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Restraint of Trade under California’s Cartwright Act

An Evolving Area of Competition Law

We have substantial experience litigating and advising clients about claims made under California’s Cartwright Act, which is California’s principal competition law. It is codified at Cal. Bus. & Prof. Code § 16700 et seq. and prohibits any unlawful restraint of trade that substantially affects California commerce.

Historically, California case law on restraint of trade followed the federal law developed under Section 1 of the Sherman Act, but a gap between the two bodies of law has emerged and will likely become more conspicuous. According to settled California case law, federal precedents under the Sherman Act constitute only persuasive authority for claims asserted under the Cartwright Act, since the California law is patterned after a draft version of the Sherman Act that never became federal law, but was adopted by several States, including California.

This distinction affords great leeway to the California courts, which usually give full effect to California’s longstanding tradition of vigorous antitrust enforcement, and which on the whole appear not to have been enthusiastic proponents of the more permissive consumer-welfare approach.

In the meantime, the federal courts have embraced consumer-welfare theories, whose principal effect has been to afford impunity to monopolists and even celebrate their contributions to our economy and society.

If the gap between these two bodies of law widens, which seems likely, it will likely give rise sooner or later to litigation over Congress’s dormant powers under the Commerce Clause of the U.S. Constitution: the central question will concern the extent to which California or any other State can regulate trade and commerce that affect its own commerce, since any such regulation must inevitably affect the commerce of other States.

These matters remain unresolved and await further development.

MR. MARKHAM’S ARTICLES ON ANTITRUST LAW

AN OVERVIEW OF ANTITRUST LAW (By William Markham, © 2000)

“Antitrust law is the law of competition and is perhaps the least understood law of all. This article provides an overview and explanation of the essential principles of antitrust law.”
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ANTITRUST EXEMPTIONS AND IMMUNITIES (By William Markham, © 2022)

“Over the years, Congress and the federal courts have established various immunities from federal antitrust law, removing from its reach specified commercial activities and even entire lines of commerce.”
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HOW THE CONSUMER-WELFARE STANDARD TRANSFORMED CLASSICAL ANTITRUST LAW (William Markham, © 2021)

“Since the late 1970s, antitrust law in the United States has been transformed out of recognition and rendered largely toothless by consumer-welfare jurisprudence….,”
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READ MR. MARKHAM’S ARTICLES ON TRIAL PROCEDURE AND CONTRACT LAW

MAKING SENSE OF THE RULES OF EVIDENCE AND PRESENTING YOUR EVIDENCE AT TRIAL (By William Markham, 2011)

“I try in this article simply to set forth a list of simple rules to explain the key points of the law of evidence. I also offer several pointers on organizing evidence in order to present it competently at trial.”
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ANATOMY OF A LAWSUIT (By William Markham, © 2007)

“This article is written for non-lawyers, young litigators, and non-litigator attorneys who wish to understand how a lawsuit works in practice from start to finish.”
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AN OVERVIEW OF CONTRACT LAW (By William Markham, 2002)

“Contract law lies at the heart of our system of laws and serves as the foundation of our entire society…. Our society depends upon free exchange in the marketplace at every level. Contract law makes this possible.”
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