WHY ASSOCIATED GENERAL CONTRACTORS SHOULD BE USED TO ASSESS STANDING IN CARTWRIGHT ACT CASES

By Anna M. Fabish¹

I. INTRODUCTION

Courts are far from united in evaluating antitrust standing for indirect purchasers under California’s antitrust laws—an inconsistency the California Supreme Court has yet to address. The solution, however, has been available for decades: the multi-factor analysis set forth by the United States Supreme Court in Associated General Contractors v. Cal. State Council of Carpenters ("AGC").² The decision provides a nuanced framework for assessing antitrust standing in all Cartwright Act claims, including—indeed, especially—claims by indirect purchasers.

The underlying principles of AGC, as well as the results of courts applying the AGC factors to Cartwright Act claims to date,³ reveal that AGC and the Cartwright Act are consistent and complementary sources of law. AGC is persuasive federal precedent that can—and, in the interest of helping courts navigate the complex questions of antitrust standing for indirect purchasers, should—be applied to Cartwright Act claims.

While the California Legislature’s 1978 amendment to the Cartwright Act was a rejection of the U.S. Supreme Court’s 1977 holding in Illinois Brick v. Illinois,⁴ which excluded indirect purchasers from the universe of plaintiffs that might have antitrust standing, the amendment has no effect on the applicability of AGC to Cartwright Act claims. Each addresses a distinct issue: Whereas the amendment makes clear that, as a threshold matter, indirect purchasers may properly be the subject of an antitrust standing analysis, AGC sets forth a framework for performing that analysis.

There is no tension between the AGC analysis and the amended Cartwright Act. The 1978 amendment protects indirect purchasers, not by automatically granting them antitrust standing, but by prohibiting a blanket rule that would automatically deny them antitrust standing. Applying AGC to determine which indirect purchasers have antitrust standing under the Cartwright Act does not resurrect a blanket rule or automatically adjudicate the standing of indirect purchasers as a group. It thus does not abrogate the protection the Cartwright Act affords indirect purchasers.

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The Cartwright Act as amended tees up an antitrust standing analysis, but it does not provide one. Not all indirect purchasers are created equal: their commercial relationships and position in the stream of commerce vary widely. And California case law is thin on how to determine which indirect purchasers should survive an antitrust standing analysis. AGC provides established guidance on antitrust standing that can serve, should serve, and in many instances already has served this role. Such guidance would be particularly helpful for courts because the group of plaintiffs the 1978 amendment swept within the potential scope of the Cartwright Act are as diverse as the outcomes of the AGC standing inquiry and present complex standing issues.

II. THE 1978 CARTWRIGHT ACT AMENDMENT AND THE AGC ANTITRUST STANDING ANALYSIS ADDRESS DISTINCT ISSUES

A. The Clayton Act and the Cartwright Act Both Require Antitrust Standing

On their face, both the federal Clayton Act and California’s Cartwright Act grant the ability to sue to any would-be plaintiff who is "injured" "by reason of" an antitrust violation.⁵ The potential reach of the Clayton Act and the Cartwright Act based on these criteria alone would be vast, as conduct that may be considered an antitrust violation can frequently cause harm with no or only a distant connection to the goals of antitrust law.⁶ To address these realities and avoid an unintended use of the antitrust laws, state and federal courts have imposed additional requirements on antitrust plaintiffs. Specifically, for a plaintiff "injured" "by reason of" an alleged antitrust violation to seek private antitrust damages under both federal and California law, he or she must establish antitrust standing.⁷ Antitrust standing involves the concepts of (i) antitrust injury and (ii) a proximate causal connection with the anticompetitive conduct⁸ Thus, under both federal and California antitrust law, not all those injured by an antitrust violation are permitted to seek antitrust damages.⁹

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B. Illinois Brick and the 1978 Cartwright Act Amendment Rejecting It Address Only the Threshold Issue of to Whom an Antitrust Standing Analysis May Properly Be Applied

1. Illinois Brick renders indirect purchasers automatically ineligible for antitrust standing under the Clayton Act

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In Illinois Brick, the Supreme Court determined that, with limited exceptions,¹⁰indirect purchasers cannot have suffered "injury" for the purposes of a Clayton Act claim.¹¹ With this holding, indirect purchasers were automatically excluded from the universe of plaintiffs that might have antitrust standing under federal law. As a result, federal courts need not even consider whether indirect purchasers have antitrust standing under the Clayton Act; a prerequisite for antitrust standing is absent.¹²

The majority in Illinois Brick acknowledged that its holding is "analytically distinct" from the question of antitrust standing for all non-indirect purchaser plaintiffs.¹³ Thus, Illinois Brick did not affect the antitrust standing analysis to be applied to all other Clayton Act plaintiffs not rendered ineligible.

2. The 1978 Cartwright Act amendment ensures that courts will not view indirect purchasers as automatically ineligible for antitrust standing

In a rejection of Illinois Brick, the California Legislature a year later amended the Cartwright Act to make clear that indirect purchasers may be considered "persons injured," and thus be eligible for antitrust standing.¹⁴ The 1978 amendment is phrased as the rejection of a possible restriction: It adds language noting that a person may be deemed "injured" for purposes of the statute "regardless of whether such injured person dealt directly or indirectly with the defendant."¹⁵

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Dictating that an indirect purchaser is a "person injured," however, simply permits the antitrust standing analysis to proceed. Unlike a court applying federal law post-Illinois Brick, a court applying the Cartwright Act is not required—indeed, is not permitted—to end its inquiry upon ascertaining a plaintiff is an indirect purchaser. Instead, a court must consider whether that plaintiff has antitrust standing under a more rigorous analysis, taking into account more than just the plaintiff’s level of privity with the defendant.¹⁶

3. The 1978 Cartwright Act amendment does not affirmatively grant standing to all indirect purchasers

While the 1978 amendment prevents Illinois Brick’s blanket exclusion, it does not automatically grant all indirect purchasers standing.¹⁷ The California Supreme Court has recognized that the intent of the 1978 amendment was to ensure that the possibility of an indirect purchaser with license to enforce the antitrust laws remained on the table.¹⁸ Beyond that, it does not affect the antitrust standing analysis at all.

This is plain from both the language of the Cartwright Act overall and the language added by the 1978 amendment. First, nothing in the amended language is relevant to establishing antitrust injury under the Cartwright Act, except to clarify that being an indirect purchaser does not preclude antitrust injury.¹⁹ The California Court of Appeals recognized this same logic in a parallel context in Morrison v. Viacom, Inc.²⁰ In Morrison, the court recognized that California law establishing the plaintiffs’ status as customers (rather than competitors) did not prevent them from proving antitrust injury, but nevertheless held that the plaintiffs had failed to do so:

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Appellants allege that the fact that they are not competitors of Viacom does not prevent them from establishing antitrust injury. Although we agree, appellants completely miss the point. Appellants failed to allege antitrust injury not because they are customers rather than competitors of Viacom, but because they have failed to allege any facts to show they suffered an injury which was caused by restraints on competition.²¹

Similarly, the fact that indirect purchasers are not prevented from proving antitrust injury or standing based on their indirect purchaser status does not change the need for them to establish antitrust injury in order to have antitrust standing.

