WH ERE ts

The follouing material is published oerbutim from "Business and Professions Code of tIrc State of California," adopted lune 75, 7937, u:ith amendments up to and including those of th,e Second, Extraordinarg Session of the Legislature, 7960.

Chapter 4

Unfqir Trode hoclices r.n.*Xtt'itlSut'o*,

$ 17000. SHORT TITLE. This chapter may be cited as the Unfair Practices Act.

$ 17001. PURPOSE. The Legislature declares that the purpose of this chapter is to safeguard the public against the creation or perpetuation of monopolies and to foster and encourage competition, by prohibiting unfair, dishonest, deceptive, destructive, fraudulent and discriminafory practices by which fair and honest competition is destroyed or prevented.

S 17002. LIBERAL CONSTRUCTION. This chapter shall be liberally construed that its beneficial purposes may be sub-served.

$ 17025. "VENDOR." "Vendor" includes any person who performs work upon, renovates, alters or improves any personal property belonging to another person.

s r 7026. "cosT."

PRODUCTION COST. "Cost" as applied fo production includes the cost of raw materials, labor and all overhead expenses of the producer.

DISTRIBUTION COST. "Cost" as applied to distribution means the invoice or replacement cost, whichever is lower, of the article or product to the distributor and vendor, plus the cost of doing business by the distributor and vendor and in the absence of proof of cost of doing business a markup of 6 percent on such invoice or replacement cost shall be prima facie proof of such cost of doing business.

PROHIBITION AGAINST COST REDUCTION BY CASH DISCOUNTS. Discounts granted for cash payments shall not be used to reduce cost.

$ 17020. USE lN CONSTRUCTION. The definitions in this article shall be used in construing this chapter.

$ 1702 l. "PERSON." "Person" includes any person, firm, association, organization, partnership, business frust, company, corporation or municipal or other public corporation.

S 17022. "SELL." "Sell" includes selling, ofiering for sale or advertising for sale.

$ give 17023. "G|VE." "Give" includes giving, offering to advertising lhe intent to give.

$ 17024. "ARTICLE OR PRODUCT": MOTION PICTURE FILMS: SERVICES, ARTICLES AND PRODUCTS EXCEPTED. "Article or product" includes any article, product, commodity, thing of value, service or oufput of a service trade. Motion picture films when licensed for exhibition to motion piclure houses are not articles or products under this chapter.

Nothing in this chapter applies: s 17027. PURCHASES AT FORCED OR BANKRUpT SALES: ADVERTISING OF CONDITIONS OF PURCHASE. ln establishing the cost of a given article or product to the distributor and vendor, the invoice cost of the article or product purchased at a forced, bankrupt, closeout sale, or other sale outside of the ordinary channels of trade may not be used as a basis for iustifying a price lower than one based upon the replacement cost as of the date of the sale of the article or product replaced through the ordinary channels of trade, unless the article or product is kept separate from goods purchased in the ordinary channels of trade and unless the article or product is advertised and sold as merchandise purchased at a forced, bankrupt, closeout sale, or by meansj other than through the ordinary channels of trade. s r 7029. "cosT oF DorNG BUSTNESS" OR "OVERHEADI EXPENSE." "Cost of doing business" or "overhead expense"l means all cost of doing business incurred in the conduct ofl the business and shall include without limitation the follow..l ing ilems of expense; labor (including salaries of execu..] tives and officers), rent, interest on borrowed capital,l depreciation, selling cost, maintenance of equipment, de..] livery costs, credit losses, all types of licenses, taxes, insur..] ance and advertising.

(l) To any service, article or product for which rates are established under the iurisdicfion of the Public Utilities Commission of this State'and sold or furnished by any public utility corporation, or installation and repair services rendered in connection with any services, articles or products.

(2) To any service, article or product sold or furnished by a publicly owned public utility and upon which the rates would have been established under the iurisdiction of the Public Utilities Commission of this State if such service, article or product had been sold or furnished by a public utility corporation, or installation and repair services rendered in connection with any services, articles or products.

