*1 merits of the reaches the opinion the district court’s
controversy and affirms
order. CORPORA- CAPITAL
AFFILIATED
TION, Etc., Plaintiff-Appellant,
v. Defendants, al., HOUSTON, et OF
CITY James Television Cable Coast
Gulf McConn, Defendants-Appellees. J.
No. 81-2335. Appeals, Court of States
United
Fifth Circuit.
July Sept.
Rehearing Denied
Stephen Susman, White, D. William H. Brink, Houston, Tex., Charles J. Michael M. Barron, Austin, Tex., plaintiff-appel- lant. Wallingford, Houston, Tex.,
Rufus
City of Houston and Jim McConn.
Jeffers,
Miller,
John L.
Richard B.
Hous-
Cable,
ton, Tex., for Gulf Coast
CLARK,
Before
Judge, BROWN GEE, RUBIN, GARZA*,
POLITZ,
Chief
REAVLEY
WILLIAMS,
TATE,
JOLY,
JOHNSON,
DAVIS,
HIGGINBOTHAM and
Circuit
Judges.**
GARZA,
Judge:
Circuit
Capital
Corp.
v.
Affiliated
Houston,
(S.D.Tex.1981),
granted
the district court
the defendant’s
judgment n.o.v. motion in an antitrust ac
tion because 5t believed there was insuffi
“ent evidence
Plaintiffs
f0n,necting
to llmlt
^
^
and its
failure
a cable television fran
í
in
panel
r
chise. A divided
of this court re-
_,
.
. .
holdmg
™vsed *hat decisi0n
am°ng
things
conspiracy complained
per
was a
se antitrust violation. Affiliated
Capital Corp.
Houston,
v. City
700 F.2d
(5th Cir.1983).
We vacated that deci
banc,
sion and decided to hear this case en
(5th Cir.1983).
haven’t “yes” attorney, and Answer “no.” very competent have competent attor- very people other No. ANSWER: done, and I would like see neys. What INTERROGATORY NO. 3 done, is get this might take a.motion to it youDo find from a preponderance Department and Legal to send credible evidence that one or more of the something out. try to work participated defendants in a 27-28. Exhibit unreasonable restraint of trade to limit Plaintiff’s competition for cable television franchis- Goldberg was clear: message to es, in violation of Section of the Sher- Council, private rather but man Act? Answer “yes” or “no.” the future decide who would businessmen ANSWER: Yes. When Mr. in Houston. television of cable agreement with INTERROGATORYNO. 4 not make an Goldberg did businessmen, you preponderance those Do find from a for the convenient Mayor voted credible evidence that of the follow- and the Gulf Coast presented persons participated package conspir- in that “yes” conspirators. acy? Answer or “no.” City of Houston a. alleging this suit then filed Affiliated Yes conspir- engaged had that defendants entry into the Houston Jim prohibit b. McConn
acy to market, violating thereby television cable Yes Specifically, Act. the Sherman section c. Gulf Coast Television Cable *5 claimed that certain plaintiff the Yes to agreed franchises television for cable INTERROGATORYNO. 5 they would in the territories which definе you preponderance find from a of the Do franchises, mem- that no two for so apply evidence that either of the con- credible conspiracy compete of the would
bers you if spiracies, have so found answer addition, territory. plaintiff In the same 3, proximately Interrogatories 1 or to in a participation defendants with charged injury to plaintiff’s caused business competi- limit general conspiracy to more “no.” property? “yes” Answer or or by ex- franchises for cable television Yes. ANSWER: non-conspirator competitors. cluding NO. 6 INTERROGATORY cash, money, paid of if now in What sum II. from a of the you preponderance find do . COURT JUDGMENT DISTRICT fairly and rea- evidence would credible sonably compensate plaintiff trial of the of evidence in the At the close any, you plaintiff if has damages, find a case, jury presented with was instant cents, Answer dollars and incurred? interrogatories. in- The relevant of series any. if repro- are responses terrogatories $2,100,000.00. ANSWER: duced below. INTERROGATORY NO. motion, argued post-trial In a defendants fran- that two or more It is established notwithstanding the judgment verdict applicants, including defendant chise First, grounds. the defendants on three Coast, participated agreements plaintiff’s Gulf all of evidence had asserted boundary lines to divide the boundary so as le- agreements, on found related appli- Interrogatory jury’s areas these geographic gal by for which answer to fran- television that there no evidence to seek cable No. so cants would jury’s indepen- you preponder- support finding from a of an Do find chises. Interrogatory under No. conspiracy that these the credible evidence dent ance of no Second, there was they claimed that part were of a arrangements trade, boundary agreements of in vio- exclusive evidence restraint in unreasonable Houston, (S.D.Tex.1981), finding proximate cause support Finally, granted defendants the relief re- the district court No. Interrogatory Noerr-Pennington doc- Although quested by the defendants. contended notwithstanding judgment mandated trine inde- judge trial found substantial evidence the verdict. pendent boundary agreements Interrogatory support