# Amicus Curiae Brief — Fisher v. Berkeley

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 1986
- **Citation:** 475 U.S. 260

## Text

Be

NO. 84-1538

In The

Supreme Court of the Gnited States

October Term, 1985

ALEXANDRA FISHER, MARGUERITE JACOBS, MORT BAKER,
RICHARD LAWHORN and ANTHONY KERSHAW, individuals; and
LEVIN-ZEMEL, a California corporation,

Appellants,

CITY OF BERKELEY, CALIFORNIA, a municipal corporation; BER-
KELEY CITY COUNCIL, and BERKELEY RENT STABILIZATION

BOARD,
Appellees.

ON APPEAL FROM THE SUPREME COURT OF THE STATE OF

CALIFORNIA
BRIEF FOR THE STATE OF NEW JERSEY DEPARTMENT OF >
THE PUBLIC ADVOCATE AS AMICUS CURIAE IN SUPPORT OF j-=
APPELLEES. i—
ie
RICHARD E. SHAPIRO, * ALFRED A. SLOCUM, —
Director Acting Public Advocate ——
Division of Public Interest Department of the Public foe)
Advocacy Advocate — «
DAVIDG. SCIARRA, Richard J. Hughes ;
Assistant Deputy Public Justice Complex a
Advocate CN 850 <r
Trenton, NJ 08625 —
(609) 292-1693 <r

* Counsel of Record

—
C9
handled

-i-

TABLE OF CONTENTS

STATEMENT OF INTEREST OF
AMICUS CURIAE_............... 2

SUMMARY OF ARGUMENT ........ 9
ARGUMENT

THE ANTITRUST PRINCIPLES
GOVERNING PRIVATE BUSINESS
ACTIVITY SHOULD NOT BE
MECHANICALLY APPLIED TO
MUNICIPAL RENT CONTROL
ORDINANCES DESIGNED TO
PROMOTE THE GENERAL

DET ctuu ceeGboec Cee cet ence 13

A Pe Tee 33

-ii-

TABLE OF AUTHORITIES
CASES Page

Ake v. Oklahoma,
U.S. , 105 S. Ct.

1087 (1985) _—........... 3
AMN, Inc. v. So.Bruns. Tp. Rent

Leveling Board, 93 N.J. 518, 461

A.2d 1138 (1983) . 7
Brunetti v. Borough of New Milford,

68 N.J. 576, 350 A.2d 19

SED maesesscece 15
City of Lafayette v. Louisiana Power

and Light Company, 435 U.S.

| irre 19, 25, 32
Community Communications Company,

Inc. v. City of Boulder,

Colorado, 4.9 U.S. 40

i 12, 19, 22, 30, 31
Dome Realty v. Paterson,

83 N.J. 211, 416 A.2d

334 (1980) _.......... 28
Eastern Railroad Presidents Conference

v. Noerr Motor Freight, 365 U.S.

St} 21
Fisher v. City of Berkeley,

693 P.2d 261, 278 (Cal.

| rere rere 19, 23
Harry's Village, Inc. v. Egg Harbor
., 89 N.J. 576,
446 A.2d 862 (1982).. 16

Hutton Park Gardens v. West Orange
‘Town Council, 68 N.J. 543, 350
A.2d 1 (1975) ...... 2

~iii-
TABLE OF AUTHORITIES-Continued

Inganamort v. Borough of Fort
Lee, 120 N.J. Super. 286,
293 A.2d 720, (Law Div.
1972), affirmed, 62 N.J.
521, 303 A.2d 298, (1973)
appeal after remand, 72
N.J. 412, 371 A.2d 34

CE Lt hn a pits ae 6 5, 13, 14, 15, B, BB
Jones v. United States,

ae FP , we

S.Ct. 3043 (1983).... 3

Klein v. Califano,
986 F.2d 250 (3d Cir.

RE Ce GN 6 oa. s 3
Kremens v. Bartley,
431 U.S. 119 (1977). 4

Matter of Egg Harbor Associates,

185 N.J. Super. 507, 449 A.2d

1324 (App. Div. 1982), aff'd.,

94 N.J. 358, 464 A.2d 1115

EE 6
Mt. Laurel Twp. v. Dept. of the

Public Advocate, 83 N.J. 522,

416 A.2d 886 (1980). 4
N.J. Builder's Association v.

Mayor of East Brunswick,

60 N.J. 222, 287 A.2d

WEED ‘Vveee cee « 28
Orange Taxpayers Council, Inc. v.

