Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alsd-1_07-cv-00357/USCOURTS-alsd-1_07-cv-00357-3/pdf.json

Nature of Suit Code: 410
Nature of Suit: Antitrust
Cause of Action: 28:1331 Fed. Question: Anti-trust

---

1 Also pending are Motions for Leave to File Amicus Curiae Briefs (docs. 45, 46)

filed by non-parties, Alabama Rural Water Association and West Morgan - East Lawrence Water

and Sewer Authority. “District courts have inherent authority to appoint or deny amici which is

derived from Rule 29 of the Federal Rules of Appellate Procedure.” Jin v. Ministry of State

Security, --- F. Supp.2d ----, 2008 WL 2252777, *3 (D.D.C. June 3, 2008). The role of an

amicus is to assist the court “in cases of general public interest by making suggestions to the

court, by providing supplementary assistance to existing counsel, and by insuring a complete and

plenary presentation of difficult issues so that the court may reach a proper decision.” Newark

Branch, N.A.A.C.P. v. Town of Harrison, N.J., 940 F.2d 792, 808 (3d Cir. 1991). In that spirit,

and in the absence of any objection, the Motions by these entities as “friends of the court” are

granted and their briefs will be considered; however, the utility of those briefs is minimal given

(a) their redundant exposition of arguments duly articulated and fully covered by plaintiff; (b)

the virtually identical content of each brief; and (c) their singular focus on a collateral issue that

is distinct from the claims and defenses properly joined herein. Amicus briefs are not properly

used to reiterate arguments and perspectives already before the Court. See Jin, 2008 WL

2252777, at *3 (noting that amicus briefs are typically allowed “when the amicus has unique

information or perspective that can help the court beyond the help that the lawyers for the parties

are able to provide”) (citation omitted).

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

MOBILE COUNTY WATER, SEWER )

AND FIRE PROTECTION AUTHORITY, )

INC., ) PUBLISH

 )

Plaintiff, )

 )

v. ) CIVIL ACTION 07-0357-WS-M

 )

MOBILE AREA WATER AND SEWER )

SYSTEM, INC., )

 )

Defendant. )

ORDER 

This matter comes before the Court on cross-Motions for Summary Judgment (docs. 37,

81). The Motions have been briefed and are ripe for disposition at this time.1

I. Background.

A. Relevant Facts.

This lawsuit is the latest battleground in a decades-old turf war between two public

Case 1:07-cv-00357-WS-M Document 92 Filed 07/23/08 Page 1 of 22
2 Plaintiff stresses that this is a “bell weather [sic] case” that “has received national

attention” and that “touches all Rural Water Authorities in Alabama.” (Doc. 82, at 1, 5 & n.6.) 

Such statements are neither relevant nor helpful. It goes without saying that every case filed in

this District Court is important. Moreover, our judicial system’s common-law framework

implies that while rulings at the district court level are not generally binding on non-parties, they

may well constitute persuasive authority in other disputes in other courts. That is no more or less

true here than it would be in any other case pending before the undersigned. The Court

categorically rejects any suggestion that special treatment or a different approach to the summary

judgment analysis is warranted in this case because of the importance, novelty or general interest

of its subject matter. The stakes are high in every lawsuit filed in this District Court, and this

case is certainly not unique in that regard.

3 In previous rulings in this case, the Court has used the unwieldy acronym

MCWSFPA to designate plaintiff. To improve readability at no expense to clarity, plaintiff’s

alternate shorthand of “MoCo” will be employed in this Order.

4 In its summary judgment briefing, defendant asserts that plaintiff has identified it

improperly and that its correct name is “Board of Water and Sewer Commissioners of the City of

Mobile, doing business as the Mobile Area Water and Sewer System.” (Doc. 37, Exh. 1 at 1 n.1;

Doc. 85, at 1, n.1.) Be that as it may, there is no dispute that MAWSS is organized as a Board of

Water and Sewer Commissioners under Alabama law; therefore, the summary judgment analysis

proceeds in recognition of that designation.

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utilities who provide services in overlapping territory to certain customers outside the city limits

of Mobile, Alabama, but within the boundaries of Mobile County, Alabama. The relevant facts

are, with few exceptions, not in dispute, so much so that it would have behooved the parties,

streamlined the summary judgment process, and obviated the need for plaintiff’s sizeable

evidentiary submission had they submitted their Rule 56 motions on stipulated facts, given the

paucity of material factual disagreements between them.2

Plaintiff, Mobile County Water, Sewer and Fire Protection Authority (“MoCo”),3 is a

rural water authority, organized pursuant to Ala. Code §§ 11-88-1 et seq. It is authorized to sell

and does sell treated water to customers within MoCo’s service area. (Doc. 85, at 13.) 

Defendant, Mobile Area Water and Sewer System (“MAWSS”),4 is formally organized as a

Board of Water and Sewer Commissioners pursuant to Ala. Code §§ 11-50-340 et seq. The

parties agree that MAWSS sells treated water and centralized sewer service to customers both

within the city limits of Mobile, Alabama, as well as outside the city limits of Mobile, including

areas within MoCo’s service territory. (Doc. 85, at 12-13.) Thus, it is quite clear (and free from

Case 1:07-cv-00357-WS-M Document 92 Filed 07/23/08 Page 2 of 22
5 In that regard, MAWSS’s planning and engineering manager, Dwight McGough,

testified that if a new sewer customer “did not connect to our water that was available, then we

would not accept them as a [sewer] customer.” (McGough Dep., at 78.) Likewise, MAWSS’s

director, Malcolm Steeves, testified that if MAWSS customers “are using our sewer service, they

need to use our water service. ... So if they are and they decide not to for some reason or another,

then that would be a problem. They’d need to get sewer service some other way.” (Steeves

Dep., at 102.) Thus, if an existing MAWSS sewer customer wanted to disconnect from MAWSS

water service, defendant’s policy would be to terminate sewer service to that customer. (Id. at

102-03.)

6 In light of the parties’ unanimity on this point, the Court will not belabor it by

reciting the considerable record evidence marshaled by MoCo to support the existence of that

practice, either as a general proposition or in specific instances.

-3-

debate) that MAWSS and MoCo are presently selling treated water service in an overlapping

geographic area, such that at some level they are vying for the same customers with regard to

treated water service. The parties are likewise in full agreement that MAWSS is the sole seller

of centralized sewer service in MoCo’s service area. (Doc. 85, at 12.)

The genesis of this lawsuit lies in MAWSS’s practice of requiring new customers to

accept MAWSS’s treated water, should MAWSS decide to supply it, as a condition of receiving

MAWSS sewer service. To be clear, there is no dispute that MAWSS in fact engages in such a

practice. MAWSS does not shy away from this fact, by either denying or downplaying it, but

instead readily admits it. In particular, MAWSS freely concedes in its briefs that “MAWSS

requires new sewer customers to accept water service from MAWSS if such service is available”

and that “MAWSS requires new customers to accept MAWSS water service, if it is made

available, if said new customer wishes to receive MAWSS sewer service.” (Doc. 37, Exh. 1 at 2;

doc. 85, at 11.)5

 This is not a case, then, in which there are factual issues as to whether the

challenged practice exists. Everyone agrees that MAWSS has adopted such a practice.6 The

only question is its legality.

