Seventh Circuit Affirms Dismissal of Antitrust Action in Chicago Parking Meter Case

Uetricht v. Chicago Parking Meters, LLC, No. 22-1166 (April 7, 2023)

In 2008, Mayor Daley entered into an agreement to lease the city’s parking meters to Chicago Parking Meetings, LLC. In the decade since the $1.15 billion agreement, the company has made its investment back and then some, by 2019, the company already had half a billion dollars in profit from the deal. The deal has been subject to close public and judicial scrutiny over the years.

Last last week, the Seventh Circuit affirmed the dismissal of an antitrust suit

There are several areas of analysis that are instructive in the court’s reasoning. First, is the court’s discussion as to whether the Sherman Antitrust Act applies at all to state action. The Act’s use of the term “persons” has been reviewed previously. In Parker v. Brown, 317 U.S. 341 (1943), the Supreme Court affirmed the dismissal of an antitrust claim for failure to state a claim, reasoning that the Act did not overtly apply to state actors and because the state was protected by the state action immunity doctrine. Here, the state legislature had expressly authorized the municipality to operate the parking agreement, so it reasoned Parker to be binding.

While the Parker case operated under the presumption that the action would have been illegal under antitrust laws if a private actor had been substituted, the Seventh Circuit in Chicago Parking Meters, LLC, seemed more skeptical, and less willing to answer affirmatively to that question. The Court con two relevant factors to that analysis, first, that the city is, in effect, swapping one monopoly for another; and second, that with over one million motor vehicles in Chicago, there are ample other parking alternatives.

The Court adds a quirk about the policy behind the parking deal: “The deal itself might have been foolish, short-sighted, or worse, and if one is to believe news reports, it may have saddled Chicago with the most expensive street parking in the country, see Tania Babich, Chicago parking most expensive in U.S., ABC7 Chicago (July 12, 2017), but that is not enough to state a claim for a violation of the antitrust laws.”

Conclusion

As the Seventh Circuit notes, the City of Chicago and its residents to benefit in a number of ways from the parking agreement. Despite paying high rates in certain areas, the private company has largely had to bare the costs associated with modernization and operations. However these benefits are wholly irrelevant to whether Parker is operative in precluding antitrust action against the City of Chicago. program. Since the city was specifically authorized by state statute and the City retains certain regulatory authority, the Parker doctrine controls based on state authority, not on whether the deal was wise.