CACI No. 3411. Rule of Reason - Anticompetitive Versus Beneficial Effects

Judicial Council of California Civil Jury Instructions (2023 edition)

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3411.Rule of Reason - Anticompetitive Versus Beneficial Effects
In deciding whether [name of defendant]’s challenged restraint had an
anticompetitive or beneficial purpose or effect on competition, you should
consider the results the restraint was intended to achieve or actually did
achieve. In balancing these purposes or effects, you also may consider,
among other factors, the following:
(a) The nature of the restraint;
(b) The probable effect of the restraint on the business involved;
(c) The history of the restraint;
(d) The reasonableness of the stated purpose for the restraint;
(e) The availability of less restrictive means to accomplish the stated
(f) The portion of the market affected by the restraint; [and]
(g) The extent of [name of defendant]’s market power; [and]
(h) [Insert other relevant consideration].
New September 2003
Sources and Authority
“The basic purpose of the antitrust laws is to prevent undue restraints upon trade
which have a significant effect on competition. A contract, combination, or
conspiracy is an illegal restraint of trade if it constitutes a per se violation of the
statute or has as its purpose or effect an unreasonable restraint of trade. The
determination of the existence of such an illegal restraint of trade turns upon
findings of fact and involves ‘weigh[ing] all of the circumstances of a case.’
(Corwin v. Los Angeles Newspaper Service Bur. (1978) 22 Cal.3d 302, 314-315
[148 Cal.Rptr. 918, 583 P.2d 777], internal citations omitted and footnotes.)
“Under the rule of reason, the court inquires into the nature and history of the
restraint, as well as other relevant considerations.” (Reynolds v. California
Dental Service (1988) 200 Cal.App.3d 590, 596-597 [246 Cal.Rptr. 331],
internal citations omitted.)
“The ‘rule of reason’ permits certain restraints upon trade to be found
reasonable. In order to determine whether the restrictions are reasonable, ‘the
court must ordinarily consider the facts peculiar to the business to which the
restraint is applied; its condition before and after the restraint was imposed; the
nature of the restraint and its effect, actual or probable. The history of the
restraint, the evil believed to exist, the reason for adopting the particular remedy,
the purpose or end sought to be attained, are all relevant facts.’ ‘Whether a
restraint of trade is reasonable is a question of fact to be determined at trial.’
(Kolling v. Dow Jones & Co. (1982) 137 Cal.App.3d 709, 727 [187 Cal.Rptr.
797], internal citations omitted.)
Secondary Sources
1 Witkin, Summary of California Law (11th ed. 2017) Contracts, §§ 602-621
1 Antitrust Laws & Trade Regulation, Ch. 12, The Per Se Rule and the Rule of
Reason, § 12.03 (Matthew Bender)
3 Levy et al., California Torts, Ch. 40, Fraud and Deceit and Other Business Torts,
§ 40.168 (Matthew Bender)
49 California Forms of Pleading and Practice, Ch. 565, Unfair Competition,
§ 565.74 (Matthew Bender)
1 Matthew Bender Practice Guide: California Unfair Competition and Business
Torts, Ch. 5, Antitrust, 5.05, 5.11, 5.17-5.22

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