Hon. Charles N. Clevert, Jr., Chief Judge of the Eastern 

District of Wisconsin, is sitting by designation.

In the

United States Court of Appeals

For the Seventh Circuit

No. 10-2568

ACTIVE DISPOSAL, INC., et al.,

Plaintiffs-Appellants,

v.

CITY OF DARIEN, et al.,

Defendants-Appellees.

Appeal from the United States District Court 

for the Northern District of Illinois, Eastern Division.

No. 09 C 2930—Matthew F. Kennelly, Judge.

ARGUED JANUARY 7, 2011—DECIDED MARCH 14, 2011

Before MANION and WILLIAMS, Circuit Judges, and

CLEVERT, District Judge. 

MANION, Circuit Judge. Plaintiffs sued several municipalities claiming the municipalities’ exclusive contracts

for trash disposal violate federal antitrust law. The

district court held that the contracts fell within the
2 No. 10-2568

state-action exception to antitrust law and dismissed

the complaint. The state-action doctrine allows municipalities to engage in conduct that would otherwise

violate antitrust law when the conduct is authorized by

the state under a policy to displace competition. Plaintiffs appeal. Because the state-action doctrine applies to

the municipalities’ contracts for trash disposal, we affirm.

I.

In some communities across Illinois, when a person or

business needs a dumpster for a spring cleaning or for

bigger construction jobs, they can’t just open the Yellow

Pages and find the best deal. Instead, they have to use a

specific company with which the municipality has an

exclusive contract. While these contracts often have a

financial benefit for the municipality, they also impose a cost on consumers who would prefer a different,

probably less expensive, trash hauler. The contracts

also prevent other trash haulers from competing in

these markets. Plaintiffs are made up of two groups:

trash haulers who want to compete for business, and

businesses that wish to hire a cheaper trash hauler. In

this case, their interest is limited to the removal of waste

that is placed in large roll-off dumpsters. With their

aligned interests, plaintiffs sued the defendant municipalities, claiming that their exclusive contracts run afoul

of federal antitrust law.

The municipalities moved to dismiss the complaint,

arguing that exclusive contracts for waste removal

are permissible under the state-action doctrine, which
No. 10-2568 3

For much of the opinion, we cite to one part of the Illinois 1

statutes, specifically 65 ILCS 5/11-19-1, et seq. Further references will cite to each part with the Act as § 1 and so forth.

exempts states from federal antitrust law. Parker v. Brown,

317 U.S. 341, 350-51 (1943). The doctrine stems from the

fact that the Sherman Antitrust Act, 15 U.S.C. §§ 1,

et seq., does not apply to sovereign entities. Over the

years, the doctrine has been logically extended

to shield municipalities from antitrust law when

the municipality’s actions are “authorized by the State

pursuant to state policy to displace competition with

regulation or monopoly public service.” Town of Hallie

v. City of Eau Clair, 471 U.S. 34, 39 (1985) (quotation omitted); LaSalle Nat. Bank v. DuPage County, 777 F.2d 377, 380-

81 (7th Cir. 1985).

Here, the parties’ dispute centers on whether Illinois

has given its municipalities the authority to contract for

the collection and disposition of waste. Illinois has an

entire Act devoted to the powers of its municipalities,

including their authority over waste. Among the provisions, one is titled “Contracts”; it empowers municipalities to make contracts “relating to the collection and

final disposition, . . . of garbage, refuse and ashes.” 65

ILCS 5/11-19-1(a). The municipalities argued and the 1

district court found that this statute authorizes the challenged contracts and that anti-competitive consequences

are the natural and foreseeable result of such a contract.

Thus, the district court held that the state-action doctrine

applied and dismissed plaintiffs’ complaint. They appeal.
4 No. 10-2568

II.

