# Reply Brief — AT&T Corp. v. RLH Industries, Inc. (No. 05-1493) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386016_0943%3A3 ## Record - **Collection:** Supreme Court brief - **Document type:** Reply Brief - **Published:** January 1, 2006 ## Text SUpreiic Gout, WS. FILED (4) JUL 5 - 2096 : CTFICE CE THE CLERK No. 05-1493 IN THE Supreme Court of the Gnited States AT&T INC. (F/K/A SBC COMMUNICATIONS INC.), Petitioner, Vv. RLH INDUSTRIES, INC.. Respondent. On Petition for a Writ of Certiorari to the Court of Appeal of the State of California REPLY BRIEF FOR PETITIONER en JAVIER AGUILAR MICHAEL K. KELLOGG WILLIAM M. SCHUR Counsel of Record AT&T SERVICES, INC. SEAN A. LEV 175 E. Houston Street PRIYA R. ATYAR 4th Floor KELLOGG, HUBER, HANSEN, San Antonio, Texas 78205 TODD, EVANS & FIGEL, (210) 351-3409 PLLC. 1615 M Street, N.W. Suite 400 Washingten, D.C. 20036 (202) 326-7900 Counsel for Petitioner July 5, 2006 CORPORATE DISCLOSURE STATEMENT Petitioner’s Statement pursuant to Rule 29.6 was set forth at page ii of the petition for a writ of certiorari, and there are no amendments to that Statement. ii TABLE OF CONTENTS Page CORPORATE DISCLOSURE STATEMENT..................... i FAR I FART BNE CAI cnprccsetersctesernenniasidscerebocinvterwes iil ARGUMENT: I. The Court Has Jurisdiction To Review The EE: RON cisusheiasechariisisiaicicleiibshddabisintenadiachipiitbteciaiints 1 II. The Circuits Are In Square Conflict Over Whether Direct Regulation Of Wholly Ex- traterritorial Conduct Is A Per Se Violation Ce ee RS I icc scantccivnicincinesdiermeenseicass 5 III. The Decision Below Conflicts With Control- eae aa CONES BI cc icciccicceecintarienctnniricieeniconn 7 IV. This Case Is A Superior Vehicle For The SNE FINE in, haskesicosccicrnicnecaeontnbencbaebesmnestes 8 CFIA scvihiscnisrnisiesteinbialiinssiccdaiidinieidicdiinaa 10 ill TABLE OF AUTHORITIES ; Page CASES ACLU v. Johnson, 194 F.3d 1149 (10th Cir. 1999)......... 5, 6 American Booksellers Found. v. Dean, 342 F.3d 96 Ee i. Oe sccsisicdectbacecnneeapitbemsienkianubicnianidiateensiian 5, 6 Batson v. Kentucky, 476 U.S. 79 (1986) ..............cccssseseeeeeees 5 Belknap, Inc. v. Hale, 463 U.S. 491 (1988) «0.0... eee 4 Beretta U.S.A. Corp. v. District of Columbia, 126 S. ie IEE CI IPIIUEE cassiic en: ioeucdspiccceurspdbees punbdnuiadednpeentnanaamebavewiant 10 Brown-Forman Distillers Corp. v. New York State Liquor Auth., 476 U.S. 573 (1986)..........ccsccccrsessscceeeeees 7 Cotto Waxo Co. v. Williams, 46 F.3d 790 (8th Cir. RP RR tach Sind NEM La Occ WNC TS SR SIPC NOE 7 Cox Broadcasting Corp. v. Cohn, 420 U.S. 469 SIDE ITE shiinhcitiieidiinlanadadisdiinshbbipempanenephivaaeanamnudcaiedicomeces 1, 2, 3, 4 District of Columbia v. Beretta U.S.A. Corp., 872 A.2d 633 (D.C.), cert. denied, 126 S. Ct. 399 EESTI" SRR Oe er Roe es SORES Pe Pee ets 10 Paes @. Gato, SET UD. GEO CIGSDD svcesccccsevereteecicosisves 4,5 Goodyear Atomic Corp. v. Miller, 486 U.S. 174 (1988)....... 4 Grant’s Dairy-Maine, LLC v. Commissioner of Maine Dep't of Agric., 232 F.3d 8 (1st Cir. 2000) ..................... 7 Healy v. The Beer Institute, 491 U.S. 324 (1989)............ 7,8 Hudson Distribs., Inc. v. Eli Lilly & Co., 377 US. Se NE sittin si decectesnid bodaa i Micekc's a cucacomsshabaca Reseed 4 Ingersoll-Rand Co. v. McClendon, 498 U.S. 133 Fea ESE PAP SEN ce ABE: RP Re aD RRB WE Se EER OP ONY TS Ne 4 Johnson v. California, 541 U.S. 428 (2004) ...... ee 5 Local No. 438 Constr. & Gen. Laborers’ Union uv. Ss SF kA ric OEE CE ED uate csacsciccemaiasidokieisbasinsiccens 4 iv Matsushita Elec. Indus. Co. v. Zenith Radio Corp., BTR 78 CLOG ciakisiscstivs cansessansatnesteseatoteks waited. 8,9 Mercantile Natl Bank v. Langdeau, 371 U.S. 555 EC RIIIENE csctavenscuvanesdccbacdatindonscruabschicnsd anemia eelaeEunamimaceee 4 Mississippi Power & Light Co v. Mississippi ex rel. Moere, ABT US. S64 CABS) s cccsiininscicnonsnind 4 National Solid Wastes Mgmt. Ass’n v. Meyer, 63 F.3d Be Cree CE RID eekcsncscicectshensbineehuhseleucrsusmbaietan 5, 6 NCAA v. Miller, 10 F.3d 633 (9th Cir. 1998) ................. 