California Supreme Court Limits Pass-on Defense
On July 12, 2010, the California Supreme Court addressed the issue of “whether under the Cartwright Act an antitrust defendant can defeat liability by asserting a pass-on defense.” Clayworth v. Pfizer, Inc., No. S166435, 2010 WL 2721021 (Cal. July 12, 2010). The Cartwright Act is California’s state antitrust law. Unlike federal law, which limits antitrust damage claims to “direct purchasers,” the Cartwright Act allows indirect purchasers as well to sue on antitrust claims. In a unanimous decision, the California Supreme Court held consistent with federal law that California law bars a pass-on defense in most circumstances, even though both direct and indirect purchasers may sue for treble damages.
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