# Opposition Brief — AT&T Corp. v. RLH Industries, Inc. (No. 05-1493)

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 2006

## Text

No. 05-1493 |

IN THE

Supreme Court of the United States

AT&T INC., fka SBC COMMUNICATIONS INC.,
Petitioner,
v.
RLH INDUSTRIES, INC.,

Respondent.

On PETITION FOR A WRIT OF CERTIORARI TO THE
CourRT OF APPEAL OF CALIFORNIA,
FOURTH APPELLATE DISTRICT,

DIVISION THREE

—
wetter

BRIEF IN OPPOSITION
H. KENNETH KUDON JAMES A. STEARMAN
Kupon Law Firm Counsel of Record
Two Old Creek Court RICHARD S. Price, II
Potomac, MD 20854 1235 N. Harbor Blvd.
(301) 279-5634 Suite 200

Fullerton, CA 92832
(714) 871-1132

Counsel for Respondent

201899 g

COUNSEL PRESS
(800) 274.3321 + (BOO) 359.6859

i

’
=

QUESTIONS PRESENTED

1. Whether the Court lacks jurisdiction to review the
interlocutory decision of the California Court of Appeal in
this case.

2. Whether application of California’s Competition
statutes to out-of-state anticompetitive conduct that
substantially affects California commerce is either beyond
the reach of the Commerce Clause or subject to the Pike
balancing analysis.

il

RULE 29.6 STATEMENT

Respondent RLH Industries, Inc., a California
corporation, does not have a parent company and no other
public company owns 10% or more of its stock.

iii

TABLE OF CONTENTS

Page
Caine PUOUNNNE 5 a ons she Oke Os Ree Ke i
HE 270 En Pica abn ec Chadkaeeeevann es il
ne SE CI ie i 5 ae a ee ili
Pauw OF CRG AOTIOTNNS oo gee eink vins vi
PIA, 8 ck i OE Ee es I
Countersiatement of the Case 2.6.5 icv ceerets 2
Reasons for [venying the Petition ............... 6

I. This Court Lacks Jurisdiction to Review The
Interlocutory Order of The California Court
OE RE oie ee a ees 6

I]. There is Not a Genuine Conflict in The Lower
Courts on Whether Direct Regulation
of Extraterritorial Commerce is Unconsti-
tutional Without Further Inquiry .......... |

A. The Critical Inquiry in Commerce
Clause Jurisprudence is Always The
Same; The Scope and Depth of The
Inquiry Vary Depending Upon The
Nature of The Statute and The Facts
OFT GONE sk Se cee ree eeees 11

Contents

B. The First and Eighth Circuits’ “First
Tier” Commerce Clause Analysis Does
Not Conflict With That of Other Circuits

C. The First Circuit’s Application of
Commerce Clause Precedents Recently
Has Been Approved by The Court .....

D. The Eighth Circuit’s Approach to
Commerce Clause Analysis is Not
Out-of-Line With its Sister Circuits ..

II. The California Court of Appeal’s Decision
Correctly Applied This Court’s Commerce
See PND Shiv sees Kons oo eke Pees

A. The California Court of Appeal Applied
the First Tier Commerce Clause Analysis ~
Insofar as The Record Permitted ......

B. The California Court’s Understanding of
Commerce Clause Jurisprudence Finds
Support in Decisions From Other
Jurisdictions That Have Applied State
Antitrust Statutes to Out-of-State
Anticompetitive Conduct ...........

Page

15

Conclusion

Contents

C. AT&T’s Contention That The Commerce

Clause Bars All Claims Under State
Statutes Based Upon Extraterritorial
Conduct is Overly Simplistic and
Re 6 OTR re LAER ae

AT&T’s Attempt to Draw a Commerce
Clause Distinction Between In-State
Impact on Consumers or Markets, on
One Side, And Manufacturers And
Vendors, on The Other, is a Distinction
Without a bitierence 24. 2. ceed.

AT&T’s Tariff Argument Presents Fact
Questions That Are Not Ripe For Review

("6 £6 @ 6..@°8:°.¢ 6/8 @ 8 £6 €.E € @ 68 O8-S €¢. P.O) 2. 8, 4-4. 6 BS

IV. This is The Wrong Case at The Wrong Time
For Further Review and Application of
Commerce Clause Principles ............

8 2°92 See 2 Se 8-4-6 2 6. 6-8 Se 2 10.8 Oe ei eS

Page

tw
to

24

25

vi

TABLE OF CITED AUTHORITIES

Page
CASES:
ACLU v. Johnson, 194 F.3d 1149 (10" Cir. 1999) .... 12
Alliant Energy Corp. v. Bie, 336 F.3d 545 (7® Cir.
BOE Ca Kee yeas Ca Che kee vee ee lake 1]
American Booksellers Foundation v. Dean, 342
Pia TOE Gs OD eb beware eee bees 12
American Libraries Ass'n v. Pataki, 969 F. Supp. 160
PRES SS. 5s ER pare poner e Meme ew Dr 12
Baldwin v. G.A.F. Seelig, Inc., 294 U.S. 511 (1935)
CuIK CUE READER As ee ae ee bie 26
Beretta, U.S.A., Corp v. District of Columbia, __ U.S.
__» 126 S. Ct. 399, 163 L. Ed. 2d 277 (20035) ... 2
BMW of North America, Inc. v. Gore, 517 U.S. 559
CEN See CUES en Cow aa Cabaedeene ds 19
Brown-Forman Distillers Corp. v. New York State
Liquor Authority, 476 U.S. 573 (1986) ....... 11, 16
C & A Carbone, Inc. v. Town of Clarkstown, 511 U.S.
PRR a. aw eu wwe ae ee We a 26

C. Bennett Bldg. Supplies v. Jenn Air, 759 S.W.2d
ee A PU CSOD i oe ep CERES) CAWER VS Ee: 20

vil

Cited Authorities
Page
California v. ARC America Corp., 490 U.S. 93 (1989)
Pods eee OAD eee EON Re ee esos 18, 26
Certain Underwriters at Lloyd’s of London v.
Superior Court, 24 Cal. 4" 945, 103 Cal. Rptr.
TOT E CAGE uo RSA Se re re eS 4
Collins v. Miller, 252 U.S. 364 (1920) ........... 7
Cotto Waxo Co. v. Williams, 46 F.3d 790 (8" Cir.
SO io voce kk Oe ds caked ee Oe 15, 16

Cox Broad. Corp. v. Cohn, 420 U.S. 469 (1975) . . 2, 8,9, 10

CTS Corp. v. Dynamics Corp., 481 U.S. 69 (1987)

Cd wea hg DE Vd ae EE a Ee 19
District of Columbia v. Beretta, U.S.A., Corp.,

Bie Aire Oot Ua. Oe Silke ed hiw ences 21
Edgar v. MITE Corp., 457 U.S. 624 (1982) ....... 18
Fiyat v. Ohio, 451 U.S. GIS CI9G)) wee evn’ 10
Freeman Industries, LLC v. Eastman Chem. Co..,

7z S.W.356 Sia CHC DO? «kn k's cet wk cs eee

Grant's Dairy-Maine LLC v. Commissioner of Maine
Dept. of Agriculture, 232 F.3d 8 (1“ Cir. 2000)

vill

Cited Authorities
Page
Hampton Feedlot v. Nixon, 249 F.3d 814 (8 Cir.