B. Claims Joined in this Proceeding.

In evaluating the lawfulness of MAWSS’s “all-or-nothing” policy of supplying sewer and

water services in MoCo’s service area, the Court is of course constrained by the specific theories

of liability interposed by plaintiff; therefore, the framing of the issues in the pleadings is of

critical importance to the summary judgment analysis. The Amended Complaint unambiguously

Case 1:07-cv-00357-WS-M Document 92 Filed 07/23/08 Page 3 of 22
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reflects that MoCo has postured this action exclusively in terms of antitrust violations. Although

the Amended Complaint is not organized by specific causes of action, the sum total of the legal

grounds on which MoCo seeks relief against MAWSS in this action are set forth in that filing as

follows:

“21. MAWSS has accordingly conditioned the purchase of sewer service (the

tied product) in the affected area to the purchase of water service (the

tying product) also from MAWSS. Since MAWSS has market power in

the provision of sewer service in the affected area, and a substantial

volume of commerce in the provision of water service has been affected

by the policy and practices here alleged, these tying arrangements are per

se unlawful under Section 1 of the Sherman Act, 15 U.S.C. sec. 1.

“22. MAWSS’ conditioning of the purchase of sewer service (the tied product) in the

affected area to the purchase of water service (the tying product) also from

MAWSS, where MAWSS has market power in the provision of sewer service in

the affected area and a substantial volume of commerce in the provision of water

service has been affected by the policy and practices here alleged, also

unreasonably restrains trade in violation of Section 1 of the Sherman Act, 15

U.S.C. sec. 1.

“23. Through the policy and practices alleged, MAWSS has abused its market

power in supplying sewer services in the affected area to gain a

competitive advantage and foreclose competition in the supply of water

services in the affected area, thereby monopolizing and attempting to

monopolize trade and commerce in violation of Section 2 of the Sherman

Act, 15 U.S.C. § 2.

“24. In addition, through the policy and practices alleged, MAWSS has abused

its market power in supplying sewer services in the affected area to gain a

competitive advantage and foreclose competition in the supply of water

services in the affected area, thereby monopolizing and attempting to

monopolize trade and commerce in violation of Code of Alabama (1970),

§ 6-5-60(a).”

(Amended Complaint (doc. 6), ¶¶ 21-24.)

Simply stated, then, MoCo brought this action contending that MAWSS’s “all-ornothing” bundling of water services with sewer services in MoCo’s service area constitutes an

Case 1:07-cv-00357-WS-M Document 92 Filed 07/23/08 Page 4 of 22
7 As a general proposition, there is no question that tying arrangements violate the

Sherman Act. See, e.g., Eastman Kodak Co v. Image Technical Services, Inc., 504 U.S. 451,

461-62, 112 S.Ct. 2072 (1992) (defining tying arrangement as an agreement by seller to sell one

product only on condition that buyer also purchase a different product, and explaining that such

an arrangement violates the Sherman Act if the seller has appreciable economic power in the

tying product market and if the arrangement affects substantial volume of commerce in tied

market); Tic-X-Press, Inc. v. Omni Promotions Co. of Georgia, 815 F.2d 1407, 1414 (11th Cir.

1987) (recognizing that tying arrangements were long ago classified as per se anticompetitive

practices prohibited by the Sherman Act). Contrary to the labels used in the Amended

Complaint, it is evident that sewer service is the tying product and water service is the tied

product in this case.

8 MoCo also requested entry of a temporary restraining order and preliminary

injunction against MAWSS. Those motions were denied by Order entered on October 29, 2007. 

See Mobile County Water, Sewer and Fire Protection Authority, Inc. v. Mobile Area Water and

Sewer System, Inc., 2007 WL 3208587 (S.D. Ala. Oct. 29, 2007). The cross-motions for

summary judgment presented at this time are in substantial part a rerun of the arguments raised

and decided in connection with the “likelihood of success on the merits” prong of MoCo’s failed

requests for emergency and preliminary injunctive relief.

9 Significantly, this case is not the only pending litigation between MoCo and

MAWSS. Indeed, in August 2005 MoCo sued MAWSS in the Circuit Court of Mobile County,

Alabama on the following bases: (a) that MAWSS’s provision of treated water services in

MoCo’s service area violates the so-called anti-duplication statute found at Ala. Code § 11-50-

1.1; (b) that MAWSS’s encroachment in MoCo’s service area breaches MAWSS’s obligations

under a settlement agreement entered into between the parties in 1987; (c) that MAWSS is

trespassing in MoCo’s service area; and (d) claims for declaratory, injunctive and monetary

relief. The Court understands that this state-court action, including specifically MoCo’s claim

against MAWSS under Ala. Code § 11-50-1.1, remains pending at this time. The legally distinct

claims joined in the state-court proceedings are not before this Court and will not be decided

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unlawful tying arrangement in violation of federal and state antitrust laws.7 The gravamen of

MoCo’s antitrust claims is that MAWSS is leveraging its dominance in the centralized sewer

services market to coerce its sewer customers to purchase water service from it, rather than from

competitors such as MoCo. MoCo seeks a permanent injunction “restraining MAWSS from

requiring any consumer of water to purchase water service from MAWSS as a condition of

receiving sewer service”; restraining MAWSS from retaliating against any customer for

purchasing water elsewhere; and requiring MAWSS to notify potential customers of their right

to purchase water elsewhere. (Doc. 6, at 8.)8

 No other claim or cause of action has been joined

by MoCo in this action.9

Case 1:07-cv-00357-WS-M Document 92 Filed 07/23/08 Page 5 of 22
herein. In August 2007, this Court denied MAWSS’s motion to stay this federal action pursuant

to Colorado River abstention principles (see doc. 17); therefore, parallel litigation has proceeded

between the same parties in federal and state court, albeit alleging different theories and claims

for relief, for more than a year. In declining to enter a stay, this Court opined as follows:

“[i]rrespective of how the ... § 11-50-1.1 claims are resolved in Mobile County Circuit Court, the

antitrust causes of action joined in this action will remain outstanding.” Mobile County Water,

Sewer and Fire Protection Authority, Inc. v. Mobile Area Water and Sewer System, Inc., 2007

WL 2460754, *4 (S.D. Ala. Aug. 27, 2007). The Court also noted that there was no indication

“that a decision on the State Court Action claims concerning whether MAWSS is exceeding its

contractual and statutory rights by encroaching on [MoCo] territory will decide or obviate the

need to decide whether MAWSS is engaging in unlawful ‘tying’ practices under the Sherman

Act.” Id.

10 The sequencing of these motions is unfortunate. Defendant’s Motion for

Summary Judgment (doc. 37) was filed and fully briefed long before Plaintiff’s Motion for

Summary Judgment (doc. 81) was submitted. Nonetheless, the parties (and plaintiff, in

particular) utilized this second motion to rebrief, reargue and reiterate the same issues that had

already been fully presented in connection with Defendant’s Motion for Summary Judgment, as

well as to raise previously omitted arguments that could and should have been presented in those

earlier rounds of briefing. The net effect is that plaintiff has parlayed its cross-motion for

summary judgment into a second bite at the apple concerning legal issues previously briefed in

full and taken under submission in the context of Defendant’s Motion for Summary Judgment.

