Pacific Gas & Electric Co. v. County of Stanislaus

947 P.2d 291, 16 Cal. 4th 1143, 97 Cal. Daily Op. Serv. 9090, 69 Cal. Rptr. 2d 329, 97 Daily Journal DAR 14669, 1997 Cal. LEXIS 7903
CourtCalifornia Supreme Court
DecidedDecember 4, 1997
DocketS047749
StatusPublished
Cited by89 cases

This text of 947 P.2d 291 (Pacific Gas & Electric Co. v. County of Stanislaus) is published on Counsel Stack Legal Research, covering California Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pacific Gas & Electric Co. v. County of Stanislaus, 947 P.2d 291, 16 Cal. 4th 1143, 97 Cal. Daily Op. Serv. 9090, 69 Cal. Rptr. 2d 329, 97 Daily Journal DAR 14669, 1997 Cal. LEXIS 7903 (Cal. 1997).

Opinions

Opinion

KENNARD, J.

In this case, a California county brought a class action in the federal court, alleging that a utility company had violated state and federal antitrust laws by illegal price-fixing that had substantially increased the county’s costs for natural gas. The utility company then initiated this lawsuit in the state court challenging the county’s power to bring the federal action, contending that only the state Attorney General may bring antitrust actions on a county’s behalf when, as here, the alleged illegal activities and injuries occurred primarily outside the county. We conclude that the county was entitled to bring the action.

I

On December 3, 1993, Stanislaus County and Mary Grogan, a residential consumer of natural gas, brought a class action in the United States District [1146]*1146Court for the Eastern District of California “on behalf of themselves, and all entities and persons similarly situated.” Named as defendants were the Pacific Gas and Electric Company (hereafter PG&E) and the Pacific Gas Transmission Company (hereafter PGT), a wholly owned subsidiary of PG&E. The complaint alleged that PG&E and PGT had conspired with a number of producers and distributors to fix the price of natural gas imported into California from western Canada. Counts I, II, and III alleged violations of federal law under the Sherman Antitrust Act (15 U.S.C. § 1), the Wilson Tariff Act (15 U.S.C. § 8 et seq.), and the Clayton Act (15 U.S.C. § 15). Counts IV and V alleged violations of California law under the Cartwright Act (Bus. & Prof. Code, § 16700 et seq.)1 and the Unfair Practices Act (§ 17000 et seq.). The complaint also alleged that the “relevant geographic market” in which the injured consumers were located was “Central and Northern California.”

Representing Stanislaus County in its action in federal court were county counsel and retained outside counsel.

While the federal lawsuit was pending, PG&E brought, in the Superior Court of Stanislaus County, this taxpayers’ action for injunctive and declaratory relief, naming as defendants the County of Stanislaus, the Stanislaus County Board of Supervisors (both collectively and individually), and the Stanislaus County Auditor/Controller. (For convenience, defendants are hereafter collectively referred to as the County.) PG&E alleged that by bringing the federal class action, the County had exceeded the powers vested in it by law, and that the federal class action therefore constituted an illegal expenditure of public funds. PG&E’s complaint sought an order enjoining the County from expending public funds to pursue the federal action (Code Civ. Proc., § 526a) and a declaration that the County’s expenditure of such funds was illegal.

The County demurred to the complaint. The trial court sustained the demurrer without leave to amend, ruling that the County had the power to bring its federal antitrust action and that PG&E’s complaint for injunctive and declaratory relief failed to state facts sufficient to constitute a cause of action.2 PG&E appealed from the resulting judgment of dismissal.

The Court of Appeal affirmed. Citing subdivisions (a) and (b) of section 16750, it held that the County could bring a class action alleging antitrust [1147]*1147violations of the state Cartwright Act. The court did not address PG&E’s claim that the County lacked the power to bring a class action alleging federal antitrust violations, even though PG&E had raised this claim both in its opening brief and in a timely petition for rehearing.3 We granted PG&E’s petition for review to address both claims.4

II

PG&E contends that the County lacked the authority, in its lawsuit in federal court, to allege a cause of action under the state Cartwright Act, because the asserted violations and injuries occurred primarily outside the county boundaries. PG&E does not dispute that consumers injured by violations of the state Cartwright Act may generally bring class actions under the act. It asserts, however, that when, as here, the injured consumer is not an individual but a county, and the violation and injury occur primarily beyond the county’s boundaries, only the state Attorney General has the authority to sue on a county’s behalf for violations of the Cartwright Act.5 Before addressing this complex issue, we give a brief overview of the relevant provisions of the statutory scheme involved here.

