It is safe to assume that corporate affiliates do not vigorously compete with one another. A price-fixing or market-allocation agreement between two or more such corporate entities does not, therefore, eliminate any competition that would otherwise exist. It makes no difference whether such an agreement is labeled a "contract," a "conspiracy," or merely a policy decision, because it surely does not unreasonably restrain competition within the meaning of the Sherman Act.Now, the California Senate is considering a bill that would repeal the Copperweld doctrine for purposes of California law.
Why? The obvious one-word answer: Enron.
Apparently, California is still having trouble finding something illegal about the profits made by companies that benefited from California's self-imposed regulatory debacle. So, it hopes to rewrite the law to retroactively permit recovery from energy companies, who, because of existing regulatory concerns, are almost always subdivided into subsidiaries trading amongst one another. There may not have been a conspiracy between different energy companies to manipulate prices, but there almost sure as heck were (harmless) intra-company agreements regarding such trading. If this bill passes, a lawyer will be able to point to the huge one-time profits, point to a few memos within the corporate entity, and the hometown jury will happily transfer wealth; the defendant can only sputter, because it won't be allowed to point out that the correct response is "So what?"
But it's not just a one-time retransfer of wealth from Texas to California, which may or may not be grossly unfair depending on whether there really was an industry-wide conspiracy to manipulate energy prices. The real concern is that there's no telling what the unintended consequences of this bill, if it passes, will be to other industries doing business in the state who may find themselves, by a quirk of corporate structure, to be suddenly subject to expropriatory lawsuits.
Because the repeal of the Copperweld doctrine is attached to a bill allowing a monopolization action in California, the whole kit and kaboodle may pass; the California Attorney General is lobbying heavily for it. It's already out of one committee and read twice.
There's been absolutely no media coverage of this.