Court Opinion

ID: 6326385
Source: CourtListenerOpinion
Date Created: 2022-03-24 15:05:56.309662+00
Date Added: 2024-06-11T09:22:11.943899
License: Public Domain

RENDERED: MARCH 24, 2022
                                                         TO BE PUBLISHED

               Supreme Court of Kentucky
                               2020-SC-0312-DG

SEILLER WATERMAN, LLC; BILL V.                                      APPELLANTS
SEILLER; TERRY MAUNEY; PHILLIP
STEWART; BETTIE STEWART; ELZIE
WATSON; AND BRIDGETTE WATSON

                  ON REVIEW FROM COURT OF APPEALS
V.                        NO. 2018-CA-1886
               JEFFERSON CIRCUIT COURT NO. 16-CI-005521

BARDSTOWN CAPITAL                                                    APPELLEES
CORPORATION AND FRANK CSAPO

               OPINION OF THE COURT BY JUSTICE HUGHES

                        REVERSING AND REMANDING

      Bardstown Capital Corporation sought to develop Jefferson County

residential property into a commercial center, including a mixture of retail,

restaurant and office uses. Neighboring homeowners opposed the

development, expressing concerns with respect to noise, drainage, and

increased automobile traffic. The proposed development was ultimately

approved, and the homeowners initiated an appeal of the rezoning ordinance in

Jefferson Circuit Court pursuant to Kentucky Revised Statute (KRS)

100.347(3), contesting it on several grounds including the adequacy of notice of

the various zoning hearings. After the neighboring homeowners’ unsuccessful
zoning appeal, Bardstown Capital filed a complaint against them and their

attorneys for wrongful use of civil proceedings and abuse of process.

      In granting the homeowners’ motion for summary judgment, the

Jefferson Circuit Court determined that the homeowners were entitled to

immunity under the Noerr-Pennington doctrine,1 which protects an individual’s

right to petition the government for grievances. The Court of Appeals agreed

the Noerr-Pennington doctrine applied but applied the “sham” exception to that

doctrine to reverse the trial court, holding that a fact-finder must determine the

legitimacy of the homeowners’ underlying appeal. On discretionary review, we

reverse the Court of Appeals’ holding that summary judgment was improper

and remand to the trial court for reinstatement of summary judgment in favor

of the homeowners and their attorneys.

                      FACTS AND PROCEDURAL HISTORY

      In 2008 Bardstown Capital Corporation began planning for the

development of approximately 43.5 acres of property in southeast Louisville at

the intersection of Bardstown Road and Interstate 265. When complete, the

proposed development would become an entertainment and shopping center,

including a movie theater and retail and restaurant spaces. In August 2009

Bardstown Capital filed an application with Louisville Metro Planning and

Design Services requesting a change in zoning of the property from residential

      1 The Noerr-Pennington doctrine is derived from two United States Supreme
Court cases: Eastern R.R. Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S.
127 (1961) and United Mine Workers of America v. Pennington, 381 U.S. 657 (1965).

                                           2
to commercial and the approval of its general development plan. Several

homeowners on Wingfield Road, which directly adjoins the proposed

development site, opposed the zoning change. The homeowners expressed

concerns about the impact of such a development, particularly with respect to

noise, drainage, and increased automobile traffic, given the close proximity of

the development to their homes. Louisville Metro Planning and Design Services

scheduled a public hearing on February 4, 2010.2 Statutorily-required notice

was mailed to the adjoining homeowners and posted on and around the

property. A notification of the February 4 hearing was also published in The

Courier-Journal.

      On February 4, no witnesses were called, no exhibits were presented,

and no arguments on either side of the proposed zoning change were advanced.

In short, no hearing was held. Instead, the Louisville Metro Planning

Commission (Commission) announced that the public hearing was continued

to March 4, 2010, but no additional notice of the rescheduled hearing was

provided. At the March 4 hearing, three hours of public testimony and

evidence was received. At that time, the Commission announced a

continuance to March 18. After several additional continuances, five and one-

half hours of evidence and testimony was eventually heard on May 20, 2010.

      2 Bardstown Capital asserts that the Land Development and Transportation
Committee, a subcommittee of the Commission, first held public review of the
development plans on December 10, 2009 and held other meetings on January 14 and
28, 2010. Bardstown Capital asserts that some of the neighboring homeowners
attended these meetings and voiced their concerns and opposition to the development.

                                         3
On that date the Commission unanimously recommended approval of the

zoning change and development plan. The Commission forwarded its extensive

written recommendation to the Louisville Metro Council which then passed an

ordinance approving the zoning change.

      On August 26, 2010, the neighboring homeowners, represented by Seiller

Waterman, filed a complaint in Jefferson Circuit Court pursuant to KRS

100.347 contesting the Commission’s recommendation to approve the zoning

change. The homeowners alleged, among other things, a lack of adequate

notice in violation of their due process rights. The appeal sought no damages—

it only requested notice and an opportunity to be heard.