-6-

The parties have now filed cross-motions for summary judgment as to MAWSS’s

liability to MoCo under federal and state antitrust provisions.10

II. Summary Judgment Standard.

Summary judgment should be granted only if “there is no issue as to any material fact

and the moving party is entitled to a judgment as a matter of law.” Fed. R. Civ. P. 56(c). The

party seeking summary judgment bears “the initial burden to show the district court, by reference

to materials on file, that there are no genuine issues of material fact that should be decided at

trial.” Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). Once the moving party

has satisfied its responsibility, the burden shifts to the nonmovant to show the existence of a

genuine issue of material fact. Id. “If the nonmoving party fails to make 'a sufficient showing

on an essential element of her case with respect to which she has the burden of proof,' the

moving party is entitled to summary judgment.” Id. (quoting Celotex Corp. v. Catrett, 477 U.S.

317 (1986)) (footnote omitted). “In reviewing whether the nonmoving party has met its burden,

the court must stop short of weighing the evidence and making credibility determinations of the

Case 1:07-cv-00357-WS-M Document 92 Filed 07/23/08 Page 6 of 22
11 Plaintiff peppers its briefs with inflammatory allegations that MAWSS’s conduct

is “hugely wasteful” and amounts to “great waste,” that a water pipeline laid by MAWSS

constitutes “an act of extraordinary aggression,” that defendant is motivated by “greed or a thirst

for power,” that customers are victimized by “the extraordinary greed of MAWSS,” that

MAWSS’s conduct is “unnecessarily wasteful and destructive,” and the like. (Doc. 82, at 4, 5,

12; doc. 86, at 6.) Whether defendant’s activities are wasteful, whether a water pipeline laid by

defendant amounts to an attack on plaintiff, whether defendant is greedy, and the like do not

appear relevant to the immunity analysis. Rather, these statements amount to little more than

name-calling designed to bias the Court against defendant. Such vituperative characterizations

concerning collateral matters will be disregarded, inasmuch as they do not assist the Court in

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truth of the matter. Instead, the evidence of the non-movant is to be believed, and all justifiable

inferences are to be drawn in his favor.” Tipton v. Bergrohr GMBH-Siegen, 965 F.2d 994, 999

(11th Cir. 1992) (internal citations and quotations omitted). “Summary judgment is justified only

for those cases devoid of any need for factual determinations.” Offshore Aviation v. Transcon

Lines, Inc., 831 F.2d 1013, 1016 (11th Cir. 1987) (citation omitted).

“The applicable Rule 56 standard is not affected by the filing of cross-motions for

summary judgment.” Godard v. Alabama Pilot, Inc., 485 F. Supp.2d 1284, 1291 (S.D. Ala.

2007); see also May v. A Parcel of Land, 458 F. Supp.2d 1324, 1333 (S.D. Ala. 2006) (same). 

Indeed, the Eleventh Circuit has explained that “[c]ross-motions for summary judgment will not,

in themselves, warrant the court in granting summary judgment unless one of the parties is

entitled to judgment as a matter of law on facts that are not genuinely disputed.” United States v.

Oakley, 744 F.2d 1553, 1555 (11th Cir. 1984) (citation omitted); see also Wermager v.

Cormorant Tp. Bd., 716 F.2d 1211, 1214 (8th Cir. 1983) (“the filing of cross motions for

summary judgment does not necessarily indicate that there is no dispute as to a material fact, or

have the effect of submitting the cause to a plenary determination on the merits”). Nonetheless,

“cross-motions may be probative of the absence of a factual dispute where they reflect general

agreement by the parties as to the dispositive legal theories and material facts.” Godard, 485 F.

Supp.2d at 1291; see also May, 458 F. Supp.2d at 1333. That is precisely the case here, as the

parties appear to be in agreement that the material facts are undisputed and that certain narrow

legal issues are dispositive of the claims joined herein.

III. Analysis.

A. State Action Immunity.11

Case 1:07-cv-00357-WS-M Document 92 Filed 07/23/08 Page 7 of 22
resolving the cross-motions for summary judgment.

12 Indeed, MoCo recognizes the centrality of this issue by stating “[t]he overarching

premise (albeit false) of MAWSS’s Motion for Summary Judgment is that MAWSS is entitled to

‘state action immunity’ for its illegal tying.” (Doc. 47, at 1.) That is not to say, however, that

state action immunity is the only legal basis touted by defendant for Rule 56 relief. To the

contrary, defendant contends that it is also entitled to judgment as a matter of law because

plaintiff has failed to establish the “economic coercion” element of an antitrust tying claim, and

that plaintiff’s summary judgment motion should be denied because it has failed to make a

sufficient showing under the “two separate products” element. See generally Thompson v.

Metropolitan Multi-List, Inc., 934 F.2d 1566, 1574 (11th Cir. 1991) (listing the basic elements of

a per se tying claim which a plaintiff must satisfy to avoid having its tying claim analyzed under

the rule of reason). The Court need not reach these subsidiary questions in order to resolve the

cross-motions for summary judgment.

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In its Answer to the First Amended Complaint (doc. 11), MAWSS stated as its Eighth

Affirmative Defense the following: “This Defendant affirmatively pleads State Action

Immunity.” (Doc. 11, at 5.) The applicability of that defense lies at the heart of the parties’

dueling Motions for Summary Judgment.12

“Under the state action immunity doctrine ..., states are immune from federal antitrust

law for their actions as sovereign.” Crosby v. Hospital Authority of Valdosta and Lowndes

County, 93 F.3d 1515, 1521 (11th Cir. 1996). This protection is not confined to states, but has

been extended to municipalities and instrumentalities of states, albeit under a different legal test. 

See id. (explaining that state action immunity does not apply directly to a state’s political

subdivisions because they are not themselves sovereign, such that “actions by the State and

actions by municipalities are evaluated under different standards”); see also Marshall v. Planz,

13 F. Supp.2d 1231, 1233 (M.D. Ala. 1998) (recognizing that state action immunity “may be

invoked not only by states themselves, but also by states’ political subdivisions, including

municipal corporations”). The Eleventh Circuit has explained that “political subdivisions such

as municipalities are immune from antitrust liability if their anticompetitive acts follow a clearly

articulated and affirmatively expressed state policy.” Bankers Ins. Co. v. Florida Residential

Property and Cas. Joint Underwriting Ass’n, 137 F.3d 1293, 1296 (11th Cir. 1998) (citation

omitted); see also Avalon Carriage Service Inc. v. City of St. Augustine, FL, 417 F. Supp.2d

1279, 1288 (M.D. Fla. 2006) (“before a municipality will be entitled to the protection of the state

Case 1:07-cv-00357-WS-M Document 92 Filed 07/23/08 Page 8 of 22
13 Although the applicable standard for state action immunity differs depending on

whether the defendant is a state, a political subdivision, or a private actor, MAWSS plainly fits

within the second category. It has been recognized in this Circuit that the “political subdivision”

iteration of the state action immunity standard encompasses entities such as hospital and transit

authorities, state bar organizations, and rural electric cooperatives, based on “the governmentlike attributes of the defendant entity” and the presence of indicia demonstrating that “the nexus

between the State and the entity is sufficiently strong that there is little real danger that the entity

is involved in a private anticompetitive arrangement.” Bankers, 137 F.3d at 1296-97. 

