Document: 35 L.Ed.2d 359 93 S.Ct. 1022 410 U.S. 366 OTTER TAIL POWER COMPANY, Appellant,v.UNITED STATES. No. 71—991. Argued Dec. 5, 1972. Decided Feb. 22, 1973. Rehearing Denied Mar. 26, See 411 910, 1523. Syllabus In this Sherman Act suit, brought byb the Government, District Court enjoined as violative of § 2 following practices in which appellant, Otter Tail Power Co. (Otter Tail), engaged to prevent towns from establishing their own power systems when Tail's retail franchises expired: refusals wholesale municipal or transfer ('wheel') it over facilities other sources, litigation intended delay establishment systems, and invocation transmission contract provisions forestall supplying by companies. Held: 1. is not insulated antitrust regulation reason Federal Act, whose legislative history manifests no purpose make laws inapplicable The essential thrust authority Commission (FPC) encourage voluntary interconnections. Though FPC may order interconnections if 'necessary appropriate public interest' considerations, though relevant under that standard, are determinative. Pp. 372—375. 2. Court's decree does conflict with regulatory responsibilities FPC. 375—377. (a) court's for wheeling correct anticompetitive monopolistic counter FPC, lacks impose such a requirement. 375—376. (b) Appellant's argument overrides FPC's premature, there being present between any contrary ruling 376—377. 3. record supports findings Tail—Solely eroding its position—refused sell at wheel, same end invoked restrictive contracts Bureau Reclamation suppliers, court correctly concluding provisions, per se, violated Act. 377—379. 4. should determine on remand whether was found have instituted maintaining position 'a mere sham' within meaning Eastern Railroad Conference v. Noerr Motor Freight, 365 127, 81 523, 5 464, so would lose constitutional protection line decision California Transport Trucking Unlimited, 404 508, 92 609, 30 642, decided after had entered decree. 379 380. 5. retention jurisdiction afford parties relief' provides an adequate safeguard against possibility compulsory might threaten ability adequately serve public. 380—382. 331 F.Supp. 54, affirmed part vacated remanded part. Milton Handler, New York City, appellant. Lawrence G. Wallace, Washington, D.C., appellee. Mr. Justice DOUGLAS delivered opinion Court. 1 civil suit appellee electric utility company, attempted monopolize monopolized distribution service area violation 26 Stat. 209, amended 15 U.S.C. communities franchise expired replacing system. principal means employed were (1) proposed where been retailing power; (2) 'wheel' say, direct displacement one another intermediate utility; (3) institution support designed those systems; (4) several suppliers denying access systems. sells 465 Minnesota, North Dakta, South Dakota. enjoins refusing existing areas serviced Tail, wheel lines supplier area, entering into enforcing prohibits use limits customers whom company power. 3 also instituting, supporting, engaging litigation, directly indirectly, municipalities officials who voted establish delaying, preventing, interfering 54. took appeal Expediting amended, 62 989, 29; we noted probable jurisdiction, 406 944, 2039, 32 330. 4 distributes retail, operates municipally granted granchises limited 10 20 years. Each town generally can accommodate only system, making each natural monopoly market sale retail. aggregate geographic competes right retail.1 That competition entire composite town, prospective These number 510 serves 91%, 465. policy acquire, can, areas. It has acquired six since 1947. Between 1945 1970, contests 12 served proposals replace three—Elbow Lake, Colman, Dakota, Aurora, Dakota—were actually established. Proposed great obstacles; they must purchase wholesale. To do lines. ones available2 belong Tail. While high-voltage bulk-power supply operate subtransmission network, but relies utilities deliver bulk customers.3 6 charge involve lawfulness outlets, methods preventing expired. critical events centered largely four towns—Elbow Hankinson, When these terminated, citizens refused new energy agree energy. 7 Colman Aurora transmission. Against them, used weapon litigation. 8 As respects Elbow Lake simply deal, although according so. cut off all sources power, constructed generating plant. Both Hankinson requested various cooperatives furnish them willing it. But refused, relying barred completing plant asked Commission, 202(b) 49 848, 16 824a(b), require interconnect ordered first temporary4 then permanent connection.5 tried unsuccessfully get relief Dakota filed complaint federal commission seeking compel wheel. application pending, council withdraw subsequently renewed franchise. 9 sponsored involving effect halting delaying efforts Municipal financed revenue bonds. Before bonds be sold, town's attorney submit includes statement pending threatened impair value legality amply bears out holding halted appreciably slowed ownership. 