Petition for Writ of Certiorari — Whorton v. Surtran Taxicabs, Inc.

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Supreme Court, US.

86-104 FILED

a DEC 23 1986

NIOL, JR.

i CLERA

IN THE

Supreme Court of the United States

OCTOBER TERM, 1986

CARL WHORTON, KEN WHORTON, et al.,

Petitioners,

SURTRAN TAXICABS, INC., YELLOW CAB OF DALLAS,

INc., FORT WORTH CAB & BAGGAGE Co., INC.,

City OF DALLAS, TEXAS, CITY OF FORT WorTH,

TEXAS, CITY OF IRVING, TEXAS, CITY OF GRAPVINE,

TEXAS,

Respondents.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

JOHN F. Bass

(Counsel of Record)

JOHN E. KENNEDY

3315 Daniel Avenue

Dallas, Texas 75275

(214) 692-2588

Of Counsel

DENNY R. MARTIN

BASS AND MARTIN ATTORNEYS

2525 Ross Avenue

Dallas, Texas 75201

(214) 922-9777

Attorneys for Petitioners

PRESS OF BYRON S. ADAMS, WASHINGTON, D.C. (202) 347-8203

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QUESTIONS PRESENTED

Whether a federal court is precluded from using

a retroactive state statute validating a local gov-

ernment’s prior monopoly contract to establish ‘‘a

clearly articulated and affirmatively expressed

state policy’ showing ‘‘the legislature contem-

plated the acts complained of.”’

Whether the Local Government Antitrust Act of

1984 does not permit a federal court to weigh

alternative, non-existent remedies against private

defendants as a ground for granting a local gov-

ernment defendant retrospective immunity from

all remedies, legal and equitable.

LIST OF PARTIES

The parties to the proceedings below were:

Petitioners here, intervenor-plaintiff-appellants Carl

Whorton et al.*

Appellants below, plaintiffs John Woolen (now de-

ceased) et al.**

Respondents here, Surtran Taxicab, Inc., Yellow Cab

of Dallas, Inc., Fort Worth Cab & Baggage Co.,***

City of Dallas, Texas, City of Fort Worth, Texas, City

of Irving, Texas, City of Grapevine, Texas.

*The Whorton-intervenor-plaintiffs represent over 200 indi-

vidually named taxicab drivers.

** The Woolen individual plaintiffs and the Dallas Taxi As-

sociation were certified as class representatives.

*** Surtran Taxicab, Inc. is owned by Yellow Cab of Dallas,

Inc. and Fort Worth Cab & Baggage Co. All are presumed to

be closely held private corporations.

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TABLE OF CONTENTS

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IIT IE tI EIEN ~ slasidbinubenincdasdsnecessscccnveosannsccsece

TABLE OF AUTHORITE&S . ..................cccccsoeeeee

IIT iccioddusautenuncsoessntnaesncensssnecinenion

SIIIIIEN. ‘ac Sehsciddsdyscspubhianteainessnestovesorionsistsees

STATUTES INVOLVED ...................ssceeeeees pinta

STATEMENT OF THE CASE .................ccccsseeeeee

REASONS FOR GRANTING WRIT .................004.

I. The test for deciding whether a state policy

authorizing municipal anticompetitive activity

is a prospective test, to be applied before the

activity, and not a retroactive test, to be

applied after the activity. ............cceeees

Parker v. Brown implied that a state may

not grant a state action immunity by ret-

roactively declaring a contract to be law-

SUNT alisilsh cctelanetainicaiddacibiieetassetbneedecoventecses

. Hallie v. City of Eau Claire requires a

prospective application of the test to es-

tablish ‘‘a clearly articulated and affirm-

atively re seedy state policy’’ showing

“the legislature contemplated the acts

aida casiianiscansitonaiosn

. Other circuits have required that the state

policy be declared prospectively, before

the activity, rather than retroactively,

NE ITING = nalakcdidinudigisnininsinnsonsinenncs

. The Fifth Circuit endorsed a retroactive

test for determination of state policy in

conflict with the prospective test required

by Parker, Hallie and other circuits. ....

E. The Fifth Circuit judgment cannot be sus-

tained on grounds that the declaration of

state policy prospectively pre-existed the

MRGTROIORY GUTITITE, acccccccccsncsccsscsscctnenscsass

F. The writ should issue because allowing

the Fifth Circuit test to stand allows state

legislatures to change their policy retro-

actively in order to moot federal antitrust

violations, and thereby allows State in-

vasion of Congresrional power to define

and to forbid anticompetitive behavior. .

II. Congress intended that the grant of retro-

active immunity to local governments ‘rom

the damage remedy be conditioned upon the

existence of alternative equitable relief

against the local government, and not upon

alternative nonexistent relief against private

IS snaccesaisatieteindencsheptandesecceadianensibictines

CAIRTLE semneissentiinntaiccideinisctalotiibisbinnuietiaainenin

APPENDIX A. SEPTEMBER 26, 1986, OPINION

OF THE UNITED STATES

COURT OF APPEALS FOR THE

FIFTH CIRCUIT, WOOLEN V.

SURTRAN TAXICABS, _INC.;

WHORTON V. CITY OF DAL-

LAS, 801 F.2d 159 (5th Cir.

SOEED abashidnssorindannenddiiunsiabdnhasteidncenés

APPENDIX B. THE LOCAL GOVERNMENT AN-

TITRUST ACT OF 1984 .....00000...

APPENDIX C. STATE STATUTES .....................

APPENDIX D. STATE LEGISLATIVE

SENET | sidsvenstnntanininléandbieniesinsios

TABLE OF AUTHORITIES

CASES:

Auton v. Dade City Florida, 783 F.2d 1009 (11th

Ce RRIIED: : ccntcccscssnciinteuconstmenisnieaeninediiidteiens

Cine 42nd Street Theater Corp. v. Nederlander Org.,

790 F.2d 1084 (2d Cir. 1986) ...................000.

City of Lafayette v. Louisiana Power & — Co.,

435 s SD CRT | fecsesticchstessaglaceinten nee

Commuter Transportation Systems v. Hillsborough

County Aviation Authority, 801 F.2d 1286

CEDAR CORP, - RID © sccciacesccnscictnvetsinnvutesaeeaamanaeas

Eastern Railroad President's Conference v. Noerr

Motor Freight, 365 U.S. 127 (1961) _ .............

Ehrlich v. United States, 252 F.2d 772 (5th Cir.

WO cccecstiscithcseniassanintasatecicincnieneaiantticnsasnsbinn

Executive Town & Country Services v. City of At-

lanta, 789 F.2d 1523 (11th Cir. 1986) _.........

Golden State Transit v. City of Los Angeles, 726

F.2d 1430 (9th Cir. 1984), rev’d on other

grounds, 88 L.Ed 2d 616 (1986) — .........::.eee0

Grason Elec. v. Sacramento Mun. Utility Dist., 770

F.2d 833 (9th Cir. 1985), cert. den., __U:S.

cated REID” ~ sscidiedneatestihcodencuntaeledaeasaaabpiabinaadinhdabiots

Green v. Mansour, 106 S.Ct. 423 (1985) .............

Huron Valley Hospital v. City of Pontiac, 792 F.2d

GOB COU Car. TID wcccecectccncansitasccnctnsiatntecenses

Independent Taxicab Drivers Employees v. Greater

Houston Transportation Co., 760 F.2d 607 (5th

Cir. 1985), cert. den., __US. —:; faa

L. & H. Sanitation v. Lake City Sanitation, 769

ek Esk fe Se ee eee

LaSalle Nat. Bank of Chicago v. County of DuPage,

777 F.2d 377 (7th Cir. 1985), cert. den., ——

OD, ccc MIEN -sesnaccinsaeenpiasinbentiepdithniiaadabieinnnns

Mass. Furniture & Piano Movers Ass’n. v. F.T.C.,

ag Be € 8: 8: BS Bee eee

Page

5,16

Table of Authorities Continued

Page

Mercy-Peninsula Ambulance v. County of San Ma-

teo, 791 F.2d 755 (9th Cir. 1986) _ ................

Miami Intern. Realty v. Town of Mt. Crested Butte,

607 F. Supp. 448 (D. Colo. 1985) © ................ 16,17

Mitchell v. Forsyth, 453 U.S. 913 (1985) © ............ 14

Montauk-Caribbean Airways v. Hope, 784 F.2d 91

(2d Cir. 1985), cert. , alty “Ts. oad

CRINGE - <oosciesuhcennsebiamtneeniesdentendbdnadecsdidiniaiatideiaieamesialicteents 7,13

Parker v. Brown, 317 U.S. 341 (1948) _ ................ 6,8

Southern Motor Carriers Rate Conference v. United

Beets, Ga Ve. GE Gee - citenseennnen 7

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

CED cctencccescnennisshesiansstabanaemetininebabediiminaaen 6,7,8,19

United Mine Workers v. Pennington, 381 U.S. 657

CEIUGD cocevecvsenenvesusiabcbinannlianaibidesnmiedininimante 5,16

United States v. Yellow Cab Co., 332 U.S. 218

CADET) cccidusunesniamieiiaseiet 10

Wetzel v. Liberty Mut. Ins. Co., 508 F.2d 239 (3d

Cir.), cert. den., 421 U.S. 1011 (1975) _......... 18

Woolen v. Surtran Taxicabs, 461 F. Supp. 1025

CED. TOR: BD Micivbactailiscctenaiitaeieienies 3,9,11

— son Surtran Taxicabs, 684 F.2d 324 (5th Cir.

cenencensehennasebnnbtonseshesanontiendiiianataiimaatnieliieintis 4

Woolen v. Surtran Taricabs, 615 F. Supp. 344

(N.D.Tex. 1985), affd per curiam, F.2d

YX eee ee 5

Woolen v. Surtran Taricabs, 801 F.2d 159 (5th Cir.

REED chertetstnsscicantaccatinaesaiae 5,10,11,15,16,18

STATUTES

Texas Municipal Airports Act, TEX. REV. CIV.

STAT. ANN. art. 46d-14, (Vernon Supp.

SED enkchiidnstsiadatadiaaattanieidadin siheetalectibitncitbinsenn 4,5,12

Ch. 626, 1983 Tex. Gen. Laws _.................... 4

Ch. 978, 1983 Tex. Gen. Laws —................00.. 5

Texas Motor Bus Act, TEX. REV. CIV. STAT. ANN.

art. 9lla, §1(c) (Vernon Supp. 1985) _............. 11,12

vil

Table of Authorities Continued

Page

Local Government Antitrust Act of 1984, Pub. L.

No. 98-544, 98 Stat. 2750 (Oct. 24, 1984) 15

U.S.C. §35 (Supp. ITI, 1985) ..................... 2.5,14,15

MP eee 2,3,14

ep RES TIEN TE” Snannceeisctiicnniaianneenbitinessiiilibiasciaatbadiie 2

RULE:

Federal Rule of Civ. Proc. 23(bM2) .............00.0000. 3

LEGISLATIVE HISTORY:

130 Cong. Rec. $13,105 (daily ed. Oct. 4, 1984) .. 17

130 Cong. Rec. $14,368 (daily ed. Oct. 11,

ISTE,‘ nincuindiniiantanisaneisisantelhiaetibnacsbilnasstncennibisemninses 17

H.R. Rep. No. 98-1158 (Oct. 10, 1984), U.S. Code

Cong. & Admin. News 1984 ........ sinibsadelicncatee 17

TREATISES AND ARTICLES:

P. AREEDA AND D. TURNER, ANTITRUST Law /1974,

NI UIE > etsisssseseeiasecintseentenanntenapennenastenensees 9

Cirace, An Economic Analysis of the ““State-Munic-

ipal Action” Antitrust Cases, 61 Tex. L. Rev.

Ge CHEE |. sncitsissatinihitistiidcecteliieidusetinamuminensasons ]

Z. CHAFFEE Jr. & E. Re, Equity 11 (5th ed.

ee Rn EEE eae ee Se OO 18

Hovenkamp & Makerron, Municipal von and

Federal Antitrust Policy, 32 U.C.L.A. L. Rev.

Sac e 10

Mayo, The Local Government Anti-trust Act: A

Comment on the Constitutional Question, 50 J.

rr oge Ff: US fee 18

IN THE

Supreme Court of the United States

OCTOBER TERM, 1986

CARL WHORTON, KEN WHORTON, et al.,

Petitioners,

SURTRAN TAXICABS, INC., YELLOW CAB OF

DALLAS, INC., FORT WORTH CAB & BAGGAGE

CoMPANY, INc., City OF DALLAS, TEXAS, CITY OF

Fort WorTH, TEXAS, CITY OF IRVING, TEXAS, AND

CITY OF GRAPEVINE, TEXAS,

Respondents.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

The petitioners, Carl Whorton, Ken Whorton, et al.,

respectfully pray that a writ of certiorari issue to

review the judgment and opinion of the United States

Court of Appeals for the Fifth Circuit entered in the

proceeding entitled Woolen, et al. v. Surtran Tazi-

cabs, Inc., et al. on September 26, 1986.

