In the case of Town of Hallie et al. v. City of Eau Claire, 1984, the U.S Supreme Court ruled in favor of the city's right to monopolize sewage treatment services within its jurisdiction without violating antitrust laws. The townships surrounding Eau Claire had argued that they were being unfairly excluded from providing their own sewage services and accused Eau Claire of creating a monopoly by refusing to provide them with access unless they agreed to be annexed into the city limits. However, citing Parker v Brown (1943), which established state immunity from federal antitrust laws when acting in sovereign capacity, Justice William Rehnquist delivered an unanimous decision stating that municipalities are also exempt if they can demonstrate a clear articulation and affirmative expression for such conduct under state law policy.

In the dissenting opinion for Town of Hallie v. City of Eau Claire, Justice Brennan disagreed with the majority's decision that a municipality is immune from antitrust liability when it acts pursuant to a clearly articulated state policy. He argued that this immunity should only apply if there was active supervision by the state over the municipality's conduct. In his view, without such oversight, municipalities could engage in anti-competitive behavior under the guise of implementing state policy. Furthermore, he contended that allowing municipalities to have such broad immunity would undermine federal antitrust laws and policies aimed at promoting competition.