Such advertising shall state the condifions under whichi the goods were purchased, and the quantity of the mer-l chandise to be sold or offered for sale.

$ r7028. "ORDTNARY CHANNELS OF TRADE." "Ordi-l nary channels of trade" means those ordinary, regular and] daily transactions in the mercantile trade whereby title] to an article or product, in no way damaged or deteriorated,l is transferred from one person to another.

"Ordinary channels of trade" does not include sales of] bankrupt stocks, closeout goods, denfs, sales of goodsl bought from a business or merchant retiring from business,] fire sales and sales of damaged or deteriorated goods,] which damage or deteriorafion results from any causel whaisoever. This listing is not all inclusive but as examplel only.

(ADVERTISEMENT)

$ 17030. "LOSS LEADER." "Loss leader" means any article or product sold at less than cost:

(a) Where the purpose is to induce, promote or encourage the purchase of other merchandise; or

(b) Where the effect is a tendency or capacity to mislead or deceive purchasers or prospective purchasers; or

(c) Where the effect is to divert trade from or otherwise iniure competitors.

S 17031. LOCALITY DISCRIMINATION. Locality discrimination means a discrimination between different seclions, communities or cities or portions thereof, or between different locations in such sections, communities, cities or portions thereof in this State, by selling or furnishing an article or product, at a lower price in one seciion, community or city, or any portion thereof, or in one location in such section, community, or city or any portion thereof, than in another.

Articte 3 Offenses Against The Chapter

$ 17040. LOCALITY DISCRIMINATIONS: MEETING COMPETITIVE PRICE. lt is unlawful for any person engaged in the production, manufacture, distribution or sale of any article or product of general use or consumption, with intent to destroy fhe competition of any regular established dealer in such article or product, or to prevent the competition of any person who in good faith, intends and attempts to become such dealer, to create locality discriminalions.

Nothing in this section prohibits the meeting in good faith of a competitive price.

$ t7041. sAME: ALLOWANCES FOR DIFFERENCES lN COST OF MANUFACTURE, SALE, DELIVERY OR TRANSPORTATION. Nothing in this chapter prohibits locality discriminations which make allowances for differences, if any, in the grade, quality or quantity when based and iustified in the cost of manufacture, sale or delivery, or the actual cosi of transportation from the point of production, if a raw product or commodify, or from the point of manufacture if a manufactured product or commodity, or from the poini of shipment io the point of destination.

E 17042. CUSTOMER SELECTION, FUNCTIONAL CLASSIFICATION AND PRICE DIFFERENTIALS. Nothing in this chapler prohibits any of the following: s 17044. "LOSS LEADER" PRACTICE PROHIBITED. lt is unlawful for any person engaged in business within this s r7050. PERMTSSTBLE LOCALITY DISCRIMINATIONS, SALES BELOW COST, AND LOSS LEADERS: SUFFICIENCY OF NOTICE. The prohibitions of this chapter against locality discriminations, sales below cost, and loss leaders do not apply to any sale made:

(a) A selection of cusfomers.

(b) A functional classification by any person of any customer as broker, iobber, wholesaler or retailer.

(c) A differential in price for any article or product as between any customers in different functional classifications.

$ 17043. SATES AT IESS THAN COST. lr is unlqwful for ony person engoged in business within this Srqte to sell ony irricle or producl ol less thon the cosl lhereof lo such vendor, or lo give dwoy qny orticle or producl, for the purpose of iniuring compelifors or desfroying competition.

Siate to sell or use any article or product as a "loss leader" as defined in Section 'l 7O3O of this chapter.

$ 17045. SECRET REBATES, REFUNDS, COMMTSSTONS OR UNEARNED DISCOUNTS. The secret payment or allowance of rebates, refunds, commissions, or unearned discounts, whether in the form of money or otherwise, or secretly extending to certain purchasers special services or privileges not extended to all purchasers purchasing upon like terms and conditions, to the iniury of a competitor and where such payment or allowance tends to destroy competition, is unlawful.

