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From Antitrust Law Daily, May 28, 2014

Water district shielded from price discrimination claims under Oklahoma Antitrust Act

By Jeffrey May, J.D.

Customers of a rural water district could not pursue price discrimination claims under the Oklahoma Antitrust Reform Act for alleged overcharges based on the water district’s practice of charging their respective recreational vehicle (RV) parks higher rates than other businesses, the Oklahoma Supreme Court has decided. A trial court's 2012 judgment based on a jury verdict in favor of the customers was reversed, and injunctive relief was vacated (Sinor's Long Bay Marina, LLC v. Wagoner County Rural Water District No. 2, May 27, 2014, Reif, J.).

The Oklahoma Antitrust Reform Act did not apply to rates charged by a rural water district, the court held. A water district, being a state agency, was not a “person” under the Antitrust Act, and only the pricing activity of a person can be challenged under the Antitrust Act.

Moreover, a customer grievance over rates should be decided by the water district board in the first instance, subject to judicial review by appeal to a district court, according to the court. The right of water district customers to be charged “nondiscriminatory” rates was granted by the Rural Water, Sewer, Gas and Solid Waste Management Districts Act and not the Antitrust Act. The court noted that legislative intent to make water district review of rate complaints a quasi-judicial function was also found in the related statutory scheme of the Regional Water Distribution Act.

Requiring customers to pursue grievances with the districts would better serve residents of a district and the public interest, the court reasoned. “The time and expense of litigation required to pursue remedies under the Antitrust Act are totally inconsistent with the nature of a rural water district and the general intent that it serve the rural residents within its territory ‘as may be necessary, convenient or appropriate,’” in the court’s view.

The case is No. 111317 (2014 OK 43).

Attorneys: James C. Milton (Hall, Estill, Hardwick, Gable, Golden & Nelson) for Sinor’s Long Bay Marina LLC. Gerard F. Pignato (Pignato, Cooper, Kolker & Roberson, P.C.) for Wagoner County Rural Water District No. 2.

Companies: Sinor’s Long Bay Marina LLC; Wagoner County Rural Water District No. 2.

MainStory: TopStory Antitrust OklahomaNews

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