Title: Titan America v. Riverton Investment Corp.

State: virginia

Issuer: Virginia Supreme Court

Document:

PRESENT: All the Justices 
 
TITAN AMERICA, LLC, ET AL. 
 
v.  Record No. 012554 
OPINION BY JUSTICE ELIZABETH B. LACY 
 
 
 
September 13, 2002 
RIVERTON INVESTMENT  
CORPORATION, ET AL. 
 
FROM THE CIRCUIT COURT OF FREDERICK COUNTY 
John E. Wetsel, Jr., Judge 
 
 
In 1998 the appellant, Titan America, LLC, the successor to 
Carolinas Cement Company, G.P., t/a Roanoke Cement Company, 
(Titan)* sought to acquire land in Warren County to use as a 
warehousing and distribution site for its cement business.  The 
appellees, Riverton Investment Corporation, Capitol Cement 
Corporation, and Riverton Corporation (collectively "Riverton"), 
a competing cement company and its affiliates, opposed Titan's 
plans by appearing before the local governing bodies including 
the board of zoning appeals and planning commission, initiating 
litigation in circuit court, and funding litigation undertaken 
by various Warren County residents. 
 
While Titan ultimately secured the necessary land and 
permits to complete its project, Titan filed a motion for 
judgment against Riverton in October 1999 asserting, inter alia, 
claims of tortious interference with existing and potential 
                     
 
* The other appellants, Titan Atlantic Cement Industrial and 
Commercial Company, S.A., Inc. and Tarmac Cement, Inc. were 
general partners of the Carolinas Cement Company, G.P. and 
remain members of Titan America, LLC. 
economic relationships, conspiracy, and defamation based on the 
litigation filed or funded by Riverton.  Following consideration 
of Riverton's demurrers, motion for partial summary judgment, 
and motions for stay of discovery relating to Titan's original 
and amended motions for judgment, the trial court ultimately 
entered judgment in favor of Riverton, holding that under the 
Noerr-Pennington doctrine none of the complained of litigation 
was objectively baseless, that discovery was not required, and 
that the alleged defamatory statements were made in the course 
of litigation and therefore were absolutely privileged.  For the 
reasons that follow, we will affirm the judgment of the trial 
court. 
FACTS
A.  Underlying Proceedings 
 
Titan originally sought to build its Warren County 
distribution facility on a site that it leased from Potomac 
Edison Company d/b/a Allegheny Power (Potomac Edison), but later 
purchased a site for the facility from the Economic Development 
Authority of Warren County and the town of Front Royal (EDA).  
The underlying litigation that forms the basis of Titan's motion 
for judgment in this case involved both sites.  Riverton 
recruited the individual litigants involved in this litigation, 
Ramona Bowden, Carol and Benjamin Weddle, and Tommy R. and Joyce 
S. Fritts, and provided legal representation for them.  Although 
 
2
Titan filed this action in Frederick County, on the recusal of 
the circuit court judge of Frederick County, the matter was 
heard by Judge John E. Wetsel, Jr.  Judge Wetsel also heard all 
of the underlying proceedings at issue in this case.  We recite 
the facts in relation to each of the proposed development sites. 
1.  Potomac Edison Site 
In February 1999, Titan applied for a by-right use permit 
for its distribution facility on a site it leased from Potomac 
Edison.  The deputy zoning administrator approved the by-right 
permit in March 1999.  The following month Bowden and the 
Weddles appealed the administrator's decision to the Warren 
County Board of Zoning Appeals (BZA), asserting that the 
facility did not qualify as a by-right use and that the access 
road to the site could not be used for industrial purposes 
because it traversed agricultural land.  After two public 
hearings, the BZA reversed the decision of the zoning 
administrator and also held that the existing road could be used 
for industrial purposes, but that Titan could not construct a 
new road through the agricultural area to service the industrial 
portion of the property. 
Titan appealed the BZA's decision to deny the by-right 
permit to the circuit court.  Bowden and the Weddles intervened 
in Titan's suit and also filed a separate appeal of the BZA's 
decision on the access road issue.  In August 1999, the circuit 
 
