Law Suit – Memphis Flyer

Photo by Brett Jordan on Unsplash

On Wednesday, December 9th, Attorney General Herbert H. Slatery III brought Tennessee into a bipartisan national coalition of 48 attorneys general filing a lawsuit against Facebook Inc. The lawsuit alleges that Facebook Inc. stifles competition to protect its business interests, classifying the multi-billion-dollar company as a monopoly. Specifically, the coalition argues that Facebook Inc. has violated Section 2 of the Sherman Act, in addition to multiple violations of Section 7 in the Clayton Act.

Throughout the lawsuit, the bipartisan coalition alleges that Facebook illegally acquired competitors in a predatory manner, while cutting services to smaller rival platforms in an attempt to deprive their competitions users of benefits. The lawsuit also alleges that the tech giant reduced privacy protection and services during its rapid rise as a way of creating barriers for newer tech companies attempting to enter the market.

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“This vast coalition of Democrats and Republicans agree — Facebook’s unlawful behavior is reducing choice, stifling innovation, and degrading privacy protections,” said General Slatery. “This lawsuit stands up for millions of Americans and small businesses that have been harmed by Facebook.”

Facebook Inc.’s business strategies have been criticized by others in the past. Though Facebook has operated as a “free” personal social networking service since 2004, they have been known to use a variety of methods to forge what their founder, Chairman, Chief Executive Officer, and controlling shareholder Mark Zuckerberg calls a “competitive moat” around the company. Methods have included outright buying smaller rivals and tucking them under the Facebook name or the suppression of third-party developers from utilizing the Facebook platform.

One of the key problems pointed to in the lawsuit is the alleged overarching reach that the tech giant has over its competition’s advertising opportunities and its users’ personal data. The bipartisan coalition argues that, through Facebook’s rapid acquisition of smaller rivals and dominance over advertising, the site is able to make decisions about what content users see and what users don’t see while also using users’ personal data to further their business interests. They also argue that the elimination of potential rivals has created a system in which no group can compete with Facebook.

Through the lawsuit, the coalition plans to halt Facebook Inc.’s expansion by restraining the company from making further acquisitions valued at or in excess of $10 million without first notifying the states included in the lawsuit and to divestiture or restructure what the coalition of state attorney generals are calling “illegally acquired companies” and current Facebook assets or business lines.

The Federal Trade Commission (FTC) also filed a lawsuit in coordination with the bi-partisan coalition levying their own set of charges. The full coalition lawsuit can be read here.

Corey Owens/Greater Memphis Chamber

A diagram shows the layer of aquifers underneath Memphis.

Tennessee has not been stealing billions of gallons of Mississippi’s waters for years, according to an opinion issued Thursday in a legal battle over water rights here that began in 2006.

The original suit claimed wells drilled in Memphis siphoned off water that belonged, exclusively, to Mississippi. Mississippi officials wanted the U.S. Supreme Court to recognize the state’s right to the water and wanted Tennessee to pay $615 million for the water Tennessee had already consumed.

But a federal judge working on the case opined against Mississippi’s claim Thursday. Judge Eugene Siler, appointed as Special Master on the water suit, recommended that the suit be dismissed and for the states to share the water.

The core of Siler’s ruling was that the disputed waters flow between many states. Thus, they become an “interstate resource,” meaning rights to the water are held by many states. Mississippi officials claimed the water is stored under their state boundaries and belongs only to them, making the water an “intrastate resource.”

“Mississippi’s claims are simple: Tennessee has, by pumping in Shelby County, Tennessee, taken groundwater that would have remained in Mississippi for centuries,” reads Siler’s ruling. “Over more than a decade of litigation, at every level in the federal court system, the core of Mississippi’s claims has not wavered. Mississippi thinks Tennessee has stolen and continues to steal its water. Easy enough.”

But Siler says surface boundaries and rights are easier when compared to the the “various rock formation and complex hydrology” found underground.

“And Mississippi claims those subsurface differences require distinguishing its water from the water that sits below other states,” Siler said. “Tennessee, on the other hand, thinks any of those geological differences are much ado about nothing. The Special Master agrees with Tennessee.”

Officials in Mississippi claim waters in the Sparta Sand Aquifer are stored only under the Magnolia State, making it an intrastate resource, only available for one state. Mississippi argued that “it owns a fixed portion of the aquifer because it controls the resources within its state boundaries.”

Officials in Tennessee claimed the Sparta and the Memphis Sand Aquifer were connected, making waters there an interstate resource, available for many states.

Siler said both aquifers are part of a much larger aquifer — the Middle Claiborne Aquifer. This massive aquifer lies beneath Alabama, Arkansas, Illinois, Kentucky, Louisiana, Missouri, Mississippi, and Tennessee.
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The Memphis Sand comprises much of this aquifer’s northern portion. The Sparta Sand takes up much of the southern portion, according to the suit.

But Mississippi’s suit seeks to separate the two. With that, officials there believe Memphis — specifically Memphis Light, Gas & Water (MLGW) — has “’forcibly siphoned’ off its water to the tune of billions of gallons. And that without modern pumping technology, none of that water would be available to Tennessee.”
[pullquote-1-center] The water and the water pressure in the Sparta Sand are both down because of MLGW’s pumping, according to the suit. Tennessee’s “heist” of groundwater is so fast and so great, Mississippi now has to drill deeper wells. That has increased the cost on Mississippians who rely on the aquifer for their groundwater.

Siler said Mississippi’s claim of a water drawdown proves that the aquifers are connected and, thus, should be a resource shared by the states. Mississippi officials claim, though, that Tennessee can only get the water if they pump it out.

Siler recommends Mississippi and Tennessee simply share the water. However, Mississippi “specifically rejects the application of equitable apportionment to this case.”

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“While Mississippi acknowledges that the aquifer extends underneath both states, it alleges that the groundwater is stored only underneath Mississippi,” reads the ruling. “In fact, its position is Tennessee can only access the water underneath Mississippi by pumping it out. As a result, Mississippi believes that the groundwater ‘is neither interstate water nor a naturally shared resource.’ Therefore, it claims that Tennessee has no right to the water. Thus, equitable apportionment cannot apply.”

But Siler sided with Tennessee in the case and will recommend to the U.S. Supreme Court that the state should share the water.

“Water is finite,” Siler wrote. “Especially the usable kind. And the Middle Claiborne Aquifer holds lots of it. Unsurprisingly, both Mississippi and Tennessee want it. Luckily, instead of war, the law requires they share it.”

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Read the Special Master’s report here:

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