the answer No. carefully researched thorough and In a 3,5 plaintiff he concluded that had failed Corp. v. Capital opinion, Affiliated motion, you sugges- If further comments response to defendant’s 5. In regarding proposed tions form of ordi- demonstrate evidence to cited wealth nance, please its memoran- let me know. conspiracy. In theory of second all the evidence Plaintiff's exhibit of the referenced set out 15. None opinion court dum theory support proposed a second sections of the ordinance relates to agreed would competition: boundaries. conspiracy to limit Runnells, In October Runnells others met on behalf August Clive By late Mayor meeting, McConn. At that Runnells Coast, agreed with Meca had Gulf Testimony was informed that McConn wanted Westland to competitors. friendly would be Levin, applied Capital’s a franchise. Westland had for a have portion Affiliated AI Runnells. Clive lawyer Coast, sought by franchising process, Gulf testified of the area during 20, 1978, general that a he contacted indicated to Gulf Coast by September Bill that Chamberlain, area, Westbury-Meyerland, agent of Gulf Coast. Chamber- was what he wanted an Runnells; attorney Testimony Coast’s Bill have. of Clive that Gulf Westland to lain told him Testimony TV pushing force of the cable McConn. of James Olson "was a 22, 1978, point.” further testified Levin of the Novem- at that On November notice situation agenda Olson and Olson told contacted indicated that six that he then ber 29th concerned, Al, late; ordinances, him, (6) ultimately it’s too I am "as far as five of which day already cut.” On the pie been approved, 27, 1978, has On November would be considered. Cable, telephone between Le- conversation attorney before this for Houston one of Olson, Day, had told Jonathan upcoming agen- Olson vin and scheduled on the the da, Cable, "try- attorney that Olson for Houston proposed television ordi- sent a final cable together” put map and that “most of the City Attorney: nance to the side.” Plaintiff's on eastern areas are defined proposed revised form of the Enclosed is a exhibit 63. t.v. ordinance which includes modi- cable lawyer September for Houston On made this week-end. fications regard- lawyer for Gulf Coast Cable wrote to the proposed time sched- order to meet the ing the franchise ordinance: ule, agreed by must be further revisions copy proposed cable Enclosed is a Tuesday, 28. Final November 12 noon *6 marked to dele- show television ordinance completed proofing will be of enclosure additions, including recom- some tions and by that time. by counsel. Also enclosed is our FCC mended copy also sent a exhibit 29. He Plaintiff's your copy for convenience. an unmarked attorney, had Gulf Coast’s who ordinance to proposed ordi- form of the The enclosed counsel for Houston it with the lead discussed processing placed in our word been nance has morning: Cable earlier that any changes Consequently, or ad- equipment. proposed cable t.v. ordi- Enclosed is the easily you make can be accom- wish to ditions Day discussed with which Jonathan nance discussed, the enclosed form we modated. As morning. copy you is a this Also enclosed working internal as an should be considered attorney. City transmittal letter to agreed proposal can reach draft so that we significant changes in red in I have marked city. present to the your you If have to facilitate review. order any questions 14. A week later he wrote Plaintiff’s exhibit comments, please let me recounting they had met on letter another know. ordinance, noting and their dis- this franchise day Houston exhibit 30. The next Plaintiff's proposed provisions this cussions of various attorney copies ordinances to sent Cable’s ordinance, including respect provision with applicants. pro- ultimately successful City's percentage of the interest in the to the gross complete except for the posed ordinances ordinances: revenues from the proposed applicants ser- and their names of form of CATV ordi- is a revised Enclosed & 189. The area. Plaintiff's exhibits 32 vice changes we discussed at our nance with applicants filled in the blanks successful then 10.B; 8.G; meeting Section in Section last areas, and for- their names and service with M; J, 12.H, and and Section 23.A. Section City Attorney. warded the ordinances suggested revision to Sec- is a Also enclosed proposed ordinances Some sent their gross percent regarding the three 20.A Attorney who then Houston Cable back to the we are unsuccessful revenue issue in the event City. exhibit Plaintiff's them to the forwarded regular limiting fee to sub- the franchise scriber service. following by comments were made Goyen: Councilman agenda City meeting for the Goldberg, Mr. address let me Council’s wis- (6) November 1978 contained six cable tele- in, applications they dom. As these came franchises, including plaintiff’s, vision Plain- Legal Department. 