California Civil Jury Instructions (CACI) (2017)

3423. Tying - "Economic Power" Explained

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3423.Tying—“Economic Power” Explained
In determining whether [name of defendant] has sufficient economic
power in the market for [tying item], you may consider whether [name of
defendant] has such a large share of the market for [tying item] that
buyers do not have alternate sources of [tying item] or a reasonably
available substitute. If [name of defendant] has economic power, it may
be established even though it exists with respect to some, but not all,
buyers.
You may also consider whether a buyer would be unable to easily locate
a similar or equally desirable product in the marketplace. If buyers do
not generally consider other products to be substitutes, this fact may
give [name of defendant] economic power over its [tied item]. The fact
that [name of defendant] can produce [tying item] in an efficient manner
or at a high level of quality does not, by itself, mean that competitors do
not offer a similar product.
New September 2003
Directions for Use
This instruction assumes that the plaintiff is seeking relief under Business and
Professions Code section 16720. If the plaintiff is instead seeking relief under
Business and Professions Code section 16727, this element is not required, so long
as the plaintiff proves that the claimed tie-in affected a “not insubstantial amount”
of sales of the tied product. If that proof is note summarily established or agreed
to, then this instruction also must be read in such cases.
Sources and Authority
• “[W]e emphasize that the power over the tying product . . . can be sufficient
even though the power falls short of dominance and even though the power
exists only with respect to some buyers in the market. As the cases
unanimously underline, such crucial economic power may be inferred from the
tying product’s desirability to consumers or from uniqueness in its attributes.”
(Suburban Mobile Homes v. AMFAC Communities (1980) 101 Cal.App.3d 532,
544 [161 Cal.Rptr. 811], internal citations omitted.)
• “Decisions of the United States Supreme Court ‘have made unmistakably clear
that the economic power over the tying product can be sufficient even though
the power falls far short of dominance and even though the power exists only
with respect to some of the buyers in the market.’ ” (Corwin v. Los Angeles
Newspaper Services Bur. (1971) 4 Cal.3d 842, 858 [94 Cal.Rptr. 785, 484 P.2d
953], internal citation omitted.)
• “Tying arrangements are illegal per se ‘whenever a party has sufficient
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economic power with respect to the tying product to appreciably restrain free
competition in the market for the tied product’ and when ‘a total amount of
business, substantial enough in terms of dollar-volume so as not to be merely
de minimis, is foreclosed to competitors by the tie.’ ” (Freeman v. San Diego
Assn. of Realtors (1999) 77 Cal.App.4th 171, 184 [91 Cal.Rptr.2d 534], internal
citations omitted.)
• “To plead this element, appellants must allege facts to show that ‘a total amount
of business, substantial enough in terms of dollar-volume so as not to be merely
de minimis, is foreclosed to competitors by the tie.’ ” (Morrison v. Viacom, Inc.
(1998) 66 Cal.App.4th 534, 542 [78 Cal.Rptr.2d 133], internal citation omitted.)
Secondary Sources
1 Witkin, Summary of California Law (10th ed. 2005) Contracts, §§ 591–607
6Antitrust Laws & Trade Regulation, Ch. 105, California, § 105.04 (Matthew
Bender)
3 Levy et al., California Torts, Ch. 40, Fraud and Deceit and Other Business Torts,
§ 40.168[4] (Matthew Bender)
49 California Forms of Pleading and Practice, Ch. 565, Unfair Competition,
§ 565.77 (Matthew Bender)
1 Matthew Bender Practice Guide: California Unfair Competition and Business
Torts, Ch. 5, Antitrust, 5.09[4], 5.15, 5.81, 5.82
3424–3429. Reserved for Future Use
CACI No. 3423 CARTWRIGHT ACT
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