benefits secured. Third, a statute will be invalid per se if it has the practical effect of extraterritorial control of commerce occurring entirely outside the boundaries of the state in question.\u201d); <em>Pike v. Bruce Church, Inc.<\/em>, 397 U.S. 137, 142 (1970) (\u201cWhere the statute regulates even-handedly to effectuate a legitimate local public interest, and its effects on interstate commerce are only incidental, it will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits. If a legitimate local purpose is found, then the question becomes one of degree. And the extent of the burden that will be tolerated will of course depend on the nature of the local interest involved, and on whether it could be promoted as well with a lesser impact on interstate activities.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_103\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_103');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>103<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See SC Manufactured Homes<\/em>, 162 Cal. App. 4th at 84 (\u201cThe [Act] prohibits conspiracies that unreasonably restrain trade.\u201d); <em>Asahi<\/em>, 204 Cal. App. at 11 (2012) (\u201c[A]n indispensable element of any action under the Cartwright Act is proof of a \u2018combination of resources of two or more independent interests for the purpose of restraining commerce and preventing market competition.\u2019\u201d) (quoting <em>G.H.I.I.<\/em>, 147 Cal. App.3d at 266).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_104\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_104');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>104<\/a><\/th> <td class=\"footnote_plugin_text\"><\/span><em style=\"font-size: 18px; font-family: inherit;\">See Fisherman\u2019s Wharf<\/em><span style=\"font-size: 18px; font-family: inherit;\">, 114 Cal. App. 4th at 317 (\u201cThe Cartwright Act targets contracts in restraint of trade and promotes a free market by proscribing trusts.\u201d); <\/span><em style=\"font-size: 18px; font-family: inherit;\">Kolling<\/em><span style=\"font-size: 18px; font-family: inherit;\">, 137 Cal. App. 3d at 720 (\u201c[T]he \u2018conspiracy\u2019 or \u2018combination\u2019 necessary to support an antitrust action [under the Act] can be found where a supplier or producer, by coercive conduct, imposes restraints to which distributors involuntarily adhere. If a single trader pressures customers or dealers into adhering to resale price maintenance, territorial restrictions, exclusive dealing arrangements or illegal tie-ins, an unlawful combination is established, irrespective of any monopoly or conspiracy, and despite the recognized right of a producer to determine with whom it will deal.\u201d); <\/span><em style=\"font-size: 18px; font-family: inherit;\">Qualcomm<\/em><span style=\"font-size: 18px; font-family: inherit;\">, 292 F. Supp. 3d at 974 (same).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_105\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_105');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>105<\/a><\/th> <td class=\"footnote_plugin_text\"><\/span><em style=\"font-size: 18px; font-family: inherit;\">See<\/em><span style=\"font-size: 18px; font-family: inherit;\"> Cal. Bus. &amp; Prof. Code \u00a7 16750(a); <\/span><em style=\"font-size: 18px; font-family: inherit;\">Stanislaus<\/em><span style=\"font-size: 18px; font-family: inherit;\">, 782 F. Supp. 2d at 1080 (\u201cUnlike the federal Sherman Act, the Cartwright Act grants indirect purchasers standing to sue, as well as direct purchasers.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_106\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_106');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>106<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Texaco<\/em>, 46 Cal. 3d at 1168 (the Act does not govern anticompetitive mergers or acquisitions); <em>Qualcomm<\/em>, 292 F. Supp. 3d at 974; (\u201cThe Cartwright Act proscribes \u2018a combination of capital, skill or acts by two or more persons\u2019 for an unlawful purpose. By its terms, the Act does not cover \u2018wrongful conduct on the part of a single entity.\u2019\u201d) (quoting <em>Bondi<\/em>, 267 Cal. App.2d at 678).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_107\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_107');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>107<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See id<\/em>.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_37192_1_108\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_37192_1('footnote_plugin_tooltip_37192_1_108');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>108<\/a><\/th> <td class=\"footnote_plugin_text\"><\/span><em style=\"font-size: 18px; font-family: inherit;\">See Texaco<\/em><span style=\"font-size: 18px; font-family: inherit;\">, 46 Cal. 3d at 1153\u20131169 (extended explanation of these points with citations to numerous authorities); <\/span><em style=\"font-size: 18px; font-family: inherit;\">Cipro<\/em><span style=\"font-size: 18px; font-family: inherit;\">, 61 Cal. 4th at 142 (\u201cInterpretations of federal antitrust law are at most instructive, not conclusive, when construing the Cartwright Act, given that the Cartwright Act was modeled not on federal antitrust statutes but instead on statutes enacted by California\u2019s sister states around the turn of the 20th century.