Opinion ID: 6324277
Heading Depth: 4
Heading Rank: 2

Heading: Step Two: whether Defendants’ conduct is

Text: protected petitioning activity Our focus at step two is whether Defendants’ conduct qualifies as “protected petitioning activity.” Sosa, 437 F.3d at 933 (emphasis added). In making this determination, we must first decide whether the Petition Clause extends to Defendants’ conduct. See id. at 933–38. If it does, we next decide whether the sham exception to Noerr-Pennington applies. See id. at 938. Sham petitioning is not protected. “Noerr–Pennington immunity is not a shield for petitioning conduct that, although ‘ostensibly directed toward influencing governmental action, is a mere sham to cover what is actually nothing more than an attempt to interfere directly with the business relationships of a competitor.’” Id. (quoting Noerr, 365 U.S at 144). We note that the Noerr-Pennington doctrine and its sham exception arose in the antitrust context, and so the shamexception principles discuss whether petitioning is done for an anticompetitive purpose or to interfere with a competitor’s business relationships. See id. Because these principles may be inapt in non-antitrust contexts in which we have extended the Noerr-Pennington doctrine, we do not treat them as rigid requirements in such situations. Rather, we rely on them to create analogous standards suitable to each case’s context. See, e.g., Manistee, 227 F.3d at 1095 (relying on the antitrust-subjective-sham-inquiry principles, which consider whether a process was used for an “anticompetitive” purpose but determining in a non-antitrust context that the corresponding inquiry is whether defendants caused the harm by “abus[ing] . . . the publicity/lobbying process” without any mention of an “anticompetitive” requirement). B&G FOODS N. AMERICA V. EMBRY 13
Defendants’ conduct Assuming Defendants are state actors, our precedent compels the conclusion that their activities were protected by the Petition Clause. In Manistee, we held that the Petition Clause protected lobbying efforts by government actors—a city and its officials. Id. at 1093. We reasoned that applying Noerr-Pennington to government actors was “consistent with [the] ‘representative democracy’ rationale” for the doctrine, as government “petitioning may be nearly as vital to the functioning of a modern representative democracy as petitioning that originates with private citizens.” Id. In Kearney, we extended Manistee to litigation activities by government actors and their attorneys by holding that conduct related to an eminent domain suit, which allegedly violated § 1983, was protected petitioning. 590 F.3d at 644– 45. We found that “[t]here is no reason . . . to limit Manistee’s holding to lobbying efforts,” id. at 644, and that the representative democracy rationale applied equally to lawsuits like eminent domain proceedings in which “a governmental entity acts on behalf of the public it represents . . . [in] seek[ing] to take private property and convert it to public use.” Id. at 645. Defendants’ activities seek to enforce Prop. 65, an initiative adopted by California voters to protect the public from harmful chemicals. See AFL-CIO v. Deukmejian, 260 Cal. Rptr. 479, 479 (Ct. App. 1989). Thus, Defendants’ conduct falls squarely within the conduct that we held was protected in Kearney—litigation activities brought by government officials to advance public goals. See Kearney, 590 F.3d at 644–45. Defendants’ conduct is therefore protected by the Petition Clause. 14 B&G FOODS N. AMERICA V. EMBRY B&G’s attempts to distinguish Kearney are unconvincing. B&G argues that Kearney’s extension of Manistee to litigation by government officials is non-binding dicta because, in Kearney, we ultimately found NoerrPennington inapplicable under the sham exception. But in reaching our ultimate holding in Kearney, we applied our three-part test. See id. at 644. Thus, before determining whether the sham exception applied, we first determined that defendants’ activities amounted to protected petitioning activities. See id. at 646. In doing so, we engaged in a detailed analysis that included analyzing our rationale and holding in Manistee, finding that Manistee should be extended to litigation activities, and analyzing whether defendants’ conduct was protected petitioning. See id. at 644–46. Our extension of Manistee was therefore not dicta, as whether defendants’ conduct was protected petitioning under Manistee bore directly on Noerr-Pennington’s applicability, and we resolved the issue after considered analysis. See United States v. McAdory, 935 F.3d 838, 843 (9th Cir. 2019) (“[W]here a panel confronts an issue germane to the eventual resolution of the case, and resolves it after reasoned consideration in a published opinion, that ruling becomes the law of the circuit, regardless