Orange, 83 N.J. 246, 416

A.2d 353 (1980)..... 17
Overlook Terrace v Management Corp.

v. Rent Control Bd., 71 N.J. 451,

366 A.2d 321 (1976). 3
Parham v. J.R.,

442 U.S. 584 (1974). 4

lem oly li pew:

-iv-
TABLE OF AUTHORITIES-Continued

Pennhurst State School v. Halderman,

451 U.S. 1 (1981)... 3
Property Owners Ass'n. of N. Bergen

v. Tp. of N. Bergen, 74 N.J.
327, 378 A.2d 25
Re: PhO os a 7

Pruneyard Shopping Center
v. Robins, 477 U.S. 74,

Be Mc ccccccccece 29
Silkwood v. Kerr McGee Corp.,

_ _ U.S. __, 10458.Ct.

615 (1984) _............ 3

So. Burlington Cty. NAACP v. Tp.

of Mt. Laurel, 67 N.J. 151,

336 A.2d 713 (1975), cert.

denied, 423 U.S. 808

(1975) (Mt. Laurel I).. 2, 6, 16
So. Burlington Cty. NAACP

v. Tp. of Mt. Laurel,

92 N.J. 158, 456

A.2d 390 (1983)

(Mt. Laurel II)...... 3, 6, 7, 16, 26, 29
Summer v. Teaneck,

53 N.J. 548, 251 A.2d

761 (1969)........... 14, 18
Sunrise Village Associates

v. Borough of Roselle

Park, 181 N.J.Super.

565 (App. Div.

BELA easccevececers 28
Town of Hallie v. City of Eau

Claire, U.S. .

105 S. Ct. 1713

0 See re Terre 20, 25, 27

ee ee

-V-
TABLE OF AUTHORITIES--Continued

United Building Construction and
Trades Ccuncil of Camden
County v. City of Camden,

U.S. , 104 S. Ct. 1020
I tata aie

Van Ness v. Borough of Deal,

78 N.J. 174, 393 A.2d
i: errr

N.J.S.A. §§2A:42-74 and
a re
N.J.S.A. 51:27E-2 ......

N.J.S.A. 52:27E-28
Re
N.J.S.A. 52:27E-29 ......
N.J.S.A. 52:37E-30 ......
N.J.S.A. 52:27E-31 ......
N.J.S.A 52:27E-41.1
re

im U.8.G. Geiev-- ......
42 U.S.C. §6012_.........

Barr, “Guidelines For
Drafting Rent Control Laws:
Lessons of A Decade," 35
Rutgers L. Rev. 723,
TC Caddeu cs buces

Barr, “Rent Control In
The 1970's: The Case
of the New Jersey Tenants'
Movement," 28 Hastings

L.J. 631 (1977)......

14, 15

15

-vi-
TABLE OF AUTHORITIES-Continued

Brennan, "State Constitution
and the Protection of
Individual Rights," 90
Harv. L. Rev. 489

30

No. 84-1538

In The
SUPREME COURT OF THE UNITED STATES

October Term, 1985

ALEXANDRA FISHER, MARGUERITE JACOBS,
MORT BAKER, RICHARD LAWHORN and
ANTHONY KERSHAW, individuals;

and LEVIN-ZEMEL, a California corporation,

Appellants,
vs.
CITY OF BERKELEY, CALIFORNIA, a
municipal corporation ;
BERKELEY CITY COUNCIL, and
BERKELEY RENT STABILIZATION BOARD,

Appellees.

ON APPEAL FROM THE SUPREME COURT
OF THE STATE OF CALIFORNIA

BRIEF FOR THE STATE OF NEW JERSEY
DEPARTMENT OF THE PUBLIC ADVOCATE
AS AMICUS CURIAE IN SUPPORT

OF APPELLEES

ee

-2-

STATEMENT OF INTEREST
OF AMICUS CURIAE

The New Jersey Department of the Public
Advocate (Department), an independent and
unique cabinet-level agency of New Jersey state
government, N.J.S.A. 51:27E-2,! has, for al-
most eleven years, litigated extensively on
behalf of New Jersey citizens in major cases

2

affecting "the public interest."" During this

: The Department is specifically empowered to
"represent the public interest in such adminis-
trative and court proceedings....as the Public
Advocate deems shall best serve the public
interest." N.J.S.A. 52:27E-29. "Public
interest" is defined as "an interest arising from
the Constitution, decisions of the court, common
laws or other laws of the United States or of
this state inhering in the citizens of this State
or in a broad class of such citizens." N.J.S.A.
52:37E-30. See also N.J.S.A. 52:27E-31
(factors to be considered in deciding whether
to represent a particular public interest).

