F OR P UBLICATION



### UNIT E D ST AT E S CO URT O F APPE AL S FO R T H E NINT H CIRCUIT

U N I T E D N A T I ON

A L M A I N T E N A N C E , I N C ., a Nevada corporation,

Plaintiff-Appellant
,

v

.

S A N D I E G O C ON

V E N T I ON C E

N T E R , I N C ., a California corporation,

Defendant-Appellee

. N o. 12-56809

D.C. No. 3:07-cv-02172- AJ B

- J MA

ORDER AND OPI NI ON

Appeal from the United States District Court for the Southern District of California Anthony J . B attag lia, District J u dg e, Presiding

Arg ued and Submitted April 8, 2014—Pasadena, California

F iled August 15, 2014

B efore: My

ron H. B r ig ht, * J erome F arris, and Andrew D. Hurwitz
, Circuit J udg es.

Order; Opinion by

J udg e F arris; Concurrence by

J udg e Hurwitz

* T h e Ho n o rab le M y ro n H. B rig h t, S en i o r Circu it J u d g e f o r th e U .S. Co urt o f A p peals f o r th e Eig h th

Circu it, sittin g b y

d esig n atio n

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SUMMARY * *

Antitrust / Calif

ornia Tort Law

The panel filed (1) an order withdrawing its p rior opinion and denying a petition for panel rehearing as moot and (2) an opinion affirming in part and reversing in p a r t the district

co u r t ’ s judg ment after a jury trial in favor o f the San Dieg o Convention Center Corporation o n claims by U nited National Maintenance, a vendor of trade show cleaning se r v i c e s , for intentional i n

t e r f e r e n c e w i t h c o n t r a c t ual relationship, antitrust violations, and intentional interference with prospective economic advantag e.
The panel reversed the district court’s g rant of judg ment

as a matter of law, which overturned the j u r y ’s verdict in favor o f the maintenance c ompany on its c l a i m that the convention center intentionally interfered w ith contracts b e tween the maintenance company and providers o f trade show decorator services when the convent i o n c e n t e r i n stituted

a policy mandating that it would be the e x clusive provider o f cleaning services sta f

f i n g

. The panel held that under California law, the tort of intentional int e rference with
contractu al r elations does not apply only to parties that lack
any leg itimate interest in the underly ing conduct.

The panel affirmed the district c o u rt’s holding that it committed instructional error b y not interpreting the terms o f the contracts to enable the j u ry t o understand whether the maintenance c ompany ’s performance was disrupted, a nd that

** T h is su m m ary co n stitu

t es n o p ar t o f t h e o p in io n o f th e co urt. It h as b eenp rep ared b y

co urt staf

f f o r th e co n v en i en ce o f

th e read er.3

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this error constituted prejudicial error that warr a n t e d a new trial.

The panel a ffirmed the district court’s g rant of judg ment

as a matter of law o n t he maintenance company ’ s Sherman Act claim, holding that the convention center possessed state action immunity

from this antitrust claim.

The panel affirmed the dismissal of th e maintenance
company ’s claim for intentional interference wit h p r ospective economic advantag e b ecause this claim turned on the antitrust claim.

The panel also affirmed t h e district court’s holding that under California la w, the convention center was ex cluded from liability for punitive damag es because i t w as a public entity

. Concurring
, J udg e Hurwitz wrote se p a r a t e l y to emphasiz e that the judg ment a s a matter of law as to the antitrust c laims also comfortably rested on the d istrict court’s h olding that no jury could r e asonably find that the convention center eng ag ed

e i t h e r in monopoliz ation or a n attempt to monopoliz e b y mandating that its own employ ees clean its building

.

COUNSEL

L eonard J

. F eldman ( argued), J a son T. Morg an, an d J

. W ill Eidson, Stoel Ri v e s L L P, Seattle, W a shing ton; J ames R. L ance, J acob M. Slania, and Micaela P. Banach, Kirby Noonan L ance & Hog e L L P, San Dieg o, Cal i f o rnia, for Plaintiff-Appellant.4 U

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J oseph T. Erg a stolo (arg

ued), J o hn H. L ’Estrang e , J r

. , a nd A ndrew E

. Schouten, W rig ht & L ’Estrang e, San D iego
, California, for Defendant-Appellee.

