City of Cleveland v. The Cleveland Electric Illuminating Company

MERRITT, Circuit Judge,

concurring.

I agree with the result reached in the opinion written by Judge Wellford and with its reasoning on the issues other than the admissibility of Cleveland Electric’s conduct in the Miller lawsuit. By sponsoring the Miller lawsuit, Cleveland Electric sought to avoid the consequences of an order of the FPC requiring interconnection with the City’s light company. My view that this conduct is irrelevant to the antitrust case is based on the Supreme Court’s opinion in Otter Tail Power Co. v. United States, 410 U.S. 366 , 93 S.Ct. 1022 , 35 L.Ed.2d 359 (1973).

The Supreme Court decided in Otter Tail that the authority of the Federal Power Commission to order interconnection does not create an immunity for electric power companies from antitrust regulation. In Otter Tail, the Supreme Court said that determinations of the FPC are in the main separate from and irrelevant to antitrust regulation. The FPC may order electric utilities which come before it to take certain actions in the public interest, and its orders may be informed by antitrust considerations if they are relevant; but, under the reasoning in Otter Tail, the two regulatory schemes — federal power regulation under the jurisdiction of the FPC and antitrust regulation under the federal courts— are otherwise entirely distinct. Given this, it seems improper to allow evidence of a party’s efforts to avoid the enforcement of an FPC order to which it takes exception to be used against that party in a private antitrust action.

Antitrust questions concerning preemption, the state action exemption, and exclusive and primary antitrust jurisdiction in connection with the regulation of utilities are legal questions. Resistance to a non-antitrust, FPC administrative order may give rise to administrative contempt proceedings, but I would not allow such resistance to create an inference of anti-competi *1170 tive intent or to be used to allow a jury to impose antitrust liability. A competitor should have to prove his antitrust case without regard to the non-antitrust litigation before the administrative agency or in the courts concerning the administrative agency’s actions. For this reason, I believe the District Court was correct in excluding evidence concerning the Miller case.

In other words, if, as Otter Tail held, orders of the FPC respecting interconnection and wheeling of electric power are not primary and do not insulate a utility subject to those orders from antitrust liability, I do not see why resistance to those orders through further litigation should be allowed to be used to create an inference of anticompetitive intent on the part of Cleveland Electric, as Muny Light argues. In my view, the issue goes beyond the Noerr-Pennington doctrine. It is an issue of basic fairness and reciprocity. If FPC regulatory litigation and orders do not displace antitrust litigation because the two are viewed as separate regimes of law, why should litigation in the regulatory area be used to establish antitrust liability?

Issues involving the relationship between antitrust enforcement and administrative regulations are especially complex and difficult:

Because the problem is so complex, the doctrines that the courts have fashioned to deal with it are, not surprisingly, tools of less than surgical precision. Moreover, the doctrines simply are not applied with any discernible consistency.

6 J. Von Kalinowski, Antitrust Laws And Trade Regulation § 44A.01[1] (1983). If these issues are confusing for courts, how can we expect a jury rationally to decide on the antitrust consequences of a competitor’s resistance through litigation of an order of interconnection by an administrative agency, an order not based on antitrust considerations? Admission of such evidence would simply confuse the jury.