Court Opinion

ID: 996280
Source: CourtListenerOpinion
Date Created: 2013-07-04 00:48:33.936165+00
Date Added: 2024-06-11T15:38:44.633459
License: Public Domain

UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

AMERICAN INTERNATIONAL SECURITY
SPECIALISTS, INCORPORATED,
Plaintiff-Appellant,

v.

B. J. ROBERTS, Sheriff, City of
Hampton; P. G. MINETTI, Chief of   No. 97-2089
Police, City of Hampton,
Defendants-Appellees,

and

THE CITY OF HAMPTON, VIRGINIA,
Defendant.

AMERICAN INTERNATIONAL SECURITY
SPECIALISTS, INCORPORATED,
Plaintiff-Appellant,

v.

TOBY A. MATHEWS, Sheriff, County
of Henrico; HENRY STANLEY, Chief           No. 97-2090
of Police, County of Henrico,
Defendants-Appellees,

and

COUNTY OF HENRICO, VIRGINIA,
Defendant.
AMERICAN INTERNATIONAL SECURITY
SPECIALISTS, INCORPORATED,
Plaintiff-Appellant,

v.

R. J. MCCABE, Sheriff, City of
Norfolk; MELVIN HIGH, Chief of      No. 97-2091
Police, City of Norfolk,
Defendants-Appellees,

and

CITY OF NORFOLK, VIRGINIA,
Defendant.

AMERICAN INTERNATIONAL SECURITY
SPECIALISTS, INCORPORATED,
Plaintiff-Appellant,

v.

GARY WATERS, Sheriff, City of
Portsmouth; DENNIS MOOK, Chief of           No. 97-2092
Police, City of Portsmouth,
Defendants-Appellees,

and

THE CITY OF PORTSMOUTH, VIRGINIA,
Defendant.

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AMERICAN INTERNATIONAL SECURITY
SPECIALISTS, INCORPORATED,
Plaintiff-Appellant,

v.

MICHELLE MITCHELL, Sheriff, City of
Richmond; JERRY A. OLIVER, Chief      No. 97-2093
of Police, City of Richmond,
Defendants-Appellees,

and

THE CITY OF RICHMOND, VIRGINIA,
Defendant.

AMERICAN INTERNATIONAL SECURITY
SPECIALISTS, INCORPORATED,
Plaintiff-Appellant,

v.

FRANK DREW, Sheriff, City of
Virginia Beach; CHARLES WALL,
Chief of Police, City of Virginia     No. 97-2098
Beach,
Defendants-Appellees,

and

THE CITY OF VIRGINIA BEACH,
VIRGINIA,
Defendant.

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AMERICAN INTERNATIONAL SECURITY
SPECIALISTS, INCORPORATED,
Plaintiff-Appellant,

v.

JOHN R. NEWHART, Sheriff, City of
Chesapeake; RICHARD A. JUSTICE,
Chief of Police, City of                                            No. 97-2105
Chesapeake,
Defendants-Appellees,

and

THE CITY OF CHESAPEAKE, VIRGINIA;
COMMONWEALTH OF VIRGINIA,
Defendants.

Appeals from the United States District Court
for the Eastern District of Virginia, at Norfolk.
Robert G. Doumar, Senior District Judge.
(CA-97-82-2, CA-97-83-2, CA-97-85-2, CA-97-86-2,
CA-97-87-2, CA-97-88-2, CA-96-921-2)

Argued: May 7, 1998

Decided: September 10, 1998

Before MURNAGHAN and WILKINS, Circuit Judges, and
BEEZER, Senior Circuit Judge of the
United States Court of Appeals for the Ninth Circuit,
sitting by designation.

_________________________________________________________________

Affirmed by unpublished per curiam opinion.

_________________________________________________________________

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COUNSEL

ARGUED: John Warren Hart, BEATON & HART, P.C., Virginia
Beach, Virginia, for Appellants. William Gray Broaddus, MCGUIRE,
WOODS, BATTLE & BOOTHE, L.L.P., Richmond, Virginia, for
Appellees. ON BRIEF: Scott Andrew Simmons, MCGUIRE,
WOODS, BATTLE & BOOTHE, L.L.P., Richmond, Virginia, for
Appellees.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

Appellant, American International Security Specialists, Inc. (Amer-
ican), appeals the district court's dismissal of its state and federal anti-
trust claims against various law enforcement officers (Appellees)
operating in Virginia. Finding no error in the district court's judg-
ment, we affirm.

I.

American is a private security provider doing business in Virginia.
It brought suit against the Appellees, numerous Virginia-based sher-
iffs and chiefs of police, alleging that they had violated the Sherman
Act, 15 U.S.C. § 1, and analogous provisions of the Virginia Antitrust
Act, Va. Code §§ 59.1-9.5, 9.6, by permitting and encouraging subor-
dinate officers to engage in off-duty employment as private security
personnel, using state and locally supplied uniforms, badges, weap-
ons, radios, and other equipment.

The Appellees filed motions to dismiss American's claims, pursu-
ant to Fed. R. Civ. P. 12(b)(6). Construing American's complaint to
state allegations against the Appellees in their official capacities only,

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the district court concluded that they were entitled to federal immu-
nity under the state action doctrine and the Local Government Anti-
trust Act, 15 U.S.C. §§ 35-36, and state immunity under the state
action doctrine and an exemption to the Virginia Antitrust Act. When
American declined to amend its complaint to state a claim against the
Appellees in their individual capacitates, the district court granted the
Appellees' motions to dismiss. On appeal, American maintains that
such dismissal was erroneous.

II.