\u201d) (citing <\/span><em style=\"font-size: 18px; font-family: inherit;\">Aryeh v. Canon Business Solutions, Inc<\/em><span style=\"font-size: 18px; font-family: inherit;\">., 55 Cal. 4th 1185, 1195 (2013)); <\/span><em style=\"font-size: 18px; font-family: inherit;\">Freeman<\/em><span style=\"font-size: 18px; font-family: inherit;\">, 77 Cal. App. 4th at 183 (\u201cIn analyzing [plaintiff\u2019s] Cartwright Act claims we frequently examine federal precedent because the Cartwright Act is similar in language and purpose to the Sherman Act. However, federal precedents must be used with caution because the acts, although similar, are not coextensive.\u201d).<\/td><\/tr>\r\n\r\n <\/tbody> <\/table> <\/div><\/div><script type=\"text\/javascript\"> function footnote_expand_reference_container_37192_1() { jQuery('#footnote_references_container_37192_1').show(); jQuery('#footnote_reference_container_collapse_button_37192_1').text('\u2212'); } function footnote_collapse_reference_container_37192_1() { jQuery('#footnote_references_container_37192_1').hide(); jQuery('#footnote_reference_container_collapse_button_37192_1').text('+'); } function footnote_expand_collapse_reference_container_37192_1() { if (jQuery('#footnote_references_container_37192_1').is(':hidden')) { footnote_expand_reference_container_37192_1(); } else { footnote_collapse_reference_container_37192_1(); } } function footnote_moveToReference_37192_1(p_str_TargetID) { footnote_expand_reference_container_37192_1(); var l_obj_Target = jQuery('#' + p_str_TargetID); if (l_obj_Target.length) { jQuery( 'html, body' ).delay( 0 ); jQuery('html, body').animate({ scrollTop: l_obj_Target.offset().top - window.innerHeight * 0.2 }, 380); } } function footnote_moveToAnchor_37192_1(p_str_TargetID) { footnote_expand_reference_container_37192_1(); var l_obj_Target = jQuery('#' + p_str_TargetID); if (l_obj_Target.length) { jQuery( 'html, body' ).delay( 0 ); jQuery('html, body').animate({ scrollTop: l_obj_Target.offset().top - window.innerHeight * 0.2 }, 380); } }<\/script>","protected":false},"excerpt":{"rendered":"<p>\u201cAn Overview of California\u2019s Cartwright Act\u201d (By William Markham, \u00a9 2024)Introduction California\u2019s principal antitrust law, the Cartwright Act (the \u201cAct\u201d), is codified at sections 16700\u201316770 of California\u2019s Business &amp; Professions Code. Broadly stated, the Act prohibits contracts, combinations, and conspiracies that unlawfully restrain trade in California.(((See Cal. Bus. &amp; Prof. Code \u00a7\u00a7 16720, 16726; SC [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":48,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"class_list":["post-37192","page","type-page","status-publish","hentry"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.8 (Yoast SEO v24.8.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>California&#039;s Cartwright Act (By William Markham, \u00a9 2024) - LAW OFFICES OF WILLIAM MARKHAM, P.C.<\/title>\n<meta name=\"description\" content=\"California\u2019s principal antitrust law is codified in the Cartwright Act (Cal. Bus. &amp; Prof. Code, \u00a7\u00a7 16700\u201316770), which is analogous to section 1 of the Federal Sherman Act. But there are important differences between these two laws. This article provides an overview of California\u2019s Cartwright Act.\" \/>\n<meta name=\"robots\" content=\"noindex, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"California&#039;s Cartwright Act (By William Markham, \u00a9 2024)\" \/>\n<meta property=\"og:description\" content=\"California\u2019s principal antitrust law is codified in the Cartwright Act (Cal. Bus. &amp; Prof. Code, \u00a7\u00a7 16700\u201316770), which is analogous to section 1 of the Federal Sherman Act. But there are important differences between these two laws. This article provides an overview of California\u2019s Cartwright Act.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.markhamlawfirm.com\/mystaging\/law-articles\/californias-cartwright-act-by-william-markham-2024\/\" \/>\n<meta property=\"og:site_name\" content=\"LAW OFFICES OF WILLIAM MARKHAM, P.C.\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/LawOfficesofWilliamMarkhamPC\/\" \/>\n<meta property=\"article:modified_time\" content=\"2025-03-29T09:41:37+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.markhamlawfirm.com\/mystaging\/wp-content\/uploads\/2023\/01\/sandiego-harbor-2.webp\" \/>\n\t<meta property=\"og:image:width\" content=\"1917\" \/>\n\t<meta property=\"og:image:height\" content=\"1074\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/webp\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"71 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.markhamlawfirm.com\/mystaging\/law-articles\/californias-cartwright-act-by-william-markham-2024\/\",\"url\":\"https:\/\/www.markhamlawfirm.com\/mystaging\/law-articles\/californias-cartwright-act-by-william-markham-2024\/\",\"name\":\"California's Cartwright Act (By William Markham, \u00a9 2024) - LAW OFFICES OF WILLIAM MARKHAM, P.C.\",\"isPartOf\":{\"@id\":\"https:\/\/www.markhamlawfirm.com\/mystaging\/#website\"},\"datePublished\":\"2024-12-26T07:18:25+00:00\",\"dateModified\":\"2025-03-29T09:41:37+00:00\",\"description\":\"California\u2019s principal antitrust law is codified in the Cartwright Act (Cal. 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