2 The Department provides legal representation

in a wide range of "public interest" cases through
its Division of Public Interest Advocacy, N.J.S.A.
52:27E-28 to 32. See, e.g., So. Burlington Cty.

NAACP v. Tp. of Mt. Laurel, 67 N.J. 151, 336 A.
(footnote continued on next page)

<_s

period, the Department has participated in a wide
variety of proceedings involving issues relating
to housing, employment, nuclear power and the

rights of the mentally handicapped.° The cri-

(footnoted continued from previous page)
2d 713 (1975), cert. den., 423 U.S. 808 (1975)
(Mt. Laurel I) So. Burlington Cty. NAACP v

of Mt. Laurel, 92 N.J. 158, 456 A.2d 390
Tas} (Mt. Laurel II) (fair share housing) ;
Klein v. Califano, 586 F.2d 250 (3d Cir 1977)
(nursing home funding); Overlook Terrace
Management Corp. v. Rent t Control Bd., 71 N.J.
451, 366 A.2d 321 (1976) (rent control) ; Van
Ness v. Borough of Deal, 78 N.J. 174, 393 A.2d

571 (1978) (applicability of public trust doctirne
to beach access).

s The Department has filed several amicus curiae
briefs on behalf of the interests of New Jersey
citizens in matters pending before the Court.
See, e.g., Ake v. Oklahoma, U.S. ,
105 S. Ct. 1087 (1985); United Building Con-
struction and Trades Council of Camden County
v. City of Camden, U.S. . 104 S.
Ct. 1020 (1984); Silkwood v. Kerr McGee Corp..,
U.S. __, 104 S. Ct. 615 (1984); Jones v.
United States, U.S. __, 103 S. Ct. 3043
(1983) ; Pennhurst State School v. Halderman,
451 iv. S- 1 (1981) (amicus brief filed by Division
of Advocacy for Developmentally Disabled of the
Department of the Public Advocate, see N.J.S.A.
(footnote continued on next page)

-4-

tically important role of the Department as a
representative of the public interest of New
Jersey citizens has been frequently
acknowledged. 4
The present case raises the issue of
whether a city's rent control ordinance that
does not result from specific state enabling
legislation conflicts with and is, therefore,

preempted by the Sherman Antitrust Act
(15 U.S.C. §§1-7).

(continued from previous page)

52:27E-41.1 to 41.5, along with "protection and
advocacy systems," see 42 U.S.C. §6012, of
forty-four individual states and territories) ;
Kremens v. Bartley, 431 U.S. 119 (1977);
Parham v. J.R., 442 U.S. 584 (1974).

‘ For example, the New Jersey Supreme Court
has characterized the Department as a "shining
example of that commitment [by the government
to the public interest,]" Mt. Laurel Twp. v.
Dept. of the Public Advocate, 83 N.J. 522, 535,
416 A.2d 886, 893 (1980), and of "admirably
further[ing] the principles embodied in our
Constitution," id. at 536, 416 A.2d at 893, as

it fulfills the role of "nourishing and revitalizing
our political system," id.

a§-

The resolution of this case is particularly
important for the municipalities and citizens of
New Jersey, since no explicit enabling legis-
lation authorizing local governments to pro-
mulgate rent control measures has been

enacted in this State.°

Furthermore, over
100 municipalities in New Jersey have rent
control ordinances in effect at the present time.

The magnitude of the affordable housing crisis

° Appellants incorrectly represent that the New
Jersey Legislature has authorized local govern-
ments in the State to enact rent controls, citing
N.J.S.A. §§2A:42-74 and 42-77. (App. Br. at
41, n. 20). That is simply not the present state
of the law in New Jersey. The thrust of these
statutes is directed toward authorizing munici-
palities to control the rents of substandard
dwellings. Contrary to the appellants’ repre-
sentation, these statutory provisions have not
been construed to establish a general state
policy authorizing municipalities in New

Jersey to impose rent control measures in

other circumstances. Inganamort v.