OPINIONS BELOW

The per curiam opinion of the Court of Appeals for

the Fifth Circuit is reported at 801 F.2d 159. It is

reprinted in Appendix A hereto and includes the opin-

ion of the United States District Court for the North-

ern District of Texas.

JURISDICTION

The judgment of the Fifth Circuit Court of Appeals

was entered on September 26, 1986.

The jurisdiction of this Court to review the judg-

ment of the Fifth Circuit is invoked under 28 U.S.C.

§1254(1).

STATUTES INVOLVED

The federal statutes involved are the Sherman Act

and Clayton Act, 15 U.S.C. §1 et seq., and the Local

Government Antitrust Act of 1984, 15 U.S.C. §35

(Supp. III, 1985). The latter Act is reprinted in Ap-

pendix B.

The state statutes involved are the Texas Motor

Bus Act and Texas Municipal Airports Act. Relevant

sections of the statutes are reprinted in Appendix C.

STATEMENT OF THE CASE

This case raises an antitrust challenge to local gov-

ernment ordinances that required taxicabs to ‘“‘dead-

head’”’ from the Dallas-Fort Worth Regional Airport

during the five year period 1974-1979. The Dallas-Ft.

Worth Regional Airport is the only Texas joint city

airport that is located outside the city limits of both

cities and is circumscribed by territory not within the

territorial limits of either city. City ordinances com-

pelled taxicab owners to ‘‘deadhead,’’ that is, to carry

passengers to the airport, approximately twenty miles,

and to return empty, without passengers.

This suit began in 1978 when some 200 individually

named taxicab owners joined to sue in federal district

court to recover treble damages against the cities and

private defendants because of the damages the own-

ers had suffered from being compelled to deadhead.

These owners have been designated ‘‘the Whortons’’

and are the petitioners here. Their complaint was that

the Dallas-Ft. Worth Joint Airport Board’s grant of

an exclusive franchise contract to a private corpo-

ration, partially owned by Yellow Cab of Dallas, Inc.,

to carry all outbound passengers from the airport was

not authorized by state law and violated the Sherman

and Clayton Acts. 15 U.S.C. §1 et. seq., (1976). Shortly

before their suit, a similar suit was filed seeking a

class action for injunctive relief. A plaintiff in that

suit was, among others, the Dallas Taxi Association,

an association chartered by Yellow Cab of Dallas,

Inc., one of the private defendants in both suits. The

Whortons’ individual damage action and the Dallas

Taxi Association class injunctive suit were consoli-

dated for pretrial.

In November 1978, then District Judge Patrick E.

Higginbotham overruled defendants’ motions for dis-

missal based in part on state action immunity. He

held the exclusive contract and deadheading require-

ment were not immunized by the state action defense

and must stand trial under the rule of reason. Woolen

vy. Surtran Taxicabs, Inc., 461 F. Supp. 1025 (N.D.

Tex. 1978). The consolidated cases were transferred

to Judge Mary Lou Robinson. Two years later in De-

cember 1980, after discovery limited to the class cert-

ification issue, Judge Robinson certified a Federal

Rule of Civ. Proc. 23(b\2) injunctive class, named the

Dallas Taxi Association and its lawyer as the class

representative, denied the individual Whorton drivers

the right to opt-out, and denied their alternative mo-

tion to intervene. On appeal by the Whortons, the

Fifth Circuit declined to rule on their right to opt

out but reversed the denial of intervention and re-

manded in August, 1982. Woolen v. Surtran Taxicabs,

684 F.2d 324 (5th Cir. 1982). For three years, Judge

Robinson continued her stay of discovery on the mer-

its until August 8, 1985 when she dismissed as to all

defendants.

Substantial changes occurred during the interim pe-

riod. Shortly after Judge Higginbotham ruled in 1978,

the first five year exclusive contract expired in 1979.

After this lawsuit was filed, and in response to the

inefficiency and to public protest, the Dallas-Ft. Worth

Joint Airport Board and the cities modified the ex-

clusive monopoly contract and compulsory deadhead-

ing, and changed to a system allowing access by all

taxicabs to the outbound business by paying a pickup

fee. These changes substantially mooted prospective

injunctive relief in the pending suits.

In 1983, the Texas legislature then amended the

Municipal Airports Act to add the provision that:

(dX6) Taxicab Licensing ... [A] joint airport

board ... shall have power to license taxi-

cabs picking up passengers at or delivering

passengers to the airport.

Ch. 626, 1983 Tex. Gen. Laws, at 4015, TEX. REV.

CIV. STAT. ANN. art. 46d-14(d\6) (Vernon Supp.

1985). Section 2 of a different amending Act, added

the provision that Judge Robinson subsequently found

“‘validated’”’ the prior exclusive joint board monopoly

contract from 1974 to 1979:

Any and all contracts, leases, or other ar-

rangements for the use or occupancy of air-

port property executed by joint boards ...

prior to the effective date of this Act, are

hereby validated and confirmed and the same

are fully effective and represent the lawful

agreements and undertakings of joint boards

in accordance with the terms thereof.

Ch. 978, 1983 Tex. Gen. Laws, at 5322, 5323, TEX.

REV. CIV. STAT. ANN. art. 46d-14(d) note (Vernon

Supp. 1985). App. C-II.

On August 8, 1985, Judge Robinson granted the

defendants’ motions to dismiss and for summary judg-

ment. Among other grounds, she ruled that “{flor

purposes of antitrust analysis, the [1983] validation

statute itself, by validating and confirming the con-

tracts in question, is an adequate indication’’ of state

policy. 615 F. Supp. at 349, 801 F.2d at 163. In the

alternative, she ruled that the Local Government An-

titrust Act of 1984, 15 U.S.C. §35 (Supp. III, 1985),

allows the federal court to consider alternative relief

to private defendants as a ground for granting ret-

roactive immunity from damage remedies to the local

government. 801 F.2d at 165. But in the remaining

part of her opinion, Judge Robinson denied all relief

against the private defendants under the Noerr-Pen-

nington doctrine. The Whorton intervenor-plaintiffs,

as well as the other plaintiffs, appealed. On Septem-

ber 26, 1986 the Fifth Circuit affirmed in a per cur-

iam opinion on the basis of the district court’s opinion.

REASONS FOR GRANTING THE PETITION

I. THE TEST FOR DECIDING WHETHER A STATE

POLICY AUTHORIZING MUNICIPAL ANTICOM-

PETITIVE ACTIVITY EXISTS IS A PROSPECTIVE

TEST TO BE APPLIED BEFORE THE ACTIVITY,

AND NOT A RETROACTIVE TEST, TO BE AP-

PLIED AFTER THE ACTIVITY.

Parker v. Brown, 317 U.S. 341 (1948) held that

under the “state action’’ doctrine, a cartel of raisin

growers was immune under the federal antitrust laws

because a California statute enacted prior to the an-

ticompetitive activity authorized the price fixing mo-

nopoly. However, in dictum this Court implied that

the test for measuring the grant of immunizing state

authority is to be applied prospectively and not ret-

roactively:

[A] state does not give immunity to those who

violate the Sherman Act by authorizing them

to violate it, or by declaring that their action

is lawful.

317 U.S. 341, 351 (1943) (emphasis added).

Thus it seems clear that if the state statute in

Parker v. Brown had been passed after, rather than

before the anticompetitive activity, the Court would

not have allowed immunity for the period before the

passage of the statute.

Forty years later, Town of Hallie v. City of Eau

Claire, 471 U.S. 34 (1985), although upholding the

state action defense on the basis of pre-existing stat-

utes, restated the judicial test that had evolved. That

test requires a “‘ ‘clearly articulated and affirmatively

expressed’ ”’ state policy in statutes showing that

‘* ‘the legislature contemplated the kind of action com-

plained of.’’’ (emphasis added) (citation omitted).

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

at 44 (1985). The plain meaning and purpose of this

test is to require that the state statute expressing

state policy pre-exist the activity, and, by implication,

to preclude the state from retroactively establishing

its policy and authority by a ratification statute at-

tempting to legalize prior anticompetitive activity. See

also Southern Motor Carriers Rate Conference v.

United States, 471 U.S. 48 (1985).

Since the date of the Town of Hallie decision, ap-

parently all federal circuit court decisions applying

the Hallie test have found municipalities immune on

summary motions. Nevertheless, all circuits, although

reaching results favoring the local governments, have

restated the rule in Hallie to require that the proper

test is a prospective one of foreseeability, and not a

retroactive test of ratification. For example, the Sec-

ond Circuit in Cine 42nd Street Theater Corp. v. Ned-

erlander Org., 790 F.2d 1032, 1042 (2d Cir. 1986)

stated: “The Court thus indicated the test should be

one of foreseeability—whether the legislature could

foresee the anticompetitive effects that would follow

from the express authority the state had delegated

to its cities.’”’ (emphasis added). See also Montauk-

Caribbean Airways v. Hope, 784 F.2d 91, 95 (2d Cir.

1985), cert. den., __U.S. __(1986).

The foreseeability standard, or versions of it, have

been articulated in other circuits as well. La Salle

EES

Nat. Bank of Chicago v. County of DuPage, 777 F.2d

377 at 381 (7th Cir. 1985), cert. den., __U.S. —_—

(1986); Mercy-Peninsula Ambulance v. San Mateo

County, 791 F.2d 755, 757 (9th Cir. 1986); Grason

Elec. v. Sacramento Mun. Utility Dist, 770 F.2d 833,

836 (9th Cir. 1985), cert. den., __U.S. __(1986); Au-

ton v. Dade City, Florida, 783 F.2d 1009, 1011 (11th

Cir. 1986); L & H Sanitation v. Lake City Sanitation,

769 F.2d 517, 520 (8th Cir. 1985); Mass. Furniture

& Piano Movers Ass’n v. F.T.C., 773 F.2d 391, 396

(1st Cir. 1985).

The Fifth Circuit in this case adopted a retroactive,

rather than a prospective test in conflict with Parker,

Hallve and other circuits. Although reciting and claim-

ing consistency with these decisions, the district

court’s opinion characterized the 1983 Texas legisla-

tion as a “validation” statute “‘itself’’ supplying the

necessary evidence of state policy to meet the Hallie

test during the period of the 1974-79 exclusive mo-

nopoly contract:

For purposes of antitrust analysis, the vali-

dation statute itself, by validating and con-

firming the contracts in question, is an

adequate indication of the state’s desire to

allow joint airport boards to displace com-

petition through anticompetitive measures in

the area of taxicab services to municipal air-

ports. 801 F.2d at 168.

The above quoted passage implies that the retroactive

test embodied in the statement and employed by the

court was essential to establish a state policy au-

thorizing the monopoly contract governing the period

1974-79.

The retroactive test endorsed by the Fifth Circuit

cannot be dismissed as surplusage and dictum on the

theory that even without considering the 1983 leg-

islation, there was pre-existing statutory authority for

the 1974-79 contract. Judge Patrick E. Higginbotham,

then district judge, in overruling motions to dismiss

based on the state action doctrine, had already ruled

in 1978 that the cities and the joint airport board at

that point in time did not have state authority to

enter into an exclusive taxicab contract on outbound

business at the joint regional airport and their ar-

rangement must stand trial under the rule of reason.

Woolen v. Surtran Taxicabs, Inc., 461 F. Supp. 1025

(N.D. Tex. 1978). His opinion also clearly implied that

if regulatory authority over taxicabs traveling back

and forth between city limits and territorial limits of

the Dallas-Ft. Worth Airport were also subject to

regulation by the Texas State Railroad Commission,

and not subject to exclusive regulatory authority by

the cities and the joint airport board, then a State

Railroad Commission certificate was not proof of the

State’s intent to validate the monopoly contract on

outbound business. 461 F. Supp. at 1032, 1033.

Professor Areeda endorsed Judge Higginbotham’s

ruling saying ‘“‘[i]t is both unusual and inefficient to

require other cabs leaving passengers at the airport

to return empty to the city.” P. AREEDA & D.

TURNER, ANTITRUST LAW (1978, Supp. 1982), at 54;

see also Cirace, An Economic Analysis of the ‘“‘State-

Municipal Action”’ Antitrust Cases, 61 Tex. L. Rev.

481, 503 (1982).

