Antitrust Aspects of Anticompetitive Zoning

AuthorJames Dabney
Published date01 September 1979
Date01 September 1979
DOIhttp://doi.org/10.1177/0003603X7902400301
Subject MatterArticle
The Antitrust Bulletin/Fall 1979
ANTITRUST ASPECTS OF ANTICOMPETITIVE
ZONING
by
JAMES
DABNEY*
Since
at
least the mid-19th century, local governing units
have endeavored to suppress competition by means of land-use
restrictions.' In this century,
the
zoning power" has been the
most popular such device,3although protective "health" 4
and
*Law Clerk, Hon. James C. Hill, U.S. Court of Appeals, Fifth
Circuit.
1See, e.g., Tugman v. City of Chicago, 78
TIL
405
(1875);
City of
Chicago v. Rumpff, 45 Ill. 90
(1867);
Town of Crowley v. West, 52
La. Ann. 526, 27
So.
53 (1900); Chaddock v. Day, 75 Mich.
527,42
N.W. 97 (1889).
2Zoning is a species of land-use control, consisting of "the divi-
sion of the whole territory of a municipality into districts, and the
imposition of restrictions upon the use of land in such districts." 1
R.
ANDERSON,
AMERICAN
LAW
OF
ZONING
§ 1.13, at 20 (2d ed. 1976)
[hereinafter cited as
ANDERSON].
See notes 8-17 and accompanying
text infra.
3See, e.g., Ex parte White, 195 Cal. 516, 234 P. 396 (1925); Lip-
pow v. City of Miami Beach, 68 So. 2d 827 (Fla. 1953); Suburban
Ready-Mix Corp. v. Village of Wheeling, 25 ill. 2d 548, 185 N.E.2d
665 (1962); Herman Glick Realty Co. v. St. Louis County, 545
S.W.2d 320
(Mo.
App. 1976); Leher v. Board of Adjustment, 137
N.J.L. 100, 58 A.2d 265 (1948); Pure Oil Div. of Union Oil
Co.
of
Calif. v. City of Brook Park, 26 Ohio App. 2d 153, 269 N.E.2d 853
(1971); Appeal of Stefonik, 1 Pa. Commonw. Ct. 13, 271 A.2d 707
(1970); Our Lady of Mercy Greenwich v. Zoning Board of Review,
102 R.I. 269, 229 A.2d 854 (1967); Board of County Supervisors v.
Davis, 200 Va. 322, 106 S.E.2d 152 (1958). See generally notes
18-24 and accompanying text infra.
4See Good Humor Corp. v. City of New York, 290 N.Y. 312, 49
N.E.2d 153 (1943) (antipeddling ordinance supported inter alia by
evidence
that
some "itinerant peddlers" are "unclean in their
habits'); Trio Distrib. Corp. v. City of Albany, 2 N.Y.2d 690, 143
N.E.2d 329, 163 N.Y.S.2d 585 (1957) (referring to unreported deci-
©
1979
by Federal Legal Publications, Inc.
435
436 THE ANTITRUST BULLETIN
"safety"
5
restrictions
also persist. Dissenting in City
of
Lafayette v. Louisiana Power &Light
CO.,6
Mr.
Justice
Stewart
stated
that
the
plurality's decision
threatened
local
governments
with
federal
antitrust
liability "[e]ach time [they]
...
[refuse] to
grant
azoning variance to abusiness." 7This
article addresses
the
antitrust
aspects of anticompetitive zon-
ing laws,
and
the
implications of Lafayette for
both
the
pro-
mulgators
and
beneficiaries of such laws.
sion striking down ''health'' ordinance requiring mobile ice cream
vendors to carry an extra person whose sole duty would be to serve
ice
cream).
cr.
S.S. Kresge Co. v.
Couzens,
290
Mich.
427, 287 N.W.
427
(1939)
(ordinance requiring street vendors of cut flowers to
secure a license).
5See, e.g., Standard Oil Co. v. Charlottesville, 42 F.2d 88 (4th
Cir.
1930);
Mobil
Oil Corp. v. Board of Adjustment, 293 A.2d 837
(Del.
