THE MISAPPLICATION OF ASSOCIATED GENERAL CONTRACTORS TO CARTWRIGHT ACT CLAIMS

By Jodie M. Williams and Kristen M. Anderson¹

I. INTRODUCTION

The private right of action under the federal antitrust laws is conferred by Section 4 of the Clayton Act,² which provides: "[A]ny person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor . . . and shall recover threefold the damages by him sustained . . . ." Antitrust standing under Section 4 is distinct from constitutional standing under Article III, in which a showing of harm in fact establishes the necessary injury.³ In Associated General Contractors of California v. California State Council of Carpenters ("AGC"),⁴ the Supreme Court identified certain factors for determining whether a plaintiff has "antitrust standing" under Section 4.⁵

Recently, defendants have urged federal courts to apply AGC to determine whether plaintiffs have antitrust standing to bring state law antitrust claims, including claims under California’s Cartwright Act.⁶ According to defendants, because courts may look to the federal laws for "guidance" in interpreting Cartwright Act claims, the AGC standing test should be applied to determine standing under state antitrust law claims as well.⁷ The issue has become most prevalent in Cartwright Act claims brought by indirect purchaser plaintiffs.⁸

From the plaintiffs’ perspective, AGC has no bearing on whether plaintiffs, particularly indirect purchasers, have standing to pursue claims under the Cartwright Act. This position is well grounded in California law. California’s antitrust laws are broader in scope and deeper in reach than federal counterparts, and expressly grant standing to indirect purchaser plaintiffs.⁹ Although the parameters of antitrust standing under the Cartwright Act have yet to be precisely defined by the California Supreme Court,¹⁰ California state court rulings demonstrate that our high court would not adopt the antitrust standing test outlined in AGC.¹¹ This article examines federal and state courts’ analyses of antitrust standing under the Cartwright Act and explains why the courts that applied AGC were wrong to do so.

[Page 120]

II. COURTS SHOULD NOT APPLY FEDERAL ANTITRUST STANDING DOCTRINE TO THE CARTWRIGHT ACT

A. The Cartwright Act Expressly Repudiates the Illinois Brick Bar Against Indirect Purchaser Recovery

The Cartwright Act was enacted in 1907. Prior to 1978, the Act paralleled Section 4 of the Clayton Act, and authorized anyone "injured in his [or her] business or property" by reason of anything forbidden or declared unlawful by the Act to bring an action for treble damages.¹² The Cartwright Act was amended in 1978 to provide that "[s]uch action may be brought by any person who is injured in his business or property by reason of anything forbidden or declared unlawful by this chapter, regardless of whether such injured person dealt directly or indirectly with the defendant."¹³ The amendments were in direct response to the Supreme Court’s holding in Illinois Brick Co. v. Illinois.¹⁴

In Illinois Brick, the State of Illinois and 700 localities brought antitrust damages claims against concrete block manufacturers for price-fixing in violation of Section 1 of the Sherman Act.¹⁵ The defendants manufactured concrete blocks and sold them to masonry contractors who submitted bids to general contractors for work on masonry portions of construction projects. The general contractors submitted bids for these projects to the plaintiffs. The plaintiffs sought, as the Supreme Court put it, "to demonstrate that masonry contractors, who incorporated [the] block into walls and other masonry structures, passed on the alleged overcharge on the block to general contractors, who incorporated the masonry structures into entire buildings, and that the general contractors in turn passed on the overcharge to [plaintiffs] in the bids submitted for those buildings."¹⁶

[Page 121]

The Supreme Court held that, in general, only a direct purchaser is "injured in his business or property" within the meaning of Section 4 of the Clayton Act.¹⁷ This holding followed the Court’s prior decision in Hanover Shoe, Inc. v. United Shoe Mach. Corp.,¹⁸ where the Court held that the pass-on defense was no longer available to antitrust defendants. More precisely, under Hanover Shoe, defendants could no longer argue that plaintiffs who had purchased a product directly from defendants did not have standing under Section 4 of the Clayton Act because the plaintiff passed on the overcharge to its customers.¹⁹ In Illinois Brick, the Court applied the rule symmetrically to the offensive use of the pass-on theory by plaintiffs.²⁰ Driving the Court’s decision were policy concerns about the danger of multiple liabilities and the complexity of proof of damages.²¹ The Court determined that indirect purchasers could not recover damages by reason of violations of the federal antitrust laws.²²

Justice Brennan dissented from the Illinois Brick majority opinion. According to Justice Brennan, "[i]t would indeed be ‘paradoxical to deny recover[y] to the ultimate consumer while permitting the middlemen a windfall recovery.’"²³ Justice Brennan explicitly rejected the contention that an indirect purchaser should not be allowed to sue, as a matter of law, if the price-fixed product is a component part of the purchased item.²⁴ He concluded that antitrust standing must extend to "those within defendant’s chain of distribution."²⁵