'The thus occasioned large financial burden imposed towns' treasury dampened local enthusiasm ownership.' 62. * contends subject respect refusal deal. We disagree position. 11 'Repeals implication statute strongly disfavored, cases plain repugnancy provisions.' United States Philadelphia National Bank, 374 321, 350—351, 83 1715, 1734—1735, 915. Silver Stock Exchange, 373 341, 357 361, 1246, 1257—1259, 389. Activities come agency nevertheless scrutiny laws. 369 482, 489, 82 901, 906, held approval acquisition assets gas pursuant Natural Gas 'would bar (an) suit.' Under 7, standard approving acquisitions 'public convenience necessity.' Although impact Commission's determination, 'no 'pervasive scheme' including ha(d) entrusted Commission.' Id., 485, S.Ct., 904. Similarly, Radio Corporation America, 358 334, 79 457, 354, exchange radio stations approved Communications attack proceeding. 13 determined consistent constituted illegal monopolization. maintains here deal immune prosecution because involuntary 202, however, S.Rep.No.621, 74th Cong., 1st Sess., 19—20, 48—49; H.R.Rep.No.1318, 8. Only refuses voluntarily limitations unrelated interconnection. governs action interest.' considerations relevant, 14 There nothing reveals insulate companies operation contrary, Part II indicates overriding maximum extent possible interest. originally conceived, included 'common carrier' provision 'the duty every . transmit person upon reasonable request .' addition, empowered desirable H.R. 5423, Sess.; S. 1725, Sess. eliminated preserve utilities.' 19. clear, then, Congress rejected pervasive scheme controlling interstate favor commercial relationships. relationships governed instance business judgment coercion, courts hesitant conclude override fundamental national policies embodied supra, 351, 467. This particularly true Congress, passing Public Utility Holding Company concerned 'restraint free independent competition' among 79a(b)(2). Thus, basis substitute for, immunize from, corporations. 17 '(r)efusing cities located (its area)' towns. goes provide: 18 defendant shall compelled Judgment case municipality except rates compensatory terms conditions 19 So far concerned, it, bills introduced contained common carrier deleted.6 passed interconnection set forth 202(b).7 original bill left 'voluntary coordination facilities.'8 Insofar Commission. ordering interconnections, record. applied and, said, obtained Court, presents actual judicial concerning pre-emption concerns instances arise future, continues hostile attitude conduct 'existing systems.' open retains appropriate' carry 'for modification contemplates future disputes governing will perusal. time enough consider remedy as, if, denies undertakes At present, potential conflict, concrete controversy III 21 makes abundantly clear foreclose gain competitive advantage, destory competitor, Griffith, 334 100, 107, 68 941, 945—946, L.Ed. 1236. strategic dominance most area' entrants obtaining outside supply. F.Supp., 60. Use 'to destroy 'attempt monopolize' clause Lorain Journal States, 342 143, 154, 72 181, 186—187, 96 162; Eastman Kodak Southern Photo Materials Co., 273 359, 375, 47 400, 404, 71 684. agreements compete, aim preserving extending monopoly. Schine Chain Theatres 110, 119, 947, 952—953, 1245. Associated Press 326 1, 65 1416, 89 2013, cooperative news association bylaws permitted member newspapers competitors joining association. practice even transgressor 'had yet achieved complete monopoly.' 13, 1421. 22 community decides renew expires, generate, transmit, distribute recently described difficulties problems isolated Gainesville Utilities Florida Corp., 402 515, 517—520, 91 1592, 1594—1595, 29 74. Interconnection frequently solution. 519 n. 3, 1594—1595. what did. engineering factors prevented selling wanted plants found—and supported—that solely 23 says relieve made. 'in reality, territorial allocation schemes,' 63, se violations citing Northern Pacific R. 356 78 514, 545. Like covenants 'deny defendant's fenced-off defendant.' 12, 521. re-emphasized vice restrictions competitors. Topco Associates, 405 596, 608, 1126, 1133, 31 515. fact some material our problem Solicitor General says, 'government contracting officers grant immunity Act.' Such stand footing valid not, depending statutory framework operates. tells us 'hindrance' 'agreed insistence,' found. evidence finding. IV 24 'with expectation predominant area.'9 discussing Presidents explained applicable 'only aimed influencing executive branches government.' Ibid. written before 513, 613, principle apply administrative processes suppress evidenced repetitive lawsuits carrying hallmark insubstantial claims 'mere exception announced Noerr. U.S., 144, 533. On phase order, vacate consideration light intervening V 25 argues that, without weapons used, more turn go downhill. familiar one. made Arnold, Schwinn & 388 365, 87 1856, 1249, dealing program bicycle manufacturer. said: promotion self-interest alone invoke rule otherwise conduct.' 