3
court entered an order reversing the decision of the BZA, 
holding that Titan was entitled to the by-right permit and that 
the BZA erred in determining that Titan had a grandfathered 
right to use the access road for industrial purposes. 
While the BZA was considering the access road issue on 
remand from the circuit court, Titan and Potomac Edison filed an 
application for a variance to allow industrial use of the access 
road.  The BZA denied the variance and made a finding strictly 
limiting Titan's grandfathered non-conforming use of the access 
road.  Titan and Potomac Edison appealed those decisions to the 
circuit court, which upheld the BZA's determinations.  
Titan filed a petition for appeal with this Court regarding 
the use of the access road, which was refused.  This Court 
awarded Bowden and the Weddles an appeal on the by-right permit 
issue, but dismissed the appeal as moot in June 2000 because 
Titan terminated the Potomac Edison lease and abandoned its 
plans to develop that site. 
2.  EDA Site 
 
In the spring and summer of 1999, Titan began to consider 
other sites for its facility, including a site owned by EDA at 
the Kelley Industrial Park in Warren County.  EDA voted to 
approve the sale to Titan on September 3, 1999.  On September 
13, Riverton filed a petition for mandamus against the EDA, 
alleging that the EDA violated Code § 2.1-343 of the Virginia 
 
4
Freedom of Information Act by not giving proper notice of its 
intention to vote on the sale of the land.  Riverton also sought 
a declaratory judgment and injunction against the sale of the 
site to Titan asserting that the sale was contrary to the 
criteria established by statute and EDA rules for such a sale.   
EDA settled this action by agreeing to comply with the 
provisions of the Virginia Freedom of Information Act and to 
vote again on the sale of the land on October 15. 
 
On September 27, 1999, EDA informed Riverton that it had 
rescheduled the vote for October 7 and Riverton filed another 
action against EDA to enforce the settlement agreement reached 
in the prior mandamus proceeding.  The circuit court entered a 
decree enjoining EDA from voting on the sale of the land to 
Titan before October 15. 
 
EDA set November 12 as the date for the vote on the sale of 
the land.  Riverton and the Fritts filed a complaint seeking a 
declaratory judgment and an injunction preventing EDA from 
selling the site to Titan.  They asserted, as they had in the 
prior action, that sale of the land to Titan did not meet the 
criteria established by statute and EDA rules for such a sale.  
Following a hearing on the request for a temporary injunction, 
the circuit court entered an order denying Riverton's and the 
Fritts' request for a temporary injunction.  Applying a liberal 
interpretation of the Industrial Development and Revenue Bond 
 
5
Act, Code §§ 15.2-4900 through -4920, the circuit court 
concluded that a facility, new to a community, qualified under 
the Act as a new industry in the Commonwealth, that EDA's 
variance from its own guidelines did not make the sale arbitrary 
and capricious because such guidelines can be altered by EDA at 
any time, and that the sale did not constitute special 
legislation merely because it benefited Titan.  Finally, in 
denying the temporary injunction, the trial court stated that 
"[w]ithout proof of damage particular to [Riverton and the 
Fritts] of an irreparable character, the plaintiffs' standing to 
maintain this action is called into question."  EDA voted to 
sign the contract of sale to Titan on November 12, 1999, and the 
sale was completed the same day. 
 
 On October 8, 1999, prior to the completion of the sale of 
the EDA site to Titan, the zoning administrator approved Titan's 
application for a by-right permit for its facility to be built 
on the EDA property.  The Planning Commission approved the by-
right use of the property on October 13.  Riverton and the 
Fritts appealed the zoning administrator's and the Planning 
Commission's decisions to the BZA.  On December 1, 1999, the BZA 
concluded that it lacked jurisdiction to review the Planning 
Commission's by-right determination, but deferred its ruling on 
the issue whether the zoning administrator properly approved the 
by-right application. 
 