Nevertheless, the Fifth Circuit here found Jnde-

pendent Taxicab Drivers’ Employees v. Greater Hous-

ton Transportation Co., 760 F.2d 607 (5th Cir.), cert.

denied, __U.S. (1985) ‘virtually indistinguish-

able.”’ 801 F.2d at 161. The Fifth Circuit rejected the

specious distinctions urged by the Dallas Taxi Asso-

ciation “plaintiffs” that there was a difference of

ownership and a “regulatory void’ at the DFW Re-

gional Airport. 801 F.2d at 162. But the Fifth Circuit

failed even to acknowledge the important, real and

valid distinctions urged by the Whorton intervenor-

plaintiffs that unlike taxi transportation through con-

tiguous territory subject to exclusive local legislative

power at the Houston airport, the transportation to

and from the Dallas-Ft. Worth Regional Airport ter-

ritory crossed through territory subject to power of

other municipalities and reserved by the State to the

State Railroad Commission.

This distinction, based upon the allocation of dual

regulatory power and of territorial power between

state and city governments follows the analogous dis-

tinction recognized by this Court in United States v.

Yellow Cab Co., 332 U.S. 218 (1947). The siate-local-

territorial power distinction is the basis for this

Court’s restraint against parochial interests of one

municipality unreasonably controlling unrepresented

municipalities in a regional market. City of Lafayette

v. Louisiana Power & Light Co., 485 U.S. 389, 404-

406 (1978); Hovenkamp & Makerron, Municipal Reg-

ulation and Federal Antitrust Policy, 32 U.C.L.A. L.

Rev. 719 (1985) (advocating that the courts use a

territorial approach to the state action defense).

—— -« 2

Because it was necessary in 1983 to amend the

Motor Bus Act, TEX. REV. CIV. STAT. ANN. art.

91lla, §1(c) to remove the mandatory regulatory power

of the State Railroad Commission, see App. C, and

this was an integral part of amendments to the Mu-

nicipal Airports Act transferring power to the joint

airport board, then both as a matter of law and as

a matter of the district court’s characterization, the

1983 retroactive “‘validating’’ legislation was essential

to establish statutory authority in the joint airport

board for the period 1974 to 1979.

The district court and Fifth Circuit, however, as-

sumed that if the State Railroad Commission had po-

tential, but unexercised, authority in the time period

1974-79 to authorize an exclusive contract on out-

bound taxicab service through multiple counties and

cities, then it was irrelevant that the DFW Joint Air-

port Board had usurped the State Railroad Commis-

sion’s authority prior to 1983. Thus the Fifth Circuit

endorsed and applied, not the required, prospective

“clearly expressed and articulated’’ standard of pre-

existing power in the local government, but a ret-

roactive, imprecise “‘suggestion’”’ standard of power

in the State agency: ‘‘This [1983] clarifying legislation

does not suggest that no power to regulate existed

before its enactment. The validating statute suggests

just the opposite.’’ 801 F.2d at 163.

But what prior state statute embodied the state

policy? The Dallas-Fort Worth Joint Airport Board

under the Municipal Airports Act had no jurisdiction,

and the Texas State Railroad Commission had juris-

diction but no articulated policy and furthermore had

not exercised its jurisdiction. Woolen v. Surtran Tax-

icabs, 461 F. Supp. at 1032, 10383 (N.D. Tex. 1978).

The Fifth Circuit’s opinion also misconceived the

anti-monopoly intent of the 1983 Texas legislature as

to future state policy after 1983. The intent of the

1983 Texas legislature was to terminate the Yellow

Cab monopoly at the Dallas-Ft. Worth Regional Air-

port, and noi as the Fifth Circuit implies, to create

prospective and retrospective economic regulatory

power in the DFW Joint Airport Board to reinstitute

the regional taxicab monopoly. As Governor Mark

White stated:

Specifically, my concern that the original

bill placed the State in the position of leg-

islating a monopoly for a single taxi com-

pany, while preventing free market

competition, has been sufficiently ad-

Rumors that there would be a veto of this

legislation should be put to rest.

(Press Release, May 27, 1983). App. D.'

‘Governor White's statement refers to the 1983 amendment

of the Motor Bus Act, TEX. REV. CIV. STAT. ANN. art. 9lla

§l(c) that was an integral part of the 1983 amendments to the

Municipal Airports Act. As set forth in the Whorton appellants’

Fifth Circuit Reply Brief and Statutory Appendix, the legislative

history of multiple bills integrated into the 1983 and 1985 leg-

islation is complex. In addition to an anti-monopoly goal, the

final outcome shows that the 1983 Texas legislature drew a clear

distinction between solely municipal airports under TEX. REV.

CIV. STAT. ANN. art. 14d-4(aX2), such as Houston, and powers

over taxicabs at the Dallas-Ft. Worth joint airport under Article

14d-14(d\6), that were subject to mandatory State Railroad Com-

mission regulation until the legislature removed its power over

such taxicabs, abortively in 1983, and finally, successfully in

1985. See App. C. The following cases therefore are distinguish-

able, primarily on the grounds that authorizing state statutes

Multiple policies based upon antitrust law, feder-

alism and legal order support the need for this Court

to reaffirm its prospective rule and reject the Fifth

Circuit’s retrospective rule. Otherwise, as a practical

matter, local governments and dominant private in-

terests, as here, will engage in anticompetitive mo-

nopoly contracts with impunity. For they know that

if and when they are challenged, because the State

has an interest in immunizing the local government

from damages, the State will retroactively validate

the contracts, on condition the local government cease

its anticompetitive monopoly. But in the interim the

damage has been done. Such a boot-strap system of

retroactive authority leaves a loophole seriously emas-

culating the power of Congress to define and to pro-

hibit anticompetitive activity because the victims of

the prohibited anticompetitive behavior will be left

remediless. Different future victims, learning that les-

son, will not litigate without a remedy. They also will

be left to ponder the coherence of a legal order that

allows federal rules governing local government ac-

tivity to be changed retroactively by the State.

were pre-existing and not retroactive, and on the secondary

ground that they involved transportation in territory exclusively

within the legislative power of the local government at the time

of the monopoly contract. Executive Town & Country Services

v. City of Atlanta, 789 F.2d 1523, 1525, 1529 (11th Cir. 1986);

Commuter Transportation Systems v. Hillsborough County Avia-

tion Authority, 801 F.2d 1286, 1288 (11th Cir. 1986); Montauk-

Caribbean Airways, Inc. v. Hope, 784 F.2d 91, 95, 96 (2d Cir.

1985), cert. den., ___U.S. (1986); Golden State Transit v.

City of Los Angeles, 726 F.2d 1430, 1434 (9th Cir. 1984), rev'd

on other grounds, 88 L.Ed.2d 616 (1986).

The policies at stake here are the same as, yet the

converse of, those in Mitchell v. Forsyth, 453 U.S.

913 (1985). That decision restates that in order to

overcome a defense of qualified immunity, the plaintiff

must establish “the legal norms allegedly violated by

the defendant were clearly established at the time of

the challenged actions....” (emphasis added), 105

S.Ct. at 2816. For analogous policy reasons necessary

to a fundamental legal order, to practical administra-

tion, and to federalism, the petitioners respectfully

urge that this Court expressly state that a local gov-

ernment, in order to invoke the state action defense,

must show that the “clearly articulated and affirm-

atively expressed state policy’’ was in existence “‘at

the time of the challenged actions.” Cf Huron Valley

Hospital v. City of Pontiac, 792 F.2d 563 (6th Cir.

1986).

Il. CONGRESS INTENDED THAT THE GRANT OF

RETROACTIVE IMMUNITY TO LOCAL GOVERN-

MENTS FROM THE DAMAGE REMEDY BE CON-

DITIONED UPON THE EXISTENCE OF

ALTERNATIVE EQUITABLE RELIEF AGAINST

THE LOCAL GOVERNMENT, AND NOT UPON AL-

TERNATIVE NON-EXISTENT RELIEF AGAINST

PRIVATE DEFENDANTS.

The Local Government Antitrust Act of 1984, Pub.

L. No. 98-544, 98 Stat. 2750 (Oct. 24, 1984), states,

in relevant part, in sections 3(a) and (b):

(a) No damages, interest on damages, costs

or attorney’s fees may be recovered under

section 4, 4A, or 4C of the Clayton Act (15

U.S.C. 15, 15a, or 15c) from any local gov-

ernment, or official or employee thereof act-

ing in an official capacity.

———E————

(b) Subsection (a) shall not apply to cases

commenced before the effective date of this

Act unless the defendant establishes and the

court determines, in light of all the circum-

stances, including the stage of litigation and

the availability of alternative relief under the

Clayton Act, that it would be inequitable not

to apply this subsection to a pending case.

In consideration of this section, existence of

a jury verdict, district court judgment, or any

stage of litigation subsequent thereto, shall

be deemed to be prima facie evidence that

subsection (a) shall not apply.

15 U.S.C. §35 (Supp. ITI, 1985).

The district court invoked section 3(b) as an alter-

native ground for dismissal of damages remedies

against the local government defendants. The stand-

ard endorsed by the Fifth Circuit is not the most

easily understood:

‘{[A]s either of the two factors ... stage of

litigation and availability of alternative relief

under the Clayton Act ... moves towards

weighing against retroactive application, the

defendant’s burden to establish that denial of

such application would be inequitable be-

comes more difficult.’ 801 F.2d at 165 (ci-

tation omitted).

Even aside from the district court’s hostile, inequit-

able characterization of the stage of the litigation

here,? the Fifth Circuit employed an erroneous legal

* Mechanically it is true that discovery on the merits had not

been completed in 1985. However, after Judge Higginbotham’s

standard by weighing alternative relief against private

defendants as a ground for denying total relief against

the government defendants (801 F.2d at 167):

‘(I]n looking to the availability of alternative

relief under the Clayton Act, the court would

assess whether a plaintiff could recover dam-

ages from a private party and whether an

injunction would be sufficient to halt contin-

uing injury caused by an ongoing antitrust

violation.’ (citation omitted). ...

Both criteria are met in these cases.[?] Each

case has three defendants which are not local

governments—Surtran Taxicabs, Yellow Cab

of Dallas, and Fort Worth Cab & Baggage

Co.—and which could be held liable for money

damages, if not otherwise exempt from the

antitrust laws.

major ruling in 1978, substantial discovery had been taken for

the class certification hearing, generating a seven volume record.

Since 1979, Judge Robinson had stayed discovery on the merits,

and resisted the Whortons’ attempts to bring the case to jury

trial, including their Pyrrhic victory on the first appeal. Woolen

v. Surtran Taxicabs, Inc., 684 F.2d 324 (5th Cir. 1982). In the

interim, defendants were benefited by the 1983 state legislation

validating their contracts, and the 1984 federal immunity leg-

islation. Compare, Miami Intern. Realty v. Town of Mt. Crested

Butte, 607 F. Supp 448 at 453 (D. Colo. 1985). Similarly, the

district court’s opinion, as endorsed by the Fifth Circuit, on

summary judgment mechanically found and endorsed the

defendants’ version of the facts, including the abstract label

“single operator concept’’ and did not report or analyze the

record evidence raising factual questions under the sham bidding

exception to Noerr-Pennington.

EN th ei BG FI M108 bt ss)

[?] As an alternative ground for dismissal, this analysis

proceeds as though the state action exemption did not

apply, thus making the availability of alternative relief

a reality. (801 F.2d 167).

This standard is based upon Senator Cranston’s re-

marks made on October 4, 1984. 130 Cong. Rec.

$13,105 (daily ed. Oct. 4, 1984). Senator Cranston

was not a Senate conference manager. Senator Metz-

enbaum was a Senate manager and stated on October

11, 1984:

None of those House Members and none

of us here in the Senate have the authority,

have the strength, have the legal right to

change the legal effect of what the conferees

concluded in their language, nor can we

change the statement of the managers. Only

the statement of the managers accurately re-

flects the congressional intent in this area,

and there is no way of changing that.

130 Cong. Rec. $14,868 (daily ed. Oct. 11, 1984)

(statement of Sen. Metzenbaum).

As extracted from the House Conference Report

dated October 10, 1984, (H. R. Rep. No. 98-1158 at

3 (Oct. 10, 1984), U.S. Code Cong. & Admin. News

1984 at 4602, 4626-27), the proper standard of law

is stated in Miami Intern. Realty v. Town of Mt.

Crested Butte, 607 F. Supp. 448, at 454 (D. Colo.

1985):

The legislative history clearly indicates that

Congress contemplated that relevant alter-

native remedies would consist solely of Clay-

ton Act injunctive relief against the municipal

defendant, rather than damage relief from

other private defendants.

