Municipal Utilities Bd. of Albertville v. Alabama Power Co.

934 F.2d 1493
CourtCourt of Appeals for the Eleventh Circuit
DecidedJuly 5, 1991
DocketNo. 90-7095
StatusPublished

This text of 934 F.2d 1493 (Municipal Utilities Bd. of Albertville v. Alabama Power Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eleventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Municipal Utilities Bd. of Albertville v. Alabama Power Co., 934 F.2d 1493 (11th Cir. 1991).

Opinion

JOHNSON, Circuit Judge:

The plaintiffs, thirty municipal and public corporations and their boards (“the Cities”), appeal the district court’s order dismissing with prejudice their antitrust complaint against twenty-two rural electric cooperatives (“the Cooperatives”), the Alabama Rural Electric Association of Cooperatives (“AREA”) and Alabama Power Company (“APC”).

I. STATEMENT OF THE CASE1

A. Background Facts

The Cities, the Cooperatives, and APC all own and operate electric distribution facilities in the State of Alabama. In 1979, the Alabama Legislature established the Joint Interim Committee on Electricity (“the Committee”) to develop legislation “to avoid wasteful, uneconomic duplication of electric facilities, the cost of which must be borne by the consumer.” 1979 Ala.Acts 764.2 In 1984, the Legislature passed the Service Territories for Electric Suppliers Act (“the 1984 Act”) for the stated purpose [1495]*1495of limiting wasteful line duplication. Ala. Code § 37-14-1 et seq. (Supp.1989). The 1984 Act assigned service territories to Alabama’s electric suppliers. This legislation was subsequently held invalid by a federal district court and enjoined from enforcement.3 In 1985, the Legislature passed a second Service Territories for Electric Suppliers Act (“the 1984 Act”) in an effort to accommodate the constitutional questions raised by the district court. Ala. Code § 37-14-33 (Supp.1989).4 The Alabama Supreme Court then held that both Acts were valid. Alabama Power Co. v. Citizens of Ala., 527 So.2d 678 (Ala.1988).

The 1984 and 1985 Acts (collectively “the Acts”) establish three sets of rules: (1) those governing activities outside existing city limits (i.e., city boundaries as of April 26, 1984); (2) those governing activities inside existing city limits; and (3) those governing the incorporation of certain listed private agreements into the Acts.

The rules governing service outside existing city limits provide that electric suppliers cannot serye premises already served by another supplier. Ala.Code §§ 37-14-3 & 37-14-32 (Supp.1989). These rules also state that electric suppliers cannot extend their facilities to service new premises located in the service area of another supplier, except for industrial customers whose electric load exceeds 2500 kilowatts. Id. The Acts also provide detailed rules to assign specific service areas to each supplier. Id.5 Finally, the Acts prohibit a municipality from serving any customers outside its boundary, even if the city annexes new territory. Id.

The rules governing service inside city limits allow the “primary electric supplier” to purchase the facilities of other suppliers within “existing municipal limits” on terms specified in the statute. Ala.Code §§ 37-14-4 & 37-14-33 (Supp.1989). If the primary supplier elects not to purchase these facilities, the statute permits the secondary supplier to maintain these facilities and become the assigned supplier to those new customers that locate “closer to” its lines. Id.

The Acts also contain certain “special rules.” Ala.Code §§ 37-14-8 & 37-14-36 (Supp.1989). These rules incorporate into the Acts certain listed agreements (“the private agreements”) previously reached by electric suppliers. According to the Acts, these agreements govern the prevention of line duplication in the areas they cover. Id. The Acts permit suppliers to enter additional agreements consistent with policies and purposes of the Acts provided the suppliers obtain the approval of the Alabama Legislature. Id6

B. Procedural History

On May 19, 1989, the- Cities filed an antitrust complaint seeking declaratory and injunctive relief and damages against the Cooperatives, AREA, and APC (collectively, “the defendants”) for conspiring to suppress competition in the retail electric market in violation of the Sherman Act, 15 U.S.C. §§ 1, 2, and the Clayton Act, 15 U.S.C. § 26. The Cities alleged that the defendants had illegally agreed to divide service territories horizontally and had conspired with members of the Alabama Legislature as well as officials of state government to immunize this antitrust violation [1496]*1496by codifying this illegal agreement as the Acts. The complaint challenged all of the defendants’ actions associated with this agreement, including their efforts to petition the Alabama Legislature to pass the Acts and their actions taken pursuant to the Acts. Moreover, the Cities sought an order declaring the Acts invalid and unconstitutional.

APC, AREA, and nineteen of the Cooperatives subsequently moved to dismiss the complaint for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). Specifically, they argued that they were immune from antitrust liability under the Noerr-Pennington and state action doctrines. APC also argued that the Cities’ claims were time-barred because both Acts were passed more than four years prior to the commencement of the action. Coosa Valley Electric Cooperative (“Coosa Valley”) also moved to dismiss, arguing that the Cities lacked standing to assert a cause of action under 15 U.S.C. § 16. The City of Lincoln, Alabama, subsequently filed a motion to intervene.

On January 9, 1990, following a hearing, the district court granted the motions to dismiss with prejudice and denied Lincoln’s motion to intervene. The court found that the Cities lacked standing to bring claims for any alleged antitrust injury occurring outside the service areas assigned to them by the Acts, but had standing to bring claims for such injuries within their service areas. Nevertheless, the court dismissed these latter claims, finding that the allegedly actionable conduct was immune from antitrust liability under the Noerr-Pennington and state action doctrines.

II. ANALYSIS

A. Standing

Section 4 of the Clayton Act creates a federal cause of action available to “any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws.” 15 U.S.C. § 15(a).7 Standing to bring an antitrust claim is a question of law which we determine by examining the allegations contained in the complaint. Todorov v.

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