Court Opinion

ID: 9940182
Source: CourtListenerOpinion
Date Created: 2024-02-13 17:16:47.62467+00
Date Added: 2024-06-11T13:42:40.131643
License: Public Domain

The declared purpose of the Unfair Practices Act is to "safeguard the public against the creation or perpetuation of monopolies and to foster and encourage competition." (Bus. 
Prof. Code, § 17001.) In pursuit of that goal, the act prohibits the "secret payment or allowance of rebates, refunds, commissions, or unearned discounts . . . to the injury of a competitor and where such payment or allowance tends to destroy competition. . . ." (Bus. Prof. Code, § 17045; hereafter all undesignated statutory references are to the Business and Professions Code.) Given the ordinary rules of English usage, this prohibition is implicated only by competitive injury to a competitor of the one prohibited. Such a result is abhorrent to the majority. It suggests that some victims of commercial discrimination might have no remedy under the act. The quixotic desire to do good, be universally fair, and make everybody happy is understandable. Indeed, the majority's zeal is more than a little endearing. There is only one problem with this approach. We are a court.
As a court, we are constrained to work with the tools available and to play by the rules. When the task is statutory construction, our inquiry begins with the words of the statute. It ends there if the words are sufficient. The majority's insistence on "interpreting" the unambiguous language of section 17045 prompts me to repeat Justice Frankfurter's tongue-in-cheek advice for a court with an overactive lawmaking gland: "[W]hen the legislative history is doubtful," he wrote, "go to the statute." (Greenwood v. United States
(1956) 350 U.S. 366, 374 [76 S.Ct. 410, 414-415, 100 L.Ed. 412].)
Here, of course, lacking even the guidance a legislative history of section 17045 would furnish, there is all the more reason for a cautious fidelity to the text of the statute. Undaunted, the majority creates doubt where none exists and, marshaling a patchwork of secondary comments that provide noclear evidence of what the Legislature had in mind in 1933, jettisons the settled understanding of the statute more than half a century after it was passed. By reading the language of section17045 as referring to competitors of those who receive
prohibited price discounts, the majority introduces into the statute an ambiguity that is not present if the words are taken to mean what they say. To use rules of statutory construction tocreate ambiguity is perverse. The sole justification of the canonical apparatus is to remove doubt, ambiguity, or uncertainty where they exist.
Apart from a couple of exceptions that only serve to prove the rule, in the more than 60 years that the price discrimination provision of the Unfair Practices Act has been on the books, neither the Legislature, this court, the antitrust bar nor the business community has regarded it as applying to *Page 1273 
so-called "vertical" price discrimination. Indeed, the decision which until today had been regarded as the definitive opinion on the scope of the act reached the opposite conclusion. (Harris
v. Capitol Records etc. Corp. (1966) 64 Cal.2d 454
[50 Cal.Rptr. 539, 413 P.2d 139] (hereafter Harris).) In a striking reversal of settled law — notable as much for its retrospective reinterpretation as for its result — the majority abandons that orthodox view and strikes out along a path that is not only contrary to the language of the statute itself, but one whose underlying view of economics has been repeatedly repudiated by national authorities on antitrust policy as "giv[ing] artificial protection to the individual competitor" (Oppenheim, FederalAntitrust Legislation: Guideposts to a Revised National AntitrustPolicy (1952) 50 Mich. L.Rev. 1139, 1201 (hereafter Oppenheim)); "unleavened by economic understanding" and "safeguard[ing] not competition, but competitors" (Adelman, Effective Competitionand the Antitrust Laws (1948) 61 Harv. L.Rev. 1289, 1328, 1335); and as "antithetical to antitrust policy and unnecessary for antitrust enforcement" (Rowe, Price Discrimination, Competition,and Confusion: Another Look at Robinson-Patman (1951) 60 Yale L.J. 929, 974, fn. omitted); indeed, the United States Supreme Court has described the interpretation espoused by the majority as promoting "a price uniformity and rigidity in open conflict with the purposes" of the antitrust laws. (Automatic CanteenCo. v. F.T.C. (1953) 346 U.S. 61, 63 [73 S.Ct. 1017, 1019, 97 L.Ed. 1454].)
