CACI No. 3408. Vertical Restraints - “Coercion” Explained

Judicial Council of California Civil Jury Instructions (2023 edition)

Download PDF
3408.Vertical Restraints - “Coercion” Explained
Coercion is conduct that interferes with the freedom of a reseller to sell
in accordance with the reseller’s own judgment. [It may include a threat
by [name of defendant] to stop doing business with [[name of plaintiff]/a
reseller] or to hold back any product or service important to [his/her/
nonbinary pronoun/its] competition in the market.] A unilateral decision
to deal or refuse to deal with a particular reseller does not constitute
Coercion may be proven directly or indirectly. In deciding whether there
was coercion, you may consider, among other factors, the following:
(a) Whether [name of defendant] penalized or threatened to penalize
[name of plaintiff] for not following [his/her/nonbinary pronoun/its]
(b) Whether [name of defendant] made or threatened to make an
important benefit depend on [name of plaintiff] following [his/her/
nonbinary pronoun/its] suggestions;
(c) Whether [name of defendant] required [name of plaintiff] to get
approval before doing something other than what
[he/she/nonbinary pronoun/it] suggested; and
(d) The relative bargaining power of [name of defendant] and [name of
New September 2003; Revised May 2020
Directions for Use
In the bracketed portion of the first paragraph, the word “reseller” should be used if
the plaintiff is not the reseller.
Sources and Authority
“[T]he ‘conspiracy’ or ‘combination’ necessary to support an antitrust action can
be found where a supplier or producer, by coercive conduct, imposes restraints
to which distributors involuntarily adhere. If a ‘single trader pressures customers
or dealers into adhering to resale price maintenance, territorial restrictions,
exclusive dealing arrangements or illegal ‘tie-ins,’ an unlawful combination is
established, irrespective of any monopoly or conspiracy, and despite the
recognized right of a producer to determine with whom it will deal.” (Kolling v.
Dow Jones & Co. (1982) 137 Cal.App.3d 709, 720 [187 Cal.Rptr. 797], internal
citations omitted.)
“If a seller does no more than announce a policy designed to restrain trade, and
declines to sell to those who fail to adhere to the policy, no illegal combination
is established.” (Kolling, supra, 137 Cal.App.3d at p. 721, internal citations
“A manufacturer may choose those with whom it wishes to deal and unilaterally
may refuse to deal with a distributor or customer for business reasons without
running afoul of the antitrust laws. It will thus be rare for a court to infer a
vertical combination solely from a business’s unilateral refusal to deal with
distributors or customers who do not comply with certain conditions.
Nonetheless, there is a line of cases that supports the proposition that a
manufacturer may form a ‘conspiracy’ or ‘combination’ under the antitrust laws
if it imposes restraints on dealers or customers by coercive conduct and they
involuntarily adhere to those restraints.” (Dimidowich v. Bell & Howell (9th Cir.
1986) 803 F.2d 1473, 1478, internal citations omitted.)
Secondary Sources
1 Witkin, Summary of California Law (11th ed. 2017) Contracts, §§ 602-621
49 California Forms of Pleading and Practice, Ch. 565, Unfair Competition,
§ 565.52[5] (Matthew Bender)

© Judicial Council of California.