American Medical Transport of Wisconsin, Inc. v. Curtis-Universal, Inc.

• Decision Date: 22 March 1990
• Docket Number: No. 88-0257,CURTIS-UNIVERSA,INC,88-0257
• Citation: 452 N.W.2d 575,154 Wis.2d 135
• Parties: , 58 USLW 2602, 1990-1 Trade Cases P 68,962 AMERICAN MEDICAL TRANSPORT OF WISCONSIN, INC., Lifeline Ambulance Service, Inc., and Cross Ambulance Service, Inc., Plaintiffs-Appellants-Petitioners, v., Paratech Ambulance Service, Inc., Meda-Care Ambulance Service, Inc., R.A. Zehetner & Associates, Inc., d/b/a Bell Ambulance, and City of Milwaukee, Defendants-Respondents.
• Court: Wisconsin Supreme Court

Page 575

452 N.W.2d 575

154 Wis.2d 135, 58 USLW 2602, 1990-1

Trade Cases P 68,962

AMERICAN MEDICAL TRANSPORT OF WISCONSIN, INC., Lifeline

Ambulance Service, Inc., and Cross Ambulance

Service, Inc., Plaintiffs-Appellants-Petitioners, v. CURTIS-UNIVERSAL, INC., Paratech Ambulance Service, Inc.,

Meda-Care Ambulance Service, Inc., R.A. Zehetner &

Associates, Inc., d/b/a Bell Ambulance,

and City of Milwaukee,

Defendants-Respondents.

No. 88-0257.

Supreme Court of Wisconsin.

Argued Nov. 28, 1989.

Decided March 22, 1990.

David R. Cross, argued, Darryl S. Bell, David L. Bourne and Quarles & Brady, on briefs, Milwaukee, for plaintiffs-appellants-petitioners.

Randall L. Nash, argued, Claude J. Krawczyk and O'Neil, Cannon & Hollman, S.C., Milwaukee, and Robert L. Hersh, Mequon, on brief, for defendants-respondents, Curtis-Universal, Inc. and Paratech Ambulance Service, Inc.

Elizabeth Adelman, argued, and Adelman & Adelman, on brief, Milwaukee, for defendant-respondent, Meda-Care Ambulance Service, Inc.

Rudolph M. Konrad, argued, Scott G. Thomas and Thomas J. Beamish, Asst. City Attys., on brief, for defendant-respondent, City of Milwaukee.

Sherman S. Abrahamson and Patricia Clifton Smith, on brief, Milwaukee, for defendant-respondent, R.A. Zehetner & Associates, Inc. d/b/a Bell Ambulance.

HEFFERNAN, Chief Justice.

This is a review of a decision of the court of appeals ¹ that affirmed the order of the circuit court for Milwaukee county, Lee E. Wells, Circuit Judge, dismissing the complaint of the plaintiffs against the city of Milwaukee (City) and four private ambulance service providers for alleged violations of the Wisconsin antitrust law, sec. 133.03, Stats. We reverse the decision of the court of appeals and remand to the circuit court for further proceedings, because we conclude that the city of Milwaukee is not immune from anti-trust liability under the alleged circumstances, and because we conclude that the individual ambulance companies who are defendants, under the allegations of the complaint, participated with the city of Milwaukee in an unlawful conspiracy to restrain trade.

The plaintiffs in this case are three private companies legally certified to do business in the city of Milwaukee. They are American Medical Transport of Wisconsin, Inc., Lifeline Ambulance Service, Inc., and Cross Ambulance Service, Inc. The plaintiffs have alleged that the city of Milwaukee's adoption of a city-wide emergency ambulance service system pursuant to an ordinance and the defendant ambulance companies' participation in the system violate Wisconsin's antitrust law.

Under the system, the City requires the certification of private ambulance companies as a prerequisite to providing service in the City. All fees and rates for service are set by the City. The Milwaukee Fire Department was designated as the central dispatcher. It receives and allocates all calls for emergency service assistance in the City of Milwaukee. If the emergency is deemed life-threatening, fire department personnel respond to the call, for only the fire department has paramedic personnel. If the emergency is deemed not life-threatening, the fire department dispatcher assigns one of the private ambulance companies to respond.

The City divided the Milwaukee area into four sections designated as service areas. By a process not stated in the complaint, a private ambulance company is assigned primary responsibility for each service area. Thus, only four of seven legally certified ambulance companies were assigned a service area. These four companies, together with the City, are the defendants in this action. The three certified ambulance companies which were not assigned to a designated service area are the plaintiffs.