of whether doing so is necessary in some strict logical sense.” (alteration in original) (quoting Cetacean Cmty. v. Bush, 386 F.3d 1169, 1173 (9th Cir. 2004))). B&G argues that Kearney is relevant only when government officials and their agents file eminent domain proceedings. But nothing in Kearney suggests such a limited holding. Indeed, in determining that Manistee should be extended to conduct beyond lobbying, we reasoned that Manistee’s rationale applied equally to “lawsuits” brought by government actors. Kearney, 590 F.3d at 644 (“In a representative democracy, . . . branches of government often B&G FOODS N. AMERICA V. EMBRY 15 ‘act on behalf of the people’ and ‘intercede’ to ‘advance their constituents’ goals, both expressed and perceived.’ Such intercession is just as likely to be accomplished through lawsuits—the very act of petitioning—as through lobbying.” (citation omitted) (quoting Manistee, 227 F.3d at 1093)). And we did not distinguish between eminent domain proceedings and other types of lawsuits. We therefore reject B&G’s narrow view of Kearney. Finally, according to B&G, Kearney involved “intergovernmental petitioning” by a municipal official to a state court. Thus, it argues that Kearney is distinguishable, because here, state officials have petitioned a state court and so there is no protected “intergovernmental petitioning.” We are unpersuaded. Nothing in Kearney suggests that our holding extending Noerr-Pennington immunity to governmental entities and officials depended on whether it was a state or municipal official who had engaged in the petitioning activity. Moreover, why should it matter? “[A] city is a political subdivision of the state, created as a convenient agency for the exercise of such of the governmental powers of the state as may be intrusted to it.” City of Trenton v. New Jersey, 262 U.S. 182, 185–86 (1923). We see no reason why Noerr-Pennington applicability should turn on whether the petitioner is an official of a state or one of its political subdivisions. In short, under our precedent, Defendants’ prelitigation communications and suit to enforce Prop. 65 are protected by the Petition Clause.
We have identified three circumstances in which the sham exception might apply in the litigation context: 16 B&G FOODS N. AMERICA V. EMBRY [F]irst, where the lawsuit is objectively baseless and the defendant’s motive in bringing it was unlawful; second, where the conduct involves a series of lawsuits brought pursuant to a policy of starting legal proceedings without regard to the merits and for an unlawful purpose; and third, if the allegedly unlawful conduct consists of making intentional misrepresentations to the court, litigation can be deemed a sham if a party’s knowing fraud upon, or its intentional misrepresentations to, the court deprive the litigation of its legitimacy. Sosa, 437 F.3d at 938 (citations and quotation marks omitted). As an initial matter, we reject Defendants’ argument that these exceptions do not apply to the NOV because the NOV should be construed as petitioning directed toward a political entity rather than a judicial body. The NOV is conduct incidental to the prosecution of a suit, as it is a prerequisite to filing a private enforcement action under Prop. 65 and, like a presuit demand letter, essentially threatens litigation against an alleged violator. See Cal. Health & Safety Code § 25249.7(d). B&G argues that all three exceptions apply. But B&G forfeited its argument on the third exception because it failed to raise such argument below. See Visendi v. Bank of Am., N.A., 733 F.3d 863, 869–70 (9th Cir. 2013). We thus address only the first and second exceptions. Under the first exception, Defendants’ “lawsuit must be objectively baseless in the sense that no reasonable litigant could realistically expect success on the merits.” Pro. Real B&G FOODS N. AMERICA V. EMBRY 17 Est. Invs., Inc. v. Columbia Pictures Indus., Inc., 508 U.S. 49, 60 (1993). “If an objective litigant could conclude that the suit is reasonably calculated to elicit a favorable outcome, the suit is immunized under Noerr . . . .” Id. “Only if challenged litigation is objectively meritless may a court examine the litigant’s subjective motivation.” Id. The subjective element can be satisfied by showing that Defendants “used government processes, as opposed to the outcome of those processes, as a mechanism to injure” B&G. Empress LLC v. City & County of San Francisco, 419 F.3d 1052, 1057 (9th Cir. 2005) (citing Manistee, 227 F.3d at 1094–95). Compare Pro. Real Est. Invs., 508 U.S. at 60–61 (explaining that the subjective inquiry in the antitrust context examines “whether the baseless lawsuit conceals an attempt to interfere directly with the business relationships of a competitor through the use of the governmental process—as opposed to the outcome of that