Moreover, nothing in the 1978 amendment disturbs the "by reason of" proximate cause language already in the Cartwright Act.²² Indeed, the Illinois Brick dissent, on which the 1978 amendment is based,²³ acknowledges that its rejection of the majority’s view does not affect the need to establish proximate cause limits on antitrust liability.^24,25 This becomes clear when one envisions a world but-for Illinois Brick: without the Illinois Brick decision, there is simply a lack of any special treatment — positive or negative — for indirect purchasers.

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Thus, the California Legislature’s rejection of Illinois Brick, like the decision itself, does nothing to inform the "analytically distinct"²⁶ issue of what the outcome of an indirect purchaser standing analysis will be, except to allow that analysis to proceed.²⁷

C. AGC Provides a Framework for an Antitrust Standing Analysis that Does Not Rely on or Incorporate the Holding of Illinois Brick

Several years after Illinois Brick, the U.S. Supreme Court in AGC provided guidance on how courts should analyze whether an "injured person" has antitrust standing under the Clayton Act and set forth factors to be weighed.²⁸ These factors have since been summarized as: "(1) the nature of the plaintiff’s alleged injury; that is, whether it was the type 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."²⁹ The first of these factors is the most important, but all factors are weighed together.³⁰

The analysis set forth in AGC "determin[es] whether a plaintiff who has borne an injury has antitrust standing,"³¹ but does not address which types of plaintiffs may have "borne an injury" or to whom this antitrust standing analysis can be applied. The analysis in AGC thus did not speak to the issue addressed in Illinois Brick or the 1978 Cartwright Act amendment spawned by Illinois Brick. AGC considers a distinct and much broader question of how to evaluate antitrust standing once a "plaintiff who has borne an injury" has been identified.³²

Nor does the analysis set forth in AGC incorporate or build significantly on Illinois Brick or its underlying concerns. Both the majority and dissenting opinions in Illinois Brick focused on the practical difficulties of apportioning damages and avoiding multiple recovery, balanced against the need to ensure that private treble damages actions deter

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and punish antitrust violations.³³ The Illinois Brick holding is guided by these concerns.³⁴ By contrast, the first and most important factor in AGC—the nature of the injury—is aimed entirely at limiting private antitrust actions to those correcting the type of harm the antitrust laws were intended to prevent.³⁵ The directness and speculativeness factors are animated by proximate cause concepts,³⁶ which are similarly unrelated to the judicial manageability, deterrence, and enforcement policies at issue in the Illinois Brick opinions.³⁷ Only the risk of multiple recovery and difficulty of apportioning damages factors in AGC incorporate some of the same practical considerations motivating Illinois Brick.³⁸ These factors do not play a prominent role in the AGC analysis: the first mention of Illinois Brick or its underlying concerns occurs 24 pages into the 27-page AGC majority opinion, and is confined to two paragraphs.³⁹

AGC therefore neither reinforces nor incorporates Illinois Brick into its holding. Instead, it sets forth a framework for analyzing antitrust standing, an issue distinct from Illinois Brick’s holding that dictates to whom such an analysis may be applied.

III. THE AGC FACTORS AND THE CARTWRIGHT ACT AS AMENDED ARE COMPATIBLE SOURCES OF LAW

Applying AGC to Cartwright Act claims will not demand (and thus far has not demanded) outcomes inconsistent with the spirit of the 1978 amendment.⁴⁰ Any concern that AGC will vitiate the Cartwright Act’s protection of indirect purchasers is unfounded.⁴¹

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A. AGC Does Not Abrogate the Protection for Indirect Purchasers Created by the 1978 Cartwright Act Amendment

The Cartwright Act offers the potential for recovery by indirect purchasers who, with very limited exceptions, would not be able to recover under the Clayton Act.⁴² This is the additional protection recognized by several courts:⁴³ preventing automatic exclusion of indirect purchasers from the pool of "persons injured" who may attempt to establish antitrust standing.⁴⁴ To abrogate such a protection, AGC would have to automatically exclude indirect purchasers from the potential pool of candidates for Cartwright Act standing—which AGC does not.⁴⁵ If anything, the hallmark of the AGC analysis is that it is a case-by-case inquiry without blanket rules. Even though an indirect purchaser might not ultimately establish antitrust standing under the AGC analysis for reasons unrelated to his indirect purchaser status as such—for example, because his injury was too remote, or because he did not suffer injury stemming from harm to competition—this would not abrogate the Cartwright Act’s additional protections, as the Cartwright Act does not promise indirect purchasers standing in all circumstances.⁴⁶

Nor does the AGC standing analysis de facto deny indirect purchasers standing in all circumstances.⁴⁷ Far from it. Where state and federal courts have applied AGC to indirect purchaser Cartwright Act claims, their analyses have yielded diverse results—including numerous findings of antitrust standing for indirect purchasers.^48,49

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B. Applying the AGC Factors to Indirect Purchaser Cartwright Act Claims Has Not Yielded Outcomes Inconsistent with the Cartwright Act

The factors set forth in AGC could potentially weigh in favor of or against conferring standing on any given indirect purchaser plaintiff. This is because how each of the AGC factors is applied depends on aspects of the plaintiff’s claims wholly unrelated to the direct or indirect nature of the relationship between plaintiff and defendant. Indeed, most of the factors focus on the relationship between conduct and harm, not the level of privity between the parties: "[I]t is not the status as a consumer or competitor that confers antitrust standing, but the relationship between the defendant’s alleged unlawful conduct and the resulting harm to the plaintiff."⁵⁰ For example, a court may deem damages sought by indirect purchasers of Product A too indirectly related to the overcharge alleged, due to the nature of Product A "as a ubiquitous component in all manner of personal electronic devices that are purchased for end use."⁵¹ The same court could deem Product B to be a component that is sufficiently "traceable" through a "relatively short" production chain, and reject arguments that damages sought by indirect purchasers of Product B are too speculative or indirect.⁵² Plaintiffs seeking recovery with respect to Product A and Product B are both indirect purchasers, but differences in the products and markets—not in the plaintiffs’ indirect purchaser status—would determine the outcome under AGC. To date, courts’ application of each AGC factor to indirect purchaser plaintiffs strongly supports this view.

1. Nature of injury / market participant

The heart of the first AGC factor is that the harm suffered by the plaintiff be "the type the antitrust laws were intended to prevent and that flows from that which makes defendants’ acts unlawful."⁵³ The "market participant" analysis is included under the same rubric, which considers whether the market in which the plaintiff participates is the same as or sufficiently connected to the market in which competition was harmed.⁵⁴ Most federal courts considering this factor have concluded plaintiffs’ standing allegations were sufficient to establish that the indirect purchaser plaintiff was a market participant who suffered a requisite antitrust injury.⁵⁵ These decisions reflect a focus not on the level of privity between the parties, but on the nature of the harm alleged, as well as the specific characteristics of the industry and relationship between markets.