1863. properly said assumes enterprise protect itself loss operating superior service, lower costs, improved efficiency. theory collided sought enticompetitive uses dominant economic power.10 27 three opposed finally got excuse conduct. condone tactics impose. Moreover, repeated FTC Lead 352 419, 431, 77 502, 510, 438, 'those caught violating expect fencing in.' proclivity predatory always fashioning Crescent Amusement 323 173, 190, 254, 262—263, 160. 28 suggest, laws, impervious assertion erode integrated system capacity dissent notes, (the utility's) render customers.' 824a(b). 'pessimistic view' advanced 'erosion study' 'is supported record.' Furthermore, concluded 'it appear serious threat nor foreseeable future.' Since connections event retained enable presumably give cannot say circumstances abused discretion. Except discussed opinion, affirmed. Affirmed. BLACKMUN POWELL case. STEWART, THE CHIEF JUSTICE REHNQUIST join, concurring dissenting 33 I join sets aside remands appellant's activities 642. rest respectfully dissent. 34 followed misapplication highly regulated, natural-monopoly industry wholly different given rise ordinary principles. my view, through perform services entailing violation. undisputed either both formerly elected owned substantial 'strategic dominance' area.1 58—60. mechanically formula: possessed acted guilty Nowhere did grips significance specific apparatus established moved enact Yet seems me central disposition 36 considering became 1935, report Policy Committee Public-Utility Companies. chiefly patterns ownership evils concentrated addressed reflected unnecessary concentration while recognizing 'natural monopoly' aspects, concomitant efficiencies, generation stated 37 '(w)hile electricity tolerated avoid duplication plants, justification extension idea embrace control, few powerful interests, scattered many totally unconnected operation.' 55 (emphasis added). 38 resulting room development economies scale, single operations. One mandates assure 'an abundant throughout greatest economy regard proper utilization conservation resources,' 824a. face monopolies similar scale forced address very raised case—use another. obvious solution obligations owning capable electricity. bill. section provided that: 39 'It to, with, therefor ..' 213. Another 40 'Whenever notice opportunity hearing, finds necessary interest, additions, extensions, repairs, improvements changes facilities, physical connection persons, permit utilize of, persons.'2 41 Had enacted, clearly available latter equally obligation provide request. Yet, debate,3 declined follow path. Senate 202 enacted: 42 committee confident enlightened lead cooperate bringing about secured planned long advocated able progressive thinkers subject. 43 'When action, subsection gives inter-state connect State act.' 49. 44 history, especially viewed subsequent congressional area,4 allow decide themselves see fit. freedom qualified (but wheeling) certain circumstances. exercise regulated function. entail 'undue burden' utility. Commmission 45 enlargement purposes, 46 found, vertically company. business—some 90% income—derives sales Left customers, entirely predictable decline previously done If leave decisions absence requirement course promise foreseeably zone specifically created scheme.5 retailer asserted legitimate interest keeping lend hand demise cheaper consumers itself. emphasizes actions simple deal—they resulted maintenance control hindering emergence cites 162, proposition '(u)se defective. dealt neither congressionally predicated existence monopolies. Journal, newspaper Lorain, Ohio, discourage advertisers supporting nearby station seen competitor. communications foreclosed newspaper's Here, contrast, sure result way. receive level, supplier. private rates—by state bodies Commission—is inevitability requires price take place competition. Antitrust principles industries blindly unilateral regime rate licensed 48 scoffs defense justification. cited '(t)he self-inerest facet reasoning escapes us, health abundance devising scheme. above, prohibited imposing requirements unduly burdensome interfere utility's efficiently. offered 'so-called study" documenting way suffer gave little credence report's predictions. 'But regardless,' went on, 'even losing justify law.' 64—65. question-begging disregard odds specifying required. paramount instances,6 exempt immunity, cf. Hughes Tool Trans World Airlines, 409 363, 647, 577, exemptions lightly implied, sweeping exemption warranted, pervasively industries, doctrine 'primary jurisdiction.'7 Cf. Corp. 346—352, 464—468, 354. Far East 570, 492, 576; Terminal Warehouse Pennsylvania 297 500, 56 546, 80 827; Navigation Cunard S.S. 284 474, 52 247, 76 408; Keogh Chicago N.W.R. 260 156, 47, 67 183; Texas Abilene Cotton Oil 204 426, 350, 51 553; Carnation Westbound Conference, 383 213, 86 781, 709. Our attempting reconcile facts regarding 'character objectives' 'are incompatible action.' 