In the case of City of Lafayette, Louisiana, et al. v. Louisiana Power & Light Co., 1977, the U.S Supreme Court ruled that cities are not exempt from antitrust laws when they operate in a commercial capacity rather than a governmental one. The dispute arose when several municipalities owning electric utility systems extended their services into areas already served by private utilities and allegedly engaged in anti-competitive practices such as predatory pricing and territorial allocation agreements to drive out competition. The court held that nothing in state law or policy indicated an intention to displace competition with regulation in this area; therefore, federal antitrust laws applied to these municipal corporations' business activities just like any other market participant's actions would be subject to them.

In the dissenting opinion for City of Lafayette, Louisiana v. Louisiana Power & Light Co., Justice Brennan, joined by Justices Stewart and Marshall, disagreed with the majority's decision that municipalities are not exempt from antitrust laws when acting in a proprietary capacity. They argued that Congress did not intend to subject cities to these laws when they engage in activities typically performed by private businesses. The dissenters pointed out that many local governments operate utilities as revenue-producing enterprises and should be allowed to make decisions about their operations without fear of violating federal antitrust law. They also noted that this ruling could have far-reaching implications for other municipal services like public transportation or waste management which compete with private entities. In conclusion, they believed the Court overstepped its boundaries by interpreting congressional silence on this issue as an intent to regulate city-owned businesses under federal antitrust law.