      A lengthy period of discovery and motion practice ensued and

approximately three years later, the homeowners and Bardstown Capital each

filed motions for summary judgment. After hearing oral arguments, the trial

court granted summary judgment in favor of Bardstown Capital, holding that

KRS Chapter 100 provides no support for the homeowners’ position that they

were entitled to additional written notices of continued hearing dates. The trial

court identified the many ways in which there had been notice of the February

4, 2010 hearing but did not explicitly address the fact that no hearing actually

occurred on February 4.3 The Court of Appeals affirmed the trial court.

Mauney v. Louisville Metro Council, 2014-CA-000263-MR, 2016 WL 4255017,

      3 The record of the Jefferson Circuit Court action, 10-CI-06022, the action in
which the homeowners originally filed an appeal from the zoning decision, is not
before us in this case.

                                           4
*1 (Ky. App. Aug. 12, 2016). The appellate court found sufficient proof in the

record to conclude that adequate notice of the February 4 hearing was

provided. The homeowners did not seek discretionary review by this Court.

      On November 4, 2016, three months after the Court of Appeals’ decision,

Bardstown Capital filed a complaint against the neighboring homeowners and

Seiller Waterman claiming that the 2010 action constituted a wrongful use of

civil proceedings.4 The complaint alleged that Bardstown Capital offered to

purchase the homeowners’ properties for fair market value, which they

rejected. Bardstown Capital claimed that the homeowners’ attorney, Bill

Seiller, approached counsel for Bardstown Capital and stated their intent to

appeal the rezoning approval in order to induce Bardstown Capital to buy the

homeowners’ properties for a higher price. In addition, Bardstown Capital

claimed substantial damages because of undue delay, including lost profits in

excess of $12 million and approximately $74,000 in legal fees. In an amended

complaint filed in February 2017, Bardstown Capital added allegations of

abuse of process and malicious prosecution.5

      On August 31, 2017 the trial court dismissed Bardstown Capital’s claim

for abuse of process based on the statute of limitations because Bardstown

      4   Bardstown Capital’s complaint named Seiller Waterman, LLC, attorney Bill V.
Seiller, and neighboring homeowners—Terry and Carolyn Mauney, Phillip and Bettie
Stewart, and Elzie and Bridgette Watson. On April 21, 2017, Carolyn Mauney passed
away and was not named as a party in the appeal to the Court of Appeals.
      5 A malicious prosecution claim derives from the wrongful prosecution of
criminal cases. In a civil context, the claim is more accurately characterized as a
wrongful use of civil proceedings. Prewitt v. Sexton, 777 S.W.2d 891, 894 (Ky. 1989).

                                          5
Capital did not file the claim within one year of the cause of action accruing. In

July 2018, Seiller Waterman and the homeowners amended their answer to

assert that Bardstown Capital’s complaint was barred by the Noerr-Pennington

doctrine, the First Amendment to the United States Constitution and Section 1

of the Kentucky Constitution.6

      Based on the defenses asserted in the answer, Seiller Waterman and the

homeowners moved for summary judgment on the sole remaining claim,

wrongful use of civil proceedings, on August 21, 2018. In response, Bardstown

Capital argued that the Noerr-Pennington doctrine is inapplicable because

zoning rights are statutory, not constitutional. Bardstown Capital asserted

that the homeowners initiated the zoning appeal to obtain a price above fair

market value for their properties.

      On November 28, 2018, the trial court granted summary judgment in

favor of Seiller Waterman and the homeowners. The trial court determined

that the Noerr-Pennington doctrine applies and the fact that the bulk of the

evidentiary hearing was held without fresh notice conferred a reasonable basis

for appeal. Applying Grand Communities, Ltd. v. Stepner, 170 S.W.3d 411 (Ky.

App. 2004), a zoning case in which the Court of Appeals applied the Noerr-

Pennington doctrine, the trial court reasoned that the homeowners’ motive in

      6 The First Amendment of the United States Constitution protects “the right of
the people . . . to petition the Government for a redress of grievances” and applies to
state and local governments through the Fourteenth Amendment.
       Section 1 of the Kentucky Constitution provides in relevant part “the right . . .
of applying to those invested with the power of government for redress of grievances or
other proper purposes, by petition, address or remonstrance.”

                                           6
filing the appeal was irrelevant. On appeal to the Court of Appeals, Bardstown

Capital again argued that the Noerr-Pennington doctrine is inapplicable and

that the trial court erred in dismissing its abuse of process claim.

      The Court of Appeals affirmed the dismissal of the abuse of process claim

and reversed the summary judgment.7 The Court of Appeals agreed with the

Stepner court’s adoption of the Noerr-Pennington doctrine in zoning actions but

held that the application of the doctrine’s “sham” exception should be

determined by a fact-finder. An action is a sham under the Noerr-Pennington

doctrine if it is objectively baseless and the subjective intent of the petitioning

party was to inhibit competition, not to seek redress from the government. Pro.