Our Legislature enacted the Cartwright Act in 1907. The act “generally outlaws any combinations or agreements which restrain trade or competition or which fix or control prices” (Antitrust and Trade Reg. Law Section of the State Bar of Cal., Cal. Antitrust Law (1991) p. 4), and declares that, with certain exceptions, “every trust is unlawful, against public policy and void” (§ 16726).

[1148]*1148The Cartwright Act may be enforced by a criminal proceeding, by an action for corporate dissolution or for revocation of license, or by a civil action for injunctive relief and treble damages as involved here. To determine whether in this case the County has the authority to bring such a civil action, we must consider these provisions of the act: sections 16750, 16754, and 16760.

Section 16754 permits the state Attorney General or the district attorney of any county to initiate either civil or criminal proceedings for violation of the state Cartwright Act; the action may be brought in the superior court of any county in which any portion of the offense was committed, where any of the defendants reside or where any corporate defendant does business. This section further provides that if a county’s district attorney brings an antitrust action, the state Attorney General “shall have all of the powers set forth in section 12550 of the Government Code”; the latter provision gives the Attorney General “direct supervision” over any district attorney pursuing an “investigation or prosecution of violations of law of which the superior court has jurisdiction,” and it allows the Attorney General to assist in or to “take full charge” of such investigations and prosecutions.

Section 16760 authorizes the Attorney General and district attorneys to bring parens patriae actions on behalf of state residents injured by violations of the state Cartwright Act.6 Thus, subdivision (a) of section 16760 permits the Attorney General to bring “a civil action in the name of the people of the State of California, as parens patriae on behalf of natural persons residing in the state” for treble damages arising from violations of the Cartwright Act. And, under subdivision (g), such an action may also be brought by the district attorney of any county on behalf of the residents of the county “whenever it appears that the activities giving rise to such prosecution or the effects of such activities occur primarily within such county.”

The third section addressing standing to bring a civil action for treble damages is section 16750.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Beverage v. Apple, Inc.
California Court of Appeal, 2024
Ahn v. Stewart Title Guaranty Co.
California Court of Appeal, 2023
Dhillon v. Anheuser-Busch CA5
California Court of Appeal, 2022
People v. Board of Parole Hearings
California Court of Appeal, 2022
Haggerty v. Thornton
California Court of Appeal, 2021
In re Verity Health Sys. of Cal., Inc.
598 B.R. 283 (C.D. California, 2018)
In re Gardens Regional Hospital & Medical Center, Inc.
567 B.R. 820 (C.D. California, 2017)
People v. Vidana
377 P.3d 805 (California Supreme Court, 2016)
B.H. v. County of San Bernardino
361 P.3d 319 (California Supreme Court, 2015)
In re Cipro Cases I & II
348 P.3d 845 (California Supreme Court, 2015)
Gdowski v. City of Palo Verdes Estates CA2/7
California Court of Appeal, 2014
In re J.M. CA4/1
California Court of Appeal, 2014
Liberty Mutual Ins. v. Brookfield Crystal Cove
California Court of Appeal, 2013
Liberty Mutual Insurance v. Brookfield Crystal Cove LLC
219 Cal. App. 4th 98 (California Court of Appeal, 2013)
Aryeh v. Canon Business Solutions, Inc.
292 P.3d 871 (California Supreme Court, 2013)
Clayworth v. Pfizer, Inc.
233 P.3d 1066 (California Supreme Court, 2010)
Marcotte v. General Electric Capital Services, Inc.
709 F. Supp. 2d 994 (S.D. California, 2010)

Cite This Page — Counsel Stack

Bluebook (online)
947 P.2d 291, 16 Cal. 4th 1143, 97 Cal. Daily Op. Serv. 9090, 69 Cal. Rptr. 2d 329, 97 Daily Journal DAR 14669, 1997 Cal. LEXIS 7903, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pacific-gas-electric-co-v-county-of-stanislaus-cal-1997.