MAWSS’s organizing statute provides that it “shall be deemed to be a public agency or

instrumentality exercising public and governmental functions to provide for the public health and

welfare.” Ala. Code § 11-50-343(a). As such, any suggestion that MAWSS does not qualify as

a political subdivision for state action immunity purposes would appear doomed. At any rate,

MoCo does not challenge MAWSS’s status as a political subdivision, nor does it contest the

propriety of the “clearly expressed state policy” yardstick for the immunity defense. (See doc.

47, at 10 (specifically agreeing that MAWSS is a state actor and an agency of the City of Mobile,

and acknowledging that the “clearly articulated state policy” standard governs).)

-9-

action exemption from the antitrust laws, it must demonstrate that it is engaging in the

challenged activity pursuant to a clearly expressed state policy”) (citation omitted). This

“clearly articulated state policy” test applies here.13

“To show the existence of a state policy displacing competition, the municipality is not

required to point to a specific, detailed legislative authorization.” Bolt v. Halifax Hosp. Medical

Center, 980 F.2d 1381, 1385 (11th Cir. 1993) (citations and internal quotations omitted); see also

Sproul v. City of Wooster, 840 F.2d 1267, 1269 (6th Cir. 1988) (“Explicit legislative authorization

for anticompetitive acts is not necessary: it is sufficient that the state bestows broad regulatory

authority from which anticompetitive effects would logically result.”); In re Jet 1 Center, Inc.,

322 B.R. 182, 195 (Bankr. M.D. Fla. 2005) (“it is not necessary that legislature expressly state in

the statute or in its legislative history that legislature intended the delegated action to have

anticompetitive effects,” inasmuch as “no legislature can be expected to catalog all of the

anticipated effects of a statute of this kind”) (citation omitted). Rather, “the ‘clear articulation’

test can be satisfied by showing that the legislation, pursuant to which the municipality is acting,

contemplates or foresees anticompetitive conduct as a result.” Bolt, 980 F.2d at 1386. All that is

required is that “the anticompetitive conduct be a foreseeable result of the powers granted to the

political subdivision,” such that immunity attaches if said conduct is “reasonably anticipated,

rather than the inevitable, ordinary, or routine outcome of a statute.” Crosby, 93 F.3d at 1532

Case 1:07-cv-00357-WS-M Document 92 Filed 07/23/08 Page 9 of 22
14 That principle is not without limits, however. In accordance with Community

Communications Co. v. City of Boulder, Colo., 455 U.S. 40, 54-56, 102 S.Ct. 835, 70 L.Ed.2d

810 (1982), “a general grant of authority to govern local affairs is insufficient to constitute a

clear articulation of state policy because the State’s position is neutral with respect to the city’s

conduct.” Auton v. Dade City, Florida, 783 F.2d 1009, 1010 (11th Cir. 1986).

15 The breadth of this grant of authority is reinforced by another subsection of the

same statute, which authorizes boards “[t]o do all acts and things necessary or convenient to

carry out the powers expressly granted in this article.” Ala. Code § 11-50-343(a)(13).

-10-

(citation omitted).14 Simply stated, then, MAWSS is entitled to state action immunity from

MoCo’s antitrust claims if its conduct was pursuant to a clearly articulated state policy, which

requires a showing that “the action is both authorized by statute and its anticompetitive effect is

an intended (meaning foreseeable) result of this authorization.” Bankers, 137 F.3d at 1298. 

Both elements are satisfied here.

The Alabama legislature has unambiguously declared that boards of water and sewer

commissioners (such as MAWSS) are authorized and empowered to combine water and sewer

systems for purposes of operations, financing and billing. For example, the Alabama legislature

expressly authorized such boards “[t]o combine the water system and the sewer system as a

single system for the purpose of operation and financing.” Ala. Code § 11-50-343(a)(7). 

Elsewhere, the legislature reiterated that “[t]he board may combine any water system and sewer

system owned and operated by it” and provided that a board “may provide a single schedule of

rates, fees and charges for the services and facilities furnished by such combined system.” Ala.

Code § 11-50-351(e). The legislature also conferred extremely broad discretion on the board to

implement its authority to combine its water and sewer systems. Indeed, the board received an

open-ended delegation of authority “[t]o exercise jurisdiction, control and supervision over any

water system or sewer system owned, operated or maintained by the board and to make and

enforce such rules and regulations for the maintenance and operation of any such system as may,

in the judgment of the board, be necessary or desirable for the efficient operation of such system

and for accomplishing the purposes of this article.” Ala. Code § 11-50-343(a)(9).15 If that grant

of authority were not sufficiently expansive already to encompass MAWSS’s implementation of

an all-or-nothing policy, the legislative intent is further amplified by the provision that “[t]his

Case 1:07-cv-00357-WS-M Document 92 Filed 07/23/08 Page 10 of 22
16 Plaintiff’s arguments to the contrary are without merit. For example, MoCo

asserts that the statutory authorization to combine water and sewer systems is limited to

“operation and financing” matters, which excludes combining the systems for purposes of the

all-or-nothing policy at issue here. (Doc. 47, at 15.) The Court cannot agree. “Operation” is a

broad term. The legislative framework clearly allows MAWSS to combine the operations of its

water and sewer systems and to enact any rules and regulations that are necessary or desirable

for efficient operations of those systems. The bundled sale of water and sewer services to its

customers is a MAWSS policy within the heartland of that broad statutory authorization. 

Plaintiff also protests that the cited Alabama code sections are silent as to whether MAWSS may

enact all-or-nothing arrangements and do not specifically endorse the all-or-nothing policy. 

Once again, this argument presupposes a much greater degree of legislative precision than the

legal standard contemplates.

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article, being necessary for the welfare of the state and its inhabitants, shall be liberally

construed to effect the purposes thereof.” Ala. Code § 11-50-357.

Reviewing all of these statutory provisions in the aggregate, the Court concludes that

MAWSS’s enactment of an all-or-nothing policy was authorized by the Alabama legislature. To

be sure, MoCo is correct that the relevant statutes do not expressly indicate that MAWSS may

condition the sale of sewer services to a customer on that customer’s purchase of its water

services. But that is not the proper test. See Bolt, 980 F.2d at 1385 (“the municipality is not

required to point to a specific, detailed legislative authorization” to establish state action

immunity defense). The Alabama legislature explicitly stated (a) that MAWSS was empowered

to combine its water services and sewer services for purposes of operations, financing and fees,

(b) that MAWSS was empowered to make and enforce any rules and regulations for the

maintenance and operation of its combined water and sewer systems that MAWSS deemed

necessary or desirable for the efficient operation of such systems; (c) that MAWSS was

empowered to take all actions necessary or convenient to carry out its powers; and (d) that these

grants of authority to MAWSS should be liberally construed. In the opinion of this Court, no

reasonable reading of Chapter 50, Article 10 of Title 11 of the Alabama Code could yield a

conclusion that MAWSS lacked statutory authorization to enact and adhere to the all-or-nothing

policy on which MoCo’s antitrust allegations are founded.16

Moreover, the Court finds that the foreseeability element is also satisfied. It is clear from

the statute that the Alabama “legislature contemplated municipalities would engage in

Case 1:07-cv-00357-WS-M Document 92 Filed 07/23/08 Page 11 of 22
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anticompetitive conduct in the course of providing their citizens with a water supply.” Auton v.