We review the granting of a motion to dismiss de novo

and affirm if the complaint does not include facts that

state a plausible claim for relief. Justice v. Town of Cicero,

577 F.3d 768, 771 (7th Cir. 2009). Our analysis rests on

the complaint, and we construe it in the light most favorable to the plaintiffs, accepting as true all well-pleaded

facts alleged and drawing all permissible inferences in

their favor. Id.

A.

On appeal, plaintiffs argue that the municipalities’

power to make “exclusive” contracts for waste removal

arises not as the district court found under § 1, but under

§ 5. Section 5 is titled “Method of Disposition”; it gives

municipalities the authority to prescribe an exclusive

method for disposing of trash and lists several acceptable

methods, including dumping it in a landfill. Pertinent

here, it provides that such a method can be enacted

despite the effect it has on competition, and it states

that “[m]aterial that is intended or collected to be

recycled is not garbage, refuse or ashes.” 65 ILCS 5/11-19-5.

Plaintiffs argue that since § 5 states that the method may

be “exclusive” and that competition will be displaced,

the municipalities’ authority to enter into exclusive contracts comes from § 5, and not § 1. And since § 5 is

limited to disposing of garbage, refuse, and ashes, the

municipality does not have the power to make contracts concerning recyclables, because “[m]aterial that is

intended or collected to be recycled is not garbage,

refuse, or ashes.” Id.
No. 10-2568 5

To address plaintiffs’ argument, the first issue is

which section authorizes municipalities to create exclusive contracts for the collection and disposition of

waste. Looking at the text of § 5, it does not appear that

it gives municipalities the power to contract. For one,

the text of § 5 does not deal with contracts. It deals with

the power to prescribe exclusive methods of disposing

of garbage:

Any municipality may provide by ordinance that

such method or methods shall be the exclusive

method or methods for the disposition of garbage,

refuse and ashes to be allowed within that municipality.

65 ILCS 5/11-19-5. The term “exclusive” in that sentence

does not refer to contracts or dealings, but to the method

of disposal. Moreover, while a statute’s title does not

define its meaning, it is relevant. United States v. Chemtco,

274 F.3d 1154, 1159 (7th Cir. 2001). And here, § 5’s text

accords with its title: “Method of Disposition.”

Similarly, the title of § 1 “Contracts” mirrors its text,

which grants municipalities the power to make

contracts for the collection and disposition of garbage,

refuse, and ashes. In fact, § 1 is the only part of the entire

Act that mentions contracts. The fact that § 1 does not use

the term “exclusive” is irrelevant to whether it gives

municipalities the authority to enter into an exclusive

contract—after all an exclusive contract is merely a

subset of the power to contract. Moreover, this reading

is buttressed by the fact that for thirty-five years Illinois

courts have read § 1 as providing municipalities the
6 No. 10-2568

authority to form contracts. E.g., Urban Products International, Ltd. v. National Disposal Service, 336 N.E.2d 138,

143 (Ill Ct. App. 1975) (citing 11-19-1); City of Decatur v.

Waste Hauling, Inc., 509 N.E.2d 716, 719 (Ill. Ct. App.

1987) (citing 11-19-1). In contrast, plaintiffs have not cited

to a single Illinois case that suggests the power to make

these sorts of contracts falls under § 5. Thus, we are

satisfied that the municipalities’ authority to enter into

these contracts comes from § 1.

Plaintiffs’ other argument is that whatever authority

municipalities have to make contracts under § 1, it does

not include the power to make exclusive contracts

when recyclables are involved. Plaintiffs claim that

recyclables are being placed in the roll-off dumpsters;

therefore, the municipalities cannot make exclusive

contracts for the roll-offs’ removal. Again, their argument hangs on § 5. They argue that under the canon

of statutory construction in pari materia, the broad grant

of power in § 1 to contract for the collection or final

disposition of “garbage, refuse and ashes” is circumscribed by the language in § 5 that “[m]aterial that is

intended or collected to be recycled is not garbage,

refuse or ashes.” 65 ILCS 5/11-19-5. That canon of interpretation simply means that we interpret statutes

dealing with the same subject (here, trash) “with reference to one another to give them harmonious effect.”

