USCA1 Opinion

UNITED STATES COURT OF APPEALS

UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
FOR THE FIRST CIRCUIT
____________________
No. 92-2218
TRI-STATE RUBBISH, INC., ET AL.,
Plaintiffs, Appellants,
v.
WASTE MANAGEMENT, INC., ET AL.,
Defendants, Appellees.
____________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE
[Hon. Gene Carter, U.S. District Judge]
___________________
____________________
Before
Breyer, Chief Judge,
___________
Torruella and Boudin, Circuit Judges.
______________
____________________
Ralph A. Dyer for appellants.
_____________
Michael A. Nelson with whom Emily A. Bloch, Nicholas S. Nadzo

_________________
______________ _________________
Jensen Baird Gardner & Henry were on brief for appellee Mid-Ma
______________________________
Waste Action Corp.
Robert S. Frank with whom Carl E. Kandutsch and Verrill & D
________________
_________________
____________
were on brief for appellees Waste Management, Inc., Waste Managem
of Maine, Inc., Consolidated Waste Services, Inc. and Consolida
Waste Transport, Inc.
John J. Wall, III with whom Thomas F. Monaghan and Monagh
___________________
___________________
______
Leahy, Hochadel & Libby were on brief for appellee City of Auburn.
_____ _________________
____________________
July 13, 1993
____________________

BOUDIN,

Circuit Judge.
______________

charged that a
seeking

to

The

complaint

number of entities, public

monopolize

the

waste

otherwise acting in violation of

in

this case

and private, were

disposal

business

and

federal and state law.

The

district court dismissed the complaint for failure to state a

claim.

We affirm the district court with one

exception:

as

to the predation claims against the private defendants, we do

not think
this

that state

action immunity has

record, and therefore

been made

remand those claims

out on

for further

proceedings.
I.
This case
communities

is one

THE BACKGROUND
of several in

have taken

measures to

cases vary,
claims

waste

haulers have

been

responded with antitrust suits.

The

allegations

and private

and in this one

numerous.
of

the history is tangled

In describing
the complaint

reviewing dismissals

for

cope

and local

with their

collection responsibilities,
adversely affected and

which state

the

facts,

as true,

failure to

as is

state

we

and the
take the

customary in

a claim.

See
___

Watterson v. Page, 987 F.2d 1, 3 (1st Cir. 1993).

_________
____
Maine

has in force statutes that give local communities

substantial

authority

disposal.

Under

over

local

this legislative

waste

collection

umbrella,

the

and

City of

Auburn and eleven

other municipalities formed in 1986 a non-

profit, non-stock

corporation to assist

-2-2-

in waste

disposal.

The entity--Mid-Maine Waste Action Corporation ("MMWAC")--was

then mandated to construct a facility to burn municipal waste
and derive electricity from the process.

Maine law expressly

authorizes

in

municipalities to

projects, Me. Rev.

cooperate

Stat. Ann. tit. 38,

for interlocal agreements to

2201, and provides

organize public waste

corporations to own or operate facilities.

MMWAC issued
waste-to-energy
through

over $42 million

facility.

so-called

waste disposal

The

"tipping

Id.
__

were

dispose of waste

at a landfill or

facility,

and

revenues

operate

through the
To

the

secure

facility

flow control ordinances.

of

all solid

MMWAC.

paying MMWAC

to

sale

of the

is,

at

to
high

MMWAC municipalities enacted

1304-B(2), required the

within

municipality also

it the

charged

These local laws, authorized by Me.

waste generated

Each

deliver to

38,

funded

waste needed

economically--that

percentage of its capacity--the

Rev. Stat. Ann. tit.

of

be

other disposal

from the

the quantity

construct a

to

fees," customarily

those who

electricity.

1304-B(5).

in bonds to

bonds

disposal

solid waste

whatever tipping

delivery

each municipality

contracted
generated in

fee was

with

to

MMWAC to

the community,

required to

produce

revenues to service its debt.

Because the

MMWAC incinerator-generator

not be ready before 1992,

facility would

MMWAC provided in the meantime for

an alternative method of disposing of the

-3-

waste it received.

-3-

For

this interim period,

MMWAC contracted with

two related

entities, Consolidated Waste Services and Consolidated

Transportation (collectively,
to operate
site.

a transfer

"the Consolidated

station near

transfer station

is a

the MMWAC

Waste

companies")
construction

collection point

at which

waste may be processed or repackaged before being sent to its

final

destination.

companies $66 per

MMWAC agreed

to

pay the

ton to receive the waste

Consolidated

delivered and to

dispose of the waste until the MMWAC incinerator was ready to

operate.
MMWAC's initial tipping fee was set at
is common in

$75 per ton.

waste collection for municipalities

It

to collect

residential trash themselves or to contract out this function

but
with

to require

commercial businesses

private haulers

for

their

to contract

trash removal

directly

facilities.