The 1978 amendments to the Cartwright Act did not constitute a change in, but rather were, "declaratory of [ ] existing law."²⁶ Also known as the "Illinois Brick repealer" law, the amendments wrote into the Cartwright Act a repudiation of Illinois Brick‘s ban on indirect purchaser suits.²⁷ As the California Supreme Court recently explained in Clayworth v. Pfizer, Inc.,²⁸ the Illinois Brick repealer law was introduced specifically to "prevent a federal case interpretation of the Sherman Act precluding an indirect purchaser’s standing to sue in antitrust actions [i.e., Illinois Brick] [from] being applied to actions under the Cartwright Act."²⁹ In Clayworth, the California Supreme Court considered whether the pass-on defense should be permitted under California law. In concluding that the defense may not be asserted, the court confirmed that the Cartwright Act was amended to protect indirect purchaser actions in the wake of Illinois Brick.³⁰ It further explained that California’s Legislature, in amending the Cartw right Act, "fully embraced" Justice Brennan’s dissenting opinion in Illinois Brick.³¹

[Page 122]

In California v. ARC America Corp.,³² the U.S. Supreme Court held that Illinois Brick repealer laws, such as the law passed by California, are not preempted by federal antitrust laws or the policies announced in Illinois Brick.³³ The Court expressly stated that it would be "inappropriate" to consider the policies identified in Illinois Brick as defining what federal law allows states to do under their own antitrust laws.³⁴ Moreover, "Illinois Brick, as well as Associated General Contractors and Blue Shield, all were cases construing § 4 of the Clayton Act; in none of those cases did the Court identify a federal policy against States imposing liability in addition to that imposed by federal law."³⁵ As a result, since 1978, California’s antitrust laws have diverged from federal law in favor of an enlarged set of plaintiffs with standing to sue for antitrust violations.

B. Neither California State Courts Nor the Ninth Circuit Have Interpreted the Cartwright Act as Encompassing the AGC Factors

Because California permits a broader range of plaintiffs to sue under the Cartwright Act, the analysis determining who has antitrust standing under the Act must also be broader than the analysis under federal law. The California Court of Appeal considered this issue in Cellular Plus, Inc. v. Superior Court,³⁶ which involved a lawsuit by a number of individual consumers and corporate sales agents against the two licensed providers of cellular telephones in San Diego.³⁷ The question before the court was whether plaintiff Cellular Plus, an indirect purchaser, had standing to sue under the Cartwright Act.³⁸ The court determined that it did,³⁹ explaining that to have standing under California’s antitrust laws, plaintiffs must allege injuries that are "not secondary, consequential, or remote, but the direct result of the unlawful conduct and were the kind of injuries the antitrust laws seek to prevent."⁴⁰ The fact that a plaintiff is not a competitor of the defendant was not fatal to plaintiff’s claims; the Cartwright Act does not ‘"confine its protection to consumers, or to purchasers, or to competitors, or to sellers. . . . The Act is comprehensive in its terms and coverage, protecting all who are made victims of the forbidden practices by whomever they may be perpetrated.’"⁴¹ Nowhere did the appellate court even mention the standing factors set out in AGC.

[Page 123]

The court in Cellular Plus reasoned that to have standing under the Cartwright Act, plaintiffs must properly allege "antitrust injury."⁴² Quoting the Supreme Court’s decision in Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc.,⁴³ the Court of Appeal explained that, as in federal antitrust cases, California plaintiffs must also "prove antitrust injury, which is to say injury of the type the antitrust laws were intended to prevent and that flows from that which makes defendants’ acts unlawful."⁴⁴ But, "[a]lthough California law similarly requires an ‘antitrust injury,’ the scope of that term is broader" than the term "antitrust injury" for purposes of the federal antitrust laws, such as the Clayton Act and the Sherman Act.⁴⁵ Because the Cartwright Act provides for lawsuits by injured persons who dealt either directly or indirectly with the offending parties, the more "restrictive definition" of antitrust injury under federal law does not apply to California state antitrust claims.⁴⁶ While the "exact parameters" of antitrust injury under the Cartwright Act have not been established, it is generally defined as "the ‘type of injury the antitrust laws were intended to prevent, and which flows from the invidious conduct which renders defendants’ acts unlawful.’"⁴⁷ Notably, the California Supreme Court declined to review Cellular Plus.⁴⁸ It therefore follows that the more restrictive standing analyses under federal antitrust laws, particularly that set forth in AGC, are inappropriate for determining whether indirect purchasers have standing under the Cartwright Act.