Albert A

. F oer, Randy M. S t u t z , and Sandeep Vaheesan, American Antitrust I nstitute, W a shing ton, D.C., for Amicus Curiae the American Antitrust I nstitute.

Kathleen M. O’Sullivan and Eric D. Mill e r , Perkins Coie L L P
, S e attle, W ashing ton; J acqueline E

. Young
, Perkins Coie L L P, San F r ancisco, California, for Amici Curiae Ex h ibition Services & Contractors Association, Society of Independent Show Org a

niz ers, and I n ternational A ssoci a t ion o f Ex hibitions & Events.

Sony a D. W inner and Cortlin H. L an n in, Coving ton & B urling L L P, San F rancisco, C a lifornia; Deborah A. Garz a , Coving ton & B urling L L P, W ashing ton, D

. C
., for Amicus Curiae International Association of Venue Manag ers, Inc.

ORDER

The Opinion filed on May 14, 2014, is WITHDRAWN

. Appellant’s Petition f

o r Panel Rehearing is DENIED AS MOOT

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OP INION

F ARRI S, Senior Circuit J u dg e:

United National Maintenance, a nationwide vendor o f trade show cleaning services, sued the San Dieg o Convention Center Co r

p o ration, alleg ing claims for 1) intentional interference with contractual relationship, 2) antitru st violations, and 3 ) intentiona l interference with prospective economic advantag e. A j u r y r eturned a verdict in favor o f United National on the intentional interference with contractual relationship claim but could not reach a verdict on the other claims. O n a r enewed motion for judg ment as a matter of law b y SDC, the district court f ound in favor of the convention c en t e r on all of the c laims. The maintenance
company appealed.

I

California has g r anted cities the s t a tutory authority to construct public assembly o r con v e n tion halls. Cal. G ov’t Code §§ 37500–37506. Cities may appoint a commission to manag e the use of the facilities. § 37506. F unds g ained from operation of the convention center f i r s t g o to p aying the assorted e x penses a ssociated with its operation; any remaining mone y m a y t hen g o to the city ’s g eneral fund. § 37505.

I n 1984, the San D ieg o City Council created t h e San Dieg o Convention Center Corporation to manag e the operations of the San Dieg o Convention C e n t e r

. SDC is a nonprofit p ublic benefit corporation that is wholly owned b y the c ity of San Dieg o. The San Dieg o City Council g ave SDC the “ex clusive authority to operate, market, and promote the6 U

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Center.” The board of SDC is chosen by the may or and city council of San Dieg o. The San D ieg o Municipal Code defines the city as including “Corporations wholly owned by the City

. . . such as [ SDC] .” SDC receives city f unding and annually submits a five y ear rollingbudg e t.

Companies and org a

n iz ations license the Center f rom the SDC for a specific p eriod to host events. L i c ensees hire a g eneral services decora t or to coordinate e vent-related services

. Champion Ex position Services, F reeman, a nd Global Ex perience Specialists p rovide decorator services for the majority o f e v ents held at the center. E a c h o f the companies operates nationwide. Ex h ibitors rent booths from decorators and may a lso contract f or other servic e s such a s cleaning

. Trade show clean i n g companies provide a variety of cleaning services throug h contracts with decorators. These services include both facility cleaningand booth cleaning

.

Uni t ed National Maintenance is a trade show cleaning

co mpany that operates throug hout the country

. UNM has
contracts w i t h GES and Champion to provide n ationwide trade show cleaning services. UNM has provided se r v i c e s since 1989 in San D ieg o. Most of its work in the area is done
at the San Dieg o Convention Center. S DC a lso offers trade show cleaning services to decorators who use the c onvention

c e nter. I n the fall of 2 006, an SDC e x ecutive approa c h e d Champion and GES about them hiring SDC personnel to p e r form trade show cleaning services. B oth compani e s declined the SDC p roposal. I n J uly 2007, S D C instituted a

new cleaning services policy

. The policy mandated that SDC

w ould be the “ex clusive p rovider of cleaning ser v i c e s

s t affing .” The policy also required that decorators p a y S D C

one half of all booth cleaning revenue that t h e decorator received as well as a $17 per hour wag e for SDC employ ees7

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that p rovide d c leaning services. UNM continued to perform

on its contracts with GES a nd UNM while using SDC personnel t o p r o vide the cleaning services. The new requirements sig n ificantly increased the costs of performance for UNM on its contracts with Champion and GES.

