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Hybud Equip. Corp. v. Akron, City of

Citation: 14 ELR 20809
No. No. 83-3306, 742 F.2d 949/16 ERC 1705/(6th Cir., 08/24/1984) Aff'd on alternate grounds after U.S. Supreme Court remand

The court holds Akron's ordinance monopolizing solid waste disposal exempt from the Sherman Antitrust Act as state action. The city passed the ordinance to fulfill an agreement with the Ohio Water Development Agency (OWDA), which financed the city's solid-waste-fueled Recycle Energy System. The court notes that the Supreme Court has ruled that a nonsovereign state representative acting under a clearly articulated, affirmatively expressed state policy to displace competition is exempt under the state action doctrine. The Court has not clarified whether a less clearly expressed directive, such as OWDA's, can also qualify for the exemption. The court of appeals rules that in a case like OWDA's, the exemption may apply only if the restraints on trade are reasonably related to an agency's express powers and are designed to promote state aims within a designated field. Although OWDA has no independent regulatory authority, OWDA has express authority to contract with and issue bonds for muncipalities, which in turn have express authority to regulate solid waste.The court holds that OWDA and the city's exercise of their powers to monopolize waste disposal is reasonably related to the state policy promoted by OWDA, since monopolization of service is one common means by which an adequate bond market for such local actions is assured. The court notes that the Supreme Court has not settled whether a municipal ordinance must also meet a requirement of active state supervision to be exempt. In any case, OWDA's participation in the regulator process would satisfy the supervision requirement.

A concurring judge would rule that the city's exercise of power taken alone would still fall under the state action exemption.

[An earlier opinion in the case appears at 11 ELR 20894.]

Counsel for Appellants
William C. Brashares, John H. Korms, Charles A. Samuels
Cladouhos & Brashares
1750 New York Ave. NW, Washington DC 20006
(202) 783-6111

Joseph E. Abdenour
730 W. Market St., Akron OH 44303
(216) 762-9421

Counsel for Appellees
Edward J. Riegler
304 Municipal Bldg., Akron OH 44308
(216) 375-2036

Eben G. Crawford
Squire, Sanders & Dempsey
1800 Huntington Bldg., Cleveland OH 44115
(216) 687-8500

Before: MERRITT and MARTIN, Circuit Judges; BROWN, Senior Circuit Judge.