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For example, whether the allegedly price-fixed product was a component part—and how big a role the component played, physically and economically—in the end product purchased by the indirect purchaser have proved to be key facts. In TFT-LCD, the court applied the AGC factors to purchasers of products containing allegedly price-fixed LCD panels, despite the plaintiffs not participating directly in the relevant market or purchasing the subject product directly from defendants.⁵⁶ The court found significant plaintiffs’ allegations that the LCD panels "have no independent utility, and have value only as components of other products," that "the demand for LCD panels thus directly derives from the demand for such products," and that "LCD panels follow a traceable physical chain from the defendants to the OEMs to the purchasers of the finished products incorporating LCD panels."⁵⁷ The first AGC factor therefore did not hinge on the status of plaintiffs as indirect purchasers, but on these numerous other characteristics of the relevant product market and product itself.⁵⁸

The nature of injury can also weigh against standing. But such rulings denying standing—as with cases in which indirect purchaser standing was upheld under AGC— do not depend on the status of the plaintiff as an indirect purchaser, but rather on the specific alleged characteristics of the market and products at issue. For example, in Refrigerant Compressors Antitrust Litigation, although plaintiffs alleged that the hermetic compressors at issue were a fundamental component of the refrigerators and water coolers that indirect purchaser plaintiffs had bought, the record did not support a connection between demand in the two markets or reveal that the components were economically traceable through the production chain.⁵⁹ As a result, the nature of injury factor weighed against a finding of antitrust standing.⁶⁰

The plaintiffs in TFT-LCD and Refrigerant Compressors all indirectly purchased the price-fixed product, yet the outcomes of the AGC analysis on this first factor were vastly different.

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2. Directness / remoteness factor

Under the second factor, courts look to "the chain of causation between the [] injury and the alleged restraint in the market."⁶¹ This factor does not consider the directness of the relationship between the parties, but the relationship between the defendant and the harm—an analysis derivative of proximate cause concepts.⁶² As a result, courts have successfully applied the AGC analysis to indirect purchaser claims without "[t]he fact that plaintiffs are indirect purchasers . . . hav[ing] negative bearing on this factor."⁶³ For example, in Knevelbaard, the Ninth Circuit considered a challenge to Cartwright Act claims brought by direct and indirect sellers of milk to defendant cheese manufacturers, who allegedly repressed the prices at which they purchased milk indirectly and directly from plaintiffs by fixing prices used by an auction agency.⁶⁴ In applying AGC, the court ultimately concluded that the directness of injury factor weighed in favor of antitrust standing because "[t]he milk sellers, insofar as the alleged conspiracy was meant to and did reduce their sales prices, suffered a direct injury."⁶⁵ Thus, despite the indirect relationship between the parties, the causal connection between the defendants’ actions and the plaintiff’s injury were sufficiently direct to satisfy AGC.

The directness analysis often considers what other factors may have contributed to the harm allegedly suffered: the more possible sources, the less clearly linked the harm and the defendant.⁶⁶ Especially when an indirect purchaser is a component part manufacturer, the specific details of the product market, relationship with other markets, and the nature of the product itself will help determine possible contributing sources and directness.⁶⁷ All these aspects can vary widely; they will not—and, in practice, have not—yielded a blanket refusal of standing for indirect purchaser plaintiffs.⁶⁸

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For example, in Flash Memory, the court determined that purchasers of products containing a price-fixed component had antitrust standing under AGC.⁶⁹ In applying the directness factor to reach this conclusion, the court considered the plaintiffs’ allegations that the component was "traceable through the product distribution chain."⁷⁰ By contrast, in DRAM I, the court declined to confer antitrust standing on purchasers of a product containing allegedly price-fixed components where the component’s "nature as a ubiquitous component in all manner of personal electronic devices . . . lessens the directness of its impact on price."⁷¹ Unlike the "traceable" components in Flash Memory, the DRAM complaint "set[] forth no allegations that demonstrate that, within the final purchase price of a given product purchased by plaintiffs for ‘end use’, the ultimate cost of the DRAM component is somehow directly traceable and/or distinguishable."⁷²

3. Speculative nature of damages⁷³

Claimed damages can be speculative or difficult to apportion due to aspects of commercial relationships unrelated to the plaintiff’s status a direct or indirect purchaser. Courts’ application of this factor, as well as the discussion of the factor in AGC,⁷⁴ confirms the importance of these other characteristics. For example, in Flash Memory, the defendants argued that "NAND flash memory is just one of many components of a finished product, and as such, any attempt to distinguish the impact of its allegedly inflated price on the purchase price of a retail product would be speculative and excessively complex."⁷⁵ Instead of accepting this argument based almost entirely on the plaintiffs’ status as indirect purchasers, the court found sufficient to confer standing at the motion to dismiss stage allegations that "NAND flash memory, whether in the form of a product or as a component of a finished product, remains discrete and traceable to its manufacturer."⁷⁶ In this way, the court considered the specific characteristics of the product and market at issue—not plaintiffs’ indirect connection with the component manufacturer—as crucial to determining speculativeness.⁷⁷

4. Duplicative recovery and difficulty of apportioning damages factors

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Unlike the first three factors, which have no connection with Illinois Brick, the fourth and fifth AGC factors—duplicative recovery and difficulty apportioning damages—do touch on policy concerns that motivated the Illinois Brick majority to exclude indirect purchasers from the scope of federal antitrust standing. But this limited connection does not mean that any part of the AGC analysis incorporates the Illinois Brick rule. Nor does it prevent the application of the full AGC balancing test from being helpful in assessing antitrust standing of Cartwright Act plaintiffs.

The fourth and fifth factors are by no means a death knell for all indirect purchasers: they have weight for or against standing for reasons unrelated to the plaintiff’s indirect purchaser status. In Flash Memory, for example, the court concluded that because "the alleged overcharges by Defendants are distinct and traceable. . . . the risk of duplicative recovery is less of a concern," and the indirect purchaser plaintiffs had standing.⁷⁸ Similarly, in TFT-LCD, the court determined that the difficulty of apportioning damages did not weigh against standing at the motion to dismiss phase, where indirect purchaser plaintiffs had "sufficiently alleged that damages are traceable and thus apportionable because LCD panels are a separate component."⁷⁹

Moreover, these factors can play an important role in determining antitrust standing of indirect purchasers, even after one accepts that some risk of duplicative recovery between direct and indirect purchasers is inherent in any indirect purchaser suit. A court can and should consider whether there is a risk of multiple recovery beyond that which is inherent in indirect purchaser claims, such as multiple recovery by various groups of indirect purchasers.⁸⁰ Similarly, a court can and should consider whether, beyond the level of difficulty in apportioning damages that inherently exists when there are plaintiffs at multiple levels of the production chain, a given claim stretches the bounds of judicial manageability to such an extent that it cannot stand.

