Mobile County Water v. Mobile Area Water and Sewer, Civil Action No. 07-0357-WS-M.

• Citation: 567 F.Supp.2d 1342
• Decision Date: 23 July 2008
• Docket Number: Civil Action No. 07-0357-WS-M.
• Parties: MOBILE COUNTY WATER, SEWER AND FIRE PROTECTION AUTHORITY, INC., Plaintiff, v. MOBILE AREA WATER AND SEWER SYSTEM, INC., Defendant.
• Court: U.S. District Court — Southern District of Alabama

567 F.Supp.2d 1342

MOBILE COUNTY WATER, SEWER AND FIRE PROTECTION AUTHORITY, INC., Plaintiff, v. MOBILE AREA WATER AND SEWER SYSTEM, INC., Defendant.

Civil Action No. 07-0357-WS-M.

United States District Court, S.D. Alabama, Southern Division.

July 23, 2008.

COPYRIGHT MATERIAL OMITTED

Jennifer S. Holifield, Joseph Pettis Isbell, Thomas Troy Zieman, Jr., Anthony M. Hoffman, Jerome E. Speegle, Zieman, Speegle, Jackson & Hoffman, L.L.C., Jay M. Ross, Ross & Jordan, P.C., Lawrence J. Hallett, Jr., The Hallett Firm, Mobile, AL, for Plaintiff.

Frank G. Taylor, James E. Atchison, Vaughan Drinkard, Jr., The Atchison Firm, P.C., Mobile, AL, Marcus Allen Huff, Wilmer & Lee, Huntsville, AL, for Defendant.

ORDER

WILLIAM H. STEELE, District Judge.

This matter comes before the Court on cross-Motions for Summary Judgment (docs. 37, 81). The Motions have been briefed and are ripe for disposition at this time.¹

I. Background.

A. Relevant Facts.

This lawsuit is the latest battleground in a decades-old turf war between two public utilities who provide services in overlapping territory to certain customers outside the city limits of Mobile, Alabama, but within the boundaries of Mobile County, Alabama. The relevant facts are, with few exceptions, not in dispute, so much so that it would have behooved the parties, streamlined the summary judgment process, and obviated the need for plaintiffs sizeable evidentiary submission had they submitted their Rule 56 motions on stipulated facts, given the paucity of material factual disagreements between them.²

Plaintiff, Mobile County Water, Sewer

and Fire Protection Authority ("MoCo"),³ is a rural water authority, organized pursuant to Ala.Code §§ 11-88-1 et seq. It is authorized to sell and does sell treated water to customers within MoCo's service area. (Doc. 85, at 13.) Defendant, Mobile Area Water and Sewer System ("MAWSS"),⁴ is formally organized as a Board of Water and Sewer Commissioners pursuant to Ala.Code §§ 11-50-340 et seq. The parties agree that MAWSS sells treated water and centralized sewer service to customers both within the city limits of Mobile, Alabama, as well as outside the city limits of Mobile, including areas within MoCo's service territory. (Doc. 85, at 12-13.) Thus, it is quite clear (and free from debate) that MAWSS and MoCo are presently selling treated water service in an overlapping geographic area, such that at some level they are vying for the same customers with regard to treated water service. The parties are likewise in full agreement that MAWSS is the sole seller of centralized sewer service in MoCo's service area. (Doc. 85, at 12.)

The genesis of this lawsuit lies in MAWSS's practice of requiring new customers to accept MAWSS's treated water, should MAWSS decide to supply it, as a condition of receiving MAWSS sewer service. To be clear, there is no dispute that MAWSS in fact engages in such a practice. MAWSS does not shy away from this fact, by either denying or downplaying it, but instead readily admits it. In particular, MAWSS freely concedes in its briefs that "MAWSS requires new sewer customers to accept water service from MAWSS if such service is available" and that "MAWSS requires new customers to accept MAWSS water service, if it is made available, if said new customer wishes to receive MAWSS sewer service." (Doc. 37, Exh. 1 at 2; doc. 85, at 11.)⁵ This is not a case, then, in which there are factual issues as to whether the challenged practice exists. Everyone agrees that MAWSS has adopted such a practice.⁶ The only question is its legality.

B. Claims Joined in this Proceeding.

In evaluating the lawfulness of MAWSS's "all-or-nothing" policy of supplying sewer and water services in MoCo's service area, the Court is of course constrained by the specific theories of liability interposed by plaintiff; therefore, the framing of the issues in the pleadings is of critical importance to the summary judgment analysis. The Amended Complaint unambiguously reflects that MoCo has postured this action exclusively in terms of antitrust violations. Although the Amended Complaint is not organized by specific causes of action, the sum total of the legal grounds on which MoCo seeks relief against MAWSS in this action are set forth in that filing as follows:

"21. MAWSS has accordingly conditioned the purchase of sewer service (the tied product) in the affected area to the purchase of water service (the tying product)also from MAWSS. Since MAWSS has market power in the provision of sewer service in the affected area, and a substantial volume of commerce in the provision of water service has been affected by the policy and practices here alleged, these tying arrangements are per se unlawful under Section 1 of the Sherman Act, 15 U.S.C. sec. 1.

