Case Name: EVELLE J. YOUNGER, as Attorney General, etc., Plaintiff and Appellant, v. JOHN JENSEN et al., Defendants and Respondents
Court: Supreme Court of California
Jurisdiction: California
Decision Date: 1980-01-31
Citations: 26 Cal. 3d 397
Docket Number: L.A. No. 31024
Parties: EVELLE J. YOUNGER, as Attorney General, etc., Plaintiff and Appellant, v. JOHN JENSEN et al., Defendants and Respondents.
Judges: 
Reporter: California Reports
Volume: 26
Pages: 397–424

Head Matter:
[L.A. No. 31024.
Jan. 31, 1980.]
EVELLE J. YOUNGER, as Attorney General, etc., Plaintiff and Appellant, v. JOHN JENSEN et al., Defendants and Respondents.
Counsel
Evelle J. Younger, Attorney General, Warren J. Abbott, Robert H. O’Brien, Assistant Attorneys General, and Linda L. Tedeschi, Deputy Attorney General, for Plaintiff and Appellant.
Manatt, Phelps, Rothenberg & Tunney, Manatt, Phelps, Rothenberg, Manley & Tunney, Alan I. Rothenberg, Julia J. Rider, McCutchen, Black, Verleger & Shea, Jack D. Fudge, Michael L. Hickok, Ward L. Benshoof and Robert L. Norris for Defendants and Respondents.
Hughes, Hubbard & Reed, Norbert A. Schlei, Ronald C. Redcay, David A. Lombardero, Otis Pratt Pearsall, John A. Donovan, Philip H. Curtis, Ronald J. Tabak, Kenneth R. Dickerson, James R. Coffee, Don- aid A. Bright ánd Edward E. Vaill as Amici Curiae on behalf of Defendants and Respondents.

Opinion:
Opinion
NEWMAN, J.
The California Attorney General has appealed from orders that deny two petitions for enforcement of subpenas to give evidence at an investigation into possible antitrust violations affecting California in the marketing of natural gas that originates at Prudhoe Bay, Alaska.
The principal issues are (1) the authorized scope of the state's investigation, and (2) whether federal law preempts the investigation. Also at issue is whether the Attorney General is collaterally estopped by a federal court injunction that on preemptive grounds forbids investigatory proceedings that appear similar.
Government Code section 11180 empowers the Attorney General to investigate any subject under his department's jurisdiction. His power may be delegated to deputies (§ 11182) and includes the right to subpena witnesses and documentary evidence (§ 11181). If a subpena is disobeyed he may petition the superior court for enforcement. (§§ 11186, 11187.) After order to show cause and opportunity for hearing the court must require compliance "[i]f it appears. . that the subpena was regularly issued. . . ."(§ 11188.)
On January 19, 1976, the incumbent Attorney General delegated to certain deputies authority "to conduct an investigation into the ownership, production, sale and distribution of Prudhoe Bay, Alaska, natural gas insofar as it affects the State of California, to determine the existence, nature, and scope of violations of the federal and state antitrust laws pertaining to price fixing, monopolization, division of markets, and restraint of trade, and to hold hearings, issue subpenas, inspect books and records, take testimony, hear complaints, and administer oaths in connection therewith...Investigation was prompted by a request of the Public Utilities Commission (PUC) for the Attorney General's opinion on possible antitrust violations arising out of two funding agreements the PUC had approved between certain California utilities and certain producers of Prudhoe Bay gas. Under one agreement Pacific Lighting Gas Development Company (PLGD), an affiliate of Southern California Gas Company, agreed with Atlantic Richfield Company (ARCO) to assume loan payments in exchange for rights to 60 percent of ARCO's gas reserves at Prudhoe Bay. In the other agreement Pacific Gas and Electric Company (PG&E) agreed to assume similar payments in exchange for 30 percent of the Prudhoe Bay gas production of Exxon Corporation over a 20-year period. Both agreements contained "most favored nation" clauses providing that gas should be purchased at prices not less than the highest price paid any producer by any buyer for Prudhoe Bay gas to be delivered in the lower 48 states. PUC's question was whether those clauses would give rise to antitrust violations.
