Town of Hallie v. City of Eau Claire

PETITIONER: Town of Hallie
RESPONDENT: City of Eau Claire
LOCATION: Board of Education of the City of Oklahoma

DOCKET NO.: 82-1832
DECIDED BY: Burger Court (1981-1986)
LOWER COURT: United States Court of Appeals for the Seventh Circuit

CITATION: 471 US 34 (1985)
ARGUED: Nov 26, 1984
DECIDED: Mar 27, 1985

ADVOCATES:
Claude J. Covelli - on behalf of Petitioners
Frederick W. Fischer - on behalf of Respondent

Facts of the case

Question

Media for Town of Hallie v. City of Eau Claire

Audio Transcription for Oral Argument - November 26, 1984 in Town of Hallie v. City of Eau Claire

Warren E. Burger:

We'll hear arguments next in Southern Motor Carriers v. the United States.

We'll hear argument next in Town of Hallie v. City of Eau Claire.

Mr. Covelli, you may proceed whenever you're ready.

Claude J. Covelli:

Mr. Chief Justice, and may it please the Court, this action arises from the complaint filed by four Towns who are adjacent to the City of Eau Claire.

That complaint alleged that the City was using its monopoly power over sewage treatment services in the relevant geographic market to monopolize another product market, sewage collection and transportation services.

Originally, other than the Sherman Act, other claims were made at the trial court level.

The relief requested in the complaint was strictly injunctive relief; in other words, to stop the City from engaging in this anticompetitive conduct.

At the trial court level, the City, pursuant to rule 12(b)(6) moved to dismiss.

That motion was granted.

As to the antitrust claims, it was granted on Parker v. Brown exemption grounds.

Only the antitrust claim was appealed to the Seventh Circuit.

The Seventh Circuit affirmed again on Parker v. Brown exemption grounds.

There are three issues that are presented in this case.

The threshold issue is what showing is sufficient to establish that the sovereign State has clearly articulated and affirmatively expressed the State policy that the competition in question be displaced with monopoly service or regulation.

If that requisite State policy is determined to exist, the next issue is what showing is sufficient to establish the State selected the City to implement that State policy with the particular anticompetitive conduct in question.

If these first two tests are met, the next question is whether active State supervision is necessary to assure the City's anticompetitive conduct is attributable to the State.

The parties disagree on the showings under all three issues.

However, the disagreement is fundamental and, I believe, determinative as to the first issue.

The Town's position that the requirement that the State clearly articulate and affirmatively express its policy decision to displace competition means just that.

It means, number one, that the evidence of that policy must be gleaned from the State's statutes.

It means, number two, that these statutes must clearly evidence that the State has addressed the displacement of competition.

William H. Rehnquist:

Mr. Covelli, you say

"from the State's statutes. "

"Do you mean by that in contradistinction to authoritative decisions of the Supreme Court of Wisconsin? "

Claude J. Covelli:

No, I do not, Your Honor.

I mean this; that the statutes define it.

The legislative statement defines it.

The decisions of the Supreme Court, to the extent they apply the appropriate test... and that is the test determined by this Court... may be informative to the Court, but if the State court applies a different standard and does not determine that these statutes do, in fact, clearly articulate this matter, this is still a federal question and it is something to be decided by the Federal Courts.

William H. Rehnquist:

No, I didn't mean that the Supreme Court of Wisconsin's decision on whether the Parker v. Brown exemption applies would be at all conclusive in this litigation, but as to whether there is a State policy, could not one look as well to the Supreme Court of Wisconsin's decisions construing statutes, as well as to the statutes themselves?

Claude J. Covelli:

I think that if the State of Wisconsin through its court declared that we find that the State of Wisconsin has clearly articulated and affirmatively expressed its particular policy, the one in question, that may be of some guidance to this Court, but it is not bound by that decision.