[Page 124]

AGC was considered by the California Court of Appeal in Vinci v. Waste Mgmt, Inc.,⁴⁹ which is often relied on by defendants as California state court authority for the proposition that AGC applies to the Cartwright Act. Such reliance is misplaced. While Vinci recited the AGC factors at the outset of its discussion, it did not discuss them in analyzing the plaintiff’s antitrust standing under the Cartwright Act.⁵⁰ Thus, several courts have found that Vinci is not a clear directive that AGC should be applied to determine antitrust standing under the Cartwright Act, given the factual dissimilarities between the vast majority of Cartwright Act claims and the claim in Vinci.⁵¹

Vinci arose in the employment context and involved an attempt to transform a time-barred wrongful termination claim into an antitrust claim.⁵² The plaintiff was an employee and the sole shareholder of a company acquired by the defendant; post-acquisition the defendant terminated plaintiff’s position, allegedly because of the plaintiff’s refusal to participate in his employer’s anticompetitive practices. The Court of Appeal affirmed dismissal because the loss of the plaintiff’s job "was not the type of loss the antitrust statute was intended to forestall,"⁵³ the injury did not result from the defendant’s "acquisition of market power,"⁵⁴ and the plaintiff was not a target of the alleged anticompetitive scheme.⁵⁵ In fact, there was no connection whatsoever between the plaintiff’s alleged injury and the anticompetitive conduct at issue.⁵⁶ The court held that the plaintiff’s remedy was a wrongful termination claim, not an antitrust claim.⁵⁷ Accordingly, while it did consider AGC, the court did not adopt AGC’s standing analysis in its holding.

Similarly, in Knevelbaard Dairies v. Kraft Foods, Inc.,⁵⁸ the Ninth Circuit used the AGC factors to frame its discussion of the plaintiffs’ antitrust standing under the Cartwright Act, but did not expressly hold that AGC applied to the Cartwright Act. In a preface to its analysis of the Cartwright Act claims, the Court of Appeals stated that "federal antitrust precedents are properly included in a Cartwright Act analysis, but their role is limited: they are ‘often helpful’ but not necessarily decisive."⁵⁹ The opinion treated AGC in exactly that manner. In its antitrust standing analysis, the court recognized that AGC was the test of antitrust standing under federal law and that antitrust standing was also a requirement under California law.⁶⁰ The court could have, but declined to, taken the extra step to hold that AGC was the test under California law.

[Page 125]

As a further indication that Knevelbaard Dairies did not hold that AGC applied to the Cartwright Act, the court did not cite Vinci in its discussion of antitrust standing but, rather, cited to Cellular Plus for the proposition that the scope of the Cartwright Act is broader than that of the federal antitrust laws.⁶¹ Indeed, the Ninth Circuit repeatedly referred to the broader scope of antitrust standing afforded by California law⁶² and cited California precedents in its analysis of the AGC factors.⁶³ Because the court found that the plaintiffs easily established antitrust standing under the admittedly narrower federal standard, it did not need to reach the issue of whether AGC was the appropriate standard for Cartwright Act claims. As one court later put it, it was not necessary to "undertake the back-breaking labor involved in deciphering the state of antitrust standing" among state law claims where the plaintiff has "shown standing under AGC."⁶⁴

[Page 126]

The only time the California Supreme Court has addressed whether AGC applies to state law claims was in Korea Supply Co. v. Lockheed Martin Corp.⁶⁵ Although not an antitrust case, the California Supreme Court declined to apply AGC to the state’s common law tort of interference with prospective economic advantage, noting that whether a plaintiff has standing to bring such a claim is not subject to the same considerations and limitations found in the Clayton Act.⁶⁶ This decision, in conjunction with the Court of Appeal’s ruling in Cellular Plus that the scope of antirust injury is broader under the Cartwright Act than under federal law, supports the conclusion that federal courts should not apply AGC when determining whether indirect purchasers have standing to sue for antitrust violations under California state law.

C. Splintered Opinions Develop in the Northern District of California

1. Courts Incorrectly Apply AGC to Cartwright Act Claims

Despite the fact that California has a broader definition of antitrust standing and California state courts have ruled on antitrust standing without relying on AGC, some federal courts have applied AGC when determining whether plaintiffs have standing to bring Cartwright Act claims. Federal district court cases that have applied AGC to Cartwright Act claims erroneously rely on Vinci and Knevelbaard Diaries. As demonstrated above, neither Vinci nor Knevelbaard Diaries are properly viewed as a clear directive that the AGC factors apply to determine antitrust standing under the Cartwright Act.

The earliest federal case that expressly applies AGC to Cartwright Act claims is In re Dynamic Random Access Memory Antitrust Litigation.⁶⁷ After concluding that indirect purchaser status alone does not confer antitrust standing under the Cartwright Act, Judge Hamilton examined what additional showing must be made under California law. Interpreting Vinci and Knevelbaard Dairies to require an application of the AGC test to determine antitrust standing for Cartwright Act claims, the court concluded that "under the Cartwright Act [the plaintiffs] are required to satisfy general antitrust standing requirements enunciated by the Supreme Court in AGC."⁶⁸ The court went on to analyze the allegations against the AGC factors and, in two separate orders, found the indirect purchaser plaintiffs who purchased DRAM as a component in computers—as distinct from the indirect purchaser plaintiffs who purchased free-standing DRAM modules—lacked antitrust standing.⁶⁹ Recognizing that its rulings were "not without controversy or uncertainty" and "not expect[ing] to be the last word on this issue,"⁷⁰ the court certified several issues for interlocutory appeal.⁷¹ The California Attorney General and others filed amicus briefs in the Ninth Circuit arguing that the district court’s analysis was incorrect.⁷² The case settled before the resolution of the appeal.