33; were sent to the Obvious- tiff's exhibit placed 22, 1978, those ordinances had been ly, lawyers got together a number of and did agenda on the on or before November they privy whatever did. I was not Plaintiff’s exhibit 174. When Affiliat- to it nor this, attorney any meeting. ed Levin heard of he contacted did I want to in on sit City Attorney Assistant Adrian Baer. Baer re- Aрparently, they up came with the formula layed following information Levin: applicants agreed upon. hop- that those I was City [T]he and Council had made your might up situation end in the decision, said, their and ‘I learned this [Baer] others, pot whereby same as the there would directly Mayor, franchises are coming be some kind of recommendation be- non-exclusive, he does not know about the Council, fore this and this Council would not areas, being it’s still worked out Williams another, give have to carve from one to and Baer ... so the result will a de net be past have we not had to do in the and facto exclusive.’ which I do not want to do now nor do I [,Baer,] explained He to me that there intend to. going were—the decisions as to who was away giveth I do not want to taketh and areas, get specifically what terms of else, somebody I because haven’t had to do boundaries, negotia- actual were still under past. very competent in the You have a tions, but the decision as to who was fait attorney, people very and the other com- accompli. petent attorneys. What I would like to see Levin; Testimony of A1 Plaintiff’s exhibit 106. done, might get and it take a motion to inspection After an on-site of Gulf Coast’s done, Legal Department is to send this to the facilities, Sadowski, Bellaire the consultant try something and work out. Earle, Houston, hired told Di- Subsequently, Service, Baer, Plaintiff's exhibit at 27-28. rector of Public and Assistant proceed the Council discussed how to Attorney, rеject appli- that he would Gulf Coast’s plaintiff’s application, morning, and Councilman Mann cation. The next Sadowski was fired. following suggestions: day messenger One later a made the from Earle retrieved concerning the notes Sadowski had made I want to make a substitute motion that the notes, applications. In his [plaintiff’s] application Sadowski had not be referred to the Le- application recommended that Gulf Coast’s rejected, be gal Department, they in turn can contact spite suggestion oral to that his these who have come for- other Baer, effect to Earle and and he testified that he they something. can ward and see if work out changes would have made no substantive in his report after the visit to Gulf Coast’s facilities. fine, this, you If take then see how much however, report, He had recommended in his going off this other Gulf Coast to knock given Gulf Coast be a smaller franchise group on farther down and then around and applied. area than that for which it had When around. typed by Sadowski’s notes were someone with City, the Moreover, that recommendation was deleted. application Substitute that this be motion significant changes were re- Legal Department referred to the Service, and Public typed flected in the version of the notes Sadow- the other are to contact messenger: ski had turned over to Earle’s his guarantee people that have ordinances Community recommendations that Houston Ca- being аdjusted that these boundaries are be- ble, Cable, (Westland) Houston and Columbia them, they report tween back to Council. rejected changed *7 be to recommendations 37, 39, Plaintiff’s exhibit considered; should continue to be presented hearing, his statement that Cablecom had Also at Mann indicated his only satisfactory application was omitted. Tes- knowledge survey of a house-count that had timony of Robert Sadowski. by been conducted Gulf Coast. Plaintiff’s exhib- plaintiff’s hearing City Prior before survey compari- it at 25. The resulted in a 12, 1978, suggest- on December Council McConn plaintiff applying son between the area for Goldberg ed to that Affiliated seek a franchise in and an area that was within Houston Cable’s City another area of the rather than in the area application, Plaintiff’s exhibit and was con- sought by Gulf Coast. McConn testified conjunction by proposal ducted in with a Gulf suggestion: thought his motivation for the that, "I Coast, give if Houston Cable would trying really help Goldberg, Mr. Coast, identified area to then Gulf Coast Gulf pretty obvious to me that Gulf Coast had willing give plaintiff would be its area. Testi- Goldberg the muscle and that Mr. did not.” document, mony prepared of A1Levin. A some- 28, 1978, hearing plaintiff’s ap- At the on time between November and Decem- 20, 1978, by Attorney plication which was conducted on December ber Assistant Baer exclude non-conspirators injury demonstrate its plaintiff’s was caused injury. anything other than boundary defendants’ Thus, agreements. he reasoned that there at 1006. support
was nо evidence to Interrogatory No. 5: agreements to allocate and divide
[T]he III.