5, 6 New York Life Ins. Co. v. Head, 234 U.S. 149 CFE GY aici veniscsisiceinccvavimebchcaotccvannigecdesenaterkccinpeamadnaatiaduan 3 Pharmaceutical Research & Mfrs. of Am. v. Con- cannon, 249 F.3d 66 (1st Cir. 2001), aff'd, 538 SFB. OG CO sieiaiveksidssdsecicchsaciede uke natmeainned 6, 7 Pike v. Bruce Church, Inc., 397 U.S. 137 Pe icc senicaestncsnsikck sive tombaccuenaiaba taken aka 5 Southern Union Co. v. Missouri Pub. Serv. Comm’n, BAO FBG BOS COG GaP. BOD) viciinsensica cvccdsectousticnionsreces 6, 7 Southland Corp. v. Keating, 465 U.S. 1 (1984)... 4 State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. Be I visas casei ntanehcddiduadhachackcaipetpienivaiedionicketstocahicina 4 ss CONSTITUTION AND STATUTES U.S. Const.: Art. I, § 8, Cl. 3 (Commerce Clause)...... 1, 2, 3, 5, 7, 8, 10 Art. IV, § 1 (Full Faith and Credit Clause)..................... 3 TAGS sciccsnessststnseninichilatdinihetidibapennasiediataheiapibinuitevantererse 4 Amend. V (Due Process Clause) ...............c::ccceeeeceeeeeseeees 3 Employee Retirement Income Security Act of 1974, ee Oe EDI, nncdocercesrtctdaretccctcsqiuiinobesteitens 4 Federal Arbitration Act, 9 U.S.C. §§ 1 et seq. ............ eee 4 National Labor Relations Act, 29 U.S.C. §§ 151 GE IGE. cnseneinisccndictaninicevendtiedesiideieen (cetiibaiaabadiiedinbaninpaiintines 4 Sherman Act, 15 U.S.C. §§ 1 ef s€q. .......ccccssceccossssseccecees 4,8 Ba Pes OO CID - roeqvatsec ecbinnininnsiabeeetleatiavnaneveinntietitienidassia 1 The lower court in this case held that, under the Com- merce Clause, there is no per se bar on States directly regulating commerce occurring wholly outside their bor- ders. That decision conflicts with the controlling decisions of this Court, as well as the law in several federal courts of appeals. It does, however, accord with the law in the First and Eighth Circuits. This Court’s intervention is necessary to resolve the conflict among the lower courts as to a fundamental and recurring constitutional issue. Respondent RLH Industries, Inc. (““RLH”) offers no con- vincing defense of the California court’s decision and, de- spite its efforts to sow confusion, cannot obscure the clear split between the circuits or the purely legal character of the question presented. RLH’s only argument against the Court’s exercise of jurisdiction is that leaving the decision below in place would not seriously erode federal policy. That argument fails under this Court’s precedents. De- nial of review would allow California, at the behest of any of its residents, to control commerce occurring wholly out- side its borders and, in so doing, trump the law of the other States where the commerce is occurring. Such ex- traterritorial regulation threatens not only the free flow of interstate commerce, but also the basic premises of our constitutional structure. The decision at issue here thus imperils federal policy in a much more fundamental and broadly applicable way than the many state-court pre- emption decisions over which this Court has previously exercised jurisdiction under the same doctrine that RLH concedes is controlling here. I. The Court Has Jurisdiction To Review The Deci- sion Below Section 1257(a) authorizes this Court’s review of any “[f]inal judgment[] or decree[{}] rendered by the highest court of a State in which a decision could be had.” 28 U.S.C. § 1257(a). In Cox Broadcasting Corp. v. Cohn, 420 U.S. 469 (1975), the Court explained that “the require- ment of finality is to be given a practical rather than a technical construction.” Jd. at 478 n.7 (:nternal quotation 2 marks omitted). Cox recognized “at least four categories of .. . cases” in which the Court had jurisdiction to review a state-court decision on a federal issue “without awaiting the completion of