Byre v. City of Chamberlain

BYRE, T. Plaintiff Martin Appellee, CHAMBERLAIN, Municipal

CITY OF Appellant.

Corporation, Defendant

No. 14090. Dakota.

Supreme Court of South

Argued Oct. 1983.

Decided Jan. City’s equipment

purchase and to provide for City’s service residents and independent as an contractor. businesses The 1960 contract between periodically modified between 1965 and order increase income. operated garbage the Byre only collection disposal thirty service within a or for- and .ty-mile of radius Chamberlain. Upon of in March advice counsel of city for Byre applied for licenses each of garbage City his trucks. Section of three provides: Ordinance 375 person Alleys No shall use the Streets or City of for collec- tion, any disposal garbage removal having without first obtained a trash perform services license to such Mueller, Chamberlain, plaintiff Paul Commission. Stoeckle, Chamberlain, appellee; Philip and 1978, Byre sought to In June of' increase on brief. garbage charged by City service rates Miller, K. Miller & Ronald Miller of Se- gross He in order to increase his income. bastian, Kimball, appel- for defendant costs asserted that increased made it diffi- Miller, lant; Miller Bucher of & Steven J. operate. City Byre cult for him to asked Sebastian, Kimball, on brief. records, books, present explana- and an his tion of costs so it could determine how his MORGAN, Justice. Byre him. refused or pay much failed complaint in action amend- The negotiations furnish this information and at only and the count survived ed broke down. alleged of the trial a violation of conclusion 1978, City Byre a September made 37-1, ch. Dakota’s antitrust South SDCL $1,400 $44,000 year, more per final offer of plaintiff, Mar- law. awarded the Byre’s original request. Byre’s than June $40,500 (Byre), damages in Byre tin actual son, family in the waste who is involved they under ch. 37-1 trebled that SDCL business, disposal at testified trial judge signed judg- trial amount. The $44,000 Chamberlain, Byre declined the offer October city against ment 23,1978, City comply failed to with (City), which awarded because South Dakota $121,500. in appeals applicable bidding procedures under SDCL 15- out City set 26A-3(1). reverse remand. We SDCL ch. 5-18.1 On October in newspaper announced the local provided garbage service residen- beginning November of Chamberlain and businesses residents garbage would collected on a con- tial problems arose and when until 1960 only. residents of tract basis Cham- sufficient or efficient provide unable requested sign and return a berlain were time, city At commission- service. newspaper in the form that was included operate Byre to asked ers they if desired ser- announcement employee City. re- as an service contracted to vice. work for but fused case, bidding procedure municipal tive set out SDCLch. 5-18. this court held that a 1978

1. In Com'rs., hauling gar- for the collection and v. Board Northern Hills Sanitation contracts bage (S.D.1978). competi- subject other waste are 6, 1978, City attempted On November and the Steckelberg Stienfeld and provide garbage collection for all (S S), resi- partnership again. Byre’s & bid sec- 31, 1978, through bid, dents first, December offer- ond like his did not meet the bid $3,000 ing Byre City’s if he would collect specifications. attempted He to reserve his residential November pick ups private contracted customers. $3,500 for December’s collection. On accepted December S & Byre refused this offer on November S’s bid to collect the waste from resi- apparently again because had failed to dences and eighty-three per- businesses for comply bidding procedure set out cent of annual revenues collected for ch. 5-18. SDCL waste disposal. collection and Under this court’s decision Northern At the meeting, Byre December 29 Com’rs., Hills Sanitation v. Board supporters his petition submitted a to initi- (S.D.1978), N.W.2d 835 contracting cities ate a permit new ordinance to comply for waste removal must with the collection of prohibit and to bidding procedures set out in SDCL ch. charging from residents and businesses city 5-18. The commission decided on No- private contracted with garbage collectors. 20, 1978, vember to advertise for bids for city commission, The 8, 1979, January on the collection of all residential and commer- began to formulate its own modification of garbage cial produced and waste City. city garbage ordinance. It directed the city attorney modify garbage 23, ordi- On Byre November placed an nances dumping pri- establish fee for announcement in the newspa- vate deposited collectors who per, waste in which read: city landfill. city The commission awarded Anyone Attention. who doesn’t have 17, 1979, 5 & S the January bid on because their signed residential contract and sent the S & only S bid was the one that con- by longer December will no to us have formed to specifications. the advertised S garbage picked up. their Byre Martin Sons, began 6 S performing City’s as contracted added) and (emphasis garbage collector February on 1979. City 1, 1978, announced that on December 6, 1979, upon the date On March Byre’s City adopted service to resi- residents dents who were not prevent contracted him initiated ordinance to City with from stop, City was to charging City would gar- collect the residents and businesses for bage. On City disposal December waste employ- provided services under con- began ees collecting residential and tracts garbage com- with collectors. The City mercial way waste. had no of distin- ordinance was retroactive to March guishing at that Byre’s time between city cus- The commission decided on March 19 tomers and residents or businesses which city bill all residents and businesses for had not contracted Byre; with consequent- waste disposal services furnished in De- ly, City attempted to gar- collect all the cember 1978 January and February and bage. 1979 and to billing continue each resident or business signed private until a

