Jefferson Disposal Co. v. Parish of Jefferson, La.

• Decision Date: 05 March 1985
• Docket Number: Civ. A. No. 83-5487.
• Citation: 603 F. Supp. 1125
• Parties: JEFFERSON DISPOSAL COMPANY, INC. v. PARISH OF JEFFERSON, LOUISIANA and Patrick J. Koloski, in his capacity as Director of the Solid Waste Management Department, Parish of Jefferson, Louisiana.
• Court: U.S. District Court — Eastern District of Louisiana

603 F. Supp. 1125

JEFFERSON DISPOSAL COMPANY, INC. v. PARISH OF JEFFERSON, LOUISIANA and Patrick J. Koloski, in his capacity as Director of the Solid Waste Management Department, Parish of Jefferson, Louisiana.

Civ. A. No. 83-5487.

United States District Court, E.D. Louisiana.

March 5, 1985.

COPYRIGHT MATERIAL OMITTED

Ernest E. Barrow, II, of Grant & Barrow, Gretna, La., Richard J. Conway, Garret G. Rasmussen and Michael G. Plantamura of Patton, Boggs & Blow, Washington, D.C., for plaintiff.

Charles W. Lane, III, George P. Manson, Jr., of Jones, Walker, Waechter, Poitevent, Carrere & Denegre, New Orleans, La., Hubert A. Vondenstein, Parish Atty., Gretna, La., for defendants.

OPINION

FELDMAN, District Judge.

This is an antitrust suit against a local government, the Parish of Jefferson, a subdivision of the State of Louisiana, and a local official, Patrick Koloski, in his capacity as the Director of the Solid Waste Management Department of the Parish of Jefferson.¹ In November 1983, the Plaintiff, Jefferson Disposal Company, Inc. ("JDC"), a private corporation, instituted this suit against the Defendants. JDC alleges that the Defendants have violated Sections 1 and 2 of the Sherman Act, 15 U.S.C. sections 1 & 2, and seeks treble damages in an amount exceeding $6,000,000 under Section 4 of the Clayton Act, 15 U.S.C. section 15.²

JDC is engaged in the business of municipal solid waste collection and disposal and has previously performed such services for Jefferson Parish under contracts relating to the unincorporated areas of the Parish. Jefferson Parish, pursuant to the express and implied powers granted to it by its Home Rule Charter, provides garbage collection and disposal services in the Parish. To fulfill this governmental function, it created the Solid Waste Management Department of Jefferson Parish, which has direct administrative supervision over solid waste management for the Parish. In January 1981, Patrick Koloski became the Director of the Waste Management Department. As Director, he is responsible for the preparation of bid specifications and the evaluation of bid proposals and contracts relating to solid waste collection and disposal for the various Garbage Districts in the Parish. The Parish Council, however, approves the award of such contracts.

The Plaintiff claims that the Defendants engaged in concerted action with American Waste and Pollution Control Company,³ another private company and a competitor of JDC, to restrain trade in the market for the collection and disposal of municipal solid waste in Jefferson Parish in violation of section 1 of the Sherman Act. According to the Plaintiff, in November 1981, Mr. Koloski and his Waste Management Department prepared bid specifications for the collection and disposal of municipal solid waste within Garbage Districts Two and Six on the West Bank of Jefferson Parish; Plaintiff says that the specifications were intentionally designed to favor American Waste and discriminate against JDC; the specifications, Plaintiff charges, purposefully contained unreasonable and unnecessary requirements preventing JDC from submitting a competitive responsive bid.⁴ JDC also claims that Jefferson Parish has attempted to monopolize and in fact monopolized the market for garbage disposal on the West Bank of the Parish in violation of Section 2 of the Sherman Act by requiring that all municipal solid waste collected from Garbage Districts Two and Six be disposed of only in a Parish-owned sanitary landfill tract.

In January 1985, the Defendants moved to dismiss Plaintiff's claim for monetary damages, interest, costs and attorney's fees for Sherman Act violations on the ground that the Local Government Antitrust Act of 1984, Pub.L. No. 98-544, 98 Stat. 2750 (1984), prohibits the Plaintiff from obtaining such relief from a local government and its officials.

Section 3(a) of the Local Government Antitrust Act of 1984 ("Act"), which became effective as of September 24, 1984, states that "no damages, interest on damages, costs, or attorney's fees may be recovered under section 4, 4A or 4C of the Clayton Act (15 U.S.C. 15, 15a or 15c) from any local government, or official or employee thereof acting in an official capacity." JDC does not dispute that Jefferson Parish is a "local government" as defined by Section 2(1)(A) of the Act and that Patrick Koloski is being sued as an official of the Parish for acts performed in his official capacity as the Director of the Waste Management Department of the Parish. JDC, however, strongly contests the retroactive application of the Act to its pending case against the Defendants.

