Limiting Pass-On Defense In Calif. — With Exceptions

Law360, New York (July 26, 2010, 1:56 PM EDT) -- In Clayworth v. Pfizer Inc., ___ Cal.4th ___ (July 12, 2010), the California Supreme Court limited the circumstances in which an antitrust defendant can avoid liability under California law where the plaintiff has passed on any alleged overcharges to its customers.

While the court held that the so-called “pass-on” defense is generally precluded, it went on to recognize two exceptions, one of which may very well swallow the rule: Where multiple levels of purchasers have sued or may sue, the defense remains available to prevent duplicative...
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