Opinion ID: 2140398
Heading Depth: 2
Heading Rank: 1

Heading: Implied Repeal Doctrine[17]

Text: ¶ 38 There are explicit statutory exceptions to some of the antitrust provisions in Wis. Stat. ch. 133. For instance, Wis. Stat. § 133.03(4) provides that This section [§ 133.03] does not apply to ambulance service contracted for under ss. 59.54(1), 60.565, 61.64 and 62.133. By exceptions of this nature and exceptions contained within statutory definitions, the legislature has effectively excepted or repealed antitrust law with respect to certain actors and actions. ¶ 39 The implied repeal doctrine addresses situations in which there is no explicit statutory exception to antitrust law but it is reasonably clear that the legislature intended to allow municipalities to undertake an action that is anticompetitive. If the legislature intends to allow municipalities to undertake an action that is anticompetitive, then that action is immune from antitrust enforcement under state law. ¶ 40 The leading case in Wisconsin for the implied repeal doctrine is Hallie I, in which we held that the City of Chippewa Falls was not liable under state antitrust law for conditioning its provision of waste treatment services to an adjacent town on the acceptance of other municipal services. Hallie I, 105 Wis.2d at 542, 314 N.W.2d 321. ¶ 41 In Hallie I, the plaintiff Town of Hallie had no sewage treatment or collection facilities. Id. at 534, 314 N.W.2d 321. The defendant City of Chippewa Falls owned and maintained a sewage treatment plant with excess capacity. Id. The town proposed to construct its own treatment plant and to connect it to the city's system. Id. The city rejected this proposal and countered with an offer to tie the use of its treatment plant with the town's agreement to allow the city to provide certain municipal services such as fire and police protection. Id. When the town did not agree to the city's offer, the city passed an ordinance annexing a portion of the town. Id. The town objected to the annexation in court and also complained that the city's tie-in scheme violated Wis. Stat. § 133.03 because it prevented the town from competing for sewer collection services. Id. at 535-36, 314 N.W.2d 321. ¶ 42 On review, we held that the town's complaint failed to state a cause of action because the city's actions, pursuant to its home rule authority and statutory annexation powers, were exempt from state antitrust law. Id. at 540, 314 N.W.2d 321. ¶ 43 The Hallie I test to determine antitrust immunity for municipal actions is whether the legislature intended to allow municipalities to undertake such actions. Id. at 539, 314 N.W.2d 321. In other words, a court must look to see if the legislature intended a conflicting statutory scheme to override state antitrust law under a given set of facts. We noted three factors to consider in making this determination: (1) an analysis of the home rule powers of cities; (2) the type of conduct undertaken by a city in a particular instance; and (3) the general statutory framework set up by the legislature in a particular field. Id. ¶ 44 Applying these factors, we first noted the broad home rule powers that some municipalities are granted pursuant to Wis. Stat. § 62.11(5) (1979-1980) [18] and Article XI, Section 3 of the Wisconsin Constitution. [19] Next, we characterized the city's conduct in annexing the town's land as a reasonable quid pro quo that a city could require before extending sewer services to the area. Hallie I, 105 Wis.2d at 540-41, 314 N.W.2d 321. Finally, we concluded that the specific statutory scheme dealing with annexation power and joint sewer systems, under Wis. Stat. §§ 66.069(2)(c) and 144.07(1m), indicated that the legislature viewed annexation as an appropriate prerequisite to the provision of sewage service outside the limits of a city. Hallie I, 105 Wis.2d at 542, 314 N.W.2d 321. Therefore, we held that the legislature did not intend that a city should be liable under the state antitrust law for the kinds of acts done by the City of Chippewa Falls. Id. at 542, 314 N.W.2d 321. ¶ 45 The court revisited the issue of municipal immunity in American Medical Transport of Wisconsin, Inc. v. Curtis-Universal, Inc., 154 Wis.2d 135, 452 N.W.2d 575 (1990) ( AMT ). In AMT, three private ambulance service providers alleged that the City of Milwaukee adopted a citywide emergency ambulance system that violated antitrust law. Id. at 138-39, 452 N.W.2d 575. Their complaint alleged that the city divided the Milwaukee area into four sections designated as service areas and assigned primary responsibility for each area to a single ambulance company. Id. at 139, 452 N.W.2d 575. The system benefited four different ambulance companies, but it relegated three other qualified companies to providing back-up service when a primary