the additional proceedings anticipated in the lower state courts.” Jd. at 477.' The fourth such category consists of cases where: (1) “the federal issue has been finally decided in the state courts with further pro- ceedings pending in which the party seeking review might prevail on the merits on nonfederal grounds, thus render- ing unnecessary review of the federal issue by this Court”; (2) “reversal of the state court on the federal issue would be preclusive of any further litigation on the relevant cause of action”; and (3) “a refusal immediately to review the state court decision might serious'y erode federal pol- icy.” Id. at 482-83. Under this Court’s prior decisions, this case falls squarely within the fourth Cox category. It is undisputed that the federal issue — whether direct extraterritorial regulation is per se invalid under the Commerce Clause — “has been finally decided in the state courts,” with the California Court of Appeal resolving the issue against AT&T, and the California Supreme Court denying review. It is further undisputed that, if the Court does not grant review now, AT&T “might prevail on the merits on non- federal grounds, thus rendering unnecessary review of the federal issue by this Court.” See Opp. 9 (conceding that, “[s]hould AT&T prevail on any of its state law defenses, the federal issues could be mooted”). Finally, it is undis- puted that reversal of the California court on the federal issue “would be preclusive of any further litigation” on RLH’s causes of action against AT&T's out-of-state sub- sidiaries. Each of those causes of action seeks to apply California law to conduct occurring outside of California. ' Cox did not require that the additional proceedings involve only state-law issues. See 420 U.S. at 477 (‘[i}n most, if not all, of the cases in these categories, these additional proceedings would not require the decision of other federal questions that might also require review by the Court at a later date”) (emphasis added). 3 If the Court agrees with AT&T that this extraterritorial regulation violates the Commerce Clause per se, that deci- sion will end litigation of RLH’s claims. RLH’s sole jurisdictional argument is thus that denial of review would not risk “seriously erod{ing] federal pol- icy.” Cox, 420 U.S. at 483; see Opp. 10.2 That assertion is demonstrably incorrect: failure to review the California court’s decision would have particularly acute conse- quences for federal policy. The principle that a State may regulate only within its jurisdiction is fundamental to our constitutional structure, finding expression in three sepa- rate constitutional provisions: the Commerce Clause, the Due Process Clause, and the Full Faith and Credit Clause. See Pet. 14 n.4; New York Life Ins., 234 U.S. at 161 (“[Ijt would be impossible to permit the statutes of Missouri to operate beyond the jurisdiction of that state ... without throwing down the constitutional barriers... upon the preservation of which the government under the Constitution depends.”). As the Chamber of Commerce and Verizon have properly emphasized in their amicus brief (at 19-20) “[m]Jore than 150 years of Dormant Com- merce Clause jurisprudence makes it clear that, until Congress says otherwise, no State may dictate to the other 49 a set of nationwide commercial rules.” In setting aside this core principle, the lower court’s de- cision has the immediate effect of permitting any Califor- nia plaintiff to bring suit undzr California law to chal- lenge conduct occurring wholly ‘n another State based on the claim that alleged “benefits” to California (e.g., bene- fits to a single California seller) outweigh the burdens of extraterritorial regulation under a standardless balancing test. The decision similarly invites plaintiffs in all other States to bring suits under their States’ laws, thus ena- bling all States to regulate commerce extraterritorially as “ RLH misquotes Cox in stating that the “fourth Cox exception ts only available when delaying review would ‘seriously erode . . . Consti- tutional! policy, Cox, 420 U.S. at 483.” Opp. 10. 