6
 
On December 8, 1999, Titan brought an action against the 
BZA, Riverton, and the Fritts asking the court to direct the BZA 
to terminate the stay and dismiss the appeal of the zoning 
administrator's and Planning Commission's decisions and to 
enjoin Riverton and the Fritts from further litigating the by-
right issue regarding the EDA site, asserting that that issue 
was resolved in the earlier case regarding the Potomac Edison 
site.  The circuit court denied Titan's requests, finding that 
the current proceedings involved a different site and different 
parties. 
 
A month later, the BZA concluded that Riverton and the 
Fritts did not have standing to appeal the zoning 
administrator's decision to the BZA.  Riverton and the Fritts 
appealed this decision.  The circuit court remanded the issue of 
standing to the BZA, but rejected the contention raised by 
Riverton and the Fritts that Titan did not have the right to 
seek the by-right permit. 
 
On remand, the BZA determined that the Fritts had standing 
to appeal the administrative decisions to the BZA, but that 
Riverton did not.  The BZA also concluded that the proposed 
facility was a by-right use of the EDA site and consistent with 
the zoning ordinance.  Titan appealed the BZA's determination 
regarding the Fritts' standing and the Fritts appealed the BZA's 
conclusion regarding the use of the site for Titan's facility.  
 
7
On May 31, 2000, the circuit court affirmed the decision of the 
BZA.  The Fritts appealed the circuit court order to this Court.  
An appeal was awarded and the decision of the circuit court was 
affirmed by an opinion issued September 14, 2001.  Fritts v. 
Carolinas Cement Co., 262 Va. 401, 551 S.E.2d 336 (2001). 
B.  This Litigation 
 
Titan filed this suit on October 28, 1999 alleging tortious 
interference with contract and business expectancy, statutory 
and common law conspiracy and defamation based on the litigation 
pursued and financed by Riverton.  Titan also filed requests for 
admissions, interrogatories and requests for documents.  
Riverton filed a demurrer and a motion for a protective order, 
asserting that the claim was barred by the Noerr-Pennington 
doctrine.  Although Riverton's first demurrer was overruled by 
the trial court, the trial court granted Riverton's motion for 
summary judgment in part, finding that the underlying 
proceedings were brought with probable cause, but deferred 
ruling on Titan's arguments that such proceedings were 
nevertheless sham proceedings because Riverton orchestrated the 
litigation through the use of straw persons.  The trial court 
granted Riverton's motions to prohibit discovery concerning its 
motivation for pursuing the litigation and granted a stay on 
further discovery pending its ruling on the straw persons issue.  
After further briefing by the parties, the trial court entered 
 
8
an order on June 6, 2000, holding that Riverton's use of straw 
persons was not a fraud upon the tribunal and did not constitute 
sham litigation depriving Riverton of the protection of the 
Noerr-Pennington doctrine. 
 
Titan filed an amended motion for judgment and second 
amended motion for judgment, adding claims of abuse of process 
and fraud.  Riverton's demurrers to both pleadings were 
sustained in part and denied in part and the trial court 
dismissed with prejudice all claims to which Riverton's 
demurrers were sustained.  The trial court entered an order 
granting Titan's motion to non-suit all remaining claims.  We 
awarded Titan an appeal. 
 
On appeal, Titan asserts that the Noerr-Pennington doctrine 
should not be applied to the causes of action pled in this case, 
that even if the doctrine is applied, the trial court applied 
the wrong test, that Titan's allegations of sham activity by 
Riverton were sufficient to withstand a demurrer, that the trial 
court should not have considered whether Riverton was entitled 
to the protection of the Noerr-Pennington doctrine without 
discovery and further development of the evidence, and that the 
trial court erred in holding that defamatory statements made by 
Riverton were entitled to an absolute privilege.  We will 
address these issues in order. 
DISCUSSION 
 