Under the municipalities' agreements with MMWAC and under the

local flow control

ordinances, private trash haulers

twelve municipalities and the

effectively required to

in the

municipalities themselves were

deliver their trash to

the transfer

station and pay the $75 per ton tipping fee to MMWAC.
Waste
subsidiary
waste

Management
of Waste

Maine

subsidiary

towns.

In

Maine,

Inc.

Management, Inc.,

collection and

operating

of

disposal

an

one

firms in

provides trash
July 1990,

is

of the

the

the

largest

nation.

collection

after

operating

The

in various

transfer station

-4-4-

agreement between
Waste

MMWAC and the two

Management,

Inc.

Consolidated companies,

acquired

the

two

Consolidated

companies; and one of the two may thereafter have been merged
into

Waste

Management of

Maine.

We

refer to

all

four

of

Waste

companies, collectively, as "Waste Management."

Tri-State
Management

Rubbish,

of Maine, is

Inc.,

customers in

competitor

also in the

and disposing of commercial

by various

business of collecting

trash, including waste generated

Auburn.

Its affiliate,

Unlimited Services Corp., Inc., processes waste

from it recyclable
in both

businesses.

commodities.

Gary Hart

In 1990, Tri-State

Recycling

and recovers

is the principal

Rubbish declined to

deliver to the Consolidated transfer station all of the waste

collected

by

Rubbish's

position was that waste capable of having recycled

commodities

Tri-State

Rubbish

extracted from it

in

Auburn.

was not covered

Tri-State

by the local

flow control ordinance.

Auburn brought suit against Tri-State Rubbish in a Maine
state trial court in December 1990 to enjoin it from refusing
to deliver all
In

July

1992,

interpretation
favor of Auburn.
No.

of its Auburn waste to

the

court

of Maine

the transfer station.

rejected

law and

Tri-State

granted

Rubbish's

an injunction

in

City of Auburn v. Tri-State Rubbish, Inc.,

_______________
______________________

CV-90-561 (Me. Sup.

Ct., Androscoggin County,

July 20,

-5-5-

1992).

That case, we are told, is now on appeal to the Maine

Supreme Judicial Court.

MMWAC's incinerator-generator
1992 and almost

began operating

at once MMWAC found that

in early

the waste produced

in the twelve

municipalities was not enough to

facility operating

at an optimal

level.

seek additional waste from outside

so

by

offering

a reduced

municipalities who

keep the new

This led

MMWAC to

the member towns; it

tipping

fee,

were not members

did

allegedly

$45 to

of MMWAC and as

low as

$28 to Waste Management of Maine for its delivery to MMWAC of

waste

collected

outside

the

twelve

communities.

These

reduced fees were not made available to Tri-State Rubbish.

In

September

Unlimited, and
present suit in

1992,

Hart

Tri-State

(collectively

Rubbish,

"Tri-State")

federal district court.

Recycling
began

the

The defendants were

Auburn, MMWAC, and the four Waste Management companies: Waste

Management,

Inc., Waste

Consolidated companies.
the

Management of

Maine,

and the

two

Based on the events described above,

complaint asserted federal and state antitrust claims, a

claim

of tortious

interference (by

Waste

Management) with

Tri-State's contractual relations, and claimed violations (by

Auburn)

of 42

U.S.C.

1983 and

provisions

of the

U.S.

Constitution.
The defendants in
the complaint under

this federal action moved

Fed. R. Civ. P. 12(b)(6)

-6-6-

to dismiss

for failure to

state a claim upon which relief may be granted.

court

granted

claims

the motions,

concluding

The district

that

the antitrust

were barred by so-called "state action" immunity; the

bases for dismissing

described

the other claims are

below as the separate claims

more conveniently

are discussed.

Tri____

State Rubbish, Inc. v. Waste Management, Inc., 803 F. Supp.