4 long as the plaintiff can assert some effect on a claimed . interest of the State. Failure to grant review would thus seriously erode the “basic principle of federalism . . . that each State may make its own reasoned judgment about what conduct is permitted or proscribed within its bor- ders.” State Farm, 538 U.S. at 421-22. This Court has consistently found decisions involving less fundamental federal interests to be within the fourth Cox category. Contrary to RLH’s suggestion that this category is limited to First Amendment cases, see Opp. 10, the Court has regularly granted review under Cox to safe- guard particular federal statutes from state encroach- ment. See, e.g., Mississippi Power & Light Co. v. Missis- sippti ex rel. Moore, 487 U.S. 354, 370 n.11 (1988) (taking jurisdiction to address whether FERC order preempted a state agency from inquiring into the prudence of a plant); Goodyear Atomic Corp. v. Miller, 486 U.S. 174, 179-80 (1988) (taking jurisdiction to address whether federal law barred an additional workers’ compensation award based on state standards); Belknap, Inc. v. Hale, 463 U.S. 491, 497 n.5 (1983) (reviewing a state-court decision regarding preemption under the National Labor Relations Act).° The threat to federal policy is significantly greater here, where the issue is not the preemptive scope of a single federal law, but the basic rules of the road limiting what States may regulate under our constitutional structure. The two cases relied upon by RLH are readily distin- guishable. In Flynt v. Ohio, 451 U.S. 619 (1981) (per cu- riam), the Court found “no identifiable federal policy that * See also Ingersoll-Rand Co. v. McClendon, 498 U.S. 133 (1990) (Employee Retirement Income Security Act preemption); Southland Corp. v. Keating, 465 U.S. 1, 6-7 (1984) (Federal Arbitration Act pre- emption); Hudson Distribs., Inc. v. Eli Lilly & Co., 377 U.S. 386, 389 n.4 (1964) (exemption of state fair trade act from prohibitions of the Sherman Act); Mercantile Natl Bank v. Langdeau, 371 U.S. 555, 557- 58 (1963) (venue under national banking legislation); Local No. 438 Constr. & Gen. Laborers’ Union v. Curry, 371 U.S. 542, 548-51 (1963) (National Labor Relations Act preemption). 5 will suffer if the state criminal proceeding goes forward” because there was “no reason to treat this selective prose- cution claim differently than we would treat any other claim of selective prosecution.” /d. at 622-23. Johnson v. California, 541 U.S. 428 (2004) (per curiam), involved a Batson claim, and the Court concluded that “petitioner can make no convincing claim of erosion of federal policy that is not common to all decisions rejecting a defendant’s Batson claim.” Id. at 430. Unlike Flynt and Johnson, this case does not involve the application of a well-settled con- stitutional rule to particular facts. Rather, it involves a purely legal question of enormous general policy signifi- cance: whether direct extraterritorial regulation is a per se violation of the Commerce Clause. II. The Circuits Are In Square Conflict Over Whether Direct Regulation Of Wholly Extra- territorial Conduct Is A Per Se Violation Of The Commerce Clause Nothing in RLH’s opposition brief diminishes the sharp conflict between the circuits on the question whether ex- traterritorial regulation is unconstitutional per se. The Second, Seventh, Ninth, and Tenth Circuits have clearly endorsed the per se rule, finding it unnecessary to rely on the balancing test of Pike to invalidate a state statute con- trolling conduct occurring wholly outside the State. See American Booksellers Found., 342 F.3d at 103-04 (2d Cir.) (“no need to apply the Pike balancing test” because Ver- mont had “projected its legislation into