Two bids contract were received in response to was filed City. This decision was They November bid notice. were upon based City’s interpretation opened at Ordi- December com- nance 375. Section meeting mission 9 of that and neither ordinance met the adver- reads: specifications; tised bid consequently, City re-let the specifications, bid. The bid City how- shall charge make a of $6.00 ever, changed request were five-year per quarter each for the collection of three, contract instead of and to allow for garbage family from each domestic price alternative bid percent- based on a unit.... shall make charge,

age gross revenues collected City for be determined the Commission for garbage disposal. collection and The same place each month to each of business.... parties two around, who bid the first time charge Such ... shall be noted on the of each bill unit and it error to quarterly water whether was reversible admit due immediately pay- testimony hearsay, become exhibits and shall based _ self-serving speculation and time mo- able studies, tion all of which demonstrated City’s comply decision to As a result of alleged City’s Byre’s actions as evidence of ordinance, meaning of with the literal whether, damages; (5) under the facts and businesses under con- some residents case, of this court committed the trial re- both tract with were billed failing error by versible to instruct the disposal services fur- for waste properly. during those three months. by Byre nished question The first issue raises When delivered collection customers, immunity from state antitrust laws for his contracts in its role as waste collector. an- stopped billing gar- contract customers for placed bage nouncement in a after March 1979. The dubious situa- collection implied tion. The garbage charges clearly for December 1978 and announcement January February to that not be collected continued would appear quarterly Byre. on the water bills mailed residents who did contract with paid City apparently expected to residents who had not for He to break his con- collection for those months. advantage nection with and take of his required payment of ordinance all out- position only garbage collector in the standing prior to indebtedness transfer of keep market area in order entire service. licenses and water simultaneously market while and unilater- ally raising monthly rate for complaint against City filed a collection. 4, initiated this lawsuit on December 1978. predicated damages on He his loss of one- Trade, 37-1, ch. Restraint of SDCL Mo half of the total Chamberlain col- and nopolies Discriminatory Trade Prac start-up lection and the a market costs of tices, directly is taken from the Sherman private After § landfill. both sides rested Act, seq. 15 U.S.C. 1 et SDCL 37-1-22 cases, their trial court the dismissed all permits this and court to use federal other except question the of City’s counts anti- interpretations state court in our construc liability trust and submitted that to the 37-1, provided tion of SDCL ch. those cases Byre $23,000 jury. awarded for are on antitrust based similar statutes. $17,500 profits, costs open- lost for the of Supreme stated The United States Court landfill, ing a the and trebled actual dam- 350-1, Brown, 341, Parker 317 U.S. 63 awarded, $121,- ages for a total award of (1943), 326 S.Ct. 87 L.Ed.2d “nothing language the that in the of Sher suggests history man Act or its ... appealed has and raises five issues: purpose or was to restrain a state its (1) Whether is immune from state agents officers or from activities directed liability providing for antitrust when waste legislature.” by its The United States (2) disposal; whether collection and Appeals of Fifth Court for the Circuit later bids, by letting antitrust laws violated state held in Lafayette, La. v. La. Power dispos- contracting for collection and waste of Co., (5th Light & 532 F.2d 434 Cir. city continuing and to all residents al bill 1976) 435 U.S. 98 S.Ct. to private issued a license when had aff'd (1978), L.Ed.2d 364 private had contracts with collector who residents; (3) governmental body whether an initiat- subordinate state city some [a] ordinance, ipso exempt opera- for petitioned city resi- is not the ed facto Rather, who had tion of the laws. except residents contract- antitrust dents to [the question is,] legisla- collector from an ordi- whether the state with a ed type of mandatorily contemplated all ture a certain anti- requiring nance bill restraint_ competitive and It disposal, waste collection is not neces- residents for power; (4) sary point express statutory the initiative to an is a valid use of public safety, health and mandate for each act is conserve our alleged resources, the beauty violate antitrust laws. will suffice natural enhance the challenged clearly environment, activity quality prevent if of our and legislative intent. pollution, within pollution pre- or water air spread disease and vent creation Lafayette also Court stated a trial nuisances. It is also declared that may authority judge ascertain from regional manage- local and solid waste governmental operate given entity systems supported ment extent area, legislature particular that the contem- practicable for the efficient and economi- plated complained of action kind of. development systems.... of such cal Id. III, state have noted that the Some courts Article section of the South Dakota exclusion state action is based empowers legislature Parker Constitution the state general principle of federalism and a preservation to enact laws for the of the sovereign to acts states. deference public peace, safety. or The legisla- health concept cannot be extended to a state- ture, This in order to ensure the health and city relationship because a is not a citizens, safety of the state’s also enacted sovereign, but rather a creature of state 9-32, SDCL ch. Sanitation and Health See, statute. Community Communica Measures. Boulder, Co. v. tions U.S. grants City power SDCL 9-32-1 (1982). 102 S.Ct. 70 L.Ed.2d 810 We necessary expedient steps to take agree Supreme with the Iowa Court that promote suppress health and disease within similarity language because be community. City specifically empow tween the federal and state antitrust stat dispose ered to collect legislative utes and sugges because other waste material. SDCL 9-32-11. interpretation tion found in SDCL 37-1- power, City the exercise of its was statuto 22, great weight given should be rily permitted acquire operate equip interpreting federal cases the federal stat ment dump grounds and to contract Roth, Neyens ute. persons with one more for the collection (Iowa 1982). hauling and other wastes. The test for exclusion under the statutory grants SDCL 9-32-11. Similar exemption, state applied Parker action as power regulation of of waste removal cities, requires clearly to that the action be interpreted permit have municipali been to affirmatively expressed articulated and as organizations ties to contract with policy. state Community Communica right for the to exclusive collect and dis Co., supra; Liquor tions Cal. Retail Deal pose municipalities of waste and to allow to Alum., 97, 100 ers Ass’n v. 445 Midcal U.S. provide this exclusively service themselves. 937, (1980); S.Ct. 63 L.Ed.2d 233 New Mo Ltd., Chesport Hobbs v. 76 N.M. of tor Bd. Vehicle Cal. v. Orrin W. Fox of 609, 210, (1966); 417 P.2d 213 83 A.L.R.2d Co., 439 U.S. 99 S.Ct. 58 L.Ed.2d (1978). 819 and Statutes ordinances that (1978); City Lafayette, 361 La. v. La. of deal disposal with the collection and of Co., Light Power & 435 U.S. 98 S.Ct. waste are health measures. Id. stat (1978). 364 L.Ed.2d give municipalities utes authority the to case, City In this operating was under powers exercise conferred law and specific statutory authority, SDCL 34A-6-1 provide by proper ordinance the meas 9-32, and SDCL ch. which find we to be preserve ures to the health and welfare of clearly affirmatively articulated and ex- community. The trial court Id. below pressed. provides: SDCL 34A-6-1 properly judicial took notice of fact a hereby public declared be the health hazard when arises is not

