Kern Tulare Water District v. City of Bakersfield, California
| Citation | 486 U.S. 1015,108 S.Ct. 1752,100 L.Ed.2d 214 |
| Decision Date | 16 May 1988 |
| Docket Number | No. 87-1433,87-1433 |
| Parties | KERN TULARE WATER DISTRICT v. CITY OF BAKERSFIELD, CALIFORNIA |
| Court | U.S. Supreme Court |
On petition for writ of certiorari to the United States Court of Appeals for the Ninth Circuit.
The petition for a writ of certiorari is denied.
This Court has previously held that a municipality is immune from antitrust liability under the state action exemption if it can demonstrate that "it is engaging in the challenged activity pursuant to a clearly expressed state policy." Hallie v. Eau Claire, 471 U.S. 34, 40, 105 S.Ct. 1713, 1717, 85 L.Ed.2d 24 (1985); see Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943). It is not necessary that the legislature explicitly state that it intends municipalities to engage in anticompetitive conduct pursuant to the state policy; it is enough that "anticompetitive effects logically would result from [the] broad authority to regulate." Hallie, supra, 471 U.S. at 42, 105 S.Ct. at 1718. From these principles, I had thought it clear that an antitrust violation would be established by showing that a municipality restrained trade by acting contrary to the clearly articulated state policy. Yet the Ninth Circuit has held here that ordinary "abuses" by local authorities in the field generally covered by the state policy are matters for state tribunals and not concerns of federal antitrust policy. 828 F.2d 514, 522 (1987).
The mischief of this unwarranted expansion of the state-action exemption can be seen in the facts of this case. All agree that an integral part of California's state water policy is its prohibition against waste and unreasonable uses of water. Id., at 519 (citing Cal.Const., Art. 10, § 2; Cal.Water Code Ann. § 106.5 (West 1971)). Furthermore, the state policy expressly encourages municipalities to transfer water rights so as to improve the efficiency of water use. Cal.Water Code Ann. § 109 (West Supp.1987). Here, petitioner water district alleged that respondent city controlled sources of water exceeding its annual needs, was in the business of reselling the surplus water for rural irrigation, and had entered a 35-year contract with petitioner, providing that petitioner would pay respondent $400,000 per year for 20,000 acre-feet of water per year. The water district alleged that, contrary to past years under the contract, the city refused to allow the district to transfer excess water to...
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