The majority reaches its conclusion by ignoring a bedrock rule of statutory interpretation: Where there is no ambiguity, there is nothing to "interpret" — the statute means what it says. Once free of the inconvenient impediments presented by a straightforward text, the majority indulges in an extravagant bout of post hoc judicial lawmaking. Long after the events that provoked section17045 have passed from memory, the majority imbues the statute with a sweeping scope that is not only unwarranted by its language, but protectionist and anticompetitive in effect.
This case involves competition among distributors of the same
product, competition that cannot conceivably have any significant effect on the touchstones of antitrust policy — interbrand competition, the structure of competitive markets, and the ultimate economic welfare of the California consumer. With the utmost respect for the views of my colleagues, I fear today's decision will not only eliminate price discounts as a means of enhancing competition; it will encourage precisely the kind of vexatious and costly litigation which serves only to burden the economy. *Page 1274
 I The Text of Section 17045
On its face, the language of section 17045 indicates a legislative concern with the business practices of sellers,
rather than purchasers. The operative language condemns the "allowance of . . . discounts . . . to certain purchasers . . . not extended to all purchasers purchasing upon like terms and conditions. . . ." (Italics added.) These words evince a concern on the part of the drafters of section 17045 with the conduct of the party allowing or extending a discount or rebate, that is, with sellers. For the prohibition applies only to them and not, at least by the statute's express terms, to those whoreceive the price discount — purchasers. That conclusion, read in light of the act's overriding purpose of enhancing competition, suggests it is anticompetitive conduct with respect to other sellers that triggers a violation of the statute, a reading that tends to confirm its horizontal focus. Moreover, the statute condemns only those price discounts resulting in an "injury . . . to . . . competition." Although it may be possible to read this language as directed at injury to competitors ofthe buyer, such a reading is a stretch. The more natural sense of the text, given the several references to the conduct of sellers and the absence of a buyer referent, is that section17045 is directed at injuries to competitors of the party "extending" or "allowing" the discount or allowance; again, other sellers.
Thus, a seller who grants a price discount to less than all of its customers commits an unlawful act, provided the discount injures a competitor and tends to destroy competition. Neither of these two qualifying phrases suggests to me (or, I imagine, to the ordinary reader) that the use of these words was meant to refer to "competitors" of the purchaser to whom the discount was given, or to "destroying competition" among purchasers from the seller. A more natural sense of the words is that they refer to competitors of the party granting the price discount — the one referred to earlier in the sentence — sellers who "pay," "allow," or "extend" the prohibited discount.
The majority reasons that because section 17045 is "focused patently on discrimination among purchasers," it is reasonable to assume that the Legislature had their interests in mind in enacting the prohibition on price discrimination. (Maj. opn.,ante, at p. 1254.) Yes and no. Purchasers are mentioned, as they would have to be in any statute whose subject is a bilateral transaction, but only because purchasers are essential to any
sale, discriminatory or not. Beyond that, however, there is no basis in the statutory language itself to warrant the conclusion that a prohibition on granting *Page 1275 
a price discount was intended for the protection of those purchasers not receiving it.
The majority also reasons that section 17045 contains no "express restriction" to horizontal injury. (Maj. opn., ante,
at p. 1254.) Granted, the statute does not affirmatively state that competitive injury to buyers is insufficient to plead a cause of action, but it would be both odd and unnecessary if it went out of its way to do so. Conceding that the language of section 17045 "does not contain an explicit reference to secondary line competitive injury like the . . . language of the Clayton and Robinson-Patman Acts," the majority declares that "the absence of a specific reference does not . . . constitute an implied restriction." (Maj. opn., ante, at p. 1255.) This is said to be so because the statute "requires injury to a `competitor,' and a tendency to destroy `competition,' without any further inclusive or restrictive language delineating the scope of those terms." (Ibid., italics in original.)