Borough of Fort Lee, 120 N.J. Super. 286,
309-10, 293 A.2d 720, 732-33 (Law Div. 1972),
affirmed, 62 N.J. 521, 303 A.2d 298, appeal
after remand, 72 N.J. 412, 371 A.2d 34 (1977).

aG=

in New Jersey was explicitly described in

the Mt. Laurel I decision, So. Burlington

Cty. NAACP v. Tp. of Mt. Laurel, 67 N.J.,

at 158-59, 336 A.2d, at 716-17, and, if
anything, has been exacerbated since that
time. 92 N.J. at 211-212, 456 A.2d at
416-17.

The Department of the Public Advocate
has a lengthy involvement and considerable
experience in matters relating to the afforda-
bility of housing and the legality of rent con-
trols in New Jersey. For example, the De-
partment has represented citizens of New
Jersey in cases establishing the constitutional
obligation of the State and municipalities to
provide realistic opportunities for low and
moderate income housing. See, e.g., Matter

!
of Egg Harbor Associates, 185 N.J. Super.

507, 449 A.2d 1324 (App. Div. 1982), aff'd,

va

oGFa

94 N.J. 358, 464 A.2d 1115 (1983) (State);

Southern Burlington County N.A.A.C.P. v.

Tp. of Mt. Laurel, 67 N.J. 151, 336 A.2d 713,

cert. den. 423 U.S. 808 (1975) (Mt. Laurel I);

Southern Burlington County N.A.A.C.P. v.

Tp. of Mt. Laurel, 92 N.J. 158, 456 A.2d

390 (1983) (Mt. Laurel II) (municipalities).

Additionally, the Department has repre-
sented New Jersey citizens in support of rent
control measures designed to address the
housing shortage and the economic reality
that the housing market is not functioning in
the public interest in this State. See, e.g.,

AMN, Inc. v. So. Bruns. Tp. Rent Leveling

Board, 93 N.J. 518, 461 A.2d 1138 (1983);

Property Owners Ass'n. of N. Bergen v. Tp.

of N. Bergen, 74 N.J. 327, 378 A.2d 25

(1977); Hutton Park Gardens v. West Orange

Town Council, 68 N.J. 543, 350 A.2d 1 (1975).

SRNReteenntcteneeew caer enn an es oe ~

-8-

Vital interests of numerous New Jersey muni-
cipalities and their citizens will be directly
affected by the decision of this Court on
whether local rent control measures are in-
consistent with the provisions of the Sherman
Antitrust Act.

Consequently, the Department anpears as

amicus curiae to address the impact upon New

Jersey municipalities and, indeed, the entire
structure of government in this State if the
antitrust standards governing private
businesses or cartels are rigidly applied to

municipal rent control.

Consent to the filing of amicus curiae

briefs has been granted by the parties. A
letter to that effect is on file with the Clerk

of this Court.

=9-

SUMMARY OF ARGUMENT

The New Jersey Legislature has not adopted
any explicit statute generally authorizing muni-
cipalities to adopt rent controls. Nonetheless,
the Supreme Court of New Jersey has held that
New Jersey municipalities possess the authority,
even without a specific State enabling act, to
enact rent control ordinances in response to
their clear responsibility to prctect the general
welfare of their citizens. To date, over 100
municipalities in New Jersey have promulgated
rent control ordinances under their police
powers.

In enacting these rent control measures,
municipalities have been motivated by the
existence of an acute housing shortage in this
State, the widespread imposition of exorbitant
rents ("rent gouging"), and monopoly control

of the rental housing market. Municipal

-10-

rent control ordinances have emerged as a
major tool in local efforts to address the
acute shortage of decent and affordable
housing that plagues many areas of New
Jersey. Such ordinances now play a sig-
nificant role in determining the quality and
affordability of housing in New Jersey.

The ability of New Jersey munici-
palities to promote the general welfare of
their citizens will be crippled if antitrust
standards developed in the context of private
business activity and private conspiracies
are held applicable to municipal rent control
ordinances in this State. The adverse effects
upon local efforts to address the shortage
of decent and affordable housing and upon
tenants throughout New Jersey would be
direct and immediate. Moreover, such a hold-

ing would strike at the heart of the ability

a ee

elie

of municipalities in New Jersey to take ap-
propriate steps to protect the best interests
of their inhabitants in a wide variety of
contexts. Additionally, traditional notions
of local government would be radically altered,
the federal courts would inevitably become
extensively entangled in the day-to-day acti-
vities of municipalities, and local officials in
the proper exercise of their governmental
responsibilities would face the daunting, and
in many instances, insurmountable obstacle
of seeking specific legislative authorization
every time they attempt to remedy a local
problem by displacing competition with
regulation.