process—as an anticompetitive weapon” (cleaned up)) with Manistee, 227 F.3d at 1095 (relying on the antitrust-subjective-shaminquiry principles in determining in a non-antitrust context that the inquiry is whether defendants caused the harm by “abus[ing] . . . the publicity/lobbying process”). B&G has not plausibly alleged that Defendants’ suit was objectively baseless. As relevant here, Prop. 65 requires a plaintiff to show that a defendant (1) “knowingly and intentionally expose[d] any individual to a chemical known to the state to cause cancer” and (2) failed to give a “clear and reasonable warning to such individual.” Cal. Health & Safety Code § 25249.6. It is undisputed that B&G’s Cookie Cakes contain some amount of acrylamide, that acrylamide is on the list of chemicals “known to the state to cause cancer,” and that B&G does not provide a warning. Given all this, an objective litigant could have concluded that Defendants’ suit was “reasonably calculated to elicit a 18 B&G FOODS N. AMERICA V. EMBRY favorable outcome.” Pro. Real Est. Invs., 508 U.S. at 60. Because B&G has failed to establish the objective element, we need not reach the subjective element. See id. 4 We now turn to the second sham exception. We agree with the district court that, under our precedent, B&G’s complaint fails to plausibly allege the application of the second sham exception. In USS-POSCO Industries v. Contra Costa County Building & Construction Trades Council, AFL-CIO, 31 F.3d 800 (9th Cir. 1994), we explained that the second sham exception applies “where the defendant is accused of bringing a whole series of legal proceedings” without regard to the merits, id. at 811. In such cases, “the question is not whether any one [suit] has merit— some may turn out to, just as a matter of chance—but whether they are brought pursuant to a policy of starting legal proceedings without regard to the merits and for the purpose of injuring a market rival.” Id. To determine whether the exception applies, we ask: “Were the legal filings made, not out of a genuine interest in redressing grievances, but as part of a pattern or practice of successive filings undertaken essentially for purposes of harassment?” Id. In USS-POSCO Industries, the record showed that “fifteen of the twenty-nine lawsuits” filed by defendants had 4 B&G also argues that, as in the labor-relations context, we need not consider the objective element; we need consider only the subjective element. But see White v. Lee, 227 F.3d 1214, 1232, 1232 n.16 (9th Cir. 2000) (stating that “[o]bjective baselessness is the sine qua non of any claim that a particular lawsuit is not deserving of First Amendment protection” and noting only one exception to this rule, which arises in the labor relations context). We decline to address this argument because B&G forfeited it by failing to raise it below. See Visendi, 733 F.3d at 869–70. B&G FOODS N. AMERICA V. EMBRY 19 been successful. Id. We reasoned: “The fact that more than half of all the actions as to which we know the results turn out to have merit cannot be reconciled with the charge that the unions were filing lawsuits and other actions willy-nilly without regard to success.” Id. Thus, based on defendants’ success rate alone, we held that plaintiff had failed to show that defendants’ conduct fell within the second sham exception. Id. B&G’s complaint alleges that “Defendants have filed or threatened to file dozens of cases about acrylamide,” and “Defendants have extracted nearly $1.7 million in penalties and fines from food companies.” There are no allegations about Defendants’ success rate. 5 Thus, the only reasonable inference is that Defendants have been largely successful, which as in USS-POSCO Industries, cannot be reconciled with the theory that Defendants were threatening to sue and suing without regard to success. See id. The district court therefore properly found the second sham exception inapplicable, given the allegations in the complaint. In sum, Defendants’ conduct is protected petitioning activity. Ninth Circuit precedent holds that government officials engaged in petitioning conduct on behalf of the public, like that present here, are entitled to NoerrPennington immunity. See Manistee, 227 F.3d at 1093; Kearney, 590 F.3d at 644–45. And B&G has failed to show that any of the sham exceptions could apply based on the 5 B&G’s reply brief points to information outside the complaint to support the application of the second sham exception. Because our review is limited to the complaint, we do not consider such outside information in analyzing whether B&G has plausibly alleged the applicability of a sham exception. See Orellana v. Mayorkas, 6 F.4th 1034, 1042–43 (9th Cir. 2021). 20 B&G FOODS N. AMERICA V. EMBRY allegations in the complaint. We thus move to the final part of our three-part analysis.