Under the permissive part of section 1 of the act, the plaintiff need not negative facts permitting associations organized to market commodities at a reasonable profit. The existence of such facts is to be pleaded and proven by the defendant. People v. Jevne Co., 179 Cal. 621, 178 Pac. 517 (1919). A conspiracy illegal under the statute can be effectuated by conduct, tacit agreement or mutual understanding. An express agreement need not be shown. People v. Sacramento Butcher's Protective Ass'n, supra. A private person "injured in business or property" by a combination illegal under the Cartwright Act can recover double damages but cannot enjoin the illegal practices. See Overland Publishing Co. v. Union Lithograph Co., supra. That plaintiff is a member of an illegal combination is no defense to an action on an obligation not resulting from such combination. Mortgage Guarantee Co. v. Patch, 116 Cal. App. 584, 3 Pac. (2d) 35 (1931). A bill to enjoin the breach of a covenant by a retiring partner not to compete was met with a cross bill praying that the dissolution of the partnership be rescinded because the continuing partner had fraudulently concealed the fact that the retiring partner's interest was increased in value from $17,500 to $25,000 by certain combinations and arrangements consummated with competitors. The cross bill was held demurrable. An injunction for the plaintiff was reversed only on the ground of plaintiff's failure to establish succession of interest. Meyers v. Merillion, 118 Cal. App. 352, 50 Pac. 662 (1897). While the statute does not expressly so provide, the offense defined in the act is a misdemeanor. Union Ice Co. v. Rose, 11 Cal. App. 357, 104 Pac. 1006 (1909). B. EXCEPTIONS TO GENERAL ANTITRUST LAWS Gen. Laws (Deering, 1937) Act 8782 permits contracts fixing the sale or resale price of branded commodities. The statute is inapplicable to horizontal contracts between producers, between wholesalers, or between retailers as to sale or resale prices. Sec. 2. Sec. 55.5 (d) of the Alcoholic Beverage Control Act, Gen. Laws (Deering, 1937) Act 3796, is to the same effect. Agric. Code (Deering, 1937) Section 1218 provides that a cooperative agricultural marketing association organized under Sections 1191 to 1221 shall not be deemed to be a conspiracy or combination in restraint of trade or an illegal monopoly. See Tying Contracts and Exclusive Dealing Arrangements, infra. See also Cooperatives in projected study. Gen. Laws (Deering, 1937) Act 2947h Section 28 provides that a cooperative association for the manufacture, processing, canning, and distribution of fishery products organized under the act, sections 1 to 31, shall not be deemed to be a conspiracy or combination in restraint of trade or an illegal monopoly. See Tying Contracts and Exclusive Dealing Arrangements, infra. See also Cooperatives in projected study. Commodities Several statutes regulating competition in particular commodities provide that compliance with the statute shall be a valid and complete defense to any action brought under the anti-trust law. Agric. Code (Deering, 1937) sec. 1300.24 (d) (agricultural commodities); sec. 750 (manufactured dairy products); Gen. Laws (Deering, 1937) Act 146, sec. 16 (agricultural products), Act 2666, sec. 14b (processed foodstuffs). See Vol. State Price Control Legislation: Administrative Price Control. Cooperatives. Judicial Decisions The marketing contracts between a cooperative marketing association and its members are not invalid under the proviso of the antitrust law making the statute inapplicable to associations organized for the purpose of marketing its members' products at a reasonable profit. Anaheim Citrus Fruit Assn. v. Yeoman, 51 Cal. App. 759, 197 Pac. 959 (1921); Poultry Producers of Southern California Inc. v. Barlow, 189 Cal. 278, 208 Pac. 93 (1922); California Bean Growers' Ass'n. v. Rindge Land & Navigation Co., 199 Cal. 168, 248 Pac. 658 (1926). See Tying Contracts and Exclusive Dealing Arrangements, infra. Resale Price Maintenance. A contract fixing the resale price of a commodity is valid in the absence of a combination to fix prices, the prices fixed being reasonable. Munter v. Eastman Kodak Co., supra. The Cartwright Act permitting agreements to market commodities at a reasonable profit validates resale price restrictions. Ghirardelli Co. v. Hunsicker, supra. See State Price Control Legislation; Resale Price Main tenance. The offenses described in the Cartwright Act are practices by a horizontal combination. A wholesaler's refusal to sell to a retailer in order to maintain retail prices is therefore not a violation of the statute. Munter v. Eastman Kodak Co., supra. See also, Grogan v. Chaffee, 156 Cal. 611, 105 Pac. 745 (1909). Labor Agreements. An agreement between a printers' trade association and a labor union whereby the union agreed to work only for members of the association for the purpose of enforcing certain restraints of trade created by the association is illegal under the antitrust law, notwithstanding the proviso exempting labor. Under the proviso a labor union may engage only in lawful acts for a legitimate object. Overland Publishing Co. v. Crocker Co., 193 Cal. 109, 222 Pac. 812 (1924). C. SPECIAL ANTITRUST LAWS 1. Special Industry Antitrust Acts Civ. Code (Deering, 1937) Section 465 (12) provides that no railroad corporation shall purchase the property or hold the stocks or bonds of any railroad corporation operated in competition with it. Gen. Laws (Deering, 1937) Act 5634 provides that contracts, combinations in the form of trusts, and agreements