provider was not available. Id. The city also assumed control over the dispatch of emergency service to either the Milwaukee Fire Department or a private ambulance service, and it set all fees and rates for such service. Id. at 139-40, 452 N.W.2d 575. The plaintiffs described this system as a conspiracy to restrain trade in ambulance servicea conspiracy in which the four defendant ambulance companies fully participated with the city. Id. at 140-41, 452 N.W.2d 575. ¶ 46 This court paid homage to Hallie I but appeared to tighten the requirements for municipal immunity when it concluded that neither the city's actions nor the private providers' actions were immune from state antitrust law. Id. at 153-54, 452 N.W.2d 575. The court said the question was whether the legislature had impliedly authorized an exception from the antitrust laws in respect to certain types of conduct. Id. at 148, 452 N.W.2d 575. It said that a city's home rule powers to determine local affairs are broad but do not supersede legislative enactments of statewide concern, such as Wisconsin antitrust law. Id. at 152, 452 N.W.2d 575. To override state antitrust law, the court said, a city must look to other statutory enactmentsbeyond home rulethat create a legislative scheme that at least impliedly authorizes anticompetitive conduct by the city. Id. at 148, 452 N.W.2d 575. ¶ 47 The gist of these cases is that a municipality may pursue the familiar objectives of home rule power, but if the tactics it chooses are anticompetitive and tend to restrain trade, the municipality will usually need to rely on supplementary authority if it expects immunity for its actions. Antitrust immunity will depend upon the legislative framework in a particular field of government activity as well as the type and purpose of the actions the municipality initiates. In the absence of explicit exceptions from antitrust statutes, such as Wis. Stat. § 133.03(4), immunity for government-related anticompetitive action will require examination of all relevant circumstances. ¶ 48 Although the City is not a defendant in this case, the City's regulation of Madison taverns is at the heart of this dispute. It is undisputed that the City imposed Luther's Blues conditions on the following taverns by explicit action of the Common Council: Luther's Blues, Regent Street Retreat, Buck's, Hawk's, Crave, Dotty Dumpling's, Kimia Lounge, and Nam's Noodles. It is our understanding that the city-imposed conditions on these eight establishments were more stringent in curtailing drink specials than the agreement announced by other establishments on September 12, 2002. Consequently, we begin our Hallie I analysis by focusing on what the City did officially and directly. ¶ 49 The first factor to consider in the implied repeal analysis is the home rule powers of cities. [20] Hallie I, 105 Wis.2d at 539, 314 N.W.2d 321. The City of Madison possesses the broad home rule powers outlined by Wis. Stat. § 62.11(5) and Article XI, Section 3 of the Wisconsin Constitution. This power allows the City to act for the health, safety, and welfare of the public, and to carry out its policy goals by license, regulation, suppression . . . and other necessary or convenient means. Wis. Stat. § 62.11(5). These powers are subject to enactments of the legislature of state-wide concern, such as antitrust laws. See Wis. Const. art. XI, § 3; Hallie I, 105 Wis.2d at 540, 314 N.W.2d 321. However, if we were to construe the exercise of general charter home rule powers as constitutionally defective whenever they deal with a matter of statewide concern, we would render Wis. Stat. § 62.11(5) a nullity. Hallie I, 105 Wis.2d at 540, 314 N.W.2d 321 (citing Wisconsin's Envtl. Decade, Inc. v. DNR, 85 Wis.2d 518, 533, 271 N.W.2d 69 (1978)). Therefore, the City of Madison's home rule powers under Wis. Stat. § 62.11(5) allow it to provide for the public health, safety, and welfare by regulating alcohol using necessary or convenient means, including the means employed here. ¶ 50 A municipality may not disregard the state's antitrust laws simply because it possesses broad home rule authority. At the same time, not every exercise of home rule authority that tends to restrain trade must pass antitrust scrutiny. The type of action may have been excepted from antitrust law explicitly, or the actionbecause it is unilateralmay not constitute a contract, combination . . ., or conspiracy in restraint of trade. Wis. Stat. § 133.03(1). The non-party brief of the University of Wisconsin-Madison directs our attention to Fisher v. City of Berkeley, 475 U.S. 260, 106 S.Ct. 1045, 89 L.Ed.2d 206 (1986), in which the Supreme Court said: A restraint imposed unilaterally by government does not become concerted action within the meaning of the [antitrust] statute simply because it has a coercive effect