Real Est. Inv., Inc. v. Columbia Pictures Indus., Inc. (PRE), 508 U.S. 49, 55

(1993).

      Having granted discretionary review, heard oral arguments, and carefully

considered the record, we reverse the Court of Appeals’ decision and remand to

the trial court for reinstatement of the summary judgment.

      7  The Court of Appeals upheld the trial court’s dismissal of Bardstown Capital’s
abuse of process claim, holding that it was filed outside the one-year statute of
limitations period. The appellate court relied on DeMoisey v. Ostermiller, 2014-CA-
001827-MR, 2016 WL 2609321, *1 (Ky. App. May 6, 2016), an opinion depublished by
this Court in its denial of discretionary review on December 8, 2016. The Court of
Appeals held that “the cause of action for an abuse of process claim accrues at the
time the conduct complained of by the plaintiff occurred, not at the termination of the
underlying litigation.” Id. at *14. Therefore, the court determined that the cause of
action accrued on October 22, 2014 when Seiller Waterman filed a motion for
extension of time to file supplemental briefs, the last action Seiller Waterman took in
the zoning appeal. Consequently, Bardstown Capital’s abuse of process claim
included in its amended complaint in February 2017 was filed outside the statute of
limitations. The parties do not raise any issues regarding the abuse of process claim
in this appeal.

                                           7
                                    ANALYSIS

        The primary issue before us is the applicability of the Noerr-Pennington

doctrine in zoning litigation. On appeal, we review a summary judgment de

novo. Shelton v. Ky. Easter Seals Soc’y, Inc., 413 S.W.3d 901, 905 (Ky. 2013).

We must consider whether the trial court “correctly determined that there were

no genuine issues of material fact and that the moving party was entitled to

judgment as a matter of law.” Fluke Corp. v. LeMaster, 306 S.W.3d 55, 59 (Ky.

2010) (citation omitted). To defeat summary judgment, Bardstown Capital

must have presented affirmative evidence that a genuine issue of material fact

exists. Steelvest, Inc. v. Scansteel Serv. Ctr., Inc., 807 S.W.2d 476, 480 (Ky.

1991).

        Seiller Waterman and the homeowners argue that the Noerr-Pennington

doctrine applies, and bars Bardstown Capital’s wrongful use of civil

proceedings claim. In response, Bardstown Capital asserts that the Noerr-

Pennington doctrine does not apply to zoning cases and if it does, the

applicability of the sham exception must be determined by a fact-finder, as the

Court of Appeals held. We begin our analysis by examining the history and

application of the Noerr-Pennington doctrine.

   I.      The Noerr-Pennington Doctrine

        The Sherman Act, enacted in 1890, was the first federal antitrust law

aimed at preserving competition as a rule of trade by prohibiting activities that

restrict interstate commerce. 15 U.S.C. §§ 1-38. The Sherman Act serves as a

century-old cornerstone in the antitrust arena that influenced the creation of

                                         8
other laws and judicial decisions to regulate trade and commerce. The right to

petition is one of “the most precious of the liberties safeguarded by the Bill of

Rights,” BE & K Constr. Co. v. NLRB, 536 U.S. 516, 524-25 (2002) (citation

omitted), and the intersection of antitrust laws and First Amendment rights

has generated litigation and implicated numerous policy considerations.

Importantly, the various immunities from antitrust coverage include the

petitioning immunity created by the Noerr-Pennington doctrine.

      The Noerr-Pennington doctrine is derived from two United States Supreme

Court cases: Eastern R.R. Presidents Conference v. Noerr Motor Freight, Inc., 365

U.S. 127 (1961) and United Mine Workers of America v. Pennington, 381 U.S.

657 (1965). In Noerr, twenty-four railroad associations started a publicity

campaign against truckers in an attempt to foster the adoption and retention of

laws destructive to the trucking business. 365 U.S. at 129. As a result, the

Governor of Pennsylvania vetoed the Fair Truck Bill, which would have allowed

trucks to increase the weight of their loads. Id. at 130. Several trucking

companies filed suit, claiming that the railroads conspired to restrain trade in,

and monopolize, the long-distance freight industry in violation of Sections 1

and 2 of the Sherman Act. Id. at 130-31. The United States Supreme Court

held that there could be no violation of the Sherman Act based on attempts to

influence the passage or enforcement of certain laws. Id. at 135.

      The right of the people to inform their representatives in
      government of their desires with respect to the passage or
      enforcement of laws cannot properly be made to depend upon their
      intent in doing so. It is neither unusual nor illegal for people to

                                         9
      seek action on laws in the hope that they may bring about an
      advantage to themselves and a disadvantage to their competitors.

Id. at 139. The Court also explained that:

      It is inevitable, whenever an attempt is made to influence
      legislation by a campaign of publicity, that an incidental effect of
      that campaign may be the infliction of some direct injury upon the
      interests of the party against whom the campaign is directed. And
      it seems equally inevitable that those conducting the campaign
      would be aware of, and possibly even pleased by, the prospect of
      such injury. To hold that the knowing infliction of such injury
      renders the campaign itself illegal would thus be tantamount to
      outlawing all such campaigns.