Instead of crippling in this fashion the
ability of municipalities in New Jersey and
elsewhere to respond to demonstrable housing

crises or other serious problems within their

het

-12-

borders -- a result that is neither compelled

nor contemplated by Community Communications

Company, Inc. v. City of Boulder, Colorado,

455 U.S. 40 (1982) or any other decision --
the Court should uphold the judgment of the
Supreme Court of California dismissing the
claim that the Berkeley rent control ordinance

is, on its face, in conflict with the Sherman

Act.

019

ARGUMENT

THE ANTITRUST PRINCIPLES
GOVERNING PRIVATE BUSINESS
ACTIVITY SHOULD NOT BE
MECHANICALLY APPLIED TO MUNICIPAL
RENT CONTROL ORDINANCES
DESIGNED TO PROMOTE THE
GENERAL WELFARE
In New Jersey, there is no explicit state
legislative authorization for local governments
to enact general rent control ordinances .°
Notwithstanding the absence of a state enabling
act, New Jersey's municipalities possess the
authority under their police powers to adopt
rent control mezsures "to deal with the evil

of inordinate rent arising out of a housing

shortage." Inganamort v. Fort Lee, 62 N.J.

521, 527, 303 A.2d 298, 301 (1973). ”

C The appellants' assumptions to the contrary
about New Jersey law are clearly wrong.

(supra at n. 5).

, In upholding the rent control ordinances at
issue in Inganamort, the New Jersey Supreme
(footnote continued on next page)

on A at

ee

-14-

Presently, over 100 municipalities in this
State, or roughly one fifth of all New Jersey
municipalities, have enacted rent control ordi-

8 ,
nances. Such ordinances represent a local

(footnote continued from previous page)

Court recognized that rent control was clearly
a proper subject for local government:
There is no inevitable need for
a single statewide prohibition or
for a single statewide enforcing
authority. On the contrary, it
may be useful to permit muni-
cipalities to act, for, being nearer
to the scene, they are more likely
to detect the practice and may be
better situated to devise an approach
to their special problems. Inganamort
v. Fort Lee, 62 N.J., at 529, 303 A.2d,
at 302 (quoting Summer v. Teaneck,
53 N.J. 548, 553, 251 A.2d 761, 764
(1969).

8 Rent Control Survey of New Jersey
Municipalities (July 1985) prepared by the
Office of Landlord and Tenant Information,
Division of Housing and Development, State
of New Jersey Department of Community
Affairs. See also Barr, "Guidelines for
Drafting Rent Control Laws: Lessons of A
Decade," 33 Rutgers L. Rev. 723, 725 n. 1
(1983).

-15-

response by the municipality to the general
welfare of its inhabitants. The rationales for
these ordinances include the existence of an
acute housing shortage, the widespread im-
position of exorbitant rents ("rent gouging"),
and monopoly control of the rental housing

market. Brunetti v. Borough of New Milford,

68 N.J. 576, 594, 350 A.2d 19, 28 (1975) .?

See also, Barr, supra, 35 Rutgers L. Rev.

726. Indeed, the "desperate need for hous-
ing, especially of decent living accommodatiuns
economically suitable for low and moderate in-

come families" has long been recognized in

° For background information on the develop-
ment of municipal rent control in New Jersey as
a means of addressing the "exploitation of a
housing shortage" in the State, Inganamort v.
Fort Lee, 62 N.J., at 531, 303 A.2d at 303,

see generally Barr, "Rent Control In The 1970's:
The Case of the New Jersey Tenants' Movement,"
28 Hastings L.J. 631 (1977).

-16-

New Jersey. So. Burlington County NAACP

v. Tp. of Mt. Laurel, 67 N.J., at 158-60,

336 A.2d., at 716-17; Mt. Laurel II, 92 N.J.

at 211-212, 456 A.2d 416-17.

Regardless of the reasons for their
enactment, however, the berefical impact of
rent control upon the general welfare and
public interest of New Jersey citizens has
been evident. Rent control in this State has
emerged as an important tool to address the
shortage of decent and affordable housing that
has chronically plauged portions of New Jersey
-- a shortage most recently decried in So.