In the event a non-life-threatening emergency call is received and the designated service company is not able to respond, the fire department dispatcher then assigns one of the three non-designated companies to respond. They are called only as back-up where the designated providers cannot respond. The back-up or support status to which the plaintiffs are relegated is defined by Milwaukee Ordinance sec. 75-15(a) as "[a] status whereby a certified provider, in lieu of being assigned a service area, receives dispatch calls to which the designated provider within the assigned service area cannot promptly respond." ²

The plaintiffs, the back-up providers, allege that, by enacting and implementing the ordinance, the defendant city has chosen "to eliminate competition in the emergency ambulance services market," because the arrangement adopted results in almost all calls going to the favored four designated providers.

The plaintiffs allege that, by allocating markets and relegating them to a back-up status, they are deprived of their market share and have sustained, and continue to sustain, economic damages, despite the fact that they are certified ambulance service providers. The plaintiffs allege that the defendants, i.e., City and the favored four providers, "By jointly creating the Section 75-15 system ... have contracted, combined or conspired to restrain trade in ambulance services in the City of Milwaukee," in violation of sec. 133.03(1), Stats. ³ They also allege that the City, by its conduct, has allocated monopoly power to itself.

An additional count--that the City and the four providers conspired to publish notices, rates, and schedules which falsely represented that ambulance calls could only be placed through the fire department telephone dispatcher--was dismissed by the circuit court. The court of appeals reversed that determination, stating that there were issues of fact that must be determined. The court of appeals remanded on that count for further consideration, and we denied defendants' cross-petition for review of that issue. Accordingly, that allegation of conspiracy to make fraudulent representations is not before us.

In the circuit court each of the defendants brought a motion to dismiss under sec. 802.06(2), Stats., that the complaint failed to state a claim under sec. 133.01, et seq., upon which relief could be granted. The circuit court granted those motions and dismissed the complaint. It concluded that the City was authorized to implement the anticompetitive ordinance under the home-rule authority granted by sec. 62.11(5), Stats., and the rationale of Town of Hallie v. City of Chippewa Falls, 105 Wis.2d 533, 314 N.W.2d 321 (1982). The judge acknowledged that, under the facts, there appeared to be a per se restraint of trade but it was not unlawful, because the restraint by the City of Milwaukee was authorized by the home-rule statute. He exonerated the four ambulance companies, because he believed they did nothing more than apply for the designation as providers as set forth in the ordinance, which the judge had already concluded did not provide for an illegal restraint of trade. ⁴ He decided that, despite sufficient allegations of a combination in restraint of trade, the defendants were "protected" as a matter of law.

The plaintiffs appealed to the court of appeals, which unanimously affirmed the circuit court's order of dismissal. Like the circuit court, the court of appeals concluded, stating that it used the reasoning of Town of Hallie, that the home-rule statute in itself provided the necessary legislation to justify the restraint of trade. It concluded that, because no specific statute limited its broad home-rule powers, the City of Milwaukee had the authority to implement the ambulance system despite its anticompetitive effect.

The court of appeals also gave weight to secs. 59.07(41) and 60.565, Stats., applicable to counties and towns, respectively, authorizing them to contract for ambulance services, stating, "[T]he legislature has recognized the importance of permitting local units of government to provide for ambulance service within their areas." 148 Wis.2d at 304, 435 N.W.2d 286. Thus, although without explication, the court of appeals concluded that these statutes impliedly permitted the City of Milwaukee to enter into anticompetitive contracts. No support was offered for that conclusion. The theory was that the specific statute would have allowed counties and towns to enter into a similar anticompetitive ambulance system. A further assumption was that only because counties and towns did not have home-rule powers was there special legislation necessary in respect to them. But similar authorization was not required for cities and villages with home-rule powers. ⁵

Because the court of appeals held that the general scheme adopted by the City of Milwaukee was within its home-rule powers, it did not find it necessary to discuss the separate liability of the four favored defendants other than holding as a matter of law that, because the ordinance passed home-rule muster and therefore constituted legislatively authorized conduct, the private defendants could not be liable. The court stated, "Actions by the defendant ambulance companies that are necessary for the regulatory scheme [i.e., anti-competitive] established by the ordinance to work must be similarly protected." 148 Wis.2d at 307, 435 N.W.2d 286. It had no reason to discuss the Noerr- Pennington doctrine. ⁶ 148 Wis.2d [154 Wis.2d 144] at 307, n. 4, 435 N.W.2d 286.

On this review of the decision of the court of appeals, we confront the question of that court's correctness in affirming the circuit court's dismissal of the complaint. "In testing the sufficiency of the complaint the facts pleaded by the plaintiff, and all reasonable inferences therefrom, are accepted as true." Prah v. Maretti, 108 Wis.2d 223, 229, 321 N.W.2d 182 (1982). A complaint should be dismissed as legally insufficient "only if 'it is quite clear that under no conditions can the plaintiff recover.' " Evans v. Cameron, 121 Wis.2d 421, 426, 360 N.W.2d 25 (1985). The court of appeals correctly stated:

We may not affirm that dismissal unless, looking at the...