The legislative history and language of section 3(b)

contemplate a sensitive balancing, according to tra-

ditional equity principles. See Mayo, The Local Gov-

ernment Antitrust Act, A Comment on _ the

Constitutional Questions, 50 J. Air L. & Com. 805,

811 (1985). Even if alternative relief against private

defendants can be weighed, traditional equitable prin-

ciples are perverted when, as here, the Fifth Circuit

affirmatively weighed nonexistent remedies against

the private defendants.

The district court’s opinion also fairly implied the

court would allow no retrospective equitable monetary

relief for past injuries. 801 F.2d at 167 and 168.

However, the Act requires the local government to

show the retroactive bar of the treble damage remedy

would not be ‘“‘inequitable.”” The maxim is not yet

dead that ‘“‘[h]le who seeks equity, must do equity.”

Z. CHAFFEE JR. & E. RE, EQuity 11 (5th ed. 1967).

By placing the affirmative burden on the local gov-

ernment to show that denial of the damage remedy

would be ‘‘[ Jequitable,’’ Congress incorporated this

equitable maxim that the court may provide retro-

spective equitable relief against the government as a

condition of granting it affirmative equitable relief,

v.e. here, immunity from treble damages. See Ehrlich

v. United States, 252 F.2d 772 at 776 (5th Cir. 1958)

(Wisdom, J.). The proper construction of the Local

Government Antitrust Act would be to fashion an

appropriate retrospective equitable remedy against the

local government as an equitable condition to the ret-

roactive grant of immunity from the damages remedy.

See Weitzel v. Liberty Mut. Ins. Co., 508 F.2d 239,

250-51, (8d Cir.), cert. den., 421 U.S. 1011 (1975).

This statutory solution is preferable because, it is sub-

des ' +

Se et

2 he Pe eee s Pe See ee ee

mitted, the Eleventh Amendment is not implicated.

Cf. Green v. Mansour, 106 S.Ct. 423 (1985).

The retroactive test for state policy and denial of

retrospective equitable relief against the local gov-

ernments, based upon non-existent alternative reme-

dies applicable to private defendants combine to create

a result that Congress did not intend. Congress did

not intend that cities and private defendants should

be able to engage in antitrust violations for a five

year period, and then when challenged in federal

court, to cease the practice and to obtain state leg-

islation retroactively validating the violations, and

thereby to escape all liability and leave the victims

remediless.

CONCLUSION

Local governments do not have sovereign immunity

from liability and from federal court remedies under

anti-trust laws. However, since the date of the Local

Government Antitrust Act and Town of Hallie, the

federal courts have swung the pendulum almost to

the point of automatic immunity. The Fifth Circuit’s

endorsement of a retroactive rule for measuring state

policy and its approval of a principle denying retro-

spective equitable relief on grounds of non-existent

alternative private relief as a practical matter have

reached that extreme. If the Court wants to draw a

balance point short of per se immunity, this case pre-

sents just cause.

For these reasons, petitioners respectfully request

this petition for writ of certiorari be granted.

Respectfully submitted,

JOHN F. Bass*

DENNY R. MARTIN

BASS AND MARTIN

2525 Ross Avenue

Dallas, Texas 75201

(214) 922-9777

Attorneys for Petitioners

Whorton, et al.

*Counsel of Record

Of Counsel:

JOHN E. KENNEDY

3315 Daniel Ave.

Dallas, Texas 75275

(214) 692-2588

Date: December 1986

APPENDIX

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 85-1564

JOHN WOOLEN, é al.,

Plarntiffs,

JoHN D. Campisi, Individually and as Class Action

Plaintiffs, et al.,

Plaintiffs-Appellants,

and

CARL WHORTON, et al.,

Intervenors-A ppellants,

SURTRAN TAXICABS, INC., et al.,

Defendants-A ppellees.

KEN WHOoRTON, et al.,

Plaintiffs-A ppellants,

City OF Datias, TEXAS, et al.,

Defendants-A ppellees.

OPINION

Filed September 26, 1986

Before: Thomas Gibbs Gee, Carolyn Dineen Randall and

W. Eugene Davis, Circuit Judges.

Per Curiam

Appeals from the United States District Court

for the Northern District of Texas

Mary Lou Robinson, District Judge, Presiding

mee

OPINION

PER CURIAM:

We affirm the judgment of the district court on the

basis of its careful opinion which is attached as Appendix

AFFIRMED.

APPENDIX A

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

CIVIL ACTION NO. 3-78-609

CONSOLIDATED WITH:

CIVIL ACTION NO. 3-78-745

JOHN WOOLEN, et ai.,

Plaintiffs,

vs.

SURTRAN TAXICABS, INC., et al.,

Defendants.

ORDER

The factual allegations in these antitrust actions have

already been reported twice and need not be repeated at

length here. See Woolen v. Surtran Taxicabs, 461 F.Supp.

1025 (N.D. Tex. 1978) (denying motions to dismiss); Woolen

v. Surtran Taxicabs, 684 F.2d 324 (5th Cir. 1982) (vacating

order denying intervention). In a nutshell, the plaintiff

taxicab drivers claim that the defendants have excluded

them from the outbound taxicab market at the Dallas/Fort

Worth Regional Airport since the airport’s opening in 1974,

in violation of the Sherman Act.

Recent antitrust law developments, most notably pas-

sage of the Local Government Antitrust Act of 1984, Pub.

L. No. 98-544, 98 Stat. 2750 (Oct. 24, 1984) (to be codified

in 15 U.S.C. § 35), and the recent decisions in Town of

SS re i ee

————————

Hallie v. City of Eau Claire, 105 S. Ct. 1713 (1985); South-

ern Motor Carriers Rate Conference v. United States, 105

S. Ct. 1721 (1985); and Independent Taxicab Drivers’ Em-

ployees v. Greater Houston Transportation Co., 760 F.2d

607 (5th Cir. 1985), now require that three issues be ad-

dressed, including one previously decided in the original

district court opinion in this case:'

I. Should these consolidated actions be dismissed be-

cause the Defendants’ challenged activities are immune

from scrutiny under the antitrust laws by virtue of the

state action exemption?

II. Should the Plaintiffs’ claims under § 4 of the Clayton

Act for damages, interest on damages, costs and attorney’s

fees against the defendant cities be dismissed under § 3

of the Local Government Antitrust Act of 1984?

Ill. Should the Plaintiffs’ claims against the private taxi

company defendants be dismissed as barred under the

Noerr-Pennington doctrine?

For the reasons set forth below, the Court answers each

question in the affirmative.

' After these actions were filed in 1978, all defendants moved to

dismiss under Fed. R. Civ. P. 12(b\6) for failure to state a claim upon

which relief can be granted, each asserting the state action exemption.

These motions to dismiss were denied in the original district court

opinion, 461 F.Supp. at 1031-33. On May 24, 1985, the Court issued

an Order stating that it would reconsider these motions in light of

subsequent authority. All parties submitted new briefs. On June 28,

1985, the private defendants—Surtran Taxicabs, Inc., Yellow Cab of

Dallas, Inc., and Fort Worth Cab & Baggage Company, Inc.—moved

for summary judgment under Rule 56, asserting the state action ex-

emption and Noerr-Pennington immunity.

The issues concerning the Local Government Antitrust Act of 1984

were raised by the Court in an Order issued December 6, 1984. In

response to that Order, each party filed papers addressing the appl-

icability of the Act’s provisions.

I. The State Action Exemption

A. The Municipal Defendants

In Parker v. Brown, 317 U.S. 341 (1943), the Supreme

Court, relying on principles of federalism and state sov-

ereignty, determined that the Sherman Act does not apply

to the anticompetitive conduct of a state acting through

its legislature. Jd. at 350-51. Thirty-five years later, the

Court also held that municipalities are not beyond the

reach of the antitrust laws by virtue of their status because

they are not themselves sovereign. City of Lafayette v.

Louisiana Power & Light Co., 435 U.S. 389, 412 (1978).

These actions were filed shortly after City of Lafayette

was decided.

City of Lafayette did not completely prohibit municipal-

ities from claiming the state action exemption. Instead,

the plurality opinion suggested that the state action doc-

trine “exempts only anticompetitive conduct engaged in

as an act of government ... [by a political subdivision of

the state] pursuant to state policy to displace competition

with regulation or monopoly public service.’’ 435 U.S. at

413. The opinion went on to explain:

This does not mean, however, that a political sub-

division necessarily must be able to point to a

specific, detailed legislative authorization before

it properly may assert a Parker defense ... [A]n

adequate state mandate for anticompetitive ac-

tivities ... exists when it is found “from the

authority given a governmental entity to operate

in a particular area, that the legislature contem-

plated that kind of action complained of.”’

435 U.S. at 419 (citation omitted). Finally, “City of La-

fayette suggested, without deciding the issue, that it would

be sufficient to obtain Parker immunity for a municipality

to show that it acted pursuant to a ‘clearly articulated

and affirmatively expressed ... state policy’ that was ‘ac-

—————eoeeo

tively supervised’ by the State.” Town oj Hallie, 105 S.

Ct. at 1717, quoting City of Lafayette, 435 U.S. at 410.

Considerable debate ensued over what would constitute

an adequate articulation and expression of state policy,

and what would constitute active supervision. In Com-

munity Communications Co. v. City of Boulder, 455 U.S.

40 (1982), the Court held that a home rule provision of

the Colorado Constitution which allocated only the most

general authority to municipalities to govern local affairs

did not satisfy the clear articulation component of the state

action test. The opinion also suggested that whether active

supervision by the state of the anticompetitive conduct was

required was an open question, despite the plurality opin-

ion in City of Lafayette. 455 U.S. at 51-52, n.14.

Noting that “ijt is fair to say that our cases have not

been entirely clear,’ 105 S.Ct. at 1720, the Court resolved

much of the debate in Town of Hallie. A unanimous Court

reiterated that the state action exemption applies when-

ever the state legislature has ‘‘clearly articulated and af-

firmatively expressed’ a _ state policy to displace

competition in the regulated area. Jd. at 1719. The Court

further held that ‘although compulsion affirmatively ex-

pressed may be the best evidence of state policy, it is by

no means a prerequisite to a finding that a municipality

acted pursuant to a clearly articulated state policy.” Jd.

Finally, the Court concluded that the ‘‘active state super-

vision requirement should not be imposed in cases in which

the actor is a municipality.”’ Id.

The Fifth Circuit has applied Town of Hallie in a case

which is virtually indistinguishable from the instant ac-

tions. In Independent Taxicab Drivers’ Employees v.

Greater Houston Transportation Co., 760 F.2d 607 (5th

Cir. 1985), the City of Houston had entered into a contract

with the Greater Houston Transportation Corporation by

which the City granted an exclusive concession over pas-

senger service at Houston Intercontinental Airport. Two

om 4 ih tare

groups of taxicab owners and operators filed suit under

the Sherman and Clayton Acts, seeking damages and in-

junctive relief from the City and its private contractor.

The district court dismissed the complaint on defendants’

motion for summary judgment, holding that the City was

immune from antitrust scrutiny under the state action ex-

emption and that the private contractor was immune under

the Noerr-Pennington doctrine. The Fifth Circuit affirmed.

The Court’s analysis focused on the relevant provision

of the Texas Municipal Airport Act, which authorizes mu-

nicipalities to establish and operate airports both within

and without their boundaries. Article 46d-4 provides:

(a) In operating an airport ... such municipality

may ... enter into contracts ... and other ar-

rangement for a term not exceeding forty (40)

years with any persons:

(2) conferring the privilege of supplying goods,

commodities, things, services or facilities at such

airport. ...

In each case the municipality may establish the

terms and conditions and fix the charges, rentals

or fees for the privileges or services... .

Tex. Rev. Civ. Stat. Ann. art. 46d-4 (Vernon 1969). The

Fifth Circuit said:

While the latter provision falls short of expressly

mentioning the establishment of ground trans-

portation services, the statute’s broad phrasing

is a strong indication of the state’s desire to ab-

dicate in favor of municipal prescience with re-

gard to airport management.

This indication is all we require. ... We think it

. Clear that the City of Houston might deem

—— ew

it most efficient to confer the privilege of airport

taxicab operation on a single company, and that

such a decision is a logical or reasonable conse-

quence of the state’s broad allocation of authority

to the City to run its own airport.

760 F.2d at 610-11. The Fifth Circuit also disposed of the

question concerning the impact of Article 46d-7(c)—a major

stumbling block in the first district court opinion in this

case, see 461 F.Supp. at 1031:

Similarly, it is of limited significance that the

statute authorizing municipal airport manage-

ment states that the municipality’s actions shall

not be “inconsistent with, or contrary to, any

Act of the Congress of the United States... .”’