On N ovember 1 3
, 2 0 07, UNM filed a complaint ag ainst SDC. UNM alleg ed claims for interf e r e nce with c ontract, interference w ith prospective economic advantag e and antitrust violations. T he case proceeded to trial. At the end o f UNM’s c ase-in chief, SDC filed a motion for judg m ent a s matter of law on each o f U NM’s claims. The district court rejected SDC’s motion. On May 4, 2011, the jury returned a unanimous verdict on U

NM’s intentional interference with contractual relations claim. The jury awarded UNM damag e s of $668,905. T he j u r y d i d not reach a verdict o n UNM’s remainingclaims.

SDC then file d a motion for n ew trial on UNM’s intentional interference w ith contractu a l relations claim a nd

a renewed motion for judg ment as a matter of law on UNM’s other claims. T he d istrict c ourt c onstrued SDC’s motion for

new trial as a motion for j u d gm e n t as a matter of law. The distri c t c o urt g ranted SDC’s motion o n each of UNM’s claims. The district court held that UNM could not assert an inte n tional interference with contractual relationship claim

a gainst SDC as SDC had an economic interest in th e contracts. I n the alternative, the district court h eld that SDC

was entitled to a new trial a s the district court had previously erred in not g iving a leg al interpretation of UNM’s contracts with the decorators. The district court also held that UNM’s antitrust claim wa s barred based o n SDC’s state-action a nd local g overnment immunity

. In the alternative, the d i strict
court held that UNM had failed to present sufficient evidence8 U

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on the specific elements of its antitrust claim. F inally
, the district c ourt dismissed U N M ’ s claims for interference with prospective economic advantag e and p unitive damag es a s well as UNM’s motion for injunctive relief

. U N M timely appealed.

II

W e review de novo a dis t r i c t court’s order g ranting o r denying judg ment as a m a t t e r of law

. See Byrd v. Maricopa Cnty. Sheriff'

s Dep' t , 6 29 F .3d 1 135, 1138 (9th Cir. 2011) (en banc). W e r eview de novo w h ether the district court committed instructional error in its statements of t h e l a w , Dang v. Cross
, 422 F .3d 800, 8 04 (9th Cir. 2005), as well a s the d istrict court’s determinations o f immunity from antitrust liability
, G rason Elec. Co. v. Sacramento M u n

. U til. Dist.
, 770 F .2d 833, 835 (9th Cir. 1985).

III

Under Cal i fornia law, the elements for the tort o f intentional interference wit h c ontractual relations a re “ (1) a valid contract b e tween p laintiff and a third party ; (2) defendant’s knowledg e o f this contract; (3) defendant’s inte n t i onal acts desig ned to induce a breach or disruption o f the contractual relationship; ( 4) actual breach or disruption o f the contractual relationship; and (5) resulting damag e.” Pac. G a s & Elec. Co. v. Bear S tearns & Co.
, 791 P.2d 58 7
, 589–90 (Cal. 1990).

After the j u r y returned its verdict in favor of UNM, the district court issued a judg ment as matter of law on the basis that the tort of intentional interference only applies to parties that lack any “l e g itimate interest

. . . in the underly ing9

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contract.” The district court heavily relied on di ctum from a prior opinion of this court that stated “California law has long
recogniz ed that the c ore of intentio n a l i nterference business
torts is interference with an economic relationship by a thirdparty strang e r to that r elationship, so that an entity with a direct interest or involvement in that relat ionship is not usually liable for harm caused b y pursu i t of its interests.” Marin Tug & Barge, Inc. v. W estport Pe t r o l eum, Inc.
, 271 F .3d 825, 832 (9th Cir. 2001).

The district c o u r t’s reading of Marin Tug to add an additional requirement to the tort of intentional interf e r e nce with contractual relationship is not justified for several

reasons. F irst, the plaintiff in Marin Tug sued under the tort of “intenti o n a l interference with p rospective economic advantag e,” and we s p e cifically stated that the tort o f “intentional interference with c ontractual relations” was “ not at issue in [ the] a

ppeal.” Id. at 828 n.3. T h a t t ort is distinct, and California law “draw[ s] and enforce [ s ] a sharpened distinction” b e tween the two. De l l a Penna v. Toyota Motor Sales, U.S.A., Inc.
, 9 02 P.2d 740, 750 (Cal. 1 9 9 5 )

. Our statements in Marin Tug d o not directly apply to the tort at issue in this appeal.