other States” and “directly regulated commerce therein, in violation of the dormant Commerce Clause”) (internal quotation marks omitted); National Solid Wastes, 63 F.3d at 657-60 (7th Cir.) (invalidating statute that “essentially controls the conduct of those engaged in commerce occurring wholly outside the State of Wisconsin and therefore directly regu- lates interstate commerce” without engaging in Pike bal- ancing); NCAA, 10 F.3d at 639-40 (9th Cir.) (Nevada stat- ute with “extraterritorial effect” was “a per se violation of the Commerce Clause”); ACLU, 194 F.3d at 1161 (10th 6 Cir.) (New Mexico statute “represents an attempt to regu- late interstate conduct occurring outside New Mexico’s borders, and is accordingly a per se violation of the Com- merce Clause”). RLH attempts to muddy the issue by claiming that these decisions invalidated statutes after determining that in “practical effect” the statutes “unduly burdened” interstate commerce. Opp. 12-14. RLH is wrong. Each of these decisions held that, because the statute at issue regulated wholly extraterritorial conduct, it was invalid per se. See American Booksellers, 342 F.3d at 104; National Solid Wastes, 63 F.3d at 658; NCAA, 10 F.3d at 640; ACLU, 194 F.3d at 1161. These circuit court decisions thus squarely conflict with the decision below, which conceded that RLH’s lawsuit sought to control commercial conduct outside of Califor- nia, but held that its constitutionality nevertheless turned on the outcome of a balancing test. See Pet. App. 15a-16a. Indeed, the lower court believed that this Court’s per se rule against direct extraterritorial regulation was re- stricted to the context of price-affirmation statutes, a proposition that the Second and Seventh Circuits have specifically rejected. Compare id. at 13a with American Booksellers, 342 F.3d at 103-04, and National Solid Wastes, 63 F.3d at 659-60. Like the California court, the First and Eighth Circuits have refused to recognize the per se rule against direct extraterritorial regulation. See Grant’s Dairy, 232 F.3d at 19 (“thle] reference to direct regulation as a basis for in- validation has not been repeated in subsequent Supreme Court opinions and it does not fit into the West Lynn framework”) (citations omitted); Southern Union, 289 F.3d at 508 (“liJn its recent Commerce Clause decisions, the Supreme Court has limited its per se rule of invalidity to provisions that patently discriminate against interstate trade”) (internal quotation marks omitted). RLH does not deny that these decisions reject the per se rule; rather, RLH argues that the First Circuit’s position is better en- capsulated in Pharmaceutical Research & Manufacturers 7 of America v. Concannon, 249 F.3d 66 (1st Cir. 2001), aff'd, 538 U.S. 644 (2003), than in Grant’s Dairy, and that the Eighth Circuit’s position is better represented in Cotto Waxo Co. v. Williams, 46 F.3d 790 (8th Cir. 1995), than in Southern Union (despite the fact that Southern Union is the more recent case). Concannon, however, dealt with a statute that it found did not regulate transactions or con- duct occurring wholly outside the State, see 249 F.3d at 81-82; thus, it did not have to hold that such direct extra- territorial regulation was or was not per se unconstitu- tional. Similarly, because Cotto Waxo found that the statute at issue did not have “extraterritorial reach,” 46 F.3d at 793-94, it too did not need to hold that direct ex- traterritorial regulation was or was not per se invalid. Ill. The Decision Below Conflicts With Controlling Supreme Court Law RLH does not dispute that this Court has endorsed a two-tiered approach to dormant Commerce Clause juris- prudence: a state statute that “directly regulates . . . in- terstate commerce” is unconstitutional “without further inquiry,” while a statute that “has only indirect effects on interstate commerce and regulates evenhandedly” is un- constitutional if “the burden on interstate commerce clearly exceeds the local benefits.” Brown-Forman, 476 U.S. at 579 (emphases added). As the Court explained in Healy, “the Commerce Clause ... precludes the applica- tion of a state statute to commerce that takes place wholly outside of the State’s borders, whether or not the com- merce has effects within the State.” 