____________________
_______________________
451 (D. Me. 1992).

This appeal followed.1

II.
A

THE FEDERAL ANTITRUST CLAIMS

half century

Parker v. Brown,
______
_____
intended

the

restraints

ago the

antitrust

monopolies

Although the antitrust

Court in

for public

governments, no

laws

imposed

by

in

Congress had not

to

apply

to

trade

state

governments.

laws aim at competitive

markets, the

Parker recognized
______

competition

Court determined,

317 U.S. 341 (1943), that

federal

or

Supreme

that governments

purposes.

less than

The

those of

often restrict

actions

the federal

of

state

government

itself, were deemed not to fall within the constraints of the

antitrust laws.
After
settled

a certain

amount

that municipalities

Parker doctrine if,

______

of
enjoy

wobbling,
the

it

has

protection

but only if, the conduct

become
of

the

in question is

____________________
1Although both sides have captioned their briefs to show
"Tri-State Rubbish,
Inc., et al." as
the plaintiffsappellants,
the notice of appeal names only Tri-State
Rubbish, Inc. as the appellant.
Our caption and other
references to Hart and Recycling Unlimited are without
prejudice to any consequences that may flow on remand from
the way the notice of appeal was framed.
-7-7-

of

a kind

authorized or

directed

by state

law.

Town of
_______

Hallie v. City of Eau Claire, 471 U.S. 34 (1985); Fisichelli

______
___________________
__________
v. Town of Methuen, 956 F.2d 12
_______________

(1st Cir. 1992).

In general

this immunity is not defeated by claims that the municipality

"conspired" with

a private party,

Outdoor Advertising, Inc.,

________________________
the

municipality

made

City of Columbia
________________

111 S. Ct.
some

v. Omni
____

1344 (1991), or

error

under

local

its

complaint,

that
law.

Fisichelli, 956 F.2d at 14.

__________
Count I.
________

In

count

I of

Tri-State

contends that in

violation of the Sherman Act,

15 U.S.C.

1-2, Auburn and MMWAC have

sought to monopolize and restrain

trade in the waste disposal

business in Auburn and the other

eleven municipalities.
in

The gist

of the claim, as elaborated

Tri-State's brief, is simple: under the local ordinances,

all solid waste

be turned

generated in the twelve

over to

disposal business

MMWAC or
in these

municipalities must

its designee.

Thus

locations, including

the waste
recyclable

materials, is within the sway of one entity, MMWAC.

With
action

a couple of caveats, Tri-State concedes that state

immunity is

legislature

available as

empowered

to

count I

municipalities to

waste including waste that might

if the

engross

Maine

all solid

be recycled.

But it argues

that Maine's policy is to promote the recovery

of recyclable

commodities
electricity.

from

waste

before the

residue

It derives this priority from

is

burned for

a declaration of

-8-8-

policy

in the Maine statute preceding the specific grants of

authority.

Me. Rev. Stat. Ann. tit. 38,

1302, para. 2.

It

urges

us to

recyclable

read

the

waste

from

Maine

legislation to

the

authorization

exclude
that

such
allows

municipalities to control the disposition of solid waste.

The Maine statute explicitly

permits a municipality

to

require that "solid waste" generated within its boundaries be

delivered to "a designated disposal or reclamation facility,"
id.
___

1304-B(2),

electricity,

reclamation

id.,
___

and

includes the

solid waste

is

generation

defined

"useless, unwanted or discarded solid material."

C(29).

The statutory definition

of

to include
Id.
__

1303-

of solid waste goes

on to

say that "[t]he fact that a solid waste or constituent of the

waste may have value or other use or may be sold or exchanged
does not exclude it from this definition."

Id.
___

This final

clause pretty much disposes of Tri-State's argument.

Statutes or ordinances similar to those involved in this
case exist elsewhere.
have

Tri-State

cites us

to several

that

been construed not to reach waste from which recyclable

commodities could
principally

be extracted.

relies

concerned

excluded recyclables.2
________

By

Yet the
an

case on

which it

authorizing statute

that

contrast, the definitional phrase

____________________
2In Waste Management of the Desert, Inc. v. Palm Springs
___________________________________
____________
Recycling Center, Inc., 11 Cal. Rptr. 2d 676 (Cal. App.),
______________________
petition for review granted, 13 Cal. Rptr. 2d 850, 840 F.2d

____________________________
955 (1992), the California statute reserved the right of
anyone "to donate, sell or otherwise dispose of his or her
-9-9-

in

the

Maine

statute

(quoted

at

the

end

paragraph) explicitly includes recyclables in

is

subject to

municipal

control.

reading of the Maine statute

F. Supp. at

The

of

the

the waste that

district

court's

follows its plain language, 803

456, and comports with the reading

of the Maine

state court in the injunction action against Tri-State.

of Auburn,
_________

supra.
_____

We see

last

no error in

City
____

the district court's

interpretation.
Tri-State also objects
that

MMWAC should

action purposes.

to the

be treated

as

district court's
a municipality

ruling

for state

As a private actor, Tri-State argues, MMWAC

must show that it is subject to state supervision pursuant to

California Retail Liquor Dealers Ass'n v. Midcal Aluminum,
________________________________________
_________________
Inc.,
___
in