Burlington Cty. NAACP v. Mt. Laurel Tp.,

92 N.J., at 212 n. 6, 456 A.2d, at 417 n.6.
Rent control ordinances have been variously
characterized as a means "to assure fairness
in the landlord-tenant relationship," Harry's
Village, Inc. v. Egg Harbor Tp., 89 N.J.

Oe BB mn we ri ks eee

me at

Wits em ER

-17-

576, 584, 446 A.2d 862, 866 (1982); "to
regulate the forces of the marketplace

to help [the municipality's] residents
obtain decent housing within their means,"

Orange Taxpayers Council, Inc. v. Orange,

83 N.J. 246, 257, 416 A.2d 353, 359 (1980);
and to address the fact that "the free housing
market was not functioning in the public

interest." Hutton Pk. Gardens v. West Orange

Council, 68 N.J. 543, 564, 350 A.2d 1, 12
(1975). In short, rent control is one of the
most significant weapons in the arsenal avail-
able to New Jersey's municipalities to cope
with a severe housing shortage and with
pressing local problems affecting the general
welfare of their citizens.

The adoption of appellants’ position, urg-
ing the unprecedented application of anti-

trust principles fashioned in the context of

-18-

private business activity to municipal regu-
lations designed to promote the public wel-
fare, would have a widespread and devas-
tating impact on New Jereey's municipalities
and citizens. The ability of municipalities in
a state like New Jersey -- one that is partly
urban, partly suburban and partly rural --
to promote the welfare of their citizens
would be radically eroded by any of the fol-
lowing developments. Yet, all of these
directly flow from the approach to the
Sherman Act urged by appellants.

First, the capacity of municipalities to
respond to the diversity of local problems
would be crippled if their legitimate regu-
latory activities for the public welfare are
equated under antitrust laws with the
actions or agreements of private cartels. As

the California Supreme Court correctly ob-

a htt

-19-

served, municipalities are unlike a private
business: the latter is motivated by a
quest for greater profit while a muni-
cipality is "generaliy motivated by the
purpose of furthering local health, safety

or welfare." Fisher v. City of Berkeley,

693 P.2d 261, 278 (Cal. 1984). Because tne
principles of antitrust law are fashioned for
regulating private business, such standards
cannot be mechanically applied to local
regulatory actions serving legitimate govern-
mental objectives. The Court itself has
recognized that "certain activities which
might appear anticompetitive when engaged
in by private parties, take on a different
complexion when adopted by local govern-

ment." Community Communications Com-

pany v. City of Boulder, 455 U.S. 40, 56

n. 20 (1982), citing City of Lafayette v.

el RR ee NE tL At

eo Ms re Oe

-20-

Louisiana Power and Light Company, 435

U.S. 389, 417 n. 48 (1978).

Furthermore, this Court has also
reiterated the fundamental distinction
between private parties and municipalities:

We may presume, absent a showing
to the contrary, that the munici-
pality acts in the public interest
[footnote omitted]. A private
party, on the other hand, may be
presumed to be acting primarily

in his or its own behalf."

Town of Hallie v. City of Eau Claire,

U.S. _—, «105 S. Ct. 1713, 1720 (1985).
Consequently, appellants' simplisitic attempt
to equate a municipal regulatory regime with
the private market would strike a severe, if
not fatal, blow at the ability of municipalities
to take appropriate steps to protect the gen-
eral welfare, and would do so without pro-
viding any principled analysis of the im-

portant differences between municipal actions

-21-

and private business activity.

Second, the effect of treating a munici-
pality's regulatory decisions as conspiracies
under antitrust laws would be equally
destructive. A municipality would be effect-
ively disabled from performing its lawful
responsibilities as a democratically elected
local unit of government if its displacement
of competition with regulation for the public
welfare were construed as a vertical con-
spiracy, in violation of the Sherman Act,
between the municipality and those regu-
lated or those who were successful in
securing the regulatory action. It clearly
would be a legally unprecedented step to
apply antitrust principles to those individuals
who persuade a local governing body to act
or who are victorious in local initiative or

referenda. Eastern Railroad Presidents

ee el i AD ey Dg EL CETL ACME ALAS SOLOS

cat! ee ee

-22-

Conference v. Noerr Motor Freight, 365 U.S.