Replying by letter on January 2, 1976, the Attorney General opined not only that the most-favored-nation clauses might be contracts in restraint of trade but also that known facts indicated the need for further investigation of other possible antitrust violations in connection with sales of Alaska gas in California—including price-fixing agreements among producers, monopolization, and division of the California market. The letter urged the PUC to investigate and offered the Attorney General's cooperation.
On December 31, 1975, the Federal Power Commission (FPC) withdrew its authorization to include in gas pipelines' rate bases advance payments made to gas producers. (See Public Serv. Com'n, State of N. Y. v. Federal Power Com. (D.C.Cir. 1975) 511 F.2d 338 (conditioning the continuation of rate-base treatment of advance payments on further investigation of cost-effectiveness).) The two California funding agreements were then terminated by the parties, whereupon the PUC rescinded its approval of the PLGD-ARCO agreement on January 27, 1976, the PG&E-Exxon agreement on April 13, 1976.
The Attorney General instituted his investigation in the spring of 1976 by serving subpenas on the four parties to the agreements, requiring that documents be produced and that representatives testify. Responses were deemed inadequate, and accordingly he commenced the enforcement proceedings now before us (§§ 11186-11187)—one against Exxon, the other against PLGD and its secretary, John Jensen. The matter was heard by the trial court, which on April 19, 1977 denied enforcement in both proceedings on the sole ground that the Attorney General's investigation was preempted by federal regulation of interstate distribution of natural gas, particularly under laws conferring jurisdiction on the FPC (see 15 U.S.C. § 717 et seq.). The Attorney General's appeals present identical issues and thus were consolidated.
Authorized Scope of Investigation
The issue posed by the trial court's order is not the validity of hypothetical steps California might take to enforce its antitrust laws but rather the power of the state's chief law officer to investigate possible violation of law. Defendants were subpenaed pursuant to his delegation of authority "to conduct an investigation into the ownership, production, sale and distribution of Prudhoe Bay, Alaska, natural gas insofar as it affects the State of California, to determine the existence, nature, and scope of violations of the federal and state antitrust laws pertaining to price fixing, monopolization, division of markets, and restraint of trade." That clearly was within his over-all authority to investigate "matters relating to.. .subjects under [his] jurisdiction" (§ 11180; see footnote 1, ante, p. 402 and Shively v. Stewart (1966) 65 Cal.2d 475, 479 [55 Cal.Rptr. 217, 421 P.2d 65, 28 A.L.R.3d 1431]). Possible antitrust violations are, of course, subjects under his jurisdiction. (See, e.g., Bus. & Prof. Code, § 16750, 16752-16754.5, 16760.)
Because his investigative power extends to "matters relating to" antitrust violations it does not depend on any predetermination that violations actually or even probably have taken place. The breadth of the power was recognized in Brovelli v. Superior Court (1961) 56 Cal.2d 524 [15 Cal.Rptr. 630, 364 P.2d 462], which upheld "an investigation commenced by the attorney general to determine whether the Cartwright Act or the Unfair Practices Act was being violated by the concrete block industry" (id., at p. 526). Noting that mere investigation requires neither the filing of charges nor any formal proceedings, this court stated: "As has been said by the United States Supreme Court, the power to make administrative inquiry is not derived from a judicial function but is more analogous to the power of a grand jury, which does not depend on a case or controversy in order to get evidence but can investigate 'merely on suspicion that the law is being violated, or even just because it wants assurance that it is not.' (United States v. Morton Salt Co., 338 U.S. 632, 642-643 [70 S.Ct. 357, 94 L.Ed. 401].)" (56 Cal.2d at p. 529.)