Second, under Cal ifornia law, the pertinent economic relationship is the o n e that e x ists between the two c ontracting parties. They are the o nes that have a “direct interest o r involvement in that relationship.” Id. at 832. L iability for this
tort e x ists to protect the parties to that relati o n s h i p from

“ i n terference b y a strang er to the ag reement.” Della Penna
, 902 P.2d at 750. Contra c t u a l liability
, in turn, protects the contracting parties from the actions o f their contractual partners. See Applied E

q uip. Corp. v. Litton S

a u d i Arabia Ltd., 869 P.2d 454, 459–63 (Cal. 1994) (rejecting an attempt10 U

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to create tort liability under a theory o f conspiracy for parties
to the contractual relatio n s hip). T o shield parties with an economic interest in the contract from potentia l liability would create an u n desirable lacuna in the law between the respective d omains of tort and contract. A pa r t y with an economic interest in a contractual relationship could interfere without risk of facing either tort or c o n t r a c t liability

. This result is particularly

perverse a s it is those parties with some ty pe of economic interest in a contract whom would have the
g reatest incentive to in t erfere w ith it. Such a result would h a r d ly serve the established g oal of p rotecting “a formall y

c e mented economic relationship

... f rom interference by a strang er to the agreement.” Della Penna , 902 P.2d at 750.

Third, Marin Tug represented a hesitant attempt to c larify the unresolved question of the “precise ty pe of wrong fulness
necessary to trig g er liability for intentional interference with prospective e conomic advantage .” Marin Tug
, 271 F .3d at 831–32 (noting that it p roceeded “with some trepidation into this area of California law”). Subseque n t to Marin Tug
, California courts have r epeatedly held that “in California, the law is settled that ‘a stran ge r to a contract may be liable in
tort for intentiona l l y i nterfering with the performance of the contract.’” See e.g., R eeves v. Hanlon
, 95 P.3d 513, 517 (Cal. 2004) ( quoting P a c i

f i c G as , 270 P.2d at 589). I n a detailed discussion, the Californ i a Court of Appeal held that Marin Tug “was not ex tending immunity from c ontract interference claims to an e ven broader, more attenuated class of persons.” W oods v. Fox Broad. Sub., Inc.
, 28 Cal. Rp t r

. 3 d 463, 472 (Ct. App. 2005). Other California Court of Appeal decisions have reached the same conclusion. See P owerhouse Motorsports Grp., Inc. v

. Y amaha Motor Corp.
, 164 Cal. Rptr. 3 d 811, 824–26 ( Ct. App. 2013). Since Marin Tug did

no t specifically address the tort of intentional interference11

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with contract, the scope o f that tort remains an open question in t h i s c ircuit. W e “must follow the state intermediate appellate cour t decision[ s] unless [ w e] find[ ] convincing evidence that the state’s supreme court li k e l y would not follow it.” Ryman v. Sears, Roebuck & Co.
, 50 5 F .3d 993, 994 (9th Cir. 2 00 7 )

. SDC points to no convincing evidence that the California Supreme Court would chang e its long h eld position on the potential tort liability o f s t r a n g e rs to a contract. See e.g., Reeves , 95 P.3d at 517.

F ourth, California courts have repeatedly held that parties with an e conomic interest in a contractual relationship may be liable for intentional interference with that contra c t

. See Applied Equipment
, 869 P.2d at 455–56; W oods
, 28 Cal. Rptr. 3d at 465–67 (company p otentially liable for interference in

a contract between a partially -owned subsidiary and several of its employ ees); Powerhous e M otorsports , 164 Cal. Rptr. 3d at 824–26 (manufacturer may be liable for interference with a sales contract between a f r a n chise operator and a potential n ew o wner). SDC argu es that there are several cases where a party with a

n economic i n t e r e s t in a contract was prevented from bring ing an i n t e ntional interference c laim. Those cases are di s t i ng uishable. 1 I n Mintz v. Blue Cross of California
, the California Court of Appeal found that a claim could not arise a s the de f e n dant was “either a c ontracting part y o r i t s ag ent.” 92 Cal. Rptr. 3d 422, 430 n.3 (Ct. App. 2009). There is no sug g estion here that SDC was the ag ent o f either Champion or GES. I n PM Group, In c