127, 136 (1961). On the other hand, it would
place a straitjacket upon the municipality if
the Sherman Act treated as a conspiracy the
compulsion of private parties by local govern-
ment under lawfully enacted municipal regu-
lations. Any regulation of competition in

the municipality, such as laws concerning
licensing, the regulation of tradesmen, or
taxicab charges, would be immediately suspect
under the federal antitrust law, however
legitimately motivated, and "a municipality's
power to regulate the economy would be all

but destroyed." Community Communications

Co. v. City of Boulder, Colo., 455 U.S., at

67 (Rehnquist, J., dissenting).
Third, municipal governments would be
totally disrupted if they were denied the op-

portunity to present a potent public welfare

RS C8 ee ER te

CR en Me Atl ee

mews

-23-

defense in the event that the merits of an
antitrust action are reached. To limit a muni-
cipality's defense of an ordinance solely to the
effects on competition, and to divest the local
government of the general welfare defense,
would wholly eviscerate the municipality's
ability to exercise its lawful police powers.
The consequences of such an approach are
completely illogical. Although the public
welfare and the best interests of a muni-
cipality's inhabitants are the motives behind

municipal action, Fisher v. City of Berkeley,

693 P.2d, at 278, these issues would be
deemed wholly irrelevant to an antitrust
defense.

The California Supreme Court's decision
quite properly avoids this disastrous result by
recognizing that "[a]nticompetitive conduct by

a municipality in exercise of its legitimate police

-24-

power is indeed of a ‘different complexion' than
similar conduct engaged in by private enter-
prises" and that "courts must adopt or modify
the application of traditional antitrust rules
when reviewing the acts of municipal defend-
ants." Id. at 277. Consequently, the
appellants' position in this Court, which seek
the mechanical application to municipalities of
rules of law fashioned in the context of
private business regulation, should be re-
jected as an unrealistic and inflexible ap-
proach to the legitimate governmental
objectives that underlie municipal regulation.
Fourth, the inevitable consequence of
appellants’ approach to antitrust law would
be a dramatic expansion of the involvement
of federal judges in the affairs of local
government. Indeed, appellants’ position

can only lead to the hopeless and excessive

ee A Ce Se

-25-

entanglement of federal courts in the
day-to-day operations of a municipality.
The demands on local officials who are con-
fronting the realities of the pressing problems
of their communities, including the critical
housing shortage in New Jersey, are over-
whelming enough without judges scrutinizing
every regulatory action to ensure its con-
sistency with the procompetitive policies of
the Sherman Act. Not only would this have
a substantial detrimental impact upon the
local autonomy of municipalities and their
authority to govern themselves, City of

Lafayette v. Louisiana Power and Light Co.,

435 U.S. 389, 434-35 (1978) (Stewart, J.,
dissenting), but also it would be undesirable,
since such a close appraisal of the justifica-
tions for municipal regulatory activities

would "embroil the federal courts in.

at Re 2

arietin - -

-26-

unnecessary interpretation." Town of Hallie

v. City of Eau Claire, U.S. :

105 S. Ct. 1713, 1719 n. 7 (1985).

Fifth, municipalities in New Jersey would
be completely hamstrung if they were forced
to seek specific legislative authorization every-
time they were faced with a local housing or
economic problem that required municipal regu-
lation. The reality in a State like New Jersey
is that the Legislature is part-time, has many
other concerns and must be largely responsible
to a suburban constituency . 1° Indeed, as the

New Jersey Supreme Court observed:

10 The New Jersey Supreme Court has care
fully documented the "great movement of
commerce, industry and people out of the
inner cities and into the suburbs." So.
Burlington Cty. NAACP v. Mt. Laurel Tp.,
92 N.J., at 210 n. 5, 456 A.2d, at 415 n. 5.
Thus, the suburban and rural constituency

in this State has greatly expanded while there
has been a corresponding decline in the popu-
lation, and legislative influence, of urban
areas.

-27-

It is well to keep in mind that
our legislators are elected from
districts rather than at large.
This is a source of strength,
but it holds the weakness that
a localized problem is less apt
than a general one to invite
prompt action at the State level.

Inganamort v. Borough of Fort Lee, 62 N.J.,

at 533, 303 A.2d at 304. For these reasons,
the state Supreme Court has emphasized the
need to ensure that "local government be
equiped to deal with matters of local con-
cern which, if left to state action, might not
be met expeditiously or at all." Id.