[Article 46d-7(c).] The relevant question is not

whether the City has transgressed federal law,

but whether the Sherman & Clayton Acts apply

to the City at all.

760 F.2d at 612, n.8.

Plaintiffs seek to distinguish Independent Taxicab on two

grounds: (1) Houston Intercontinental is wholly owned and

operated by the City of Houston, whereas the Dallas/Fort

Worth Regional Airport is jointly owned and operated by

the Cities of Dallas and Fort Worth, and (2) recent sta-

tutory amendments demonstrate that taxicab operations at

jointly owned and operated airports were in a “regulatory

void” until 1983.

The first argument is of no import. The Cities of Dallas

and Fort Worth operate the airport through the Dallas/

Fort Worth Regional Airport Board, a joint board created

under § 14 of the Municipal Airport Act, Article 46d-14.

That section provides, in relevant part:

(a) For the purposes of this Section, unless oth-

erwise qualified, the term “public agency”’ in-

cludes municipality... .

Ram oe

lls nett PID la art

(b) Any two (2) or more public agencies may en-

ter into agreements with each other for joint ac-

tion pursuant to the provisions of this Act and

any two or more municipalities are specially au-

thorized to make such agreement or agreements

as they may deem necessary for the joint ...

operation of airports.... Concurrent action by

ordinance, resolution or otherwise of the govern-

ing bodies of the participating public agencies

shall constitute joint action....

acquire, establish, develop, construct, enlarge, im-

prove, maintain, equip, operate, regulate, protect

and pe'ice any airport ... to be jointly acquired,

controlied and operated, and such board may ex-

ercise on behalf of its constituent public agencies

all the powers of each with respect to such air-

port. ...

The Regional Airport Board is designed as a mechanism

for joint action. That the defendant cities in these actions

operated through the Regional Airport Board on a jointly

owned airport, instead of on their own on individually

owned airports, does not affect their state action exemp-

tion. “[T]he state’s desire to abdicate in favor of municipal

prescience with regard to airport management”’ is equally

clear in both instances. The decision to grant an exclusive

airport taxicab franchise—to utilize the ‘‘single-operator

concept,” in the parlance of these actions—is a logical and

reasonable consequence of the State’s broad allocation of

authority to cities to jointly acquire, own and operate mu-

nicipal airports.

Defendants second argument is based on legislation

passed in 1983. The Obstruction to Air Navigation Control

and Taxicab Licensing Act, 1983 Tex. Gen. Laws, ch. 626,

at 4015, amended § 14 of the Municipal Airport Act to

provide that:

10a

(dX6) Taxicab Licensing.... [A] joint airport

board ... shall have power to license taxicabs

picking up passengers at or delivering passengers

to the airport.

(7) Regulations. Any resolution, rules, regula-

tions, or orders of the joint airport board dealing

with subjects authorized by Subdivision (65) of

this subsection become effective only upon ap-

proval of the governing bodies of the constituent

public agencies.

Article 46d-14(d\6)-(7) (Vernon Supp. 1985). While this

statute was not enacted until well after the bulk of the

actions challenged in these suits, it is significant as an

indication of state policy, particularly when read in con-

junction with § 2 of the Municipal Airport Act Amend-

ments of 1983, 1983 Tex. Gen. Laws, ch. 978, at 5322,

which provides:

Any and all contracts, leases, or other arrange-

ments for the use or occupancy of airport prop-

erty executed by joint boards created under the

Municipal Airports Act (Article 46d-1 et seq.,

Vernon’s Texas Civil Statutes), and all provisions

thereof, and executed prior to the effective date

of this Act, are hereby validated and confirmed

and the same are fully effective and represent

the lawful agreements and undertakings of joint

boards in accordance with the terms thereof.

From these enactments, Plaintiffs draw the conclusion

that no governmental entity had any power to regulate

taxicab service at the airport until September of 1983. The

opposite is true.

The amendment to § 14 of the Municipal Airport Act

was designed to clarify the role of joint airport boards in

regulating taxicab service at joint airports because of un-

certainties that might have arisen from concurrent legis-

nena

lla

lation which clarified the role of the Railroad Commission

in establishing licensing requirements under the Motor Bus

Act, Article 91la. See 1983 Tex. Gen. Laws, ch. 263, at

1161. This clarifying legislation does not suggest that no

power to regulate existed before its enactment. The val-

idating statute suggests just the opposite.

The plaintiffs’ operations at the airport were limited

because ground transportation service was provided by

- means of a single-operator concept. The Cities of Dallas

and Fort Worth own the airport and, as noted above,

: operate it through the Dallas/Fort Worth Regional Airport

Board. The Cities of Dallas and Fort Worth contracted

with the Airport Board to provide ground transportation

under the single-operator concept. To meet their obliga-

tions to the Board, the Cities of Dallas and Fort Worth

formed an entity known as the D/FW Surtran System.

The System then solicited bids for the provision of the

taxicab component of the ground transportation services.

Yellow Cab of Dallas and Fort Worth Cab & Baggage

formed an entity known as Surtran Taxicab, Inc., which

submitted the winning bid. The D/FW Surtran System

then contracted with Surtran Taxicab, Inc., for the pro-

vision of taxicab service at the airport. The single-operator

concept, then, originated in the first agreement between

the Airport Board and the Cities of Dallas and Fort Worth.

; The 1983 validation statute confirms that, under state law,

the single-operator concept was lawful.

For purposes of antitrust analysis, the validation statute

itself, by validating and confirming the contracts in ques-

tion, is an adequate indication of the state’s desire to allow

joint airport boards to displace competition through anti-

competitive measures in the area of taxicab services to

municipal airports.

The Court concludes that Plaintiffs’ actions against the

Cities of Dallas, Fort Worth, Grapevine and Irving should

be dismissed because the chalienged conduct is immune

oO ae ae ees a

12a

from scrutiny under the antitrust laws by virtue of the

state action exemption.

B. The Private Defendants

In a companion case to Town of Hallie, the Supreme

Court outlined the criteria a private party must satisfy to

fall within the state action exemption. “First, the chal-

lenged restraint must be ‘one clearly articulated and af-

firmatively expressed as state policy.’ Second, the State

must supervise actively any private anticompetitive con-

duct.”” Southern Motur Carriers Rate Conference v. United

States, 105 S. Ct. 1721, 1727 (1985) (citations omitted).

The Court explained the reason for extending the state

action exemption to private parties:

The Parker decision was premised on the as-

sumption that Congress, in enacting the Sherman

Act, did not intend to compromise the States’

ability to regulate domestic commerce. If Parker

immunity were limited to the actions of public

officials, this assumed congressional purpose

would be frustrated, for a State would be unable

to implement programs that restrain competition

among private parties. A plaintiff could frustrate

any such programs merely by filing suit against

the regulated private parties, rather than the

state officials who implement the plan. We de-

cline to reduce Parker’s holding to a formalism

that would stand for little more than the prop-

osition that Porter Brown sued the wrong par-

ties.

Id. at 1726-27. Instead, “‘[t]he success of an antitrust ac-

tion should depend upon the nature of the activity chal-

lenged, rather than on the identity of the defendant.”’ Jd.

at 1728.

The private defendants have met the first prong of the

test. As discussed above, the single-operator concept re-

a aay

13a

sulted from the state’s clearly articulated and affirmatively

expressed “desire to abdicate in favor of municipal pres-

cience with regard to airport managment.” 760 F.2d at

610. Because the Cities of Dallas and Fort Worth deter-

mined that the single-operator concept would be used at

the airport and solicited bids only on this basis, it is fair

to say that the private defendants, who simply submitted

a bid, were compelled to participate in the anticompetitive

activity if they wanted to provide taxicab service at the

airport. As the Court said in Southern Motor Carriers,

“compulsion often is the best evidence that the State has

a clearly articulated and affirmatively expressed policy to

displace competition.”’ 105 S.Ct. at 1729.

The active supervision requirement—the second prong

of the test—‘‘prevents the state from frustrating the na-

tional policy in favor of competition by casting a ‘gauzy

cloak of state involvement’ over what is essentially private

anticompetitive conduct.” Jd. at 1729, quoting California

Retail Liquor Dealers Assn. v. Midcal Aluminum, Inc.,

445 U.S. 97, 106 (1980). ‘(T]he state supervision require-

ment is intended to control the potential for abuse created

by authorizing private persons to make anticompetitive de-

cisions and to insure that those decisions are consistent

with the clearly articulated and affirmatively expressed

state policy at stake.”” Gold Cross Ambulance & Transfer

v. Cag of Kansas City, 705 F.2d 1005, 1014 (8th Cir. 1983),

cert. denied, 105 S. Ct. 1864 (1985).

Midcal involved a challenge to a California wholesale

wine pricing system that the Court found resulted in a de

facto resale price maintenance program. The Court held

that the system.was a clearly articulated state policy, but

that it did not meet the active supervision requirement:

The State simply authorizes price setting and en-

forces the prices established by private parties.

The State neither establishes prices nor reviews

the reasonableness of the price schedules; nor

l4a

does it regulate the terms of fair trade contracts.

The States does not monitor market conditions

or engage in any ‘“‘pointed reexamination” of the

program.

455 U.S. at 105-106.

In the instant actions, there is no doubt that the Cities

of Dallas and Fort Worth, and the Regional Airport Board,

have actively supervised the private defendants’ conduct.

The details of taxicab service at the airport are set forth

comprehensively in the contracts between D/FW Surtran

System and Surtran Taxicabs, Inc., attached to the com-

plaints. Further, the successive contracts show a gradually

changing approach to ground transportation at the airport.

For example, the 1979 Contract allows Surtran Taxicabs

to subcontract with other taxicab companies for provision

of service at the airport.

The Court concludes that the Plaintiffs’ actions against

the private defendants should be dismissed because the

challenged conduct is immune from scrutiny under the an-

titrust laws by virtue of the state action exemption.

II. The Local Government Antitrust Act of 1984

The second question before the Court is whether the

plaintiffs’ claims for damages, interest on damages, costs

and attorney’s fees against the cities should, in the alter-

native, be dismissed under § 3 of the Local Government

Antitrust Act of 1984, Pub. L. No. 98-544, 98 Stat. 2750

(Oct. 24, 1984) (to be codified in 15 U.S.C. § 35), which

provides:

(a) No damages, interest on damages, costs or

attorney’s fees may be recovered under section

4, 4A or 4C of the Clayton Act (15 U.S.C. 15,

15a, or 15c) from any local government, or of-

ficial or employee thereof acting in an official

capacity.

eee

15a

(b) Subsection (a) shall not apply to cases com-

mence1 before the effective date of this Act un-

less the defendant establishes and the court

determines, in light of all the circumstances, in-

cluding the stage of litigation and the availability

of alternative relief under the Clayton Act, that

it would be inequitable not to apply this subsec-

tion to a pending case. In consideration of this

section, existence of a jury verdict, district court

judgment, or any stage of litigation subsequent

thereto, shall be deemed to be prima facie evi-

dence that subsection (a) shall not apply.

Section 3(b) of the Act “was a compromise between

those Congressmen who thought that retroactive applica-

tion was not in accord with Congress’ traditional approach

to changing existing law and those who felt that denial

of retroactive application would unjustly penalize those lo-

calities that were defendants in pending suits for treble

damages.” Jefferson Disposal Co. v. Parish of Jefferson,

603 F.Supp. 1125, 1131 (E.D. La. 1985).

There is no dispute that these cases were commenced

before the effective date of the act and that the cities of

Dallas, Fort Worth, Grapevine and Irving are local gov-

ernments within the meaning of § 2(1)A) of the Act, 15

U.S.C. § 34(1A). The question, then, is whether it would

be inequitable not to apply § 3(a) retroactively on the facts

of these cases.

The Joint Explanatory Statement of the Conference

Committee, which accompanied the Conference Report on

the Bill, discusses the application of the Act to pending

cases:

The application to pending cases of the money

damage protection afforded by § 3 will be based

upon a case-by-case determination by the district

court. The local government has the burden of

proof to establish to the court’s satisfaction that

16a

it would be inequitable not to apply this Act to

the pending case. The court is to consider all

relevant circumstances. The statute mentions two

of the factors that the court should consider—

stage of litigation and the availability of alter-

native relief under the Clayton Act. Where a

pending case is in an early stage of litigation and

where injunctive relief can remedy the problem,

the defendant local government may be able more

easily to sustain its burden. Where a case is in

more advanced stages of litigation or where in-

junctive relief is unavailable or incomplete, the

burden would become more difficult. If a case

has progressed to or beyond a jury verdict or

district court judgment, a local government

defendant would need compelling equities on its

side to justify the application of this section to

the pending case.