policy of regulate properly disposed the state to and and control collected of. The disposal right municipalities exclusively regu the collection ... and of solid of protect wastes a upheld proper manner will late area as a has been municipalities’ jecting oth- itself to the police or exercise of antitrust laws. See City was powers. Id. Whether or not SDCL 9-32-11. er compelled to extent statutorily act and the the foregoing, Based on the trial court under Dakota City’s of duties the South properly jury: instructed the Code, law, case irrelevant or under our are every You are instructed that munici- this case. questions under facts of pality power shall have to collect and There is no doubt that under SDCL regulate dispose of and the manner of municipali ch. and SDCL ch. 34A-6 a 9-32 handling of and other waste ma- or may by granting restrain trade one ty purpose acquire, terial and for such parties portion or even more substantial establish, maintain, operate regulate and city’s garbage market. See of 100% equipment garbage disposal plants, and Service, Springs Ambulance Inc. dumping grounds incinerators and and to (9th Mirage, 745 F.2d 1270 Cir. Rancho chrages (sic) of fix and collect such ser- 1984); Catalina Cablevision Associates vices, to contract with one or more Tucson, (9th 745 F.2d 1266 Cir. City of persons hauling for the collection and 1984). or upon a restraint trade “Where garbage and other waste material monopolization gov is the result valid municipality or districts established no ernmental action violation of the Sher therein. Westborough man Act can be made out.” municipality You are instructed that a Mo., City Cape Girardeau, Mall v. lawfully complies preced- with the (8th Cir.1982). principle F.2d This ing paragraph does not the anti- violate parallels exemption” the “state action trust laws. municipal applies to that furthers it action properly The court further instructed: implements clearly and af articulated Every municipality in the State Id.; expressed firmatively policy. state enact, power Dakota has the South Service, Inc., supra; Springs Ambulance reissue, make, amend, repeal all such Co., Community supra. Communications regulations may ordinances clearly and SDCL eh. ch. 9-32 34A-6 SDCL proper necessary carry into effect articulately delineate the state’s waste granted plenary power to it affirmatively out disposal policy and set Legislature. Dakota State The South parameters power. City has granted every munici- Legislature has historically disposal furnished servic waste dispose pality power to collect and ordinance, The effective No. es. regulate the han- garbage, manner of adopted apparently in 1974 and dling garbage to fix city, with the ordinance, amendment of an earlier No. charges services. and collect for such Furthermore, during period of near are instructed a munici- You that when years ly eighteen under the forerunner regulating gar- pality passes ordinances gar handled the those ordinances had bage charges collection and to be by contracting pick up bage problem for therefor, collected the said ordinances by operating dump. its The trial and own and have the force effect of law. instructed the that such ordi court force of law. challenged have the and effect Byre nances not of these has either They are by notice of review. instructions Byre publicly announced When the law of this and not sub- therefore case 1, 1978, col he would not after December ject to review. city from residents who were lect waste question second thus becomes him, his 1960 to he breached contracted by by or City, its official acts whether repudi City by anticipatory agreement officers, agents, employ its and conduct of or one free to contract with City was ation. exemption, ees, its state exceeded action disposal and for the collection parties more thereby subjected to the antitrust itself from charge and collect to waste ordinance, passed initiated laws. The sub- without and business every residence were, designated pick up, City’s specific Ordinance March actions case, effective retroactive to in was made this outside the limits of its author: 9-32-11, City’s March ity, 1. Under SDCL or- and that such actions evidenced a con- exemption,” “state action dinances and the spiracy to ruin him him drive out of lawfully monopolized City could have by monopolizing city garbage business up removal market Chamberlain waste un- market. til March Byre first claims nefarious alteration expressly permitted pri- Ordinance 416 specifications between the first and garbage contracting vate collection and lettings. second He bid contends that the prohibited City charging from residents alteration result of was the S & S’s bank privately who were contracted. After that Gary Busack, loan. the bank loan officer date, by any city official actions com- City Garbage Commissioner, pro- and the any city employees mission or acts while previously noted, cessed the loan. As nei- employment scope pre- in the of their Byre specifications ther nor S met the S & running vented from his business or changes the first notice. Two bid were product restrained his trade were the specifications, then made in the bid may trigger conspiracy liability of a under changed term of the contract from City may SDCL 37-1-3.1. also be liable years three and the opportunity to five if, under 37-1-3.2 SDCL after March percentage submit an bid for a alternate city city commission or employees revenue garbage rather than a acting scope of employ- within the their flat monthly payment was added. monopolized, attempted ment to mono- again specifications. bid failed to meet S &