[Page 127]

Nevertheless, the analysis in DRAM has found footing in the Northern District of California. In re Flash Memory Antitrust Litigation,⁷³ Judge Armstrong relied on DRAM, Vinci, and Knevelbaard Dairies to hold that AGC applied to the Cartwright Act claims.⁷⁴ Under an application of the AGC factors, however, the court found antitrust standing.⁷⁵ In In re Cathode Ray Tube (CRT) Antitrust Litigation,⁷⁶ Judge Conti relied exclusively on Flash Memory, but sustained the Cartwright Act claim, finding the allegations of antitrust standing sufficient to satisfy AGC factors.⁷⁷ Similarly, in Dang v. San Francisco Forty Niners⁷⁸ Judge Davila held that AGC factors applied to the plaintiff’s Cartwright Act claim, citing to Vinci, Knevelbaard Dairies, Flash Memory, and DRAM.⁷⁹ The court went on to find those factors satisfied by the complaint’s allegations of antitrust standing.⁸⁰

The analysis in DRAM took hold outside the Northern District of California in In re Refrigerant Compressors Antitrust Litigation.⁸¹ There, the court concluded that DRAM was "the most persuasive of the decisions"⁸² and held that AGC applies to determine antitrust standing for Cartwright Act claims.⁸³ Refrigerant Compressors, a post-Clayworth decision, also relied on the California Supreme Court’s citation of AGC and Vinci in Clayworth to support its application of AGC.⁸⁴ Clayworth, however, did not discuss those cases in the antitrust standing context. Rather, Clayworth cites to AGC and Vinci in its discussion of the analytically distinct issue of proximate causation.⁸⁵

[Page 128]

2. Courts Properly Decline to Apply AGC to Cartwright Act Claims

A competing line of cases, also with origins in the Northern District of California, have declined to apply AGC to Cartwright Act claims because AGC has not been expressly adopted as the law of this state.

First, in In re Graphic Processing Units Antitrust Litigation ("GPU I"),⁸⁶ Judge Alsup declined to apply AGC in determining whether the indirect purchasers had standing in that case.⁸⁷ The indirect purchaser plaintiffs, some of whom resided in California, alleged that they purchased the defendants’ graphics processing units ("GPUs") indirectly, through intermediaries or in purchasing consumer electronics, such as computers, containing the GPUs.⁸⁸ In moving to dismiss the complaint, the defendants argued that the indirect purchasers’ injuries were too remote to support standing and that AGC should be applied as the blanket standing test.⁸⁹ The district court disagreed, reasoning that it is "far from clear that Associated General Contractors should be automatically read into the substantive antitrust law of each and every state."⁹⁰ The court explained that standing under each state’s antitrust statute is a matter of that state’s law.⁹¹ "It would be wrong for a district judge, in ipse dixit style, to bypass all state legislatures and all state appellate courts and to pronounce a blanket and nationwide revision of all state antitrust laws."⁹² In the subsequent In re Graphic Processing Units Antitrust Litigation ("GPUs II") decision⁹³ Judge Alsup again declined to apply AGC to the indirect purchasers’ claims, ruling that it would be wrong to do so where it is not "clear" that the state has adopted or otherwise explicitly held that AGC applies.⁹⁴

[Page 129]

In In re TFT-LCD Antitrust Litigation ("TFT-LCD"),⁹⁵ Judge Illston considered whether it is appropriate to apply the AGC test to evaluate indirect purchaser plaintiffs’ standing in "repealer states," including California.⁹⁶ After reviewing GPUs I and GPUs II, the court agreed that it is "inappropriate to broadly apply the AGC test . . . in the absence of a clear directive from those states’ legislatures or highest courts."⁹⁷ Since neither the California legislature nor the California Supreme Court have advanced a clear directive concerning whether AGC should be applied to state law indirect purchaser claims, the court in TFT-LCD did not apply AGC to determine standing for the indirect purchaser plaintiffs’ claims.⁹⁸

The opinion by Judge Armstrong in In re Flash Memory Antitrust Litigation ("Flash Memory")⁹⁹ is also instructive. As discussed above, although the court (incorrectly) applied AGC to determine whether the indirect purchaser plaintiffs had sufficiently alleged antitrust standing, it explained that whether federal courts may apply federal law such as the AGC test is a question predicated on state law and that federal courts are bound by the decisions of the state’s highest courts.¹⁰⁰ Moreover, "[i]t is settled that ‘[w]here the state’s highest court has not decided an issue, the task of the federal courts is to predict how the state high court would resolve it.’If ‘there is relevant precedent from the state’s intermediate appellate court, the federal court must follow the state intermediate appellate court decision unless the federal court finds convincing evidence that the state’s supreme court likely would not follow it.’"¹⁰¹ The appropriate intermediate court decision here is the Cellular Plus decision, which did not apply AGC and expressly held that standing under the Cartwright Act is broader than under the federal antitrust laws.