9
A.  The Noerr-Pennington Doctrine 
1.  Application to state law conspiracy and business tort 
claims 
 
 
The Noerr-Pennington doctrine was initially developed in 
the United States Supreme Court cases of Eastern Railroad 
Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127 
(1961), and United Mine Workers of America v. Pennington, 381 
U.S. 657 (1965).  In those cases, the Supreme Court held that 
actions taken to influence legislative or executive action 
cannot be the basis for a violation of the Sherman Antitrust Act 
unless such activities were "a mere sham" designed to disguise 
actions directed towards interfering with the business 
relationships of a competitor.  Noerr, 365 U.S. at 144.  This 
doctrine is based on the federal constitutional rights to free 
speech and to petition the government.  In subsequent cases, the 
doctrine has been expanded to apply to actions taken in 
adjudicatory proceedings before administrative agencies and 
courts.  California Motor Transp. Co. v. Trucking Unlimited, 404 
U.S. 508, 510-11 (1972). 
 
Titan argues that the Noerr-Pennington doctrine should not 
be extended to state law claims of the type raised in this case 
because the doctrine was developed in the context of the federal 
antitrust laws and because Virginia law affords a defendant 
 
10
sufficient defenses "without the need to inject an additional 
defense based on the Noerr-Pennington doctrine." 
 
The Noerr-Pennington doctrine arises from rights afforded 
by the First Amendment to the United States Constitution and 
does not limit protection of those rights to causes of action 
involving antitrust matters.  See, e.g., Pacific Gas & Elec. Co. 
v. Bear Stearns & Co., 791 P.2d 587, 594 (Cal. 1990); Protect 
Our Mountain Env't v. County of Jefferson, 677 P.2d 1361, 1365-
66 (Colo. 1984); Harrah's Vicksburg Corp. v. Pennebaker, 812 So. 
2d 163, 171 (Miss. 2001).  We have previously acknowledged that 
the Noerr-Pennington doctrine is concerned with efforts to 
affect the decisions of legislative, judicial, and executive 
bodies in the field of public policy matters.  Lockheed Info. 
Mgmt. Sys. Co., Inc. v. Maximus, Inc., 259 Va. 92, 104, 524 
S.E.2d 420, 426-27 (2000) (citing F. Buddie Contracting, Inc. v. 
Seawright, 595 F. Supp. 422 (N.D. Ohio 1984)).  While we have 
rejected the application of the doctrine when the government is 
acting in its proprietary capacity under the "commercial 
activity exception," the rationale underlying that exclusion 
does not exist in this case.  Id., 524 S.E.2d at 427.  This case 
involves actions seeking to enforce or challenge governmental 
decisions through the use of the courts and, thus, falls 
squarely within the constitutional protections recognized by the 
Noerr-Pennington doctrine.  We conclude that the protection of 
 
11
First Amendment rights provided by application of the Noerr-
Pennington doctrine should be available to a defendant in causes 
of action for tortious interference with business expectancy and 
conspiracy, and that the trial court did not err in applying the 
Noerr-Pennington doctrine in this case. 
2.  Appropriate test for determination of sham litigation 
 
Titan asserts that, even if the Noerr-Pennington doctrine 
is applicable in this case, the trial court applied the wrong 
test in considering whether the litigation at issue was sham 
litigation.  The trial court utilized the two-part test set out 
in Professional Real Estate Investors, Inc. v. Columbia Pictures 
Industries, Inc., 508 U.S. 49, 60 (1993) (PRE).  Under that 
test, a court first determines whether the challenged litigation 
was objectively baseless.  Id.  A case is objectively baseless 
if the proponent of the litigation lacked probable cause to 
institute the unsuccessful lawsuit.  Id.  Probable cause in this 
context means a " 'reasonable belief that there is a chance that 
[a] claim may be held valid upon adjudication.' "  Id. at 62-63 
(quoting Hubbard v. Beatty & Hyde, Inc., 178 N.E.2d 485, 488 
(Mass. 1961)).  If such litigation is objectively baseless, the 
court then makes a subjective inquiry into whether the 
litigation was filed with an anti-competitive purpose.  Id. at 
60.  If the litigation was not objectively baseless, the second 
inquiry is not necessary.  Id.  In this case, the trial court 
 
12
concluded that none of the underlying actions was objectively 
baseless and, accordingly, did not consider whether the actions 
were subjectively pursued for anti-competitive purposes. 
 