In the context of another statute, one not focused so "patently" on the conduct of those who "pay," "allow," or "extend" discounts, such reasoning might persuade. But here, the language of the statute does contain a "specific reference" which, in context, does "constitute an implied restriction." That reference is to those who make the payments, allow the rebates, or extend the privileges made unlawful; in a word, sellers. The statute's "evident concern with discrimination between competing purchasers," the majority concludes, "suggests its intended protection extends to such competition." (Maj. opn.,ante, at p. 1255.) But what "evident concern," apparent on the surface of the statute, does the majority have in mind? A disinterested reader of the text, I suggest, would come away with a clear impression, not of an "evident concern" with purchasers, but with those who "grant," "pay," or "allow" discounts andtheir competitors. It strikes this reader as improbable to conclude that the words "competition" and "competitor" refer, not to competitors of the price-cutting seller, which may suffer commercial injury as a result of such a practice, but to competitors of the purchaser. Sellers, of course, do not compete with buyers but with other sellers, their "competitors," and it is to them that the statute evidently refers.
Had the Legislature intended the statute to apply to competitors of purchasers receiving prohibited discounts, it would have been easy enough to insert language in section 17045
making that point clear. Indeed, three years after section17045 was passed, Congress passed the Robinson-Patman Act, outlawing price discounts on goods in interstate commerce. That legislation, however, left no doubt whatever that its
prohibition applied to those who received, as well as those who granted, discounts. How did Congress express *Page 1276 
such a "bilateral" prohibition? Quite simply. By making unlawful price differences which injure competition "with any person who grants or . . . receives" their benefit. (15 U.S.C. § 13(a), italics added.)
 II Harris v. Capitol Records
Some 30 years ago, Justice Mosk, writing for a unanimous court in Harris, supra, 64 Cal.2d 454, described the Unfair Practices Act — including section 17045 — as intended to proscribe onlyhorizontal price discrimination, that is, differences in the price a seller charges buyers, the effect of which is to impair competition with other sellers. He wrote that "[t]hroughout the Act the Legislature has manifested its intent to discourage practices which injure the seller's competitors (§§ 17040, 17043, 17045, 17071) and thereby tend to create the monopolies condemned by section 17001. . . . Together these constitute the `horizontal' concept of price regulation, one of the fundamental characteristics of this legislation. In his exhaustive study entitled Experience in California With Fair Trade LegislationRestricting Price Cutting (1936) 24 Cal.L.Rev. 640, 686, Professor Ewald T. Grether explained: `Whereas the Fair Trade Law has to do with vertical price relations, the Unfair Practices Act operates horizontally.' (Italics in original.) And in Cupp,The Unfair Practices Act (1936) . . . 10 So.Cal.L.Rev. 18, the author said that `The act may be said to be the consummation of years of effort by businessmen to carry out the horizontal concept of trade regulation.' More recently, it has been pointed out that . . . the Unfair Practices Act `protects only first-line competition against predatory price cutting on an area basis and does not make illegal price discriminations which only injure second or third-line competition at the buyer level or lower. . . . [A] seller can lawfully discriminate in favor of one of his purchasers for the purpose of enabling that purchaser to meet his competition, so long as there is no intent on the part of the seller to prevent or destroy the competition of other sellers at his level.' (Bermingham, Legal Aspects of Petroleum MarketingUnder Federal and California Law[s] (1960) 7 U.C.L.A.L.Rev. 161, 246-247.)" (Harris, supra, 64 Cal.2d at pp. 461-462, first italics added.)
From the context in which these statements appear, it is clear that Justice Mosk was speaking of the Unfair Practices Act as a whole ("Throughout the Act"), characterizing it as fundamentally "horizontal" in effect. (Harris, supra, 64 Cal.2d at p. 461.) I cannot subscribe to the majority's dismissal of those statements in Harris, supra, 64 Cal.2d 454, as standing for something other than what their ordinary meaning conveys. Not only Justice Mosk's *Page 1277 
statement, but also the authorities he relied on in support of it, make an unqualified case for a horizontal interpretation of the Unfair Practices Act as a whole, including section17045 The article by Professor Ewald T. Grether, for example, discusses the near concurrent rise of state fair trade statutes, companion legislation to the national outbreak of unfair competition laws in the 1930's. "The Unfair Practices Act," Grether concluded, "represented the culmination of legislation begun in 1913. . . . The core of this act was a provision" — now section 17040 — "declaring it unlawful to discriminate between different sections, communities, cities or between different locations in the state by selling at a lower rate . . . `with the intent to destroy the competition of any regular established dealer.'" (Grether, Experience in California With Fair Trade LegislationRestricting Price Cutting (1936) 24 Cal.L.Rev. 640, 645, italics omitted (hereafter Grether).)