Other district courts in California have not considered AGC, but instead analyzed standing under the Cellular Plus rubric and determined that the indirect purchaser plaintiffs had standing under the Cartwright Act by virtue of their indirect purchaser status. For example, Eastern District of California Judge O’Neill in Stanislaus Food Products Co. v. USS-POSCO Industries¹⁰² ruled that the indirect purchasers had standing, applying the analysis articulated in Cellular Plus.¹⁰³ The court found that the scope of standing is broader under California law than federal law because, unlike the Sherman Act, the Cartwright Act permits both direct and indirect purchaser claims.¹⁰⁴ After observing that "California courts have held that a plaintiff whose injuries ‘were not secondary. consequential, or remote, but the direct result of the unlawful conduct and were the kind of injuries the antitrust laws seek to prevent’ have standing," the court concluded: "Thus, an indirect purchaser has standing under the Cartwright Act."¹⁰⁵ Courts in the Central and Southern Districts of California likewise have applied Cellular Plus to determine standing under the Cartwright Act.¹⁰⁶

[Page 130]

At least one other district court outside of California has refrained from applying AGC to determine indirect purchaser plaintiff antitrust standing. The Eastern District of Louisiana recently declined to apply AGC to the indirect purchaser plaintiffs’ Cartwright Act claims in In re Pool Products Distribution Marketing Antitrust Litigation.¹⁰⁷ The court ruled that the "AGC factors apply to standing inquiries under state antitrust law claims only to the extent that a state has adopted them."¹⁰⁸ Relying primarily on Clayworth, the court determined that California is not one of those states.¹⁰⁹ The court rejected defendants’ reliance on decisions in federal court and inferior California courts that applied AGC because those authorities "cannot overcome the California Supreme Court’s decision in Clayworth to allow suit by indirect purchasers under the Cartwright Act and the [Unfair Competition Law] without applying the AGC factors."¹¹⁰

III. CONCLUSION

The California legislature sought to protect consumers and indirect purchasers, who typically bear the brunt of antitrust violations, by amending the Cartwright Act in 1978 to expressly state that plaintiffs may bring antitrust claims regardless of whether they dealt directly or indirectly with the defendant. Although the California Supreme Court has not articulated the precise antitrust standing test for Cartwright Act claims, the Court’s opinion in Clayworth, as well as precedent from lower courts, demonstrate that the California Supreme Court has not, and will not, adopt the test the United States Supreme Court set out in AGC. In fact, many California lower courts have rejected employing a narrow standing analysis under the Cartwright Act. Federal courts must respect our federal system, follow the state court’s lead in applying state law, and refrain from engrafting AGC requirements onto state law to determine whether plaintiffs have standing to bring their state antitrust law claims.

[Page 131]

——–

Notes:

^1. Ms. Williams is a senior associate with The Mogin Law Firm, P.C. Ms. Anderson is a partner in the San Diego office of Scott+Scott, Attorneys at Law, LLP. We thank our colleagues Daniel Mogin and Christopher M. Burke for their insightful comments on this article.

^2. 15 U.S.C. § 15 (2014).

^3. Am. Ad Mgmt, Inc. v. Gen. Tel. Co. of Cal., 190 F.3d 1051, 1054 n.3 (9th Cir. 1999).

^4. 459 U.S. 519 (1983).

^5. Id. at 536-545. These factors include (1) the nature of the plaintiff’s alleged injury; that is, whether it was the type of injury the antitrust laws were intended to forestall; (2) the directness of the injury; (3) the speculative measure of the harm; (4) the risk of duplicative recovery; and (5) the complexity in apportioning damages.

^6. Cal. Bus. & Prof. Code §§ 16700-16770 (2014).

^7. See Knevelbaard Dairies v. Kraft Foods, Inc., 232 F.3d 979, 985 (9th Cir. 2000).