A brief background sketch of the dilemma local governments were in before passage of the Act will help to highlight the serious public policy questions the Act tries to resolve. Public policy questions which are central to the present motion to dismiss.

The Act represents a logical extension of the well-known doctrine enshrined in antitrust dogma in Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943) that insulated state action from antitrust inquiry. Parker v. Brown and its progeny reflect a vital and important public policy, but for years local governments were still left open to the threat of bankruptcy from Federal antitrust treble damage awards. Although states were free to conduct operations which might otherwise be open to antitrust challenges, the same conduct by local governments was not similarly emancipated unless it was authorized by specific state legislation. See Community Communications Co. v. City of Boulder, 455 U.S. 40, 102 S.Ct. 835, 70 L.Ed.2d 810 (1982). Boulder spawned an avalanche of antitrust suits against local governments; the spectre of treble damages numbering in the multi-millions of dollars threatened the financial life of many cities and counties. Against that setting, Congress began to examine various proposals for legislative relief. In early October 1984, a compromise bill was enacted which exempts local governments only from the damages provisions of the antitrust laws; parties may still seek injunctive relief. Thus, the Act is a clear affirmation of the strong and judicially sanctioned public policy against subjecting governmental agencies and their officials to the chilling financial threat of antitrust damages.

The question here is whether the Act should be applied retroactively and, if so, whether constitutional infirmaties are triggered.

Congress was aware that plaintiffs would question the retroactive application of the Act and addressed this problem in Section 3(b) of the Act. It provided the following guidelines for Federal courts to apply:

Subsection (a) shall not apply to cases commenced before the effective date of this Act September 24, 1984 unless the defendant establishes and the court determines, in light of all the circumstances, including the stage of litigation and the availability of alternative relief under the Clayton Act, that it would be inequitable not to apply this subsection to a pending case. In consideration of this section, existence of a jury verdict, district court judgment, or any stage of litigation subsequent thereto, shall be deemed to be prima facie evidence that subsection (a) shall not apply.

This case has not passed the pre-trial discovery stage of litigation. Thus, the question presented is whether, in light of all the circumstances, including the stage of litigation and the availability of alternative relief, it would be inequitable for this Court to allow JDC to proceed against Jefferson Parish and Patrick Koloski for monetary damages under the Clayton Act.

This Court holds that it would, indeed, be inequitable not to apply Section 3(a) of the Act here. Furthermore, retroactive application of the Act does not violate JDC's rights under the Constitution. Finally, while the Court is not insensitive to the fact the JDC has dedicated sizable resources to pursue this litigation in the hope of receiving a treble damage award for Federal antitrust law violations, it is important to underscore that the national concern expressed by the Act in protecting local governments and their citizens from the potentially devastating effects of such awards deserves paramount consideration.

Legislative Intent

The legislative history of the Local Government Antitrust Act reflects Congress' deep concern over the increasing number of Federal antitrust suits against local governments arising after two recent Supreme Court opinions restricted the availability of antitrust immunity to local governments. In City of Lafayette v. Louisiana Power & Light Co., 435 U.S. 389, 98 S.Ct. 1123, 55 L.Ed.2d 364 (1978), the Supreme Court held that "state action" immunity established in Parker v. Brown did not automatically extend to local governments; rather, according to the Court, local government antitrust immunity is dependent upon whether the conduct alleged to be anticompetitive was performed pursuant to a state policy to displace competition with regulation or monopoly public service. Then, in Boulder the Supreme Court held that a state's grant of homerule powers to a local government was insufficient authorization by the state to cloak the local government with antitrust immunity. The Boulder Court explained that in order for the action of a local government to constitute the action of the state itself the local government's action had to be in furtherance or implementation of a "`clearly articulated and affirmative expressed,'" state policy. 455 U.S. at 51, 102 S.Ct. at 840-41. As the Senate Judiciary Committee has pointed out, prior to Lafayette and Boulder, "it was generally assumed that the `State action' doctrine applied not only to States, but to local units of government as well." Report to the Senate Committee on the Judiciary on the Local Government Antitrust Act, S.Rep. No. 593, 98th Cong., 2d Sess. 1 (1984). Thus, when Congress discovered that this general assumption was...