The Supreme Court, substantially undoing the havoc city officials said it had created in recent years, yesterday made municipalities more immune from lawsuits charging that they had violated federal antitrust laws.
In a major victory for local governments, the court unanimously ruled that local governments are immune from such suits, even if their anticompetitive activities are not required by state law or actively supervised by state governments, which enjoy immunity from antitrust laws.
The court in 1978 said municipalities can be sued for unfair practices unless they could show that the state had approved them. The court did not say how cities could prove that they had state approval.
That ruling, along with one in 1982 involving cable television in Boulder, Colo., prompted hundreds of lawsuits against local governments and officials, claiming various violations of federal antitrust laws.
In the Boulder case, the court ruled that companies that had been denied a cable franchise or other government contracts -- for such services as mass transit, sewage treatment and ambulance transportation -- can challenge a city's decision in federal court.
The rulings exposed cities and city officials to triple damages in the event they lost such suits, but Congress last year barred litigants from collecting monetary damages from local governments. That left cities open to other legal moves by disgruntled competitors to delay or block city actions. Yesterday's ruling appears to make those challenges less likely to succeed.
Justice Lewis F. Powell Jr., writing for the court, noted, "It is fair to say that our cases have not been entirely clear" on what the court meant by "active state supervision" or how municipalities could show that the state had authorized them to violate antitrust laws.
The decision, affirming a unanimous ruling by the federal appeals court in Chicago, said the city of Eau Claire, Wis., could not be sued by four neighboring communities for monopolizing sewage-treatment services in the area.
"We . . . hold that active state supervision is not a prerequisite to exemption from antitrust laws where the actor is a municipality rather than a private party," Powell said. Wisconsin, Powell said, had "expressed a state policy" to allow municipalities to monopolize sewage-treatment services.
The case is Town of Hallie v. City of Eau Claire.
In a related case, the court ruled 7 to 2 that federal antitrust laws do not forbid associations of truckers from submitting joint intrastate rate proposals to regulatory commissions.
The court, again in an opinion by Powell, said that even when such activities are not "compelled" by the states involved -- North Carolina, Georgia, Tennessee and Mississippi -- the associations are entitled to immunity from antitrust laws.
The federal government had sued two trucker groups, alleging antitrust violations.
The 11th U.S. Circuit Court of Appeals said that since the truckers' actions were not required by the states, they were not immune from antitrust laws.
But the high court yesterday said that their price-fixing was sanctioned by a "clearly articulated state policy." Three of the states have laws permitting collective rate-making.
"We have had a cloud on intrastate collective rate-making ever since the federal government filed its suit in 1976," said Nelson J. Cooney, a spokesman for the American Trucking Associations.