Opinion ID: 852830
Heading Depth: 3
Heading Rank: 7

Heading: Federal Antitrust Liability of Governmental Entities

Text: We also find instructive the history of government liability under the federal antitrust laws. It too points in the direction of nonliability. The Clayton Act allows any person to be a plaintiff. The term is defined to include corporations and associations existing under or authorized by federal, state or foreign law. 15 U.S.C. § 12. As early as 1906 it was held that a municipality could be a plaintiff. Chattanooga Foundry & Pipe Works v. City of Atlanta, 203 U.S. 390, 396, 27 S.Ct. 65, 51 L.Ed. 241 (1906) (a municipality is a person entitled to sue under § 7 of the Sherman Act). Chattanooga did not address, and apparently was not presented with any of the issues discussed in Parts C, E, and F of this opinion. Similar rulings as to states and foreign nations followed. See Pfizer, Inc. v. Gov't of India, 434 U.S. 308, 320, 98 S.Ct. 584, 54 L.Ed.2d 563 (1978) (a foreign nation otherwise entitled to sue in our courts is entitled to sue for treble damages under the antitrust laws to the same extent as any other plaintiff); Georgia v. Pa. R.R. Co., 324 U.S. 439, 447, 65 S.Ct. 716, 89 L.Ed. 1051 (1945) (State of Georgia was a person within provision of § 26 of the Clayton Act authorizing any person to sue for injunctive relief and to recover damages). Whether an entity of local government could be sued for damages under the Sherman Act did not arise until many years later. In 1978, a four-Justice plurality of the Supreme Court held that a municipal utility, which had brought a treble damage claim against a competitor, could be subject to a counterclaim for treble damages. City of Lafayette v. La. Power & Light Co., 435 U.S. 389, 412-13, 98 S.Ct. 1123, 55 L.Ed.2d 364 (1978). The plurality concluded that the Parker doctrine exempts only anticompetitive conduct engaged in as an act of government by the State as sovereign or, by its subdivisions, pursuant to a state policy to displace competition with regulation or monopoly public service. Id. at 413, 98 S.Ct. 1123. Chief Justice Burger agreed that the municipal utility could be sued for treble damages but based his opinion on the nature of the entity as a competitor in a market place, not on its status as an arm of government. Id. at 419, 98 S.Ct. 1123. Four Justices dissented specifically complaining that exposure to treble damages could be ruinous to local governments. Id. at 440, 98 S.Ct. 1123. The dissenters took the view that a state can authorize its arms of government as it chooses, and the state action doctrine announced in Parker v. Brown [11] should exempt any government actor from the antitrust law. Shortly after City of Lafayette, the Court held that Parker immunity extended to a municipality only if its actions were in furtherance of a clearly articulated and affirmatively expressed state policy. Cmty. Communications Co. v. City of Boulder, 455 U.S. 40, 51, 102 S.Ct. 835, 70 L.Ed.2d 810 (1982). The general grant of authority under Home Rule legislation, such as Indiana's, codified at Indiana Code section 36-1-3-1-9, was not a sufficiently articulated state policy to guarantee immunity. Although no treble damage award had yet been entered against a governmental entity, after City of Lafayette and City of Boulder, that result was seen as a realistic possibility. Congress promptly responded to these decisions by enacting the Local Government Antitrust Act of 1984, codified at 15 U.S.C. §§ 34-36. That statute left governmental entities subject to injunctive or declaratory relief but prohibited recovery of antitrust damages from any local government, or official or employee thereof acting in an official capacity. [12] 15 U.S.C. § 35(a). A local government within the meaning of the Act includes any city, county, parish, town, township, village or any other general function governmental unit established by state law, and also a school district, sanitary district, or any other special function governmental unit established by State law. 15 U.S.C. § 34(1)(A)-(B). The House Judiciary Committee pointed out that City of Lafayette and City of Boulder appear to have limited the extent that antitrust immunity applicable to States will be accorded to local governments and these decisions could undermine a local government's ability to govern in the public interest. Most of the suits instituted by private parties have sought treble damages from local governments. 5 U.S.Code Congressional & Administrative News 98 Cong.2d 1984 at 4603 (1985). The purpose of the Act was to clarify the application of the Clayton Act to the official conduct of local governments and eliminate antitrust damage liability for official conduct of a local government and its officials. Id. Congress was also concerned that local taxpayers, the very persons the antitrust laws are designed to protect, are called upon to pay treble damage judgments rendered against local governments. Irving Scher, Antitrust Adviser § 7.09 at 43 (vol. 2, 4th ed.2003). Indiana courts have generally followed federal precedent in interpreting the Indiana Antitrust Act. E.g. Berghausen v. Microsoft Corp., 765 N.E.2d 592, 594-96 (Ind.Ct.App.2002); Mavis, 468 N.E.2d 584, 585-86; Rumple v. Bloomington Hosp., 422 N.E.2d 1309, 1313-14 (Ind.Ct.App.1981); Citizens Nat'l Bank of Grant County v. First Nat'l Bank in Marion, 165 Ind.App. 116, 125, 331 N.E.2d 471, 476 (1975). Consistent with that approach, a few states have followed City of Lafayette and City of Boulder. [13] We do not join them. Where the government activity is not competition with private enterprise, even the City of Lafayette Court lacked a majority for subjecting the municipality to treble damages. In any event, we think the rapid congressional removal of exposure of potential liability of municipalities under the antitrust laws also indicates that liability was simply not contemplated by federal antitrust legislation. When the implications of this potential liability were explored, it was promptly and soundly rejected. We do not agree that federal precedent is appropriate in considering whether governmental immunity is available to municipal and local government units under state antitrust laws. Parker and its progeny turned significantly on the relationship between the federal government and the states as dual sovereignties. Municipal and local government units, on the other hand, are creatures of the State. As such there is no consideration of comity or deference. The only issue is the intention of the state legislature to impose or withhold liability. See People ex rel. Freitas v. City and County of San Francisco, 92 Cal.App.3d 913, 917, 155 Cal.Rptr. 319 (1979); Fine Airport Parking, Inc. v. City of Tulsa, 71 P.3d 5, 11 (Ok.2003) (The principles of federalism that govern the relationship between the two sovereigns, the federal and state governments, do not apply to the relationship between a state and a municipality acting pursuant to state law.... The principles of federalism supporting the Parker doctrine are meaningless in an analysis of municipal liability); Town of Hallie v. City of Chippewa Falls, 105 Wis.2d 533, 314 N.W.2d 321, 324 (1982) (The relationship between the federal government and the states is not parallel to the relationship between the state government and the cities.). For the reasons already given, we do not read our statute to provide liability of governmental agencies. In this conclusion we join Massachusetts, New Jersey, Oklahoma and New York in rejecting the federal state action immunity doctrine under state antitrust law. Monsanto Co. v. Dept. of Pub. Utils., 412 Mass. 25, 586 N.E.2d 982, 983 (Mass.1992); Fanelli v. City of Trenton, 135 N.J. 582, 641 A.2d 541, 547-49 (1994); City of Tulsa, 71 P.3d at 12; Capital Tel. Comp. v. New York Tel. Comp., 146 A.D.2d 312, 540 N.Y.S.2d 895, 896-99 (1989).