Id. at 143-44. However, the Court acknowledged the possibility of situations

where efforts toward influencing governmental action were merely a sham “to

cover what is actually nothing more than an attempt to interfere directly with

the business relationships of a competitor . . . .” Id. at 144.

      Four years later, in Pennington, 381 U.S. 657, the United States Supreme

Court reaffirmed its decision in Noerr and held that efforts to influence public

officials were protected regardless of intent or purpose. Id. at 670. Later, in

California Motor Transportation Co. v. Trucking Unlimited, 404 U.S. 508, 510

(1972), the Court held that “the right to petition extends to all departments of

the Government.” The Court also reiterated that there is no immunity where a

challenged 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. at 511 (quoting Noerr, 365 U.S. at 144).

                                         10
         The Court elaborated on the sham exception to the Noerr-Pennington

immunity in PRE, 508 U.S. at 50. In that case, the Supreme Court outlined a

two-part definition of sham litigation:

         First, the lawsuit must be objectively baseless in the sense that no
         reasonable litigant could realistically expect success on the merits.
         If an objective litigant could conclude that the suit is reasonably
         calculated to elicit a favorable outcome, the suit is immunized
         under Noerr, and an antitrust claim premised on the sham
         exception must fail. Only if challenged litigation is objectively
         meritless may a court examine the litigant's subjective motivation.
         Under this second part of our definition of sham, the court should
         focus on whether the baseless lawsuit conceals “an attempt to
         interfere directly with the business relationships of a competitor,”
         Noerr, supra, 365 U.S., at 144 81 S.Ct., at 533 (emphasis added),
         through the “use [of] the governmental process—as opposed to the
         outcome of that process—as an anticompetitive weapon,” Omni,
         499 U.S., at 380, 111 S.Ct., at 1354 (emphasis in original).

Id. at 60-61. The PRE Court also determined that “an objectively reasonable

effort to litigate cannot be sham regardless of subjective intent.” Id. at 57.

   II.      The Noerr-Pennington Doctrine and Kentucky Law

         Historically, Kentucky courts have been presented with few opportunities

to consider the applicability of the Noerr-Pennington doctrine. In Eastern

Kentucky Resources v. Arnett, 892 S.W.2d 617 (Ky. App. 1995), a citizens group

filed suit challenging a solid waste management plan. The solid waste facility

developer filed an action against the citizens group asserting intentional

interference with contractual relations and characterized the initial lawsuit as a

“sham” under the Noerr-Pennington doctrine. Id. at 618. While the Court of

Appeals noted that federal and state courts have applied the doctrine to

petitioning activities outside the antitrust realm, including specifically zoning

                                          11
cases, the court declined to address the doctrine, concluding it was

unnecessary to its resolution of the case. Id. at 618-19. Three years later, this

Court acknowledged the Noerr-Pennington doctrine in Simpson v. Layhart, 962

S.W.2d 392, 396 (Ky. 1998), an abuse of process case arising out of a zoning

matter, but declined to address the doctrine given the propriety of summary

judgment on the abuse of process claim on other grounds.

      In 2004 the Court of Appeals applied the Noerr-Pennington doctrine in a

zoning case. In Stepner, 170 S.W.3d at 413, Donald Stepner learned that

adjoining property was to be rezoned to allow for increased density housing,

allowing a developer to quadruple the number of houses per acre. The City of

Florence adopted an ordinance rezoning the property per the developer’s

wishes. Id. Stepner and other neighboring landowners filed an unsuccessful

appeal in Boone Circuit Court challenging the rezoning. Id. The developer

then filed a civil complaint alleging abuse of process, wrongful use of civil

proceedings, and intentional interference with contractual relations. Id. The

developer claimed that Stepner damaged its business interests by filing a

“frivolous” challenge to the rezoning decision. Id. The trial court dismissed

both claims, concluding that the Noerr-Pennington doctrine shielded Stepner

from liability. Id. at 413-14.

      On appeal, the Court of Appeals applied the Noerr-Pennington doctrine

and held that Stepner was shielded from liability on the abuse of process and

wrongful use of civil proceedings claims. Id. at 416. Landowners, like Stepner,

have an “absolute right to appeal the rezoning” because KRS 100.347(3) allows

                                        12
“[a]ny person or entity claiming to be injured or aggrieved” to appeal. Id. at

415-16. “Thus, his subjective motivation, whatever it may have been, is

irrelevant, and the sham exception to the Noerr-Pennington doctrine does not

apply.” Id. at 416. Given that Stepner had standing to appeal the zoning

decision, “his appeal cannot be said to have been objectively baseless.” Id.