$ 17046. USE OF THREAT, tNTtMtDATtON OR BOYCOTT. lt is unlawful for any person to use any threat, intimidation, or boycott, to effectuate any violation of this chapter.

S 17047. SOLICITATION TO VIOLATE CHAPTER. lt is unlawful for any manufacturer, wholesaler, distributor, iobber, contractor, broker, retailer, or other vendor, or any agent of any such person, to solicit any violation of this chapfer.

S 17048. JOINT PARTICIPATION OR COLLUSION. lt is unlawful for any manufacturer, wholesaler, disiributor, iobber, contractor, broker, retailer, or other vendor, or any agent of any such person, ioinrly to participate or collude with any other such person in the violation of this chapter.

$ r7049. SCHEMES AND DEVICES EMBRACED lN PROHIBITIONS. The prohibitions of ihis chapter against locality discrimination and sales below cost embrace any scheme of special rebates, collateral contracts or any device of any nature whereby such discrimination or sale below cost is in substance or fact effected in violation of the spirit and intent of this chapter.

(a) In closing out in good faith the owner's stock or any part lhereof for the purpose of discontinuing his trade in any such article or product and in the case of the sale of seasonal goods or io the bona fide sale of perishable goods to prevent loss to the vendor by spoilage or depreciation; provided, notice is given to the public thereof.

(b) When the goods are damaged or deteriorated in quality, and notice is given to the public thereof.

(c) By an officer acting under the orders of any court.

(d) In an endeavor made in good faith to meet the legal prices of a competitor selling the same article.or product, in the same locality or trade area and in the ordinary channels of trade.

(e) In an endeavor made in good faith by a manufacturer, selling an article or product of his own manufacture, in a transaciion and sale to a wholesaler or retailer for resale to meet the legal prices of a competitor selling the same or a similar or comparable article or product, in the same locality or trade area and in the ordinary channels of trade.

(Continued" on Nefi Page)

(ADVERTISEMENT)

WHERE IS THE BOTTOM?

(Continued lrom Pretsiotts Page) the service for fhe particular services performed, such services shall be charged as an expense of the business in which rendered and at the raie of the wage for fhe services rendered prevailing at the time of the service at the place where rendered. s r 7076. PERSONS EMPLOYED WITHOUT COMPENSATION OR AT LESS THAN PREVAILING WAGE SCALE. In any action brought under this chapter, where persons are employed or performing services for any person or in the conduct of the business wherein such person is charged with a violation of this chapter, and are so employed or performing such services without compensafion or at a wage lower than that prevailing at the time and place of s 17079. sAME: RESTRATNTS WHTCH MAy BE tNCLUDED. The court may, in its discretion, include in any iniunction against a violation of this chapier such other restraint as it may deem expedient in order to deter the defendant from, and insure against, his committing a future violation of this chapter. s t7080. sAME: ARTTCLES OR PRODUCTS COVERED. Any iniunction against a violation of this chapter, whether interim or final, shall cover every article or product and not merely the particular article or product involved in the action.

The notice required to be given under this section shall not be sufficient unless the subiect of such sales is kept sep€rate from other stocks and clearly and legibly marked with the reason for such sales, and any advertisement of such goods must indicate the same facts and the number of items fo be sold.

$ 17051. ILLEGAL CONTRACTS. Any contract, express or implied, made by any person, firm, or corporation in violation of this chapter is an illegal contract and no recovery thereon shall be had.

S 17077. PRESUMED COST OF RAW MATERIALS. In any action or prosecution for sales below cost in violation of this chapter, if the defendanf acquires his raw materials for a consideration not wholly or definitely computable in money, the cost of the raw materials shall be presumed to be the prevailing market price for similar raw materials in the ordinary channels of trade in the locality or vicinity in which such raw materials were acquired, at the time of the acquisilion.

S 17070. ACTIONS TO ENJOIN VIOLATION: DAMAGES. Any person or trade association may bring an action to enioin and restrain any violation of this chapter and, in addition thereto, for the recovery of damages.