The investigation here could be undertaken to inquire not only into the existence of violations but also into questions of California's jurisdiction over them. (See Okla. Press Pub. Co. v. Walling (1946) 327 U.S. 186, 215-217 [90 L.Ed. 614, 633-634, 66 S.Ct. 494, 166 A.L.R. 531].) Obviously there is an overlap between coverages of the Sherman Act (15 U.S.C. § 1 et seq.) and state antitrust laws that prohibit substantially the same conduct, such as California's Cartwright Act (Bus. & Prof. Code, § 16700 et seq.). Neither the Sherman Act nor the federal prohibition of undue burdens on interstate commerce (U.S. Const., art. I, § 8, cl. 3) prevents those state laws from reaching transactions that have interstate aspects but significantly affect state interests. (Speegle v. Board of Fire Underwriters (1946) 29 Cal.2d 34, 51 [172 P.2d 867]; R. E. Spriggs v. Adolph Coors Co. (1974) 37 Cal.App.3d 653, 659 [112 Cal.Rptr. 585].) Accordingly, the coordination of federal and state antitrust enforcement has become a prime example of "cooperative federalism." (Rubin, Rethinking State Antitrust Enforcement (1974) 26 U.Fla.L.Rev. 653, 680; see too Mosk, State Antitrust Enforcement and Coordination with Federal Enforcement (1962) 21 A.B.A. Antitrust Section 358; Fellmeth & Papageorge, A Treatise on State Antitrust Law and Enforcement (1978) 7-18.)
The present investigation has both interstate and intra-California aspects. Though dealing with gas to be imported from another state, defendants' actions are being investigated for possibly illegal impact on the marketing of that gas in California. Thus while conducting the investigation the Attorney General properly may be concerned not only with the possibilities of prosecution in California courts but also with formulations of enforcement policy in cooperation with federal authorities and with recommendations for remedial administrative rulings and legislation. (See 1 Davis, Administrative Law Treatise (2d ed. 1978) § 4:4.) Section 11180 surely empowers the Attorney General to gather information that is "not plainly incompetent or irrelevant to" those purposes. (See Endicott Johnson Corp. v. Perkins (1943) 317 U.S. 501, 509 [87 L.Ed. 424, 429, 63 S.Ct. 339].)
Natural Gas Act
Defendants contend the Attorney General's investigation is preempted by the Natural Gas Act, which gives the FPC regulatory control over rates charged for interstate sale and transportation of natural gas and over the construction, connections, and abandonment of interstate gas pipelines. (15 U.S.C. § 717-717w.) The act preempts state laws that would interfere with its regulatory scheme by fixing rates that are under FPC jurisdiction (Natural Gas Co. v. Panoma Corp. (1955) 349 U.S. 44 [99 L.Ed. 866, 75 S.Ct. 576] (producer's prices to interstate pipeline); Public Utilities Comm'n v. Gas Co. (1943) 317 U.S. 456 [87 L.Ed. 396, 63 S.Ct. 369] (interstate pipeline's prices to local distributor)), by requiring an interstate pipeline to purchase ratably from all connected wellheads (Northern Gas Co. v. Kansas Comm'n (1963) 372 U.S. 84 [9 L.Ed.2d 601, 83 S.Ct. 646]), or by ordering extension of an interstate pipeline to a local gas utility (Illinois Gas Co. v. Public Service Co. (1942) 314 U.S. 498 [86 L.Ed. 371, 62 S.Ct. 384]; cf. Cabot Corporation v. Public Service Com'n of W. Va. (S.D.W.Va. 1971) 332 F.Supp. 370 (denying state's authority to disapprove transfer of interstate pipeline facilities to entity holding FPC certificate)).