This Court denied discretionary review on September 14, 2005. Since Stepner,

and until now, this Court has not been presented with the application of the

Noerr-Pennington doctrine in the context of KRS 100.347 zoning appeals.8

   III.   The Noerr-Pennington Doctrine in Other Jurisdictions

      Although the Noerr-Pennington doctrine initially arose in the antitrust

field, courts across the country have expanded the doctrine to protect First

Amendment petitioning of the government in zoning litigation. In Cove Road

Development v. Western Cranston Industrial Park Associates, 674 A.2d 1234

(R.I. 1996), property was rezoned to allow for a residential development and

neighboring landowners contested the rezoning. After an unsuccessful appeal,

the developer sued the neighboring landowners for abuse of process and

malicious prosecution. Id. at 1236. The Rhode Island Supreme Court affirmed

the trial court’s dismissal of both claims on summary judgment. Id. at 1239.

      8 We note that the Court of Appeals recently addressed the Noerr-Pennington
doctrine in Willow Grande, LLC v. Cherokee Triangle Association, Inc., 2020 WL
4910127, *1 (Ky. App. August 21, 2020). Relying on Stepner, 170 S.W.3d 411, the
Court of Appeals determined that “the [Noerr-Pennington] doctrine generally provides
immunity from legal action to persons who bring a zoning appeal to induce the
passage or enforcement of law or to solicit governmental action.” Id. at *5. The
Cherokee Triangle Association filed a motion for discretionary review in this Court on
September 22, 2020. On February 9, 2021, we issued an order holding the Willow
Grande case in abeyance pending final disposition of this case.

                                          13
The Court held that “the constitutional protection of the right to petition is no

less compelling in the context of common-law tort claims than in the

framework of federal antitrust legislation.” Id. at 1237. The Court was

unpersuaded by the developer’s contention that First Amendment protection is

limited to petitioning activity at the zoning board and city council levels. Id. at

1237-38.

      In a Utah case, neighboring property owners opposed a proposed

commercial development near a local river. Anderson Dev. Co. v. Tobias, 116

P.3d 323, 327 (Utah 2005). The developer brought claims against the property

owners for intentional interference with economic relations. Id. The trial court

denied the property owners’ motion for summary judgment that argued their

petitions to the city council were privileged under the First Amendment and the

Noerr-Pennington doctrine. Id. at 332. On appeal, the Supreme Court of Utah

determined that the property owners’ petitions to the city council were

“genuinely designed to achieve their desired outcome—the denial of [the

developer’s] zoning application.” Id. at 333. Therefore, the trial court erred in

denying the property owners’ motion for summary judgment on the intentional

interference claim. Id.

      The Supreme Court of Mississippi also applied the Noerr-Pennington

doctrine in a zoning context in Jourdan River Estates, LLC v. Favre, 278 So. 3d

1135 (Miss. 2019). A yacht club sued neighboring property owners who

opposed the development of hundreds of condominiums and a yacht basin,

asserting fifteen causes of actions based on allegations that the property

                                        14
owners delayed the development. Id. at 1140. For nearly seven years, the

parties employed significant resources in litigating the rights of parties to a

county road that allowed various property owners access to a major highway,

which was essential for the purpose of the condominium development. Id. The

Court held that the property owners’ request that a county board deny the

extension of the yacht club’s conditional use permit for continued development

of the condominium complex and yacht basin did not come within the sham

exception to the Noerr-Pennington doctrine. Id. at 1152. In concluding their

petitioning activities were not objectively baseless, the Mississippi Court

focused on the amount of time and resources used to ascertain the rights of

different parties and concluded that those efforts demonstrated that the

litigation was not a sham. Id.

      Although an intermediate court, the Appellate Court of Connecticut has

applied and reaffirmed the application of the Noerr-Pennington doctrine in

zoning litigation. In Zeller v. Consolini, 758 A.2d 376, 382 (Conn. App. 2000),

the court applied the Noerr-Pennington doctrine to bar a developer’s claims for

tortious interference against nearby landowners who challenged the

development of a mall. The court noted that the application of Noerr-

Pennington to protect petitioning activity directed at local governments is well

established in other jurisdictions. Id. at 380. The court held that the doctrine

“subordinates antitrust considerations and commercial expediency to the

constitutional rights of individuals and groups to petition their government.”

Id. at 381-82. Additionally, the court contemplated that

                                        15
      failure to apply the Noerr–Pennington doctrine aggressively may
      create a “chilling effect” on the first amendment right to petition in
      zoning and other matters. See Ottensmeyer v. Chesapeake &
      Potomac Telephone Co., 756 F.2d 986, 993–94 (4th Cir.1985).
      Indeed, such a chilling effect can be a virtual deep freeze when
      individual citizens not versed in the legal system and without
      financial resources do not exercise potentially meritorious legal
      challenges for fear of costly and protracted, retributive litigation
      from opponents.

Id. at 382. The Connecticut Appellate Court recently reaffirmed the application

of the Noerr-Pennington doctrine in zoning litigation in Procurement, LLC v.