"22. MAWSS' conditioning of the purchase of sewer service (the tied product) in the affected area to the purchase of water service (the tying product) also from MAWSS, where MAWSS has market power in the provision of sewer service in the affected area and a substantial volume of commerce in the provision of water service has been affected by the policy and practices here alleged, also unreasonably restrains trade in violation of Section 1 of the Sherman Act, 15 U.S.C. sec. 1.

"23. Through the policy and practices alleged, MAWSS has abused its market power in supplying sewer services in the affected area to gain a competitive advantage and foreclose competition in the supply of water services in the affected area, thereby monopolizing and attempting to monopolize trade and commerce in violation of Section 2 of the Sherman Act, 15 U.S.C. § 2.

"24. In addition, through the policy and practices alleged, MAWSS has abused its market power in supplying sewer services in the affected area to gain a competitive advantage and foreclose competition in the supply of water services in the affected area, thereby monopolizing and attempting to monopolize trade and commerce in violation of Code of Alabama (1970), § 6-5-60(a)."

(Amended Complaint (doc. 6), ¶¶ 21-24.)

Simply stated, then, MoCo brought this action contending that MAWSS's "all-ornothing" bundling of water services with sewer services in MoCo's service area constitutes an unlawful tying arrangement in violation of federal and state antitrust laws.⁷ The gravamen of MoCo's antitrust agreement by seller to sell one product only on condition that buyer also purchase a different product, and explaining that such an arrangement violates the Sherman Act if the seller has appreciable economic power in the tying product market and if the arrangement affects substantial volume of commerce in tied market); Tic-X-Press, Inc. v. Omni Promotions Co. of Georgia, 815 F.2d 1407, 1414 (11th Cir. 1987). (recognizing that tying arrangements were long ago classified as per se anticompetitive practices prohibited by the Sherman Act). Contrary to the labels used in the Amended Complaint, it is evident that sewer service is the tying product and water service is the tied product in this case claims is that MAWSS is leveraging its dominance in the centralized sewer services market to coerce its sewer customers to purchase water service from it, rather than from competitors such as MoCo. MoCo seeks a permanent injunction "restraining MAWSS from requiring any consumer of water to purchase water service from MAWSS as a condition of receiving sewer service"; restraining MAWSS from retaliating against any customer for purchasing water elsewhere; and requiring MAWSS to notify potential customers of their right to purchase water elsewhere. (Doc. 6, at 8.)⁸ No other claim or cause of action has been joined by MoCo in this action.⁹

The parties have now filed cross-motions for summary judgment as to MAWSS's liability to MoCo under federal and state antitrust provisions.¹⁰

II. Summary Judgment Standard.

Summary judgment should be granted only if "there is no issue as to any material fact and the moving party is entitled to a judgment as a matter of law." Fed. R.Civ.P. 56(c). The party seeking summary judgment bears "the initial burden to show the district court, by reference to materials on file, that there are no genuine issues of material fact that should be decided at trial." Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir.1991). Once the moving party has satisfied its responsibility, the burden shifts to the nonmovant to show the existence of a genuine issue of material fact. Id. "If the nonmoving party fails to make `a sufficient showing on an essential element of her case with respect to which she has the burden of proof,' the moving party is entitled to summary judgment." Id. (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)) (footnote omitted). "In reviewing whether the nonmoving party has met its burden, the court must stop short of weighing the evidence and making credibility determinations of the truth of the matter. Instead, the evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor." Tipton v. Bergrohr GMBH-Siegen, 965 F.2d 994, 999 (11th Cir.1992) (internal citations and quotations omitted). "Summary judgment is justified only for those cases devoid of any need for factual determinations." Offshore Aviation v. Transcon Lines, Inc., 831 F.2d 1013, 1016 (11th Cir.1987) (citation omitted).

"The applicable Rule 56 standard is not affected by the filing of cross-motions for summary judgment." Godard v. Alabama Pilot, Inc., 485 F.Supp.2d 1284, 1291 (S.D.Ala.2007); see also May v. A Parcel of Land, 458 F.Supp.2d 1324, 1333 (S.D.Ala.2006) (same). Indeed, the Eleventh Circuit has explained that "[c]ross-motions for summary judgment will not, in themselves, warrant the court in granting summary judgment unless one of the parties is entitled to judgment as a matter of law on facts that are not genuinely disputed." United States v. Oakley, 744 F.2d 1553, 1555 (11th Cir.1984) (citation...