Titan argues that the PRE analysis should not be applied in 
this case because PRE involved a single underlying action, not a 
series of proceedings as in this case.  Rather, Titan asserts 
that the trial court should have applied the test suggested by 
language in California Motor Transport, a case involving 
multiple underlying actions.  404 U.S. at 515.  Titan argues, 
based on California Motor Transport, that courts must apply a 
subjective test when multiple filings are alleged to have been 
"pursued to harass, delay and coerce a competitor."  Titan 
describes that test as looking at "the totality of the filings 
and determin[ing] whether they were truly undertaken out of a 
genuine interest in redressing grievances, or whether they were 
merely a part of a pattern or practice of successive filings 
undertaken for the purpose of harassing and injuring a 
competitor."  Whether there was probable cause to file an action 
is irrelevant in this test, according to Titan.  Therefore, 
Titan argues that the trial court in this case should not have 
looked to whether the litigation undertaken directly or 
indirectly by Riverton was objectively baseless but rather 
should have considered whether the litigation was pursued for 
the purpose of harassing and injuring its competitor. 
 
13
 
We disagree with Titan and its interpretation of California 
Motor Transport.  The United States Supreme Court in PRE 
considered California Motor Transport and other cases decided 
since Noerr and concluded that "the sham exception contains an 
indispensable objective component" and a subjective 
"anticompetitive intent or purpose alone cannot transform 
otherwise legitimate activity into a sham."  PRE, 508 U.S. at 
58–59.  The language in California Motor Transport upon which 
Titan relies for the test it advocates is the statement that "a 
pattern of baseless, repetitive claims may emerge which leads 
the factfinder to conclude that the administrative and judicial 
processes have been abused."  California Motor Transport, 404 
U.S. at 513.  This statement specifically identifies baseless 
litigation as forming the pattern of harassment, a requirement 
consistent with the test established in PRE. 
Considering the holdings in both PRE and California Motor 
Transport, we find no support for the imposition of a single, 
subjective test based on a finding of anti-competitive purpose 
simply because a series of actions rather than a single action 
is the focus of the alleged anti-competitive activity.  We 
conclude that, when considering an allegation that the sham 
exception to the Noerr-Pennington doctrine applies, a court must 
consider first whether any or all of the complained of actions 
were objectively baseless, and those which are not may not be 
 
14
considered in determining whether the sham exception is 
applicable.  Therefore, the trial court in this case did not err 
in applying the two-part test as described in PRE. 
3.  Standing to claim the protection of the Noerr-
Pennington doctrine. 
 
Titan argues that Riverton was not entitled to the 
protection of the Noerr-Pennington doctrine because such 
protection is available only to those persons or entities that 
are parties to the underlying litigation.  Relying on In re 
Burlington Northern, Inc., 822 F.2d 518 (5th Cir. 1987), cert. 
denied sub nom. Union Pacific Railroad v. Energy Transportation 
Systems, Inc., 484 U.S. 1007 (1988), Titan asserts that a person 
without standing to bring a suit cannot "manufacture standing" 
by "orchestrating litigation" for the purpose of interfering 
with a competitor.  Titan argues that Riverton's lack of 
standing in the underlying litigation denies Riverton the 
protection of the Noerr-Pennington doctrine for its actions in 
supporting, soliciting, and financing others in the prosecution 
of that litigation. 
 