Ahuja, 234 A.3d 135 (Conn. App. 2020), holding that the lack of adequate

notice of a rescheduled zoning hearing provided objectively plausible grounds

for the underlying appeal, despite the fact that the protestor had lost the

underlying appeal. The challenge to notice stemmed from the city’s charter

provisions, which permitted the zoning board to hold more than one public

hearing “upon due notice.” Id. at 146. The appellate court stated that a

reasonable litigant “could deduce that notice is required for every public

hearing, including a continuation.” Id. at 149.

      In addition to extending the Noerr-Pennington doctrine beyond antitrust

cases, some states have adopted statutes specifically designed to prohibit

“SLAPP” lawsuits, Strategic Lawsuits Against Public Participation. SLAPP

lawsuits aim to harass, intimidate or silence those individuals who use their

right to petition. Anti-SLAPP laws typically function by allowing the defendant,

the person who exercised his or her petitioning rights, to file a motion to strike

or dismiss because the case involves protected speech on a matter of public

concern.

                                        16
       Approximately thirty-three states have some type of anti-SLAPP

legislation.9 These laws vary in the degree and type of procedural tools

available to litigants and the protection offered to those exercising their First

Amendment rights. California Code of Civil Procedure § 425.16, for example,

recognizes that “there has been a disturbing increase in lawsuits brought

primarily to chill the valid exercise of the constitutional rights of freedom of

speech and petition for the redress of grievances.” The statute renders a cause

of action arising from the exercise of the right to petition or free speech subject

to a special motion to strike, “unless the court determines that the plaintiff has

established that there is a probability that the plaintiff will prevail on the

claim.” Id. Anti-SLAPP laws have existed in Washington state since 1989. In

2002, Revised Code of Washington 4.24.520 was amended to bring Washington

law in line with court decisions that recognize that the “United States

Constitution protects advocacy to government, regardless of content or motive,

       9  See, e.g., Tennessee Code §§ 20-17-1001–04 (the Public Participation Act
encourages and safeguards “the constitutional rights of persons to petition to speak
freely, to associate freely, and to participate in government to the fullest extent
permitted by law. . . .” The Act provides that if legal action is filed in response to a
person’s exercise of their right to petition or freedoms of speech and association, that
person may file a motion to dismiss the legal action.); Indiana Code §§ 34-7-7-1–10
(the anti-SLAPP law allows a party to use “an act in furtherance of a person’s right to
petition or free speech” that is “in connection with a public issue or an issue of public
interest” as a defense to claims brought against them.); Texas Civil Practice &
Remedies Code §§ 27.001-.011 (to protect the exercise of constitutional rights, Texas
law allows a party to file a motion to dismiss in a legal action based on or in response
to the party’s exercise of their right to free speech, petition, or association). Additional
states with anti-SLAPP laws include Georgia (Ga. Code § 9-11-11.1), Illinois (735 Ill.
Comp. Stat. 110/15), New York (N.Y. Civ. Rights Law § 70-a) and Oklahoma (Okla.
Stat. tit. 12, § 1430).

                                            17
so long as it is designed to have some effect on government decision making.”

Wash. Rev. Code Ann. § 4.24.510 (West 2022). The statute affords a person

who communicates a complaint or information to any branch of government

immunity from civil liability.10

      In 2021, Washington adopted the Uniform Public Expression Protection

Act (UPEPA), designed to prevent SLAPP litigation that intends to silence and

intimidate defendants from engaging in constitutionally-protected activities.11

Five states, including Kentucky, have introduced UPEPA legislation, although

Washington is the only state that has enacted the UPEPA as of March 1, 2022.

The Kentucky legislation was introduced as House Bill 222 on January 5,

2022, passed in the House unanimously on February 18, 2022, and is

currently pending in the Senate. House Bill 222 would create new KRS

sections that establish procedures for dismissing legal actions filed in response

to a party’s exercise of free speech, right to petition, or right to association.

The proposed legislation would also allow a party to appeal, as a matter of

right, any order granting or denying a motion to dismiss filed in conjunction

with this statute.

      The extension of the Noerr-Pennington doctrine to zoning disputes in

other jurisdictions, as well as the presence of anti-SLAPP legislation in most

      10Some jurisdictions refer to immunity afforded to petitioners as Petition
Clause immunity, “reserving the name, Noerr-Pennington, for antitrust cases.” See
CSMN Inv., LLC v. Cordillera Metro. Dist., 956 F.3d 1276, 1283 (10th Cir. 2020).
      11Public Expression Protection Act, UNIFORM LAW COMMISSION (Feb. 28, 2022),
https://www.uniformlaws.org/committees/community-home?Community
Key=4f486460-199c-49d7-9fac-05570be1e7b1.

                                         18
jurisdictions (including active consideration in Kentucky), underscores that

protection of the First Amendment right to petition is crucial and requires

vigilance. With this Opinion, we join those jurisdictions in applying Noerr-

Pennington in the context of zoning disputes, an area where our legislature has

granted “injured or aggrieved” parties such as the neighboring homeowners in

this case an express right to seek recourse in the courts.