WED bee ia Cow WEAE EROS ROO e 16
Healy v. Beer Inst., 491 U.S. 324 (1989) ..... 11, 19, 24
Heath Consultants v. Precision Instruments,

S27 TEAWAG SIG UNOO. AFGS) ica oie i cs 19, 20
In re Lorazepam & Clorazepate Antitrust Litigation,

295 F. Supp. 2d 30 (D.D.C. 2003) ........ 19, 20, 23
Instructional Sys. v. Computer Curriculum Corp.,

5S F356 SiS 90 CO. TOPS) is ho eae 21

Jefferson v. City of Tarrant, 522 U.S. 75 (1997) ..1,7,9

Johnson vy. California, 541 U.S. 428 (2004) ...... 10
_ Knevelbaard Dairies v. Kraft Foods, Inc., 232 F.3d
FFD. FP CM. FE on bs CRONE eS 19, 23
Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
STSAUG: FIG CEH 65 ELS Ba ee ee 23
Mazurek v. Armstrong, 520 U.S. 968 (1997) ...... 10

National Solid Wastes Management Association v.
Meyer, 63 F.3d 652 (7" Cir. 1995) ........ $872,395

NCAA v. Miller, 10 F.3d 633 (9" Cir. 1993) ....... 12

ix

Cited Authorities
Page
Okla. Tax Comm’n v. Jefferson Lines, Inc., 514 U.S.
Ne ee 8 i ius ve wwaweeae 16
Olstad v. Microsoft Corp., 700 N.W.2d 139 (2005)
ee ed yeh wills cede sbivewewess 20
Pharm. Research & Mfrs. of Am. v. Walsh, 538 U.S.
ee a ae ku eo 0 A adie w sles 8 14
Pharm. Research & Mfrs. of Am. v. Concannon,
Se yo | a 14, 15

Phonetele, Inc. v. American Tel. & Tel. Co., 664
ee Oo, PE ic wine vceeyevccveeas

Pike v. Bruce Church, Inc., 397 U.S. 137 (1970) ... 1,5,

6, 16, 20
Psinet, Inc. v. Chapman, 362 F.3d 227 (4" Cir. 2004)
ee os te a ew aweeec 12
Southern Union Co. v. Missouri Public Service
Commission, 289 F.3d 503 (8" Cir. 2002) ...... 15

State v. Coca Cola Bottling Co. of Southwest,
697 S.W.20 677 (Tex. App. 1985) ............ 20

x

Cited Authorities
Page
CONSTITUTION, STATUTES, AND RULES:
California Business & Professions Code
IN SR on ha A oe Keene tees Clee ie 3
OE DRT NE fis oS ba occ oe aS Oates sk 23
PE 05 6k kha a oe ee eae ce 3
NN TE a ic wh deeb whee ees 3
EO Ons B SAPO « ii 66 4 ine reed ven 1, 6, 26
OTHER MATERIALS:
Black’s Law Dictionary (7" Ed. 1999) ........... 22
Donald H. Regan, Siamese Essays: (1) CTS Corp. v.
Dynamics Corp. of America and Dormant
Commerce Clause Doctrine; (11) Extraterritorial
State Legislation, 85 Mich. L. Rev. 1865 (1987)
CREEK SER AED Cod kdRa 4k SR OR ae FI 21

Herbert Hovenkamp, State Antitrust in the Federal
Semen; SS 1G. 0.35: 579 CIF) i oe cs ec Re ees 19

JURISDICTION

This Court lacks jurisdiction to review the interlocutory
order of the California Court of Appeal in this case.
The California Court of Appeal rendered an “interim”
decision; not a final judgment. After the Supreme Court of
California denied review, the case was remanded to the trial
court. Trial is set for January 8, 2007. j

Under 28 O°S.C. § 1257(a), this Court’s review of state
court decisions is confined to “final judgments or decrees
rendered by the highest court of a State in which a decision
could be had.” To warrant review by this Court, a case must
be subject to no further review or correction in any other
state tribunal and must also be final as an effective
determination of the litigation and not of merely interlocutory
or intermediate steps therein. Jefferson v. City of Tarrant,
522 U.S. 75, 81 (1997).

The decision of the court below was not an effective
determination of the litigation. First, petitioner AT&T Inc.
(“AT&T”) may yet establish that the Commerce Clause bars
the antitrust and unfair competition claims of respondent
RLH Industries, Inc. (“RLH”’); and this showing may, indeed,
be bound together with RLH’s proofs of the effectsof AT&T's
conduct in California. Secondly, AT&T undoubtedly will
raise other federal issues including due process of law. Third,
not all of RLH’s claims involve federal issues. Fourth, the
‘ trial court's decision will be subject to further review by the
California appellate courts and also by this Court.

Moreover, the decision below does not fall within any
of the four categories of exceptional cases in which the Court
has treated state-court judgments as final even though further

2

proceedings were to take place in state court. See Cox Broad.
Corp. v. Cohn, 420 U.S. 469, 479-485 (1975). The first three
Cox categories are plainly inapplicable. The fourth Cox category,
too, is inapplicable. Delaying review of the decision below
cannot “seriously erode ... Constitutional policy” as no
immediate and systemic consequences will result from such a
delay.

COUNTERSTATEMENT OF THE CASE

RLH, a California company, is one of only four
manufacturers of high voltage protection (““H VP”) devices used
to prevent life and property threatening electrical surges.
P.A. 4.' The California Court of Appeal, reversing summary
judgment in favor of AT&T, determined that “triable issues
abound” on whether AT&T’s policy of forbidding its customers
from buying or installing their own high voltage protection
(“ri VP”) devices from RLH or anyone else, in AT&T’s five
state Midwestern territory where it dominates local t.uephone
service, is a tying arrangement. P.A. 19a-20a. The court below
also found evidence tending to show that this conduct injured
RLH (“Cynergy Corporation would prefer to use RLH devices
in its new facilities, but instead leases [AT&T] HVP services
due to its HVP policy”). P.A. 20a. In recent years, RLH lost
thousands of dollars in sales to AT&T at Cynergy alone.
Appellant's Opening Brief, pg. 36.