upon parties who must obey the law. The ordinary relationship between the government and those who must obey its regulatory commands whether they wish to or not is not enough to establish a conspiracy. Similarly, the mere fact that all competing [business] owners must comply with the same provisions of the Ordinance is not enough to establish a conspiracy among [the business owners]. Id. at 267, 106 S.Ct. 1045. ¶ 51 There is no dispute that the City imposed Luther's Blues conditions unilaterally on eight Madison taverns. ¶ 52 Next, we turn to an evaluation of the regulation of alcohol beverages in Wisconsin to ascertain the general statutory framework set up by the legislature in this field for purposes of the implied repeal analysis. See Hallie I, 105 Wis.2d at 539, 314 N.W.2d 321. ¶ 53 We have observed that the states, under the broad sweep of the Twenty-first Amendment, are endowed with `something more than the normal' police power in regulating the sale of liquor in the interests of the public health, safety, morals, and general welfare. State ex rel. Grand Bazaar Liquors, Inc. v. City of Milwaukee, 105 Wis.2d 203, 217, 313 N.W.2d 805 (1982) (citing California v. LaRue, 409 U.S. 109, 114, 93 S.Ct. 390, 34 L.Ed.2d 342 (1972)). ¶ 54 In Odelberg v. City of Kenosha, 20 Wis.2d 346, 122 N.W.2d 435 (1963), this court reiterated the justifications for the near-plenary police power that a unit of government has to regulate alcohol sales: The justification for the exercise of the police power in restraining or prohibiting the sale of intoxicating liquors has been stated and restated by the courts time and again. It may be summed up as resting upon the fundamental principle that society has an inherent right to protect itself; that the preservation of law and order is paramount to the rights of individuals or property in manufacturing or selling intoxicating liquors; that the sobriety, health, peace, comfort, and happiness of society demand reasonable regulation, if not entire prohibition, of the liquor traffic. Unrestricted, it leads to drunkenness, poverty, lawlessness, vice, and crime of almost every description. Against this result society has the inherent right to protect itselfa right which antedates all constitutions and written lawsa right which springs out of the very foundations upon which the social organism rests; a right which needs no other justification for its existence or exercise than that it is reasonably necessary in order to promote the general welfare of the state. Id. at 350, 122 N.W.2d 435 (quoting Zodrow v. State, 154 Wis. 551, 555, 143 N.W. 693 (1913)). [21] To serve these policy goals, the statutory scheme governing alcohol in Wisconsin is pervasive, sweeping, and restrictive. ¶ 55 Chapter 125 of the Wisconsin Statutes regulates Alcohol Beverages. The chapter's statement of legislative intent provides this state regulatory authority over the production, storage, distribution, transportation, sale, and consumption of alcohol beverages by and to its citizens, for the benefit of the public health and welfare and this state's economic stability. Wis. Stat. § 125.01. Chapter 125 covers approximately 34 pages of the Wisconsin Statutes. This shows that the manufacture and sale of alcohol beverages is one of the most heavily regulated trades in our state. Here are some familiar examples. ¶ 56 Persons under age 21 cannot purchase alcohol. Wis. Stat. §§ 125.02(8m), (20m), and 125.07. Consequently, an underage person not accompanied by his or her parent, guardian or spouse who has attained the legal drinking age may not enter, knowingly attempt to enter or be on any premises for which a license or permit for the retail sale of alcohol beverages has been issued, subject to certain exceptions. Wis. Stat. §§ 125.07(3)(a); 125.07(3)(a)1.-14. An underage person who procures or attempts to procure alcohol, possesses or consumes alcohol, knowingly enters or attempts to enter a licensed premises, or falsely represents his age to receive alcohol from a licensee or permittee, may be fined, required to complete community service, or temporarily lose his driver's license. Wis. Stat. §§ 125.07(4)(a); 125.07(4)(bs). Those who sell liquor to an underage person or a person of age who is intoxicated also are subject to substantial fines, or even imprisonment. Wis. Stat. §§ 125.07(1)(b)2.a.