Municipal Utilities Bd. v. Alabama Power Co.

925 F.2d 1385
CourtCourt of Appeals for the Eleventh Circuit
DecidedMarch 11, 1991
DocketNo. 90-7095
StatusPublished
Cited by1 cases

This text of 925 F.2d 1385 (Municipal Utilities Bd. 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.

Bluebook
Municipal Utilities Bd. v. Alabama Power Co., 925 F.2d 1385 (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 CASE

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 764.1 In 1984, the Legislature passed the Service Territories for Electric Suppliers Act (“the 1984 Act”) for the stated purpose of limiting wasteful line duplication. Ala. Code § 37-14-1 (Supp.1989). The 1984 Act assigned service territories to Alabama’s [1389]*1389electric suppliers. This legislation was subsequently held invalid by a federal district court and enjoined from enforcement.2 In 1985, the Legislature passed a second Service Territories for Electric Suppliers Act (“the 1985 Act”) in an effort to accommodate the constitutional questions raised by the district court. Ala.Code § 37-14-33 (Supp.1989).3

The 1984 and 1985 Acts (collectively “the Acts”) established 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 special situations.

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

The rules governing service inside city limits allowed the “primary electric supplier” to purchase the facilities of other suppliers within “existing municipal limits” on terms specified in the statute. Id. If the primary supplier elected not to purchase these facilities, the statute permitted the secondary supplier to maintain these facilities and become the assigned supplier to those new customers which locate “closer to” its lines. Id.

The Acts also contained certain “special rules.” Ala.Code §§ 37-14-7, 37-14-36 (Supp.1989). These rules incorporated into the Acts certain listed agreements that had been reached previously by electric suppliers and recognized by the Alabama Public Service Commission (the “APSC”). These agreements governed the prevention of line duplication in the areas they covered. The Acts prohibited changing these agreements without the approval of the Legislature. Id.

B. Procedural History

On May 19, 1989, the Cities filed an antitrust complaint seeking declaratory and injunctive relief and damages against the defendant 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.A. §§ 1, 2 (West 1990), and the Clayton Act, 15 U.S.C.A. § 26 (West 1990). The Cities alleged that the defendants had illegally agreed to divide service territories horizontally and had conspired with members of the Alabama Legislature and Government to immunize this antitrust violation by codifying this illegal agreement as the Acts. The complaint challenged all of the defendants’ actions associated with this agreement, including their efforts to pass the Acts and any actions the defendants had taken pursuant to the Acts.

On June 12, 1989, APC, AREA, and nineteen of the Cooperatives moved to dismiss the complaint for failure to state a claim under Fed.R.Civ.P. 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. On June 14, 1989, Coosa Valley Electric Cooperative [1390]*1390(“Coosa Valley”) also moved to dismiss, arguing that the Cities lacked standing to assert a cause of action under 15 U.S.C.A. § 15 (West 1990). On August 11, 1989, the City of Lincoln, Alabama, moved to intervene.

On January 9, 1990, following oral argument, the district court granted the motions to dismiss and denied Lincoln’s motion to intervene. The court held 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, holding that the allegedly actionable conduct was immune from antitrust liability under the Noerr-Pennington and state action doctrines.

II. ANALYSIS

A. Dismissal of the Cities’ Claims

When reviewing a district court’s order dismissing a complaint pursuant to Fed.R. Civ.P, 12(b)(6), this Court will presume the allegations of the complaint are true and liberally construe the complaint in the plaintiff’s favor. Burch v. Apalachee Community Mental Health Servs., Inc., 840 F.2d 797, 798 (11th Cir.1988) (en banc), aff'd sub nom., — U.S. —, 110 S.Ct. 975, 108 L.Ed.2d 100 (1990). A motion to dismiss will be denied “ ‘unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claims that would entitle him to relief.’ ” Id. (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957)).

Notice pleading is all that is required for a valid antitrust complaint. Quality Foods de Centro America, S.A. v. Latin Am. Agribusiness Dev. Corp., 711 F.2d 989, 995 (11th Cir.1983).

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925 F.2d 1385, Counsel Stack Legal Research, https://law.counselstack.com/opinion/municipal-utilities-bd-v-alabama-power-co-ca11-1991.