Forcing municipalities to go to the legisla-
ture to obtain specific authorization for
every regulatory action with possible anti-
competitive consequences would not only
pose an insurmountable burden, but

also would have detrimental effects upon

en ee en ee ere =

-28-

the municipality's local autonomy. Cf.

Town of Hallie v. City of Eau Claire,

_ v.s. , M8. Ct. a 1719.

If anything, the experience in New
Jersey has been that while the state
legislature leave power in the hands of
the cities to act in order to foster safe,
decent and affordable housing, it is
ordinarily unwilling to provide specific
grants of authority. See e.g., Dome

Realty v. Paterson, 83 N.J. 211, 230, 416

A.2d 334 (1980) (municipal ordinance con-
ditioning grant of certificates of occupancy
in rental housing in compliance with housing

codes); Inganamort v. Fort Lee, 62 N.J.

521, 303 A.2d 298 (municipal rent control);

N.J. Builders' Assocation v. Mayor of East

Brunswick, 60 N.J. 222, 287 A.2d 725

(1972) (municipal regulation of building

-29-

contractors); Summer v. Teaneck Township,

53 N.J. 548, 251 A.2d 761 (1969) (muni-
cipal antiblockbusting ordinance); Sunrise

Village Associates v. Borough of Roselle

Park, 181 N.J. Super. 565 (App. Div.
1981) (municipal ordinance requiring
security measures in apartment buildings);

Apartment House Council v. Mayor of Ridge-

field, 123 N.J. Super. 87 (Law Div. 1973),
aff'd., 128 N.J. Super. 192 (App. Div. 1973)
(municipal ordinance requiring security
deposits by landlords).

This approach is particularly evident
where the obligations and burdens imposed
upon the municipality are created by the
state court's interpretation of the State's
own constitution, and the legislature has

still failed to act. So. Burlington Cty.,

NAAPC v. Tp. of Mt. Laurel, 92 N.J.,

-30-

at 212, 456 A.2d, at 417. (Legislature has
failed for eight years to act on Court's 1975
decree establishing the obligation of muni-
cipalities to provide opportunities for low
and moderate income housing). In these
circumstances, the requirement of express
authorization for every municipal regulatory
action would signify a disrespect on the
part of federal courts for the separate and
distinct obligations imposed on municipalities

by state constitutions. Cf. Pruneyard

Shopping Center v. Robins, 477 U.S. 74,

81 (1980). See also, Brennan, "State
Constitution and the Protection of

Individual Rights," 90 Harv. L. Rev. 489

(1977).
The above five factors provide power-
ful and compelling reasons why antitrust

standards governing private business

ET

Ant ee at ae NO ae

-31-

activity should not be mechanically applied
to municipal rent control ordinances de-
signed to promote the public welfare.

In closing, amicus curiae must em-

phasize that uphold‘ng the judgment below
will not result in a blanket exemption for
municipalities from the antitrust laws.

This Court has already held that cities,
unlike states, may not exempt themselves
from the provisions of the Sherman Antitrust

Act. Community Communications Company v.

City of Boulder, 455 U.S. 40 (1982). How-

ever, in rejecting the use by cities of the
"state action" exemption as a shield from
federal antitrust policy, the Court certainly
did not intend, and nothing in Boulder pro-
vides, that the Sherman Antitrust Act was
converted into a sword to strike down every

municipal rent control ordinance or other

-32-

legitimate governmental regulation promul-
gated without a specific state enabling
statute. Indeed, appellants' efforts to
transform Boulder into an automatic federal
veto of the legitimate exercise of local
authority in response to the public welfare
is fundamentally at odds with this Court's
express admonition that "certain activities
which might appear anticompetitive when
engaged in by private parties, take on a
different complexion when adopted by a
local government." Boulder, 455 U.S.,

at 57 n. 20 (quoting City of Lafayette

v. Louisiana Power and Light Co., 435

U.S., at 417 n. 48.

=33-

ly aN

CONCLUSION

For the reasons stated above, amicus
curiae, the State of New Jersey Department
of the Public Advocate respectfully submits
that the judgment of the Supreme Court of
California should be affirmed.

ALFRED A. SLOCUM

ACTING PUBLIC ADVOCATE
STATE OF NEW JERSEY

Z

BY:

RICHARD E. SHAPIRO

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385012_0318%3A25. Public record. Not legal advice.