Bearing in mind that the risk of multiple recovery and the difficulty of apportioning damages are only two AGC factors (and secondary to the nature of the injury), there is no risk that they will overpower the analysis, or that indirect plaintiffs will be denied recovery solely because their claims impose some additional burdens on the court. In dissenting from the Illinois Brick holding, Justice Brennan did not view concerns about multiple recovery and apportioning damages as irrelevant to the antitrust standing analysis overall. Instead, he concluded that these concerns were real, but insufficient to warrant the majority’s blanket rejection of standing for virtually any indirect purchaser plaintiffs.⁸¹ Courts can apply the fourth and fifth AGC factors to Cartwright Act claims by taking this same approach: recognizing the role of these factors, yet understanding that they cannot be used to deny all indirect purchasers standing. In discussing the application of these factors to indirect purchaser Cartwright Act claims, the superior court in Crouch v. Crompton Corporation aptly described this approach:

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While these factors are limited by the General Assembly’s creation of indirect purchaser standing, they should not be totally eliminated when considering the state claims. The courts still have the same interest in keeping the scope of a complex antitrust trial within judicially manageable limits. AGC, 459 U.S. at 543. The factors are simply taken down a level and the Hanover Shoe/Illinois Brick restrictions eliminated. State cases may present apportionment issues which are simply too complex and for which there exists no measure of recovery which is not speculative. It is clear that the General Assembly did not intend that every purchaser in the distribution chain have a right of recovery or that there be duplicative recovery among indirect purchasers.⁸²

Finally, to the extent these factors could, in certain indirect purchaser cases, directly conflict with the Cartwright Act, courts can easily consider either factor neutral,⁸³ much as they have done where no facts are present that allow the factor to weigh for or against standing.⁸⁴

***

The AGC factors, both in theory and as applied by courts, do not across the board deny indirect purchaser standing. This makes sense, as all indirect purchaser plaintiffs are not created equal, and thus will not fare the same under a case-specific analysis, simply because they share a single characteristic. As a result, the outcome of the standing inquiry will be different for different indirect purchasers, and any concerns about the AGC analysis de facto blocking antitrust standing for indirect purchasers are misguided.

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IV. THE AGC ANTITRUST STANDING ANALYSIS SHOULD BE APPLIED TO CARTWRIGHT ACT CLAIMS

For the reasons discussed above, there is no tension between the Cartwright Act and AGC that would prevent their joint application. For the reasons discussed below, courts should apply them together and seek guidance from AGC in analyzing indirect purchaser claims under the Cartwright Act. Indeed, the Cartwright Act’s inclusion of indirect purchasers within its potential scope has rendered the AGC standing analysis especially helpful precedent.

Because the federal and California antitrust regimes share common goals and have a similar structure,⁸⁵ federal antitrust precedent is generally considered a persuasive source of authority in applying the Cartwright Act.⁸⁶ Even California state court jurisprudence on Cartwright Act standing that does not rely on persuasive federal decisions is substantively consistent with the AGC analysis.⁸⁷ Of course, the numerous cases applying AGC to Cartwright Act claims, such as those discussed in supra section III.B, also support the role of federal jurisprudence as persuasive authority in interpreting the Cartwright Act.

The 1978 Cartwright Act amendment creates the opportunity to apply an antitrust standing analysis to indirect purchasers, but it does not provide such an analysis. Nor does the California state jurisprudence provide concrete guidance in this area.⁸⁸ Given that indirect purchaser claims will likely trigger additional factual complexities, such guidance would be especially helpful. Analyzing these claims thus requires a particularly nuanced consideration of the connections between markets, nature of injury, the directness and speculativeness of the harm, and other practical considerations. The persuasive and tested federal antitrust law framework provided in AGC is ideally suited for this task, and courts should look to it to help them navigate the complex questions posed by indirect purchaser standing claims.

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Some courts have rejected or questioned the application of AGC to Cartwright Act claims,⁸⁹ but have often done so based at least in part on the lack of direction from the California Supreme Court that the analysis should apply.⁹⁰ Moreover, other courts—including the California appellate courts—have in other instances applied the AGC factors expressly,⁹¹ or in substance,⁹² to analyze antitrust standing of Cartwright Act plaintiffs. The handful of cases expressing an opposing view on this open issue of law do not foreclose the conclusion that the AGC factors should nonetheless apply, or the prospect of a California Supreme Court decision to that effect.

V. CONCLUSION

No persuasive basis exists for declining to apply AGC‘s antitrust standing analysis to indirect purchaser claims under the Cartwright Act. The AGC framework addresses an issue distinct from that addressed by Illinois Brick and the 1978 Cartwright Act amendment "repealing" Illinois Brick. AGC is therefore wholly consistent with the Cartwright Act as amended, which continues to require plaintiffs to show antitrust standing, even for indirect purchasers. To conclude otherwise, one must either conflate the "analytically distinct" holdings of Illinois Brick and AGC, or treat the Illinois Brick repealer provision in the Cartwright Act as doing more than rejecting the federal blanket ban on a certain class of plaintiffs. Either approach would be an analytical mistake, and would deprive courts of helpful guidance on a complex area of law.

While application of AGC may help limit recovery under the Cartwright Act to only those plaintiffs that properly have antitrust standing, this is a shared goal of federal and California antitrust regimes. It is hardly a basis for arguing that AGC should not apply. To the contrary, this consideration vies in favor of seeking guidance from the Supreme Court’s analysis in AGC as a means of ensuring that only proper antitrust plaintiffs—be they indirect purchasers or not—proceed with Cartwright Act claims. The AGC factors are best understood not as limiting the reach of antitrust laws, but rather as ensuring the correct, accurately shaped reach of those laws. Because AGC and the Cartwright Act are consistent and complementary sources of law, there is no sound reason for California courts not to use AGC as a tool.

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Notes:

^1. Anna M. Fabish is a counsel in the antitrust and competition law practice group of O’Melveny & Myers LLP. The views expressed in this article are those of the author and not necessarily those of O’Melveny & Myers, its lawyers, or its clients.

^2. 459 U.S. 519 (1983).

^3. In fall 2013, two articles appeared in this journal that thoughtfully surveyed and analyzed much of the case law on the applicability of AGC to Cartwright Act standing analyses. See David C. Kiernan & Lin W. Kahn, Indirect Purchaser Standing Under California Antitrust Law and Federal Antitrust Law: Defense Perspective, 22 Competition: J. Anti. & Unfair Comp. L. Sec. St. B. Cal. 24 (2013); Christopher T. Micheletti, Indirect Purchaser Standing Under California Antitrust Law and Federal Antitrust Law: A Plaintiff Perspective, 22 Competition: J. Anti. & Unfair Comp. L. Sec. St. B. Cal. 1 (2013). Few cases have considered this issue since those articles were published.

^4. 431 U.S. 720 (1977).

^5. The Clayton Act provides in relevant part:

[A]ny person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor in any district court of the United States in the district in which the defendant resides or is found or has an agent, without respect to the amount in controversy, and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney’s fee.

^15. U.S.C. § 15(a) (2014).

