California’s below-cost pricing statute, the Unfair Practices Act (the “UPA”), is perhaps the broadest such statute in the nation, and far broader than comparable federal laws, which have been narrowed in recent decades almost to the vanishing point.  Indeed, the statute—which dates back to the Great Depression and the era of New Deal economics—could be interpreted as a bright line prohibition against pricing just about anything below cost to take business from a competitor.  See Bus. & Prof. Code § 17043.  And yet, at least by the hyperactive standards of contemporary commercial litigation, the statute has not been heavily employed or even spoken about, mainly collecting cobwebs in the dim corners of law libraries.

California’s businesses should be paying more attention to this law, and to its peculiar risks and rewards.  Sheppard Mullin’s Antitrust Group has extensive experience counseling and representing both defendants and plaintiffs with respect to UPA claims, including recent success representing the largest independent publisher of yellow pages phone directories in California as plaintiff in a UPA action alleging below cost pricing, loss leader, and secret rebate violations.  AGI Publishing, Inc. v. YP Western Directory, Fresno Superior Court, No.14 CE CG 00656.

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* This article originally appeared in the April 15, 2019 edition of the Daily Journal.

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