AT&T, until recently known as SBC Communications
Corp., conceded personal jurisdiction in California.* PA. 18a.

1. The Appendix to the Petition for Certiorari is cited as
“P.A. |[page].”

2. SBC asserts that the court erroneously found personal
jurisdiction over it. But the record clearly shows that SBC not only
(Cont'd)

3

RLH brought its second amended complaint against AT&T in
California state court consisting of four causes of action, the
first and second for unlawful tying arrangements in violation of
California’s Cartwright Antitrust Act, Cal. Bus. & Prof. Code,
§§ 16720, 16726 et seq., the third under California’s Unfair
Competition Act, Cal. Bus. & Prof. Code, §§ 17200 et seq., and
the fourth for common law intentional interference with
prospective advantage. The third and fourth causes of action
are based primarily, but not entirely, on the tying arrangements.
P.A. 25a-42a. Although AT&T glosses over it [Cert. Pet., pp. 4,
11, 21], only the unfair competition cause of action seeks
affirmative injunctive relief. P.A. 38a, 40a (Prayer for Relief).

AT&T incorrectly asserts that RLH’s second amended
complaint did not allege claims against AT&T’s out-of-state
subsidiaries based on RLH’s efforts to sell its products in
California. Cert. Pet., pg. 4. This statement creates the
misconception that RLH does not manufacture and sell its HVP
devices in California. To the contrary, as AT&T acknowledges,
RLH has its headquarters and principal place of business in
California; it manufactures and sells its HVP devices there.
P.A. 26a, ¥ 4. So, RLH’s claims are, in fact, based on its efforts
to sell HVP devices in California.

(Cont'd)

conceded the Court’s personal jurisdiction over SBC but also the
Court's power to award damages or injunctive relief as to
extraterritorial conduct that impacts California, as follows:
“[w]e don’t dispute at all that we are properly here and that this
court has the power to issue an award ... of damages or injunctive
relief with respect to conduct that impacts the state of California”
and, moments later, “[t]his is not about jurisdiction. We'll concede

jurisdiction.” Appellant's Reply Brief, p. 14 (citing August 26, 2003

Hearing Transcript, pp. 7:18-24, 13:22-24)

4

AT&T also claims that RLH’s pleading does not allege that
AT&T’s out-of-state tying arrangements impacted the California
market for HVP devices or California consumers of HVP
devices. Cert. Pet., pg. 4. AT&T’s statement again creates the
misconception that AT&T’s allegedly unlawful conduct is
disconnected from California. AT&T not only fails to
acknowledge that its conduct has caused injury to California
commerce but also ignores RLH’s allegation that California was
the locus of part of the allegedly wrongful conduct. P.A. 32a,
q 24.

Further, AT&T asserts that every state in which it
operates has its own regulatory body and tariffs and some of
these tariffs embody the conduct comprising the alleged tying
arrangements. Cert. Pet., pg. 5-6. AT&T, however, has
overlooked relevant fact-intensive questions: whether these
tariffs are proper subjects of regulation that are mandated by
State law and closely supervised or are, as the evidence would
suggest, unilaterally written and imposed by AT&T.
Appellant’s Reply Brief, pp. 24-25; P.A. 19a. These questions
can only be answered through trial on the merits.

In response to a summary judgment motion in California,
the nonmovant must demonstrate (i) that the movant failed
to produce admissible evidence showing that an element of
the cause of action cannot be established or (ii) if necessary,
the existence of a triable issue of material fact as to the
element at issue. Certain Underwriters at Lloyd’s of London
v. Superior Court, 24 Cal. 4" 945, 103 Cal. Rptr. 2d 672
(2001). Thus, while RLH produced sufficient evidence to
defeat AT&T’s summary judgment motion, RLH did not have
to show, for example, the full extent of its injuries attributable
to AT&T's allegedly anticompetitive conduct or the total
effect of AT&T’s out-of-state conduct upon California

2

commerce. Again, development of a complete factual record
on this issue must await trial.

The California Court of Appeal also denied summary
judgment to AT&T on its contention that it was not liable for its
subsidiaries’ HVP policies, holding that “[w]hether AT&T is
liable under either an agency or alter ego theory is a question of
fact.” As the court below found, this is a fact-laden question.
P.A. lla. It is inextricably intertwined with the merits of the
case. Accordingly, determination of this issue, too, awaits trial.

Finally, in finding that AT&T “failed to meet its summary
judgment burden” on the Commerce Clause defense (P.A. 18a),*
the court below allowed AT&T the opportunity to establish in
the trial court that the Commerce Clause, in fact, bars RLH’s
state antitrust and unfair competition claims. P.A. 19a. The court
explained that whether the state law unduly burdens interstate
commerce when all is taken into account requires an analysis
which AT&T did not present on summary judgment: a “fact
intensive” balancing of the “benefits of applying California law
to [AT&T’s] alleged tying arrangements against the burden
condemning the tying arrangements under California law .. .
would impose on interstate commerce (citing Pike v. Bruce
Church, Inc., 397 U.S. 137, 142 (1970)).” P.A. 15a.

3. At trial RLH expects to show the full extent of the harm to
RLH’s production, sales and earnings in California resulting from
AT&T's alleged conduct and, beyond that, the “ripple” effects of AT&T's
conduct upon, among other things, salaries and employment of California
residents, purchases from California suppliers and the like.

4. The specific statutes which AT&T contends are barred by
the Commerce Clause are the Cartwright Act and the Unfair
Competition Act. Brief for Respondents, p. 30.

6

The California Court of Appeal found that AT&T not
only came up short on its Commerce Clause analysis but
also neglected to raise and, therefore, waived for summary
judgment purposes other potentially relevant issues including
legislative intent, due process of law and conflict of laws
(“[t]he conflict of laws or due process issues may. . . require
an in-depth analysis of the legal effect of the tariffs that AT&T
has filed with various state agencies”). P.A. 18a-19a.
Accordingly, the California Court of Appeal remanded the
case for trial, “express[ing] no opinion on potentially relevant
issues not yet litigated, including a rigorous Pike analysis.”
P.A. 19a. Reflecting the “interim” nature of the proceedings,
the court granted the trial court discretion to award appeal
costs to “the party ultimately prevailing.” P.A. 21a.