. v. Stewart
, the

1 A lso distin g u i sh ab le i s a case th at SDC d o es n o t cite. S ee Ka sp a ria n

v. Cn t y. o f Lo s An g eles
, 3 8 Cal. A

p p. 4 th 24 2 (Ct. A

p p

. 1 9 9 5 ). L ik e Ma r in Tu g , Ka s p a r ia n o n ly ad d ressed “ in ten t io n al in terf eren ce w ith p ro sp ectiv e

eco n o m ic ad v an tag e ,” id

. at 2 5 7
, a d if f eren t to rt f

ro m th e “ in ten tio n al in terf eren ce w ith

co n tract” at issu e h ere.12 U

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California Court of Appeal reiterated that a contracting party coul d n o t be tortiously liable for interfering with the performance of its own contract; thus, by ex tension, a contracting p arty could not be held liable for interfering with the performance o f s u b c ontracts if that claim hing ed on the defendant’s fa i lure to perform on the orig inal contract. 64 Cal. Rptr. 3d 227, 235–36 (Ct. App. 2007). U NM’s theory o f liability in this case is not b ased on SDC’s failure to perform on a contract with Champion or GES.

W e therefore reverse the district court holding that under California law, SDC can n o t b e held liable f or the tort o f intentional interference with contractual relationsh i p

. The J MOLg ranted on that g r o und is also reversed.

IV

During trial, the district court rejected SDC’s request for

a leg al interpretation of p otentia l conditions precedent in UNM’s contracts with the d ecorators. The district court h eld that the model jury instructions on a n intentional interference with contractual relatio n s h i p claim w ere sufficient: the two elements at issue were “1. T h at there was a contract b etween plaintiff and defendant” and “4. Th a t defendant’s conduct prevented performance or made performance more ex pensive or difficult.” California Civil J ury I nstructions § 2201.

Th e fourth element ex amines whether plaintiff has suffered “a d isruption or b r e ach of their contractual rig h ts.” W oods
, 28 Cal. Rptr. 3d at 473. After the jury returned its verdict, the district court held that a new trial was warranted because h e should have leg ally interpreted UNM’s contracts with GES and Champion in order to allow the j u r y to determine w hether they contained relevant conditions13

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. precedent to the ability of G ES a nd Champion to hire U NM for trade show cleaning services. I f UNM’s contractual rig hts

were conditioned on the usag e policies of SDC, then SDC’s chang e in policy determined UNM’s contractual r i ghts instead of d isrupting UNM’s performance of th e c ontract. The jury ’s request for clarification on this point indicates the importance of this issue.

UNM argues that a c ontract with a condition p recedent
may still be a v alid, enforceable c ontra c t. UNM’s argument focuses o n element one o f the claim

– the validity of the
contracts between UNM and the decorators. California law on this topic is s o mewhat murky

. Compare Reeves
, 95 P.3d at 5 1 9 –20 (no intentional interference claim for at-will employ ment c o ntracts) with SCEcorp v. S uperior Court
, 4 Cal. Rptr. 3d 372, 3 77 (Ct. App.1992) (potential claim for
contract that was conditioned on regulatory approval). SDC’s proposed jury instructions, however, focus on the separate element of disruption. F or the j ury to understand whether UNM’s performance was disrupted required the district court to determine what contractual rig hts U N M possessed. This thus required a leg al interpretation of the contract and the trial
court c orrectly conclu d e d that it erred in this case by not doing so.

I n cases of instructiona l e rror, there is a presumption o f prejudice. Medtronic, Inc. v. W h ite
, 526 F .3d 487, 493 (9th Cir. 2 008). UNM has provided no argument for why the jury “would have reached the same verdict had i t been properly i n s t ructed.” Id (quoting Galdamez v. Potter
, 4 1 5 F .3d 1015, 1025 ( 9th Cir. 2005)) ( internal quotati o n m arks omitted). I t has failed to rebut the presumption of prejudice.14 U

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W e therefore affirm the district c o urt’s holding that it committed instructional e rror by not interpreting the terms o f the contract a nd that this error constituted prejudicial error that warrants a new trial.