territory cannot be considered as evi- IMPACT ON proving plaintiff’s causation of COMPETITION
dence in- record, jury, and no other evidence abundantly It is clear from the record of inferential, provides either direct or group this case that a of Houston business- necessary connection between the second receipt men decided to ensure the of cable theory of to exclude non-eon- by agreeing television franchises to divide plaintiff’s city among and the spirators failure to themselves and exclude compete wanted to a fran- anyone who a franchise. receive simply They chise on merits. did so not testimony by plaintiff elicited The blessing Mayor, with the but at his witness further expert demonstrates Appeal, behest. Record on vol. at 450. plaintiff that what established was a devastating competitive impact relationship appli- between the causal gentlemen’s anyone agreement to exclude agreements overlaps to eliminate cants’ franchise, compete who wished to for a territory plaintiff’s and the failure against backdrop evident of the inher- franchise, rather than a be awarded structure indus- ent of the cable television relationship agreement between the try. boundary 20th, description application alternative Goldberg bears an tal's if "on the Mr. in, including had come in the Gulf Coast the Houston and Mr. Runnels had come in, area, princi- Mr. Mishcher Baer’s had come and all the Cable notation: "1-10 line come, pals piece had and a had Hwy. Goldberg’s Houston 290 without tract— shifted to Goldberg been carved out for Mr. with no contingency.” Plaintiff’s exhibit 56. objection by anybody.” Councilman Robin- City Council favored Gulf Coast's fran- supported son testified that he would have chise, plaintiff which subsumed the area had Capital’s application Affiliated if had for, applied and at trial several councilmen and something been able to work out with Gulf McConn testified as their reasons give Coast to him what he wanted. Council- keep politi- therefor. McConn’s concern was to man Westmoreland testified that he did not groups cally influential content: disagree prior deposition testimony with his step anybody’s politi- Q. You didn't want to that Affiliated had been unable out to work toes, you? cal did Coast, any type arrangement with Gulf A Not if I could avoid it. for that reason Westmoreland voted in favor politi- type Q didn’t want to make You of Gulf Coast. powerful person where some like cal decision witness, Finally, plaintiff’s expert Martin unhappy, you? would be did Walter Mischer Malarkey, length testified at about the detri- could avoid it. A Not if I noncompetitive mental results of the franchis- parties things Q all of the could work And if Houston, ing process in and about the bene- out, you any type wouldn’t have to make then pro- fits to residents of other cities where the decision, approving agree- than their cess has involved оn the merits of ments, that correct? isn’t applications. According testimony, to his Yes, correct, yes, generally that is A sir. rates, provisions the benefits include lower you happen? Q isn’t that what wanted to And noncompliance for sanctions in the event of beautiful, have been if it could A That would franchisee, provisions performance way. happened bonds, provisions requiring city approval *8 happen you Q But it didn’t and had to when prior changes ownership to in or control of between Southwest Houston make the choice Further, the franchises. he testified that nor- Coast, you you and Gulf stated that the other— mally prepares the itself the franchise thought people political- the other were more ordinance, allowing applicants rather to than Southwest, ly powerful isn’t than that correct? do so. Yes, that,
A sir. I don’t know if I said but I'll (footnotes omitted). 519 at 1000-05 say Testimony it now. of James McConn. Goyen by deposition Councilman testified that he Capi- would have voted for Affiliated
1563 utilities, television, contrary is men not arrive at like electric able could a Cable monopoly. verdict, granting prop- a of the motions generally considered natural is wisdom, hand, ex- According to the the if conventional On there is sub- er. high tremely prepar- fixed costs incurred in opposed motions, stantial evidence the opera- company for is, a cable television quality of such evidence in prevent competition the survival of weight that reаsonable fair-minded marketplace. expert Plaintiffs witness the impartial in the judg- men exercise industry the cable television admitted on conclusions, might ment reach different it did make economic sense not motions denied. the should be bound- grant overlapping franchises with 374-75; at Bazile v. Ma Id. accord Bisso 35, Appeal, Record on vol. at aries. (5th Co., 101, Cir.1979), 606 F.2d 104 rine approach do of scale not The economies denied, cert. U.S. S.Ct. theory but the those of electric utilities (1980). L.Ed.2d 33 long-run that the av- industries holds both weighing In the jury the evidence at had increases. erage output costs to fall as tend amply disposal supports we find that it discussion purposes assume for this We jury’s findings interrogatories the Nos. 3 is indeed a natural that cable television In and 5. no event is