445 U.S. 97 (1980).

Parker

and later

cases,

Midcal, building upon statements

______
made clear

that

state action

______
immunity
subject
other

will extend to
to adequate

words, may

private actors only

official supervision.

take

where they are

The state,

anticompetitive measures

itself

in
or

authorize its municipalities to do so; but it may not license

private restraints
_______

unless the private parties are themselves

regulated.
Passing the

question whether the conduct

count I is that of

challenged in

MMWAC (as opposed to the municipalities),

____________________
recyclable materials" and of any private company to contract
with a private waste hauler to remove segregated recyclable
materials. 11 Cal. Rptr. at 683-84.
-10-10-

we think that
MMWAC's

MMWAC's status is that of

mission,

waste disposal,

government

function.

By

elected by

municipal officers and

is

traditional local-

statute MMWAC's directors

are themselves

officers. Me. Rev. Stat. Ann. tit. 38,

faith and credit of the

the municipalities.

1304-B(5).

must be
municipal
The full

municipalities may be pledged in aid

of its
its

operations.

member

Id.
__

Patently MMWAC is

municipalities

Interface Group, Inc.

____________________

and enjoys

the creature of

their

status.

See
___

v. Massachusetts Port Authority,

_____________________________

816

F.2d 9, 13 (1st Cir. 1987).3

Counts II, III and III-A.
_________________________
Tri-State's
different

remaining
set

challenged

of

as

monopolization
Consolidated

the

In

restraint
agreement

companies.

As a

count
of

argues that

to offer "predatory"

companies

ton

payment

by

and

MMWAC

first

attempted

MMWAC
of the

Waste

and

the

interim

Management

of

prices to customers

in

and other MMWAC municipalities.

per

present a

Tri-State

consequence

Maine was able

$66

II

between

Tri-State

the

claims,

trade

arrangements,

Auburn

counts, which include

federal antitrust

issues.
a

These

In Tri-State's view,
to

the

Consolidated

for disposing of the waste allowed their affiliate

____________________
3The
only participants named in count I are the
municipalities and MMWAC. Since their conduct is authorized
by statute, the state action doctrine applies. Contrary to
Tri-State's
claim,
municipalities
(or
their
instrumentalities) engaged in state-authorized conduct are
not themselves required to be further supervised by the
state. See Town of Hallie, 471 U.S. at 47.
___ ______________
-11-11-

Waste Management of

Maine effectively to reduce its

$75 per

ton tipping fee to $9 ($75 less $66) and thus steal away TriState's customers.4
Counts III
Management of

and III-A
Maine in

concern the

other non-MMWAC

competitor, says Tri-State,

low

tipping fee ($24

for

"foreign"

municipalities
result,

delivered

to

the

new

Tri-State

has

lost

municipalities

Waste

communities.

This

has been favored by MMWAC with a

per ton), not

waste

activities of

available to Tri-State,

from

outside

the

incinerator-generator.5
customers

to "low ball" prices.

outside the

MMWAC
As

twelve

Further, the customers

are "lock[ed] up" by exclusive dealing contracts and supplied

with

trash

containers

that

can be

used

claims,

the

only

for

Waste

Management trash.
In

analyzing

distinguished
companies.

these

between

MMWAC

and

the

district
Waste

As to the former, the court pointed

participating

municipalities

were

empowered

court

Management
out that the

by the

Maine

____________________
4Tri-State's assertion of a $9 per ton "net" tipping fee
appears to be faulty economics. The $66 per ton payment to
the Consolidated companies was to cover the cost of receiving
and disposing of the waste. Whether or not the cost to the

____
per ton, it is not

Consolidated companies was actually $66

likely to have been zero.

5The record does not explain why, given MMWAC's need for
fuel, it would make sense for MMWAC to offer the $24 tipping
fee exclusively to Waste Management of Maine.
While we
accept the allegation as true for purposes of this appeal, we
note that MMWAC's brief denies that this is what happened.
-12-12-

statute to control completely

of

waste generated within their communities, dealing if they

chose to do so
Me. Rev.
that

the collection and disposition

with a single entity.

Stat. Ann.

MMWAC's

interim

companies favored

tit. 38,

1304-B(4).

arrangements

the Waste

803 F. Supp. at

with

458;

Thus, assuming
the

Consolidated

Management companies over

Tri-

State, MMWAC was protected by the state action doctrine.

As to the conduct in
court noted that

Counts III and III-A, the district

the Maine legislature clearly

contemplated

that municipalities could buy waste from other municipalities

to

make up

any shortfall.