Dade City, Fla., 783 F.2d 1009, 1011 (11th Cir. 1986). Indeed, the Supreme Court, examining

Wisconsin statutes relating to municipal sewage systems, declared that “it is sufficient that the

statutes authorized the City to provide sewage services and also to determine the areas to be

served. We think it is clear that anticompetitive effects logically would result from this broad

authority to regulate.” Town of Hallie v. City of Eau Claire, 471 U.S. 34, 42, 105 S.Ct. 1713, 85

L.Ed.2d 24 (1985). Similarly, the relevant Alabama statutes authorized MAWSS (a) “[t]o

acquire, ... construct, reconstruct, improve, extend, operate and maintain any water system or

part thereof or any sewer system or part thereof or any combination thereof within or without or

partly within and partly without the corporate limits of the ... city,” Ala. Code § 11-50-343(a)(5);

(b) “[t]o combine the water system and the sewer system as a single system for the purpose of

operation and financing,” § 11-50-343(a)(7); and (c) “to make and enforce such rules and

regulations for the maintenance and operation of any such system as may, in the judgment of the

board, be necessary or desirable,” § 11-50-343(a)(9). If the Wisconsin scheme in Town of

Hallie was sufficient to evidence a clearly articulated state policy to displace competition with

regulation in the area of municipal provision of sewage services, from which the tying

arrangement complained of was logically foreseeable, then surely the Alabama scheme

summarized above establishes a clearly articulated state policy to displace competition with

regulation in the area of boards of water and sewer commissioners’ provision of water and sewer

services, from which MAWSS’s alleged tying policies were logically foreseeable. Simply

stated, Alabama’s grant of authority to MAWSS is at least as clear as Wisconsin’s in Town of

Hallie; therefore, because the municipality in Town of Hallie was entitled to state action

immunity, the same is true of MAWSS here.

A trio of Eleventh Circuit decisions concerning analogous water statutes in Florida and

Georgia bolster this conclusion. See McCallum v. City of Athens, Ga., 976 F.2d 649 (11th Cir.

1992); Falls Chase Special Taxing District v. City of Tallahassee, 788 F.2d 711 (11th Cir. 1986);

Auton v. Dade City, Fla., 783 F.2d 1009 (11th Cir. 1986). In all three cases, the courts examined

state statutes that authorized cities to create and construct municipal water supplies. McCallum,

976 F.2d at 654; Falls Chase, 788 F.2d at 713; Auton, 783 F.2d at 1010. Each of those statutory

frameworks granted the municipality the power of eminent domain. McCallum, 976 F.2d at 654;

Case 1:07-cv-00357-WS-M Document 92 Filed 07/23/08 Page 12 of 22
17 In its Reply Brief (doc. 86), the last of several briefs filed by MoCo on the issue

of state action immunity, plaintiff argues for the first time that state action immunity is

unavailable here because the antitrust claims brought against a political subdivision are being

brought by a political subdivision, not a private individual. Plaintiff fails to identify any

authority supporting the proposition that the availability of state action immunity depends on the

identity of the entity bringing the antitrust claims. Nor is there any basis in logic or common

sense why state action immunity should turn on the status of the plaintiff, such that

municipalities who would enjoy such immunity if private actors sue them in antitrust would be

stripped of such immunity if another municipality is the plaintiff. Accordingly, even if this

argument were properly raised in MoCo’s reply brief at the conclusion of multiple rounds of

briefing, the Court declines plaintiff’s invitation to devise a novel exception to the wellestablished state action immunity doctrine. If, as plaintiff suggests, there is a paucity of

authority awarding state action immunity when a regulated entity is being sued by another

regulated entity under antitrust law, it does not follow that there is an analytical impediment to

application of state action immunity in those circumstances. Rather, a far more likely

explanation for the dearth of such authority is that municipalities rarely sue each other under the

Sherman Act. Government-on-government antitrust lawsuits are aberrational. Besides,

plaintiff’s contention that all of the relevant caselaw concerning this immunity involves private

actors suing regulated actors is simply false. See, e.g., Town of Hallie, 471 U.S. 34 (city entitled

to state action immunity from antitrust liability where plaintiffs were four Wisconsin townships);

-13-

Falls Chase, 788 F.2d at 713; Auton, 783 F.2d at 1011. Each of those statutory provisions also

authorized municipalities to fix water rates. McCallum, 976 F.2d at 654; Falls Chase, 788 F.2d

at 714; Auton, 783 F.2d at 1011. Finally, both Florida and Georgia barred municipalities from

constructing a water system if a similar system already existed in immediately adjacent territory. 

McCallum, 976 F.2d at 654-55; Falls Chase, 788 F.2d at 713; Auton, 783 F.2d at 1010. Upon

examining these features of the Georgia statute, the Eleventh Circuit opined that state action

immunity applied because “[t]he clear implication is that these state policies oppose competition

... [and] contemplate anticompetitive effects.” McCallum, 976 F.2d at 655. As for the Florida

statute, the Eleventh Circuit’s conclusion was that “[t]he cumulative effect of these statutes is to

grant Florida municipalities broad power to provide water to their inhabitants” and “[i]t is clear

that anticompetitive effects logically would result from this broad authority to regulate.” Auton,

783 F.2d at 1011 (citation omitted); see also Falls Chase, 788 F.2d at 713-14 (similar). The

Alabama enactments at issue in this case are indistinguishable in any material respect from those

deemed in McCallum, Falls Chase and Auton to have foreseeable anticompetitive effects giving

rise to state action immunity.17

Case 1:07-cv-00357-WS-M Document 92 Filed 07/23/08 Page 13 of 22
Falls Chase, 788 F.2d at 711-714 (city entitled to state action immunity from antitrust liability

where plaintiff was a local unit of special government created by state law to perform prescribed

specialized functions within limited boundaries). Plaintiff’s insistence that the Wisconsin

townships in Town of Hallie and the local unit of special government in Falls Chase are “private

actors” is misleading and inaccurate. And MoCo’s desperate argument that to cloak MAWSS

with immunity here would somehow create a “pecking order” among Alabama regulated utilities

is meritless. It does not create a pecking order to recognize that the Alabama legislature

intended anticompetitive effects in the market for service of water and sewer supplies. It does

not create a pecking order for the Court to hold that MoCo has no remedy in antitrust law,

particularly where it is pursuing potentially viable remedies under state law in state court at this

time. Ironically, if anyone is requesting a pecking order here, it is MoCo, with its insistence that

federal antitrust law should operate to forbid MAWSS from undertaking any water service

activities in MoCo’s territory, thereby affording MoCo preeminence and monopoly power in its

service area.

18 Also instructive is Kern-Tulare Water Dist. v. City of Bakersfield, 828 F.2d 514

(9th Cir. 1987), wherein Sherman Act claims were brought against a California municipality for

conditioning its sale of water to a water district on that water district not re-selling the water. 