V

States receive immunity from potential antitrust liability

as “‘nothing in the lan gu a ge of the Sherman A ct or its history ’

. . . sug g ested that Cong ress i n tended to restrict the sovereig n capacity of the States to regulate their economies

. . . .” FTC. v

. Phoebe Putney H ealth Sys., Inc.
, 133 S. Ct. 1003, 1 010 (2013) (quoting Parker v. Brown
, 317 U.S. 341, 350 (1943 ) )

. Nonstate actors may also receive “immunity from the f

ederal antitrust laws” if they are “carry ing out the State' s reg

u latory prog r am.” Id. at 1010.

The Supreme Court has articulated a two-part t es t to determine whether nonstate actors are en t itled to this immunity : “F irst, the challeng ed restraint must be one clearly articulated and affirmatively ex press e d as state policy ; second, the policy must b e actively supervised by the State itself.” Cal. Retail Liquor Dealers A ss’n v. Midcal Aluminum, Inc.
, 445 U.S. 97, 1 05 ( 1980) (internal quotation marks omitted). T he requirement of active s upervision, however, does not apply “to the activities o f local g overnmental entities,” as “they h ave less of an incentive to pu r s u e t h eir

own self-interest under t h e guise of implementing state policies.” Phoebe Putney , 133 S. Ct. at 1011.

I n o r d e r to pass the c lear-articulation test, the “anticompetitive effect” in dispute should be the “foreseeable result of what the State auth oriz ed.” Id (internal quotation marks omitted). I t is not necessary , however, f o r a state15

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. leg islature to “ex pressly state in a statute or its leg islative history that the leg islature intends for the deleg ated a ction to have anticompetitive effects.” Town of Hallie v. City of Eau Claire
, 471 U.S. 34, 43 (1985). W e review each challeng ed anticompetitive act to determine w het h e r i t was the foreseeable result of wh a t t he state authoriz ed. Phoebe Putney
, 133 S. Ct. at 1012; C i t y of Columbia v. Omni Outdoor Adver., Inc. , 499 U.S. 365, 373 (1991). In applying the “clear-articulation test,” the Supreme Court h a s disting uished between g eneral g rants of either local authority

or corporate power a

n d specific d eleg ations o f an authority to act or regulate where “the displacement of competition

. . . is the foreseeable result of what the statute authoriz es.” O mni
, 499 U.S. at 372–73 (internal quotation marks o mitted). Only the latter qualifies for immunity

. F or ex ample, the Court has found that Georg ia’s g r ant of g eneral corpo r a t e p o wers to a hospital a u thority did not a lso entail an authoriz ation to use those powers in an anticompetiti v e f ashion. Phoebe Putney
, 133 S. Ct. at 1014. B y contrast, the “clear-articulatio n ” t e s t

was satisfied w hen W isconsin ex pre s s l y allowed cities to limit the municipal p r ovision of sewag e s e r v ices to neig hb oring unincorporated areas and consequently g ave those cities the a

uthority t o m ake the provision o f sewag e

serv i c e s conting ent on annex ation o f the unincorporated

a r eas. H allie
, 471 U .S. at 41. Similarly the test was fulfilled by South Carolina’s deleg ation o f z oning authority over local billboards t o a city as “[ t] he very purpose of z oning
regulation is to displ ac e u n fettered business freedom in a

manner that regularly has the effect of preventing n o rmal acts of competition

. . . .” Omni
, 499 U.S. at 373. The “ clear articulat i o n ” test thus requires both a specific deleg ation o f authority by the s t a t e and some indication that the state has

“ a f f i r m a t i v e l y c o n t e m p l a t e d t h e d i s p l a c e m e n t o f competition. ” Phoebe P utney , 133 S. Ct. at 1006. The16 U

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indication m u s t be more than mere neutrality but need not rise to the level of ex plicit authoriz ation. See id. at 1007.

California’s deleg ation of authority satisfies both of these elements with re l ation to SDC’s decision to hire cleaning staff internally

. California G overnment Code § 37506 states that “by ordinance the leg islative body may a p point a

c o m mission to select the site f or the b uilding
, supervise its construction, and manag e its use. B y o r d i nance, the leg islative body shall prescribe the powers and d u t i e s of the

c o m mission.” This g rant of authority does not just g ive Sa n Dieg o permission to play in th e m a r k et by b uilding a convention center. Rather, the leg islature authoriz ed San Dieg o to create a commission that would “manag e the use” o f the convention center. This ty pe of manag erial authoriz ation is distinct from a g eneral g r ant of corporate authorit y t hat simply allows a state subdivision to act.

