(CN) - The 11th Circuit dismissed federal antitrust claims against a Florida county that awards franchises for the collection of residential and commercial trash.
Florida legislators passed a law in 1983 allowing Hillsborough County to take "exclusive control over the collection and disposal of solid waste" within the county.
The county then passed an ordinance establishing a two-tiered franchise system for waste disposal: one for residential customers and one for commercial customers. The county awarded just three franchises for commercial waste disposal services.
A commercial customer and a non-franchised garbage disposal service sued the county in federal court, claiming the ordinance violates antitrust law.
They said the ordinance effectively capped the size of the competitive market, allowing franchisees to fix prices. And because franchisees must charge below-market rates to residential consumers, the lawsuit claims, they're forced to recoup their losses from commercial customers.
The county unsuccessfully moved for dismissal on the basis of state action immunity. Two of the three commercial franchisees intervened on the county's behalf on appeal.
The federal appeals panel in Atlanta said the district court's decision not to grant the county immunity was "legal error." Even if federal antitrust law preempts the county's actions, the court ruled, the lower court must decide if the county is entitled to immunity.
"Because the county has acted pursuant to a clearly articulated anticompetitive policy of the state, we conclude that its actions are immune from antitrust liability," Chief Judge Joel Dubina wrote for the three-judge panel.
The 11th Circuit dismissed the federal antitrust claims and remanded for further proceedings on the remaining counts.
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