REASONS FOR DENYING THE PETITION

I. This Court Lacks Jurisdiction to Review The
Interlocutory Order of The California Court of Appeal.

Palpably, this Court lacks jurisdiction to review the
interlocutory order of the California Court of Appeal in this
case. This Court’s review of state court decisions is confined
to “final judgments or decrees rendered by the highest court
of a State in which a decision could be had.” 28 U.S.C.
§ 1257(a). From the face of the California Court of Appeal’s
decision, it is readily apparent that, in the court’s own words,
it is an “interim proceeding”; the court did not render a “final
judgment.” The court referred specifically to AT&T's failure
to meet its summary judgment burden and “express[ed] no
opinion on potentially relevant issues not yet litigated,
including a rigorous Pike analysis.”

7

There are indeed further proceedings yet to come in the
case. The trier-of-fact has not heard RLH’s antitrust and
unfair competition claims or AT&T’s state and federal
defenses including that (i) AT&T is not liable for the acts of
its local telephone subsidiaries (ii) the tying claims are barred
by the Commerce Clause and (iii) the tying claims are barred
by other Constitutional infirmities such as due process of
law. Apart from that, the trier-of-fact has yet to hear RLH’s
tortious interference with prospective advantage claim which
is unaffected by federal issues.* After the trial court renders
judgment on all of RLH’s claims, either party may appeal as
of right to the California Court of Appeal. That court’s
decision is in turn subject to discretionary review by the
Supreme Court of California and by this Court.

The finality requirement “is not one of those
technicalities to be easily scorned. It is an important factor
in the smooth working of our federal system.” Jefferson v.
City of Tarrant, 522 U.S. 75, 81 (citation omitted). To warrant
review by this Court, a case must be final in two senses:
‘it must be subject to no further review or correction in any
other state tribunal; it must also be final as an effective
determination of the litigation and not of merely interlocutory
or intermediate steps therein. It must be the final word of a

final court.” /d. (citation omitted).

The Court has expressly held that the judgment “should
be final not only as to all the parties, but as to the whole
subject-matter and as to all the causes of action involved.”
Collins v. Miller, 252 U.S. 364, 370 (1920). The decision
below plainly does not meet this standard. To begin with,

5. AT&T did not argue whether RLH'’s intentional interference
cause of action is barred by the Commerce Clause. Therefore, the
Court of Appeal did not address this question.

8

the court below ruled that AT&T may yet establish that
the Commerce Clause bars RLH’s antitrust and unfair
competition claims as a matter of fact. This showing may,
indeed, be bound together with RLH’s proofs on the merits,
i.e. substantial impact upon California commerce.

Secondly, AT&T undoubtedly will raise due process of
law and other federal issues. Third, some but not all of RLH’s
claims involve federal issues. RLH’s tortious interference
claim remains unaffected. Finally, the trial court’s decision
is subject to review by the California appellate courts. Even
assuming the Court of Appeal adheres to its interim
Commerce Clause ruling as “law of the case,” that decision
will not bind the California Supreme Court, should it grant
discretionary review. And, the decision surely will not be
binding upon this Court.

Nor does, the decision below fall within any of the four
categories of cases in which the Court has treated state-court
judgments as final even though further proceedings were to
take place in state court. See Cox Broad. Corp. v. Cohn,
420 U.S. 469, 479-485.° The first three Cox categories are

6. Cox holds that the finality requirement may be satisfied
despite the pendency of further proceedings when (1) “there are
further proceedings * * * yet to occur in the state courts but where
for one reason or another the federal issue is conclusive or the
outcome of further proceedings preordained,” (2) “the federal issue
* * * will survive and require decision regardless of the outcome of
future state-court proceedings,” (3) “the federal claim has been finally
decided, with further proceedings on the merits in the state courts to
come, but in which later review of the federal issue cannot be had,
whatever the ultimate outcome of the case,” or (4) “the federal issue
has been finally decided in the state courts with further proceedings

(Cont'd)

9

plainly inapplicable. The federal issue is not conclusive or
preordained. Indeed, the California Court of Appeal identified
potential Constitutional issues, e.g. due process, that AT&T has
not yet raised. See Cox, 420 U.S. at 477 (exceptional situations
typically “would not require the decision of other federal
questions that might also require review by the Court at a later
date”).

The federal issues will not necessarily “survive and require
decision regardless of the outcome of future state-court
proceedings.” Cox, 420 U.S. at 480. Should AT&T prevail on
any of its state law defenses, the federal issues could be mooted.
Jefferson, 522 U.S. at 82. On the other hand, if AT&T does not
prevail, it may appeal all issues as of right to the California
Court of Appeal followed by discretionary review in the
California Supreme Court. Thus, the California courts’ ultimate
“determination will in no way limit [this Court’s] ability to
review the issue on final judgment.” Jefferson, 522 U.S. at 82-
83.

The fourth Cox category involves cases in which

the federal issue has been finally decided in the state
courts with further proceedings pending in which
the party seeking review here might prevail on the
merits on nonfederal grounds, * * *-and where
reversal of the state court on the federal issue would
be preclusive of any further litigation on the relevant
cause of action.

This category is also inapplicable.

(Cont'd)

pending in which the party secking review here might prevail on the
merits on nonfederal grounds, * * * and where reversal of the state
court on the federal issue would be preclusive of any further litigation
on the relevant cause of action.” 420 U.S. at 479-483.

10

Although AT&T could arguably prevail on the merits on
nonfederal grounds and prevail on federal grounds on the
antitrust and unfair competition claims if this Court reversed
the lower court’s Commerce Clause ruling, the fourth Cox
exception is only available when delaying review would
“seriously erode . . . Constitutional policy.” Cox, 420 U.S.
at 483. In the Constitutional realm, the fourth Cox exception
has been limited, as a rule, to First Amendment cases,
id. at 484-85 (citing cases), and, as a rare exception, to other
Constitutional issues in which the impact of delaying review
has immediate and potentially systemic consequences.
E.g. Mazurek v. Armstrong, 520 U.S. 968 (1997).

Delaying review would not seriously erode
Constitutional policy in the circumstances of this case. The
question raised by AT&T does not raise First Amendment
questions. Nor does it have imminent and potentially
systemic consequences. It is, therefore, comparable to such
cases as Flynt v. Ohio, 451 U.S. 619, 622-23 (1981)
(resolution of equal protection clause issue could await final
judgment without “adverse effect upon important Federal
interests; a contrary conclusion would permit the fourth
exception to swallow the rule”) and Johnson v. California,
541 U.S. 428, 430 (2004) (“no convincing claim of erosion
of federal policy that is not common to all decisions rejecting
a defendant's [Constitutional] claim’).

