Opinion ID: 1732316
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Heading: Exemption of Section 553.6(4).

Text: Iowa's competition law includes certain exemptions, including one for activities or arrangements expressly approved or regulated by any regulatory body or officer acting under authority of this state or of the United States. Iowa Code § 553.6(4). This exemption parallels the state action exclusion from the Sherman Act, first recognized by the Supreme Court in Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943). Parker held that a state marketing program, which prevented a raisin producer from marketing his crop in interstate commerce, was exempt from antitrust attack because it constituted state action: We find nothing in the Sherman Act or in its history which suggests that its purpose was to restrain a state or its officers or agents from activities directed by its legislature. In a dual system of government in which, under the Constitution, the states are sovereign, save only as Congress may constitutionally subtract from their authority, an unexpressed purpose to nullify a state's control over its officers and agents is not lightly to be attributed to Congress. Id. at 350-51, 63 S.Ct. at 313, 87 L.Ed. at 326. The defendants argue that their regulation of ambulance service is under authority of this state and therefore qualifies for exemption under section 553.6(4). The city's authority for such activities is granted by the state, they submit, through the Home Rule Amendment: Municipal corporations are granted home rule power and authority, not inconsistent with the laws of the General Assembly, to determine their local affairs and government.... Iowa Const. amend. 2 (1968). The Parker exclusion for state action is based on the principle of federalism and a general deference to actions by a sovereign state. See Parker at 351-52, 63 S.Ct. at 313-14, 87 L.Ed. at 326; Goldfarb v. Virginia, 421 U.S. 773, 790, 95 S.Ct. 2004, 2015, 44 L.Ed.2d 572, 587 (1975); Bates v. State Bar of Arizona, 433 U.S. 350, 362, 97 S.Ct. 2691, 2698, 53 L.Ed.2d 810, 822 (1977); Lafayette v. Louisiana Power & Light Co., 435 U.S. 389, 400, 98 S.Ct. 1123, 1130, 55 L.Ed.2d 364, 374-75 (1978); California Dealers v. Midcal Aluminum, 445 U.S. 97, 103, 100 S.Ct. 937, 942, 63 L.Ed.2d 233, 242 (1980). In contrast, the Iowa exemption rests solely on section 553.6(4); the concept of federalism cannot be extended by analogy to the state-city relationship. A city is not a sovereign for such purposes. See Community Communications Co. v. City of Boulder, ___ U.S. ____, ____, 102 S.Ct. 835, 840, 70 L.Ed.2d 810, 820 (1982). Despite the different rationale of the federal and state exemptions, however, we believe the similarity of language of the Parker exemption and section 553.6(4), as well as the legislatively expressed desire for uniformity, Iowa Code section 553.2, require us to give federal cases interpreting the Parker exemption considerable weight. The test for exclusion under the federal act is whether the restraint on trade is (1) clearly articulated and affirmatively expressed as state policy and (2) actively supervised by the state itself. Midcal, 445 U.S. at 105, 100 S.Ct. at 943, 63 L.Ed.2d at 243. See also Community Communications, ___ U.S. at ____, 102 S.Ct. at 840, 70 L.Ed.2d at 810. The general rule is that exemptions from coverage of competition laws are to be narrowly applied. See, e.g., Group Life and Health Insurance Co. v. Royal Drug Co., 440 U.S. 205, 232, 99 S.Ct. 1067, 1083, 59 L.Ed.2d 261, 280 (1979); United States v. National Association of Securities Dealers, Inc., 422 U.S. 694, 719-20, 95 S.Ct. 2427, 2443, 45 L.Ed.2d 486, 504-05 (1975). Community Communications examined whether a home-rule municipality, which enacted an ordinance prohibiting a permitee from expanding its cable television business for three months in order to encourage potential competitors to enter the market, was exempt from antitrust liability under Parker. Despite Colorado's broad grant of home rule authority, [1] the Supreme Court rejected the argument that this authority was a sufficient state involvement in the acts of trade restraint to cloak the city with its state action immunity. The Court in Community Communications held that the monopolistic activities were not clearly articulated and affirmatively expressed policy of the state; it had merely permitted them under home rule. [P]lainly the requirement of clear articulation and affirmative expression is not satisfied when the state's position is one of mere neutrality respecting the municipal actions challenged as anticompetitive. A state that allows its municipalities to do as they please can hardly be said to have contemplated the specific anticompetitive actions for which municipal liability is sought. Nor can these actions be truly described as comprehended within the powers granted, since the term, granted, necessarily implies an affirmative addressing of the subject by the state. The state did not do so here.... Id. at ____, 102 S.Ct. at 843, 70 L.Ed.2d at 821. Accordingly, the Court held the Parker exemption was inapplicable. Community Communications was decided by the Supreme Court after the district court's conclusions of law were filed in this case. The court, therefore, did not have the guidance of that opinion. We believe the reasoning of Community Communications requires us to reject the defendants' argument that section 553.6(4) exempts their action from liability. Although they refer to legislation which shows a similar intent to regulate and control health care services based upon criterion other than `classic marketplace forces,' Iowa Code section 135.61 (establishing the health care facilities council), the intent underlying this legislation does not amount to a clearly articulated and affirmatively expressed state policy favoring a city's monopoly of ambulance services, nor were the city's actions expressly approved or regulated by ... this state as required by section 553.6(4). Rather, as stated in Community Communications, the state's position is one of mere neutrality. The district court erred in concluding the exemption of section 553.6(4) applied. REVERSED AND REMANDED.