Antitrust Law Daily Wrap Up, ANTITRUST—Ariz. App.: Colorado City loses appeal of private sanitation service antitrust action, (May 8, 2025)

By Justin Marcus Smith, J.D.

The City did not enjoy statutory or state action immunity because it did not appear to have been engaged in conduct that amounted to making law or policy.

An Arizona appellate court accepted special-action jurisdiction but denied relief to defendant-appellant Town of Colorado City (City), in an antitrust action brought by a private sanitation service. More or less as the trial court had concluded, there was not enough evidence in the record below to credit the City’s limitations period defense. The court also affirmed those challenged aspects of the trial court’s summary judgment decision that concluded the City did not qualify for immunity. First, the City did not show any exercise of a legislative or policy-determinative function to qualify for statutory immunity. Second, the state action exemption did not apply because the Colorado legislature had not professed a requisite “clear policy for municipalities to monopolize all garbage collection” (Town of Colorado City, Arizona v. Centennial Park Disposal, Inc., No. 1 CA-SA 25-0035 (Ariz. App. May 6, 2025)).

Background. Centennial Park Disposal (Centennial), a private sanitation company, sued Colorado City (the City) for forcing municipal water-service customers to pay for municipal garbage-collection.

Centennial filed a second amended complaint seeking injunctive relief and damages for “anti-competitive” behavior in violation of Arizona statute A.R.S. § 9-[516] (the statute), as stated in Arizona Attorney General (AG) Opinion 57-40. The court said the statute provides that municipalities can only displace a lawful and adequate “public utility service” through acquisition, and the AG opinion read that municipalities may not refuse water service to collect delinquent garbage-collection disposal charges.

When Colorado City moved for summary judgment, the trial court ruled the City had not violated the statute; however, the court denied the City summary judgment on limitations and immunity grounds. The trial court said it saw enough evidence of ongoing anticompetitive behavior to submit questions about the timeliness of the complaint to the jury. As for immunity, the court ruled the city was not immune under A.R.S. § 12-820.01 because its conduct was neither “judicial” nor “legislative.” The trial court also held the state-action exemption doctrine also did not apply because several Arizona statutes expressed a “competition-based policy” for garbage collection.

The city petitioned for special-action relief from the denial of summary judgment on limitations and immunity grounds. The court accepted jurisdiction and applied de novo review.

Jurisdiction. The court said it accepted jurisdiction because a party usually has no right to direct appeal or post-judgment review of an order denying summary judgment, and a party claiming immunity loses the benefit of it if forced to stand trial.

Limitations. The court held Colorado City was not entitled to special-action relief from the superior court denial of summary judgment on limitations grounds. The City failed to submit prima facie evidence that Centennial’s claim accrued more than one year before its 2022 complaint. The City identified a 2018 meeting as the accrual event; however, the record below did not explain how it would have started the clock. Centennial provided deposition testimony about it, but the court said it could not conclude anything from evidence that had not been presented below on a motion for summary judgment. In any event, that testimony arguably supported equitable tolling.

Statutory immunity. The court held the City was not entitled to special-action relief from the superior court’s denial of summary judgment on A.R.S. § 12-820.01 immunity grounds. The court reasoned the City did not show that it had exercised any legislative or policy-determinative administrative function, as pertinent here, affecting rights to or provision of governmental services. Operational or implementation decisions did not qualify for protection under the statute. The court continued that the statute was inapplicable to claims for injunctive relief against public officials, and the City also failed to show the statute could apply to a claim for money damages.

State-action exemption. Last, the court held the City was not entitled to special-action relief from the superior court’s denial of summary judgment on state-action exemption grounds. The court noted the state action exemption is a “federal doctrine premised on federalism and state sovereignty.”

The court said the parties assumed the exemption extended to claims brought under Arizona’s antitrust act. The court said it did not find any Arizona case on point, but the Ninth Circuit had “posited the exemption applies to Arizona law.” The court said it agreed with the Ninth Circuit because Arizona’s antitrust act was meant to parallel the federal act, and, even if federalism and sovereignty concerns underlying the exemption were “not implicated” in state antitrust cases, “it would be illogical to hold municipalities liable for anticompetitive conduct sanctioned by the state legislature.”

However, after a review of the applicable statutes, even taking the statutes together, the court said it could not find the requisite state policy for a state action exemption affirmative defense. More specifically, the court said it could not conclude that the Colorado legislature professed a “clear policy for municipalities to monopolize all garbage collection.” On the contrary, A.R.S. § 49-746 appeared to favor private garbage collection for at least some of the services Centennial alleged it was providing within the City.

The Case is No. 1 CA-SA 25-0035.

Judge: McMurdie, P.

Attorneys: William H. Doyle (Doyle Hernandez Millam) for Town of Colorado City, Arizona. Tucson William G. Walker (William G. Walker, P.C.) for Centennial Park Disposal, Inc.

Companies: Centennial Park Disposal, Inc.

Cases: Antitrust ArizonaNews