The Cartwright Act provides in relevant part:

Any person who is injured in his or her business or property by reason of anything forbidden or declared unlawful by this chapter, may sue therefor in any court having jurisdiction in the county where the defendant resides or is found, or any agent resides or is found, or where service may be obtained, without respect to the amount in controversy, and to recover three times the damages sustained by him or her, interest on his or her actual damages pursuant to Section 16761, and preliminary or permanent injunctive relief when and under the same conditions and principles as injunctive relief is granted by courts generally under the laws of this state and the rules governing these proceedings, and shall be awarded a reasonable attorneys’ fee together with the costs of the suit.
This action may be brought by any person who is injured in his or her 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

Cal. Bus. & Prof. Code § 16750(a) (2014).

^6. See Cargill, Inc. v. Monfort of Colo., Inc., 479 U.S. 104, 110 n.5 (1986); Sundance Land Corp. v. Cmty. First Fed. Sav. & Loan Ass’n, 840 F.2d 653, 664 (9th Cir. 1988) (due to "the generality of the antitrust statutes and the complexity and interdependence of modern business relationships; a violation of the antitrust laws often significantly affects many different economic actors in myriad ways, some of which are not within the intended scope of the antitrust laws. Courts therefore recognized the need to limit antitrust standing beyond the requirement of proximate causation."); In re Dynamic Random Access Memory (Dram) Antitrust Litig. ("DRAM I"), 516 F. Supp. 2d 1072, 1085 (N.D. Cal. 2007) ("plaintiff’s right to sue for money damages is nonetheless subject to certain limitations, based upon policies found by the courts to be inherent in the structure and purpose of the antitrust laws") (citing Cargill, 479 U.S. at 110 n.5); Leisure Marketing, Inc. v. Camp Coast to Coast, No. 314452, 1987 WL 92053, at *11 (Cal. Super. Ct. Jan. 14, 1987) ("It is reasonable to assume that Congress did not intend to allow every person tangentially affected by an antitrust violation to maintain an action to recover threefold damages for the injury to his business or property.").

^7. See AGC, 459 U.S. at 535 n.31; Kolling v. Dow Jones & Co., 137 Cal. App. 3d 709, 723-24 (1982) (applying a "standing to sue" requirement to Cartwright Act claims); Saxer v. Philip Morris, Inc., 54 Cal. App. 3d 7, 26 (1975) (requiring antitrust standing for plaintiff to recover under Cartwright Act).

^8. See Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 487-89 (1977) (antitrust injury); Or. Laborers-Employers Health & Welfare Trust Fund v. Philip Morris Inc., 185 F.3d 957, 963 (9th Cir. 1999) (private right of action for antitrust damages "require[s] that the alleged violation of the law be a ‘proximate cause’ of the injury suffered" (internal citations omitted)); AGC, 459 U.S. at 535-37; Kolling, 137 Cal. App. 3d at 723-24 ("The plaintiff in a Cartwright Act proceeding must show that an antitrust violation was the proximate cause of his injuries.. . . An ‘antitrust injury’ must be proved; that is, the type of injury the antitrust laws were intended to prevent, and which flows from the invidious conduct which renders defendants’ acts unlawful. Finally, a plaintiff must show an injury within the area of the economy that is endangered by a breakdown of competitive conditions." (internal citations omitted)).

^9. See, e.g., Cargill, 479 U.S. at 110 n.5 (although showing of antitrust injury is necessary, it still is "not always sufficient[] to establish standing under § 4 because a party may have suffered antitrust injury but may not be the proper plaintiff under § 4 for other reasons"); AGC, 459 U.S. at 534 ("’Congress did not intend the antitrust laws to provide a remedy in damages for all injuries that might conceivably be traced to an antitrust violation.’" (internal citations omitted)); Kolling, 137 Cal. App. 3d at 723 (noting that a party "incidentally injured" by an antitrust violation may not recover under the Cartwright Act).

^10. In Illinois Brick v. Illinois, 431 U.S. 720 (1977), the majority noted two potential exceptions to the exclusion of indirect purchasers: when the direct purchaser and the indirect purchaser have already entered into "cost-plus" contracts, id. at 732 n.12, and when the direct purchaser is owned or controlled by the indirect purchaser, id. at 736 n.16.

^11. Id. at 746-47, 748; California v. ARC Am. Corp., 490 U.S. 93, 97 (1989) (describing Illinois Brick as holding that, "with limited exceptions, only overcharged direct purchasers, and not subsequent indirect purchasers, were persons ‘injured in [their] business or property’ within the meaning of § 4, and that therefore the State of Illinois was not entitled to recover under federal law for the portion of the overcharge passed on to it.").

^12. The blanket exclusion of indirect purchasers from the antitrust standing analysis is not itself some truncated version of an antitrust standing analysis. Illinois Brick denied indirect purchaser plaintiffs the right to be considered for antitrust standing as a threshold matter of policy; it did not conclude that an indirect purchaser failed a standing analysis. Indeed, nothing in the Illinois Brick decision implies an antitrust standing analysis: it does not discuss proximate cause or antitrust injury with respect to the plaintiffs’ claims, and instead focuses almost exclusively on pragmatic concerns, antitrust policy goals, and the need to be consistent with Hanover Shoe’s rejection of a pass-on defense. See generally Illinois Brick, 431 U.S. at 720-47. In AGC, the Supreme Court also does not discuss or describe Illinois Brick as concluding that the indirect purchaser plaintiffs failed an antitrust standing analysis, or as setting out some alternative standing analysis applicable to indirect purchasers. See AGC, 459 U.S. at 544 (noting that in Illinois Brick "we held that treble damages could not be recovered by indirect purchasers of concrete blocks who had paid an enhanced price because their suppliers had been victimized by a price-fixing conspiracy.").

^13. Illinois Brick, 431 U.S. at 728 n.7; see also Blue Shield of Va. v. McCready, 457 U.S. 465, 476 (1982).

^14. See Cal. Bus. & Prof. Code § 16750(a) (1978); Union Carbide v. Superior Court, 36 Cal. 3d 15, 20 (1984) ("California’s 1978 amendment to section 16750 in effect incorporates into the Cartwright Act the view of the dissenting opinion in Illinois Brick that indirect purchasers are persons ‘injured’ by illegal overcharges passed on to them in the chain of distribution.").

15 The amendments to the section since 1978 are not relevant for the purposes of this article. For the current language contained in Cal. Bus. & Prof. Code § 16750, see supra note 5.

^16. See, e.g., Cellular Plus, Inc. v. Superior Court, 14 Cal. App. 4th 1224, 1234 (1993) (considering question of antitrust standing under the Cartwright Act as requiring "’antitrust injury,’" defined as "’the type of injury the antitrust laws were intended to prevent, and which flows from the invidious conduct which renders defendant’s acts unlawful’" (quoting Kolling, 137 Cal. App. 3d at 723)); Saxer, 54 Cal. App. 3d at 26 (concluding that plaintiff had antitrust standing because "[p]laintiff’s injuries were not ‘secondary’ or ‘consequential,’" and "not ‘remote,’ for they were the direct result of the allegedly illegal conduct") (cited in Cellular Plus, 14 Cal. App. 4th at 1233).