803 F.

Supp. at 459;

Stat. Ann. tit. 38,

1304-B(4-A)(B).

is merely one

"buying" such waste.

way of

Me. Rev.

A reduced tipping fee

Nothing in

authorizing statute says that the same price must

the

be offered

to

everyone; on

commitments,
Rev.

the contrary

recognized

Stat.

Ann.

with one

foreseeable.

We

alleged

elsewhere in

tit.

arrangements

38,
or

of

for

long-term fuel

the statute,

1304-B(4),
few

Maine

of

suppliers

the $24

for foreign

were

that

entirely

that MMWAC's

tipping

waste

see Me.
___

suggests

agree with the district court

exclusive offer

Management

the need

fee to

was

Waste

authorized by

statute and is protected by the state action doctrine.

A different, and

more difficult, issue is

Waste

Management's claim

state

action

that it

doctrine.

too is

Tri-State

presented by

protected

objects

by the

that

Waste

the

Midcal
______

-13-13-

Management,

at

least,

requirement that it
can be protected.
is

required.

is

fully

subject

be supervised before any

to

of its actions

The district court agreed that supervision

But it

found that

state, supervision is sufficient.

municipal, as

opposed to

It further held

that this

obligation was satisfied by MMWAC's obligation, undertaken in

its contracts with
all pertinent laws.
We
the

its municipality members, to

comply with

803 F. Supp. at 461.

agree with the

greater weight of

district court's view,

supported by

authority, that municipal supervision

of private actors is adequate where authorized by or implicit

in the
to

state legislation.

Although there

the contrary,6 we share the view

Circuits, endorsed
municipal

by the

supervision is

and Hovenkamp note,

is some precedent

of the Eighth and Ninth

leading antitrust
adequate.7

treatise, that

As Professors

"it would be implausible to

Areeda

rule that a

city may regulate, say, taxi rates but only if a state agency
also

supervises the private taxi operators."

Antitrust Law,
_____________

supra n.7, at 197.

_____

____________________
6See, e.g., Riverview
Investments, Inc. v. Ottawa
___
____
_____________________________
______
Community Improvement Corp., 774 F.2d 162 (6th Cir. 1985).
__________________________
7Gold Cross Ambulance & Transfer v. City of Kansas City,
_______________________________
___________________
705 F.2d 1005 (8th Cir. 1983), cert. denied, 471 U.S. 1003
____ ______
(1985); Tom Hudson & Assocs. v. City of Chula Vista, 746 F.2d
___________________
___________________
1370 (9th Cir. 1984), cert. denied, 472 U.S. 1028 (1985);
____ ______
Savage v. Waste Management, Inc., 623 F. Supp. 1505 (D.S.C.
______
_____________________
1985); see also P. Areeda & H. Hovenkamp, Antitrust Law
___ ____
______________
212.7c at 196-97 (Supp. 1992).
-14-

-14-

At

this

point,

our

analysis

position diverges somewhat

As

to any

tipping

claim that

Consolidated
think

companies or

protection

district court.
favorable

payments

to

the

foreign waste--we

requirement at all: the choice

that of MMWAC and its

protected as state action.

authorized payments as

MMWAC

outright as to

"supervision" is not a

Management's

Management received

through

to make such payments was

Waste

from that of the

Waste

fees--whether

of

actions are

To treat the mere receipt of such

wrongful would

afforded MMWAC

undermine the

and mistake

the

Parker
______

purpose of

supervision requirement, which is to prevent the

the

unregulated

licensing of private anticompetitive conduct.

_______
This analysis disposes of the claims under counts II and
III

against

all

parties

defendants,

so far

as

actions

MMWAC:

of

those
the

Consolidated companies,
companies by

including

MMWAC, and

claims

contract

the

payments

the

Waste

attack

Management

the

between MMWAC
to

the tipping fees

the

official
and

the

Consolidated

set by

MMWAC for

Waste

Management

waste.

of

It does not,

throughout counts

Maine, whether

for

local

or foreign

however, resolve the attacks, scattered

II, III, and III-A against

the conduct of

Waste Management of Maine vis-a-vis its own customers.

attacks

charge

Waste

Management

of Maine

pricing of its waste collection services,

with

These

predatory

wrongful exclusive

-15-15-

dealing by long-term

contracts, and unreasonably restricting

the use of the containers it furnished.8

The Predation Claims.
____________________
Waste

Management

customer-related
The

court

defendants

with

MMWAC;

sufficient

were

conduct under

reasoned

that

municipalities, MMWAC had

that Waste

The district court held that

the

by

municipal

as

state action

its

agreements

committed itself to obey

Management of Maine had

and that

protected

this

their

doctrine.
with

the

the law;

contractual arrangements

contractual

supervision

to

the

to

authority provided

cast

the garment

of

Parker
______

protection

conduct.