Nothing in the California statutes expressly conferred authority on the municipality to impose a

no-resale condition on water sales; however, the Ninth Circuit concluded that state action

immunity attached nonetheless because “[t]he restriction of transfer is foreseeable within the

authority of the city to contract for, acquire and hold water rights, to furnish itself and its

inhabitants with water, and to sell, lease, exchange, or transfer surplus water.” Id. at 519-20. 

Surely, if a municipality’s attachment of “no-resale” conditions on water transfers was an

anticompetitive effect that was reasonably foreseeable from the general grant of authority to the

municipality to buy and sell water, then MAWSS’s requirement that its sewer customers also

-14-

At the risk of repetition, the Court emphasizes that MAWSS was expressly authorized by

the Alabama legislature to operate municipal water and sewer systems, to combine those systems

for operational purposes, to implement any rules and regulations pertaining to the operations of

those systems that MAWSS deemed desirable for their efficient operation, and to do all acts and

things necessary or convenient to carry out those powers, with the additional overlay that these

provisions must be liberally construed. Viewed collectively, Alabama’s statutory scheme

unquestionably authorized MAWSS to require its sewer customers to purchase water from it if

they wanted to received MAWSS sewer service, and the anticompetitive effects of MAWSS’s

actions were reasonably foreseeable from the authority granted it by the legislature. To find

otherwise would be to disregard the teachings of Town of Hallie, McCallum, Falls Chase and

Auton.

18

Case 1:07-cv-00357-WS-M Document 92 Filed 07/23/08 Page 14 of 22
buy water from it was an anticompetitive effect that was authorized and reasonably foreseeable

from the general grant of authority to MAWSS to combine its water and sewer systems

operationally and to take any actions desired or convenient in furtherance of that combined

system. See also Avalon Carriage, 417 F. Supp.2d at 1289 (broad legislative enactment

authorizing city to regulate carriages and wagons gave rise to state action immunity because it

had foreseeable anticompetitive effects, where city capped number of horse-drawn carriage

permits and awarded almost all such permits to plaintiff’s competitor, even though competitor

was not using most of those permits). 

19 In light of this determination, it is unnecessary to examine defendant’s alternative

argument for summary judgment that, even if immunity does not attach, plaintiff’s claims should

still be dismissed for want of evidence of actual coercion. (See doc. 37, at 7-8.) In any event,

plaintiff has come forward with substantial record evidence of coercion, so it appears unlikely

that Rule 56 relief would be appropriate for defendant based on this argument, were the Court to

reach it.

-15-

In short, the Court holds that, as a matter of law, MAWSS’s challenged conduct follows a

clearly articulated and affirmatively expressed state policy. Defendant’s practice of conditioning

sewer service on its customers’ purchase of defendant’s water service was authorized by the

Alabama legislature and its anticompetitive effects are a foreseeable result of this authorization. 

Therefore, MAWSS is entitled to state action immunity with respect to MoCo’s federal antitrust

claims.19

B. The Non-Impact of Alabama Code § 11-50-1.1.

In arguing that the “clearly articulated state policy” requirement is not satisfied here,

MoCo spends little time parsing Chapter 50, Article 10 of Title 11 of the Alabama Code, as the

Court has done, but instead devotes the bulk of its argument to discussion of Ala. Code § 11-50-

1.1. That statute provides, in relevant part, that “[m]unicipalities are hereby prohibited from

acquiring, or duplicating any services of, any waterworks system or any part thereof, operated by

a corporation or association which has been organized under ... Sections 11-88-1 through 11-88-

21 ... without the consent of a majority of the members of the governing board of said

corporation or association.” Ala. Code § 11-50-1.1. MoCo submits evidence and extensive legal

argument in support of the proposition that MAWSS’s conduct of laying water pipes in MoCo’s

service territory amounts to unlawful duplication of MoCo’s water services, in violation of § 11-

50-1.1.

Case 1:07-cv-00357-WS-M Document 92 Filed 07/23/08 Page 15 of 22
20 Before reaching the merits of MoCo’s argument, two other points bear mention,

at least in passing. First, MoCo’s reliance on § 11-50-1.1 effectively blurs or, more accurately,

obliterates the line separating its federal lawsuit from its state lawsuit. If MoCo intended for its

Sherman Act claims in this action to collapse into the § 11-50-1.1 cause of action it began

pursuing against MAWSS in state court two years before it filed its Complaint in federal court,

then it is difficult to conceive of why MoCo would choose to prosecute a second, redundant

lawsuit in this forum. After all, the declaratory and injunctive relief sought here would

presumably be equally available in the state-court proceedings. (See doc. 82, at 6 (conceding

-16-

Plaintiff’s invocation of Alabama’s anti-duplication statute does not alter (and,

paradoxically, actually reinforces in some respects) the state action immunity analysis set forth

in Section III.A., supra. As an initial matter, it bears emphasis that MoCo has asserted no causes

of action sounding in § 11-50-1.1 against MAWSS in these proceedings. To be sure, MoCo has

sued MAWSS for alleged violation of § 11-50-1.1 in state court, and this Court’s understanding

is that the parties are actively litigating that issue in that forum. To the extent that plaintiff

intends to use its summary judgment briefs to inject a duplicative § 11-50-1.1 claim against

MAWSS in these proceedings, that effort is improper. See Hurlbert v. St. Mary’s Health Care

System, Inc., 439 F.3d 1286, 1297 (11th Cir. 2006) (having proceeded through discovery without

seeking to amend complaint to reflect new theory of cause of action, plaintiff “was not entitled to

raise it in the midst of summary judgment”); Gilmour v. Gates, McDonald and Co., 382 F.3d

1312, 1315 (11th Cir. 2004) (“A plaintiff may not amend her complaint through argument in a

brief opposing summary judgment.”). Plaintiff’s claims against MAWSS in this case are

confined to the antitrust violations alleged in the pleadings, and this Court’s analysis is therefore

equally circumscribed.

If the Court understands MoCo’s position correctly, its purpose in focusing its summary

judgment briefs on the § 11-50-1.1 issue is to show that the Alabama legislature did not

authorize MAWSS’s conduct. As mentioned supra, state action immunity from federal antitrust

law applies to political subdivisions only when their activities are “both authorized by statute

and [their] anticompetitive effect is an intended (meaning foreseeable) result of this

authorization.” Bankers, 137 F.3d at 1298. Thus, MoCo purports to be raising its § 11-50-1.1

argument to demonstrate that the Alabama legislature did not authorize MAWSS’s activities,

such that MAWSS is not protected by state action immunity. The Court cannot agree.20

Case 1:07-cv-00357-WS-M Document 92 Filed 07/23/08 Page 16 of 22
that MoCo seeks nothing other than an injunction in this case).) And if both the federal and the

state lawsuits turn on the construction of § 11-50-1.1, then MoCo can achieve nothing in this

action other than increased expense and inconvenience for the parties, as well as duplicative

commitment of judicial resources in two different forums. Second, if as MoCo now contends its

Sherman Act claims rest on the § 11-50-1.1 issue, then it is troubling that this factor was not

brought to the Court’s attention by MoCo during the briefing of MAWSS’s Motion to Stay (doc.

13), which was predicated on the existence of parallel state-court proceedings. Upon applying

the Colorado River factors, this Court declined to abstain pending the outcome of the state-court

action, based in no small part on the Court’s assessment that the legal issues in the two cases

were distinct and that the state-court rulings would not affect the antitrust claims in this action. 