^17. See DRAM I, 516 F. Supp. 2d at 1087-88 ("[T]he court is of the opinion that the Cartwright Act’s grant of indirect purchaser standing, while ensuring that plaintiffs’ status as indirect purchasers cannot bar their claim under the Cartwright Act, does not in actuality set forth the sum total of what a give[n] plaintiff must establish in order to satisfy antitrust standing generally." (emphasis omitted)).

^18. See Union Carbide, 36 Cal. 3d at 21 (describing the legislative intent of the 1978 amendment being to "retain the availability of indirect-purchaser suits as a viable and effective means of enforcing" the antitrust laws (emphasis added)).

^19. See Kolling, 137 Cal. App. 3d at 723-24; see also In re Napster, Inc. Copyright Litig.("Napster"), 354 F. Supp. 2d 1113, 1125-26 (N.D. Cal. 2005) (noting that "the standing afforded to indirect purchasers under the Cartwright Act does not permit a court to dispense with the requirement that an antitrust plaintiff allege an injury of the type the antitrust laws were intended to prevent and that flows from that which makes the defendant’s acts unlawful." (internal citations omitted)).

^20. 66 Cal. App. 4th 534 (1998).

^21. Id. at 548 (emphasis added) (internal citations omitted).

^22. Kolling, 137 Cal. App. 3d at 723-24; see also Saxer, 54 Cal. App. 3d at 26 (noting that "to have standing to maintain an action for violation of the antitrust laws the plaintiff must be within the ‘target area’ of the alleged violation—’the area which it could reasonably be foreseen would be affected’ by the antitrust violation" (internal citations omitted)).

^23. Clayworth v. Pfizer, Inc., 49 Cal. 4th 758, 782 (2010) ("Reviewing the legislative history behind this enactment, we find indications the Legislature fully embraced the Illinois Brick dissent"); see also Union Carbide, 36 Cal. 3d at 19-20 (explaining that Cartwright Act was amended to repudiate the Illinois Brick bar against indirect purchaser recovery).

24 Illinois Brick, 431 U.S. at 760 (Brennan, J., dissenting) ("[D]espite the broad wording of § 4, there is a point beyond which the wrongdoer should not be held liable.").

25 Certain statements from Justice Brennan’s dissent are sometimes quoted out of context to support the proposition that Cartwright Act indirect purchaser plaintiffs categorically enjoy antitrust standing. See, e.g., Micheletti, supra note 3, at 16 ("Illinois Brick dissent statements and facts support the view that the standing under the Cartwright Act should be broadly construed to find that indirect purchasers . . . have standing to pursue claims."). For example, Justice Brennan notes that " if the broad language of § 4 means anything, surely it must render the defendant liable to those within the defendant’s chain of distribution." Illinois Brick, 431 U.S. at 761 (Brennan, J., dissenting). But this language actually speaks to Justice Brennan’s position that the majority in Illinois Brick should not automatically deny all indirect purchasers standing, not that indirect purchaser standing automatically should be granted. The language that follows makes this clear: "It would indeed be ‘paradoxical to deny recovery to the ultimate consumer while permitting the middlemen a windfall recovery.’" Id. (quoting P. Areeda, Antitrust Analysis: Problems, Text, Cases 75 (2d ed. 1974)).

^26. Illinois Brick, 431 U.S. at 728 n.7; see also Blue Shield of Va, 457 U.S. at 476.

^27. See Am. Ad Mgmt., Inc. v. Gen. Tel. Co. of Cal., 190 F.3d 1051, 1058 (9th Cir. 1999) ("[I]t is not the status as a consumer or competitor that confers antitrust standing, but the relationship between the defendant’s alleged unlawful conduct and the resulting harm to the plaintiff."); Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd, 269 F. Supp. 2d 1213, 1224 (C.D. Cal. 2003) ("[T]he Cartwright Act’s more expansive standing provision does not dispense with the requirement that an antitrust plaintiff allege an ‘"injury of the type the antitrust laws were intended to prevent and that flows from that which makes defendants’ acts unlawful."’ (internal citations omitted)); accord Napster, 354 F. Supp. 2d at 1125-26.

^28. See AGC, 459 U.S. at 535; Am. Ad Mgmt., 190 F.3d at 1054 ("the Supreme Court in Associated General identified certain factors for determining whether a plaintiff who has borne an injury has antitrust standing.").

^29. Am. Ad Mgmt., 190 F.3d at 1054-55.

^30. See AGC, 459 U.S. at 538; In re Cathode Ray Tube (CRT) Antitrust Litig. ("CRT"), 738 F. Supp. 2d 1011, 1023 (N.D. Cal. 2010) ("No single factor is decisive; courts are to balance the factors, giving ‘great weight to the nature of the plaintiff’s alleged injury.’" (quoting Am. Ad Mgmt., 190 F.3d at 1055)).

^31. Am. Ad Mgmt., 190 F.3d at 1054.

^32. See DRAM I, 516 F. Supp. 2d at 1087 (noting federal standing analysis is much broader than the indirect/direct purchaser issues in Illinois Brick).

^33. Illinois Brick, 431 U.S. at 737 ("Permitting the use of pass-on theories under § 4 essentially would transform treble-damages actions into massive efforts to apportion the recovery among all potential plaintiffs that could have absorbed part of the overcharge—from direct purchasers to middlemen to ultimate customers," which "would add whole new dimensions of complexity to treble-damage suits and seriously undermine their effectiveness."); id. at 759-60 (Brennan, J., dissenting) ("Lack of precision in apportioning damages between direct and indirect purchasers is thus plainly not a convincing reason for denying indirect purchasers an opportunity to prove their injuries and damages.").

^34. Illinois Brick, 431 U.S. at 737; Id. at 759-60 (Brennan, J., dissenting).

^35. AGC, 459 U.S. at 538.

^36. See id. at 535.

^37. Illinois Brick, 431 U.S. at 737; Id. at 759-60 (Brennan, J., dissenting).

^38. See AGC, 459 U.S. at 543-44 (noting the "strong interest, identified in our prior cases, in keeping the scope of complex antitrust trials within judicially manageable limits" and "the importance of avoiding either the risk of duplicative recoveries on the one hand, or the danger of complex apportionment on the other" and discussing Illinois Brick and Hanover Shoe).

^39. See id. at 543-45 (discussing concerns about multiple liability and managing complex actions); see id. at 544 -45 (discussing Illinois Brick).

^40. The U. S. Supreme Court has also determined in the context of a preemption analysis that federal and California antitrust laws do not conflict, the 1978 Cartwright Act amendment notwithstanding. ARC, 490 U.S. at 105-06.

^41. See, e.g., Micheletti, supra note 3, at 9 ("As a result, applying one or more AGC factors to bar indirect purchasers’ damages claims arguably abrogates the remedies authorized by the repealer states, disregarding the Supreme Court’s clear directive in ARC America that federal constraints addressed in AGC should not be applied to indirect purchaser claims under state antitrust laws.").

^42. See supra Sections II.A & II.B.