People v. McCarty, 858 N.E.2d 15, 31 (Ill. 2006).

Reading the language in § 5 the way plaintiffs urge

does not create a harmonious effect within the Act’s subsections; instead, it presents an uncertain and confused
No. 10-2568 7

Plaintiffs have not alleged in the complaint, or argued here 2

or below, that the municipalities have made contracts for the

removal of waste that is exempted under § 2 and thus

beyond the municipalities’ power to contract. And our opinion

in no way speaks to such contracts.

statutory scheme. After authorizing municipalities to

enter into contracts for the disposal of “garbage, refuse,

and ashes” in § 1, the legislature defined each of these

terms in § 2, which is titled “Definitions.” Under plaintiffs’ theory, the language in § 5 would redefine those

definitions by excluding recyclables from the definition

of “garbage, refuse, and ashes.” When the Illinois legislature intended to exclude a waste product from “garbage,

refuse, and ashes,” it expressly stated that exemption

in § 2’s definitions. Specifically, after defining refuse, the

legislature expressly stated: 

but refuse does not mean earth and wastes from

building operations, nor shall it include solid

wastes resulting from industrial processes and manufacturing operations such as food processing wastes,

boiler-house cinders, lumber, scraps and shavings.2

Had Illinois intended to also exempt recyclables from

the definition of “garbage, refuse, and ashes,” it could

have easily done so in the definitions section. Yet it

did not, and this negates plaintiffs’ argument that § 5

modifies § 2’s definition and the power granted municipalities in § 1. See United States v. Davis, 471 F.3d 783,

787 (7th Cir. 2006) (noting the legislature has made it

clear that if it wants to make a specific point in the

law, it knows how to).
8 No. 10-2568

Not only does that cut against plaintiffs’ argument, but

also reading the statutes the way plaintiffs urge would

render some of the language in § 2 superfluous. Refuse

includes such items as “paper,” “cartons,” “boxes,”

“metals,” “tin cans,” “metal furniture,” and “glass.” Id.

All of these things are what we would commonly think

of as “recyclables,” but they are clearly considered

refuse under § 2. Thus, plaintiffs’ reading would either

lead to confusion about what constitutes refuse or it

would render superfluous the delineation of “paper,”

“glass,” and other such items in the definition of refuse.

Connecticut Nat. Bank v. Germain, 503 U.S. 249, 253 (1992)

(“[C]ourts should disfavor interpretations of statutes

that render language superfluous.”).

Moreover, the statutory scheme makes sense when the

line “[m]aterial that is intended or collected to be

recycled is not garbage, refuse or ashes” is read in

context of § 5. Municipalities can enact ordinances

that provide for exclusive methods for disposing of

garbage, refuse, and ashes. For example, they can require

that it only be put in a landfill or incinerated. The same

cannot be done with recyclables. They are different. Once

certain categories of disposables are designated as

recyclables, they are not meant to be put into landfills, and

under § 5 a municipality does not have the power to

prescribe an exclusive means for disposing of them.

Rather, Illinois has a complex system under the Illinois

Environmental Protection Agency that deals with recy-
No. 10-2568 9

The precise interplay between the Act and the statutes 3

governing the Environmental Protection Agency and its

authority over municipalities is beyond the questions

presented here, and nothing in our opinion should be read to

express an opinion on it. The issue has not been briefed.

cling. See 415 ILCS 15/1, et seq. (West Supp. 2010); Id. 20/1,

3

et seq. (West Supp. 2010). Given the subject matter of § 5

and the broad authority of Illinois’s Environmental Protection Agency over recycling programs, the line

“[m]aterial that is intended or collected to be recycled

is not garbage, refuse or ashes” makes sense in the

context of § 5. Dolan v. Postal Ser., 546 U.S. 481, 486 (2006)

(“Interpretation of a word or phrase depends upon

reading the whole statutory text, considering the purpose and context of the statute.”).