As Grether's comments indicate, a consistent theme — restraints on horizontal price discrimination — runs through the act from its origin in 1913 to 1935, the year in which its major provisions were consolidated. As the Sherman and Clayton Acts were aimed at structural reforms of the economy by promoting horizontal competition, so state antitrust legislation — including California's act of 1913 — was aimed at thwarting the growth of monopolies and business combinations that had a restraining effect on competition among sellers. Like the federal antitrust acts of the same era, these state antitrust statutes were aimed at prohibiting so-called locality or area price discrimination, the paradigmatic condition for the rise of cartels. (See, e.g., 3 Kintner, Federal Antitrust Law (1984) § 19.1, pp. 42-50 accompanying fns. (hereafter Kintner).) As the majority points out, the act of 1931, popularly named the "Anti-Discrimination Act" (Stats. 1931, ch. 617, pp. 1333-1335), was aimed primarily at these "large scale distributors, especially chain store systems." (Grether, supra, 24 Cal.L.Rev. at p. 645.) It carried forward the proscription on geographic price discrimination of the original 1913 act and coupled to it, in amendments adopted in 1933, two significant additions — the prohibition on "secret rebates" (now § 17045), and a provision prohibiting sales below cost (now § 17043). (Stats. 1933, chs. 261, 504, pp. 793, 1280-1281; see Wilson, California UnfairPractices Act and Fair Trade Act (1941) 27 ABA J. 249.) Throughout this series of amendments, however, there is nothing to indicate that the legislation lost its original horizontal focus. In particular, there is no convincing basis in the text of section 17045 to indicate that the Legislature had adopted the vertical prohibitions on price discrimination that were soon to appear in section 2(a) of the federal Robinson-Patman Act. Parallel events suggest the contrary.
Almost concurrently with the consolidation of what is now the Unfair Practices Act, the Legislature enacted the "Fair Trade Act" (Stats. 1931, ch. *Page 1278 
278, p. 583; Stats. 1933, ch. 260, p. 793), legislation that was expressly vertical in orientation.1 The product of pressure by the same retailers and distributors threatened by the chains who pushed for the Unfair Practices Act, the fair trade movement had been popularized by the National Industrial Recovery Act (Act of June 16, 1933, ch. 90, 48 Stat. 195), Depression-era legislation authorizing the establishment and self-policing of "codes of competition" designed to prohibit "unfair competitive practices." Fair trade legislation, which swept the states in the 1930's, was not antitrust legislation in the classic mold of the Sherman, Clayton and Federal Trade Commission Acts of the monopoly era. It was directed at providing relief to distributors and small retailers, squeezed more than ever by a weak economy and the highly competitive chains. Rather than seeking to promote a structurally competitive market, fair trade and similar legislation was aimed at relieving the pressure on the individual competitor — permitting floors to be set on prices, for example, and authorizing resale price maintenance — thus in a senserestraining competition. (See, e.g., Rowe, Price Discrimination,Competition, and Confusion: Another Look at Robinson-Patman, supra,