polize, conspired monopolize the S was the successful low bidder on the waste removal market Chamberlain. letting. Byre’s second illegality claim of City, prior points monopol- position to December Busack’s the bank loan garbage ized the service market. officer who handled S & S’s loan and as the merely obligated pick a contractor changed who commissioner the bid up deposit city- it in the specifications years from three to five dump. Byre owned equip- furnished the coincidewith the term of S & S’s bank loan. ment, gas labor and and received a set Byre suggests is in violation of SDCL per amount money payment month in 6-1-1, prohibits “any officer of a ... thereof. municipality interested, ... either agent, any himself or contract entered When decided to become an entre- municipality^]” into said ... We disa- preneur out and strike on his own to fur- gree. nish service to the businesses and Chamberlain, residences of he had no vest- all, Byre First of appli- would stretch the right ed market. The evidence at cation of far beyond specific the statute trial approximate- indicated that there were plain language. collection ly six hundred customers. secured contract was between and S & S. The approximately contracts to service one-half loan was Bank and S & S. between Busack of that According Byre’s market. adver- had no direct connection with S & S and we tisement newspaper, the Chamberlain presume he conducted himself properly in the other one-half have would been without his role as a commissioner and in his waste removal services after December 1 if role specification as bank loan officer. The stay had not decided to in the waste change years years three to five did removal business. preclude Byre bidding from the second time, effect, replaced fact,

In in City so. He simply with anoth- he did did not preserve according specifications er bid pick- contractor order nor was up service he eighteen it had furnished for There low bidder. is no evidence years. Byre contends that even that this though change any bidding constituted City to continue contracting advantage Byre. authorized Although to & S over S change did allow spread S & S to pay you go you and Son will be ments on start-up its loan years over five billed a month until $3.00 the first of the instead of three thereby improve year. you We ask put your garbage chances for success in the event it was plastic bags so it will be easier for the bid, awarded the this is not evidence of city to handle as do gar- we not have a favoritism, improvidence, extravagance, bage yet. truck go along Please with us corruption. fraud or Northern Hills Sani working your as we are best interest. tation, supra. you, Thank specification change second when City Commission the bids were re-let possibility added the Byre complains that this discouraged percentage alternative bid based on a contracted potential customers and custom- gross revenue by City collected contracting ers from with him they because disposal. bidding proce- waste The first were to by City regardless be billed of who dure was conducted before the initiated actually garbage. collected their He waxes presented ordinance City. was even Be- vociferously City did in fact bill his requested, fore the second City bids were customers per and collect the month $3.00 apparently regardless realized that of who fee accounting without himto for such bid, Byre won the if private- maintained his vein, collection. In complains this he also ly City contracted customers could not approve refused to certain license guarantee any city contractor for waste transfers for some of his customers who disposal a set annual fee as it had in the pay City had refused to garbage bills.. past. long As as a contractor was providing a service similar to what Section 9 of Ordinance No. 375 mandated offered, City anticipate could not what its charge for the collection of from gross income from that service would be. family each domestic place unit and each face, specification change On its would business, charge such to be noted on the appear good to be a matter respon- fiscal quarterly water bill. v. City Owens sibility part on the and as between Beresford, 87 S.D. bidders, competing perhaps more ad- (1972), this court held that an ordinance vantageous striving who was to which billings every mandates residence keep privately his contracted customers in order city-wide to finance a separate apart city-serviced cus- collection disposal system is valid and tomers. whether enforceable or not services are appears We next examine what provided. obviously The ad was run Byre’s be one of principal complaints, the response Byre’s announcement that non- fact that billed privately con contracted collection would end on tracted customers for service until December 1978. ad advised resi- March refers to an adver dents that pick up would continue to tisement run City in the Chamberlain garbage and warned them of the ordained 30,1978, paper on November which read as mandatory billing requirement. merely follows: “told it like it was.” After enactment of Ordinance arrange- No. made GARBAGE COLLECTION exempt ments to Byre’s customers from city’s billing As it is the responsibility for after March 1979.2 The entire sanitation effective 1 we will issue is appeal by December laid to rest on this collecting garbage. Regardless if provided: trial court’s Instruction reading appellee’s impres- 2. A brief clearly leaves the SDCL 2-1-12 states that an or- initiated billing practice sion that this nitely. Byre’s continued indefi- day dinance does not become effective until the continuing counsel faults after the official canvass of the votes on the February billing beyond Byre's when measure. passed by City initiated ordinance was Council. exemption during city instructed that the chief fiscal the time

You are he held the contract. city of had an officer duty to bill for ser- affirmative The most serious claim of miscon in these in- previously set out vice as part City, officers, duct on the of passage city until the of said structions one, employees perhaps only valid 6, 1979, no. 416 on March ordinance Byre’s is claim that the Finance Offi relieved the said officer of such which cer, who was also the mother of one of the you duty. However are further instruct- partners, city employees S & S told that passage city ordinance no. ed that the City’s policy required city employees all to 416 did not relieve the chief fiscal officer go Although with S & S’s service. there is collecting garbage service from fees was, no in evidence the record that this prior accrued to March

