United States Court of Appeals For the Seventh Circuit ____________________ No. 20-3261 ALWAYS TOWING & RECOVERY, INC., et al., Plaintiffs-Appellants, v. CITY OF MILWAUKEE, et al., Defendants-Appellees. ____________________

Appeal from the United States District Court for the Eastern District of Wisconsin. No. 2:20-cv-00919 — Nancy Joseph, Magistrate Judge. ____________________

ARGUED APRIL 21, 2021 — DECIDED JUNE 24, 2021 ____________________

Before FLAUM, SCUDDER, and KIRSCH, Circuit Judges. FLAUM, Circuit Judge. This case is about the scrap metal re- cycling business—the collection and processing of ferrous (iron-based) and nonferrous metals. Plaintiffs-appellants, an assortment of companies that tow or recycle used cars, allege that defendants-appellees, the City of Milwaukee (“the City”) and its subcontractor, engaged in anticompetitive behavior to self-allocate towing services and abandoned vehicles, a pri- mary input in that industry. 2 No. 20-3261

Among other claims, plaintiffs allege that a contract the City entered into with one of the area’s largest recycling pro- viders, defendant-appellee Miller Compressing Co., violates § 1 of the Sherman Act, 15 U.S.C. § 1 et seq. Plaintiffs assert that the contract provided direct evidence of an agreement to restrain trade. We agree with the district court’s judgment that plaintiffs failed to state a claim upon which relief could be granted because they did not plead an unreasonable re- straint on trade, and we therefore now affirm. I. Background A. Factual Background Always Towing & Recovery, Inc., Apys Cars, Inc., Brew City Towing, LLC, SP Towing, LLC, and Adams Recycling, LLC (collectively, “plaintiffs”) are among the various players, both private and public, that tow, sell, and buy vehicles for scrap recycling in and around Milwaukee. The City under- takes various roles—regulating that process, as well as citing, towing, and disposing of abandoned and unlawfully parked vehicles. Plaintiffs allege that the City, its various subdivisions, and a Milwaukee-area recycling provider called Miller Compress- ing conspired to improperly divert scrapped vehicles and al- locate towing services through a decades-long exclusive con- tract. Plaintiffs further allege that the City and Miller Com- pressing reinforced their market positions through a conspir- acy to regulate private tow truck companies along the way. In light of these allegations, the intersection of laws gov- erning the removal of unlawfully parked vehicles on the one hand and the ways in which the City and various players dis- pose of such vehicles on the other is therefore relevant to this No. 20-3261 3 case. We will thus proceed by briefly describing the regula- tory backdrop and the City’s enforcement actions against plaintiffs before turning to the City’s disposal of vehicles and the contract central to this appeal. Regarding the City’s regulatory role, by plaintiffs’ ac- count, the City has not only enacted, but also enforced regu- lations to prevent plaintiff towing companies from perform- ing private and public tows. Plaintiffs take issue with the City’s enactment of various ordinances that govern the tow- ing of unlawfully parked vehicles. For example, during the period relevant to this case, the Milwaukee Common Council approved a series of laws that require a City-issued license to tow vehicles from certain areas, that obligate towing compa- nies to provide various notices, and that cap maximum charges imposed on vehicle owners who have illegally parked or abandoned their vehicles. See generally A Su