60 Yale L.J. at p. 1067; Oppenheim, supra, 50 Mich. L.Rev. at pp. 1198-1202.)
As Grether summarized the situation in 1936, "[I]t is . . . essential to note that these statutes [i.e., the Unfair Competition and Fair Trade Acts] were promulgated during depression years. Both the vigor of the demands and the weakness of opposition were decidedly tempered by the condition of the glutted market. The impact upon the legislature showed itself not only in the fair trade acts, but in a great number of measures aimed at economic control. Apparently, legislators had accepted the proposition that price cutting in the distributive trades engenders a series of repercussions that react harmfully upon primary producers." (Grether, supra, 24 Cal.L.Rev. at p. 648, fn. omitted.) Contrasting the California fair trade and unfair practices legislation, Grether pointed to the differing orientation and scope of the two trade regulation acts: Although it applied vertically, the Fair Trade Act reached only a select group of commodities — those that were trade- or brand-marked. The "horizontal procedure under the Unfair Practices Act," Grether wrote, "may develop possibilities for wider, perhaps, even general application, in *Page 1279 
contrast to the relatively limited possibilities of the Fair Trade Act. The strength of the Unfair Practices Act is that action under it need not wait upon the initiative of manufacturers or distributors at the apex of the distributive pyramid but may arise at any level, and that it is not limited merely to trade-marked, identified goods." (Grether, supra, 24 Cal.L.Rev. at p. 686.)
The majority dismisses these comments as of marginal value in reaching an understanding of the scope of the act. (Maj. opn.,ante, at pp. 1265-1266.) I disagree. It was not until 1936 that congressional passage of the Robinson-Patman Act, validating vertical restraints by extending prohibitions on discriminatory pricing to those granting or receiving discounts, or customers of either, set the stage for a rush of similar state statutes. (See Kintner, supra, § 19.1, pp. 47-50.) Although some of these state acts were modeled on the "vertical" Robinson-Patman Act, others, enacted earlier in the decade, including our own act, carried forward the original horizontal antidiscrimination model. (See Comment, Prohibiting Price Discrimination and Sales BelowCost: The State Unfair Practice Acts (1938) 32 Ill. L.Rev. 816; 819-820, fn. 5; see also Harris, supra, 64 Cal.2d at p. 459, fn. 5 ["By contrast [to the Unfair Practices Act], as of 1938 seven states specifically prohibited discrimination between purchasers as well as between localities."]; McAllister, PriceControl by Law in the United States: A Survey (1937) 4 Law 
Contemp. Probs. 273, 298 (hereafter McAllister) ["The [California] Unfair Practices Act is directed at the horizontal level of prices and, unlike the Fair Trade Act, it applies to all goods. . . . Another provision outlaws price discrimination `with the intent to destroy . . . or to prevent the competition of any person' but this precursor of the Clayton and Robinson-Patman Acts has long been familiar in state anti-trust laws."].)2
It is possible that the available extrastatutory materials Justice Mosk relied on in Harris, supra, 64 Cal.2d 454, are simply too equivocal to establish *Page 1280 
satisfactorily the Legislature's intent, one way or the other. If so, our response ought to be a refusal to extend the act beyond the horizontal view, one that is supported by the words of section 17045, is consistent with the act's purpose of enhancing competition, and is congruent with the ruling horizontal orthodoxy of the day — precisely the view reflected in Harris
itself. If that cautious view turns out to be mistaken, Justice Mosk prescribed the appropriate remedy in Harris: "Plaintiff complains that this [horizontal] construction of the Act will allow a predatory company `to vertically feed on those beneath it.' Such arguments should be addressed to the Legislature, which alone is equipped to determine the gravity of the economic evil here alleged, and to take such steps as it deems appropriate." (Harris, supra, 64 Cal.2d at p. 462, fn. omitted.)
 III Vertical Restraints on Price Competition
It is worth pointing out just how far from the contemporary antitrust mainstream the majority's construction of California's Unfair Practices Act strays. (See, e.g., Continental T.V., Inc. v. GTE Sylvania Inc. (1977) 433 U.S. 36, 54 [97 S.Ct. 2549, 2559-2560, 53 L.Ed.2d 568] ["Vertical restrictions reduce intrabrand competition by limiting the number of sellers of a particular product competing for the business of a given group of buyers. . . . [¶] [Such] restrictions promote interbrand competition by allowing the manufacturer to achieve certain efficiencies in the distribution of his products."]; Bork,Vertical Restraints: Schwinn Overruled (1977) Sup. Ct. Rev. 171; *Page 1281 
Posner, The Next Step in the Antitrust Treatment of RestrictedDistribution: Per Se Legality (1981) 48 U.Chi. L.Rev. 6; 8 Areeda, Antitrust Law (1989) § 1609e, pp. 139-143.) Whatever its business motivation, the alleged price differential at issue in this case reflects an implicit preference for two distributors of the same brand of telephone over a third. I find it difficult to comprehend how a discount offered to some but fewer than all distributors of the same product can even affect, much less "tend to destroy" the only kind of competition that matters to the consumer — competition among brands.