^43. See Knevelbaard Dairies v. Kraft Foods, 232 F.3d 979, 987 (9th Cir. 2000) (noting that "California law affords standing more liberally than does federal law"); Cellular Plus, 14 Cal. App. 4th at 1234 ("Although California law similarly requires an ‘antitrust injury,’ the scope of that term is broader."). These courts did not explain the scope of this additional protection.

^44. See supra Section II.B.3.

^45. Nor would it make sense for AGC automatically to exclude indirect purchasers, given that Illinois Brick had just done so.

^46. See supra Section II.B.3.

^47. See Micheletti, supra note 3, at 5 ("[T]he traditional federal antitrust standing and injury analysis used by the AGC court, if strictly enforced, would bar most indirect purchaser claims.").

48 See infra Section III B; see, e.g., Dang v. S.F. Forty Niners, 964 F. Supp. 2d 1097, 1111-15 (N.D. Cal. 2013); In re TFT-LCD (Flat Panel) Antitrust Litig. ("TFT-LCD"), 586 F. Supp. 2d 1109, 1123 (N.D. Cal. 2008); In re Graphics Processing Units Antitrust Litig. ("GPU II"), 540 F. Supp. 2d 1085, 1098 (N.D. Cal. 2007); In re Flash Memory Antitrust Litig. ("Flash Memory"), 643 F. Supp. 2d 1133, 1154 (N.D. Cal. 2009); CRT, 738 F. Supp. 2d at 1023-24; CRT, No. C-07-5944-SC, 2013 WL 4505701, at *8-*13 (N.D. Cal. Aug. 21, 2013); see also Knevelbaard, 232 F.3d at 990 (plaintiffs included indirect sellers to defendants). It is outside the scope of this article to discuss whether these or other decisions properly applied the AGC analysis to Cartwright Act claims—it is sufficient for current purposes to identify the heterogenous outcomes.

49 Many of these decisions involved a motion to dismiss, and several have cited a reluctance to deny standing at such an early procedural stage based on some of the complex factual questions posed by AGC. See, e.g., Dang, 964 F. Supp. 2d at 1111-15 (upholding Cartwright Act claims against an antitrust standing challenge where AGC factors presented more complex factual questions than could be answered at the motion to dismiss stage). Cf. In re Dynamic Random Access Memory (DRAM) Antitrust Litig. ("DRAM II"), 536 F. Supp. 2d 1129, 1141 (N.D. Cal. 2008) (denying standing to indirect purchasers after full discovery record).

^50. Am. Ad Mgmt., 190 F.3d at 1058.

^51. See DRAM I, 516 F. Supp. 2d at 1091; infra Section III.B.2.

^52. See TFT-LCD, 586 F. Supp. 2d at 1124; infra Section III.B.3.

^53. Am. Ad Mgmt., 190 F.3d at 1055.

^54. "Antitrust injury requires the plaintiff to have suffered its injury in the market where competition is being restrained." Id. at 1057. The "narrow exception" to the market participant rule allows plaintiffs "whose injuries are ‘inextricably intertwined’ with the injuries of market participants" or whose "injury the conspirators sought to inflict" to potentially have standing. Id. at 1057 n.5 (citing McCready, 457 U.S. 465); Lorenzo v. Qualcomm Inc., 603 F. Supp. 2d 1291, 1300-01 (S.D. Cal. 2009) ("This exception applies when the claimant can be considered the ‘direct victim’ of a conspiracy or the ‘necessary means’ by which the conspiracy was carried out." (citing Ostrofe v. H.S. Crocker Co., Inc., 740 F.2d 739, 744-47 (9th Cir. 1984)).

^55. See, e.g., Dang, 964 F. Supp. 2d at 1111-15; TFT-LCD, 586 F. Supp. 2d at 1123; GPUs II, 540 F. Supp. 2d at 1098; Flash, 643 F. Supp. 2d at 1154; CRT, 738 F. Supp. 2d at 1023-24; In re Optical Disk Drive Antitrust Litig. ("ODD"), No. 3:10-md-2143 RS, 2011 WL 3894376, at *12 (N.D. Cal. Aug. 3, 2011); Aftermarket Filters Antitrust Litig., No. 08 C 4883, 2009 WL 3754041, at *7-*8 (N.D. Ill. Nov. 5, 2009); Stanislaus Food Prods. Co. v. USS-POSCO Indus., 782 F. Supp. 2d 1059, 1070-72 (E.D. Cal. 2011).

^56. 586 F. Supp. 2d at 1114.

^57. Id. at 1123.

^58. The court reached a similar conclusion in CRT, where the price fixed component part was alleged to represent 60 percent of the end product purchased by plaintiffs, and the price of the component directly correlated with the price of the end product, rendering the markets for the end product and component "inextricably linked." CRT, 738 F. Supp. 2d at 1024. The nature of injury/market participant factors weighed in favor of standing, and the plaintiffs’ claims were upheld. Id.

^59. In re Refrigerant Compressors Antitrust Litig., No. 2:09-md-02042, 2013 WL 1431756, at *11-*12 (E.D. Mich. April 9, 2013).

^60. Id. at *12.

^61. AGC, 459 U.S. at 540.

^62. See, e.g., id. at 540-41 (analyzing the "somewhat vaguely defined links" between the plaintiff’s injury and the "alleged restraint in the market" in discussing the directness factor).

^63. DRAM I, 516 F. Supp. 2d at 1091.

^64. 232 F.3d at 984-85.

^65. Id. at 990.

^66. DRAM I, 516 F. Supp. 2d at 1092 ("There are a variety of factors, for example, that could have influenced the price that each plaintiff paid for their computer (or other products)—the cost of various other components, whether those costs were themselves artificially high, etc."); see, e.g., Lorenzo, 603 F. Supp. 2d at 1302-03 (noting at least three intermediaries between plaintiff’s injury and the alleged antitrust violation in concluding this factor weighed against standing); Flash Memory, 643 F. Supp. 2d at 1154-55 (noting in determining this factor favored standing that the component "makes up an overwhelming majority of the cost of NAND flash-based memory devices and a substantial portion of the consumer devices in which NAND Flash Memory is packaged to be sold as a component").

^67. See, e.g., Crouch v. Crompton Corp., Nos. 02 CVS 4375, 03 CVS 2514, 2004 WL 2414027, at *24 (N.C. Super. Ct. Oct. 28, 2004) ("the directness can be impacted by the nature of the item subject to price-fixing, be it a component, labor cost, or something used in the manufacturing process").

^68. An indirect purchaser of an end product containing a price fixed component will necessarily have more factors potentially contributing to his claimed injury than would a direct purchaser of the price-fixed product. See id. at *19. But this is hardly a bias in the AGC analysis, as demonstrated by the varying results in courts’ application of this factor to indirect purchasers.

^69. Flash Memory, 643 F. Supp. 2d at 1156.

^70. Id. at 1155. The court reached the same conclusion with respect to the plaintiffs in TFT-LCD, 586 F. Supp. 2d at 1123, and GPUII, 540 F. Supp. 2d at 1098.

^71. DRAM I, 516 F. Supp. 2d at 1091.

^72. Id. at 1092.