The Natural Gas Act does not, however, preclude application of federal antitrust laws to interstate gas transactions under FPC regulation. Generally, subsequent federal statutes repeal federal antitrust laws only when there is plain repugnancy, and then only to the extent necessary to make the new statutory scheme work. (Gordon v. New York Stock Exchange (1975) 422 U.S. 659, 682-683 [45 L.Ed.2d 463, 478-480, 95 S.Ct. 2598]; see Cantor v. Detroit Edison Co. (1976) 428 U.S. 579, 596 fn. 34 [49 L.Ed.2d 1141, 1152-1153, 96 S.Ct. 3110].) The FPC's power over rates does not preclude federal antitrust proceedings against anticompetitive conduct that affects the rate-making process. The FPC fixes rates by approving or revising those initiated by the regulated companies. (15 U.S.C. § 717c, 717d, 717f; United Gas Co. v. Mobile Gas Corp. (1956) 350 U.S. 332 [100 L.Ed. 373, 76 S.Ct. 373]; Atlantic Rfg. Co. v. Pub. Serv. Comm'n (1959) 360 U.S. 378, 388-392 [3 L.Ed.2d 1312, 1319-1321, 79 S.Ct. 1246].) Proceedings to prevent or redress anticompetitive agreements or monopolizations that contaminate the private component of the rate-making process do not undercut or impair the regulatory function. (Georgia v. Pennsylvania R. Co. (1945) 324 U.S. 439, 455-460 [89 L.Ed. 1051, 1061-1064, 65 S.Ct. 716].) Similarly the FPC's control of market allocation through its authority over pipeline interconnections, acquisitions, construction, and abandonment (15 U.S.C. § 717f) does not preclude challenges to that allocation under federal antitrust law. (California v. Fed. Power Comm'n (1962) 369 U.S. 482 [8 L.Ed.2d 54, 82 S.Ct. 901] (FPC approval of pipeline merger must be stayed pending Justice Department's suit under Clayton Act); Otter Tail Power Co. v. United States (1973) 410 U.S. 366 [35 L.Ed.2d 359, 93 S.Ct. 1022] (FPC authority to order electric utility interconnections (16 U.S.C. § 824a(c); cf. Natural Gas Act, 15 U.S.C. § 717f(a)) does not preclude Justice Department's Sherman Act suit for monopolistic refusal to supply wholesale electric power).) Though the FPC must take antitrust considerations into account when it determines "public interest" and "public convenience and necessity" (15 U.S.C. § 717f), it has "no power to insulate utilities under its regulation from the operation of the antitrust acts, or to determine when an antitrust violation has taken place. Otter Tail Power Co. v. United States, 410 U.S. 366, 93 S.Ct. 1022, 35 L.E.2d 359 (1973)." (Monsanto Co. v. United Gas Pipe Line Company (D.D.C. 1973) 360 F.Supp. 1054, 1057, affd. (1974) 489 F.2d 1272 [160 App.D.C. 148]; accord, Northern Natural Gas Co. v. Federal Power Comm'n (1968) 399 F.2d 953, 959-961 [130 App.D.C. 220]; City of Pittsburgh v. Federal Power Commission (1956) 237 F.2d 741, 754 [99 App.D.C. 113].)