491 U.S. at 336 (em- phasis added; alteration in original). Nevertheless, RLH contends that the lower court “cor- rectly applied the first tier of this Court’s two-tier Com- merce Clause analysis.” Opp. 17. That is manifestly false. The lower court simply ignored the per se “first tier” of the Court’s analysis by stating that, in all cases, Commerce Clause jurisprudence “focuses on the balance between the state law’s benefits to local commerce and its burdens upon interstate commerce, not simply on 8 the location of the challenged conduct.” Pet. App. 15a (emphasis added). RLH’s argument that the lower court sanctioned extraterritorial regulation only when out-of- state conduct causes harm in California, see Opp. 19, is beside the point. Controlling wholly out-of-state conduct is impermissible “whether or not the commerce has effects within the State,” Healy, 491 U.S. at 336 (emphasis added; internal quotation marks omitted). RLH’s suggestion that other jurisdictions have upheld state antitrust statutes with “incidental effects” on inter- state commerce, Opp. 19-20, is similarly irrelevant. The impact on interstate commerce here is direct, rather than an “incidental” consequence of regulation of in-state activ- ity. See Pet. 11-12. Finally, contrary to RLH’s assertion, AT&T never con- ceded “that a nexus between out-of-state anticompetitive conduct and in-state impact upon consumers or markets” would prevent extraterritorial regulation from violating the Commerce Clause. Opp. 22. Rather, AT&T explained that direct regulation of wholly extraterritorial conduct is impermissible even when that conduct has in-state effects, but that the lower court also erred in concluding that any injury to RLH from the alleged conduct of AT&T’s out-of-state subsidiaries amounted to a substan- tial effect on California commerce. See Pet. 12-13. In any event, the distinction between an impact on markets and an impact solely on a potential plaintiff is hardly a “dis- tinction without a difference,” Opp. 22, in antitrust law. Matsushita specifically found that an injury to plaintiffs, which were U.S. companies, did not amount to an effect on U.S. commerce warranting application of the Sherman Act. 475 U.S. at 582 & n.6. Similarly, an injury to RLH is not a substantial effect on California commerce. IV. This Case Is A Superior Vehicle For The Ques- tion Presented This case cleanly presents a pure question of law: whether direct regulation of wholly extraterritorial con- duct is a per se violation of the Commerce Clause, or 9 whether its constitutionality turns on the outcome of a balancing test. RLH attempts to obscure the question presented by distorting the facts of the case. RLH first suggests that the claims at issue in this petition are based on RLH’s efforts to sell HVP devices in California. See Opp. 3. That is false: RLH asserted claims based on its activities in California only against Pacific Bell, the local telephone company in California. RLH could not assert such claims against AT&T’s out-of-state subsidiaries, which do not provide local telephone service in California, and thus could not have prevented California customers from purchasing RLH’s equipment through any alleged tying arrangement. The claims against Pacific Bell have been dismissed and are not at issue here. See Pet. 4 n.2. Nor does AT&T “fail[] to acknowledge that its conduct has caused injury to California commerce,” Opp. 4. The only injury from the alleged anticompetitive conduct of AT&T's out-of-state subsidiaries identified by RLH is to RLH itself, and