-d.; 125.07(2). ¶ 57 No person may sell alcohol without a license, Wis. Stat. § 125.04(1), and the statutes list numerous requirements to obtain such a license. See Wis. Stat. § 125.04(5). Consumption of alcohol on premises open to the public is also prohibited unless the lessee, owner, or person in charge of the operation possesses a license. Wis. Stat. § 125.09(1). Most license holders must be at least 21 years old, Wis. Stat. § 125.04(5)(a)3., and successfully complete a responsible beverage server training course before being granted a license. Wis. Stat. § 125.04(5)(a)5. ¶ 58 Significantly, some of the state's vast power to regulate alcohol has been delegated to municipalities. Municipal authority to regulate alcohol sales and consumption, including licensing, is outlined in several sections of Wis. Stat. ch. 125. General municipal authority to regulate alcohol is outlined in Wis. Stat. § 125.10(1): (1) Authorization. Any municipality may enact regulations incorporating any part of this chapter and may prescribe additional regulations for the sale of alcohol beverages, not in conflict with this chapter. The municipality may prescribe forfeitures or license suspension or revocation for violations of any such regulations. Regulations providing forfeitures or license suspension or revocation must be adopted by ordinance. (Emphasis added.) ¶ 59 Licensing the sale of alcohol beverages is the exclusive province of municipalities, so long as it does not conflict with state standards. ¶ 60 Licensing is the primary tool available to municipalities to regulate alcohol sales and consumption. Most notably, any municipality may put to a vote whether the municipality shall issue retail licenses for the sale of fermented malt beverages or intoxicating liquor[.] Wis. Stat. § 125.05(1). In other words, municipalities have the right to ban alcohol sales within their borders. See Johnson v. Town Bd. of Wyocena, 239 Wis. 461, 465, 1 N.W.2d 796 (1942). [22] If a municipality chooses to issue licenses, it may grant and issue `Class A' and `Class B' licenses for retail sales of intoxicating liquor, and `Class C' licenses for retail sales of wine, from premises within the municipality to persons entitled to a license under this chapter as the issuing municipal governing body deems proper [.] Wis. Stat. § 125.51(1)(a) (emphasis added). ¶ 61 Alcohol sales licenses are issued on an annual basis by the municipality; they are considered privileges rather than vested property rights. See State ex rel. Ruffalo v. Common Council of City of Kenosha, 38 Wis.2d 518, 523, 157 N.W.2d 568 (1968). Both Class A and Class B licenses may be revoked by the municipality if the terms of the license are not honored. Wis. Stat. §§ 125.25(3), 125.26(3). ¶ 62 Some Class B retail licenses are limited in numbera quota has been placed on their issuance by the legislature. Wis. Stat. § 125.51(4). This is anticompetitive. ¶ 63 Class B sellers are not permitted to remain open between the hours of 2 a.m. to 6 a.m. during weeknights and 2:30 a.m. to 6 a.m. on Saturday and Sunday nights, subject to certain exceptions. Wis. Stat. §§ 125.32(3); 125.68(4)(c). This is anticompetitive. ¶ 64 Alcohol may not be sold by Class A retailers after 9 p.m. and before 8 a.m. Wis. Stat. § 126.68(4)(b). This is anticompetitive. ¶ 65 The preceding analysis describes only a few of the many regulations in Wis. Stat. ch. 125. The legislature's regulatory scheme in this field does not intend or permit unbridled competition. In fact, the regulatory scheme in place is overtly anticompetitive and intentionally gives municipalities leeway to place significant barriers in the way of alcohol sales and consumption. ¶ 66 We agree with the court of appeals' conclusion that Wis. Stat. ch. 125 contemplatesand expressly directsthat regulation is to supersede competition in the retail sale of alcohol beverages in Wisconsin. Eichenseer, 297 Wis.2d 495, ¶ 15, 725 N.W.2d 274. Unlike the statutes in AMT, the regulatory scheme in question here indicates a legislative intent to make state antitrust law not applicable . . . by authorizing contrary or inconsistent conduct by the City. See AMT, 154 Wis.2d at 148, 452 N.W.2d 575. Within reason, municipalities have broad statutory authority to prescribe or orchestrate anticompetitive regulation in the sale and consumption of alcohol if that regulation serves an important public interest. The statutory licensing scheme gives municipalities the power to do what the City did in this caseimpose anticompetitive Luther's Blues conditions on new licenses and license renewals as a means of discouraging over-consumption. See Wis. Stat. § 125.51(1)(a) (Every municipal governing body may grant and issue `Class A' and `Class B' licenses for retail sales of intoxicating liquor . . . from premises within the municipality to persons entitled to a license under this chapter as the issuing municipal governing body deems proper). ¶ 67 This brings us to the third and final Hallie I factor, the type of conduct undertaken by a city in a particular instance. Hallie I, 105 Wis.2d at 539, 314 N.W.2d 321. The City was concerned about binge drinking by students and others at establishments near the University of Wisconsin campus. It was concerned in general because binge drinking and