We review de novo the district court's decision to dismiss Ameri-
can's claims pursuant to Rule 12(b)(6). See Brooks v. City of Winston-
Salem, 85 F.3d 178, 181 (4th Cir. 1996). In conducting our review,
we are required to accept as true the factual allegations in American's
complaint and to construe those facts in the light most favorable to
American. See Estate Constr. Co. v. Miller & Smith Holding Co.,
Inc., 14 F.3d 213, 217-18 (4th Cir. 1994). The district court's dis-
missal of the claim must be affirmed if it appears beyond doubt that
no set of facts could be proved which would entitle American to
relief. See id. at 218.

The state action doctrine was first articulated by the Supreme Court
in Parker v. Brown, 317 U.S. 341, 350-51 (1943). It provides states
with immunity from federal antitrust suits seeking monetary or
injunctive relief. See Cohn v. Bond, 953 F.2d 154, 158 (4th Cir. 1991)
(citation omitted). In more recent times, the doctrine has been
extended to provide immunity to local governments that engage in
anticompetitive conduct "pursuant to [a] state policy to displace com-
petition with regulation or monopoly public service." See City of
Lafayette v. Louisiana Power & Light Co., 435 U.S. 389, 413 (1978).
Other courts have held, and we agree, that the state action doctrine
applies not only to municipalities, but to the official acts of their offi-
cers. See Fisichelli v. City Known as Town of Methuen, 956 F.2d 12,
15-16 (1st Cir. 1992) ("We do not believe that a plaintiff can avoid
the [state action doctrine] simply by substituting, for the name of the
town, the names of the town officials who approved the challenged
municipal action.").

To demonstrate the existence of a clearly articulated state policy to
displace competition, a municipality "need not be able to point to a

                     6
specific, detailed legislative authorization . . . .'" Town of Hallie v.
City of Eau Claire, 471 U.S. 34, 39 (1985) (quoting Lafayette, 435
U.S. at 415). Nor must its actions be actively supervised by the state.
See id. at 46. Instead, it is sufficient if the municipality acted pursuant
to "a clearly articulated and affirmatively expressed . . . state policy,"
see Lafayette, 435 U.S. at 410, the "foreseeable" or "logical" result of
which is anticompetitive, see Hallie, 471 U.S. at 42.

In the present case, the district court concluded, and we agree, that
the Appellees are entitled to immunity under the state action doctrine.
The Commonwealth of Virginia has clearly articulated a policy of
allowing municipalities and their law-enforcement officers to engage
in the conduct complained of by American. Section 15.2-1712 of the
Virginia Code authorizes municipalities to "adopt an ordinance which
permits law-enforcement officers and deputy sheriffs. . . to engage
in off-duty employment which may occasionally require the use of
their police powers . . . [and to provide for] reasonable rules to apply
to such off-duty employment . . . ." In light of that provision, it is cer-
tainly foreseeable that a municipality might allow its police officers
to engage in off-duty work in the private security field, and that a
municipality could, as part of the "regulation" thereof, allow its offi-
cers to use publicly supplied uniforms and other equipment during the
course of such employment.

American argues that the Appellees' activities are outside the scope
of the state's clearly articulated policy since some of the municipali-
ties have failed to pass the ordinance authorized by§ 15.2-1712. We
find that argument unpersuasive. In City of Columbia v. Omni Out-
door Advertising, Inc., 499 U.S. 365 (1991), the Supreme Court held
that for purposes of the state action doctrine, a municipality's "author-
ity" to act is "broader than what is applied to determine the legality
of the municipality's action under state law," id. at 372. As the Court
explained, a broader conception of authority is necessary "to prevent
[the state action doctrine] from undermining the very interests of fed-
eralism it is designed to protect." Id. at 372.

          To be sure, state law "authorizes" only agency decisions that
          are substantively and procedurally correct. . . .[However,]
          [i]f the antitrust court demands unqualified"authority" in
          this sense, it inevitably becomes the standard reviewer not

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          only of federal agency activity but also of state and local
          activity whenever it is alleged that the governmental body,
          though possessing the power to engage in the challenged
          conduct, has actually exercised its power in a manner not
          authorized by state law.

Id. at 371-72 (emphasis added) (quoting P. Areeda & H. Hovenkamp,
Antitrust Law ¶ 212.3b (Supp. 1989)); see also Allright Colorado,
Inc. v. City and County of Denver, 937 F.2d 1502, 1511 (10th Cir.
1991) ("[W]e reject the argument that alleged errors or abuses in the
implementation of state law should expose the City to antitrust liabil-
ity."); Boone v. Redevelopment Agency of San Jose, 841 F.2d 886,
892 (9th Cir. 1988) ("[C]oncerns over federalism and state sover-
eignty . . . dictate that the [plaintiffs] not be allowed to use federal
anti-trust law to remedy their claim that the city and the agency
exceeded their authority under state law."). In the present case, it is
clear that, pursuant to § 15.2-1712, municipalities have the "author-
ity," in the broad sense intended by Columbia , to regulate the off-duty
employment of their police officers. We therefore affirm dismissal of
American's federal claims.1

We reach the same conclusion with respect to state immunity. Sec-
tion 59.1-9.4(b)(1) of the Virginia Code exempts from scrutiny under
the Virginia Antitrust Act any "conduct that is authorized, regulated,
or approved . . . by a statute of this Commonwealth." Here, as dis-
cussed above, the Appellees are so authorized. We, therefore, have no
difficulty concluding that they are entitled to immunity.2

The judgment of the district court is, therefore,

AFFIRMED.
_________________________________________________________________

1 Our conclusion that the Appellees are entitled to immunity under the
state action doctrine renders it unnecessary to consider whether they
might also be entitled to immunity under the Local Government Antitrust
Act.

2 This conclusion makes it unnecessary to address the district court's
alternative holding, about which we have considerable doubt, that the
Appellees are entitled to state immunity under the Parker state action
doctrine.

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