Accordingly, the Court lacks jurisdiction to review the
interlocutory decision of the California Court of Appeal in
this case.

11

II. There is Not a Genuine Conflict in The Lower Courts
on Whether Direct Regulation of Extraterritorial
Commerce is Unconstitutional Without Further Inquiry

AT&T argues that the Court should grant certiorari because
there is a division in the Circuits on whether direct regulation
of extraterritorial commerce is unconstitutional without further
inquiry. Cert. Pet., pg. 16. No genuine conflict exists. It is simply
the case that no court has adopted AT&T’s view that “regardless
of the beneficial effects a statute has on local activity it should
be declared invalid if it has any extraterritorial effects.”
See Alliant Energy Corp. v. Bie, 336 F.3d 545, 547 (7" Cir.
2003) (rejecting such an argument in denying petition for
rehearing en banc). Rather, lower courts have applied this
Court’s precedents requiring courts to strike down “a state law
shown to have extraterritorial scope and an adverse impact on
commerce occurring wholly outside the state.” National Solid
Wastes Management Association v. Meyer, 63 F.3d 652, 659
(7" Cir. 1995) (emphasis added).

A. The Critical Inquiry in Commerce Clause
Jurisprudence is Always The Same; The Scope and
Depth of The Inquiry Vary Depending Upon The
Nature of The Statute and The Facts of The Case.

In all cases addressing Commerce Clause questions, the
critical inquiry remains the same: “[T]he overall effect of the
statute on both local and interstate commerce.” Healy v. Beer
Inst., 491 U.S. 324, 337 n.14 (1989) (citing Brown-Forman
Distillers Corp. v. New York State Liquor Authority, 476 U.S.
573, 579 (1986)).’ The scope and depth of the inquiry needed

7. The Healy Court also noted that its “distillation of principles
from prior cases involving extraterritoriality [including the principle
upon which AT&T relies] is meant as nothing more than a restatement
of those specific concerns that have shaped this inquiry.” Healy v.
Beer Inst., 491 U.S. at 337 n.14 (emphasis added).

12

to determine whether a state law unduly burdens interstate
commerce and, therefore, transgresses the Commerce Clause
vary depending upon the nature of the statute at issue and
the facts of the particular case. AT&T’s review of the lower
court cases overlooks this important point. As a consequence,
AT&T sees division and confusion that on closer scrutiny
does not necessarily exist.

In American Booksellers Foundation v. Dean, 342 F.3d
96 (2d Cir. 2003), as one example, the court reviewed a
Vermont criminal statute intended to protect minors living
in Vermont from internet obscenity. The court observed that
the internet is a unique phenomenon that does not recognize
geographic boundaries. /d. at 103. As a result, website
operators operating lawfully in State A were subject to
criminal penalties in Vermont. /d. While acknowledging
Vermont’s interest in protecting minors against such out-of-
state websites (id. at 104), the court nevertheless found an
undue burden on out-of-state commerce resulting from
inconsistent state legislation in this sphere. /d. (citing e.g.
American Libraries Ass'n v. Pataki, 969 F. Supp. 160, 182
(S.D.N.Y. 1997)).

Accordingly, in striking down state internet legislation,
lower courts have relied upon analysis of its practical
effects and found adverse impact upon interstate commerce.
Accord: Psinet, Inc. v. Chapman, 362 F.3d 227, 240 (4" Cir.
2004) (adopting Pataki analysis regarding “haphazard,
uncoordinated, and even out-right inconsistent regulation by
states”) and ACLU v. Johnson, 194 F.3d 1149 (10" Cir. 1999)
(also relying upon the Pataki analysis).

Similarly, in NCAA y. Miller, 10 F.3d 633 (9" Cir. 1993),
the court analyzed a Nevada statute providing certain due

13

process protections during enforcement proceedings that the
NCAA, the national intercollegiate athletic regulatory
organization, did not provide. The statute was apparently
aimed exclusively at the NCAA, whose goal is to create a
uniform nationwide collegiate athletic “product” through
enforcement procedures applied uniformly and even-
handedly nationwide. /d. at 638.

The court clearly found that Nevada’s statute was per
se invalid because it unduly burdened out-of-state commerce.
Nevada’s statute forced the NCAA either to adopt non-
uniform standards which could lead to college athletic non-
uniformity or, alternatively, to compromise the integrity of
its produet in every state by adopting Nevada’s procedures
nationwide. /d. at 639. Beyond that, other states also had
enacted or were about to enact their own due process statutes,
creating “the serious risk of inconsistent obligations .. .”
Id. at 640.

In National Solid Wastes Management Association v.
Meyer, 63 F.3d 652 (7" Cir. 1995), the court analyzed a
Wisconsin statute that prohibited waste generators from using
Wisconsin landfills unless they generated waste in a
community that adopted the law’s “effective recycling
program.” The court struck down the statute after finding an
adverse impact on out-of-state commerce. The law worked a
practical “embargo” on out-of-state communities that refused
to comply with the Wisconsin law and had the practical effect
of inflicting a higher cost burden on some out-of-state
competitors than on others wholly based on whether their
communities adhered or refused to adhere to Wisconsin's

statute. /d. at 660-61.

14

B. The First and Eighth Circuits’ “First Tier”
Commerce Clause Analysis Does Not Conflict
With That of Other Circuits.

Although AT&T argues otherwise [Cert. Pet. Pg. 18],
the First and Eighth Circuits have not rejected the view that
direct regulation of interstate commerce is per se invalid.
Rather, these courts, too, have looked beyond the mere
extraterritorial effect of the statute and have analyzed whether
in “practical effect” it unduly burdens interstate commerce
and, therefore, violates the Commerce Clause.

C. The First Circuit’s Application of Commerce
Clause Precedents Recently Has Been Approved
by The Court.

The First Circuit’s decision in Pharm. Research & Mfrs.
of Am. v. Concannon, 249 F.3d 66 (Ist Cir. 2001), aff’d sub
nom. Pharm. Research & Mfrs. of Am. v. Walsh, 538 U.S.
644 (2003), illustrates the proper application of Tier One
analysis more adequately than Grant’s Dairy-Maine LLC v.
Commissioner of Maine Dept. of Agriculture, 232 F.3d 8
(1* Cir. 2000), and also carries the advantage of this Court’s
review and imprimatur of its Commerce Clause analysis.
Walsh, 538 U.S. at 669-70 (“Maine Act does not regulate the
price of any out-of-state transaction” and the “Program will
not impese a disparate burden on any competitors.”)