$ 17071. PROOF OF INTENT. ln all actions brought under this chapter proof of one or more acts of selling or giving away any article or product below cost or at discriminatory prices, together with proof of the iniurious eftect of such acls, is presumptive evidence of the purpose or intent to iniure competitors or destroy competition.

$ 17072. COST SURVEYS COMPETENT EVIDENCE. Where a particular trade or industry, of which a person complained against is a member, has an established cost survey for the locality and vicinity in which lhe offense is committed, that cost survey is competent evidence fo be used in proving the costs of such person.

$ 17073. PRESUMPTTVE EVTDENCE: COST OF GOODS. Proof of average overall cost of doing business for any particular inventory period when added to the cost of production of each article or product, as to a producer, or invoice or replacement cost, whichever is lower, of each article or product, as to a distributor, is presumptive evidence of cost of each such article or product involved in any action brought under this chapter.

S '17074. SAME: DELIVERY COSTS. Proof of transportatioi tarifis when fixed and approved by the Public Uiilities Commission of the State of California is presumptive evidence of delivery cost.

$ 17075. EVIDENCE OF PREVAILING WAGE SCALE. In any action where it is alleged and shown that the person complained against is selling below his cost of doing business, and such person is including labor at less than prevailing wage scale in the trade in which such person is engaged for ihe locality or vicinity in which he is doing business, evidence of such prevailing wage scale shall be admissible to prove the intent or purpose of such person to violate fhis chapier.

$ 17078. INJUNCTIONS: AUTHORITY TO ISSUE. lf it appears to the court upon any application for a temporary restraining order, or upon the hearing of any order to show cause why a preliminary iniunction should not be issued, or upon the hearing of any motion for a preliminary iniunction, or if the court shall find, in any such action, that any defendant therein is violating, or has violated, this chapter, ihen the court shall enioin the defendant from doing all acts which are prohibited by the section, or sections, of which any provision thereof is being violated, or has been violaled, by the defendant.

S 17081. SAME: UNDERTAKING OR BOND. lt is not necessary for the plaintiff, in any action under this chapter, to provide or file any undertaking or bond for the issuance of any interim or final iniunction.

$ 17082. INJURY AND DAMAGES: AWARD OF ATTORNEY'S FEES AND COSTS OF SUIT: APPIICATIONS OF AMENDMENTS TO THIS SECTION. In ony oction under this chopler, it is not necessqry to ollege or prove ocluql domoges or lhe threqt thereof, or qcluol inlury or the threqt fhereof, to the plointiff. But, in qddirion to iniunclive relief, ony plointiff in ony such oction shqll be entirled to recover three times fhe qmounf of the qcluol domoges, if ony, susloined by the ploinfifi, os well qs three times the qctucrl domoges, if ony, sustcrined by ony person who hqs ossigned to the plointifr his cloim for dcmoges resulting from q violqtion of rhis chopter.

In ony qction under this chopter in which iudgment is entered ogoinst the defendqnt the plointifi shqll be qwcrrded q reosonoble oflorney's fee together with the cosls of suil.

The omendments lo this section odopted ot the 1959 Regulor Session of the legisloture do not opply to ony qction commenced prior to September 18, 1959.

$ 17083. TESTIMONY: METHOD OF TAKING: BOOKS AND RECORDS. The testimony of any witness in any action brought under this chapter may be taken by deposition even though the case is not one specified in Section 202 I

(ADVERTISEMENT) of the Code of Civil Procedure, but otherwise the provisions of Part 4, Title 3, Chapter 3 of the Code of Civil Procedure are applicable to the witness, his testimony and deposition. lf a compliance wilh the order is refused, the court shall exclude the entries of accounts in any such book, or any such document, paper, or memorandum from being given in evidence by the other pariy, or if wanted as evidence by the applicant the court shall presume them to be as the applicant alleges. s r7096. pRocEEDtNGS AGATNST OFF|CERS, ETC.: PROOF OF UNLAWFUL INTENT. ln any iniucrion proceeding against any person as officer, director or agenl, it is sufficient to allege and prove the unlawful intent of the person, firm or corporation for which he acts. *

In addition, the books and records of any party, or of any such witness, may be subpenaed into court and introduced into evidence, or introduced, by reference, info evidence, and may be required to be produced at the taking of the deposition of any party or of any such witness and there inquired into.