between common carrier railroads and oil pipe lines, not common carriers, which transport crude oil, petroleum or the products thereof for a distance of at least thirty-five miles in the aggregate to any refinery or to any selling, marketing, consuming, or shipping point for such commodities, whereby such oil pipe lines secure or are enabled to secure unreasonable control or monopoly or to bring about unreasonable restraint of competition in the purchase, sale, or transportation of such commodities, are illegal. The statute further provides that such a combination shall be deemed illegal, in restraint of trade, and contrary to public policy whenever: (a) Such oil pipe line is constructed along the right-of-way of such railroad for a distance of at least five miles with the permission of such railroad, the oil pipe line is owned or controlled by the railroad or the pipe line and the railroad have common owners or directors, and the pipe line is engaged in the business or purchasing, transporting, and reselling petroleum or its products; and (b) The schedule of rates for the transportation of such commodities filed by the railroad with the railroad commission is so high, compared to the actual cost of transportation, as to tend to prevent competition in such transportation between the oil pipe line and the railroad, to prevent competition among producers of such crude oil or petroleum or enable the oil pipe line to restrain competition, secure a monopoly, fix the price in the sale or purchase of such commodities, or secure a monopoly in the transportation of such commodities. The statute defines "unreasonable" as the point at which the nature and extent of the restraint or control is injurious to the public welfare or hinders the necessary public use of the subject controlled or restrained. The penalty for violation of the statute is a fine not exceeding $5,000 or imprisonment not exceeding one year or both. The several district attorneys in the state are charged with the duty of enforcing the act and any person damaged by any violation may sue and recover actual damages. The statute further provides that upon violation, such oil pipe line shall either secure a license as a common carrier, subject to the complete supervision of the railroad commission, or secure from the railroad commission permission to procure a license from the Secretary of State to continue in business otherwise than as a common carrier, subject to the prohibitions set forth above, or, as a further alternative, cease to operate and do business. The act includes several sections setting out the procedure to be followed in securing a license and requiring the filing of monthly reports with the railroad commission on the operation of the business. Banks Act 654, section 1 (c) provides that no corporation organized in the state to engage in the business of international and foreign banking without the United States shall purchase, own, or control the stock of another corporation which is or which controls the stock of a corporation which is in substantial competition with the purchasing corporation. Such a corporation shall not purchase, own, or control the stock of any corporation engaged in the general business of buying or selling goods, wares, merchandise, or commodities in the United States. It is further provided that no such corporation shall control or fix the price of any such commodities. The license of any corporation violating these prohibitions is subject to forfeiture. Any agent of such a corporation is subject to fine or imprisonment or both. Agric. Code (Deering, 1937) Packing and Stockyards Sections 430 to 433 provide that no packer shall own or control, directly or indirectly, through stock ownership or control or otherwise, by himself or through his agents or employees, any interest in a stockyard. Gen. Laws (Deering, 1937) Act 372 provides that combinations or agreements to prevent any person from buying livestock, to fix the amount or minimum amount of commission in the sale of livestock received by commission merchants, to prevent a person from acting as commission merchant in livestock for such persons as see fit to engage his services, or to prevent the sale of livestock by commission merchants on such terms as they and the owners of such livestock shall agree, are unlawful. The act, sections 2 and 3, further provides that any rule, regulation, or bylaw of any corporation which has the purpose or tendency of preventing its members or stockholders from purchasing livestock from any person lawfully having the same for sale, is unlawful and void. The penalty for violation of the statute is a fine or imprisonment of not more than one year, or both. Any person damaged by any violation may sue and recover actual damages sustained. Hydroelectric Companies Act 9152, section 28 provides that contracts, combinations, or conspiracies between hydroelectric companies, whether through leases, trusts, or other devices, to limit the output, increase the price, or prevent the lowering of the price of electric power or to restrain trade in the generation, sale, and distribution of electric power are prohibited. All rights to the appropriation or the use of water in the state shall be forfeited by any person, firm, or corporation violating this Act by proceedings to be instituted by the Attorney General either on his own initiative or upon demand of the Water Commission. Violation of the provisions of the Act or any order or regulation of the Water Commission is declared a misdemeanor, punishable by fine or jail sentence or both. |