In Concannon, the court reviewed a Maine statute
intended to obtain lower prescription drug prices for Maine’s
citizens. The program subsidized drug prices by collecting
rebate payments from participating drug manufacturers.
The primary incentive for manufacturers to enter rebate
agreements with the state was a rule that drugs of all

15

noncompliant manufacturers could lose their Medicaid
authorization. Concannon, 249 F.3d at 71-72.

The court rejected an argument that the law constituted
per se invalid extraterritorial regulation as it necessarily
regulated drug manufacturer and distributor transactions
outside the borders of Maine and reduced rmanufacturers’
profits. /d. at 80, 82. Because Maine did not insist that
manufacturers sell their drugs to a wholesaler for a certain
price nor tie the price of its in-state products to out-of-state
prices, it was not regulating their out-of-state conduct.
Id. at 81-82. Rather, the Act simply regulated in-state activity.
Id. at 82. Moreover, it did not appear that adverse effects on
commerce would occur if similar legislation were enacted
in other states. /d. at 82-83.

D. The Eighth Circuit’s Approach to Commerce
Clause Analysis is Not Out-of-Line With its Sister
Circuits. -

Finally, AT&T has cited Southern Union Co. v. Missouri
Public Service Commission, 289 F.3d-503 (8" Cir. 2002), as
evidence that the Eighth Circuit has rejected the principle
that direct regulation of interstate commerce is per se invalid.
The Eighth Circuit, however, has not rejected that principle.
Instead, like her sister Circuits and this Court, the Eighth
Circuit has analyzed whether the law has “extraterritorial
scope and an adverse impact on commerce occurring wholly
outside the state.” See Meyer, supra, 63 F.3d 652, 659.

Cotto Waxo Co. v. Williams, 46 F.3d 790 (8" Cir. 1995),
applied this type of analysis to a Minnesota law_prohibiting
the sale of petroleum-based sweeping compounds. As a result
of the law’s passage, Minnesota wholesalers and distributors

16

refused to purchase or sell these petroleum-based sweeping
compounds from the plaintiff who lost not only its Minnesota
customers but also most of its sales in surrounding states.
Id. at 793-94,

Mindful that a statute could have per se unconstitutional
extraterritorial reach under this Court’s precedents “when it
necessarily requires out-of-state commerce to be conducted
according to in-state terms,” the court did not find that to be
the case. Although the law “affected [the plaintiff's]
participation in interstate commerce,” it did not “necessarily
affect out-of-state commerce” — the plaintiff was still “able
to sell to out-of-state purchasers regardless of [its]
relationship to Minnesota.” Jd. at 794. Therefore, the court
ruled out per se invalidity and applied the balancing analysis
approved in Pike, supra, 397 U.S. 137, 142. Accord: Hampton
Feedlot v. Nixon, 249 F.3d 814, 818 (8 Cir. 2001)
(determining that state statute was not per se invalid direct
regulation of or discrimination against interstate commerce).

Cotto Waxo underscores that, though the scope and depth
of the inquiry needed to determine whether a state law unduly
burdens interstate commerce may vary depending upon the
nature of the statute at issue and the facts of the particular
case, there is no genuine conflict among the Circuits
regarding proper application of the Court’s Commerce Clause
precedents.

17

Ill. The California Court of Appeal’s Decision Correctly
Applied This Court’s Commerce Clause Precedents.

The California Court of Appeal’s analysis of AT&T's
Commerce Clause argument is incorporated herein by reference.
PA | la-19a. Contrary to the argument advanced by AT&T [Cert.
Pet., p. 12], the court below correctly applied the first tier of
this Court’s two-tier Commerce Clause analysis®, insofar as the
summary judgment record would permit.

A. The California Court of Appeal Applied the First
Tier Commerce Clause Analysis Insofar as The
Record Permitted.

In determining whether a statute unreasonably burdens
interstate commerce, the Court repeatedly has deemed it
appropriate to consider how a statute such as California’s
Cartwright Act operates in the context of other states’ laws.
E.g., Okla. Tax Comm'n v. Jefferson Lines, Inc., 514 U.S. 175,
185 (1995) (applying “internal consistency” test and inquiring

8. The two-tier analysis reads as follows:

When a state statute directly regulates or discriminates
against interstate commerce, or when its effect is to favor
in-state cconomic interests Over out-of-state interests,
we have generally struck down the statute without further
inquiry. When, however, a statute has only indirect
effects on interstate commerce and regulates
evenhandedly, we have examined whether the State's
interest is legitimate and whether the burden on interstate
commerce clearly exceeds the local benefits.

Brown-Forman Distillers Corp. v. New York State Liquor Authority,
476 U.S. at 579.

18

whether “imposition of a tax identical to the one in question by
every other State would add no burden to interstate commerce
that intrastate commerce would not also bear”).

The California Court of Appeal properly applied the
“internal consistency” test and found no inconsistency.’
Observing that Healy’s “understanding of the commerce
clause’s purpose and scope may be consistent with giving
extraterritorial effect to [state antitrust] laws,” the court
determined that projecting California’s prohibition of tying
arrangements into other states would not create internal
inconsistency as “the Sherman Act already bars tying
arrangements throughout the land.” P.A. 14a.'°

Implicit in the California Court of Appeal’s Commerce
Clause analysis is the recognition that, unlike the statutes in
cases such as Edgar v. MITE Corp., 457 U.S. 624 (1982),
where extraterritorial transactions were regulated in some
instances for no reason while providing no protection for
any legitimate state interest, application of the California
statutes in this case never affects extraterritorial conduct

9. The court below pointedly observed that AT&T “notes no
inconsistency” between condemnation of the tying arrangements
under California or federal law. P.A. 15a.

10. Additionally, practically every state has enacted “little
Sherman” statutes which are generally governed or guided by federal
antitrust precedents. This Court has recognized in connection with
the settlement of a case brought by various states challenging an
extraterritorial price fixing conspiracy under both state and federal
antitrust laws that the former are not preempted by federal antitrust
laws and, indeed, are “consistent with the broad purposes of the
federal antitrust laws: deterring anticompetitive conduct and ensuring
the compensation of victims of that conduct.” See California v. ARC
America Corp. 490 U.S. 93, 101-102 (1989),

19

without providing corresponding protection for California’s
significant interests. See CTS Corp. v. Dynamics Corp., 481
U.S. 69 (1987). Thus, the California Court of Appeal
reasoned without finally deciding the issue — that
California’s antitrust and unfair competition statutes could
reach out-of-state anticompetitive practices that cause harm
in California.

B. The California Court’s Understanding of
Commerce Clause Jurisprudence Finds Support
in Decisions From Other Jurisdictions That Have
Applied State Antitrust Statutes to Out-of-State
Anticompetitive Conduct.