$ 17084. tNSpECTtON AND COpy OF ENTR|ES, ETC.: EFFECT OF NON-COMPLIANCE WITH ORDER. Any party fo any action brought under this chapter may, upon notice, apply to the court in which the action is pending, or to any iudge thereof, for an order requiring any other party to give to the applicant, within a specified fime, an inspection and copy, or permission to take a copy, of entries of accounts in any book, or of any documents, papers, or memoranda in such party's possession or under his control containing evidence relating to the merits of any such aclion or any defense therein.

$ 17085. REFERENCES. lf, at any time while any action for a violation of this chapter is pending, it appears to the court that an extensive examination of books, papers, records, or documenis is or may become material or relevant to the issues in the action, the court may, in its discretion, upon application of any party to the action, or upon its own motion, order a reference to be had in the manner and form provided in Part 2,Title 8, Chapter 6, of the Code of Civil Procedure.

$ .|7086. IMMUNITY FROM PROSECUTION. No information obtained under any provision of this article, or under ParI 4, Title 6, Chapter 2, o{ lhe Code of Civil Procedure, may be used against any such party, or any such witness, as a basis for a misdemeanor or felony prosecution in any court of this State.

PENAtRIrRcii,,S,o*,

$ 17100. VIOLATION A MISDEMEANOR: PUNISHMENT. Any person, whether as principal, agent, ofiicer or direclor, for himself, or for another person, or for any firm or corporation, or any corporation, who or which violates this chapter is guilty of a misdemeanor for each single vio- lation and upon conviction thereof, shall be punished by a fine of not less than one hundred dollars ($100) nor more than one thousand dollars ($1,000) or by imprisonment not exceeding six months or by both such fine and imprisonment, in the discretion of the court.

S l7l0l. PROSECUTION OF OFFICER, ETC.: PROOF OF UNLAWFUL INTENT. In the prosecution of any person as officer,.director or agent, it is sufficient to allege and prove the unlawful intent of the person, firm or corporation for which he acts.

ROBINSON - PATMAN ACT

(Quoted verbafim from fhe Federal Anti-Trust Laws-Stafi Report to Sub-Commitfee No. 5-85th Cong,, 2nd session.)

Sec. 3. lr shall be unlawful for any person engaged in commerce, in the course of such commerce, to be a party to, or assist in, any transaction of sale, or contract io sell, which discriminates to his knowledge against competitors of the purchasers, in that, any discount, iebate, allowance, or advertising service charge is granted to the purchaser over and above any discount, rebate, allowance, or advertising service charge available at the time of such transacfion to said competitors in respect of a sale of goods of like grade, quality, and quantity; to sell, or contract to sell, goods in any part of the United States at prices lower than those exacted by said person elsewhere in the United States for the purpose of destroying competition, or eliminaiing a competitor in such part of the United Siates; or, to sell, or contract to sell, goods at unreasonably low prices for the purpose of destroying competition or eliminating a competitor.

. Any person violating any of the provisions of this secfion shall, upon conviction thereof, be fined not more than $5,000 or imprisoned not more than one year, or both.

$ 17095. DIRECTORS, ETC.: LIABILITY. Any person, who, either as director, officer or agent of any firm or corporation or as agent of any person, violating the provisions of this chapfer, assists or aids, directly or indirectly, in such violation is responsible therefor equally with the person, ' firm or corporation for which he acts.

Federol Trqde Commission Acf

(38 Srat. 717; 15 U.S.C. 4l fi; Public, No. 203, 63d Cong. (1914). )

Sec.5. (a) (l) Unfair methods of competition in commerce. and unfair or deceptive acts or practices in commerce, are hereby declared unlawful.

(As amended by McGuire Act, July 14, 1952, sec. 2, 66 Stat. 632, ls U.S.C.45 (a); Public Law 542,82d Cong.)