358, 1257, 'Repeal (of laws) regarded implied (Act) work, minimum necessary.' 357, 1257. 50 With nonretail services, think horizontal conspiracy, teaching jurisdiction' leaving governmental instead invariably less sensitive expert process believe declining like entrusting 'assuring States' 'sporadic courts' 'work mischief.' 466—467.8 Even assuming colorably reach square recent Ricci Mercantile 289, 573, 525. two concurrent proceedings—one Ricci, related identical traditional jurisdiction,' defer proceeding progress. Surely least responsibility Commodity Exchange implementation membership markets. 310—311, 584 (Marshall, J., dissenting). wholesaling satisfy criteria enunciated deferral agency: complained statute, laws; 'some facets dispute' 'within agency; 'that adjudication dispute promises aid resolving question.' 302, 580. last criteria, useful contrast cursory treatment business-justification today interconnection: 53 '(W)e Examiner's view ill-advised excursion business.' Given Lake's effort rewards expected; indeed, year operations, during perpetuated charged loss. Unlike earlier doubtful reliability, presence now. .. steps insure high invite improvident ventures elsewhere. 54 'We share legitimately erosion route, having miscalculated results, could rescued overly-generous terms, fears seriatim, seem supported. mean accept captive concept, however. (statutory) well require, here, system.' F.P.C. 675, 677—678. attempts sidestep noting vaguely suggest cope conflicts arises. basic easily wished away. Defendant.'9 injunction 'compensatory' 'terms setting rates, conditions, 202(b), plainly ignores warranted criteria. Unless modified, starkly explicit mandate 57 donduct improperly pre-empted reverse us. supplies excluded compete other. Of 615 remaining 105 rural cooperatives. Rural Electrification 1936, 1365, 904, borrowing funds already receiving service. For reasons, market. Subtransmission lines, voltages 34.5 kv 69 moving points distribution. two-thirds 41.6 low-voltage utilities. significantly subtransmission. 1262, aff'd, 429 F.2d 232 (CA8), cert. denied, 401 923, 230. 675. F.P.C., 679. Section provides: energy, affected (if undue placed thereby) persons persons: Provided, customers. prescribe arrangement apportionment cost compensation reimbursement reasonably due them.' 6, After 'pendency marketing system,' 62, find: 'Most carried highest appellate unsuccessful merits, halting, slowing, instances, offers absorb costs expenses, enhance quality years abortive effort, accepted type offer franchise.' 678: broader than particular legal responsibility, Supreme Water 343 414 (72 843, 1042) (1952), States,' company's lack deter it.' looked measured Computed way, 91% 59. appellant out, vary size 29,000 inhabitants. sales, 28.9% sold area. important note geographical unit individual municipality. Viewed whichever counterparts Hearings 1725 Interstate Commerce, (1935); 5423 House Foreign (1935). See, e.g., 350 2101, 88th providing 'Any certificate issued authorizing condition required applicant's energy.' re-introduced 1472 2072 89th Session, failed pass. 2140 7791, reintroduced 90th 12322, proposing Electric Reliability wheeling. 91st again introduced. wheeling, see, 1071, bill, 12585, broad networks rates. 92d 294 605. 12585 reintroduced, 6972, Still regional corporations unless 'permit(s) excess corporation load centers corporation.' 2324, 9970, 103(c)(1)(B). None enacted. persuaded schemes.' 63. finding erroneous. Territorial arrangements run afoul traditionally horizontal, involved elimination enterprises similarly situated 515; Timken Roller Bearing 341 593, 971, 95 1199; White 372 253, 261—264, 696, 700—703, 738. vertical, relationship. exact alternative means. Hence, how territorial-allocation schemes. demanded former combined retailers undertaken mutual non-competition agreements, example, order) 678. orders powers times war emergency. 824a(c). normally file schedules assessing 824d. concludes 'unjust, unreasonable, discriminatory preferential,' determines 'just 824e(a). regulates into. comprehensive bank mergers insufficient oust 915, broadcasters, displace Nevertheless, considerable allowed persuades repugnant features reason, political so-called 'sham' constitute genuine agreement supra. Were impermissible me, dispositive. situation presented R.C.A., brief disavowing functions id., 18, 466—467, taken unusual step filing amicus curiae lawsuit progressing An requiring long-term September 1971—just days judgment. reads interconnection, 824a, exclusive matters unreported.

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