the evidence in favor perni- monopoly proceed to discuss the the defendant overwhelming so that rea- this conspiracy given cious effects of the sonable men could not arrive at the verdict assumption. Thus, jury. reached the the trial court argues Coast that since Defendant Gulf overturning jury incorrect ver- monopoly and television is a natural cable dict. imp- franchise is competition within areas addressing In harm ractical, prac- of territories is a division conspiracy suffered as result of the rec industry this and was tical characteristic of ognized Interrogatory impor No. it is harmful this riot to consumers. Given agreement that the tant understand characteristic, competition pоssible is compete those wanted to exclude who con granted. before franchise is Unfortu- separate conspiracy stitutes and a valid nately for both Affiliated and the citizens independent ground liability. Houston, imposing was no there glance first Inter While at answers to among corporations fran- received appear Nos. 1 and 3 high- rogatories irreconcila quality, chises. result was lower ble, explanation simple. priced Houston. The manner er cable television for Appeal, Interrogatory posed Record on vol. at No. was 23-27. in which they caused to believe the'jury them IV. question on passing whether or to have one not it was better THE RULING J.N.O.V. city multiple franchises. All of the F.2d 365 Boeing Shipman, v.Co. agreed dividing to the suit parties (en banc), (5th Cir.1969) court estab- preferable franchises was city into several judg- of review of lished standard unreasonably restrain trade. and would by a trial ment n.o.v. or directed verdict Indeed, jury note sent a to the trial that: court. We stated asking or not judge whether needed judgment notwith- On motions for ... They questions. as answer both asked: standing should the verdict Court “yes suming to vote #3 is we want on just the evidence—not consider all of voting Jury # any point in on 1?” there supports the non- that evidence which vol., 1, Appeal, No. Note Record light in the and with case—but mover’s all inferences most favorable reasonable noted, As the trial court believed If party opposed to the motion. (In found strongly point the facts and inferences so 3), proximate terrogatory No. was not par- one overwhelmingly favor of fran- plaintiff’s failure to receive a that reason- cause of ty that the Court believes *9 1564
chise. The court
Despite
thus overturned the
opinion
the learned trial court’s
jury’s
judgment
Interrogatory
answer
No. 5.
we find that
n.o.v.
Be
was im-
addressing
proper because there is
argument
fore
substantial
directly, we
evi-
support
dence and inferences to
pause
jury’s
point
proof
out that
of causation
finding
conspiracy
pursuant
found
in this case
necessarily hypothetical
Interrogatory
No. 3 was
proximate
(what would have
occurred
the absence
plaintiff.
cause of harm to the
We reach
conspiracy).
Supreme
As the
Court
this conclusion because three categories of
noted,
vagaries
has
of the market
“[t]he
evidence indicate that
conspiracy
to lim-
place usually deny
knowledge
us sure
competition
prevented Affiliated from ob-
plaintiff's
what
situation would have been
(1)
taining a franchise:
circumstantial evi-
in the absence of defendant’s antitrust vio
flowing
dence
from the nature of the con-
Payne
Chrysler
lation.” J. Truett
v. Co.
(2)
spiracy;
evidence that Gulf Coast
Corp.,
557, 567,
Motor
451 U.S.
101 S.Ct.
conjunction
with the
Council vetoed
1923, 1930,
(1981).
1565
properly
concerning plaintiff’s
consider evidence
failure to receive a franchise.”
agreements
demonstrating
F.Supp.
519
at 1006.
those
the de
See,
to conspire.
e.g.,
fendant’s intent
disagree;
We
substantial inferential evi-
Mine
United
Workers America v. Pen
example,
dence exists. For
Affiliated’s at-
657,
3,
nington, 381 U.S.
670 n.
85 S.Ct.
Levin,
torney, Al
testified that when he
3,
(1965);
1593 n.
record evidence
that this alterna-
reveals
Plaintiff’s exhibit 83. Gulf
Coast,
hand,
contingent upon
approval
the other
tive was
had assets of
$366,259
$327,259.
conspirators.
equity of
and the other
Gulf Coast
Plain-
*11
Moreover, by
tiff’s exhibit 10.
1980
certainly
many
Reasonable men could
conspirators
bought
of the
had been
out
appli-
drawn the inference that Affiliated’s
corporations
out of town
and Gulf Coast
cation was denied because Gulf Coast and
half of
had borrowed
its debt from another
participants
conspiracy
in the
ve-
55,
company.
II,
Plaintiff’s
part
exhibit
at
application.
toed its
§
Affiliated,
hand,
on the other
had the
Third, the record contains evidence that
qualifications of close ties to the communi-
conspiracy,
absent a
Affiliated would have
sought
ty
capacity
to serve and the
to
obtained
on the
a franchise
merits of its
immediate
provide
service. We find that
application. Citing Malarkey’s testimony,
jury
properly
could
pre-
infer from the
applica-
the trial court held
all
ceding evidence that Affiliated would have
tions, including plaintiffs, were “wеll below
obtained a franchise if the conspiracy to
and not at all
to
standard
informative as
nonconspirators
exclude
eclipsed
had not
important
many
aspects of the franchise
competition on the merits.
application.”
