Antitrust Aspects of Anticompetitive Zoning

• Author: James Dabney
• Published date: 01 September 1979
• Date: 01 September 1979
• DOI: http://doi.org/10.1177/0003603X7902400301

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 meansof 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,45Ill.90

(1867);

Town ofCrowley v.West,52

La. Ann. 526, 27

So.

53(1900); Chaddock v.Day, 75Mich.

527,42

N.W. 97 (1889).

2Zoning isaspecies ofland-usecontrol,consistingof "thedivi-

sion of thewhole territory of a municipalityintodistricts, and the

imposition of restrictions upon theuse of landinsuch districts." 1

R.

ANDERSON,

AMERICAN

LAW

OF

ZONING

§ 1.13,at20(2ded. 1976)

[hereinafter cited as

ANDERSON].

See notes 8-17 andaccompanying

text infra.

3See, e.g., Ex parteWhite,195Cal. 516,234P.396(1925); Lip-

pow v.CityofMiamiBeach,68So. 2d827(Fla.1953); Suburban

Ready-Mix Corp. v. Villageof Wheeling, 25ill. 2d548, 185 N.E.2d

665(1962); HermanGlickRealtyCo. v.St.Louis County,545

S.W.2d 320

(Mo.

App. 1976); Leher v.Boardof Adjustment,137

N.J.L.100,58A.2d 265(1948); PureOilDiv. ofUnionOil

Co.

of

Calif. v.City ofBrook Park, 26Ohio App.2d153,269N.E.2d853

(1971); Appeal ofStefonik,1Pa.Commonw. Ct. 13, 271A.2d 707

(1970); Our LadyofMercy Greenwichv.Zoning BoardofReview,

102 R.I. 269,229A.2d854(1967); Boardof CountySupervisorsv.

Davis, 200Va. 322,106S.E.2d152(1958). See generallynotes

18-24 andaccompanying text infra.

4See Good HumorCorp.v. CityofNew York,290N.Y. 312,49

N.E.2d153(1943) (antipeddlingordinance supported inter alia by

evidence

that

some "itinerant peddlers" are"unclean intheir

habits'); Trio Distrib. Corp. v. City ofAlbany, 2 N.Y.2d 690, 143

N.E.2d329,163N.Y.S.2d585 (1957) (referringtounreported 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 strikingdown ''health''ordinancerequiring mobile ice cream

vendors tocarryanextrapersonwhose sole dutywould be to serve

ice

cream).

cr.

S.S. Kresge Co. v.

Couzens,

290

Mich.

427, 287 N.W.

427

(1939)

(ordinance requiringstreet vendors ofcutflowers to

secure alicense).

5See, e.g., Standard Oil Co. v.Charlottesville,42F.2d88(4th

Cir.

1930);

Mobil

Oil Corp. v.BoardofAdjustment,293A.2d837

(Del.

Super. Ct. 1971);

Chicago

Title &Trust

Co.

v. Village of

Lom-

bard,19 Ill. 2d98,166 N.E.2d 41 (1960); Town ofClinton v.Stand-

ardOil Co., 193N.C. 432,137S.E.183

(1927);

New JerseyGood

Humor, Inc. v. Board of Comm'rs,124 N.J.L. 162, 11 A.2d 113

(1940);

Trio Distrib.Corp. v.CityofAlbany, 2N.Y.2d 690,143

N.E.2d 329,163N.Y.S.2d 585(1957); Consumers Gasoline Stations

v. City ofPulaski, 200Tenn. 480, 292S.W.2d 735 (1956).

6435 U.S. 389

(1978).

In Lafayette,apluralityof theCourtheld

that municipal governmentswere not"exempt" fromtheapplication

of the antitrust laws, exceptwhencertainspecified conditionswere

present. See notes108-11 infra.

7435 U.S. at438.See Whitworthv. Ferguson, 559F.2d 378(5th

Cir. 1977), vacated, 435U.S. 992

(1978),

aff'd on rehearing

per

curiam, 576 F.2d696 (5thCir.1978), cert. denied, 440 U.S. 911

(1979);

Nelson v.UtahCounty, 1978-1

TRADE

CAS.

(CCH)

, 62,128

(D.

Utah 1977).

But

see Miller &Son Paving, Inc. v. Wrightstown

Township Civic Ass'n, 443F. Supp.1268

(E.D.

Pa.1978), aff'd

mem., 595F.2d1213 (3dCir.1979), petition for cert. filed,48

U.S.L.W. 3005 (U.S. June27,1979)

(No.

78-1925).

ANTICOMPETITIVE

ZONING

I. STATUS OF ANTICOMPETITIVE ZONING AT STATE

LAW

437

Variouspolitical entities exercisezoning power." Most

often, the power is delegated to municipal authorities," which

in

tum

establish the necessary administrative machinery."

The permissible objectivesof zoning typicallyaredescribedin

sweeping terms.The Standard State Zoning Enabling Act11

permits zoning "[fjor the purposeof 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 theybore "no

substantial relation to thepublic health, safety, morals, or

generalwelfare." 15 The import of thesewordshas expanded

with modem interpretations of the states' "policepower," 16

such

that

todaythezoningpower is exercisedin thenameof

8In the United States, zoning power isexercised atstate, county,

and municipallevels ofgovernment.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 thefountainhead of allmodernzoning laws.

It

has been adoptedat onetimeor another by all 50 states, and,

with modifications, iscurrently 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, thezoning ordinancein questionwas challengedboth

on due process andequal protection grounds. 272 U.S. at384.

15 ld. at 395.

16 See Young v. AmericanMini Theatres,Inc.,427 U.S. 50 (1976);

Village ofBelle Terrev. Boraas,416 U.S. 1 (1974); Berman v.

Parker, 348 us. 26 (1954).