Despite the compatibility of the Natural Gas Act with federal antitrust enforcement, defendants here contend that the act precludes the Attorney General's investigating possible violations of California antitrust law. Ordinarily a state's exercise of its police power is not deemed superseded under the supremacy clause (U.S. Const., art. VI, cl. 2) unless "that was the clear and manifest purpose of Congress" (Rice v. Santa Fe Elevator Corp. (1947) 331 U.S. 218, 230 [91 L.Ed. 1447, 1459, 67 S.Ct. 1146]), "compliance with both federal and state regulations is a physical impossibility" (Florida Avocado Growers v. Paul (1963) 373 U.S. 132, 142-143 [10 L.Ed.2d 248, 256-257, 83 S.Ct. 1210]), or state law "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." (De Canas v. Bica (1976) 424 U.S. 351, 363 [47 L.Ed.2d 43, 53, 96 S.Ct. 933], quoting Hines v. Davidowitz (1941) 312 U.S. 52, 67 [85 L.Ed. 581, 587, 61 S.Ct. 399]). (Ray v. Atlantic Richfield Co. (1978) 435 U.S. 151, 157-158 [55 L.Ed.2d 179, 188, 98 S.Ct. 988].) Defendants do not point out, nor have we found, any words in the Natural Gas Act that expressly prohibit investigation or other activity regarding state antitrust laws that are consistent with the federal counterparts. (Cf. 15 U.S.C. § 717s(a): "The [FPC] may transmit such evidence as may be available.. . concerning apparent violations of the Federal antitrust laws to the Attorney General....") Nor does there appear any threatening conflict between federal and state antitrust provisions concerning conduct that the present investigation is designed to uncover; namely, "price fixing, monopolization, divisions of markets, and restraint of trade." Hypothetical conflict between federal law and enforcement of California antitrust provisions within the scope of the investigation, even if assumed, is not ground for preemption since it may never arise in fact. (See Exxon Corp. v. Governor of Maryland (1978) 437 U.S. 117, 130 [57 L.Ed.2d 91, 102-103, 98 S.Ct. 2207]; Goldstein v. California (1973) 412 U.S. 546, 554-555 [37 L.Ed.2d 163, 172-173, 93 S.Ct. 2303]; Rice v. Chicago Board of Trade (1947) 331 U.S. 247, 255-256 [91 L.Ed. 1468, 1473-1474, 67 S.Ct. 1160].)
Defendants argue that the sweeping and complex character of Natural Gas Act regulation implies congressional intent to exclude state antitrust enforcement or inquiry. Comprehensiveness and complexity, however, may simply reflect the intricate nature of the regulated subject matter; and no preemptive intent need be implied. (New York Dept. of Social Services v. Dublino (1973) 413 U.S. 405, 414-415 [37 L.Ed.2d 688, 695-696, 93 S.Ct. 2507].) A federal regulatory act does not preempt harmonious state regulation of matters that only peripherally affect federal concerns. (De Canas v. Bica, supra, 424 U.S. 351 (Immigration & Nationality Act (8 U.S.C. § 1101 et seq.), being centrally concerned with admission of aliens and treatment of aliens lawfully admitted, does not preempt state law prohibiting employment of illegal entrants); Farmer v. Carpenters (1977) 430 U.S. 290 [51 L.Ed.2d 338, 97 S.Ct. 1056] (National Labor Relations Act, though prohibiting hiring hall discrimination, does not preclude state tort action for emotional distress caused by outrageous conduct accompanying such discrimination).) Since, as already explained, federal antitrust enforcement seems peripheral rather than central to aims of the Natural Gas Act, no reason appears for deeming the present inquiry into violations of California statutes that harmonize with the federal antitrust laws to be other than peripheral. Therefore there is no preemption.
Alaska Natural Gas Transportation Act (ANGTA)
Defendants also contend that the Attorney General's investigation is preempted by the Alaska Natural Gas Transportation Act (ANGTA), 15 U.S.C. sections 719-719o, enacted in October 1976 to facilitate selection, construction, and initial operation of a transportation system for delivery of Alaskan gas to the lower 48 states. The act provides for review and recommendation to the President by the FPC and other agencies (15 U.S.C. § 719c-719d), a presidential decision and report to Congress (15 U.S.C. § 719e), and final approval by congressional joint resolution (15 U.S.C. § 719f). That approval was given in November 1977. (Pub.L. No. 95-158, 91 Stat. 1268.) The act limits judicial review by requiring challenges to be filed within limited periods in a particular court and by making the environmental impact statements conclusive (15 U.S.C. § 719h); and those limits are reinforced by declarations of urgency and of intent to exercise fullest congressional power in limiting administrative and judicial procedures (15 U.S.C. § 719-719a).