F.Supp.
519
at 1009. Al-
though
debatable,
this conclusion is
there
V.
can
little doubt that Affiliated
more
be
qualified to
than the
receive
franchise
NOERR-PENNINGTON DOCTRINE
Moreover,
applicants.
five successful
The Noerr-Pennington
doctrine
demonstrates,
jury
evidence
so the
could provides
exception
to
liability
antitrust
infer, that Affiliated would have received a
enabling citizens or business entities
in
to
if
conspiracy
prevent-
had not
petition public
fluence or to
officials to take
application
ed a consideration of its
on the
official action that will harm or eliminate
Malarkey
merits.
testified that the most
competition. Eastern R.R. Presidents
important part
application
of a franchise
Inc.,
Freight,
v. Noerr Motor
Conference
qualifications.
concerns a firm’s financial
523,
81
U.S.
S.Ct.
In
No. 3
that a defendant cannot
its answer
nington immunity
implicitly
found a
activity
when the
in
entitled
found that the defendants were not
government
fluence
action is mere sham
rul
immunity.
analyzing
jury’s
to hide
essentially
what
an attempt
produced
the trial court
an exhaustive
interfere with
competitor’s
business.
ex
study
why
public co-conspirator
Eastern R.R. President’s
v.
Conference
Noerr-Pennington
doctrine
ception
Inc.,
Noerr
Motor Freight,
365 U.S.
applicable
case.
to the instant
523, 533,
(1961).
S.Ct.
7.
Court has
held that
"[T]he
cess,
that
were
immunity
sphere
determined
two
exists for actions outside
including
qualified,
applicants,
and that
three
legitimate legislative activity.”
Way
Espanola
Cir.1982),Westland,
rejected.
should be
827,
(11th
Corp. Meyerson,
v.
F.2d
690
829
publicly
Mayor
The
did not adhere to the
denied,
1039,
1431,
rt.
460 U.S.
103 S.Ct.
ce
program
granting
announced
franchises
(1983). Although
1569
not use Parker
interpretation regarding
immunity
to avoid the
The trial court’s
anti
inapplicable
immunity is
now be-
trust
laws
mandate
qualified
without a state
to dis
Lafayette
v. Louisiana
place competition.
not have
benefit of
cause the court did
Co.,
decision Harlow v.
Light
389,
Power &
Supreme
Court’s
435 U.S.
98 S.Ct.
800,
2727, 73
Fitzgerald,
1123,
102 S.Ct.
(1978) (decided
457 U.S.
ing city with no total compet- Selecting among boundaries. Supreme Court in City Lafayette The of fit to companies those most Boulder QHy left the inferior courts of exquisite of citizens provide cable service to the w¡th fitting task of the anti- paradigmatic governmental Houston was a municipal government. laws to trust The function, and it is difficult to conclude is at rule of reason the center of the uncer. . to mayor city council the desire of the ^ was it- making this determination escape antitrust principles pri Basic teach that As purpose.1 legitimate municipal self a corporations weigh citizens cannot vate failed municipal defendants have thus good public against competitive im any public justifying policy to advance is, agreements.2 their pact of It for exam- conduct, jury was I their conclude to pie, price-fixing charges no answer concluding their anticom- warranted letting competitive design work of will of anti- petitive imposition merit the actions design. government inferior cause It is for liability. trust public weigh good against any anti- II competitive impact. When the antitrust applicable are then today laws found to be we Isolating the restraint which municipalities, may the lim- places perspective how we balance condemn also rulings Amend- regarding impact its our First competitive of decisions city of redress, petitions protections of ment against perception government of principle growth stunted the Parker public good is uncertain. Lafayette Noerr-Penningtonuntil City of ¡s d cit Thfe when n. and City Boulder were decided. of ¡n ]oca] ^ uni aets rok of n. ment , , , , , Noerr-Penmngton by necessi- lull reach of „ , , j ment, . whatever be the issue when it acts -i . f. -A But , „ , ty open exploration. today . is now , , , goods Argu- a consumer and services. x .i In the * exploring. present posture jn , . we do no marketplace tbe ably- enters govern- petition there is no this case thf whf others, f°r custom °f or to c°mPete do not face a successful ment at issue. We the, for the cleaners Hall Purchase wmdow_ request governmental action with anti- windows, activity virtually is mdistm participation results where the competitive private Where, guishable from business. deci- government was confined to that of however, city regulator acts as a Instead, con- sionmaker. the condemned deliveries governor of sales and by the participation active duct included constituents, services goods to its in the exclusion of a com- with citizens role from that engaged dissimilar petitor. Resolution of the host of difficult private business. traveling Noerr-Penning- under the issues day. await ton rubric must another system, private In our economic business presumed resрond predo- are enterprises sum, Judge I concur with Garza’s minately, exclusively, profit if not writing in opinion separate and add this By contrast, “prof- concept we do motive. parts identify I and II issues *16 today. part per purposes I in III to is alien to of a not decide continue it” se the unit case, procedural Regardless, jury posture from the could inferred 2. Given the of this the city