The trial court considered these same arguments in 
connection with its ruling on Riverton's demurrer and motion for 
partial summary judgment on Titan's original motion for 
judgment.  The trial court rejected Titan's arguments, adopting 
the rationale of the federal district court in Baltimore Scrap 
 
15
Corp. v. The David J. Joseph Co., 81 F. Supp. 2d 602 (D. Md. 
2000).  In that case, the district court held that the Noerr-
Pennington doctrine applied even if a company secretly and for 
anti-competitive purposes, sponsored a lawsuit against a 
competitor, "so long as the lawsuit is neither a sham, meaning 
that it is not objectively baseless, nor fraudulent."  Id. at 
603.  The United States Court of Appeals for the Fourth Circuit 
subsequently affirmed the federal district court's holding that 
the defendants' participation in the underlying action was not 
determinative in the sham litigation analysis and that 
"[f]unding of litigation by a non-party can be petitioning to 
the same extent" as actually filing the lawsuit.  Baltimore 
Scrap Corp. v. The David J. Joseph Co., 237 F.3d 394, 401 (4th 
Cir.), cert. denied, 533 U.S. 916 (2001).  In reaching its 
holding, the Fourth Circuit observed that 
nonparties often provide aid to litigants, whether 
through financial backing, legal assistance, amicus 
briefs, or moral support. . . .  The realities often 
are that litigation cannot be entirely financed out of 
the pocket of the party bringing suit. . . .  To hold 
that only parties who have standing in their own right 
receive the protection of Noerr-Pennington immunity is 
to artificially restrict that doctrine by penalizing 
even the lawful support of objectively meritorious 
actions.  
 
Id. at 401. 
We consider this rationale the more persuasive and proper 
application of the Noerr-Pennington doctrine.  Accordingly, we 
 
16
conclude that the trial court did not err in holding that 
Riverton's support for and financing of the litigation brought 
by others did not exclude Riverton from the protection afforded 
by the Noerr-Pennington doctrine. 
B.  Demurrer 
 
Next Titan asserts that the trial court should not have 
decided this matter on demurrer.  Applying the principle that a 
pleading that sufficiently states a cause of action survives a 
demurrer, Titan argues that each of its pleadings sufficiently 
recited facts which if proved at trial would have invoked the 
sham exception to the Noerr-Pennington doctrine, and therefore 
the trial court should have denied Riverton's demurrers.  We 
disagree with Titan. 
When the Noerr-Pennington doctrine and accompanying sham 
exception were invoked in Titan's pleadings and challenged by 
Riverton's demurrers, the trial court was required to consider 
the facts alleged in the pleadings as true and to draw all 
reasonable inferences from those facts in favor of Titan.  
However, the trial court was not required to accept Titan's 
conclusions of law and, thus, the trial court was not bound by 
Titan's allegations in its pleadings that the litigation in 
question was baseless.  Yuzefovsky v. St. John's Wood 
Apartments, 261 Va. 97, 102, 540 S.E.2d 134, 137 (2001).  To 
rule on the demurrer, the trial court was required to apply the 
 
17
two-part PRE test and the initial focus of the court's inquiry 
was whether the underlying litigation was objectively baseless. 
To make this determination, the trial court took judicial 
notice of the records of the underlying actions, a procedure 
long recognized as appropriate by our jurisprudence. 
[W]here the plaintiff refers to another proceeding or 
judgment, and specifically bases his right of action, 
in whole or in part, on something which appears in the 
record of the prior case, the court, in passing on a 
demurrer to the complaint, will take judicial notice 
of the matters appearing in the former case. 
 
