Under § 24866(b) of the California Business and Professions Code, all wine producers and wholesalers are obligated to file fair-trade contracts or price schedules with the State of California. Private wine dealers set the price schedules used to determine minimum pricing. If a wine producer or wholesaler sells wine below the prices established by the price schedules, the producer or wholesaler will be subject to fines and license suspension or revocation. Midcal Aluminum, Inc. (Midcal) (plaintiff) was a wholesale distributer of wine in California. In 1978, Midcal sold 27 cases of wine at prices below the prices established in the pricing schedule and was charged for violating § 24866(b). Midcal did not contest the allegations and instead filed a writ of mandate in the California court system, seeking an injunction against California’s wine-pricing policy. Midcal alleged that the pricing system was an antitrust violation under the Sherman Act. The court of appeal ruled in favor of Midcal, and the California Retail Liquor Dealers Association challenged the decision, arguing that the wine-pricing policy was immune to antitrust violations under the state-action doctrine.