If the net economic effect on the retail buyer of telephones of a price differential between intrabrand competitors is nil, how can competition in any sense that justifies "trundling out the great machinery of antitrust enforcement" (Valley Liquors, Inc. v. Renfield Importers, Ltd. (7th Cir. 1982) 678 F.2d 742, 745) have been affected by the allegedly discriminatory price involved here? It seems evident that competition among manufacturers of telephones and related consumer electronic goods is robust, and that nothing respondent does in its dealings with distributors of its own products is likely to affect significantly that hard economic fact. The lesson in all of this is one that belies the majority's tautology that "competition is competition." (Maj. opn., ante, at p. 1262.) For antitrust purposes at least, it is not necessarily so. (See, e.g., Valley Liquors, Inc. v.Renfield Importers, Ltd., supra, 678 F.2d at p. 745 ["We reject the casual equation of intrabrand price competition with interbrand competition. . . . The plaintiff in a restricted distribution case must show that the restriction he is complaining of was unreasonable because, weighing effects on both intrabrand and interbrand competition, it made consumers worse off."]; Bork, Vertical Restraints: Schwinn Overruled, supra,
Sup. Ct. Rev. at p. 172 ["The Court's Sylvania opinion not only counted efficiencies in favor of a challenged business practice but did so in a sophisticated way, perceiving that the elimination or mitigation of competition among a manufacturer's dealers was essential to the achievement of certain distributional efficiencies."].) In this very case, the majority imposes a ban on vertical, intrabrand price differences as a legitimate business method, an interpretation that may not only hobble structural competition, but may also fuel claims of California's "unfriendly" regulatory and legal climate. On the basis of what appears to be some misplaced principle of distributive equality, the majority today virtually rules out vertical price differences as a method of enhancing
competition.
The conclusion that there is no sound basis in the text of the statute or relevant materials for the idea that in enacting the Unfair Practices Act the Legislature anticipated the vertical, secondary line innovations introduced *Page 1282 
three years later in the Robinson-Patman Act, is reinforced by these views of national authorities on antitrust and trade regulation policies. If vertical restrictions on price discrimination are both anticompetitive in effect and protectionist in intent, then the Legislature's explicit declaration in section 17001 of an intention to "foster competition" is thwarted by the majority's innovative gloss on section 17045 We ought to be especially reluctant to engraft onto the statute so dramatic and counterproductive a policy innovation, doubly so in the absence of a clear legislative directive.
 CONCLUSION
There is a lesson in the half-century-plus of legislative inactivity since section 17045 was enacted; unfortunately, it is one lost on the majority. Today's result is not only bad law, it is demonstrably bad policy and even worse economics. Why? Because the fundamental aim of antitrust legislation is to protect the competitive process. Protecting the individual business from the benefits of competition will cost the California consumer in the form of higher prices; it will cost the state as a whole in a flood of wasteful price discrimination litigation unrelated to the only goal section 17045 was meant to protect — a competitive market.
For that constituency whose interests alone justify legislative intervention in market-pricing forces — the California consumer — price competition, including discounts, is an unmixed good. It lowers prices and maximizes buying power. Yet the majority condemns it, rewriting the act in the process, to import a construction that is not only bad economics but questionable policy as well. For object lessons we need look no further than the national experience with the heavily criticized Robinson-Patman Act. Confronted with a text that fails to support the majority's construction, and the likelihood of anticompetitive consequences, we ought to pause to consider whether we do more harm than good.
I dissent.