^73. The directness and speculativeness factors are often considered together, thus the discussion of the directness factor above is relevant to this section as well. See, e.g. , TFT-LCD, 586 F. Supp. 2d at 1124 (considering directness and speculativeness factors with one line of reasoning).

^74. AGC, 459 U.S. at 542-43 ("Partly because it is indirect, and partly because the alleged effects on the Union may have been produced by independent factors, the Union’s damages claim is also highly speculative.").

^75. Flash Memory, 643 F. Supp. 2d at 1155.

^76. Id.

^77. See also, e.g., TFT-LCD, 586 F. Supp. 2d at 1124 (finding speculativeness and directness factors weigh in favor of antitrust standing because LCD panels were a component part alleged to be traceable, and the distribution chain was alleged to be "relatively short").

^78. Flash Memory, 643 F. Supp. 2d at 1156.

^79. TFT-LCD, 586 F. Supp. 2d at 1124; see also GPUII, 540 F. Supp. 2d at 1098.

^80. In assessing antitrust standing in Cellular Plus, the California Court of Appeals considered the risk of duplicate recovery as between allegedly overpaying consumers and sales agents who lost sales. 14 Cal. App. 4th at 1235 n.4. Similarly, in Vinci v. Waste Management Inc., 36 Cal. App. 4th 1811 (1995), the California Court of Appeals applied the AGC factors and concluded that permitting a sole shareholder to sue for injuries experienced by the corporation created too great a risk of duplicative recovery, and that this factor weighed against standing for the plaintiff shareholder under the Cartwright Act. Id. at 1814-15.

^81. See Illinois Brick, 431 U.S. at 761 (Brennan, J., dissenting) ("the hypothetical possibility that a few defendants might be subjected to the danger of multiple liability does not, in my view, justify erecting a bar against all recoveries by indirect purchasers without regard to whether the particular case presents a significant danger of double recovery"); id. at 759-60 ("Lack of precision in apportioning damages between direct and indirect purchasers is thus plainly not a convincing reason for denying direct purchasers an opportunity to prove their injuries and damages").

^82. Crouch, 2004 WL 2414027 at *19 (emphasis added). The analysis in Crouch is persuasive notwithstanding that the opinion was by a North Carolina Superior Court.

^83. See, e.g., Flash Memory, 643 F. Supp. 2d at 1156 ("Defendants briefly assert that a duplicative recovery ‘is a near certainty’ given that the Direct Purchasers’ claims also are before the Court. Such a concern, however, generally is inapposite in the context of indirect purchaser state law antitrust claims." (internal citations omitted)); DRAM I, 516 F. Supp. 2d at 1093 ("Duplicative recovery is . . . a necessary consequence that flows from indirect purchaser recovery. Accordingly, it is no bar against standing, and this factor does not weigh against standing.").

^84. See, e.g., Knevelbaard, 232 F.3d at 991 ("The Risk of Duplicative Recovery. There appears to be no risk of this nature . . . . Complexity of Apportioning Damages. This factor . . . is totally absent here.").

^85. Saxer, 54 Cal. App. 3d at 19 ("The Cartwright Act is patterned upon the federal Sherman AntiTrust Act and both derive their basic provisions from the common law policy against restraint of trade; thus cases decided under the latter act are applicable as an aid to decision in interpreting the former.").

^86. Knevelbaard, 232 F.3d at 985 ("federal antitrust precedents are properly included in a Cartwright Act analysis"); Marin Cnty. Bd. of Realtors, Inc. v. Palsson, 16 Cal. 3d 920, 925 (1976) (federal precedent interpreting federal antitrust laws is persuasive authority in state antitrust cases because both statutes "have their roots in the common law"); Vinci, 36 Cal. App. 4th at 1814 n.1 ("Because the Cartwright Act has objectives identical to the federal antitrust acts, the California courts look to cases construing the federal antitrust laws for guidance on interpreting the Cartwright Act."); Kolling, 137 Cal. App. 3d at 717 ("The Cartwright Act is patterned after the federal Sherman AntiTrust Act . . . so that decisions under the latter are applicable to the former.").

^87. Kolling, 137 Cal. App. 3d at 723-24 ("The plaintiff in a Cartwright Act proceeding must show that an antitrust violation was the proximate cause of his injuries. . . . An ‘antitrust injury’ must be proved; that is, the type of injury the antitrust laws were intended to prevent, and which flows from the invidious conduct which renders defendants’ acts unlawful. Finally, a plaintiff must show an injury within the area of the economy that is endangered by a breakdown of competitive conditions." (internal citations omitted)); Saxer, 54 Cal. App. 3d at 26 (plaintiff had antitrust standing because "[p]laintiff’s injuries were not ‘secondary’ or ‘consequential,’ since they did not result from injury to third parties; they were not ‘remote,’ for they were the direct result of the allegedly illegal conduct. The fact that plaintiff was not a competitor of defendants presents no obstacle to recovery" (internal citations omitted)); Cellular Plus, 14 Cal. App. 4th at 1233-35 & 1235 n.4.

^88. As discussed supra Section II.A, California law imposes an additional standing requirement on Cartwright Act plaintiffs.

^89. See, e.g., Sidibe v. Sutter Health, No. C 12-04854, 2013 WL 2422752, at *16 (N.D. Cal. June 3, 2013) (noting in the context of antitrust standing analysis for Cartwright Act claim that the Northern District of California "cases that do not require the [AGC] factors are persuasive"). Cellular Plus could potentially be characterized in this way. However, Cellular Plus more accurately may be viewed not as rejecting federal antitrust standing jurisprudence in toto, but rather specifically rejecting the threshold issue under federal law of exclusion of indirect purchasers from the pool of plaintiffs who might have antirust standing.

^90. See, e.g., TFT-LCD, 586 F. Supp. 2d at 1123 ("it is inappropriate to broadly apply the AGC test to plaintiffs’ claims under the repealer states’ laws in the absence of a clear directive from those states’ legislatures or highest courts"); Sidibe, 2013 WL 2422752, at *16. Other federal decisions have also viewed application of the AGC test to Cartwright Act claims by California intermediate courts as sufficient guidance for the federal court to choose to do the same. See, e.g., Flash Memory, 643 F. Supp. 2d at 1151-52 ("As to California, its Supreme Court has not reached this issue, but at least one of its intermediate appellate courts has applied these factors to its antitrust law, the Cartwright. Accordingly, the Court finds that AGC applies to Plaintiffs’ California law antitrust claims as well." (internal citations omitted)); Knevelbaard, 232 F.3d at 985.

^91. See, e.g., Knevelbaard, 232 F.3d at 985 (stressing that Sherman Act precedent was "often helpful" though "not necessarily decisive," but applying the AGC factors as such to Cartwright Act claims); In re Wholesale Elec., 147 Cal. App. 4th 1293, 1309 (2007) (citing the AGC factors, as summarized in Knevelbaard, as the applicable law for analyzing antitrust standing under the Cartwright Act).

^92. See Cellular Plus, 14 Cal. App. 4th at 1233-35 & 1235 n.4; In re Wholesale Elec., 147 Cal. App. 4th at 1309.