^8. See, e.g., In re Dynamic Random Access Memory (DRAM) Antitrust Litig. ("DRAM I"), 516 F. Supp. 2d 1072, 1093 (N.D. Cal. 2007); In re Dynamic Random Access Memory Antitrust Litig. ("DRAM II"), 536 F. Supp. 2d 1129, 1142 (N.D. Cal. 2008); In re Graphic Processing Units Antitrust Litig. ("GPUs I"), 527 F. Supp. 2d 1011 (N.D. Cal. 2007); In re Graphic Processing Units Antitrust Litig. ("GPUs II"), 540 F. Supp. 2d 1085 (N.D. Cal. 2007); In re TFT-LCD Antitrust Litig. ("TFT-LCD"), 586 F. Supp. 2d 1109 (N.D. Cal. 2009); In re Flash Memory Antitrust Litig. ("Flash Memory"), 643 F. Supp. 2d 1133 (N.D. Cal. 2009); In re Cathode Ray Tube Antitrust Litig., 738 F. Supp. 2d 1011 (N.D. Cal. 2010); Stanislaus Food Prods. Co. v. USS-POSCO Indus., 782 F. Supp. 2d 1059 (E.D. Cal. 2011); Dang v. S.F. Forty Niners, 964 F. Supp. 2d 1097 (N.D. Cal. 2013).

^9. See Stanislaus Food Prods. Co., 782 F. Supp. 2d at 1079-80.

^10. See Cellular Plus, Inc. v. Superior Court, 14 Cal. App. 4th 1224, 1234 (1993).

^11. See id.; Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134, 1189 (2003); Clayworth v. Pfizer, Inc., 49 Cal. 4th 758, 781-82 (2010).

^12. Union Carbide Corp. v. Superior Court, 36 Cal. 3d 15, 19-20 (1983).

^13. Union Carbide, 36 Cal. 3d at 19 (emphasis added) See also Cal. Bus. & Prof. Code §16750

^14. 431 U.S. 720 (1977). To date, 25 states and the District of Columbia have passed Illinois Brick repealer statutes, and the courts of numerous other states have interpreted their antitrust statutes to allow indirect purchaser suits. Clayworth, 49 Cal. 4th at 782 (citing Daniel R. Karon, "Your Honor, Tear Down That Illinois Brick Wall!" The National Movement Toward Indirect Purchaser Antitrust Standing and Consumer Justice, 30 Wm. Mitchell L. Rev. 1351, 1361-62 (2004)).

^15. Illinois Brick, 431 U.S. at 726.

^16. Id. at 735.

^17. Id. at 729. Illinois Brick noted two exceptions to the indirect purchaser bar: (1) where the direct purchaser is owned or controlled by the indirect purchaser or the defendant; and (2) where the indirect purchaser obtained the product from the direct purchaser under a "cost-plus" contract. Id. at 726 n.2, 735 n.16; see also Arizona v. Shamrock Foods Co., 729 F.2d 1208, 1213 n.2 (9th Cir. 1984) (recognizing the ownership/control and cost-plus exceptions). The Ninth Circuit also recognizes a "co-conspirator exception" to Illinois Brick. Shamrock Foods, 729 F.2d at 1211. Further, as the Ninth Circuit has recognized, Illinois Brick does not bar indirect purchasers from obtaining equitable relief pursuant to Section 16 of the Clayton Act, 15 U.S.C. § 26. See Freeman v. San Diego Ass’n of Realtors, 322 F.3d 1133, 1145 (9th Cir. 2003).

392 U.S. 481 (1968).

^18. Id. at 494.

^19. Illinois Brick, 431 U.S. at 729, 735.

^21.Id. at 730-47.

^22. Id. at 746.

^23. Id. at 761 (Brennan, J., dissenting) (internal citations omitted).

^24. Id. at 759 (Brennan, J., dissenting).

^25. Id. at 760-61 (Brennan, J., dissenting).

^26. Union Carbide, 36 Cal. 3d at 19 (internal citations omitted).

^27. Clayworth, 49 Cal. 4th at 781-82.

^28. 49 Cal. 4th 758 (2010).

^29. Id. at 781 n.18 (internal citations omitted).

^30. Id. at 782.

^31. Id. at 782; see also Union Carbide, 36 Cal. 3d at 19-20.

^32. 490 U.S. 93 (1989).

^33. Id. at 105-06.

^34. Id. at 103 ("It is one thing to consider the congressional policies identified in Illinois Brick and Hanover Shoe in defining what sort of recovery federal antitrust law authorizes; it is something altogether different, and in our view inappropriate, to consider them as defining what federal law allows States to do under their own antitrust law.").

^35. Id. at 105.

^36. 14 Cal. App. 4th 1224 (1993).

^37. Id. at 1229.

^38. Id.

^39. Id. at 1235.

^40. Id. at 1232-33 (citing Kolling v. Dow Jones & Co., 138 Cal. App. 3d 709, 724 (1982)).

^41. Id. at 1233 (quoting Saxer v. Philip Morris, Inc., 54 Cal. App. 3d 7, 26 (1975)) (emphasis in original).

^42. Id. at 1234 (internal quotation marks omitted).

^43. 429 U.S. 477, 489 (1977).

^44. Cellular Plus, 14 Cal. App. 4th at 1234 (emphasis in original) (internal citations omitted).

