Dooley's Hardware Mart v. Food Giant Markets Inc.

Opinion

KINGSLEY, J.

This is an action against a retail food market and two of its employees for an injunction to prevent alleged violations of the California Unfair Practices Act (Bus. &Prof. Code §§ 17000-17101).

1

Judgment was entered for the defendants;

2

plaintiff has appealed; we reverse the judgment.

The present appeal, on the record before us,

3

presents only the single issue: Is the statutory presumption set forth in section 17071.5 of the Business and Professions Code constitutional?

The California Unfair Practices Act prohibits, inter alia, the sale of products below cost when the effect is to injure competitors or destroy competition.

4

The findings of the trial court were to the effect that

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defendants had advertised certain products—as to which the corporate defendant was in competition with plaintiff—below their cost to that defendant but on terms that limited the quantity purchasable by any one customer to an amount less than the entire supply of that product then owned or controlled by defendants. Plaintiff relied for proof of the wrongfulness of that conduct on the statutory presumption set forth in section 17071.5; the trial court ruled that that presumption was unconstitutional and that there was no other evidence sufficient to support the plaintiff’s case. We conclude that the statutory presumption is valid and, therefore, that (since admittedly it is applicable) judgment should not have gone for defendants.

The section involved reads as follows: section 17071.5 “In all actions brought under this chapter proof of limitation of the quantity of any article or product sold or offered for sale to any one customer to a quantity less than the entire supply thereof owned or possessed by the seller or which he is otherwise authorized to sell at the place of such sale of offering for sale, together with proof that the price at which the article or product is so sold or offered for sale is in fact below its invoice or replacement cost, whichever is lower, raises a presumption of the purpose or intent to injure competitors or destroy competition. This section applies only to sales by persons conducting a retail business the principal part of which involves the resale to consumers of commodities purchased or acquired for that purpose, as distinguished from persons principally engaged in the sale to consumers of commodities of their own production or manufacture.”