California Supreme Court Disallows Pass-On Defense in State Antitrust Actions

Morrison & Foerster LLP

This week the California Supreme Court issued its most significant antitrust opinion in years, with important implications for damages claims for conspiratorial overcharges under the Cartwright Act by intermediaries in the supply chain, as well as for standing in California Unfair Competition Law cases.

Clayworth v. Pfizer, Inc., .___ Cal. Rptr. 3d ___, No. S166435, slip op. (July 12, 2010), overturned the dismissal on summary judgment of Cartwright Act and UCL claims brought by several retail pharmacies against manufacturers of brand-name prescription drugs. Plaintiffs alleged that the manufacturers had unlawfully conspired to maintain prices for their drugs in California at levels above those charged for the same or comparable products in Canada, and sought damages under the Cartwright Act and damages and an injunction under Section 17200 of the UCL.

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