Super. Ct. 1971);
Chicago
Title &Trust
Co.
v. Village of
Lom-
bard, 19 Ill. 2d 98, 166 N.E.2d 41 (1960); Town of Clinton v. Stand-
ard Oil Co., 193 N.C. 432, 137 S.E. 183
(1927);
New Jersey Good
Humor, Inc. v. Board of Comm'rs, 124 N.J.L. 162, 11 A.2d 113
(1940);
Trio Distrib. Corp. v. City of Albany, 2 N.Y.2d 690, 143
N.E.2d 329, 163 N.Y.S.2d 585 (1957); Consumers Gasoline Stations
v. City of Pulaski, 200 Tenn. 480, 292 S.W.2d 735 (1956).
6435 U.S. 389
(1978).
In Lafayette, a plurality of the Court held
that municipal governments were not "exempt" from the application
of the antitrust laws, except when certain specified conditions were
present. See notes 108-11 infra.
7435 U.S. at 438. See Whitworth v. Ferguson, 559 F.2d 378 (5th
Cir. 1977), vacated, 435 U.S. 992
(1978),
aff'd on rehearing
per
curiam, 576 F.2d 696 (5th Cir. 1978), cert. denied, 440 U.S. 911
(1979);
Nelson v. Utah County, 1978-1
TRADE
CAS.
(CCH)
, 62,128
(D.
Utah 1977).
But
see Miller &Son Paving, Inc. v. Wrightstown
Township Civic Ass'n, 443 F. Supp. 1268
(E.D.
Pa. 1978), aff'd
mem., 595 F.2d 1213 (3d Cir. 1979), petition for cert. filed, 48
U.S.L.W. 3005 (U.S. June 27, 1979)
(No.
78-1925).
ANTICOMPETITIVE
ZONING
I. STATUS OF ANTICOMPETITIVE ZONING AT STATE
LAW
437
Various political entities exercise zoning power." Most
often, the power is delegated to municipal authorities," which
in
tum
establish the necessary administrative machinery."
The permissible objectives of zoning typically are described in
sweeping terms. The Standard State Zoning Enabling Act11
permits zoning "[fjor the purpose of promoting health, safety,
morals, or the general welfare of the community." 12 This
language apparently derives from Village
of
Euclid v.
Ambler
Realty
CO.,13
in which the Supreme Court held
that
zoning
restrictions would be unconstitutional" only if they bore "no
substantial relation to the public health, safety, morals, or
general welfare." 15 The import of these words has expanded
with modem interpretations of the states' "police power," 16
such
that
today the zoning power is exercised in the name of
8In the United States, zoning power is exercised at state, county,
and municipal levels of government. See 5 N.
WILLIAMS,
AMERICAN
PLANNING
LAW
§ 18.03 (1974).
9See
ANDERSON,
supra note 2, § 2.19; U. S.
DEP'T
OF
HOUSING
AND
URBAN
DEVELOPMENT,
STATUTORY
LAND
USE
CONTROL
ENABLING
AUTHOR.
ITY
IN
THE
FIFTY
STATES
(1976).
111
See,
e.g.,
U.S.
DEP'T
OF
COMMERCE,
A
STANDARD
STATE
ZoNING
ENABLING
ACT
§§ 6-7 (1926) [hereinafter cited as the
STANDARD
ACT].
The Standard Act was the fountainhead of all modern zoning laws.
It
has been adopted at one time or another by all 50 states, and,
with modifications, is currently in force in 47. See
WILLIAMS,
supra
note 8, §18.01, at 355.
11 See note 10
supra.
12
STANDARD
ACT,
supra note 10, §1.
13 272 U.S. 365 (1926).
14 In Euclid, the zoning ordinance in question was challenged both
on due process and equal protection grounds. 272 U.S. at 384.
15 ld. at 395.
16 See Young v. American Mini Theatres, Inc., 427 U.S. 50 (1976);
Village of Belle Terre v. Boraas, 416 U.S. 1 (1974); Berman v.
Parker, 348 us. 26 (1954).

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