over-consumption were creating life-threatening conditions for some drinkers, as well as vandalism, disorder, and sexual assault affecting innocent third parties. The City was also concerned about the expensive police services it was required to provide. ¶ 68 The City believed that Luther's Blues conditions limiting drink specials would respond to potential binge drinking at specific licensed establishments, and it imposed those conditions on at least eight Madison taverns. The City's actions also served as warning to other taverns. ¶ 69 The City's imposition of conditions on taverns it licensed was commonplace; its imposition of Luther's Blues conditions on eight taverns was an official exercise of legislative judgment by the Common Council. Invalidating the City's action on antitrust grounds would severely undermine a municipality's authority to regulate the sale of alcohol beverages within its borders and represent a sea change in Wisconsin law. ¶ 70 To sum up, insofar as the City is concerned, we believe the City's action in imposing Luther's Blues conditions on eight tavern licensees is immune from antitrust liability under the implied repeal doctrine of Hallie I. ¶ 71 We acknowledge that the issue in this case is not whether the City is immune for its actions but whether the defendants are immune for their voluntary agreement to eliminate alcohol drink specials in their establishments after 8 p.m. on Friday and Saturday nights. In reality, we must determine whether private parties are eligible for antitrust immunity when they act in concert, in an anticompetitive manner, in direct response to pressure bordering on compulsion from a municipality with the power to condition or non-renew their licenses. ¶ 72 As noted above, the material facts are not in dispute. In her comprehensive, well-reasoned decision, Circuit Judge Angela Bartell found that the evidence was overwhelming that the pressure on campus bar owners from the City and University officials was enormous. The longtime chair of the ALRC threatened that the City would enact a citywide ban on drink specials if the bar owners did not police themselves, clean up their acts, and devise a solution to the City's concerns. In this context, the City, by its duly authorized ALRC representative, unilaterally decided that the bar owners should voluntarily ban drink specials at least on weekends. After the bar owners acceded to the City's demands, the ALRC took no further action to ban drink specials by ordinance, unequivocally showing its approval and ratification of the negotiated voluntary ban. But for the intense demands of the City through its ALRC, there would have been no voluntary ban on weekend drink specials by campus bar owners. See ¶ 27, above. ¶ 73 The circuit court's factual findings are not clearly erroneous. On the contrary, they appear to be inescapable. The question remaining is whether private tavern keepers acquire the immunity from antitrust enforcement that a municipality would enjoy because of the City's intense involvement in these circumstances. ¶ 74 The court of appeals turned to federal precedents discussing the state action doctrine to help answer this question. [23] Eichenseer, 297 Wis.2d 495, ¶ 19, 725 N.W.2d 274. Federal precedents are often instructive and persuasive in analyzing Wisconsin antitrust law. Conley Publ'g Group Ltd. v. Journal Commc'ns, Inc., 2003 WI 119, ¶ 17, 265 Wis.2d 128, 665 N.W.2d 879; AMT, 154 Wis.2d at 152-53, 452 N.W.2d 575. ¶ 75 The federal state action antitrust immunity doctrine originated in Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943). Parker established an exemption from federal antitrust law for state action or official action directed by a state. Id. at 351, 63 S.Ct. 307. In this early decision, the Court added a caveat that a state does not give immunity to those who violate the Sherman Act by authorizing them to violate it, or by declaring that their action is lawful. Id. (citing Northern Sec. Co. v. United States, 193 U.S. 197, 332, 344-347, 24 S.Ct. 436, 48 L.Ed. 679 (1904)). ¶ 76 In time, however, the Court revised its position. In Southern Motor Carriers Rate Conference, Inc. v. United States, 471 U.S. 48, 105 S.Ct. 1721, 85 L.Ed.2d 36 (1985), the Court stated: Although Parker involved an action against a state official, the Court's reasoning extends to suits against private parties. The Parker decision was premised on the assumption that Congress . . . did not intend to compromise the States' ability to regulate their domestic commerce. If Parker immunity were limited to the actions of public officials, this assumed congressional purpose would be frustrated, for a State would be unable to implement programs that restrain competition among private parties. A plaintiff could frustrate any such program merely by filing suit against