There is also substantial evidence that the California leg islature contemplated that the Convention Center need not hire outside contractors to clean its b u ilding

. The California leg islature’s g rant of s tatutory authority stated that funds from the convention center would be used first to pay f or the convention center and second f o r the benefit of the municipality

. Cal. Gov’t Code § 3750 5

. T h is specification naturally contemplates that the c onve n t i on center w ill be operated in order to g enerate profits for the munic i p a lity

. A

c onvention center r e p resents a substantial financi al investment by a municipality

. I n order to ensure t h e s u c cess of that investment, it is f ore s e e a b le that an operator of the

c o n vention center may e x clusively provide cleaning staff t o

ensure the success of that financial commitment. T h e ensuing profit-g e nerating actions challeng ed here were the “ordinary17

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result of the ex ercise of authority deleg ated by t h e s t a te leg islature.” Phoebe Putney , 133 S. Ct. at 1013.

The active supervision r equirement “serves essentially an

e videntiary function: it is one way of e nsuring that the a ct o r is eng ag ing in the chall e ng e d conduct pursuant to state policy .” Hallie
, 471 U.S. at 46–47. I t prevents private actors from eng ag ing in an anticompetitive activity solely to f urther “[ their] own interests, rather than the g overnmental interests of the State.” Id. at 47. Those same concerns, however, do not apply to a municipality , as “there is little or no dang e r that it i s involved in a private price-fix ing arrang ement.” Id. T h e dang er that it may seek “pu re l y p arochial public interests at the ex pense of more o v e rriding state g o als” is satisfactorily addressed by

the clear-articulation test. Id.

U NM argu es that the active supervision requiremen t should be a

ppli ed to SDC’s actions. UNM heavily emphasiz es that SDC is a public, non-profit corporation rather than a municipality

. San Dieg o ’s m unicipal code, however, defines the city itself as including SDC. I n a similar
case, w e found that a charitable corporation incorporated b y

a county b oard of health th a t provided ex clusive ambulance services for the cou n t y s e rved as a n instrument of the municipality

. Ambulance Serv. of Reno, Inc

. v

. Nev. Ambulance Servs., Inc.
, 819 F .2d 910, 913 (9th Cir. 1 987) (emphasiz ing that the district board of health supe rvised the services of the c o rporation and retained rig hts t o the equip m e n t o f the corporation in the e vent of a corporate default). SDC’s relationship with San Dieg o also shows that SDC acts as the i n strument of San Dieg o : (1) San Dieg o appoints all of SD C ’ s board members, (2) upon dissolution, S D C’s asserts revert back to San Dieg o; (3) SDC must publicly account for its operations. O verall, SDC acts as an18 U

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ag ent that operates the convention center for the benefit of its principal, the city of San Dieg o

. I t is an ex tension of the municipality of San Dieg o and thus does not require active supervision by the state in o r d e r t o r etain its immunity from antitrust liability

.

F urthermore, the s p e c i fic facts indicate there is no need for the evidentiary function of a c t i ve supervision. Althoug h S D C’s actions may reflect the pursuit of parochial inte r e s t s , there is no evidence that it entered into any ki n d o f private price-fix ing arrang ement wi t h other convention center operators. This fact disting uishes SDC from other case s where g roups of p rivate a ctors, entrusted with state regulatory authority over a profession, may have taken actions to f urther their own p rivate interests. See e.g. , N.C. State B d. o f Dental Exam’rs v. FTC
, 717 F

. 3d 359 (4th Cir. 2013), cert. g ranted
, 134 S. Ct. 1 4 91 (2014) (need to fulfill the active supervision
test where a state dental association, p rima ri l y composed o f d e n tists, prevented n on-dentists from offering teeth wh i t e n i n g services).

W e affirm the district court’s holding that SDC possessed
state action immunity from UNM’s antitrust claim. T hus, it’s
unnecessary to address the district court’s alternative holding on the merits of the antitrust claim.

VI

The d istrict court dismissed UNM’s claim for intentional interference with prospective economic advantag e. This tort requires UNM to establish “that [ SDC’s] interference was wrong ful by some measure bey ond the fact of the interference itself.” Della Penna
, 902 P.2d at 7 51(internal quotat i o n marks omitted). UNM’s asse r t ion o f independent wrong f ulness is19

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based on the antitrust claims. That claim’s failure dooms this claim.

