Municipal Activities and the Antitrust Laws after City of Lafayette

Abstract

The Supreme Court decision in City of Lafayette v. Louisiana Power & Light and certain other institutional factors are likely to cause a rise in antitrust litigation involving municipalities. Therefore, it is important for local governmental units to know what types of actions are most likely to produce antitrust litigation. The purpose of this paper is to identify those types of municipal activities. The types of antitrust violations that may be alleged are varied and numerous. With the exception of mergers, antitrust charges against municipalities are not likely to differ greatly from antitrust litigation generally. The most common allegations are likely to involve violations of section 1 of the Sherman Act, such as price fixing, concerted refusals to deal, or division of the market by competitors; violations of section 3 of the Clayton Act, such as tying agreements or exclusive dealing agreements; or violations of section 2 of the Sherman Act, such as monopolization or attempts to monopolize as a result of refusals to deal. This paper examines the particular types of antitrust violations in connection with the particular types of municipal activities that are likely to give rise to antitrust litigation. One important respect in which municipal antitrust litigation will differ from antitrust litigation generally is that the former will often involve claims that conduct is exempt from the antitrust laws under the Parker or Noerr doctrines.

Keywords: municipality, antitrust, Sherman Act