the regulated private parties, rather than the state officials who implement the plan. We decline to reduce Parker's holding to a formalism . . . Id. at 56-57, 105 S.Ct. 1721 (footnote omitted). ¶ 77 Town of Hallie v. City of Eau Claire, 471 U.S. 34, 105 S.Ct. 1713, 85 L.Ed.2d 24 (1985) ( Hallie II ) was decided the same day as Southern Motor Carriers. In the course of defining when local municipalities are exempt from federal antitrust law, the Hallie II Court observed that [w]here a private party is engaging in . . . anticompetitive activity, there is a real danger that he is acting to further his own interests, rather than the governmental interests of the State. Hallie II, 471 U.S. at 47, 105 S.Ct. 1713. To address this concern, the Court has established a two-prong test to determine whether state action antitrust immunity extends to the actions of private parties: First, the challenged restraint must be `one clearly articulated and affirmatively expressed as state policy.' Second, the State must supervise actively any private anticompetitive conduct. Southern Motor Carriers, 471 U.S. at 57, 105 S.Ct. 1721 (citing Midcal, 445 U.S. at 105, 100 S.Ct. 937 and quoting City of Lafayette, La. v. Louisiana Power & Light Co., 435 U.S. 389, 410, 98 S.Ct. 1123, 55 L.Ed.2d 364 (1978)). This two-prong test is used to determine whether private action, closely linked to government action, should be protected from antitrust law, inasmuch as the success of an antitrust action should depend upon the nature of the activity challenged, rather than on the identity of the defendant. See Southern Motor Carriers, 471 U.S. at 58-59, 105 S.Ct. 1721 (citations omitted). ¶ 78 The instant case does not involve state action, and technically it does not involve municipal action. But we think it makes sense to apply the Southern Motor Carriers analysisfirst adopted in Midcal and City of Lafayette to our third Hallie I factor (the type of conduct undertaken by a city in a particular instance, Hallie I, 105 Wis.2d at 539, 314 N.W.2d 321) to determine whether the City's immunity extends to the defendants. ¶ 79 With regard to the clear articulation test, state law empowers municipalities to prescribe additional regulations for the sale of alcohol beverages, not in conflict with [Chapter 125]. Wis. Stat. § 125.10(1). The imposition of Luther's Blues conditions on eight licensees is an exercise of this power. As one authority notes, [a] state policy to displace competition can be inferred if the challenged restraint is a foreseeable consequence of the municipality's engaging in state-authorized activities, or if the statutory provision empowering the municipality's action plainly shows that the legislature contemplated the kind of action complained of. Melissa K. Stull, Annotation, What constitutes state action rendering public official's participation in private antitrust activity immune from application of federal antitrust laws, 109 A.L.R. Fed. 758 (1992). See also City of Columbia v. Omni Outdoor Adver., Inc., 499 U.S. 365, 372-73, 111 S.Ct. 1344, 113 L.Ed.2d 382 (1991) (observing that the purpose of the zoning regulation in question was to displace unfettered business freedom in a manner that regularly had the effect of preventing normal acts of competition); Hallie II, 471 U.S. at 42, 105 S.Ct. 1713 (noting that anticompetitive effects would logically follow from statutes authorizing a city to refuse to provide sewage services to unannexed areas). ¶ 80 Luther's Blues conditions represented the University's goal for campus taverns. Luther's Blues conditions were formally received by the ALRC on May 21, 2002. The ALRC's report recommending Luther's Blues conditions was subsequently accepted by the Madison Common Council. The ALRC drafted an ordinance imposing on all taverns the conditions that the council had imposed on eight taverns, and it repeatedly threatened to push for the enactment of that ordinance. The record before us is bereft of evidence that Alder Bruer and Alder Verveer were rogue regulators acting without the approval of the Council and the Mayor. We think the clearly articulated policy prong has been satisfied because the defendants' agreement was a scaled-down version of the Luther's Blues conditions, first demanded, then ratified, by the ALRC Chair. ¶ 81 With regard to the second prong of the Midcal/Southern Motor Carriers test, the Court has stated that the active state supervision requirement should not be imposed in cases in which the actor is a municipality. Hallie II, 471 U.S. at 46, 105 S.Ct. 1713. Thus, the basic question in antitrust cases that involve municipal and private actors is whether the municipality or the regulated party made the effective decision that resulted in the challenged anticompetitive conduct. Mich. Paytel Joint Venture v. City of