Opinion ID: 1312425
Heading Depth: 5
Heading Rank: 4

Heading: Enactment of the Cartwright Act

Text: (2a) Against this background of increasingly sophisticated state antitrust statutes and case law, our Legislature in 1907 enacted the Cartwright Act. In doing so it settled on an act patterned closely after the original 1889 Texas act and its progeny, most notably the 1899 Michigan act. [14] The Act embraced by our Legislature contained the well-known limitations on combinations in restraint of trade, but it (i) failed to include the latest invention of the evolving antitrust statutes  an antimerger provision  and (ii) embraced the term combination, without attempting to modify the language in order to avoid the prevailing narrow construction of that term. In the absence of contrary indications  of which we have none  it must be assumed that our Legislature intended combination to have the same meaning under the Cartwright Act as that term was given under the identical words of the original 1889 Texas act and the 1899 Michigan act. (3) We have long recognized the principle of statutory construction that `[w]hen legislation has been judicially construed and a subsequent statute on the same or an analogous subject is framed in the identical language, it will ordinarily be presumed that the Legislature intended that the language as used in the later enactment would be given a like interpretation.' ( Belridge Farms v. Agricultural Labor Relations Bd. (1978) 21 Cal.3d 551, 557 [147 Cal. Rptr. 165, 580 P.2d 665]; see also Erlich v. Municipal Court (1961) 55 Cal.2d 553, 558 [11 Cal. Rptr. 758, 360 P.2d 334] [statute patterned after New York statute given same construction as given by New York courts].) (2b) Contrary to the Attorney General's suggestions, the absence of today's computerized legal research systems in 1907 does not diminish the force of this canon. As demonstrated above, the Gates and Davis courts' construction of the term combination was both widely known and followed, explicitly and implicitly, in other courts' interpretations of the same term in cases involving acquisitions. These cases were published in the National Reporter System and the American State Reports, and were available to our Legislature through the Shepard's Citation Service and other resources of the period. In this case, the presumption of legislative intent (by virtue of previous judicial construction) is additionally strengthened by the history of sister state legislation  dating from eight years before the Cartwright Act  designed to regulate mergers. It is clear that the legislatures of the day both (i) recognized the problems posed by mergers, and (ii) were capable of framing legislation designed to regulate such practices. In particular, the fact that the Texas Legislature (to which our Legislature obviously looked for guidance in this area) saw it necessary to twice enact antimerger provisions, but ours did not, strongly suggests our Legislature was content to enact a law of limited scope, which did not address mergers. (See post, pp. 1167-1168.) Finally, our Legislature's inaction on this subject for the past 80 years is significant. Although it has amended the Cartwright Act at least 26 times between 1909 and the present, it has never enacted a merger provision. [15] This stands in contrast to other states that either (i) enacted antitrust legislation with specific antimerger provisions well before the Cartwright Act was passed in 1907 (see ante, pp. 1159-1160) or (ii) have since then amended their antitrust laws specifically to address the regulation of mergers or acquisitions. (Some of these provisions were enacted shortly after the Cartwright Act: see, e.g., Okla. Stat., tit. 79, § 84 (1913 Okla. Sess. Laws, ch. 114, § 4); La. Rev. Stat. Ann., tit. 51, § 125 (1915 La. Acts, No. 11, § 5). Others are of more recent vintage: Alaska Stat., § 45.50.568 (1975 Alaska Sess. Laws, ch. 53, § 1); Hawaii Rev. Stat., § 480-7 (1961 Hawaii Sess. Laws, ch. 190, § 5); Neb. Rev. Stat., § 59-1606 (1974 Neb. Laws, LB 1028, § 13); N.J. Stat. Ann., 56:9-4 (1970 N.J. Laws, ch. 73, § 4); Wash. Rev. Code, § 19.86.060 (1961 Wash. Laws, ch. 216, § 6).) [16] The Attorney General has not cited, nor have we found, a state statute similar to the Cartwright Act that has been construed as applying to mergers. (Cf. post, fn. 20.) The foregoing history demonstrates that the drafters of the Cartwright Act must have known the limitations of what they were adopting: The operative words of their act had been construed consistently in at least three published opinions, and Texas, the parent state from which the Cartwright Act was copied, was among the states that had in the interim adopted additional, express statutory provisions clearly extending coverage of their acts to mergers. Instead of adopting one of the newer, more expansive models of antitrust statutes, our Legislature opted for the simpler, judicially construed format first enacted by Texas in 1889. Given this history, we must conclude that the drafters intended that their Act apply, as its words had been construed, only to entities that combine, in the sense of those who perdure (i.e., continue as separate, independent, competing entities during and after their collusive action)  and therefore that the drafters did not intend the Cartwright Act to regulate the bona fide purchase and sale of one firm by another. Any other interpretation of the drafters' intent cannot be reconciled with the Act's history. As we explain below, nothing presented by the Attorney General undermines this conclusion.