which fact, adopted city policy, an it was never Byre agent failed to file a notice of to theless employee review stated challenge propriety City. of this instruction We note first that there is no evi dence that Any any so it becomes the law of the case. the statement had effect on Byre’s argument regarding city business. The billing, the facts of number em ployees billing consequence involved is not even shown. Fur the effect of thermore, as an isolated instance to wholly thereof is without merit. show a conspiracy to ruin and drive him out Byre complains conspiracy that a to business, pathetically it is weak. put him out business can be does, however, show evidence of one in through demonstrated an examination of over-reaching, stance of which would be City’s City changed padlocks conduct. City’s outside exemption State Action gates city dump ground on on Febru subject could liability it to some if some 1, 1978, ary began. when S & S’s contract relationship cause and effect could be es contractor, city given As the tablished. key entry During at allowed will. that The third issue appeal raises on this exempt time he dumping was also ordinance, petitioned is whether an initiated fees, charged that private were citizens exempt electorate to certain dump. made undisput who use of the It is mandatory municipal residents from billing change ed that padlock. did fact disposal for waste service is a valid use of undisputed It is further also en power. Byre the initiative support- and his acted provided Ordinance which for a presented petition ers circulated and dumping persons fee for all except city exempt Byre’s private customers from the discloses, contractor. The evidence how mandatory billing requirement. Initiated ever, admits, Byre’s brief permitted III, ordinances are under Article anticipated this and had arrange made Constitution, section 1 of the South Dakota opening ments for dump his own site states, part the people “[t]hat across the There river. is further evidence expressly right reserve to themselves could have key received a but measures, propose Legis- which ... opportunity eschewed that favor de lature shall submit to a vote of the veloping dump operation his own site. The apply electors.... This section shall dump obviously of a landfill site entailed municipalities.” The initiated ordinance expense some equip labor and questioned here was submitted to expectation ment. of free access to passed. electorate March city dump private as a contractor when The ordinance was retroactive March 1 required pay, other users were billing disposal and double for waste The fact untenable. that the contrac not allowed after that date. exempt is tor was understandable in that percent retains seventeen of the waste mandatory billing contends that the disposal purpose for the dump revenue necessary govern- ordinance dealt with a Byre enjoyed function, site maintenance. police power reg- same mental and as a

79 ulation, could not properly changed excepted included in one of the by be classes. 82 § petition. 121; an electoral In its brief to this C.J.S. Statutes Klosterman court, City specified Marsh, that function as “the 180 Neb. 143 N.W.2d 744 preservation immediate public peace, (1966). of the safety.” health or III, Article section 1 of our state Initiative is the constitutional constitution, legislative which vests the power reservation of people pro to powers legislature, of the state in a ex pose bills and reject laws to enact or pressly right reserves the propose to meas polls independent them at the legis of the people, ures to the which measures the assembly. Referendum, lative on the other legislature shall enact and submit a vote hand, right is a constitutionally reserved III, of the electors of the state. Article people of the state or local subdivisions section also right require reserves the thereof to approv have submitted for their any legislature act which the may act, rejection any act, part any al or enacted shall have be submitted to a vote passed by legislature which in most of the electors of the state going before would, part cases without action on the effect, except into such may laws as be electorate, become a 82 law. C.J.S. necessary for preservation the immediate § (1953). 115 purpose Statutes of the public peace, safety, of the health or sup is not legislative initiative to curtail or limit port government of the state and its exist power laws, to enact rather compel but ing public Clearly, institutions. the latter enactment of peo measures desired exception applies only to referendum. ple, empower people, and to in the was, therefore, clearly power within the act, legislature event the fails to to enact the voters of the of Chamberlain to purpose such measures themselves. The initiate the permits private ordinance which suspend of referendum is to or annul laws contracting collection and the yet which are not effective in order to properly legally council enacted provide people a means of expressing the same and submitted it to a vote of the regarding legislative their desire proposi people. tion. Id. at 116. When the referendum is City’s complaint We next examine triggered, people approve legis must erroneously the trial court admitted proposition lative opera before it becomes regarding Byre’s evidence claim for dam tive as a law. Id. ages. The complained first evidence of in It has been said that the initia billing. volves the so-called double power tive types legisla extends to all trial court testimony admitted the of nu Tobin, tion. citing Id. at 119 Dawson v. merous residents that had them billed (1946); N.D. Mitchell though they collection even Walker, Cal.App.2d 295 P.2d 90 paid Byre light had for that service. (1956); ex rel. Leahy, State Andersen v. the trial court’s determination that this bill (1972). 189 Neb. N.W.2d 713 As a ing was mandated statute as discussed rule, general legislative all matters above, in the second issue such evidence which the voters have an interest are sub wholly conspiracy immaterial to show

ject they to the referendum unless are ex damages or to Byre. show The evidence cepted by provisions. constitutional A however, billing obviously, of double exception state constitutional which re highly prejudicial City. legislature power pre serves people review the under the complains cludes ref next of the trial expression, erendum is an within sound court’s admission of evidence which construction, of a reservation Byre’s rules of showed loss of the balance of the things specified. so pass Excep on all market over and right should not be denied tions to the above contracted customers. We question people plainly appropriate unless the act first look at the measure of damages. City contends that liability type conspiratorial, nepotistic, must hibits the on a causal connection evil, based between wrongful, manipulative, and tortious alleged unlawful conduct and the loss sus corporate body conduct which the tained. Cleveland Cleveland City deeply in- of Chamberlain became (N.D.Ohio Electric, F.Supp. 1981). 1344 provides: “A con- volved. SDCL 37-1-3.1 hand, Byre, argues the other there tract, combination, conspiracy or between merely some be must reasonable basis persons two or more in restraint of trade or loss, citing the conduct and the tween East any part commerce of which is within this man Kodak Co. v. Southern Photo Mate any state is ‘Person’ means nat- unlawful. 359, 379, Company, rials 273 U.S. 47 S.Ct. person, partnership, corporation, ural asso- (1927). 71 L.Ed. 689-91 We ciation, legal entity.” or other SDCL 37-1- particularly case find Eastman Kodak provides: monopolization 3.2 further “The inappropriate plaintiff since in that case by person, any attempt monopol- or an going prod had a with a record of business ize, combine, conspire any or with other prior alleged uct sales to defendant’s un person persons, monopolize any of the case, present lawful acts. In the trade or commerce within this state shall contrary, Byre any did not have business 37-1-14.3, be unlawful.” Under SDCL until he breached his contract and damage remedy provided equi- is either in privately endeavored to contract with the damages. table relief or This section fur- various residential and business customers provides ther damages. for treble SDCL in Chamberlain. The trial court admitted alia, provides, 37-1-14.3 inter as follows: times, that at the two evidence relevant person injured A in his business or trial, at the fall of 1978 and the time of property by chapter a violation of this approximately contracts with had one- may appropriate bring an action for half of the residential market and one-half injunctive equitable relief, or other dam- market, of the commercial with some de and, ages by sustained as determined category. cline in the latter The trial court court, taxable and costs reasonable then admitted evidence in the form of testi attorney’s fees. The trier fact shall mony by Byre’s expert and exhibits recovery increase under this section to alleged Byre’s damages included the damages three times the sustained. loss of the other one-half of the market. mine.) (Emphasis supplied only indirectly, had the whole market tried, The effect, of Chamberlain was in its as the contractor. own county seat, grant $121,500 would monopo have the courts him a was assessed damages market, ly of the which we decline to do. violations of the above assumption Beyond any three statutes. damage was shadow of a doubt, groundless. one-half of the market of Chamberlain was deter- relating wholly jury evidence mined conspirator thereto was to be a without It obviously prej activity. foundation. unlawful Coconspirators, al- udicial. though defendants, not named as were offi- cials and officers of the of Chamber- judgment We reverse the and remand for lain, profit and those who stood to make a a new trial in conformance with our deci- springing conspiracy. from the In the sion. very of Chamberlain—its own—found it wanting justice ultimately at the bar of FOSHEIM, C.J., WOLLMAN, J., exploited determined that it had its munici- concur. pal power inflicting wrong. Lay a civil J., HENDERSON, DUNN, Retired people’s judgment, healthy so vital to a Justice, dissent. legal system, being thwarted substi- HENDERSON, (dissenting). Justice by legalistic judgment tuted far removed spirit We here ourselves to the address misbe- from the facts of this case and municipal body. pro- havior of a State law Trial Courtroom. Busack, Garbage Commissioner