The California Court of Appeal’s understanding of the
Court’s Commerce Clause jurisprudence also finds support
in decisions from other jurisdictions that have applied state
antitrust statutes to out-of-state anticompetitive conduct
causing in-state harm, and also in authoritative commentary.
P.A. 16a-18a (citing In re Lorazepam & Clorazepate Antitrust
Litigation, 295 F. Supp. 2d 30 (D.D.C. 2003); Knevelbaard
Dairies v. Kraft Foods, Inc., 232 F.3d 979, 993-994 (9th Cir.
2000); and Heath Consultants v. Precision Instruments,
527 N.W.2d 596 (Neb. 1995); Herbert Hovenkamp,
State Antitrust in the Federal Scheme, 58 Ind. L.J. 375,
376(1983)."!

11. The Court’s approach in BMW of North America, Inc. v.
Gore, 517 U.S. 559, 572-73 (1996) also offers support. The Court
found that the punitive damages award under Alabama’s statute could
violate Healy's state sovereignty and comity principles only
if (a) the conduct “had no impact on Alabama or its residents” or
(b) Alabama's intent was to punish the defendant or to deter its lawful
conduct in other states rather than to protect Alabama's own
consumers and economy from harm.

20

Significantly, leading antitrust decisions from other
jurisdictions disagree with AT &T’s contention that application
of a state’s antitrust statute to out-of-state anticompetitive
conduct is per se invalid direct regulation of interstate
commerce. Cert. Pet., p. 11, et seg. These decisions regard the
state’s antitrust statute as having “incidental effects” on interstate
commerce subject to the Pike balancing analysis'* — an analysis
the court below found appropriate for the present case but
declined to undertake for AT&T. P.A. 16a-17a."°

C. AT&T’s Contention That The Commerce Clause
Bars All Claims Under State Statutes Based Upon
Extraterritorial Conduct is Overly Simplistic and
Unavailing. -

AT&T persists in maintaining — somewhat awkwardly
as will be shown in the next section — that the Commerce
Clause bars all claims under state statutes based upon
extraterritorial conduct (even when the conduct has in-state

12. Heath Consultants and Lorazepam Antitrust Litigation,
supra, cited by the court below, reached this conclusion. Other
decisions that were not cited by the court also have determined that
the state antitrust statute in question had “incidental effects” on
interstate commerce and, therefore, employed or would employ the
Pike balancing analysis in determining whether such statutes can be
applied to out-of-state anticompetitive conduct harmful to state
interests. See, e.g., Freeman Industries, LLC v. Eastman Chem. Co.,
172 S.W. 3d 512 (Tenn. 2005); Olstad v. Microsoft Corp., 700 N.W.
2d 139 (2005); C. Bennett Bldg. Supplies v. Jenn Air, 759 S.W. 2d
883 (Mo. App. 1988); State v. Coca Cola Bottling Co. of Southwest,
697 S.W. 2d 677 (Tex. App. 1985).

13. The court noted that “[e]ven if we wanted to conduct a
Pike balancing analysis for [AT&T], the record [AT&T] developed
for summary judgment would not allow us to do so at this time.”
P.A. 16a n.5.

21

effects). Cert. Pet., pp. 12-13. AT&T’s overly simplistic
argument is flawed. This Court “has never suggested that
the dormant Commerce Clause requires Balkanization, with
each state’s law stopping at the border.” /nstructional Sys. v.
Computer Curriculum Corp., 35 F.3d 813, 825 (3d Cir. 1994)
(citing Donald H. Regan, Siamese Essays: (1) CTS Corp. v.
Dynamics Corp. of America and Dormant Commerce Clause
Doctrine; (II) Extraterritorial State Legislation, 85 Mich.
L. Rev. 1865, 1878 (1987) (“prohibition [of all state laws
that have substantial extraterritorial effects] would invalidate
much too much legislation.”)).

That AT&T’s overly simplistic argument is at odds with
this Court’s Commerce Clause jurisprudence is also
suggested by the recent denial of a writ of certiorari to Beretta,
U.S.A., Corp. (joined by the Chamber of Commerce of the
United States, among others, as amici curiae), whose
argument to the Court was strikingly similar to that of
AT&T.'* Beretta, U.S.A., Corp. v. District of Columbia, __
U.S. __; 126 S. Ct. 399; 163 L. Ed. 2d 277 (2005).

14. Beretta sought review of District of Columbia v. Beretta,
U.S.A., Corp., 872 A.2d 633 (D.C. 2005) (en banc), which rejected
a contention that the Commerce Clause, inter alia, barred application
of a District of Columbia statute holding out-of-state weapons
manufacturers strictly liable in tort for injuries arising from the
discharge of certain weapons in the District of Columbia.

22

D. AT&T’s Attempt to Draw a Commerce Clause
Distinction Between In-State Impact on
Consumers or Markets, on One Side, And
Manufacturers And Vendors, on The Other, is a
Distinction Without a Difference.

While, on the one hand, AT&T contends that the
Commerce Clause bars all claims under state statutes based
upon extraterritorial conduct (even when the conduct has in-
state effects), on the other, the Petitioner strongly implies
that a nexus between out-of-state anticompetitive conduct
and in-state impact upon consumers or markets would
withstand Commerce Clause scrutiny. As just one example,
and there are others, AT&T states that “no benefits on the
side of regulation can justify California in controlling [out-
of-state] conduct. . . that does not impact California markets
or consumers.”'> Cert. Pet., pp. 13, 23. While in-state
competitive injury to consumers or markets would withstand
such scrutiny, such injury to California manufacturers or
vendors of goods; that is, RLH, would not.

AT&T has merely created a distinction without a
difference in either law or economics. Commerce, by
definition, is “the exchange of goods and services, esp. on a
large scale involving transportation between cities, states and
nations.” Black’s Law Dictionary (7" Ed. 1999). In seeking
to limit its definition of commerce to consumers or markets,
AT&T is perforce excluding manufacturers and vendors, one-
half of the commerce equation. AT&T’s “distinction” of

15. AT&T effectively concedes this point in its Question
Presented: “Whether a State’s direct regulation of commercial [out-
of-state}] conduct ... that has no effect on consumers or markets
within that State is a per se violation ...” (emphasis added).

23

convenience is out-of-touch not only with economic and
business reality but also with the sound objectives of antitrust
law.

