Opinion ID: 167719
Heading Depth: 3
Heading Rank: 2

Heading: The dismissal of Bricktown, Inc.'s Sherman Act claim against the Developers and Douglas

Text: 36 Bricktown, Inc. alleges both the Developers and Douglas engaged in a conspiracy to rig bids in violation of the antitrust laws in order to ensure the Developers were awarded the Bricktown redevelopment contract. The district court determined the Developers and Douglas were immune under the Parker and Noerr-Pennington immunity doctrines. It also questioned whether Bricktown, Inc. had adequately stated an antitrust claim. 37
38 Bricktown, Inc. argues the Parker and Noerr-Pennington immunity doctrines are unavailable to Appellees because the Developers are private persons and Douglas was acting outside of her official duties. Additionally, it argues these immunity doctrines do not apply when conspiracy to rig public bids are at issue. (Corporate Br. at 31.) 39
40 Generally, a state's anticompetitive actions are immune from civil antitrust laws. Parker v. Brown, 317 U.S. 341, 350-52, 63 S.Ct. 307, 87 L.Ed. 315 (1943). This federalism-based state immunity can, under certain circumstances, apply to municipalities. Cmty. Commc'ns Co. v. City of Boulder, Colo., 455 U.S. 40, 51, 102 S.Ct. 835, 70 L.Ed.2d 810 (1982). To be protected, a municipality must be authorized by the State pursuant to state policy to displace competition with regulation or monopoly public service. Town of Hallie v. City of Eau Claire, 471 U.S. 34, 39, 105 S.Ct. 1713, 85 L.Ed.2d 24 (1985) (internal quotation omitted). This requires that the state legislature authorize the challenged action and intend to displace competition with regulation. Jacobs, Visconsi & Jacobs, Co. v. City of Lawrence, Kan., 927 F.2d 1111, 1120 (10th Cir.1991). 41 In this case, the State of Oklahoma authorized the creation of urban renewal authorities. 11 OKLA. STAT. TIT. §§ 38-101 to -123. The district court held that the authorizing statutes clearly contemplate anticompetitive activity. (Appellants' App., Ex. 3 at 23.) In support, the district court cited 11 OKLA. STAT. TIT. § 38-108(a) which gives an urban renewal authority the power [t]o undertake and carry out the urban renewal projects within its area of operation . . . and to make and execute contracts . . . necessary or convenient to the exercise of its powers under this article. 42 We agree with the district court's analysis. In an analogous case, Buckley Construction, Inc. v. Shawnee Civic & Cultural Development Authority, we upheld state immunity for a development authority that coordinated bidding under the Oklahoma Public Competitive Bidding Act of 1974, 61 OKLA. STAT. TIT. §§ 101-136 (1981). 933 F.2d 853, 856 (10th Cir.1991). We held the Competitive Bidding Act clearly contemplates anticompetitive activity, in part because the statute gives the public agency discretion to reject any or all bids if it determines that is in the best interest of the State of Oklahoma. Id. Like the Oklahoma Competitive Bidding Act at issue in Buckley Construction, the statute at issue in this case gives urban renewal authorities the discretion to make contracts necessary or convenient to the exercise of its powers. This language has a foreseeable anticompetitive effect no less than the Competitive Bidding Act which was found to confer immunity in Buckley Construction. Thus, the Renewal Authority was not required to select the lowest bidder for the redevelopment contract if it was not convenient to the exercise of its powers. Consequently, Douglas, as the executive director of the Renewal Authority, is entitled to Parker immunity, regardless of anticompetitive results or intent, assuming her actions were in furtherance of her Renewal Authority responsibilities. 43 Bricktown, Inc. alleges Douglas was acting outside of her official responsibilities by engaging in bid-rigging. However, no facts support Bricktown, Inc.'s claim, and there is no evidence Douglas had a personal interest in the contract being awarded to the Developers. Moreover, the city council approved her actions by adopting resolutions in support of the Developers' proposal. Bricktown, Inc.'s naked allegations of a bid-rigging conspiracy do not render Douglas' actions outside of her official duties and thus do not deprive her of immunity. 44
45 A corollary of Parker immunity is the Noerr-Pennington doctrine, which exempts from antitrust liability any legitimate use of the political process by private individuals, even if their intent is to eliminate competition. Zimomra v. Alamo Rent-A-Car, Inc., 111 F.3d 1495, 1503 (10th Cir.1997); see also City of Columbia v. Omni Outdoor Adver., Inc., 499 U.S. 365, 379-80, 111 S.Ct. 1344, 113 L.Ed.2d 382 (1991). The doctrine is grounded in the First Amendment and arises from the [Supreme] Court's conclusion that the Sherman Act was not intended to derogate the First Amendment right of citizens to petition the government for a redress of grievances. GF Gaming Corp., 405 F.3d at 883. The actual intent of the parties petitioning the government or of the government agent involved is irrelevant. City of Columbia, 499 U.S. at 380, 111 S.Ct. 1344; Zimomra, 111 F.3d at 1503. 