Fleming v. Anderson, 187 Va. 788, 794-95, 48 S.E.2d 269, 272 
(1948); see also Martone v. Martone, 257 Va. 199, 208, 509 
S.E.2d 302, 307 (1999).  The issue before the trial court was 
the objective legal merit of each of the underlying proceedings.  
Following a review of each proceeding, the trial court, which 
conducted those underlying proceedings, concluded that Riverton 
had probable cause to pursue each of the proceedings and, 
therefore, those cases were not objectively baseless.  Having 
made this determination, the trial court did not have to reach 
the second part of the PRE test by considering Titan's 
allegations of sham activity when ruling on Riverton's demurrer. 
C.  Discovery Limitation 
 
Titan also complains that, in light of its allegations of 
fraud and misrepresentation, the trial court erred in limiting 
discovery and making a probable cause determination without 
 
18
further development of the evidence.  Titan asserts that making 
the probable cause determination solely on the basis of the 
record of the underlying proceedings as a matter of law is 
proper only if "there is no dispute over the predicate facts of 
the underlying legal proceeding."  PRE, 508 U.S. at 64-65.  
Here, Titan alleges disputed facts in the underlying litigation 
regarding "secret conspiracies," the use of straw persons, 
Riverton's "surreptitious orchestration and involvement" in the 
underlying litigation, and that named litigants were not members 
of a "citizens group."  These matters involve Riverton's 
motivation for participating in the proceedings and the manner 
in which the litigation proceeded and do not address the 
predicate facts of the underlying legal proceedings. 
Clearly, the parties had divergent views on the legal 
implications of the facts in the underlying litigation, such as:  
whether Titan's proposed facility was a warehouse or 
distribution center entitled to a by-right permit; could the 
access road to the facility be used for industrial purposes; 
were the notice provisions of the Freedom of Information Act 
violated; and did EDA comply with existing law and internal 
rules in selling its property to Titan?  These disputes, 
however, are not disputed facts in the underlying litigation 
that would prevent a court from determining whether the 
 
19
underlying litigation was "objectively baseless" as a matter of 
law.  
Finally, Titan urges that the trial court erred in making 
its probable cause rulings "in a vacuum" without further 
discovery on Titan's allegations that Riverton engaged in 
"concealments and misrepresentations, the full extent of which 
could not be known without ordinary discovery."  We agree with 
Titan that the protection of the Noerr-Pennington doctrine 
should not be based on a judgment obtained by fraud and that 
intentional misrepresentations made to a court may deprive a 
proceeding of its legitimacy.  But such alleged 
misrepresentations must be material to the underlying 
proceedings.  To make this determination, the court examines the 
record of the underlying proceedings, the outcome of those 
cases, the nature of the alleged fraud or misrepresentation, and 
whether those allegations would have had an impact on the 
outcome of the underlying litigation.  See Bath Petroleum 
Storage, Inc. v. Market Hub Partners, L.P., 129 F. Supp. 2d 578, 
593 (W.D. N.Y.), aff'd, 229 F.3d 1135 (2nd Cir. 2000), cert. 
denied, 532 U.S. 1037 (2001).  If this analysis shows that the 
alleged misrepresentations did not have a significant impact on 
the underlying litigation, further discovery is not necessary: 
To allow [ ] claims based solely on broad and 
indistinct allegations of misrepresentation and "sham 
litigation" to reach discovery, regardless of the role 
 
20
the claimed misrepresentations played, or could have 
played, in the prior proceeding would predicate the 
viability of [a] complaint on a petitioner's 
subjective intent, and not the objective merit of its 
petition, and thus directly contravene the Supreme 
Court's holding in PRE. 
 
Id. at 594 (citations and quotations omitted). 
In this case, Titan's allegations of fraud and 
misrepresentations, as we have already noted, concerned 
Riverton's motivation in pursuing or supporting the underlying 
actions.  Allegations that Riverton solicited and financed 
litigation by others, even if its involvement was kept from the 
court, is not the type of fraud on the court that would bring 
into question the legitimacy of the proceeding, Baltimore Scrap, 
237 F.3d at 401-02, especially when the court has determined 
that the litigation was brought with probable cause and was not 
objectively baseless. 
The trial court carefully reviewed each of the underlying 
actions, including Riverton's suit based on an alleged violation 
of the Freedom of Information Act and the continuation of the 
appeal before this Court regarding the Potomac Edison site.  In 
each instance the trial court concluded that none of the suits 
was objectively baseless.  As stated by the trial court "[w]hile 
Riverton may have gotten perilously close to the line, it did 
not cross it."  In light of this record, we conclude that the 
trial court did not err in considering whether there was 
 