an injury to a California plaintiff is not an injury to California commerce. Even now, RLH relies on the “‘ripple’ effects” of the harm to RLH on RLH’s employ- ees and suppliers. Opp. 5 n.3. But if such “ripple effects” of injury sustained by a California resident in its efforts to compete outside the State constitute an injury to Califor- nia commerce, then the “ripple effects” of injuries to the plaintiffs in Matsushita would surely have constituted an effect on U.S. commerce. On that theory, any State would be able to regulate commerce occurring in other States that has a financial impact on one of its residents.‘ * RLH is also wrong to suggest that “California was the locus of part of the allegedly wrongful conduct” described in RLH’s complaint. Opp. 4. RLH did allege in its Second Amended Comp/aint that an employee of “PacBell and/or SBC” based in California, Don Murray, participated in a uniform decision by AT&T's non-California subsidiaries not to ap- prove use of RLH’s HVP equipment. Pet. App. 32a (€ 24). However, it is undisputed that Mr. Murray was in fact an employee of a third party, SBC Services, Inc., not of SBC Communications Inc. or of Pacific Beli. Before the Court of Appeal, RLH did not rely on any alleged in- state conduct by Mr. Murray as a basis for application of California law 10 RLH further errs in suggesting that any factual dis- putes regarding the status of filed tariffs in other States bear on the Court’s consideration of the question pre- sented. While the existence of these tariffs illustrates the inconsistent regulation that results when States govern extraterritorially, it is irrelevant to the question whether RLH’s lawsuit violates the Commerce Clause per se. The point of a per se rule is precisely that constitutionality does not turn on the extent of the conflict in a particular case. RLH’s next error is to claim that the decision below is of limited practical significance. In fact, the decision is highly significant because it squarely rejects the core principle that a State may not regulate conduct occurring wholly outside its borders. The lower court’s decision is of particular concern because it is not restricted to the con- text of state antitrust statutes. Indeed, the court held that the per se rule against direct extraterritorial regula- tion was itself restricted to the context of price- affirmation statutes. See Pet. App. 13a. The decision thus has enormous practical import: it requires compa- nies across the nation that conduct no business in Cali- fornia or with California consumers to conform their ac- tions to California law, given the possibility that a Cali- fornia resident may believe itself injured by conduct out- side the State. See Pet. 19-23.° CONCLUSION The petition for a writ of certiorari should be granted. to the activity of AT&T's non-California subsidiaries. See Appellant's Reply Br. at 17-25. The court itself similarly did not rely on any al- leged conduct by Mr. Murray. ° RLH suggests in passing that the Court's denial of certiorari in Beretta U.S.A. Corp. v. District of Columbia, 126 S. Ct. 399 (2005) (No. 05-118), means that it should deny review here. The lower court in Beretta, however, found that the state statute at issue did not directly regulate commerce outside the State. See District of Columbia v. Beretta U.S.A. Corp., 872 A.2d 633, 657 (D.C. 2005). Thus, Beretta did not squarely present the issue raised in this petiiion. JAVIER AGUILAR WILLIAM M. SCHUR AT&T SERVICES, INC. 175 E. Houston Street 4th Floor San Antonio, Texas 78205 (210) 351-3409 Respectfully submitted, MICHAEL K. KELLOGG Counsel of Record SEAN A. LEV PRIYA R. AIYAR KELLOGG, HUBER, HANSEN, TODD, EVANS & FIGEL, P.L.L.C. 1615 M Street, N.W. Suite 400 Washington, D.C. 20036 (202) 326-7900 Counsel for Petitioner July 5, 2006 --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386016_0943%3A3. Public record. Not legal advice.