46 Of course, this immunity does not encompass fraudulent or illegal actions. Oberndorf v. City & County of Denver, 900 F.2d 1434, 1440 (10th Cir.1990). But, to establish fraud or illegality, there must be more than a mere allegation of a conspiracy. City of Columbia, 499 U.S. at 383, 111 S.Ct. 1344. [C]ultivating close ties with government officials is the essence of lobbying. Boone v. Redevelopment Agency of the City of San Jose, 841 F.2d 886, 894 (9th Cir.1988). It would be unlikely that any effort to influence legislative action could succeed unless one or more members of the legislative body became. . . co-conspirators in some sense with the private party urging such action. City of Columbia, 499 U.S. at 383, 111 S.Ct. 1344. Therefore, [f]or purposes of Noerr-Pennington, there is no distinction between petitioning government officials and conspiring with them. GF Gaming Corp., 405 F.3d at 883. 47 Bricktown, Inc. argues the Developers are not entitled to Noerr-Pennington immunity because they are private entities and because Noerr-Pennington immunity does not apply when a conspiracy to rig public bids [is] at issue. (Corporate Br. at 31.) However, Bricktown, Inc. is clearly wrong that the Noerr-Pennington doctrine does not apply to private entities; that is precisely for whom the immunity was created. Zimomra, 111 F.3d at 1503. Nor does the fact the alleged antitrust violation is a bid-rigging claim automatically remove it from Noerr-Pennington immunity. 14 The Developers, even though potentially acting with anticompetitive intent, are covered under the Noerr-Pennington doctrine unless there is some colorable claim of fraud or illegality. In this case, there is only an allegation the Developers participated in an abstract bid-rigging conspiracy. Bricktown, Inc. does not proffer any facts that, if credited, would support the charge of conspiracy or indicate any fraudulent behavior on the part of the Developers or Douglas. Bricktown, Inc.'s only specific factual allegations are that the Developers made two out of the five Urban Renewal's Commissioner[s] partners in a number of business ventures; managed an office building of a third Commissioner below market value; and similarly, [were] the landlord[s] of Urban Renewal and leased it office space in one [of] the Hogan Team's downtown buildings below market value. (Corporate Br. at 37.) 48 According to the Developers, Bricktown, Inc. is merely complaining that they vigorously petitioned [the Renewal Authority] to consider [their] proposal for the development of South Bricktown, lobbied the city council in promotion of [their] development proposal, lobbied the city council to adopt the resolutions that would be necessary to implement that proposal, and made legal campaign contributions. (Developers' Br. at 31.) We agree and reject Bricktown, Inc.'s challenge to the district court's application of Noerr-Pennington immunity. 49
50 Even if the Developers and Douglas were not immune under Parker and Noerr-Pennington, Bricktown, Inc. failed to allege sufficient facts to support its antitrust claim. Bricktown, Inc. alleges it adequately plead an antitrust violation because it clearly alleged that the Defendants engaged in a conspiracy scheme of bid-rigging (pre-determined before publication of bid), and that the submission of TMK/Hogan's RFP Proposal was collusive, fabricated, and non-competitive. (Corporate Br. at 31.) 51 A complaint is subject to dismissal where it does little more than recite the relevant antitrust laws. TV Commc'ns Network, Inc. v. Turner Network Television, Inc., 964 F.2d 1022, 1027 (10th Cir.1992) (internal quotation omitted). Conclusory allegations are insufficient. Id. at 1024. Bare bones accusations of a conspiracy without any supporting facts are insufficient to state an antitrust claim. Mountain View Pharmacy v. Abbott Labs., 630 F.2d 1383, 1388 (10th Cir.1980). Moreover, [t]he use of antitrust `buzz words' does not supply the factual circumstances necessary to support . . . conclusory allegations. TV Commc'ns, 964 F.2d at 1026. 52 Bid-rigging has been found to violate Section 1 of the Sherman Act when two or more competitors coordinate their bids to a third party. United States v. Mobile Materials, Inc., 881 F.2d 866, 869 (10th Cir.1989). However, Bricktown, Inc.'s bid-rigging antitrust claim suffers from the lack of factual support. 15 Its bald allegations of conspiracy and bid-rigging are insufficient to support an antitrust claim and are no better than claiming that the defendants violated the antitrust laws in the abstract. Indeed, Douglas had no economic interest in the Developers receiving the bid as she was not a competitor or owner, nor was there any evidence of bribery. At best, the conduct complained of includes the Developers' zealous lobbying of the city council to approve their proposed renovation plan. This conduct does not constitute collusion among competitors to fix a bid price, nor is there anything illegal about lobbying. Absent specific factual allegations that support a claim of bid-rigging, Bricktown, Inc.'s use of antitrust buzz-words and parroting of general antitrust theories is insufficient to support a Sherman Act violation. 53