Duck Tours Seafari, Inc. v. City of Key West

875 So. 2d 650, 2004 Fla. App. LEXIS 3290, 2004 WL 575695
CourtDistrict Court of Appeal of Florida
DecidedMarch 17, 2004
Docket3D02-2812
StatusPublished
Cited by7 cases

This text of 875 So. 2d 650 (Duck Tours Seafari, Inc. v. City of Key West) is published on Counsel Stack Legal Research, covering District Court of Appeal of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Duck Tours Seafari, Inc. v. City of Key West, 875 So. 2d 650, 2004 Fla. App. LEXIS 3290, 2004 WL 575695 (Fla. Ct. App. 2004).

Opinion

875 So.2d 650 (2004)

DUCK TOURS SEAFARI, INC., Appellant,
v.
THE CITY OF KEY WEST, Florida, Appellee.

No. 3D02-2812.

District Court of Appeal of Florida, Third District.

March 17, 2004.
Rehearing or Certification Denied June 9, 2004.

*652 Kenny Nachwalter and Scott E. Perwin; Michael R. Barnes, Miami, for appellant.

David J. Audlin, Jr., for appellee.

Before COPE, LEVY and SHEVIN, JJ.

Rehearing En Banc or Certification Denied June 9, 2004.

COPE, J.

Duck Tours Seafari, Inc., an entity seeking to operate amphibious tours of Key West, appeals a summary judgment for the City of Key West on its claims of breach of the antitrust laws. We reverse.

I.

The Conch Train ("Train") and Old Town Trolley Tours ("Trolley")of Key West are two well-known tourist service entities which operate motorized tours of the City of Key West. For approximately 30 years the City has granted franchises for these tours through local ordinances. The most recent ordinances were enacted in 1995 as Ordinances 95-4 and 95-5. Pursuant to Ordinance 95-4, the City is to receive 5% of the gross receipts or $210,000 per year, whichever is greater, from the operator of the Train. Pursuant to Ordinance 95-5, the City receives a similar amount from the operator of the Trolley.

Each ordinance prohibits issuance of franchises to competitors of the Train and Trolley. The ordinances also prohibit "sightseeing or shuttle services or any other similar type of operation, their representatives and agents from having offices, depots, load[ing] or unload[ing] passengers, sell[ing] tickets or promot[ing] their business within 1,000 feet of the Grantee's [Train or Trolley's] existing depots." Ord. 95-4, § 12; Ord. 95-5, § 12 (emphasis added). Despite this limitation, the City allows the Train and Trolley, which at this point are sister corporations, to operate within 1,000 feet of each other.

In 1995 Duck Tours Seafari, Inc. ("Duck Tours") sought to begin operating a business providing sea-based sightseeing tours of Key West in World War II amphibious vehicles known as "ducks." Duck Tours desired to operate by picking up tourists at hotels and other locations in the old part of Key West. The passengers would be driven to the water entry point to board the "duck" for a tour by sea.

Duck Tours asserts that it was impossible to operate a competing tour in Key West under the limitations imposed by the above ordinances.[1] The prohibition on obtaining a franchise was a barrier to entering the market. In addition, the effect of the 1000-foot limitation was to bar Duck Tours from the areas frequented by tourists in the old part of Key West, as well as numerous hotels used by tourists. The ordinances also barred any access by Duck Tours to the landing docks used by cruise ships, these being reserved under the ordinance for the Train and Trolley. The ordinances allow full access by taxicabs and City buses, however, to all of these locations.

The City cited Duck Tours for violating the above ordinances. The City also added criminal penalties to the ordinances Duck Tours was charged with violating.

Duck Tours commenced this action against the City seeking injunctive relief for violations of the state antitrust laws. See §§ 542.18-.19, § 542.235(2), Fla. Stat. (1995). Duck Tours also asserted a claim under 42 U.S.C. § 1983 for damages and injunctive relief for violations of the Commerce *653 Clause of the United States Constitution.[2]

The City moved for summary judgment arguing that it was entitled to state action immunity and that there was no Commerce Clause violation. The trial court granted the City's motion, and Duck Tours has appealed.

II.

Florida's antitrust laws prohibit restraints of trade. See §§ 542.16, 542.18, 542.19, Fla. Stat. (1995). Florida's antitrust laws apply to local government. See id. § 542.235. The remedies available against local government are injunctive or other equitable relief, but not damages. Id.

The City argues that it is entitled to state action immunity. State action immunity is a doctrine which originated under federal antitrust law. See City of Columbia v. Omni Outdoor Advertising, Inc., 499 U.S. 365, 370-73, 111 S.Ct. 1344, 113 L.Ed.2d 382 (1991). Under Florida law, "Any activity or conduct ... exempt from the provisions of the antitrust laws of the United States is exempt from the provisions of this chapter [542]."[3] § 542.20, Fla. Stat. (1995). Thus, the doctrine of state action immunity which has developed under federal antitrust law is also an available defense to a suit against a municipality for a violation of Florida's antitrust laws.

The relevant principles have been summarized by the United States Supreme Court as follows:

The starting point in any analysis involving the state action doctrine is the reasoning of Parker v. Brown [, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943)]. In Parker, relying on principles of federalism and state sovereignty, the Court refused to construe the Sherman Act as applying to the anticompetitive conduct of a State acting through its legislature. 317 U.S., at 350-351, 63 S.Ct., at 313-314. Rather, it ruled that the Sherman Act was intended to prohibit private restraints on trade, and it refused to infer an intent to "nullify a state's control over its officers and agents" in activities directed by the legislature. Id., at 351, 63 S.Ct., at 313.
Municipalities, on the other hand, are not beyond the reach of the antitrust laws by virtue of their status because they are not themselves sovereign. Lafayette v. Louisiana Power & Light Co., 435 U.S. 389, 412, 98 S.Ct. 1123, 1136, 55 L.Ed.2d 364 (1978) (opinion of BRENAN, J.). Rather, to obtain exemption, municipalities must demonstrate that their anticompetitive activities were authorized by the State "pursuant to state policy to displace competition with regulation or monopoly public service." Id., at 413, 98 S.Ct., at 1137.

Town of Hallie v. City of Eau Claire, 471 U.S. 34, 38-39, 105 S.Ct. 1713, 85 L.Ed.2d 24 (1985) (emphasis in original).

"[B]efore a municipality will be entitled to the protection of the state action exemption from the antitrust laws, it must demonstrate that it is engaging in the challenged activity pursuant to a clearly expressed state policy." Id. at 40, 105 S.Ct. 1713.

It is not necessary that state law explicitly say that the municipality is allowed *654 to suppress or limit competition. See id. at 43, 105 S.Ct. 1713. However, it must be clear that the state law has delegated to the municipality "the express authority to take action that foreseeably will result in anticompetitive effects." Id. The fact that the state has made a general delegation of home rule power to the local government is not enough to authorize anticompetitive action. Id.

The decision in Town of Hallie illustrates the point. In Town of Hallie

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875 So. 2d 650, 2004 Fla. App. LEXIS 3290, 2004 WL 575695, Counsel Stack Legal Research, https://law.counselstack.com/opinion/duck-tours-seafari-inc-v-city-of-key-west-fladistctapp-2004.