I am facts in his shocked the skeleton set of own moreover, words, majority forth in the opinion; set described Chamberlain’s employee, the facts set forth the author of the Stienfeld, way: banker, “I am his majority opinion con seem to be 100% friend, say.” Byre I private would had jury flict with the facts that the found. contracts to service customers as a jury is axiomatic that the resolves all fact under hauler Beadles, questions. Bogh v. 79 S.D. Chamberlain, by skulldug- Ordinance 375. (1961). jury A N.W.2d is entitled gery, effectively disregarded Byre’s private accept one witness’ version of the facts placed position contracts and him in the Zavadil, reject another’s. Lukens bidding on his own customers via a bid (S.D.1979). Here, notice of November 23 and accepted Byre’s the version witnesses November bid notices called for a conspiracy rejected that there a was three-year Byre contract. submitted a bid City the of Chamberlain’s witnesses that only portion that of the customer mar- conspiracy. there was not a “It is the privately ket for which he was contract- function, ours, jury’s rather than to resolve notices; exactly specified ed in the bid conflicting evidence. Urban Wait’s Su Byre’s three-year bid was for the term. (S.D. Inc., permarket, 294 N.W.2d 793 Steckelberg Stienfeld and submitted a bid 1980).” Farmers Bank Winner State five-year Upon for a contract. motion and Westrum, (S.D.1983). N.W.2d Busack, Garbage advice of Commissioner Court, reviewing “As a we view the evi City rejected days the bids. Just five both dence and all reasonable inferences there bids, rejection after the of both Commis- light support from in a most favorable to sioner Busack motivated the to initiate the verdict. Alberts v. Mut. Serv. Cas. Thereupon, another bid. Chamberlain al- Co., Ins. 80 S.D. specifications tered bid to conform with the (1963).” Id., 341 at 634-35. N.W.2d With Thereby, first bid submitted S & S. expressly stating, appears out so it to me three-year provision changed contract was majority opinion the author of the is assert five-year provision to a contract to aid and ing presented trial the evidence at get January assist S the bid. & S On An support jury does not verdict. accepted rigged Chamberlain bid damages prov award of rests within the again Garbage and once it was Commis- freely ince of the and should not be acceptance sioner Busack who motioned for disturbed. bidding process of S & S’s bid. While this portrayal indispens- A fair of the facts is way, manipu- was under behind-the-scenes just able to a result. The of Chamber- maneuvering transpired. lation and S & S partook perpet- lain of efforts to create and garbage hauling equipment, no owned but service, private garbage namely, uate S Garbage Commissioner Busack took care legitimate service. This is not a mu- & S of this. Busack made a bank loan S & S nicipal partner- function. S & S service is a purchase garbage truck for the of a new by Lyle ship owned Stienfeld and Bruce banker). During (acting as a friend and Steckelberg. em- Chamberlain trial, it was revealed admissions of ploys develop, As I will Stienfeld. City employee Busack that he had met with employ- municipal took this of Chamberlain early De- Stienfeld late November and private gar- him ee and structured into concerning loan for the cember bank bage One Delora Steckel- service business. purchase garbage of a truck. Convenient- officer; finance her berg is Chamberlain’s ly, payback promissory on the note was Steckelberg. Bruce is Bruce Steckel- son years (coinciding five-year for five with Lyle berg also the son-in-law Stien- trial, garbage contract). During through of Gar- Commissioner feld. Chamberlain’s cross-examination, brought it principal was out Gary Busack. Busack’s bage was had the contract and the loan for a personal loan officer for been was a livelihood gone Tri-County three-year period, Bank of S & S would have State Chamberlain. effort, seems, Every ed to be filled. it each month. Chamberlain’s was the red into Busack, Garbage, closed made Busack to make sure Commissioner Tri-County for the five-year totally squeezed loan State out of the service signed for the bank. Neither testimony Bank submitted business. had ever Steckelberg nor Stienfeld been expert, a Professor of Economics at Steckelberg before. business University. pro- South Dakota State This had no assets for collater- he admitted fessor wrote a doctorial thesis on market truck and admitted re- al on the Testimony structure. was adduced that loan. dis- ceiving bank Evidence a 100% provided an entire framework for economic Chamberlain’s ad in the that after closes analysis damages of the and the below, Byre on re- newspaper, commented causative actions of Chamber- private contracts as a haul- very few ceived expert lain. Another was called on behalf and that he had numerous er of Byre, namely, college graduate with canceling telephone calls his letters and years’ experience as an economic twelve stomp In an effort to services. planner government in the sec- him, son, and his who worked analysis operating tor. An of income and literally attempted to exter- of Chamberlain garbage operation expenses Byre’s minate him from the business. The developed great detail and from numer- tried to beat truck to resources, Office, City ous to wit: Finance by using open an truck. garbage the cans records, records, Byre’s income tax time months, open of this truck period For a two Byre’s operation, and motion studies of cer- City by the of Chamberlain on was used tified audit from the Auditor General of the of fact City the streets Chamberlain. The Dakota, fuel State of South costs from a people were contracted with that some station, County local data from the Brule City Byre seemed to be immaterial to the Courthouse, and information from the Having bridged of a time Chamberlain. Department Transporta- Dakota of South gap, City permitted of & the Chamberlain S tion. This data then was contrasted to that the truck to fulfill S S to use & S’s private garbage of another collection busi- S & did a contract because S not have Mitchell, ness at Dakota. South Ultimate- garbage February truck on the ly, Byre presented plus testimony this ex- date of S & contract. effective S’s new (received # hibits # 67 and without ob- to, Steckelberg, Delora as earlier alluded $83,782. jection) establishing a loss of City was the finance officer for the of item-by-item Plaintiff’s # 67 exhibit City Chamberlain. of Chamberlain comparison expenses of income and for the paid compensation for one-half of S S’s& 1979-1982, years comparing the entire mar- plates, highly prac- which was a unusual against ket of the market. Plaintiff’s 50% City tice. There is even evidence that the summary # exhibit 68 was a of income and (notwith- billing of did Chamberlain double expenses based on the total market for the contracts), standing Byre’s and then col- years 1979-1982. performed by Byre. Ap- lected for services agree I with the Court’s decision con- City parently, the never accounted for one cerning the existence of Chamberlain’s paid City Byre’s the penny services. exemption state action from antitrust liabil- destroy Byre and force him out To further ity propriety the of the initiated ordi- business, Chamberlain, act- However, I officials, nance and instructions. ing through changed its the lock agree cannot that the did not exceed denying gate dump ground of the exemption its state action or that the ad- compound Byre’s access. To further woe, damage of certain evidence consti- appears that mission it the same Mr. Busack Thus, my reported complaint tuted reversible error. conclu- South Dakota offi- majority concerning Byre’s dump radically cials alternative sion is different than the Therefore, site. had a.farmer I vote to sustain the opinion. contacted across $121,500. gravel This is another the river about an old site that need- verdict below example government rejected of where used its S & bid and their five-year S’s usurp equipment next power open changed market the free loan. gar- enterprise system. example bage require another It is ordinance to a dumping fee government crunching private garbage down on a little collectors and awarded grind operator him into oblivion. contract to S & On the start-up S. date contract, City operated changed business since 1960 of the new the lock bought equipment dump gates he first from when and loaned S equip- & S year. oper- begin Chamberlain in that He ment so that S fulfilling & S could this business with his four sons work- after Finally, separate ates the contract. acting him mother ing operating, beside and the services were com- bookkeeper. only these facts plained Not came to state officials about new jury, dump facility; City Auditor, but the fact that did before and the who is job partner S, an excellent with his service also mother of a in S & in- notwithstanding city employees that he suffered dia- formed some that city poli- required and was Before the cy betes almost blind. them to use the S & garbage S “Well, jury, municipal muscle, he testified: it kind of looks It service. maneu- trying vering manipulation It looks like bad. Chamberlain to such extent Therefore, me out.” it exploitation power run comes as no that it was of their —the surprise very to this Supreme writer kind which the States United judgment Chamberlain suffered a of this has Court condemned. against