803 F.

over

Waste

Management

Supp. at 461.

of

The district

Maine's

own

court noted,

however, that the contracts had not been made available to it

for inspection.
contract terms

Id.
__

We are not persuaded that the rates and

Waste Management

set for

its own

customers

have been brought within Parker.

______
There is simply nothing to which we have been pointed to
show that MMWAC has claimed or exercised any control whatever
over the rates that Waste

Management of Maine charges to its

customers or the other terms

which it

deals.

(such as length of contract) on

While it is

conceivable (but

not proved)

____________________
8MMWAC is also charged in these counts but, apart from
bare references to conspiracy, there is nothing in the
complaint to connect MMWAC with Waste Management's actions
vis-a-vis its own customers except the favorable tipping
fees.
Since the fee payments are state action, we do not
think that any claim has been stated against MMWAC based on
Waste Management's alleged predation.
-16-16-

that MMWAC

claims such

authority with

respect to

customer

contracts

in the

MMWAC communities,

it

is certainly

less

likely that it does so in the non-MMWAC communities which are

the locales for the predation
A.

Absent

showing

alleged in counts III and III-

of

control,

authorization and the adequacy

questions

of

state

of official supervision

need

not even be reached.

It is a close question whether the judgment of dismissal
should

nevertheless

be affirmed

on an

alternative ground,

namely, that the allegations of the complaint fail to state a

predation claim even if the state action doctrine is ignored.
This alternative course is urged by Waste Management, and
have

given it

proving

serious consideration.

predatory

pricing

conditions under which

because it
which

can

are

demanding,

it is plausible

easily be

because

merely low

227 (1st

Cir. 1983).

and

prices

See Barry Wright Corp. v.

___ ___________________

724 F.2d

for
the

are not common,

confused with

benefit customers.

Grinnell Corp.,
______________

The requisites

we

ITT
___

Exclusive

dealing contracts may also benefit customers and are unlawful

only

upon

particularized

Tampa Electric Co.

__________________

v.

showing

of

unreasonableness.

Nashville Coal Co., 365

___________________

U.S.

320

(1961).
Thus a complaint that did no more than
pricing or

exclusive

specific might well

dealing contracts

allege predatory

with

be susceptible to dismissal

nothing
_______

more

for failure

-17-17-

to state a claim.

The present complaint is, in a sense, both

better and worse.

It is somewhat more specific, asserting at

one point

that the

prices

offered by

Waste Management

of

Maine were as much as 50 percent below market rates, at other

places that the rates were sometimes below variable cost, and
that the exclusive dealing contracts were for three years.
At

the

same

time, the

toward undermining

its own

complaint

goes

predatory pricing

some distance
claim.

Tri-

State implies that the low prices offered by Waste Management

of Maine were,

in some instances at least, the result of the

favorable tipping fees

this is the

whole of the charge, then

pricing claim at
own

that MMWAC made available to

all.

product or service

violate the Sherman

rationally prices its

its own

Act merely because

its prices, are lower than a

costs does not

its costs, and

thus

rival's costs; and this is true

even though its lower costs may be due to

foolishness,

If

there is no predatory

A company that
at or above

it.

the generosity, or

of another supplier who has charged the company

too little for an input.

See generally Brooke Group Ltd. v.

_____________ ________________

Brown & Williamson Tobacco Corp., 61 U.S.L.W.

________________________________

4699, 4702-03

(June 21, 1993).

Even

apart from

this

possible

explanation for

lower

prices, Tri-State's predatory pricing claim is on the edge of

inadequacy.

Although

the

complaint

asserts

that

Waste

Management is pricing below variable cost--the normal test of

-18-18-

predation,
any

see Barry Wright--it

___ ____________

Tri-State has

prices

for

50 percent below

is not clear

this assertion.

what basis if

The reference

customary prices might

to

invite some

suspicion, but in an industry like waste collection, in which

customers
serving

are scattered along

additional customers

routes, the variable

to piece

out a

route

cost of
may be

extremely low.
The claim that

the duration of the

exclusive contracts

is unlawful is, if anything, an even thinner case on the face

of

the complaint.

years,

the

That

only

some

specific in

Under Tampa Electric Co., it is the totality of

__________________
a

competition, that are

the

number

cancellation
anything

of

customers

else that

and

decisive.

penalty,

competitive scene.

term,

even

might invite

illegality.

such

not

complaint,

three

but

for

does

the

contracts are

curiosity,

reasons

it

of the

the

begin

its

actual

establish

impact

on

Here, we know nothing about

affected,
practice

might help

to

to

the
in

size

the

paint a

of

industry,
picture of

Of course, a plaintiff is

any
or
the

required only

to plead a claim, not to recite evidence, but the

essence of

a claim like this one lies in the details.

