Opinion ID: 770581
Heading Depth: 2
Heading Rank: 2

Heading: Sham exception

Text: 18 We reject Manistee's contention that defendants' petitioning is not immunized because it falls within the sham exception to the Noerr-Pennington doctrine. The concept of the sham exception is simple: There may be situations in which a publicity campaign, 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 and the application of the Sherman Act would be justified. Noerr, 365 U.S. at 144; see City of Columbia v. Omni Outdoor Adver., Inc., 499 U.S. 365, 379 (1991). 19 The sham exception is more easily applied to litigation, however, than it is to lobbying before executive or legislative bodies. The district court applied the two-part definition of the sham exception set out by the Supreme Court for petitioning that takes the form of litigation. See Professional Real Estate Investors, 508 U.S. at 60-61. Under this test, the sham exception applies only if the (1) the petitioner's lawsuit is objectively baseless and (2) the baseless lawsuit conceals a subjective  `attempt to interfere directly with the business relationships of a competitor.'  Id. (quoting Noerr, 365 U.S. at 144). We decline to apply the Professional Real Estate Investors standard here. 20 [F]or purposes of the sham exception, executive enti ties are treated like judicial entities only to the extent that their actions are guided by enforceable standards subject to review. Only when administrative officials must follow rules is it meaningful to ask whether a petition before an agency was objectively baseless, or whether there has been a pattern of petitioning without regard to the merit of the petitions. 21 Kottle v. Northwest Kidney Ctrs., 146 F.3d 1056, 1062 (9th Cir. 1998), cert. denied, 525 U.S. 1140 (1999). The same limitations apply in Manistee's case. Defendants petitionedcounty officials not to enter a lease, and attempted to energize members of the public to do the same. There are no enforceable standards by which either of the two prongs of the Professional Real Estate test can be applied. The exception simply does not fit. 22 Even if we were to attempt to apply the sham exception here as it relates to litigation, we would conclude that defendants' petitioning was no sham. In the antitrust context, petitioning may be considered a sham only where the petitioner uses the governmental process -as opposed to the outcome of that process -as an anticompetitive weapon. Omni, 499 U.S. at 380. This abuse of the governmental process must  `directly'  have an anticompetitive effect. Id. at 381 (quoting Noerr, 365 U.S. at 144). Thus, in Omni, a billboard company's successful lobbying of the City of Columbia to enact a zoning ordinance that hampered its competitor's ability to compete did not fall within the sham  exception because it was not the process of lobbying, but the result of the effort, that interfered with its competitor's business. Similarly, in Amarel v. Connell, 102 F.3d 1494, 1520 (9th Cir. 1997), we summarily rejected a claim that a rice grower's lobbying of the State Department and members of Congress fell within the sham exception to Noerr-Pennington immunity. In Boone v. Redevelopment Agency of San Jose, 841 F.2d 886 (9th Cir. 1988), a developer's lobbying of the city for favorable amendments to a redevelopment plan did not fall within the sham exception: The developers have neither alleged the existence of a publicity campaign nor that [the defendant developer] was not genuinely seeking official action from the city and agency. Such allegations are necessary to state a claim under this exception. Id. at 895. 23 Here, Manistee contends that defendants orchestrated a publicity and lobbying campaign to convince the County not to lease space at Manistee. The harm to Manistee, the failure to lease space, was caused by the outcome of the process, not any abuse of the publicity/lobbying process by defendants. Indeed, Manistee's complaint makes it quite clear that this outcome was the goal of defendants' efforts. Manistee accordingly has failed to allege direct injury from the process, rather than the outcome, as required by Noerr and Omni. 4 24 Manistee relies on Clipper Exxpress v. Rocky Mountain Motor Tariff Bureau, Inc., 690 F.2d 1240 (9th Cir. 1982), but that case is easily distinguished. Clipper, for the purposes of the summary judgment motion, has sufficiently shown that defendants' protests were spurious, baseless, and prosecuted without regard to their merit, intended only to delay competitive action, not to influence governmental action.  Id. at 1253. No comparable conduct has been alleged by Manistee. 25 For the reasons stated above, we conclude that the facts alleged by Manistee do not place defendants' actions within the sham exception to Noerr-Pennington immunity. The immunity thus applies. We accordingly affirm the district court's dismissal of Manistee's 1983 claim. MANISTEE'S 1985 CLAIM 26 Although the district court dismissed Manistee's claim under 42 U.S.C. 1985(3) on the ground of Noerr-Pennington immunity, it also dismissed the claim on the alternative ground that Manistee had failed to allege that  `some racial, or perhaps otherwise class-based, invidiously discriminatory animus [lay] behind the conspirators' action.'  Bray v. Alexandria Women's Health Clinic, 506 U.S. 263, 268 (1993) (quoting Griffin v. Breckinridge, 403 U.S. 88, 102 (1971)). We affirm on this latter ground. A cause of action under the first clause of 1985(3) cannot survive a motion to dismiss absent an allegation of class-based animus. See Bretz v. Kelman, 773 F.2d 1026, 1028 (9th Cir. 1985) (en banc). 5