Conference Report of H.R. 6027, 98th Cong., 2d Sess.,

130 Cong. Rec. H11,850-51 (daily ed. Oct. 10, 1984). “This

Statement makes clear that as either of the two factors

specifically mentioned in § 3(b) of the Act (stage of liti-

gation and availability of alternative relief under the Clay-

ton Act) moves towards weighing against retroactive

application, the defendant’s burden to establish that denial

of such application would be inequitable becomes more

difficult.” Jefferson Disposal, 603 F.Supp. at 1132.

In addition to the two factors listed in the statute—the

stage of the litigation and the availability of alternative

relief under the Clayton Act—the legislative history indi-

cates that the Court should expressly consider at least

three other factors in deciding the equity question:

In making its determination as to whether a local

government should be protected against damages

in a currently pending case, however, the state-

ment of managers specifically directs the court

17a

to consider ail relevant circumstances, including

the stage of litigation and the availability of al-

ternative relief under the Clayton Act—that is,

the injunction remedy. But public policy requires

that the court’s inquiry in such instances must

not be limited solely to antitrust considerations

in cases brought against local governments.

Among the other relevant factors, the court

should properly consider:

First, whether the local government was acting

within its normal legislative, regulatory, execu-

tive, administrative, or judicial authority;

[SJecond, the financial harm which a treble dam-

age award could inflict on the municipality and

its taxpayers; and

[Tjhird, whether the municipal action was pred-

icated on or in furtherance of Federal or State

laws, policies or regulations.

130 Cong. Rec. H12,187 (daily ed. Oct. 11, 1984) (remarks

of Rep. Fish). Accord, id. at H12,184 (remarks of Rep.

Lungren). But see id. at $14,368 (remarks of Sen. Metz-

enbaum), reprinted in Miami International Realty Co. v.

Town of Mt. Crested Butte, 607 F.Supp. 448, 452 n.2 (D.

Colo. 1985) (additional factors suggested on the House floor

do not reflect Congressional intent). The Court will con-

sider the statutory factors first, then those suggested by

the legislative debates.

The Stage of Litigation. This litigatior is now seven

years old, but chronological age is deceptive in this in-

stance. These suits were filed in May and June of 1978.

The initial motions to dismiss were filed on November 29,

1978. Discovery then went forward on the class certifi-

cation issues, and on the merits from February, 1979, for-

ward. The class certification hearing was held in October

1979. The Court’s ruling on class certification was issued

18a

December 31, 1980. Both cases were essentially dormant

during the period the Court had the class certification

issues under advisement.

The December 31, 1980, Order also denied the motion

to intervene in the Camnisi (Woolen) suit, which had been

fled by some of the Whorton plaintiffs. Those plaintiffs

appealed in January 1981. The Fifth Circuit’s opinion was

issued on August 30, 1982. The mandate was filec in the

district court on September 27, 1982. No proceedings, other

than those related to the appeal, took place during the

pendency of the appeal.

After this case was remanded, the Campisi plaintiffs

moved to modify the class certification order to certify a

damages class and the Whorton plaintiffs moved to de-

certify the class. All parties filed statements concerning

the future course this litigation should take. In the ensuing

2 1/2 years, though, no party has made any real effort to

complete discovery and ready the case for trial on the

merits.

The past 5 1/2 years has not been devoted to preparation

for trial on the merits. Completion of pretrial discovery

would take at least another year. Because the status of

these actions has not changed since the effective date of

the Act, the Court need not determine whether the ap-

propriate date for assessing the stage of the litigation is

the date of this Opinion or the date the Act took effect,

September 24, 1984—30 days before its date of enactment

under § 6 of the Act. See Jefferson Disposal, 603 F.Supp.

at 1132 n.16.

The failure to complete pretrial discovery before the

effective date of the Act is a significant indication that §

3(a) should be applied retroactively. See 130 Cong. Rec.

H12,186 (daily ed. Oct. 11, 1984) (remarks of Rep. Hyde)

(the fact that pretrial discovery has not been completed

“is an important distinction between the first and second

sentences of section 3(b) for purposes of retroactive ap-

19a

plication’’); id. at H12,187 (remarks of Rep. Rodino) (un-

completed pretrial discovery “‘is the essential difference

made in the conference report between pending cases gen-

erally, and pending cases where a jury verdict or district

court decision has been rendered.’’) Congressman Hyde

and Rodino were floor managers for the Act. Their state-

ments during the course of debate are particularly useful

in determining Congress’ intent. Miami International

Realty, 607 F.Supp. at 452 n.2. The failure to complete

discovery before the effective date of the Act has partic-

ular weight where, as here, major discovery remains to

be conducted.

The Availability of Alternative Relief Under the Clayton

Act. “{I}n looking to the availability of alternative relief

under the Clayton Act, the court would assess whether a

plaintiff could recover damages from a private party and

whether an injunction would be sufficient to halt contin-

uing injury caused by an ongoing antitrust violation.’’ 130

Cong. Rec. $13,105 (daily ed. Oct. 4, 1984) (remarks of

Sen. Cranston). Contra Miami International Realty, 607

F.Supp. at 454 (“the potential damage liability of other

defendants should not enter into the calculus used in de-

termining whether to apply § 3 to pending cases’’).

Both criteria are met in these cases.* Each case has

three defendants which are not local governments—Sur-

tran Taxicabs, Yellow Cab of Dallas, and Fort Worth Cab

& Baggage Co.—and which could be held liable for money

damages, if not otherwise exempt from the antitrust laws.

Any continuing injury could be halted with injunctive

relief prohibiting the cities from excluding the plaintiffs

from the outbound taxicab market at the airport, or other

appropriate prohibitions. ‘‘Injunctive remedies under § 16

* As an alternative ground for dismissal, this analysis proceeds as

though the state action exemption did not apply, thus making the avail-

ability of alternative relief a reality.

20a

[of the Clayton Act] may be as broad as necessary to

ensure that ‘threatened loss or damage’ does not mater-

ialize or that prior violations do not recur.’’ International

Telephone & Telegraph Corp. v. General Telephone & Elec-

tronics Corp., 518 F.2d 918, 925 (9th Cir. 1975).

Exercise of Normal Regulatory Authority & Action in

Furtherance of State Law. As discussed in Part I of this

Opinion, the cities were plainly exercising their normal

regulatory authority and acting in furtherance of state law

in their implementation of taxicab service at the airport.

Financial Harm of a Treble Damages Award. The com-

bined actions seek actual damages of $7,000,000, which

would be trebled to $21,000,000. Such an award inevitably

would have an adverse impact even on these major cities,

but they would not be crippled in their provision of ser-

vices or forced into bankruptcy. The burden would also be

shared by the three nonmunicipal defendants. The mag-

nitude of any adverse consequences falls far short of those

suggested as benchmarks in the House:

[W]hether an adverse impact would be felt by the

unit of local government and its residents be-

cause of the antitrust damage award ... is im-

portant because certainly we do not want the

antitrust laws of our country to result in insol-

vency with respect to our local governments, nor

to intrude in such a way on local government

that we do not have people coming forth to serve

on local government out of fear of potential an-

titrust suits.

130 Cong. Rec. H12,184 (daily ed. Oct. 11, 1984) (remarks

of Rep. Lungren). At the same time, “‘[i]t cannot be denied

that a judgment of that magnitude would have an adverse

impact on any community in this country and would be

totally at odds with the spirit and intent of the Act.”’

Jefferson Disposal, 603 F.Supp. at 1135.

2la

Conclusion. The Court determines, in light of all the

circumstances, that it would be inequitable not be apply

§ 3(a) of the Local Government Antitrust Act of 1984, 15

U.S.C. § 35(a), to this case. Plaintiffs’ claims under § 4

of the Clayton Act, 15 U.S.C. § 15, for damages, interest

on damages, costs, and attorney’s fees against the Cities

of Dallas, Fort Worth, Grapevine and Irving are dismissed

on this additional ground. This dismissal does not affect

Plaintiffs’ claims for costs and attorney’s fees under § 16

of the Clayton Act, 15 U.S.C. § 26, as the Act does not

encompass them. Jefferson Disposal, 603 F.Supp. at 1133

n. 19.

Under the express language of § 4(b) of the Act, the

relief provided to private litigants is not available to the

private defendants in these actions because they were com-

menced before the effective date of the Act.

III. Noerr-Pennington

The private defendants have moved for summary judg-

ment on the ground that their activities are immune from

antitrust scrutiny under the Noerr-Pennington doctrine. See

Eastern Railroad President’s Conference v. Noerr Motor

Freight, Inc., 365 U.S. 127 (1961); United Mine Workers

v. Pennington, 381 U.S. 657 (1965).

“The Noerr-Pennington doctrine provides an exception

to antitrust liability enabling citizens or business entities

to influence or to petition public officials to take official

action that will harm or eliminate competition.” Affiliated

Capital Corp. v. City of Houston, 735 F.2d 1555, 1566 (5th

Cir. 1984) (en banc), petition for cert. filed, 105 S. Ct.

1164 (1984). The Noerr-Pennington doctrine stems from

the First Amendment’s guarantee of a right to assemble

and petition the government. “Joint efforts to influence

public officials do not violate the antitrust laws even though

intended to eliminate competition. Such conduct is not il-

legal, either standing alone or as part of a broader scheme,

22a

itself violative of the Sherman Act.” Pennington, 381 U.S.

at 670. As the Court later said:

[I]t would be destructive of rights of association

and of petition to hold that groups with common

interest may not, without violating the antitrust

laws, use the channels and procedures of state

and federal agencies and courts to advocate their

causes and points of view respecting resolution

of their business and economic interest vis-a-vis

their competitors. ,

California Motor Transport Co. v. Trucking Unlimited, 404

U.S. 508, 510-11 (1972).

However, ‘‘a defendant cannot rely on Noerr-Pennington

immunity when the activity to influence government action

is a mere sham to hide what is essentially an attempt to

interfere with a competitor’s business.”’ Affiliaied Capital,

735 F.2d at 1567. This sham exception may manifest itself

in a variety of ways. See Coastal States Marketing v. Hunt,

694 F.2d 1358, 1371 n.42 (5th Cir. 1983); ABA Antitrust

Section, Antitrust Law Developments 615-18 (2d ed. 1984).

The plaintiffs in the instant actions have not suggested

what variety of the sham exception they believe is appli-

cable here.

Recognizing that “[a petitioning party] should enjoy

petitioning immunity from the antitrust laws so long as a

genuine desire for [governmental] relief is a significant

motivating factor underlying [the petitioning activity],” the

Fifth Circuit has said that the sham exception is initially

established by a showing that the defendant’s petitioning

activity was “‘substantially’’ motivated by impermissible an-

ticompetitive factors. If this showing is made, the

defendant must demonstrate to the satisfaction of the trier

of fact that the defendant’s petitioning activity was ‘“‘sub-

stantially’’ motivated by a hope of governmental relief. If

the defendant discharges this burden, ‘[nlothing more is

23a

required to bring the case within the immunity.’’ Coastal

States Marketing, 694 F.2d at 1872 & n.45.

The summary judgment record in this case discloses no

genuine issue as to any facts material to determination of

the Noerr-Pennington question. The undisputed facts dem-

onstrate that the private defendants are entitled to sum-

mary judgment by virtue of the Noerr-Pennington doctrine.

The same comments made by the Fifth Circuit in Inde-

pendent Taxicab apply here:

Viewing the record in the light most favorable

to [plaintiffs], the most that can be said is that

[the private defendants] secured from the [Re-

gional Airport Board] an exclusive concession

whose anticompetitive effects stem primarily from

a valid municipal, and vicariously state, policy. It

would be anomalous to hold on the one hand that

government can contract with private entities to

effectuate valid, albeit anticompetitive, policies,

while holding on the other hand that private ent-

ities cannot petition government to participate in

the public endeavor.

760 F.2d at 613.

This result is compelled if Noerr-Pennington pro-

tection is to have meaning in the context of

agreements with the government. First Amend-

ment petitioning privileges would indeed be hol-

low if upon achieving a petitioned-for end the

petitioner were then subjected to antitrust lia-

bility for his success.

Greenwood Utilities Commission v. Mississippi Power Com-

pany, 751 F.2d 1484, 1505 (5th Cir. 1985).