^45. Id.(internal citations omitted).

^46. Id.

^47. Id. (quoting Kolling, 137 Cal. App. 3d at 723).

^48. Cellular Plus, Inc. v. Superior Court, No. S032640, 1993 Cal. LEXIS 3613 (Cal. July 1, 1993).

^49. 36 Cal. App. 4th 1811 (1995).

^50. Id. at 1814-17.

^51. Christopher T. Micheletti, Indirect Purchaser Standing Under California Antitrust Law and Federal Antitrust Law: Plaintiff Perspective, 22 Competition: J. Anti. & Unfair Comp. L. Sec. St. B. Cal. 1, 23 (2013) (citing In re Graphics Processing Units Antitrust Litig., 540 F. Supp. 2d at 1097; In re Pool Prods. Distribution Mkt. Antitrust Litig., 946 F. Supp. 2d 544, 564 (E.D. La. 2013); but see DRAM I , 516 F. Supp. 2d at 1088; Flash Memory, 643 F. Supp. 2d at 1151-52; In re Refrigerant Compressors Antitrust Litig., No. 2:09-MD-02042, 2013 WL 1431756, at *10 (E.D. Mich. Apr. 9, 2013); see also Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 269 F. Supp. 2d 1213, 1224-25 (C.D. Cal. 2003) (finding AGC not applicable to Cartwright Act claim and interpreting Vinci to hold that "while the scope of actionable injury is slightly different under the Cartwright Act, the standing analysis is nonetheless informed by many of the same factors").

^52. Vinci, 36 Cal. App. 4th at 1816-17.

^53. Id. at 1816.

^54. Id.

^55. Id.

^56. See id. at 1817.

^57. Id. at 1813, 1816.

^58. Knevelbaard Dairies v. Kraft Foods, Inc., 232 F.3d 979 (9th Cir. 2000).

^59. Id. at 985.

^60. Id. at 987.

^61. Id. at 991.

^62. Id. at 985 ("There are, however, differences in statutory wording and legislative history that lead, in some respects, to different results."); id. ("Thus, federal antitrust precedents are properly included in a Cartwright Act analysis, but their role is limited: they are ‘often helpful’ but not necessarily decisive."); id. at 987 ("California law affords standing more liberally than does federal law"); id. at 991 ("The extent to which antitrust injury is recognized under the Cartwright act is enlarged, by statute, in comparison to federal law."). See also Cianci v. Superior Court, 40 Cal. 3d 903, 920 (1985) ("the Cartwright Act is broader in range and deeper in reach than the Sherman Act"); Freeman, 77 Cal. App. 4th at 183 n.9 ("federal precedents must be used with caution because the [antitrust] acts, although similar, are not coextensive"); Cellular Plus, Inc., 14 Cal. App. 4th at 1234 (holding scope of "antitrust injury" under California Cartwright Act "broader" than federal law); State ex rel. Van de Kamp v. Texaco, Inc., 46 Cal. 3d 1147, 1164 (1988) (judicial interpretation of the Sherman Act "is not directly probative of the Cartwright [Act’s] drafters’ intent").

^63. Knevelbaard Dairies, 232 F.3d at 988 (citing Speegle v. Bd. of Fire Underwriters, 29 Cal. 2d 34, 44 (1946) on antitrust injury factor); id. at 991 (citing Cellular Plus, Inc.,14 Cal. App. 4th at 1234 on directness of injury factor).

^64. GPUs II, 540 F. Supp. 2d at 1097; see, e.g., In re Auto. Parts Antitrust Litig., No. 12-MD-02311, 2013 WL 2456612, at *18 (E.D. Mich. June 6, 2013) ("Because the Court finds that the pleadings are sufficient to demonstrate that the AGC factors do not undermine standing, there is no need to determine whether the various states identified in the . . . complaints apply those factors, whether mandatory, permissive, or not at all in assessing the existence of antitrust standing."); In re Napster, Inc. Copyright Litig., 354 F. Supp. 2d 1113, 1122, 1125-26 (N.D. Cal. 2005) (holding allegations of antitrust standing under Section 4 of the Clayton Act sufficient and therefore concluding antitrust standing sufficient under the "less restrictive" Cartwright Act).

^65. 29 Cal. 4th 1134 (2003).

^66. Id. at 1163 n.13.

^67. In re Dynamic Random Access Memory (DRAM) Antitrust Litig. ("DRAM I"), 516 F. Supp. 2d 1072 (N.D. Cal. 2007).

^68. Id. at 1088-89.

^69. Id. at 1093. The court also dismissed an amended complaint on an analysis of AGC factors. DRAM II, 536 F. Supp. 2d at 1142.

^70. DRAM II, 536 F. Supp. 2d at 1142.