(See doc. 17, at 7-8.) Had the Court been aware at that time that MoCo intended to bootstrap its

Sherman Act claims on the proposition that MAWSS was in violation of § 11-50-1.1, when a

separate § 11-50-1.1 claim was already pending before the Mobile County Circuit Court, the

Colorado River analysis would have proceeded far differently. The net result of MoCo’s

omission of its intentions in this regard in briefing the Colorado River analysis was that this

Court in ruling on the Motion to Stay was incorrectly led to believe that the issues pending in the

two cases were distinct and that this Court was being asked to decide only issues of federal law,

not unsettled, thorny questions of Alabama statutory interpretation that were already pending

before a state tribunal. If, in fact, the § 11-50-1.1 issue were relevant to the antitrust claims

presented here (the Court finds herein that it is not), then the Court would not embark on a quest

to resolve unsettled questions of Alabama statutory interpretation that are pending in a statecourt action involving these very parties without first taking a long look at the propriety of

abstention, whether on motion by defendant or sua sponte, given the obvious potential for

interference with the state-court proceedings and inconsistent rulings arising from the significant

overlap of legal issues involved.

-17-

Fundamentally, MoCo is mixing apples and oranges. The MAWSS transgression on

which MoCo’s antitrust claims are based is its alleged “tying arrangement,” whereby MAWSS

obliges its sewer customers to purchase MAWSS treated water service as a condition to

receiving MAWSS sewer service, thereby restraining trade, inhibiting competition, and

leveraging its market power with respect to centralized sewer service to increases sales of its

treated water service. This is the “all-or-nothing” policy referenced in the pleadings. The

question, then, for purposes of assessing MAWSS’s entitlement to state action immunity from

antitrust liability is whether the Alabama legislature authorized MAWSS’s all-or-nothing policy

and whether the anticompetitive effects of that policy are reasonably foreseeable. In section

III.A., supra, the Court has already answered this question affirmatively based on review of

MAWSS’s organizing statutes and applicable precedents.

With its § 11-50-1.1 argument, however, MoCo would recast its antitrust claims into

Case 1:07-cv-00357-WS-M Document 92 Filed 07/23/08 Page 17 of 22
21 It is difficult to imagine how the mere duplication of services by competing

service providers in the same geographic area -- which is the very definition of competition in

the marketplace -- could possibly amount to a restraint of trade or other anticompetitive conduct

that might violate the Sherman Act. Even if it could, the point remains that MoCo has not

fashioned its Sherman Act claims on this theory, and cannot rely on sleight of hand in a

summary judgment brief to rewrite those claims now.

22 To be clear, the Court makes no findings and expresses no opinions as to whether

MAWSS’s conduct is violative of § 11-50-1.1. That determination hinges on issues of Alabama

statutory interpretation as well as construction of the Alabama Supreme Court’s limited and

potentially ambiguous guidance in City of Wetumpka v. Central Elmore Water Authority, 703

-18-

something they are not. If MoCo’s § 11-50-1.1 argument is accepted as true, then the Alabama

legislature did not authorize MAWSS to extend its water treatment service network into areas

already covered by MoCo’s water treatment system. If that were correct, then MAWSS’s act of

encroaching on MoCo’s turf would contravene Alabama law, and MoCo would prevail in the

pending state-court action. But that encroachment is not the conduct of which MoCo is

complaining in this case. Here, MoCo has specifically delineated its antitrust claim to be about

MAWSS’s requirement that sewer customers buy its water service, not MAWSS’s presence in

MoCo’s service area. Stated differently, the Sherman Act violation claimed by MoCo is a tying

arrangement, not a duplication of services.21 As long as a clearly articulated state policy allows

MAWSS to condition the sale of sewer service on customers’ agreement to purchase water

service from MAWSS, then state action immunity applies and the Sherman Act claims against

MAWSS must be dismissed. Section 11-50-1.1 has precisely no bearing on whether an Alabama

board of water and sewer commissioners may implement all-or-nothing policies concerning sale

of water and sewer services. Therefore, that section is, quite plainly, irrelevant to the state action

immunity analysis. MoCo’s argument to the contrary unhelpfully muddies the waters, and

serves only to divert attention from the issues that have been properly joined in these

proceedings. MoCo must live with the claims that it has actually joined herein, not some

hypothetical, unpleaded set of claims that might or might not be able to survive Rule 56 scrutiny. 

MAWSS having identified a fatal legal deficiency in (or, more accurately, a valid legal defense

to) MoCo’s antitrust claims in this action, MoCo will not be permitted to morph those claims at

the eleventh hour to remedy the defects and dodge the swing of the summary judgment axe.22

Case 1:07-cv-00357-WS-M Document 92 Filed 07/23/08 Page 18 of 22
So.2d 907 (Ala. 1997). Inasmuch as these questions have not been properly joined in this

lawsuit, whereas they are pending before the Circuit Court of Mobile County in parallel statecourt litigation, this Court will not wade into those murky waters unnecessarily. See generally

Allapattah Services, Inc. v. Exxon Corp., 362 F.3d 739, 755 (11th Cir. 2004) (recognizing that

“questions of state law ... should presumptively be left to state tribunals”); Baggett v. First Nat’l

Bank of Gainesville, 117 F.3d 1342, 1353 (11th Cir. 1997) (citing general proposition that “[s]tate

courts, not federal courts, should be the final arbiters of state law”).

23 Plaintiff admits as much, stating that MoCo “does not dispute any conduct

pursuant to [MAWSS’s organizing statutes] within the city limits of Mobile.” (Doc. 47, at 19.)

24 To take the reasoning one step further, suppose the shoe were on the other foot

and MoCo were attempting to reach into MAWSS’s service territory to provide competing water

services. Under MoCo’s own reasoning, MAWSS would face no Sherman Act liability for its

tying arrangements in that event because MoCo would be infringing on MAWSS’s service

territory (such that MAWSS would not be violating § 11-50-1.1, even though its anticompetitive

behavior would be precisely the same as it is in the facts of this case), rather than the converse. 

Likewise, under MoCo’s theory, MoCo would apparently be protected by immunity from

Sherman Act liability for tying arrangements that it performed anywhere because Ala. Code §

11-50-1.1 does not apply to it. In short, to adopt MoCo’s reasoning would be to draw false,

unprincipled distinctions and yield bizarre, incongruent results in which antitrust liability would

be predicated on mere happenstance and caprice, rather than being rooted in any systematic,

consistent application of federal and state statutory authority. The Court declines to embrace

such a blatantly result-driven rationale.

-19-

Moreover, plaintiff’s reliance on § 11-50-1.1 is misplaced because its result-driven

reasoning would lead to absurd results in an array of circumstances. Tying arrangements are

generally proscribed by the Sherman Act, unless immunity applies. To accept MoCo’s position,

however, would be effectively to declare that MAWSS’s all-or-nothing policy violates the

Sherman Act when it occurs in MoCo’s service territory (because of § 11-50-1.1), but not when

it occurs outside the territory of MoCo or any other rural water authority (where § 11-50-1.1

would not apply).23 So MoCo would have this Court hold that MAWSS is not entitled to

immunity for anticompetitive acts in MoCo’s service territory, even though MoCo’s own

argument shows that MAWSS would be entitled to such immunity for precisely the same

anticompetitive acts performed anywhere else.24 The Court perceives nothing in the Sherman

Act or Alabama’s legislative scheme that would contemplate immunizing MAWSS from

antitrust liability for tying arrangements performed in certain service territories, but not for those

in others.