Detroit, 287 F.3d 527, 537-38 (6th Cir.2002). See also Vartan v. Harristown Dev. Corp., 661 F.Supp. 596, 604 (M.D.Pa. 1987) (The crucial question [is] which entity [is] the effective decisionmaker.), aff'd, 838 F.2d 1208 (3d Cir.1988); City Commc'ns, Inc. v. City of Detroit, 660 F.Supp. 932, 935 (E.D.Mich.1987), aff'd, 888 F.2d 1081 (1989). Active encouragement is also viewed as a hallmark of whether a private party was supervised by the municipality for purposes of antitrust immunity. See Cine 42nd St. Theater Corp. v. Nederlander Org., 790 F.2d 1032, 1048 (2d Cir.1986). ¶ 82 In this case, the City was the effective decision maker with regard to the defendants' agreement to eliminate drink specials on Friday and Saturday nights after 8 p.m. It is undisputed that the defendants entered into their agreement as a direct response to the City's increasing regulatory pressure. Without this pressure, the defendants would have had no motivation to voluntarily ban weekend drink specials after 8 p.m. As the circuit court correctly noted, the City's actions, through Alder Bruer, were the but for cause of the voluntary ban. ¶ 83 The plaintiffs allege that the defendants entered into an agreement to voluntarily end all drink specials on Friday and Saturday nights after 8 p.m. for the express purpose of increasing prices in order to reduce output (i.e., consumption). At this point, we must accept that allegation as true. However, it should be obvious that the purpose stated in the complaint is a purpose that would be sought primarily by the City and the University, not the defendants. The defendants would have understood that if drink specials were an effective way to market their taverns, they would be placing themselves at a competitive disadvantage with those Madison taverns that were not limiting weekend drink specials. [24] ¶ 84 Active supervision can be interpreted in a more conventional way: the degree of monitoring by the City. The 24 defendant taverns are reviewed annually for license renewal. The ordinance establishing the ALRC provides that the ALRC has the responsibility and duty to view the triennial Alcohol License Problem Report submitted by the Chief of Police and may conduct additional review of problems reported with the licenses affected. Eichenseer, 297 Wis.2d 495, ¶ 3 n. 4, 725 N.W.2d 274. The University submits periodic reports to the ALRC with the results of its own monitoring of the campus bar scene. ¶ 85 In short, we think the active supervision prong has been satisfied. ¶ 86 The undisputed facts suggest that the City compelled the defendants' actions through threat and coercion. The facts suggest that the City thereafter approved the defendants' actions. The facts suggest that the City is closely monitoring the defendants' actions and would not tolerate an end to those actions. ¶ 87 [A] private party should not be induced to . . . comply with regulatory regimes at the risk that later invalidity of those . . . regimes will leave the part[y's] active compliance naked to antitrust scrutiny as if there had been no official action. Antitrust Law, supra, ¶ 228d, at 222. Furthermore, where the private defendant had no discretion but to obey the [regulation] or challenge it in court, one can rightfully say that the cause of the plaintiffs' injuries is not the defendant's act but the government's compulsion. Id. at 223. The City was the effective decision maker with regard to the alleged anticompetitive actions at issue and has actively supervised them; therefore, its immunity should extend to the defendants. See Mich. Paytel, 287 F.3d at 537-38; City Commc'ns, Inc., 660 F.Supp. at 935. ¶ 88 As we look at the conduct undertaken . . . in a particular instance, we note that neither the City nor the defendants is directly setting the price of alcohol beverages in the campus area. The defendants may compete with each other and must compete with other taverns in the Cityon overall price. There is no effort by anyone to allocate markets or market share. There are many, many options available to consumers who respond solely to price. We are influenced in this decision by the inextricable link between the City's objectives and the defendants' actions, as well as the transparency of this link. The cause and effect relationship between the City's threats and the defendants' response to those threats sets this case apart from most cases we are likely to see. ¶ 89 Accordingly, we conclude that Hallie I should be extended to recognize that the actions of the defendants, under the intense pressure of the City, were intended by the legislature to be immune from antitrust liability when the legislature granted municipalities broad authority to regulate the sale and consumption of alcohol beverages. To conclude otherwise would enshrine theory over practical reality.