A final concern is that predatory pricing is a section 2
claim and is condemned only where it is part of an attempt to
monopolize or is used to secure or retain an actual monopoly.
E.g.,
____

C.A.T. Industrial Disposal, Inc. v.

_________________________________

Browning-Ferris
_______________

-19-19-

Industries,

884

F.2d

209

(5th

Cir.

1989).9

Tri-State

__________
certainly

does

allege both

the

aim

of monopoly

and

the

actuality, but its complaint supplies very little information

(e.g., market shares in a properly defined market) from which
____
one can frame a judgment whether this claim is plausible. The
complaint

does say

subsidiaries

that

are the

Waste

largest

Management,
waste

Inc.

handling and

and

its

disposal

business in Maine and in the nation; but the primary issue is

dominance

or

prospective dominance

in

properly defined

economic market.
One's first instinct

is that monopoly would

be hard to

sustain in a business in which the basic equipment is a truck

and entry is apparently easy.
Waste Management, Inc., 743
______________________

See generally United States v.

_____________ _____________
F.2d 976 (2d

Cir. 1984).

But

waste collection might in theory be subject to local monopoly

in

some circumstances.

from a

number of closely

new entry difficult,

and many customers

Thus, the efficiencies of collecting

located customer sites

could make

especially if the community

were small

were tied to an existing

dominant hauler

by long-term contracts; and environmental restrictions on new

landfills in some areas could

give a decisive advantage to a

____________________
9Exclusive

dealing, which

can be

attacked inter alia

___________
under section 1 of the Sherman Act, 15 U.S.C.
1, can be
condemned without a showing that monopoly power is present or
within reach. But the impact on competition is part of the

equation and, absent a potential monopoly or

competitive impact may be hard to establish.

oligopoly, the

-20-20-

hauler that controlled

are some hints,
Management

the only available facility.

but only hints, in the

of Maine

may enjoy an

There

complaint that Waste

advantage of

this latter

sort.
Taking everything
affirm

the

dismissal

alternative ground.
cannot

say at

together, we
of

the

think it

predation

wiser not

claims

on

to
the

Thin and doubtful though they may be, we

this stage

that these claims

inadequate if Parker's shield is removed.

______

are hopelessly

The district court

did not rest its decision on that ground, and it has been the
subject of only a small portion of the briefs on this appeal.
The

old prejudice

against summary disposition

of antitrust

claims has diminished, First National Bank v. Cities Services

___________________
_______________
Co.,
__

391 U.S. 253

(1968), but the grant

motion on the predation claims

be a shade too summary.

of a Rule 12(b)(6)

would, at least at this time,

We underscore the limited

claims

can be

Management

stated, if

defendants.

at

nature of our remand.

These

all, only

Waste

against the

The district court is fully entitled

to demand more specific explanations from Tri-State as to the

gray areas

in its predation claims, including

the charge of pricing below

market definitions
monopoly

variable cost, the basis for the

urged, and the

power exists

the basis for

or could

properly defined economic market.

basis for any

plausibly be

claim that

secured

in a

Nothing in this opinion is

-21-21-

intended

to preclude summary

and this need not

disposition at a

mean much later if

later stage,

these claims prove

to

have little substance.10

III.
Count IV

TRI-STATE'S REMAINING CLAIMS

of the

antitrust statute, the

earlier

counts.

Sherman Act,

The

see Me.
___

complaint reasserts,

under the

federal antitrust claims made

Maine antitrust statutes
Rev. Stat.

Ann. tit.

10,

Maine
in the

parallel the
1101 et
__

seq., and Tri-State offers no separate argument for liability

___
under state law.

In point

of fact, the Maine statute

which MMWAC is organized also

state antitrust
ordinances.

laws for

Me.

Accordingly,

Rev.

under

has an explicit exemption from

specified

Stat.

Ann.

the dismissal of

municipal contracts
tit.

38,

or

1304-B(6).

the state antitrust

claim is

sustained except as to the predation claims against the Waste

Management defendants.
In

count V, Tri-State

Tri-State

customers by

claims that the

Waste

Management

solicitation of
of

Maine

was

violation of Maine law against interference with advantageous

contractual
solicitation
discriminatory

relations.
was

The

gravamen

unlawful

because

tipping fees,

predatory

is

that

achieved
pricing, and

this

through
other

____________________
10The Waste Management defendants are also free to
pursue their Parker defense as to the predation claims. Our
______
holding is that on this record there is an insufficient basis
for determining that Parker immunity exists as to the terms
______
on which Waste Management of Maine deals with its customers.
-22-22-

wrongs.