Case 1:07-cv-00357-WS-M Document 92 Filed 07/23/08 Page 19 of 22
25 Similarly, plaintiff argues elsewhere that § 11-50-1.1 “prohibits competition

initiated by a municipal Water Board (MAWSS) against a rural Water Authority (Mobile County

Water Authority) without the permission of the rural Water Authority.” (Doc. 47, at 6-7.) 

Plaintiff also states that “the legislative intent is to protect [MoCo] from competition of any

sort.” (Id. at 18.)

26 Another way to make the point is as follows: MoCo’s antitrust causes of action in

this lawsuit are rooted in the premise that MAWSS is competing with it unfairly. Unfair

competition is, at some level, the essence of an antitrust violation. Yet, MoCo’s own position is

that the Alabama legislature intended to forbid competition between MAWSS and MoCo

altogether. If the legislature intended there to be no competition between MAWSS and MoCo,

and if an anticompetitive legislative scheme lies at the core of the state action immunity defense,

then the legislature’s clear anticompetitive framework for municipal water and sewer supplies

should immunize MAWSS from liability in antitrust law for anticompetitive acts with respect to

-20-

Finally, far from defeating MAWSS’s state action immunity defense, MoCo’s § 11-50-

1.1 arguments actually strengthen and reinforce defendant’s entitlement to immunity under that

doctrine. As interpreted by MoCo, § 11-50-1.1 is an anticompetitive statute evincing a

legislative intent to curtail or, indeed, eradicate all competition between municipal boards of

water and sewer commissioners, on the one hand, and rural water authorities, on the other. For

example, MoCo insists that “[n]o Alabama Code section more clearly articulates the legislature’s

intent to prevent direct competition (and wasteful duplication of services) between Municipal

Water Boards (like MAWSS) and Rural Water Authorities (like MoCo).” (Doc. 82, at 22.)25

But this argument plays directly into defendant’s hand as to the foreseeability prong of state

action immunity. Recall that a touchstone of state action immunity is that the anticompetitive

effects of the legislature’s authorization be foreseeable. See generally Bankers, 137 F.3d at

1298. By plaintiff’s own admission, the legislative scheme here was established, designed and

intended to “prevent direct competition” in the provision of water and sewer services. Taking

plaintiff’s argument at face value, then, § 11-50-1.1 is a clear articulation of the Alabama

legislature’s intent to enact an anticompetitive system of water and sewer service delivery. Thus,

even if MoCo’s reading of § 11-50-1.1 as a bar on competition between MAWSS and MoCo is

accepted as correct, that construction bolsters the Court’s determination, supra, that the

anticompetitive effects of the legislative scheme at issue in this case were sufficiently

foreseeable to warrant application of state action immunity to MAWSS’s conduct.26 See

Case 1:07-cv-00357-WS-M Document 92 Filed 07/23/08 Page 20 of 22
MoCo. Once again, it is clear that MoCo is attempting to fit a square peg into a round hole by

seeking to hold MAWSS liable in antitrust law for its conduct in this case. The theory simply

does not fit the facts. MoCo may or may not have viable claims for relief under § 11-50-1.1, for

breach of contract, and the like, but those issues are joined in the parallel state-court proceedings

and are not properly before this Court.

-21-

McCallum, 976 F.2d at 654-55 (awarding state action immunity to municipality where state

enactments provide clear implication “that these state policies oppose competition among water

providers within a single territory” and “contemplate anticompetitive effects in general”); Auton,

783 F.2d at 1010-11 (reaching conclusion, based on similar feature of Florida statute, that “the

legislature recognized that municipal public works often require anticompetitive practices,” such

that state action immunity was proper because it was clear that anticompetitive effects logically

would result from this legislative scheme).

For all of the foregoing reasons, it is the determination of this Court that Alabama Code §

11-50-1.1 in no way undermines, alters or defeats defendant’s entitlement to state action

immunity from the federal antitrust claims interposed against it in this action.

C. The State-Law Antitrust Claim.

Having found that MAWSS is entitled to immunity with respect to the Sherman Act

claims, the only remaining question is the fate of MoCo’s state-law claim under Ala. Code § 6-5-

60(a). That section creates a right of action for anyone “injured or damaged by an unlawful

trust, combine or monopoly, or its effect, direct or indirect.” Id.

“The federal law relating to monopolization governs Alabama antitrust actions” brought

under § 6-5-60. McCluney v. Zap Professional Photography, Inc., 663 So.2d 922, 926 (Ala.

1995); see also City of Tuscaloosa v. Harcros Chemicals, Inc., 158 F.3d 548, 555 n.8 (11th Cir.

1998) (“Under Alabama law, federal antitrust law prescribes the terms of unlawful monopolies

and restraints of trade as they should ... be administered in Alabama.”) (citations and internal

quotations omitted); Auton, 783 F.2d at 1010 n.1 (noting that conduct exempt under federal

antitrust law is also exempt under Florida state antitrust provisions). Moreover, it is well

established that, with respect to § 6-5-60(a), “Alabama courts interpret this provision in

accordance with federal antitrust law.” Marshall, 13 F. Supp.2d at 1246 (dismissing § 6-5-60

cause of action where Sherman Act claims had also been dismissed, and for the same reasons);

Case 1:07-cv-00357-WS-M Document 92 Filed 07/23/08 Page 21 of 22
27 Notably, the parties have not argued otherwise, and plaintiff has never suggested

that its § 6-5-60 cause of action can survive summary judgment if its federal antitrust claims do

not. To the contrary, plaintiff concedes that “Alabama state antitrust analysis mimics the Federal

antitrust analysis.” (Doc. 82, at 2 n.3.) There being no discernable distinction between the

federal and state antitrust claims, and the parties having identified none, the dismissal of the

Sherman Act claims will likewise be fatal to plaintiff’s § 6-5-60 cause of action.

-22-

see also Jet 1, 322 B.R. at 197 (observing that where state-law claims are piggybacking on

Sherman Act claims, and where defendants have been found exempt from federal antitrust

claims, they are also exempt from state antitrust claims). In light of the foregoing, the Court’s

determination that MAWSS is entitled to state action immunity as to the federal antitrust claims

applies with equal force to plaintiff’s parallel state-law claims interposed pursuant to § 6-5-60.27

IV. Conclusion.

For all of the foregoing reasons, the Court concludes that principles of state action

immunity bar all of plaintiff’s claims against defendant herein. Accordingly, Defendant’s

Motion for Summary Judgment (doc. 37) is granted, Plaintiff’s Motion for Summary Judgment

(doc. 81) is denied, and the Amended Complaint is dismissed with prejudice. A separate

judgment will enter.

DONE and ORDERED this 23rd day of July, 2008.

s/ WILLIAM H. STEELE 

UNITED STATES DISTRICT JUDGE

Case 1:07-cv-00357-WS-M Document 92 Filed 07/23/08 Page 22 of 22