## Facts

- The Town of Hallie and nearby townships in Wisconsin were adjacent to the City of Eau Claire and were potential competitors in sewage collection and transportation.
- Eau Claire operated the only sewage treatment plant in the area.
- Eau Claire offered sewage treatment to outlying areas only if the area was annexed to the city and the landowners connected to and used the city’s collection and transportation system.
- The townships sought to buy treatment services while building their own collection and transportation systems, but Eau Claire refused to provide treatment alone.
- The townships sued under Sherman Act §§ 1 and 2, alleging monopolization of sewage treatment and an unlawful tying arrangement conditioning treatment on use of the city’s collection/transport system (and effectively on annexation).
- Wisconsin statutes authorized cities to construct and maintain sewage systems, define the service district, and refuse service to unannexed areas.

## Issues

1. Whether the city’s conduct was exempt from federal antitrust liability under the Parker state-action doctrine because it was taken pursuant to a clearly articulated and affirmatively expressed state policy to displace competition.
2. Whether a municipality claiming Parker immunity must show state compulsion of the challenged conduct and/or active state supervision.

## Decision

- The Supreme Court affirmed dismissal of the antitrust claims.
- The Court held that Wisconsin’s statutory scheme clearly articulated a state policy authorizing municipal sewage regulation with foreseeable anticompetitive effects, bringing the city’s conduct within Parker immunity.
- The Court rejected any requirement that the State compel the specific challenged conduct to satisfy “clear articulation.”
- The Court held that municipalities are not subject to the “active state supervision” requirement applicable to private parties asserting state-action immunity.

## Legal Principles

- A municipality obtains state-action antitrust immunity when it acts pursuant to a clearly articulated and affirmatively expressed state policy to displace competition.
- The “clear articulation” requirement is satisfied if anticompetitive effects are the foreseeable result of authority granted by the State; the State need not expressly authorize anticompetitive conduct in statutory text or history.
- State compulsion is not required for municipal state-action immunity; authorization producing foreseeable anticompetitive effects can suffice.
- Active state supervision is not required for municipalities (as opposed to private actors) once the clear-articulation requirement is met.

## Conclusion

The Court held that Eau Claire was immune from Sherman Act liability because Wisconsin law authorized municipal control over sewage services in a manner that foreseeably displaced competition, and municipalities need not show either state compulsion or active state supervision to receive Parker state-action immunity.


Town of Hallie v. City of Eau Claire, 471 U.S. 34 (1985)