California. Practice Text

Chapter 6

for the

STATE OF CALIFORNIA

Updated and Revised by

Corey C. Watson, Esq.

Tammy A. Tsoumas, Esq.

Jonathan J. Faria, Esq.

Jason Kelly, Esq.

Logan MacCuish, Esq.

Kirkland & Ellis LLP

Los Angeles, California

The Section of Antitrust Law thanks Kathleen Foote, Senior Assistant Attorney

General, California Attorney General’s Office, for her review of this chapter.

The Section gratefully acknowledges Zorah Braithwaite, Esq., Mary B. Cranston,

Esq., Joy K. Fuyuno, Esq., Thomas Greene, Esq., Christopher B. Hockett, Esq., May

Y. Lee, Esq., Barbara Motz, Esq., J. Thomas Rosch, Esq., Karen Silverman, Esq.,

Robert P. Taylor, Esq. and Daniel M. Wall, Esq. for their work on this chapter in

prior editions.

California 6-iii

CONTENTS

1.Introduction ................................................................................................... 1

1.a.Overview ........................................................................................... 1

1.b.Source of Law–Statutes and Other .................................................... 1

1.c.History ............................................................................................... 4

1.d.Relation to Federal Law .................................................................... 5

1.e.Remedies ........................................................................................... 6

1.f.Enforcement ...................................................................................... 7

2.The Per Se Rule and the Rule of Reason ....................................................... 8

3.Horizontal Agreements Other Than Group Boycotts .................................. 11

3.a.Price Fixing ..................................................................................... 11

3.b.Market Allocation ........................................................................... 12

3.c.Customer Allocation ....................................................................... 12

3.d.Bid Rigging ..................................................................................... 12

3.e.Covenants Not to Compete ............................................................. 12

4.Group Boycotts ............................................................................................ 13

4.a.Concerted Refusals to Deal ............................................................. 13

4.b.Expulsion or Exclusion from Membership in Trade

Associations or Other Groups ......................................................... 15

5.Resale Price Maintenance ............................................................................ 16

5.a.Generally ......................................................................................... 16

5.b.Monsanto Rule ................................................................................ 17

5.c.Impact of Leegin ............................................................................. 18

6.Nonprice Vertical Restraints–Intrabrand ..................................................... 19

7.Nonprice Vertical Restrains–Interbrand ...................................................... 20

8.Tying Arrangements .................................................................................... 21

9.Dual Distribution ......................................................................................... 24

10.Intracorporate Conspiracy............................................................................ 25

11.Monopolization ............................................................................................ 27

11.a.Monopolization ............................................................................... 27

11.b.Attempts to Monopolize .................................................................. 28

11.c.Monopoly Leveraging ..................................................................... 28

11.d.Predatory Pricing ............................................................................. 28

11.e.Conspiracy to Monopolize .............................................................. 29

12.Mergers ........................................................................................................ 29

13.Discrimination & Other Single Firm Pricing Regulation ............................ 30

13.a.Price Discrimination ....................................................................... 30

13.a.1.Territorial or Locality Discrimination .......................... 32

13.a.2.Buyer Liability ............................................................. 33

13.a.3.Meeting Competition Defense ..................................... 33

13.a.4.Functional Classifications ............................................ 34

13.a.5.Preemption ................................................................... 35

13.a.6.Other Defenses and Exemptions .................................. 35

13.a.7.Brokerage ..................................................................... 36

13.a.8.Secret Payments or Allowances ................................... 36