regard- parties evidence that the and the defendant the do not attack instruction the agreed applicant no would other Regardless, of reason. the rule rule how is permission. being It is be considered without their applied gives actually meaning apart from its city to defend action as that of difficult phrasing, traditional government, ought weight to with all the such carry, decisionmaking placed in the when the is private potential competitors. hands of minority- favor planned Houston City of the clash of Consequently, government. of awarding the law— cable necessitating an antitrust businesses owned interests reap anti-competi- extra-normal policy is desire franchises. Such a private the in free public interest advantage the in that it accords an profits versus tive in its tradi- appear not competition a non-economic businesses based on certain —will antitrust con- accused the form when tional criterion, liability but no antitrust should entity. governmental is a spirator advancing if the of result one decides that outweighs public policy “legitimate” antitrust princiрle underlying competition. pri- any impact adverse on stated, when the is that laws, starkly the conflicts profit of pursuit vate majority prob- does not surface the public competition, public interest lem, but, by analogy pri- to other uses of turn, the tradi- In prevail. shall interest goals, implement social such a vate suits that a states reason” of tional “rule ought implemented by allo- rationale to be may be present constraint party equipped best to make cating to the ultimately pro-competi- by an justified only going of forward with proof the burden which benefits societal Other tive effect. Thus, when a has the evidence. anticompetitive from may allegedly flow prima facie case of anticom- established it is because irrelevant act are defendant, by municipal conduct petitive to determine prerogative businessman’s municipality would then burden on the obtained. may best be those benefits how governmental legitimate be to articulate competition will Rather, presume that we put by its which advanced conduct interests by greater social ordinarily be attended reasonably ex- gains at issue whether market structure. than other benefits anticompetitive by its pected to be achieved government of prerogative then the It is compe- degree by which justify the conduct competitive determine when alone to expected to be dimin- reasonably tition was meet the needs or inadequate to process is persuasion burden of The ultimate ished. society. such interests of the best measured, restraint, was unrea- so may pursue three cases, government sonable, plaintiff. be on the would courses: It often-overlapping related and competition, for ex- replace or restrict may a rule will not be Application of such licensing procedure; it by adopting a ample not rec- Critically, such a rule does easy. example for competition, may supplement antitrust of the federal applicability oncile anti-pollution enacting product safety or by principles those municipalities with laws to competi- laws; may and it substitute counsel deference federalism which price tion, regulating the example by performed balancing public interests monopolist. natural charged by under authori- government units of by local has not addressed Though majority To the con- ty delegated the states. signifies opinion directly, its this issue give to the courts the task trary, it would “rule amenability to the rationale municipal objective against balancing a when the accused applies of reason” Reviewing the anticompetitive effect. entity must differ governmental is a could of such restraint “reasonableness” accused is a that encountered when commitment to federal- against our travel so because the This is private business. ism. duty ultimately rests on a majority opinion analysis reason that allows A rule of compe- the absence justify directly weighed purpose to be government franchises; political pa- awarding tition impact seems antitheti- against competitive justification. Under tronage is not Yet, premise of this cal to federalism. than com- rationale, public interests municipal decisions is that concern against the inter- petition can be balanced govern- species reflect a government particu- it is the competition, because est review is an and that such mental choice to advance government prerogative of lar into government federal intrusion of the Thus, example, other interests. these pre- This government. of local the affairs case that in this there was evidence *17 however, accept majority in this Relevant Market—The mise, fails to that ac- knowledges majority opinion city in Boul- started the this unfor- sense sovereignty municipal political affair a denied tunate when made deci- der (we city are not a nation of government multiple sion to let franchises for cable TV so, doing the court sanctioned states). In coverage in majority Houston. What the decision-making in a intrusion into free promptly ignores then is that this final placed dissimilar to limitations manner not decision established the relevant market upon private business. competitor as, each city for not the Houston, segment but each discrete of the weigh purpose Finally, not to any competitor a for franchise presence of less anticom- restraint