Opinion ID: 2826960
Heading Depth: 3
Heading Rank: 2

Heading: California Claims

Text: Insulate appeals the dismissal of its California antitrust and unfair competition claims. 8 Minnesota law differs from federal law in one material respect: Minnesota allows indirect purchasers to sue manufacturers for antitrust violations. See Lorix, 736 N.W.2d at 626-27. Minnesota still imposes some “prudential limits” on antitrust plaintiffs, including a showing of proximate cause. Id. at 631. Assuming Insulate has alleged an anticompetitive agreement between Graco and Foampak, Insulate still lacks standing under Minnesota law to challenge this agreement because it only purchased FSE from Intech and has not pled any injury traceable to a Graco-Foampak conspiracy. To the extent Insulate alleges in its brief a Minnesota monopolization claim against Graco individually, there is nothing in the pleadings or record mentioning this claim, and we will not consider that claim for the first time on appeal. See Horras v. Am. Capital Strategies, Ltd., 729 F.3d 798, 803 n.3 (8th Cir. 2013). -13- As with its Minnesota claim, Insulate has failed to state a claim under California’s Cartwright Antitrust Act, Cal. Bus. & Prof. Code § 16700 et seq. “A long line of California cases has concluded that the Cartwright Act is patterned after the Sherman Act and both statutes have their roots in the common law. Consequently, federal cases interpreting the Sherman Act are applicable to problems arising under the Cartwright Act.” Marin Cnty. Bd. of Realtors, Inc. v. Palsson, 549 P.2d 833, 835 (Cal. 1976) (in bank); see also Corwin v. Los Angeles Newspaper Serv. Bureau, Inc., 484 P.2d 953, 959 (Cal. 1971) (in bank) (“[F]ederal decisions interpreting section 3 [of the Clayton Act] are applicable to section 16727 [of the Cartwright Act].”). Because Insulate has not sufficiently pled a claim under federal antitrust law, Insulate also has not stated a claim under the Cartwright Act. See, e.g., nSight, Inc. v. PeopleSoft, Inc., 296 Fed. App’x 555, 557 n.3 (9th Cir. 2008) (unpublished memorandum) (“nSight’s monopolization and attempted monopolization claims under the Cartwright Act fail for the same reasons as its [Sherman Act] Section 2 claim.”). Insulate similarly has failed to state a claim under California’s Unfair Competition Law (UCL), Cal. Bus. & Prof. Code § 17200 et seq. The UCL “prohibits unfair competition, including unlawful, unfair, and fraudulent business acts.” Korea Supply Co. v. Lockheed Martin Corp., 63 P.3d 937, 943 (Cal. 2003). The district court found Insulate failed to state a claim under the UCL’s unlawful prong because Insulate did not allege a violation of the antitrust laws. Insulate now claims the appellees engaged in both unlawful and unfair business practices. As discussed above, Insulate has not sufficiently pled the appellees violated any antitrust law and thus has no claim under the UCL’s unlawful prong. See Davis v. HSBC Bank Nev., N.A., 691 F.3d 1152, 1168, 1171 (9th Cir. 2012) (explaining “[t]o be ‘unlawful’ under the UCL, the [defendant’s] advertisements must violate another ‘borrowed’ law” and affirming the dismissal of the plaintiff’s UCL claim -14- because he failed to plead adequately a violation of California’s False Advertising Law (quoting Cel-Tech Commc’ns, Inc. v. Los Angeles Cellular Tele. Co., 973 P.2d 527, 539-40 (Cal. 1999))). Insulate also failed to plead a violation of the UCL’s unfair prong. In the antitrust context, “the word ‘unfair’ . . . means conduct that threatens an incipient violation of an antitrust law, or violates the policy or spirit of one of those laws because its effects are comparable to or the same as a violation of the law, or otherwise significantly threatens or harms competition.” Cel-Tech, 973 P.2d at 544. Here, Insulate has only pled actions consistent with Graco’s “right to deal, or refuse to deal, with whomever it likes,” Monsanto, 465 U.S. at 761, which is not unfair conduct. See Orchard Supply Hardware LLC v. Home Depot USA, Inc., 967 F. Supp. 2d 1347, 1364 (N.D. Cal. 2013) (“[A]cts permissible under antitrust laws ‘cannot be deemed unfair under the unfair competition law,’ at least not where a plaintiff alleges that the acts are unfair for the same reason it argues that they violate antitrust law.” (quoting Chavez v. Whirlpool Corp., 113 Cal. Rptr. 2d 175, 184 (Cal. Ct. App. 2001))).