Section 14 of the act (15 U.S.C. § 719/) provides, however: "Nothing in this Act, and no action taken hereunder, shall imply or effect an amendment to, or exemption from, any provision of the antitrust laws." Moreover, section 19 (15 U.S.C. § 719 note) directed the United States Attorney General "to conduct a thorough study of the antitrust issues and problems relating to the production and transportation of Alaska natural gas" and to report findings and recommendations to Congress within six months of the act's enactment. That was done. The report recommended (1) the imposition of conditions on the license for the pipeline project, (2) legislation to clarify the pipeline's common carrier status (15 U.S.C. § 719k(a)), and (3) "collateral" actions by the FPC. Based on those recommendations, the President's decision, approved by Congress, requires the licensee to exclude gas producers from participation in ownership of the transportation system and requires parties to sales of gas through the pipeline to submit their sale agreements to the FPC for approval.
We conclude that ANGTA presents no bases for preemption of the present investigation beyond those we have considered and rejected with respect to the Natural Gas Act. ANGTA expressly disclaims amendment of or exemption from federal antitrust laws. (15 U.S.C. § 719/.) The pipeline-licensing conditions imposed as a consequence of the United States Attorney General's report do not differ in their relation to federal and state antitrust enforcement from comparable conditions that might be imposed on a pipeline project by the FPC under the Natural Gas Act.
Collateral Estoppel Defense
Defendants contend that the Attorney General is estopped from enforcing the subpenas against them by the federal district court judgment that enjoins him from enforcing a similar subpena against ARCO. The judgment declares that his investigation and the ARCO subpena are "unconstitutional. " The court's memorandum of decision that explicates the judgment (see Tygrett v. Washington (1974) 543 F.2d 840, 844 [177 App.D.C. 355]) concludes that the investigation is preempted by the Natural Gas Act and ANGTA on grounds we have considered and rejected in this opinion.
A federal judgment "has the same effect in the courts of this state as it would have in a federal court." (Levy v. Cohen (1977) 19 Cal.3d 165, 173 [137 Cal.Rptr. 162, 561 P.2d 252].) Accordingly, the fact that the Attorney General has appealed from the ARCO judgment does not prevent it from operating as a collateral estoppel. (Calhoun v. Franchise Tax Bd. (1978) 20 Cal.3d 881, 887 [143 Cal.Rptr. 692, 574 P.2d 763]. Martin v. Martin (1970) 2 Cal.3d 752, 761 [87 Cal.Rptr. 526, 470 P.2d 662].) Moreover, like this court the United States Supreme Court has abandoned the mutuality requirement. (Parklane Hosiery Co., Inc. v. Shore (1979) 439 U.S. 322 [58 L.Ed.2d 552, 99 S.Ct. 645]; Blonder-Tongue v. University Foundation (1971) 402 U.S. 313 [28 L.Ed.2d 788, 91 S.Ct. 1434]; Bernhard v. Bank of America (1942) 19 Cal.2d 807 [122 P.2d 892].) The fact that defendants here are not parties to the federal judgment therefore does not preclude its collaterally estopping the Attorney General, who is a party.
Nonetheless the federal judgment does not bar enforcement of the subpenas against defendants because FPC v. Amerada Petroleum Corp. (1965) 379 U.S. 687 [13 L.Ed.2d 605, 85 S.Ct. 632] is controlling. The Eighth Circuit had held that the FPC had no jurisdiction over intrastate sales of gas commingled in a pipeline with other gas being transported interstate. One ground for the decision was that the FPC was collaterally estopped by the denial of its jurisdiction in an earlier case involving the same parties but different, though legally indistinguishable, sales and pipeline transmission arrangements. Reversing the Eighth Circuit, the Supreme Court said: "The Court of Appeals thought that its decision in North Dakota v. Federal Power Comm'n, 247 F.2d 173, brought collateral estoppel into play in the present case. 334 F.2d 404, 411-412. But that rule has no place here for no judgment governing past events is in jeopardy, only the scope of future regulation that involves different events and transactions. See Commissioner v. Sunnen, 333 U.S. 591, 601-602." (379 U.S. at p. 690 [13 L.Ed.2d at p. 607], italics added.)