and designate. wanted to This elemental truth pur- achieving the petitive alternatives to negates every anticompetitive conclusion illuso- render the rule of reason pose would sum, majority proper draws. When the con- ry, for its essence is balance. subjecting cept put deci- of relevant market is jury about with the weighty concerns government to tradition- municipal finding conspiracy there was no in sions of presum- measures were al rule of reason agreements restraint of trade in the which insufficient to ably found lines, considered and proposed boundary every drew the un- policies pro-competitive overcome doubt that this is not an antitrust case antitrust laws when the Su- derlying the disappears. Capital Affiliated could have municipalities from removed preme Court competed one or more of the rele- While in of Parker v. Brown. the cover designated by any applicant vant markets path, an is a treacherous as my view this group. Capital in the defendant Affiliated judg- accept we must inferior court competed yet could have different mar- opinion as majority I read the ment and by forming group dividing kets its own doing so. differently. belatedly territories When it piece demanded a choice of Gulf Coast’s CLARK, REAV- Judge, with whom Chief territory, conspira- neither the rebuff was JOLLY, E. GRADY Circuit LEY and anticompetitive. torial nor dissenting part. Judges, join, jury Special Inconsistent Verdicts—The reheard en banc This case came to be boundary agree- line determined that City of panel held that because the areas geographic ment to divide between Houston, and a franchise mayor cable part was not of a con- per violation of applicant committed a se in unreasonable restraint of trade. spiracy Act. The en banc Section of Sherman finding for the This is a lion in the street Although position. court abandons majority’s fact conclusions on causation. reasoning it lacks the substitutes jury finding fact was not a casual This error, prior just it remains sweep of the a insisted this was aside. reversing the district court’s wrong in the The court’s major fact issue case. in favor of Gulf Coast. judgment interrogatories instructions as well as its Initially, majority fails to make the majority does the har- made it so. How of relevant market. critical determination critical, finding supported well monize this legal by choosing compounds this error It judge the trial heard saw which who through path the facts to arrive its own controlling? It recasts the witnesses found ignores contrary result initial jury’s special first verdict—which finding and the trial fact boundary agreements were not found the jury’s reconciliation of the two judge’s fact re- in unreasonable part of findings. The result is to sad- inconsistent multiple finding of trade —as a straint municipal franchise with dle bidder preferable to one. franchises were 6.3 million dollar award an erroneous majority’s forced reconciliation are no more an antitrust of- actions that interrogatories 1 and jury’s answers to agreement to estab- fense than would be merely It is no reconciliation at all. parts of 3 in different separate lish churches finding that of substitutes this court’s town. *18 path reasoned to resolu- jury. through reconciliation ease SALINAS, al., Plaintiffs-Ap- Thomas et answers is inconsistent otherwise jury’s pellants Cross-Appellees, grant by the trial court—to that followed the basis defendants on for the judgment Torry, Chester of no causation. Plaintiff-Intervenor-Appellant conceding the sake Alternatively, Cross-Appellee, basis could be some that there argument damage finding causation refusal Gulf Coast conspiratorial in a Stuart M. Nelkin and Warren boundary agreement, valid remake a Weir, Appellants, that the should be court of this decision in- interrogatories were jury’s answers v. new trial is and that a ternally inconsistent EXPRESS, INC., al., ROADWAY et Co., M’fg Guidry v. Kem required. Defendants-Appellees, Cir.1979); Wright and Miller (5th F.2d 402 Civil and Procedure Practice Inc., Federal Roadway Express, Defendant-Ap- § majority enters its own But pellee Cross-Appellant. findings remade at on inconsistent verdict No. 81-1623. wrong. This level. is appellate Appeals, States United Court more Injury Antitrust Lack —Still Fifth Circuit. approval of the use of wrong the court’s dispute in this to wound Act the Sherman July city’s on the terms and competed one who soldier who did not. The a summer reward not intended to restore laws were
antitrust mistakes or free
losses caused business Capital, rea- Affiliated
market forces. own, TV did seek cable
sons of legally interested had
franchise until others areas. That
agreed on market default is proximate cause of its failure to
the sole
get a franchise. in Part
I in the result reached VI concur opinion mayor’s majority agree I with the
qualified immunity. also Judge Higginbotham’s expressed
view majority’s deci-
concurring opinion ruling not be read as a
sion should competitive bidding to
cities must use and franchises. Such a
award contracts drastically impede the devel-
ruling would
opment municipal law of antitrust lia- of a
bility proper accords deference to decision-making.
municipal respectfully partial dissent from the
I judgment.
reversal of