Community Communications Company, Inc v. City of Boulder, Colorado
| Decision Date | 13 January 1982 |
| Docket Number | No. 80-1350,80-1350 |
| Citation | 70 L.Ed.2d 810,102 S.Ct. 835,455 U.S. 40 |
| Parties | COMMUNITY COMMUNICATIONS COMPANY, INC., Petitioner, v. CITY OF BOULDER, COLORADO, et al |
| Court | U.S. Supreme Court |
Respondent city of Boulder is a "home rule" municipality, granted by the Colorado Constitution extensive powers of self-government in local and municipal matters. Petitioner is the assignee of a permit granted by a city ordinance to conduct a cable television business within the city limits. Originally, only limited service within a certain area of the city could be provided by petitioner, but improved technology offered petitioner an opportunity to expand its business into other areas, and also offered opportunities to potential competitors, one of whom expressed interest in obtaining a permit to provide competing service. The City Council then enacted an "emergency" ordinance prohibiting petitioner from expanding its business for three months, during which time the Council was to draft a model cable television ordinance and to invite new businesses to enter the market under the terms of that ordinance. Petitioner filed suit in Federal District Court, alleging that such a restriction would violate § 1 of the Sherman Act, and seeking a preliminary injunction to prevent the city from restricting petitioner's proposed expansion. The city responded that its moratorium ordinance could not be violative of the antitrust laws because, inter alia, the city enjoyed antitrust immunity under the doctrine of Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315. The District Court held that the Parker exemption was inapplicable and that the city was therefore subject to antitrust liability. Accordingly, the District Court issued a preliminary injunction. The Court of Appeals reversed, holding that the city's action satisfied the criteria for a Parker exemption.
Held : Boulder's moratorium ordinance is not exempt from antitrust scrutiny under the Parker doctrine. Pp. 48-57.
(a) The ordinance cannot be exempt from such scrutiny unless it constitutes either the action of the State itself in its sovereign capacity or municipal action in furtherance or implementation of clearly articulated and affirmatively expressed state policy. Pp.48-51.
(b) The Parker "state action" exemption reflects Congress' intention to embody in the Sherman Act the federalism principle that the States possess a significant measure of sovereignty under the Federal Constitution. But this principle is inherently limited: Ours is a "dual system of government," Parker, supra, at 351, 63 S.Ct., at 313, which has no place for sovereign cities. Here, the direct delegation of powers to the city through the Home Rule Amendment to the Colorado Constitution does not render the cable television moratorium ordinance an "act of government" performed by the city acting as the State in local matters so as to meet Parker § "state action" criterion. Pp. 52-54.
(c) Nor is the requirement of "clear articulation and affirmative expression" of a state policy fulfilled here by the Home Rule Amendment's "guarantee of local autonomy," since the State's position is one of mere neutrality respecting the challenged moratorium ordinance. This case involves city action in the absence of any regulation by the State, and such action cannot be said to further or implement any clearly articulated or affirmatively expressed state policy. Pp. 54-56.
(d) Respondents' argument that denial of the Parker exemption in this case will have serious adverse consequences for cities and will unduly burden the federal courts is simply an attack upon the wisdom of the longstanding congressional commitment to the policy of free markets and open competition embodied in the antitrust laws, which laws apply to municipalities not acting in furtherance of clearly articulated and affirmatively expressed state policy. Pp. 56-57.
630 F.2d 704 (10th Cir.), reversed and remanded.
Harold R. Farrow, Oakland, Cal., for petitioner.
Thomas P. McMahon, Asst. Atty. Gen. of Colorado, for the State of Colorado, et al., amici curiae, by special leave of Court.
[Argument of Counsel from pages 42-43 intentionally omitted] Justice BRENNAN delivered the opinion of the Court.
The question presented in this case, in which the District Court for the District of Colorado granted preliminary injunctive relief, is whether a "home rule" municipality, granted by the state constitution extensive powers of self-government in local and municipal matters, enjoys the exemption from Sherman Act liability announced in Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed.2d 315 (1943).