Antitrust laws generally and California’s Cartwright Act,
in particular, outlaw combinations to “prevent competition in
manufacturing ... transportation ... [or] sale ... of
merchandise.” See Cal. Bus. & Prof. Code § 16720 (c). In
Commerce Clause challenges to state antitrust law enforcement,
courts have never recognized any distinction based on which
side of the commerce equation the victim falls. See, e.g.,
Knevelbaard Dairies v. Kraft Foods, Inc., supra, 232 F.3d at
993-994 (milk producers adversely affected by out-of-state
conspiracy) and Lorazepam Antitrust Litigation, supra. (Illinois
insurance company responsible for paying its out-of-state
subscribers’ price-fixed prescription drug costs).

AT&T’s citation to Matsushita Elec. indus. Co. v. Zenith
Radio Corp., 475 U.S. 574 (1986), as support for its strained
distinction, is far off the mark. Indeed, the Court noted in
Matsushita that the Sherman Act reaches conduct outside United
States borders “when the conduct has an effect on American
commerce.” /d. at 582 n.6. The Matsushita language recited by
AT&T simply pertains to conduct in Japan having no impact on
American commerce. /d. at 583.'° That language is manifestly
inapposite to the present case. The court below found that RLH
demonstrated sufficient injury attributable to AT&T’s out-of-
state tying arrangements to meet its summary judgment burden.
P.A. 20a.

16. In Matsushita, the Court found that, although a below-cost
(predatory) pricing conspiracy by Japanese television producers
could have injured the plaintiff manufacturers, they were unable to
establish such a conspiracy. Matsushita Elec. Indus. Co. v. Zenith
Radio Corp., 475 U.S. 574, 596-97 (1986).

24

If AT&T were to concede, as it should, that there is no
legitimate distinction in this context between consumers,
manufacturers and vendors, it would be left with the argument
that the nexus between AT&T’s out-of-state anticompetitive
conduct and RLH’s in-state injury could withstand Commerce
Clause scrutiny under other circumstances but does not on the
facts of this case because the commerce is quantitatively
insufficient.

Such an argument, of course, presents a paradigm fact
question that is entirely inappropriate for review on an
incomplete summary judgment record. See n.3, supra. But
wholly apart from it being a paradigm fact issue, it is not the
proper analysis of substantiality in any event. See Freeman
Industries, LLC v. Eastman Chem. Co., 172 S.W. 3d 512, 523-
24 (Tenn. 2005) (under federal antitrust precedents, whether
effect is substantial does not involve “mathematical nicety”;
“test is pragmatic, turning on facts ...”; “anticompetitive
conduct need not threaten demise of [state’s] business’’).

E. AT&T’s Tariff Argument Presents Fact Questions
That Are Not Ripe For Review.

Finally, AT&T argues that RLH “seeks to use California
law to make AT&T’s subsidiaries change their filed tariffs” in
other states. Cert. Pet., pg. 15. The California Court of Appeal
refused to entertain this argument on its merits because AT&T
“mentioned the tariff issue only in a footnote with a single
citation to Healy, and thus failed to offer the comprehensive
legal analysis needed to affirm summary judgment on this
ground (citations omitted).” P.A. 19a. The court, however, added
that this was one of the “potentially relevant issues” that could
be litigated after the case was remanded to the trial court.
P.A. 18a-19a.

25

AT&T’s tariff argument is not yet ripe for review by this
Court for the reasons stated by the court below, among others.
First, RLH seeks affirmative injunctive relief only under the
California Unfair Competition statute, not under the Cartwright
Act. Secondly, injunctive relief has not been granted in this case
so there has been no judgment requiring AT&T to modify its
conduct and, therefore, no review of such relief by California’ s
appellate court system. Most importantly, and finally, the
factual record has not been sufficiently developed to
determine whether the tariffs embodying the HVP tying
arrangements at issue are immune from antitrust scrutiny.
See P.A. 19a (citing Phonetele, Inc. v. American Tel. & Tel.
Co., 664 F. 2d 716, 733-37 (9" Cir. 1981)).

IV. This is The Wrong Case at The Wrong Time For
Further Review and Application of Commerce Clause
Principles.

The California Competition statutes reviewed in the court
below apply only to anticompetitive conduct having
substantial effects on California commerce. AT&T’s
speculation concerning other states following the lead of the
California Court of Appeal in this case, risks of inconsistent
legislation, and interstate economic battles, can readily be
put to rest.

All companies transacting business in the United States
must comply with federal antitrust laws. Federal antitrust
laws proscribe certain unlawful tying arrangements. The same
tying arrangements fall within the purview of the antitrust
laws of California and other states based on federal antitrust
precedents. This Court unanimously has determined that state
antitrust laws are “consistent with the broad purposes of the
federal antitrust laws: deterring anticompetitive conduct and

26

ensuring the compensation of victims of that conduct.”
See California v. ARC America Corp. 490 U.S. 93, 101-102
(1989). If any state were to enact antitrust legislation that
“actually conflicts” with federal antitrust law, the legislation
would be subject to federal preemption. /d. at 100-101.

Nothing in the record reviewed by the California Court of
Appeal would suggest that AT&T or any other company is
required by California’s Competition statutes to do anything
beyond complying with federal antitrust law. Each and all are
able to sell their products and services and compete on equal
terms throughout the Union, and that has remained the case,
not despite, but rather because of state (and federal) antitrust
enforcement of out-of-state anticompetitive conduct on behalf
of its citizens over many, many years.

Anticompetitive conduct imposes a significant burden on
commerce. Thus, the chief concerns of state antitrust law
enforcement and the Commerce Clause are complementary: both
protect against actions “with the aim and effect of establishing
an economic barrier against competition ...,” the former
through the use of private anticompetitive conduct and the latter
through the use of state authority. See Baldwin v. G.A.F. Seelig,
Inc., 294 U.S. 511, 527 (1935); see, e.g., C& A Carbone, Inc. v.
Town of Clarkstown, 511 U.S. 383, 390 (1994).

So, for reasons going beyond the palpable absence of
jurisdiction under 28 U.S.C. § 1257(a), this antitrust case —
which challenges the Petitioner’s alleged anticompetitive
conduct under state laws intended to protect and maintain the
flow of commerce — is not certworthy. It is simply the wrong
case at the wrong time for a further review and application of
this Court’s Commerce Clause principles, one that could have
far reaching and uncharted consequences for the rapidly
changing face of American business.

27
CONCLUSION
The Petition for a Writ of Certiorari should be denied.
Respectfully submitted,

JAMES A. STEARMAN
Counsel of Record
RICHARD S. Price, Il
1235 N. Harbor Blvd.
Suite 200

Fullerton, CA 92832
(714) 871-1132

H. KENNETH KUDON
KupDON Law FirM
Two Old Creek Court
Potomac, MD 20854
(301) 279-5634

Counsel for Respondent

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386016_0943%3A2. Public record. Not legal advice.