Otter Tail Power Co. v. United States
410 U.S. 366 (1973)

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U.S. Supreme Court

Otter Tail Power Co. v. United States, 410 U.S. 366 (1973)

Otter Tail Power Co. v. United States

No. 71-991

Argued December 5, 1972

Decided February 22, 1973

410 U.S. 366

Syllabus

In this Sherman Act suit, brought by the Government, the District Court enjoined as violative of § 2 the following practices in which appellant, Otter Tail Power Co. (Otter Tail), engaged to prevent towns from establishing their own power systems when Otter Tail's retail franchises expired: refusals to wholesale power to the municipal systems or transfer ("wheel") it over Otter Tail's facilities from other sources, litigation intended to delay establishment of municipal systems, and invocation of transmission contract provisions to forestall supplying by other power companies.

Held:

l. Otter Tail is not insulated from antitrust regulation by reason of the Federal Power Act, whose legislative history manifests no purpose to make the antitrust laws inapplicable to power companies. The essential thrust of the authority of the Federal Power Commission (FPC) is to encourage voluntary interconnections. Though the FPC may order interconnections if "necessary or appropriate in the public interest," antitrust considerations, though relevant under that standard, are not determinative. Pp. 410 U. S. 372-375.

2. The District Court's decree does not conflict with the regulatory responsibilities of the FPC. Pp. 410 U. S. 375-377.

(a) The court's order for wheeling to correct Otter Tail's anticompetitive and monopolistic practices is not counter to the authority of the FPC, which lacks the power to impose such a requirement. Pp. 410 U. S. 375-376.

(b) Appellant's argument that the decree overrides FPC's power over interconnections is premature, there being no present conflict between the court's decree and any contrary ruling by the FPC. Pp. 410 U. S. 376-377.

3. The record supports the District Court's findings that Otter Tail -- solely to prevent the municipal systems from eroding its monopolistic position -- refused to sell at wholesale or to wheel, and that Otter Tail, to the same end, invoked restrictive provisions in its contracts with the Bureau of Reclamation and other suppliers, the court correctly concluding that such provisions, per se, violated the Sherman Act. Pp. 410 U. S. 377-379.

Page 410 U. S. 367

4. The District Court should determine on remand whether the litigation that Otter Tail was found to have instituted for the purpose of maintaining its monopolistic position was "a mere sham" within the meaning of Eastern Railroad Conference v. Noerr Motor Freight,365 U. S. 127, so that the litigation would lose its constitutional protection in line with the Court's decision in California Motor Transport Co. v. Trucking Unlimited,404 U. S. 508, which was decided after the District Court had entered its decree. Pp. 410 U. S. 379-380.

5. The District Court's retention of jurisdiction to afford the parties "necessary and appropriate relief" provides an adequate safeguard against the possibility that compulsory interconnections or wheeling might threaten Otter Tail's ability adequately to serve the public. Pp. 410 U. S. 380-382.

331 F.Supp. 54, affirmed in part and vacated and remanded in part.

DOUGLAS, J., delivered the opinion of the Court, in which BRENNAN, WHITE, and MARSHALL, JJ., joined. STEWART, J., filed an opinion concurring in part and dissenting in part, in which BURGER, C.J., and REHNQUIST, J., joined, post, p. 410 U. S. 382. BLACKMUN and POWELL, JJ., took no part in the consideration or decision of the case.

Page 410 U. S. 368

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