21
probable cause to pursue the underlying litigation based on the 
records of those proceedings without allowing further discovery. 
Titan has challenged the use of the Noerr-Pennington 
doctrine in this case and the manner and circumstances under 
which it was applied.  Titan has not challenged the trial 
court's probable cause determinations based on the record of any 
of the underlying proceedings.  Accordingly, the trial court's 
conclusion that Riverton had probable cause to pursue that 
litigation is not before us for review. 
D.  Defamation 
In its September 13, 1999 bill of complaint seeking a writ 
of mandamus, a declaratory judgment, and an injunction against 
the sale of the EDA site to Titan, Riverton alleged that "the 
Commission of the European Communities and the Restrictive 
Practices Court in London have found that Titan and a Tarmac 
subsidiary, respectively, have violated European antitrust laws 
by engaging in collusive, anti-competitive activities in the 
cement industry, including market sharing and price fixing."  
Titan asserts that this statement was per se defamatory.  The 
trial court sustained Riverton's demurrer to Titan's defamation 
count, concluding that the statement was entitled to an absolute 
privilege because it was made in the course of litigation.  
Titan assigns error to this holding. 
 
22
A statement made in the course of a judicial proceeding is 
absolutely privileged if it is material and relevant to the 
proceeding.  Donohoe Constr. Co. v. Mount Vernon Associates, 235 
Va. 531, 537, 369 S.E.2d 857, 860 (1988).  Such statements are 
privileged because of the safeguards in those proceedings, 
including rules of evidence and penalties for perjury.  
Lockheed, 259 Va. at 101, 524 S.E.2d at 424-25.  Titan argues 
that the statement at issue here had no bearing on the issue in 
the litigation which was a suit "to compel [EDA] to comply with 
the Freedom of Information Act."  The matter was settled by 
agreement on the pleadings with no evidence taken.  Under these 
circumstances, Titan concludes that the allegedly defamatory 
statement was not entitled to absolute privilege. 
Titan's argument overlooks the second part of Riverton's 
mandamus proceeding in which Riverton sought a declaratory 
judgment and injunction precluding the sale of the land by EDA 
to Titan.  In that count, Riverton alleged that, by statute, EDA 
was required to consider the public interest in determining 
whether it would sell the site to Titan.  Whether the sale would 
be in the public interest if the site were to be used to 
facilitate unfair competition was an issue before EDA and the 
circuit court and, therefore, statements regarding Titan's past 
actions were relevant.  Finally, settlement of the litigation 
before consideration of all the counts does not deprive 
 
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statements relevant to the untested allegations of the 
protection of absolute privilege.  Furthermore, the trial court 
judge in this case conducted all the underlying proceedings 
including the mandamus action.  He was aware of all the 
arguments made and their relevance to the causes of actions 
before him. 
Based on this record, we cannot say that the trial court 
was in error as a matter of law in determining that the 
allegedly defamatory statement was relevant to the proceedings. 
For the reasons stated above, we hold that the trial court 
did not err by applying the Noerr-Pennington doctrine to the 
state tort claims at issue here; that the trial court properly 
applied the two-step analysis from PRE when determining that 
Riverton's actions did not fall within the sham exception to the 
Noerr-Pennington doctrine; that the trial court did not err by 
deciding that Riverton had standing to claim the Noerr-
Pennington doctrine as a defense; that the trial court properly 
made the determination regarding whether Riverton had probable 
cause to bring the underlying proceedings based on the record of 
those proceedings without allowing or considering additional 
discovery or evidence; and that the trial court did not err in 
sustaining Riverton's demurrer to Titan's defamation count. 
Accordingly, we will affirm the judgment of the trial 
court. 
 
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Affirmed. 
 
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