Those italicized words apply here. The judgment governs no "past events" but only restricts "the scope of future regulation" by enjoining enforcement of the ARCO subpena. That subpena calls only for evidence under the control of ARCO and thus "involves different events and transactions" from the present subpenas, which demand evidence under defendants' control. The high court's citation of Commissioner v. Sunnen establishes the existence of that difference notwithstanding the subpenas' common origin in a single investigation. On the pages cited Sunnen says: "[I]f the.very same facts and no others are involved in the second case, a case relating to a different tax year, the prior judgment will be conclusive as to the same legal issues which appear, assuming no intervening doctrinal change. But if the relevant facts in the two cases are separable, even though they be similar or identical, collateral estoppel does not govern the legal issues which recur in the second case. Thus the second proceeding may involve an instrument or transaction identical with, but in a form separable from, the one dealt with in the first proceeding. In that situation, a court is free in the second proceeding to make an independent examination of the legal matters at issue. It may then reach a different result or, if consistency in decision is considered just and desirable, reliance may be placed upon the ordinary rule of stare decisis. Before a party can invoke the collateral estoppel doctrine in these circumstances, the legal matter raised in the second proceeding must involve the same set of events or documents and the same bundle of legal principles that contributed to the rendering of the first judgment. [Citations.]" (Fn. omitted.)
The orders denying enforcement of the subpenas are reversed.
Bird, C. J., Mosk, J., and White, J., concurred.
All section references are to the Government Code unless otherwise indicated. Section 11180 provides: "The head of each department may make investigations and prosecute actions concerning:
"(a) All matters relating to the business activities and subjects under the jurisdiction of the department.
"(b) Violations of any law or rule or order of the department.
"(c) Such other matters as may be provided by law."
The Attorney General is head of the Department of Justice (§ 12510; cf. § 15000), which includes the Office of the Attorney General (§ 15001).
As of October 1, 1977, all functions of the FPC were transferred to the Secretary of Energy and the Federal Energy Regulatory Commission. (42 U.S.C. § 7151, 7172, 7341; Exec. Order No. 12009, 42 Fed. Reg. 46267 (Sept. 13, 1977), 42 U.S.C.A. § 7341, note.) For convenience here we use "FPC" to refer to the entity exercising those functions after as well as before the transfer.
A proceeding against PG&E culminated in an order of the San Francisco Superior Court filed November 22, 1976, which enforced most of the terms of the subpena and is now final. ARCO did not respond to its subpena. Instead it obtained from the United States District Court, Central District of California, an injunction against enforcement that is still on appeal. See post, footnote 8. The ARCO proceeding is discussed below in connection with defendants' contention that the present proceedings are barred by collateral estoppel.
Federal cases interpreting the Sherman Act generally apply to construction of the Cartwright Act. (Mailand v. Burckle (1978) 20 Cal.3d 367, 376 [143 Cal.Rptr. 1, 572 P.2d 1142]; Marin County Bd. of Realtors, Inc. v. Palsson (1976) 16 Cal.3d 920, 925 [130 Cal.Rptr. 1, 549 P.2d 833]; Corwin v. Los Angeles Newspaper Service Bureau, Inc. (1971) 4 Cal.3d 842, 852-853 [94 Cal.Rptr. 785, 484 P.2d 953].)
Cases cited as examples of conflict between state and federal antitrust laws involve statutory differences not present here: Connell Co. v. Plumbers & Steamfitters (1975) 421 U.S. 616 [44 L.Ed.2d 418, 95 S.Ct. 1830] (though federal antitrust law applies to contractor's collective bargaining agreement to subcontract only with firms recognizing union, Texas law does not apply because, unlike federal law, it conflicts with federal policies favoring employee organization); cf. Shell Oil Co. v. Younger (9th Cir. 1978) 587 F.2d 34 (Bus. & Prof. Code, § 21200, prohibiting motor-fuel price discrimination, not preempted by Sherman or Robinson-Patman acts even though it provides a "meeting competition" defense that is narrower than 15 U.S.C. § 13(b) (Robinson-Patman)).