UNM a ppeals the district court’s or d er denying it permanent injunctive relief. N o permanent injunction should issue as we h old that a n e w trial is warranted o n UNM’s claim for in t en t i o n a l i n t e r f e re n c e w i t h c o n t r a c t u al relationship.

UNM also appeals f

r o m t he d istrict court’s order that

ex c lude d an y liability for SDC from punitive damag es. I n California, a p ublic entity is not liable for punitive d amag es. Cal. Gov’t Co d e § 818. SDC is a public entity a s it is a wholly owned sub s i d iary and instrumentality of San Dieg o formed for g overnmental purposes and vested with
g overnmental powers. Cal. G o v ’ t Code § 811.2. Under California law, it cannot be liable for punitive damag es.

The judg ment of the district court is AF F IRME D I N P A RT AND REVERSED IN P ART

. E ach party shall bear its own costs on appeal.

HURW I TZ , Circuit J udg e, concurring :

I c o n cur in J u dg e F arris’ thoroug h opinion. I write separately only to emphasiz e that the judg ment as a matter o f law as to U

NM’s antitrust claims als o comfortably rests on another g round identified b y the district judg e: No jury could

r e a s onably find that SDC e ng a g ed e ither in monopoliz ation

or an attempt to mo n o p o liz e by mandating that its o wn employ e es c lean its building

. S ee Cal. Computer Prods., Inc.

v. Int’l Bus. Machs. Corp
., 613 F .2d 727, 734 (9th Cir. 1 979)20 U

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. (“[ A] dir ec t e d verdict is proper, even in an antitrust c ase, when ‘there is no substantial evidence to support the claim.’” (quoting Santa Clara Valley Distrib. Co. v. Pabst Brewing Co.
, 556 F .2d 942, 945 n.1 (9th Cir. 1977))).

To succeed on it s S h erman Act monopoliz ation claims, UNM had the burden of provi n g that SDC possessed monopoly power over a specific product in a specific
g eog raphic market. 15 U.S.C. § 2; Allied Orthope dic Appliances Inc. v. Tyco Health Care Grp. LP
, 592 F .3d 991, 9 9 8 (9 t h Cir. 2010). The district c ourt concluded that th e relevant d ownstream market was, at b est, trade show cleaning services for e x hibition and meeting spaces in the Sa n D ieg o

area. Despite the testimony of UNM’s ex pert, no reasonable finder of fact could conclude that t he relevant g eog raphic market for cleaning services consisted only of the San Dieg o Convention Center. I t beg g ars reason to define t h e relevant market as a sing le customer who d ecides to use its o wn employ e es to perform routine clean i n g services, rather than hire others do so. See Broo ke Grp. Ltd. v

. Brown & W illiamson Tobacco Corp.
, 509 U.S. 209, 242 (1993) (“Ex p ert testimony is useful as a g uide to interpreting market facts, but it is not a substitute for t h e m ” )

. U NM employ e es—who perform ty pical cleaning service s , such a s vacuuming and wiping down ex hibition booths—plainly could clean o ther meeting spaces and convention f a cilities in San Dieg o

. See Todd v

. E xxon Corp.
, 275 F .3d 191, 202 (2d Cir. 2001) (Sotomay or, J .) (“A g reater availabil i t y o f substitute buy ers indicates a smaller q uantum of market power on the part of the buy e rs in question.”).

SDC represents only 43% of the cleaning services market for convention and meeting f a c i l i ties in the San Dieg o area. That is not enoug h to establish actual monopoliz ation. See21

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Twin City Sportservice, I nc. v

. C h a r l es O. Finley & Co.
, 512 F .2d 1264, 1274 (9th C i r

. 1975). Althoug h SDC’s market share mig ht suffice in connection with a n attempted monopoliz ation claim, see Rebel Oil Co. v. Atl. Richfield Co.
, 51 F .3d 1421, 1 438 (9th Cir. 1995), such a claim also requires “p re d atory or anticompetitive conduct,” Supermarket of Homes, Inc. v

. San Fernando Valley Bd. of Realtors
, 786 F .2d 1400, 1405 (9th Cir. 1986). The district correctly held that no rational f

inder of f

act could conclude that SDC acted anticompetitively and without a leg itimate business purpose by using its own employ ees to clean its own building

.