The single-operator concept, which is at the heart of

Plaintiffs’ claims, apparently originated in an independent

consultant’s report prepared for the Cities of Dallas and

Fort Worth in 1964. Even if the private defendants ac-

24a

tively lobbied for implementation of the single-operator

concept and vigorously pressed their views concerning cri-

teria the successful bidder would have to meet in such

areas as minimum insurance coverage and fleet size, Noerr-

Pennington would apply because these activities plainly

were not a sham. Plaintiffs’ alleged injuries were caused

by the governmental action which the private defendants

genuinely attempted to secure and succeeded in securing.

See In re Airport Car Rental Antitrust Litigation, 521

F.Supp. 568, 587-90 (N.D. Cal. 1981), affd, 693 F.2d 84

(9th Cir. 1982), cert. denied, 103 S.Ct. 3114 (1983).

Plaintiffs’ contention that the private defendants’ ac-

tions fall within the co-conspirator exception to the Noerr-

Pennington doctrine is without merit. Viewing the sum-

mary judgment record in the light most favorable to

plaintiffs, the most that has been shown is mere adoption

by the cities of some of the private defendants’ proposals.

The record shows that while some of the private

defendants’ suggestions were adopted, the general concept

and specific details of taxicab service at the airport were

closely scrutinized and extensively debated by a variety of

public and private entities. There is no evidence of a con-

spiracy. See Affiliated Capital Corp. v. City of Houston,

519 F.Supp. 991, 1016-23 (S.D. Tex. 1981), adopted in

relevant part, 735 F.2d at 1567 (applying co-conspirator

exception where the evidence revealed ‘‘active participa-

tion and orchestration by public officials in an anticom-

petitive agreement’’).

The Court concludes that the plaintiffs’ claims against

the private defendants should also be dismissed as barred

under the Noerr-Pennington doctrine.

IV. The Civil Rights Claim

In their First Amended Complaint, filed May 17, 1985,

the Whorton plaintiffs allege that the defendants’ conduct

constituted ‘‘a discrimination against the rights of the

Plaintiffs under the Civil Rights Act and the Constitution

25a

of the United States.” Jd. ¢ 17, at 9. The Whorton plaintiffs

have not further elaborated on this cause of action in any

document filed with the Court, nor have they identified

what statute they purport to sue under.

This alleged civil rights claim based on discrimination

has no plausible foundation and is wholly insubstantial and

frivolous. It is dismissed for want of subject matter juris-

diction. Rule 12(b\1). See Williamson v. Tucker, 682 F.2d

579, 590-91 (5th Cir. 1980) (discussion of applicable stand-

ards). In the alternative, the civil rights claim is dismissed

for failure to state a claim upon which relief can be

granted. Rule 12(b\6).

V. Summary of Holdings

1. Plaintiffs’ antitrust claims are DISMISSED because

the Defendants’ challenged activities are immune from

scrutiny under the antitrust laws by virtue of the state

action exemption.

2. Plaintiffs’ antitrust claims under § 4 of the Clayton

Act for damages, interest on damages, costs and attorney’s

fees against the Defendant cities are DISMISSED under

§ 3 of the Local Government Antitrust Act of 1984 be-

cause, in light of all the circumstances, it would be ine-

quitable not to apply § 3(a) of the Act to this case.

3. Plaintiffs’ antitrust claims against the private

Defendants are DISMISSED as barred under the Noerr-

Pennington doctrine.

4. The Whorton Plaintiffs’ civil rights claim is DIS-

MISSED for lack of subject matter jurisdiction and for

failure to state a claim upon which relief can be granted.

5. This Order disposes of all pending claims in this lit-

igation. Judgment will be entered accordingly.

It is so ORDERED.

ENTERED this 8th day of August, 1985.

26a

/s/ MARY Lou ROBINSON

Maxy Lou ROBINSON

United States District Judge

27a

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

CIVIL ACTION NO. CA-3-78-609

CONSOLIDATED WITH:

CIVIL ACTION NO. CA-3-78-745

JOHN WOOLEN, et al.

Plaintiffs,

¥i

SURTRAN TAXICABS, INC., et al.,

Defendants.

FILED

AUG 8 1985

ORDER OF DISMISSAL

Civil action nos. 3-78-609 and 3-78-745 are dismissed.

It is so ORDERED.

ENTERED this 8th day of August, 1985.

/s/ MARY Lou ROBINSON

MARY LOU ROBINSON

United States District Judge

28a

APPENDIX B

LOCAL GOVERNMENT ANTITRUST ACT OF 1984

PUBLIC LAW 98-544 [H.R. 6027]; October 24, 1984

LOCAL GOVERNMENT ANTITRUST ACT OF 1984

For Legislative History of Act, see Pamphlet No. 10A

An Act to clarify the application of the Clayton Act to

the official conduct of local government, and for other

purposes.

Be it enacted by the Senate and House of Representatives

of the United States of America in Congress assembled,

That this Act may be cited as the “Local Government

Antitrust Act of 1984’’.

Sec. 2. For purposes of this Act—

(1) the term ‘“‘local government’? means—

(A) a city,county, parish, town, township, village,

or any other general function governmental unit

established by State law, or

(B) a school district, sanitary district, or any other

special function governmental unit established by

State law in one or more States,

(2) the term ‘‘person’’ has the meaning given it in

subsection (a) of the first section of the Clayton Act

(15 U.S.C. 12(A)), but does not include any locai

government as defined in paragraph (1) of this sec-

tion, and

(3) the term ‘State’ has the meaning given it in

section 4G(2) of the Clayton Act (15 U.S.C. 15g(2)).

Sec. 3. (a) No damages, interest on damages, costs, or

attorney’s fees may be recovered under section 4, 4A, or

4C of the Clayton Act (15 U.S.C. 15, 15a, or 15c) from

any local government, or official or employee thereof act-

ing in an official capacity.

29a

(b) Subsection (a) shall not apply to cases commenced

before the effective date of this Act unless the defendant

establishes and the court determines, in light of all the

circumstances, including the stage of litigation and the

availability of alternative relief under the Clayton Act, that

it would be inequitable not to apply this subsection to a

pending case. In consideration of this section, existence of

a jury verdict, district court judgment, or any stage of

litigation subsequent thereto, shall be deemed to be prima

facie evidence that subsection (a) shall not apply.

SEc. 4. (a) No damages, interest on damages, costs or

attorney’s fees may be recovered under section 4, 4A, or

4C of the Clayton Act (15 U.S.C. 15, 15a, or 15c) in any

claim against a person based on any official action directed

by a local government, or official or employee thereof act-

ing in an official capacity.

(b) Subsection (a) shall not apply with respect to cases

commenced before the effective date of this Act.

Sec. 5. Section 510 of the Departments of Commerce,

Justice, and State, the Judiciary, and Related Agencies

Appropriation Act, 1985 (Public Law 98-411), is repealed.

Sec. 6. This Act shall take effect thirty days before the

date of the enactment of this Act.

Approved October 24, 1984.

30a

APPENDIX C

STATE STATUTES

The history and content of the multiple statutes and

bills that produced the 1983, and later the 1985, Texas

legislation are more fully set forth in the Whorton

Appellants’ Reply Brief and attached Statutory Appendix

in the Fifth Circuit. Reprinted here are some of the parts

most relevant to this petition for certiorari.

App. Page

I. 1983 Tex. Gen. Laws, ch. 626, 4015-4022,

Obstruction to Air Navigation Control Act

and Taxicab Licensing Act. ............ccccccceeeees 3la

II. 19838 Tex. Gen. Laws, ch. 978, 5322-5324,

Municipal Airports—Joint Boards—Con-

tracts, Leases, and Other Arrangements—

COD GE PUG - crasnscdcincusscsnciniianiadsnincesss 32a

III. 1985 Tex. Gen. Laws, ch. 268, 2322-24, Tax-

icabs-Operation at Airports-Regulation. ....... 34a

IV. Texas Munici Airports Act, TEX. REV.

CIV. STAT. ., art. 46d-4(aX2), art. 46d-

14(d)6, 7, and note (Vernon Supp. 1985). .... 37a

V. Texas Motor Bus Act, TEX. REV. CIV.

STAT. ANN., art. 9lia, §1(c) (Vernon Sup.

RIDDEN suscovtiseccestasentiaiciataaaiadanaes 4la

3la

APP. C-I.

1983 TEX. GEN. LAWS, CH. 626, 4015-4022,

OBSTRUCTION TO AIR NAVIGATION CONTROL

ACT AND TAXICAB LICENSING

CHAPTER 626

S. B. NO. 960

AN ACT

relating to the regulation of obstructions to air navigation

of taxicabs serving certain airports; ... adding Subdivi-

sions (6) and (7) to Subsection (d), Section 14, Municipal

Airports Act (Article 46d-14, Vernon’s Texas Civil Stai-

utes).

BE IT ENACTED BY THE LEGISLATURE OF THE

STATE OF TEXAS:

SECTION 2. Subsection (d), Section 14, Municipal Airports

Act (Article 46d-14, Vernon’s Texas Civil Statutes), is

amended by adding" Subdivisions (6) and (7) to read as

follows:

“(6) Taxicab Licensing Notwithstanding any contrary

provisions in H.B. 593, Acts of the 68th Legislature, Reg-

ular Session, 1983,'* a joint airport board established pur-

" Vernon’s Ann. Civ. St. art. 46d-14, subsec. 12. Chapter 263. (d).

subds. (6&7).

Additions in text indicated by underline; deletions by [brackets]

‘? Passed the Senate on April 14, 1983: Yeas 30, Nays 0; May 27,

1983, Senate refused to concur in House amendments and requested

appointment of Conference Committee; May 27, 1983, House granted

request of the Senate; May 28, 1983, Senate adopted Conference Com-

mittee Report by a viva-voce vote; passed the House, with amendments,

on May 25, 1983, by a non-record vote, May 27, 1983, House granted

request of the Senate for appointment of Conference Committee; May

30, 1983, House adopted Conference Committee Report by a non-record

32a

suant to Chapter 114, Acts of the 50th Legtislature,

Regular Session, 1947, as amended (Article 46d-14, Ver-

non’s Texas Civil Statutes‘, shall have power to license

taxicabs picking up passengers at or delivering passengers

to the airport.

“(7) Regulations. Any resolutions, rules, regulations, or

orders of the joint board dealing with subjects authorized

by Subdivision (6) of this subsection become effective only

upon approval of the governing bodies of the constituent

public agencies. Upon the approval, the resolutions, rules,

regulations, or orders of the joint board have the same

force and effect in the territories or jurisdictions involved

as the ordinances, resolutions, rules, regulations, or orders

of each public agency would have in its own territory or

jurisdiction.”

vote.

Filed without signature June 19, 1983.

Effective Sept. 1, 1983.

33a

APP. C-II

1983 TEX. GEN. LAWS, CH. 978, 5322-5324,

MUNICIPAL AIRPORTS—JOINT BOARDS—

CONTRACTS, LEASES, AND OTHER

ARRANGEMENTS—USE OF PROPERTY

CHAPTER 978

H. B. No. 2009

AN ACT

relating to contracts, leases, and other arrangements for

the use and occupancy of airport property entered into by

joint boards under the Municipal Airports Act.

BE IT ENACTED BY THE LEGISLATURE OF THE

STATE OF TEXAS:

SECTION 1. Subsection (d), Section 14, Municipal Air-

ports Act (Article 46d-14, Vernon’s Texas Civil Statutes),

is amended to read as follows:

(d) Limitations on Joint Board.

(4) Disposal of Real Property. Use of Property by Oth-

ers. The joint board shall not dispose of any airport, air

navigation facility or real property under its jurisdiction

except with the consent of the governing bodies of its

constituent public agencies. [provided that] However, the

joint board may, without such consent, enter into [the

contract, lease or other arrangements contemplated by

Section 4 of this Act] contracts, leases, or other arrange-

ments for the use and occupancy by others of airport lands

and personal property for the purposes specified in Section

4 of this Act upon such terms, for such rentals, revenues,

and payments, and for such period or periods of years and

with such options of renewal, as shall be approved by the

joint board. It is provided, however, that if any such con-

34a

tract, lease, or other arrangement shall be for a term,

including any renewal or option terms, in excess of 40

years, the same shail be subject to the approval of each

of the governing bodies of the constituent public agencies

of the joint board unless the necessity for such approval

is waived by resolution of each such governing body.

SECTION 2.27 Any and all contracts, leases, or other

arrangements for the use or occupancy of airport property

executed by joint boards created under the Municival Air-

ports Act (Article 46d-1 et seq., Vernon’s Texas Civil Stat-

utes), and all provisions thereof, and executed prior to the

effective date of this Act, are hereby validated and con-

firmed and the same are fully effective and represent the

lawful agreements and undertakings of joint boards in ac-

cordance with the terms thereof.