In questioning the relevance of those concerns to an investigation designed to uncover violations of state antitrust law, the dissenting opinion (post, at p. 419) appears to lose sight of (1) the overlap and consequent necessity for coordination of state and federal antitrust enforcement, and (2) the Attorney General's right, on discovering possible violations, not only to invoke existing remedies but also to recommend to legislators and administrators improvement of those remedies or creation of alternate remedies.
Defendants rely on Standard Radio & Television Co. v. Chronicle Pub. Co. (1960) 182 Cal.App.2d 293 [6 Cal.Rptr. 246], which barred a Cartwright Act suit that attacked "exclusivity" clauses through which contracts for film distribution to defendant television stations forbade marketing of the same films to other stations, including plaintiffs, within a 60-mile radius. The Court of Appeal concluded that the suit was foreclosed by the FCC's power over such arrangements in connection with its aims to optimize use of broadcast channels (182 Cal.App.2d at pp. 298-300; see Nat. Broadcasting Co. v. U.S. (1943) 319 U.S. 190, 200-201, 214-220, 222-224 [87 L.Ed. 1344, 1354-1355, 1361-1367, 63 S.Ct. 997]), even though such power would not foreclose a suit to enforce federal antitrust laws (182 Cal.App.2d at pp. 300-301).
That case preceded decisions that limited the preemptive effect of the Federal Communications Act (Head v. New Mexico Board of Examiners in Optometry (1963) 374 U.S. 424 [10 L.Ed.2d 983, 83 S.Ct. 1759]; see O'Neil, Television, Tort Law, and Federalism (1965) 53 Cal.L.Rev. 421, 456-460) and that curtailed federal statutes' preemptive effect on state proceedings peripheral to these statutes' central concerns (De Canas v. Bica, supra, 424 U.S. 351; Farmer v. United Brotherhood of Carpenters, supra, 430 U.S. 290). (See too Note, Federal Preemption in Television Antitrust (1961) 13 Stan.L.Rev. 629) (criticizing Standard Radio even under precedents then available.) Standard Radio is disapproved insofar as it holds that a federal regulatory scheme which does not expressly restrict the states and allows enforcement of federal antitrust laws nonetheless may preclude state antitrust enforcement consistent with those laws.
See footnote 3, ante. ARCO was granted a temporary restraining order on June 14, 1976, a preliminary injunction on September 29, 1977, and a summary judgment incorporating a permanent injunction on June 26, 1978. (Lewis and Atlantic Richfield Co. v. Younger et al., (C.D. Cal.) Dock. No. CV 76-1890-FW.) Appeal is pending in the Ninth Circuit.
The factual distinction discussed in the dissenting opinion (post, at pp. 419-420) does not undercut the applicability here of the quoted words. Though asserted by the FPC the distinction was rejected by the court of appeals, which said: "In our former opinion we fully adjudicated and decided the same issue recurring now under equivalent circumstances that the Commission lacks jurisdiction to regulate gas produced, sold, and consumed intrastate, which is transported in a pipeline commingled with interstate gas and that decision as between these parties bars resurrection of the issue again." (334 F.2d at p. 412.)
When reversing, the Supreme Court majority gave no weight to the asserted distinction and indicated no disagreement with the court of appeals' conclusion that its former opinion "decided the same issue recurring now under equivalent circumstances." The concurring opinion footnote (379 U.S. at p. 691 [13 L.Ed.2d at p. 608]), quoted in the dissent here (post., p. 420, fn. 8), declared that the factual changes "standing alone, makes inapplicable any doctrine of collateral estoppel" (italics added) but did not disagree with the majority's broader statement, quoted in our text above, that the doctrine "has no place here" (379 U.S. at p. 690).
Assigned by the Chairperson of the Judicial Council.