Respondent city of Boulder is organized as a "home rule" municipality under the Constitution of the State of Colorado.1 The city is thus entitled to exercise "the full right of self-government in both local and municipal matters," and with respect to such matters the City Charter and ordinances supersede the laws of the State. Under that Charter, all municipal legislative powers are exercised by an elected City Council.2 In 1964 the City Council enacted an ordinance granting to Colorado Televents, Inc., a 20-year, revocable, nonexclusive permit to conduct a cable television business within the city limits. This permit was assigned to petitioner in 1966, and since that time petitioner has provided cable television service to the University Hill area of Boulder, an area where some 20% of the city's population lives, and where, for geographical reasons, broadcast television signals cannot be received.
From 1966 until February 1980, due to the limited service that could be provided with the technology then available, petitioner's service consisted essentially of retransmissions of programming broadcast from Denver and Cheyenne, Wyo. Petitioner's market was therefore confined to the University Hill area. However, markedly improved technology became available in the late 1970's, enabling petitioner to offer many more channels of entertainment than could be provided by local broadcast television.3 Thus presented with an oppor- tunity to expand its business into other areas of the city, petitioner in May 1979 informed the City Council that it planned such an expansion. But the new technology offered opportunities to potential competitors, as well, and in July 1979 one of them, the newly formed Boulder Communications Co. (BCC),4 also wrote to the City Council, expressing its interest in obtaining a permit to provide competing cable television service throughout the city.5
The City Council's response, after reviewing its cable television policy,6 was the enactment of an "emergency" ordi- nance prohibiting petitioner from expanding its business into other areas of the city for a period of three months.7 The City Council announced that during this moratorium it planned to draft a model cable television ordinance and to invite new businesses to enter the Boulder market under its terms, but that the moratorium was necessary because petitioner's continued expansion during the drafting of the model ordinance would discourage potential competitors from entering the market.8
Petitioner filed this suit in the United States District Court for the District of Colorado, and sought, inter alia, a preliminary injunction to prevent the city from restricting petition- er's proposed business expansion, alleging that such a restriction would violate § 1 of the Sherman Act.9 The city responded that its moratorium ordinance could not be violative of the antitrust laws, either because that ordinance constituted an exercise of the city's police powers, or because Boulder enjoyed antitrust immunity under the Parker doctrine. The District Court considered the city's status as a home rule municipality, but determined that that status gave autonomy to the city only in matters of local concern, and that the operations of cable television embrace "wider concerns, including interstate commerce . . . [and] the First Amendment rights of communicators." 485 F.Supp. 1035, 1038-1039 (1980). Then, assuming, arguendo, that the ordinance was within the city's authority as a home rule municipality, the District Court considered City of Lafayette v. Louisiana Power & Light Co., 435 U.S. 389, 98 S.Ct. 1123, 55 L.Ed.2d 364 (1978), and concluded that the Parker exemption was "wholly inapplicable," and that the city was therefore subject to antitrust liability. 485 F.Supp., at 1039.10 Petitioner's motion for a preliminary injunction was accordingly granted.
On appeal, a divided panel of the United States Court of Appeals for the Tenth Circuit reversed. 630 F.2d 704 (1980). The majority, after examining Colorado law, rejected the District Court's conclusion that regulation of the cable television business was beyond the home rule authority of the city. Id., at 707. The majority then addressed the question of the city's claimed Parker exemption. It distinguished the present case from City of Lafayette on the ground that, in contrast to the municipally operated revenue-producing utility companies at issue there, "no proprietary interest of the City is here involved." 630 F.2d, at 708. After noting that the city's regulation "was the only control or active supervision exercised by state or local government, and . . . represented the only expression of policy as to the subject matter," id., at 707, the majority held that the city's actions therefore satisfied the criteria for a Parker exemption, 630 F.2d, at 708.11 We granted certiorari, 450 U.S. 1039, 101 S.Ct. 1756, 68 L.Ed.2d 236 (1981). We reverse.
Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943), addressed the question whether the federal antitrust laws prohibited a State, in the exercise of its sovereign powers, from imposing certain anticompetitive restraints. These took the form of a "marketing program" adopted by the State of...
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