^71. The district court certified the following issues: (1) whether the requirements for standing under AGC apply to indirect purchaser plaintiffs’ state law antitrust claims; (2) if the answer to the first question is yes, "whether indirect purchasers, who are not participants in the same market in which the defendants have allegedly fixed prices, but are participants in a related and interlinked market, have antitrust standing in light of American Ad. Mgmt. v. GTE, 190 F.3d 1051 (9th Cir.1990) and Bhan v. NME Hosps., Inc., 772 F.2d 1467 (9th Cir.1985);" and (3) whether the dismissal of plaintiffs’ state law antitrust claims for lack of antitrust standing was erroneous. DRAM I, No. M 02-1486 PJH, 2008 WL 863994, at *1 (N.D. Cal. Mar. 28, 2008).

^72. Brief of Amicus Curiae the State of California in Support of Appellants, Supporting Reversal, In re Dynamic Random Access Memory (DRAM) Antitrust Litig., 2009 WL 2609769 (9th Cir. March 6, 2009) (No. 08-16478).

^73. 643 F. Supp. 2d 1133 (N.D. Cal. 2009).

^74. Id. at 1151-52.

^75. Id. at 1156.

^76. 738 F. Supp. 2d 1011 (N.D. Cal. 2010).

^77. Id. at 1023 (citing Flash Memory, 643 F. Supp. 2d at 1151); id. at 1024 (allegations sufficient to find antitrust standing).

^78. 964 F. Supp. 2d 1097 (N.D. Cal. 2013).

^79. Id. at 1110-11.

^80. Id. at 1114.

^81. No. 2:09-MD-02042, 2013 WL 1431756, at *8 (E.D. Mich. Apr. 9, 2013).

^82. Id. at *8.

^83. Id. at *10.

^84. Id. (citing Clayworth, 49 Cal. 4th at 680).

^85. Clayworth, 49 Cal. 4th at 774-75. The Supreme Court in Clayworth also approvingly discusses several early California Court of Appeal cases that held under the facts of those cases that there was no causal nexus between the plaintiffs’ injury and the alleged unlawful restraint of trade. Id. at 774-76 (citing Krigbaum v. Sbarbaro, 23 Cal. App. 427 (1913) and Overland Publ’g Co. v. Union Lithograph Co., 57 Cal. App. 366 (1922)).

^86. 527 F. Supp. 2d 1011 (N.D. Cal. 2007).

^87. Id. at 1025-26.

^88. Id. at 1013.

^89. Id. at 1025.

^90. Id.

^91. Id. at 1026.

^92. Id.

^93. 540 F. Supp. 2d. 1109 (N.D. Cal. 2007). Although the court in GPU I declined to apply AGC to determine whether the indirect purchasers had standing, it dismissed the complaint on other grounds. See GPU I, 527 F. Supp. 2d at 1026-27. GPU II addressed plaintiffs’ motion for leave to amend the complaint.

^94. GPUs II, 540 F. Supp. 2d at 1097.

^95. 586 F. Supp. 2d 1109 (N.D. Cal. 2008).

^96. Id. at 1120-21.

^97. Id. at 1123.

^98. Id. Although the Court did not determine standing based on the factors under AGC, it did note that, if AGC did apply to the indirect purchasers’ state actions, they had alleged sufficient facts to have standing at the pleading stage. Id.; see also Sidibe v. Sutter Health, No. C 12-04854 LB, 2013 U.S. Dist. LEXIS 78521, at *47-*48 (N.D. Cal. June 3, 2013) (declining to decide whether the plaintiffs had standing under their Cartwright Act claim, but finding California district court decisions that did not require the factors in AGC to be satisfied to allege standing "persuasive").

^99. 643 F. Supp. 2d 1133 (N.D. Cal. 2009).

^100. Id. at 1151; accord Dang, 964 F. Supp. 2d at 1110-11.

^101. Flash Memory, 643 F. Supp. 2d at 1151 (internal citations omitted); see also Dang, 964 F. Supp. 2d at 1110-11.

^102. 782 F. Supp. 2d 1059 (E.D. Cal. 2011).

^103. Id. at 1079-80.

^104. Id. at 1080 (quoting Cellular Plus, 14 Cal. App. 4th at 1233).

^105. Id.

^106. See Metro-Goldwyn-Mayer Studios. Inc., 269 F. Supp. 2d at 1224-25; Lorenzo v. Qualcomm Inc., 603 F. Supp. 2d 1291, 1302-03 (S.D. Cal. 2009); Mayer v. Qualcomm Inc., No. 08cv655, 2009 WL 539902 (S.D. Cal. Mar. 3, 2009); Valikhani v. Qualcomm Inc., No. 08cv786, 2009 WL 539915 (S.D. Cal. Mar. 3, 2009). In each of these four cases, the courts dismissed the Cartwright Act claim for lack of standing, applying the Cellular Plus decision.

^107. 946 F. Supp. 2d 554 (E.D. La. 2013).

^108. Id. at 564.

^109. Id.

^110. Id.