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KEC


Kay Electric Cooperative and the City of Newkirk and the Newkirk Municipal Authority have agreed to a settlement of all issues between parties


After lengthy litigation, Kay Electric Cooperative and the City of Newkirk and the Newkirk Municipal Authority have agreed to a settlement of all issues between the parties. In the lawsuit, Kay Electric claimed that Newkirk illegally forced consumers who had a choice of electric providers to contract for electric ser- vice from Newkirk by enact- ing an “all or nothing” policy which mandated that in order to obtain water or sewer from the City, the consumer must also agree to take the City’s electrical service. Kay Elec- tric claimed that such a policy violated the Federal Sherman Anti-Trust Act, as well as the Oklahoma Anti-Trust Act, and created an unfair competitive advantage which destroyed mandated lawful competition. Kay Electric also claimed that Newkirk failed to comply with applicable law when it annexed the site where the Kay County Detention Facility was con- structed.


Newkirk denied the allega- tions of Kay Electric Coopera- tive and also claimed it could not be sued for anti-trust viola-


tions because it was immune from such suits as a result of a “State Action Immunity Doctrine”. The U. S. District Court in Oklahoma City initially agreed with Newkirk and dis- missed Kay Electric’s lawsuit. Kay Electric appealed that decision to the 10th Circuit Court of Appeals in Denver, Colorado. The Court of Ap- peals reversed the decision of the Oklahoma Court, holding that Newkirk was not immune from suit and any attempt by municipalities to mandate a “tying” arrangement for utility services was, as a matter of law, not allowable and violated applicable Anti-Trust laws. Newkirk attempted to appeal the 10th Circuit decision to the United States Supreme Court, but that appeal was rejected and the Court of Appeals deci- sion became final. The case was then remanded to the Oklahoma Court for determina- tion of the factual allegations.


The terms of the settlement


are: 1)


The parties will enter into a binding Agreement prohibit-


ing Newkirk from condition- ing furnishing of other utilities upon also purchasing electric- ity from Newkirk, applicable to any properly annexed areas in which Newkirk and Kay Electric are authorized by law to com- pete for electrical consumers; 2)


Newkirk will be allowed to continue to provide electric- ity to the Kay County Detention Facilities; PROVIDED, how- ever, the property annexed for the Kay County Jail shall not be considered contiguous or adjacent to the current munici- pal boundaries for the purpose of future annexations in accor- dance with applicable law; 4)


Newkirk will repeal any currently existing ordinances tying electricity to furnishing of other utilities; 3)


The Agreement shall not waive any rights of Kay Electric Cooperative to object to future annexations and shall have no precedential value in any future proceedings between the par- ties; 5)


Newkirk shall pay Kay Electric the sum of $25,000. After considering the antici- pated length and expense of continuing litigation, as well as


2 • Kay Electric Cooperative


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