Municipal Utilities Board of Albertville v. Alabama Power Co.
Municipal Utilities Board of Albertville v. Alabama Power Co.
Opinion of the Court
I.
This is an antitrust action brought by thirty Alabama municipalities (the “Cities”) against the Alabama Power Company and twenty-two rural electric cooperatives,
In an earlier proceeding, we agreed with the district court that the state action immunity doctrine of Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943), as applied in California Retail Liquor Dealers Ass’n v. Midcal Aluminum, Inc., 445 U.S. 97, 100 S.Ct. 937, 63 L.Ed.2d 233 (1980), controlled the disposition of this case. Municipal Util. Bd. of Albertville v. Alabama
The first part of Midcal’s test asks whether the challenged legislative enactment implements a clearly articulated state policy to restrain competition; the second part asks whether the state has actively supervised the anticompetitive conduct. Midcal, 445 U.S. at 105, 100 S.Ct. at 943. We concluded that the Acts challenged here satisfied the first prong of the Midcal test because “[t]he Alabama legislature has clearly articulated a policy to displace competition in the retail electric market” in order “to prevent duplication of electric facilities.” Municipal, 934 F.2d at 1502. We were unable to determine, however, whether the second part of the Midcal test was satisfied because the private agreements, which the Acts incorporated, were not in the record. For this reason, we could not tell whether these agreements authorized the parties, in implementing them, to engage in anticompetitive conduct that would not require the state’s prior approval. We therefore remanded the case to the district court for a resolution of this issue. We told the court that, if the implementation of the incorporated agreements satisfied the second Midcal requirement, dismissal of the suit would be proper. Id. at 1504-05.
On remand, the district court examined the agreements in question, concluded that the requisite state supervision of the implementation of the agreements was present, and dismissed the ease. The Cities now appeal, challenging this conclusion. We affirm.
II.
Only three of the agreements the Acts incorporate are involved in this appeal. These agreements authorize the parties, by mutual consent, to assign new customers between themselves. The first is the Agreement between Tarrant City, Alabama, and the Alabama Power Company dated June 8, 1983, which assigned all new customers having an initial contract demand of less than 5,000 kilowatts to the city:
[P]rovided, however, if [Tarrant] City and [the Alabama Power] Company mutually agree, upon request for such agreement by the customer, that service by Company could be provided in a manner which minimizes the potential for duplication of electric facilities, then service to such customer shall be provided by the Company.
The second is the Agreement between the Southern Pine Electric Cooperative, Inc., and the City of Evergreen, Alabama, which assigned to Southern Pine all existing customers, and all new customers locating within 300 feet of Southern Pine’s then existing electrical lines, within an area then proposed to be annexed by the City:
[Provided, however, that any new industry which might locate in these areas shall be negotiated as to who will serve the industry by the Governing Bodies of the City of Evergreen and Southern Pine Electric Coop.
The third is the Agreement between the Utilities Board of the City of Cullman and the Cullman Electric Cooperative dated November 5, 1954, which, in relevant part, established a boundary separating the service areas of the Utilities Board and the Cooperative and provided that, if either party refused to make service available to prospective customers in its service area, the other party might, after submission to it by the prospective customer of proof of the refusal, and after giving six months’ notice, commence serving the customer.
Standing alone, the provisions we have quoted appear to give the parties the right to allocate new customers without the Legislature’s approval. These provisions, however, do not stand alone, as the district court concluded; they must be read in pari materia with the incorporating provision of the 1985 Act, section 37-14-36. That section states:
The separate agreements listed below which have heretofore been entered into between, or negotiated between retail electric suppliers, have been reviewed by the legislature, determined to be in the public interest and found not to be inconsistent with the purposes and policies set forth' in this article. In areas to which these agreements are applicable, the procedures*387 for elimination and prevention of duplication of electric distribution facilities set forth in these agreements shall govern. The following agreements are therefore mandated by the State of Alabama to be applicable:
(3) Agreement between the City of Tar-rant City, Alabama and Alabama Power Company dated June 8, 1988 regarding electric service areas in and around Tar-rant City, Alabama.
(13) Agreement between Southern Pine Electric Cooperative, Inc. and the City of Evergreen, Alabama as such agreement is reflected in the resolution of the city council of the City of Evergreen dated June 6, 1967 relating to electric service in the City of Evergreen.
(15) Agreement between the utilities board of the City of Cullman and the Cull-man Electric Cooperative dated November 5, 1954.
Subsequent to May 20, 1985 [the effective date of the 1985 Act], suppliers [of electricity] shall be permitted to enter into mutual agreements, approved by the respective governing bodies of all suppliers affected by the agreements, respecting the nondu-plieation of lines, that are consistent with the purposes and policies set forth in this article; provided, however, that no subsequent agreement shall be valid unless and until it has been reviewed by the legislature.
Ala.Code § 37-14-36 (Michie 1992) (emphasis added). Under the 1985 Act, therefore, the Alabama Legislature must explicitly approve any customer allocations the parties might wish to make.
The Cities urge us to reject the district court’s conclusion — that. section 37-14-36 covers the implementation of these agreements — because it makes no practical sense.
Notwithstanding this possibility, we reject appellants’ argument. The district court’s interpretation is consistent with the plain language of the statute. When construing a state statute, we look to state rules of statutory construction, because the same rules of construction apply in a federal court as would apply in a state court. See Thomas v. Reliance Ins. Co., 617 F.2d 122, 125 (5th Cir. 1980).
We therefore hold that the private agreements in. question in this ease qualify for state action immunity.
IT IS SO ORDERED.
. The Cities also sued the cooperatives' association, the Alabama Rural Electric Association of Cooperatives. For convenience, we refer only to the defendants named in the text.
. The Cities concede that section 37-14-36 would cover the parties' "new” agreements; that is, agreements not made in the process of implementing the existing agreements.
. In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), this court adopted as binding precedent all decisions of the former Fifth Circuit handed down prior to October 1, 1981.
. The Cities also argue that, in applying the second part of Midcal’s test, we must determine whether the Legislature, in incorporating the agreements into the Acts by reference, exercised sufficient independent judgment and control so
Case-law data current through December 31, 2025. Source: CourtListener bulk data.