1 Prior to its repeal in 1975 (Stats. 1975, ch. 402, p. 878), section 1 of the Fair Trade Act declared legal contract terms for the sale of "commodit[ies]" by which the buyer agreed not to resell "except at the price stipulated by the vendor," and authorized buyers to require their buyers "to agree that [they] will not, in turn, resell except at the price stipulated by such vendor or by such vendee." (Stats. 1931, ch. 278, § 1, p. 583.) As Grether pointed out, "The vertical nature of the rights under the [Fair Trade] [A]ct are clearly indicated by Section 2: `This act shall not apply to any contract or agreement between producers or between wholesalers or between retailers as to sale or resale prices.'" (Grether, supra, 24 Cal.L.Rev. at p. 641.)
2 Opinions from other jurisdictions with unfair competition statutes of the same provenance as the California act follow the horizontal interpretation we adopted in Harris, supra,64 Cal.2d 454, often relying on our opinion. In Beam v. MonsantoCo., Inc. (1976) 259 Ark. 253 [532 S.W.2d 175, 181-182], for example, the Arkansas Supreme Court wrote that "It is apparent that the [Unfair Practices Act] is intended to foster competition for the primary benefit of the general public by protecting dealers . . . from unfair competition by large dealers. . . . Appellants' argument for `vertical competition' would broaden the Act to not only protect dealers . . . from unfair competition by other dealers, but would also protect buyers from competition by [other] business buyers who use and purchase the same . . . product for use in their . . . businesses." (See also Carlock
v. Pillsbury (D.Minn. 1989) 719 F. Supp. 791, 849 [applyingHarris to state-based unfair practices claim]; USA PetroleumCo. v. Atlantic Richfield Co. (C.D.Cal. 1983) 577 F. Supp. 1296, 1307 [distinguishing Harris in a "true" horizontal case];Chapiewsky v. G. Heilemann Brewing Co. (D.Wis. 1968) 297 F. Supp. 33, 41 [following Harris]; William Ingliss, etc. v. I.T.T. ContinentalBaking Co. (9th Cir. 1982) 668 F.2d 1014 William Inglis Sons v.Continental Baking (9th Cir. 1991) 942 F.2d 1332 [relying on Harris
as to state law claims]; Burge v. Pulaski County Special Sch. Dist. (1981) 272 Ark. 67 [612 S.W.2d 108] [Arkansas Unfair Practices Act applies only horizontally]; Rose v. Vulcan Materials Co. (1973)282 N.C. 643 [194 S.E.2d 521, 67 A.L.R.3d 1] [same].)
This account of the scope of unfair practice provisions of other states differs, it is apparent, from the majority's evaluation. (Maj. opn., ante, at p. 1261, fn. 6.) The Eighth Circuit Court of Appeals' gloss on the Arkansas act, cited by the majority, merely declares, without analysis or discussion, that it was passed in 1937 shortly after the Robinson-Patman Act, "and was obviously designed to prohibit similar types of business conduct." (Ideal Plumbing Co. v. Benco, Inc. (8th Cir. 1976)529 F.2d 972, 978, fn. 7 [42 A.L.R.Fed. 266].) I am persuaded by the contrary reasoning and result of the Arkansas cases cited above interpreting that state's statute as "horizontal." The opinion of the Wyoming Supreme Court in State v. Langley
(1938) 53 Wyo. 332 [84 P.2d 767], also cited by the majority, involved a criminal prosecution under a statute prohibiting sales below cost; although a provision of the statute contains language similar to section 17001, the opinion is too obscure to stand for much, other than the statement that the provision prohibiting such sales "was probably intended mainly for" the independent merchant. (84 P.2d at p. 774.) The price discrimination provision of the Wisconsin act, also cited by the majority, is almost identical to section 17045, and at least one Wisconsin appellate court has construed it as applying vertically. (Jauquet Lumber
v. Kolbe Kolbe Millwork (1991) 164 Wis.2d 689 [476 N.W.2d 305, 309].) As noted, however, the Arkansas statute, also modeled on the California provision (see McAllister, supra, 4 Law Contemp. Probs. at p. 298, fn. 141), has received a contrary construction.
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