magnitude to be entered it. If law reasonably cannot be contended that anything, being it fair is about is about maneuvering city employees such to im play did fair. plement a new contractor and city’s activities, anticompetitive A “even make that success business a was within [though] may monopol[y,] contemplation legislature lawful be sub- when it ject statutes, to antitrust when it seeks granted restraints enacted in effect exploit monopoly in municipalities extend or a manner immunity state action when contemplated by establishing granting garbage not its authorization.” or removal monopolies. Power Lafayette Light “City Louisiana & Whether could have 389, 1123, Co., 417, lawfully 435 U.S. S.Ct. monopolized 98 1138- the Chamberlain 39, 364, (1978) (bracketed up 55 L.Ed.2d 6, 385 waste removal until market March inserted). 1979,” material the of When is irrelevant the because action tak toto, Chamberlain’s actions are examined in before en that time not within was contemplation a shameful course of authorizing legislation conduct aimed at of the running Byre exposed. out of business is thus constituted an unlawful restraint First, Chamberlain advertised bids on a trade not immune from antitrust liabili three-year published complained contract and an ad The acts ty. fact that the informing garbage may their residents that be lawful in and of themselves is also “regardless be collected “[Pjlaintiffs would irrelevant. need not establish if ” you go they with and that each illegal. only & Sons that act was It is neces sary legal be billed for this service. The ad illegal would the acts whether or along commanded citizens to “Go in a plan also furtherance of common Commissioner, City Garbage conspiracy us.” The in in restraint trade.” Juneau bank, Square his role as a loan officer a local v. First Nat’l Bank Mil Wis. began five-year waukee, (E.D.Wis. negotiating loan for F.Supp. then a 435 1317 S, 1977)(citations omitted). truck partners a with the of S & “It is well settled Obviously, Garbage related legal above. that acts which are in themselves lose questionable they took on character Commissioner a when become constitu dual of the tainted role. Both bids sub- ent elements of an scheme.” unlawful Jer rejected subsequently mitted were Corp. rold Electronics Wescoast Broad five-year (9th Co., the bids for casting re-let a contract. 341 F.2d 663 Cir. omitted). corresponded 1965) (citations requirement jury This new bid The deter- 84 (1973). plan L.Ed.2d that a or scheme to run 93 S.Ct. 150 The