The district court dismissed the count on the ground

that the
state

actions in

legislation

interference."
State

question were within

and

therefore

could

not

803 F. Supp. at 463-64.

does not argue the claim

the ambit
be

of the

"wrongful

In this court, Tri-

at length, asserting instead

that its tortious interference claim is "contingent" upon our

finding that

the alleged

anticompetitive conduct

enjoys no

immunity.
We

think

the

fixing

municipalities and MMWAC

Tri-State

makes

no

of

which

Waste

effort to

Management

customers has been

count V, so

fees

is embraced by the
show

earlier stated, we cannot find

on

tipping

the

by

the

Maine statute-contrary--but, as

on this record that the terms

of Maine

dealt

with

the subject of regulation.

far as it makes allegations

its

own

Accordingly,

against the private

defendants based on Waste Management of Maine's dealings with

its own

customers,

is remanded

with the predation claims.

why

for consideration

together

Nothing in the complaint explains

MMWAC is responsible for such contracts, however, and as

to it the

dismissal of count

V is sustained for

failure to

state a claim.
Count
U.S.C.
the

VI of

the

complaint asserts

1983 against Auburn.

City of Auburn
________________

represented

claim under

In part, this count says

injunction

action

discriminatory prosecution

against

42
that

Tri-State

in violation

of due

-23-23-

process principles.

Count VII makes the same complaint based

on equal protection principles.

Count VIII, the final count

of the complaint, re-asserts the allegations of counts VI and

VII as violations of Maine's

own civil rights statutes.

Rev. Stat.

4682-83.

Ann., tit. 5,

On

Me.

appeal, Tri-State

advises that it elects not to press the selective prosecution

issue in this court, reserving it for its state court appeal.
This leaves only Tri-State's final contention--the other
subject of its count
ordinance

is "an

VI claim--that the Auburn

unconstitutional

property without compensation."

be that

the Auburn flow control ordinance

in which

interests in

it has

to

has crippled Tri-

This, says Tri-State, is a

engaged

continuing without

[Tri-State's]

Tri-State's theory seems

State's waste disposal business.

business

taking of

flow control

for many

years and

undue interference

protection as "investment-backed expectations."

its

deserve

Penn Central
____________

Transp. Co. v. New York City, 438 U.S. 104, 124 (1978).

__________

_____________

While the Supreme

Court did

use the

quoted phrase

to

describe a pertinent consideration in takings cases, the Penn

____
Central opinion actually reaffirms that government for public
_______
purposes

can,

without

regulations that may

business.

The

compensation,

impose

severely limit the value

Supreme

municipal

ordinances

exclusive

right to collect

Court

granting

has

in

one

waste

general

of an ongoing

fact twice

and dispose of

collector

upheld
the

waste within the

-24-24-

community,
Despite

putting

Tri-State's

nothing in the

haulers

claims that

out

of

these cases

Supreme Court's more recent

serious doubts about

rejected

existing

their validity.

The

business.11
are outdated,

decisions raises
Sixth Circuit has

an argument almost identical to Tri-State's.

Equipment Corp.
_______________

v. City of Akron, 654

_______________

F.2d

vacated on other grounds, 455 U.S. 931 (1982).

Hybud
_____

1187 (1981),

________________________
* * *
In this case, we have concluded
exception

of

its

predation

defendants, none of

that, with the possible

claims

against

the

Tri-State's claims has any

private

merit.

This

does not mean that there is no basis for Tri-State's concerns

about

the competitive impact

for its assertion

recycling.

But

unfair or unwise

of the MMWAC

that the plan is

government

action

arrangements, or

unfair to it or
may be

without being illegal.

bad for

anticompetitive,
Absent illegality,

the solution lies with the legislature and not in the courts.
The

judgment of the

for the dismissal

in

counts II-V

those

of the federal and state

and the tort

counts charge

predation

or

district court is

the

related

claim in

Waste

affirmed except
________
antitrust claims

count VI

insofar as

Management defendants

anticompetitive

conduct

with
toward

____________________
11See California Reduction Co. v. Sanitary Reduction
___ ________________________
__________________
Works, 199 U.S. 306 (1905); Gardner v. Michigan, 199 U.S. 325
_____
_______
________
(1905).
-25-25-

customers.

Those claims are remanded for further proceedings

________

in accordance with this opinion.

It is so ordered.
________________

No costs.

-26-26-