   IV.        KRS 100.347 Creates a Statutory Right to Appeal Zoning
              Decisions

         Section 115 of the Kentucky Constitution provides for appeals as a

matter of right in all cases originating in our court system. However, a zoning

decision and legislative action taken therefrom are not the equivalent of a court

proceeding and its attendant rulings. In the absence of a matter of right

appeal, KRS 100.347(3) creates a statutory right to appeal from a final action of

the legislative body of any city, county, consolidated local government or

urban-county government relating to a zoning map amendment.12

         In enacting KRS 100.347, the legislature explicitly created three avenues

for “injured or aggrieved” parties to appeal planning and zoning decisions. The

neighboring landowners appealed the zoning decision under KRS 100.347(3),

which states that

         Any person or entity claiming to be injured or aggrieved by any
         final action of the legislative body of any city, county, consolidated

         The Louisville Metro Planning and Zoning Commission is tasked with
         12

considering change in zoning requests. The Commission makes recommendations to
the appropriate legislative body, here Louisville Metro Council, which has the final
authority to approve or deny a change in zoning request. Metro Council voted to enact
an ordinance that changed the zoning of the property at issue here on July 29, 2010.

                                           19
      local government, or urban-county government, relating to a map
      amendment shall appeal from the action to the Circuit Court of the
      county in which the property, which is the subject of the map
      amendment, lies. Such appeal shall be taken within thirty (30)
      days after the final action of the legislative body. All final actions
      which have not been appealed within thirty (30) days shall not be
      subject to judicial review. The legislative body shall be a party in
      any such appeal filed in the Circuit Court.

An appeal from a zoning decision by a legislative body is “a matter of legislative

grace, and not a right.” Taylor v. Duke, 896 S.W.2d 618, 621 (Ky. App. 1995).13

      As discussed in Kenton County Board of Adjustment v. Meitzen, 607

S.W.3d 586, 595 (Ky. 2020), by enacting KRS 100.347 the legislature

intentionally created a narrow avenue to appeal zoning decisions. “By limiting

the appeal process to certain injured or aggrieved persons or entities, the

legislature has effectively prevented the filing of unnecessary and unfounded

complaints by any citizen who simply disagrees with the board of adjustment's

action.” Id. These statutory appeals are not limited to neighboring property

owners, like the homeowners here, but can be utilized by rezoning applicants

or anyone otherwise injured or aggrieved by a zoning decision.

      After the Louisville Metro Council voted to enact an ordinance that

changed the zoning of the affected real property, the neighboring landowners,

represented by Seiller Waterman, appealed the legislation that rezoned the

land. The complaint, filed on August 26, 2010, included several claims but the

      13  Taylor involved a challenge to a planning and zoning commission decision
pursuant to KRS 100.347(2). Because a zoning appeal from a legislative body is also a
creature of statute, KRS 100.347(3), the Taylor court’s designation of “legislative grace”
is equally applicable in the context of subsection (3).

                                           20
focal point was the allegation that the Commission acted unconstitutionally

and in violation of KRS Chapter 100, by failing to give proper notice for the

zoning hearings and failing to accord the neighboring homeowners an

opportunity to be heard. In filing the action, the homeowners used a lawful

and legislatively-prescribed means to challenge the development and zoning

activities on substantive grounds.

   V.        The Noerr-Pennington Doctrine Bars Bardstown Capital’s Claim
             for Wrongful Use of Civil Proceedings and the Sham Exception Is
             Inapplicable

        Seiller Waterman and the homeowners argue that the Noerr-Pennington

doctrine bars Bardstown Capital’s claim for wrongful use of civil proceedings.14

We agree. Given the statutory right to appeal zoning decisions and the

importance of the First Amendment right to petition, the Noerr-Pennington

doctrine necessarily applies to zoning litigation in the context of appeals

pursuant to KRS 100.347.

        Here, the neighboring homeowners properly protested the zoning change

through an avenue of recourse provided by the legislature to those persons or

        14As is evident by now, this case presents an important opportunity for this
Court to address the longstanding Noerr-Pennington doctrine and its applicability in
Kentucky zoning matters. We recognize that Seiller Waterman and the homeowners
also claim that Bardstown Capital did not specifically plead a lack of probable cause,
an essential element of a wrongful use of civil proceedings claim. See Mosier v.
McFarland, 106 S.W.2d 641, 642 (Ky. 1937) (holding that a lack of probable cause is
an essential element of a wrongful use of civil proceedings claim and “must be alleged
and proved . . . .”). Seiller Waterman and the homeowners suggest that the
inadequacy of Bardstown Capital’s complaint is the most direct basis for upholding
the trial court’s judgment. Given our ultimate conclusion that the Noerr-Pennington
doctrine does in fact apply, and affords immunity to Seiller Waterman and the
neighboring homeowners, we decline to address this argument.