mined Supreme existed States Court has also out of business and this Court United rec- ognized practical difficulty proving not disturb that determination. should cry damages. are set forth out that facts which above Eastman Kodak Co. v. S. Co., conspiracy existed a in restraint of there Materials 273 U.S. Photo (1927), trade. L.Ed. S.Ct. “It is sufficient if a reasonable Court said: agree majority’s can I with the Neither afforded, computation although basis of evidentiary ques- ruling regard in to the only approximate.” In the the result be concerning Testimony presented. tions hand, Byre sought prove case at his billing was elicited as of residents double damages by presenting an income and ex- conspira- in yet another link evidence of pense analysis operation of his damages chain and as evidence of torial necessarily in- landfill. This resulting The fact therefrom. comparison of the income and volved billing legal because mandated was double expense portion of the of the market of its does not make evidence ordinance had under contract and the income and thereby, injury and the caused occurrence expense of the total Chamberlain above, in As stated each act immaterial. analysis grant market. Such an does not conspiracy need not be restraint of trade Byre monopoly of the market of the scheme. illegal if done furtherance instead establishes the maximum Thus, billing testimony but double possible damages. The limita- it both rele- amount of highly admissible because was probative question damages, when tion on combined with oth- vant illegal conspiracy i.e., contracts, and the damage testimony, existence of an er lost resulting damages. afforded the a reasonable basis for computing damages and avoided an award majority also holds that ex speculation, pure guesswork based on mere including testimony damages about pert’s conjecture. The foundation of this anal- other one-half of the market the loss of the ysis was the facts and data involved groundless and under contract was case, gathered by expert and facts and thus foundation inadmissible.* without experts rely reasonably which other would has, detail, great exposed author This computation upon. SDCL 19-15-3. The testimony. facts for this the foundational damages (received in evidence as exhibit Moreover, recognize majority fails to $83,782loss), reflecting # 67 as testified difficulty proving pre the extreme by Byre’s expert, properly admitted damages any antitrust cise amount of judge, proper the trial for there a was failing great This is a academic action. objection foundation laid and no to its re- majority writing ignores it for sub Therefore, ceipt having in not evidence. authority in weight of the United stantial below, objected damage to this evidence it damages Difficulty proving up in States. appellate cannot at the level now be raised illustrated some of in antitrust actions is for the first time. Chamberlain did not following authorities. “The latitude preserve appellate record thereon. in granted of antitrust violations the victim Boortz, (S.D. 301 Weaver v. N.W.2d 673 establishing monetary damages has his 1981). also, Sully See Jones v. Buttes Corp. long recognized.” SCM v. Xe been Schools, (S.D.1983); (2nd Cir.1974) 340 N.W.2d 697 Mort Corp., 507 F.2d 363 rox Eliason, (S.D. (citations omitted). weet v. 335 N.W.2d 812 amount of dam “[T]he 1983); Dep’t proof....” v. South Dakota ages depend precise Weber need Labor, (S.D.1982); Gilliland, Ward Hobart Bros. v. Malcolm T. Co. Cir.1973)(cita 60-5, Inc., (5th Viborg 319 471 F.2d 902 School Dist. No. omitted), denied, (S.D.1982); tions cert. U.S. N.W.2d First Federal Sav. Brown; produced expert City’s expert Ralph garbage. no *The was Dr. this expert providing figures crumbled under cross-examination be- City employee cost for run- jury expert fore the for he testified not as an ning municipal garbage service. its own but as a consumer business rather Lovett, (S.D. N.W.2d 133 Loan v. &

1982). trying We are not lawsuits at the level. Reference is made to the

appellate majority opinion. six sentences of the

last indicates, essence, majority opinion $83,782 Byre’s damages as re by plaintiffs # exhibit

flected foundation,”

“groundless,” “without

“obviously prejudicial.” Counsel for the objected of Chamberlain should have especially this line of evidence very important

these exhibits were great impact jury. on the have

bound

If, indeed, it improper this evidence go jury before be received jury

this and to be considered this arriving verdict, at its it was for Cham object give counsel to and to

berlain’s opportunity court an to rule

trial immedi

ately thereupon. court The trial is entitled we, objection rule on an at this before level, say that it has committed an error. conclusion, it wrong this Court to fault the

now trial court on this matter of

damages when the of Chamberlain

permitted these critical exhibits to be ad objection. without

mitted reasons, these I

For vote to affirm the judgment

verdict below.

I am authorized to state Retired joins Dunn dissent.

Justice BALDWIN,

Howard Defendant Appellant,

FIRST NATIONAL BANK OF HILLS, Plaintiff

BLACK Appellee. 14338, 14383.

Nos.

Supreme Court of South Dakota.

Argued Oct. 1984.

Decided Jan. 1985.

Rehearing Denied March

Case Details

Case Name: Byre v. City of Chamberlain

Court Name: South Dakota Supreme Court

Date Published: Jan 16, 1985

Citation: 362 N.W.2d 69

Docket Number: 14090

Court Abbreviation: S.D.