In sum, transposing the language from § 5 to the rest

of the Act does not alleviate ambiguity; instead, it would

either render certain language superfluous or create

anomalies and unexplained distinctions in the way

refuse is defined. In contrast, reading the language

“[m]aterial that is intended or collected to be recycled

is not garbage, refuse or ashes” within the context of the

§ 5—and confined to § 5—Illinois’s statutory scheme

remains clear. Thus, we reject plaintiffs’ argument that

the language in § 5 should be read to modify the rest of

the Act.
10 No. 10-2568

B.

The next issue is whether the state-action doctrine

shields the municipalities from antitrust law when they

create monopolies for the collection and disposition of

garbage, refuse, and ashes under § 1. We look to the

statute and ask two questions: first, whether it

authorizes the challenged conduct; second, whether the

anti-competitive effects are a foreseeable result of the

authorization. LaSalle Nat. Bank, 777 F.2d at 381. If the

answers to both questions are yes, then the state

intended the municipalities’ “action to be immune from

antitrust challenge.” Unity Ventures v. Cty. of Lake, 841

F.2d 770, 777 (7th Cir. 1988).

Section 1 authorizes municipalities to contract for the

collection and disposition of garbage, refuse, and ashes.

The remaining question is whether the state authorized

these contracts under a policy “ ‘to displace competition

with regulation or monopoly public service.’ ” Town of

Hallie, 471 U.S. at 39 (quoting Lafayette v. La. Power & Light

Co., 435 U.S. 389, 413 (1978)). In this context, legislatures

aren’t required to articulate how competition will

be displaced. Id. at 42-43. All that matters is whether

“the anti-competitive effects would logically result

from the authority to regulate.” Campbell v. City of Chicago,

823 F.2d 1182, 1184 (7th Cir. 1987).

Waste and its regulation, like sewer services, remain

a traditional area of local concern. Consumers Co. v. City

of Chicago, 313 Ill. 408, 413-14 (1924). Often municipalities

use a single hauler for the collection of trash. Id. at

413. In the context of municipal powers, it is generally

understood that the authority to contract contemplates
No. 10-2568 11

the power to create exclusive contracts. Southern Disposal, Inc. v. Tex. Waste Mgmt., 161 F.3d 1259, 1263 (10th Cir.

1998) (noting “although the enabling statute does not

explicitly authorize exclusive contracts, such agreements are ‘a foreseeable result’ of the general statutory

authorization to contract”); LaSalle Nat. Bank, 777 F.2d at

381-82 (finding the statute authorized exclusive contracts when it provided that the counties “may enter into

and perform contracts . . . with any municipal[ity]”). Thus,

when the legislature provides that municipalities may

contract for the collection and disposition of trash,

those contracts will often be exclusive, a monopoly will

be created, and anti-competitive effects will necessarily

follow. See Springs Ambulance Serv., Inc. v. City of Rancho,

745 F.2d 1270, 1273 (9th Cir. 1984); Tal v. Hogan, 453

F.3d 1244, 1259 (10th Cir. 2006) (authority to make contracts has foreseeable anti-competitive effect). Therefore, we hold that the anti-competitive effects are a foreseeable result of Illinois’s authorization for municipalities to make contracts for the collection and disposition

of garbage, refuse, and ashes. Accordingly, the stateaction doctrine applies.

III.

In sum, we reject plaintiffs’ arguments that § 5 controls

the Illinois municipalities’ power to contract for the

collection and disposition of garbage, refuse, and ashes.

We also reject plaintiffs’ argument that the same section

circumscribes the definitions of “garbage, refuse,

and ashes” as those terms are used in § 1 and § 2.
12 No. 10-2568

Further, we find that the state-action doctrine applies to

the municipalities’ power to make exclusive contracts

for the collection and disposition of garbage, refuse, and

ashes. Therefore, the judgment of the district court

is AFFIRMED.

3-14-11