SECTION 3. This Act takes effect September 1, 1983.

27 Vernon’s Ann. Civ. St. art. 46d-14 note.

Passed by the House on April 21, 1983: Yeas 133, Nays 1, 1 present,

not voting; passed by the Senate on May 19, 1983; Yeas 29, Nays 0.

Approved June 19, 1983.

Effective Sept. 1, 1983.

Additions in text indicated by underline; deletions by [brackets]

35a

APP. C-III

Ch. 268, TEXAS 69th LEGISLATURE—REGULAR

SESSION (1985)

TAXICABS—OPERATION AT AIRPORTS—

REGULATION

CHAPTER 268

S. B. No. 748

AN ACT

relating to the regulation of taxicabs operating at certain

airports; amending Subsection (c), Section 1, Chapter 270,

Acts of the 40th Legislature, Regular Session, 1927, as

amended, and Subdivision (6), Subsection (d), Section 14,

Chapter 114, Acts of the 50th Legislature, Regular Ses-

sion, 1947, as amended (Articles 91la and 46d-14, Vernon’s

Texas Civil Statutes).

BE IT ENACTED BY THE LEGISLATURE OF THE

STATE OF TEXAS:

SECTION 1. Subsection (c), Section 1, Chapter 270, Acts

of the 40th Legislature, Regular Session, 1927, as amended

(Article 91la, Vernon’s Texas Civil Statutes), is amended”

to read as follows:

‘“(c) The term ‘Motor Bus Company’ when used in this

Act means every corporation or persons as herein defined,

their lessees, trustees, receivers, or trustees appointed by

any court whatsoever, owning, controlling, operating or

managing any motor propelled passenger vehicle not usu-

ally operated on or over rails, and engaged in the business

of transporting persons for compensation or hire over the

public highways within the State of Texas, whether op-

erating over fixed routes or fixed schedules, or otherwise.

7 Vernon’s Ann.Civ.St. art. 9lla, § 1, subsec. (c).

36a

However, the term ‘Motor Bus Company’ as used in this

Act shall not include:

“(1) corporations or persons, their lessees, trustees, or

receivers, or trustees appointed by any court whatsoever,

insofar as they own, control, operate, or manage motor

propelled passenger vehicles operated wholly within the

limits of any incorporated town or city, and the suburbs

thereof, whether separately incorporated or otherwise;

‘“(3) corporations or persons, their lessees, trustees, or

receivers, or trustees appointed by any court whatsoever,

insofar as they own, control, operate, or manage motor

propelled taxicabs designed for carrying no more then five

passengers [(permits, licenses, or certificates issued prior

to June 1, 1983, would not be affected by the provisions

of this exclusion. Such taxicabs are motor buses only when

they operate to or from an airport established pursuant

to Section 14, Chapter 114, Acts of the 50th Legislature,

1947, as amended (Article 46d-14 Vernon’s Texas Civil

Statutes)].”’

SECTION 2. Subdivision (6), Subsection (d), Section 14,

Chapter 114, Acts of the 50th Legislature, Regular Ses-

sion, 1947 (Article 46d-14, Vernon’s Texas Civil Statutes),

is amended” to read as follows:

(6) Taxicab Licensing. A [Notwithstanding any contrary

provisions in H.R. 593, Acts of the 68th Legislature, Reg-

ular Session 1983 a] joint airport board established pur-

suant to this Act [Chapter 114 Acts of the 50th Legislature

Regular Session 1917 as amended (Article 46d-14 Vernon's

Texas Civil Statutes)] shall have power to license taxicabs

picking up passengers at or delivering passengers to the

airport and to charge and collect fees with respect to the

issuance of licenses under this subdivision.”

* Vernon's Ann.Civ.St. art. 46d-14, subsec. (d).

37a

SECTION 3.” A permit for the operation of a taxicab

that was issued by the Railroad Commission of Texas un-

der Chapter 270, Acts of the 40th Legislature, Regular

Session, 1927, as amended (Article 9lla, Vernon’s Texas

Civil Statutes), before the effective date of this Act, is

valid for the period for which the permit was issued.

* * * *

Passed the Senate on April 30, 1985; Yeas 22, Nays 0;

passed the House on May 17, 1985; Yeas 117, Nays 0;

three present not voting.

Approved June 5, 1985.

Effective June 5, 1985.

” Vernon's Ann.Civ.St. art. 9lla note.

(Editorial Note: [st#ke-outs] have been converted to [ ] for readibility

so that legislative deletions are indicated by [ ].)

38a

APP. C-IV

TEXAS MUNICIPAL AIRPORTS ACT

(As Amended, 1985)

Art. 46d—4. Operation and use privileges

(a) Under Municipal Operation. In operating an airport

or air navigation facility owned, leased or controlled by a

municipality, such municipality may, except as may be lim-

ited by the terms and conditions of any grant, loan, or

agreement pursuant to Section 12 of this Act,' enter into

contracts, leases and other arrangements for a term not

exceeding forty (40) years with any persons:

(1) granting the privilege of using or improving such

airport or air navigation facility or any portion or facility

thereof, or space therein for commercial purposes;

(2) conferring the privilege of supplying goods, com-

modities, things, services or facilities at such airport or

air navigation facility; or

(3) making available services to be furnished by the mu-

nicipality or its agents at such airport or air navigation

facility.

In each case the municipality may establish the terms

and conditions and fix the charges, rentals or fees for the

privileges or services, which shall be reasonable and uni-

form for the same class of privilege or service and shall

be established with due regard to the property and im-

provements used and the expenses of operation to the

municipality.

(b) Under Other Operation. Except as may be limited

by the terms and conditions of any grant, loan, or agree-

ment pursuant to Section 12 of this Act, a municipality

may be contract, lease or other arrangement, upon a con-

Article 46d-12

39a

sideration fixed by it, grant to any qualified person for a

term not to exceed forty (40) years the privilege of op-

erating, as agent of the municipality or otherwise, any

airport owned or controlled by the municipality; provided

that no such person shall be granted any authority to

operate the airport other than a public airport or to enter

into any contracts, leases or other agreements in connec-

tion with the operation of the airport which the munici-

pality might not have undertaken under Subsection (a) of

this Section.

Acts 1947, 50th Leg., p. 185, ch. 114, § 4.

*x* * * *

(d) Limitations on Joint Board.

** * *

(4) Disposal of Real Property. Use of Property by Others.

The joint board shall not dispose of any airport, air nav-

igation facility or real property under its jurisdiction ex-

cept with the consent of the governing bodies of its

constituent public agencies. However, the joint board may,

without such consent, enter into contracts, leases, or other

arrangements for the use and occupancy by others of air-

port larius and personal property for the purposes specified

in Section 4 of this Act upon such terms, for such rentals,

revenues, and payments, and for such period or periods

of years and with such options of renewal, as shall be

approved by the joint board. It is provided, however, that

if any such contract, lease, or other arrangement shall be

for a term, including any renewal or option terms, in ex-

cess of 40 year, the same shall be subject to the approval

of each of the governing bodies of the constituent public

agencies of the joint board unless the necessity for such

approval is waived by resolution of each such governing

body.

40a

(5) Police Regulations. Any resolutions, rules, regula-

tions, or orders of the joint board dealing with subjects

authorized by Section 7 of this Act shall become effective

only upon approval of the governing bodies of the con-

stituent public agencies provided that upon such approval,

the resolutions, rules, regulations or orders of the joint

board shall have the same force and effect in the terri-

tories or jurisdictions involved as the ordinances, resolu-

tions, rules, regulations or orders of each public agency

would have in its own territory or jurisdiction.

(6) Taxicab Licensing. A joint airport board established

pursuant to this Act shall have power to license taxicabs

picking up passengers at or delivering passengers to the

airport and to charge and collect fees with respect to the

issuance of licenses under this subdivision.

(7) Regulations. Any resolutions, rules, regulations, or

orders of the joint board dealing with subjects authorized

by Subdivision (6) of this subsection become effective only

upon approval of the governing bodies of the constituent

public agencies. Upon the approval, the resolutions, rules,

regulations, or orders of the joint board have the same

force and effect in the ‘erritories or jurisdictions involved

as the ordinances, resolutions, rules, regulations, or orders

of each public agency would have in its own territory or

jurisdiction.

*e eee K KH HE KH K

Subsecs. (1) to (c) amended by Acts 1981, 67th Leg., p.

852, ch. 300, § 2, eff. Aug. 31, 1984;

Subsec. (d) amended by Acts 1983, 68th Leg., p. 5322, ch.

978, § 1, eff. Sept. 1, 1983; |

Subsec. (d\6), (7) added by Acts 1983, 68th Leg., » 4022,

ch. 626, § 2, eff. Sept. 1, 1983;

Subsec. (d\6) amended by Acts 1985, 69th Leg., p. 2323,

ch. 268, § 2, eff. June 5, 1985.

Section 2 of Acts 1983, 68th Leg., p. 5323, ch. 978,

provided:

4la

‘Any and all contracts, leases, or other arrangements

for the use or occupancy of airport property executed by

joint boards created under the Municipal Airports Act (Ar-

ticle 46d-1 et seq., Vernon’s Texas Civil Statutes), and all

provisions thereof, and executed prior to the effective date

of this Act, are hereby validated and confirmed and the

same are fully effective and represent the lawful agree-

ments and undertakings of joint boards in accordance with

the terms thereof.”’

42a

APP. C-V

THE MOTOR BUS ACT, ARTICLE 91la

MOTOR BUS TRANSPORTATION AND

REGULATION BY RAILROAD COMMISSION,

AS AMENDED, JUNE 5, 1985

Art. 9lla. Motor bus transportation and regulation by

Railroad Commission Definitions

Sec. 1.

**x* k*xX kK KK K *

Act means every corporation or persons as herein defined,

their lessees, trustees, receivers, or trustees appointed by

any court whatsoever, owning, controlling, operating or

managing any motor propelled passenger vehicle not usu-

ally operated on or over rails, and engaged in the business

of transporting persons for compensation or hire over the

public highways within the State of Texas, whether op-

erating over fixed routes or fixed schedules, or otherwise.

However, the term “Motor 3us Company” as used in this

Act shall not include:

(4) corporations or persons, their lessees, trustees, or

receivers, or trustees appointed by any court whatsoever,

insofar as they own, control, operate, or manage motor

propelled taxicabs designed for carrying no more than five

passengers.

*x**x* ke KKK KK K *

Sec. 1(c) amended by Acts 1981, 67th Leg., p. 294, ch.

118, § 1, eff. May 18, 1981: Acts 1983, 68th Leg., p. 1180,

ch. 263, § 14, eff. Sept. 1, 1988; Acts 1988, 68th Leg.,

Ist C.S., p. 13, ch. 2, § 1, eff. Sept. 1, 1983; Acts 1985,

69th Leg., p. 186, ch. 54, § 1, eff. April 30, 1985; Acts

1985, 69th Leg., p. 2322, ch. 268, § 1, eff. June 5, 1985.

* x KKK KK K K K

43a

APPENDIX D

STATE LEGISLATIVE HISTORY EXCERPT.

OFFICE OF THE GOVERNOR

STATE CAPITOL

AUSTIN, TEXAS 78711

January 11, 1985

| State of Texas

| County of Travis

AFFIDAVIT

Before me the undersigned authority on this day per-

sonally appeared Glen David Mason who stated and de-

posed the following:

“T, Glen David Mason, assistant press secretary, Office

of the Governor of the State of Texas, affirm and certify

that the attached copy of a press release dated May 27,

1983, from the Office of Governor Mark White is a true

and correct copy of said press release as made available

to the press on or about May 27, 1983.”

/s/ GLEN DAavip MASON

GLEN DAVID MASON

Subscribed and sworn this 11th day of January, 1985.

/s/ UNREADABLE

Notary Public in and for the State

of Texas, my commission expires

08-03-85

iia

44a

Office of Governor Mark White

May 27, 1983

I am very pleased that the House and Senate today

acted quickly to make changes to correct problems in the

Railroad Commission bill. These revisions overcome the

objections and concerns which I expressed in meetings

yesterday and today with members of the Commission,

Legislators and others.

Specifically, my concern that the original bill placed the

State in the position of legislating a monopoly for a single

taxi company, while preventing free market competition,

has been sufficiently addressed. An additional problem,

which would have enabled members of the Railroad Com-

mission to own stock in railroad companies, creating the

potential for a clear conflict of interest, has now been

corrected.

Rumors that there would be a veto of this legislation

should be put to rest.

I appreciate the cooperation of the Speaker and Lieu-

tenant Governor and the members of the House and Sen-

ate to deal so expeditiously with this matter.

———————

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.