Querrey & Harrow Obtains Important Victory of Taxpayers In Seventh Circuit Antitrust Decision

Attorneys: Rettberg, Paul A.    Lemley, Brandon K.

Related Practices: Appellate

On March 14, 2011, the Seventh Circuit issued an important victory for municipalities across Illinois. In Active Disposal v. City of Darien, No. 10-2568, the Court held for a group of municipalities represented by Querrey & Harrow attorneys Paul Rettberg,Christopher Keleher and Brandon Lemley. The case was brought as a class-action on behalf of several waste haulers as well as a class of customers who used the haulers. The catalyst for the suit was municipal ordinances granting exclusive contracts to a single waste hauler to provide roll off dumpsters. Such dumpsters are a common sight in residential areas, typically used for home remodeling and construction projects. 

The exclusivity ordinances facilitated the health and safety of the municipalities because, inter alia, they required waste haulers to demonstrate and abide by safety requirements. Nevertheless, the class claimed the municipalities’ exclusive contracts violated federal antitrust law. The municipalities prevailed in the district court. The district court held that the exclusive contracts fell within the state-action exception to antitrust law and dismissed the complaint. The state-action doctrine, as its name suggests, allows municipalities to engage in conduct that would otherwise violate antitrust law when the conduct is authorized by the state. The Seventh Circuit affirmed. The appeals court determined the state-action doctrine applied to the municipalities’ contracts for trash disposal. It reasoned that anti-competitive effects were a foreseeable result of Illinois’s authorization for municipalities to make contracts for the collection and disposition of roll off waste.

The Seventh Circuit's decision reflects the notion that municipalities need freedom and flexibility in dealing with waste issues. The Active Disposal decision preserves the ability of municipalities across Illinois to streamline how they contract with waste haulers.

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