                                          21
entities injured or aggrieved. As the applicant that initiated the zoning

proceedings, Bardstown Capital was a necessary party to the homeowners’

appeal. KRS 100.347(4).15 Therefore, Seiller Waterman and the homeowners

are shielded from liability for filing the appeal by the Noerr-Pennington doctrine,

unless the sham exception applies. We hold that it does not.

      From the outset of the Noerr-Pennington doctrine, the Supreme Court

recognized the possibility that some efforts to influence governmental action

are “a mere sham to cover what is actually nothing more than an attempt to

interfere directly with the business relationships of a competitor . . . .” Noerr,

365 U.S. at 144. A plaintiff relying on the sham litigation exception to

overcome Noerr-Pennington immunity bears the burden of proving the two-part

test established by the Supreme Court in PRE, 508 U.S. at 50. To reiterate that

test, “sham” litigation must be “objectively baseless in the sense that no

reasonable litigant could realistically expect success on the merits.” Id. If that

threshold is met, the court must then determine whether there is evidence of a

subjective intent to use the governmental process to interfere directly with a

competitor’s business. Id. Stated differently, “[o]nly if the challenged litigation

is objectively meritless may a court examine the litigant’s subjective

motivation.” Id. Matters which concern a party’s “motivations in bringing suit

      15  In the litigation underlying Stepner, 170 S.W.3d at 413, Stepner failed to
name all owners of a development property in his KRS 100.347(3) appeal in circuit
court, leading that court to dismiss the appeal.

                                          22
[are] rendered irrelevant by the objective legal reasonableness of the litigation.”

Id. at 66.

      The objectively reasonable prong is not based on hindsight. As the U.S.

Court of Appeals for the Third Circuit recently held, “the essential question is

not whether the suit succeeds, but whether the suit was a sham at the time it

was filed.” In re Wellbutrin XL Antitrust Litig., 868 F.3d 132, 149 (3rd Cir. 2017)

(citing PRE, 508 U.S. at 60 n.5). (“[W]hen the antitrust defendant has lost the

underlying litigation, a court must resist the . . . temptation to engage in post

hoc reasoning by concluding that an ultimately unsuccessful action must have

been unreasonable or without foundation.” (internal quotations omitted)). As

repeatedly noted, our legislature has given adjoining landowners an express

statutory right to appeal if injured or aggrieved by a zoning decision and the

exercise of that right is objectively reasonable, without regard to the eventual

outcome of their claim. Moreover, the allegation in this case that proper notice

for the zoning hearing was not given invokes the fundamental due process

rights of the parties involved, rendering it far from “objectively baseless.” PRE,

508 U.S. at 50.

      As stated in Stepner, 170 S.W.3d at 416, if a party is genuinely aggrieved

by the outcome of a zoning action, KRS 100.347 affords that party both the

right and standing to challenge that action. In Meitzen we discussed the

distinction between standing and jurisdiction.

      Standing, of course, in its most basic sense, refers to an integral
      component of the justiciable cause requirement underlying a trial
      court's jurisdiction. To invoke the court’s jurisdiction, the plaintiff

                                        23
      must allege an injury caused by the defendant of a sort the court is
      able to redress. More specifically in this case, [s]tatutory standing
      refers to whether a statute creating a private right of action
      authorizes a particular plaintiff to avail herself of that right of
      action. Statutory standing is simply statutory interpretation: the
      question it asks is whether [the legislature] has accorded this
      injured plaintiff the right to sue the defendant to redress his
      injury.

607 S.W.3d at 597 (internal quotations and citations omitted). The standing

component of KRS 100.347(3) requires that a party must be “injured or

aggrieved” by a legislative body’s action.

      Here, the plaintiffs in the zoning appeal were adjoining property owners

who asserted that they were injured or aggrieved by the zoning decision, i.e.,

they had standing and a justiciable cause. The neighboring homeowners

asserted that the zoning change would result in immediate and irreparable

injury—loss or damage by being deprived of the use, value and enjoyment of

their property. The exercise of their appeal rights was a legislatively-approved

form of petitioning government and deserves the protection accorded by

application of the Noerr-Pennington doctrine.

                                  CONCLUSION

      Given the explicit statutory grant to adjoining property owners of the

right to pursue appeals from zoning decisions, the Noerr-Pennington doctrine

affords the neighboring homeowners and Seiller Waterman immunity from

claims of wrongful use of civil proceedings. The trial court properly applied the

doctrine and, as a result, did not err in granting summary judgment. We

therefore reverse the Court of Appeals and remand to the trial court for

                                        24
reinstatement of the summary judgment in favor of the neighboring

homeowners and their attorneys.

      Minton, C.J.; Conley, Lambert, and VanMeter, JJ. concur. Keller, J.,

concurs in result only. Nickell, J., not sitting.

COUNSEL FOR APPELLANTS,
SEILLER WATERMAN, LLC, and
BILL V. SEILLER:

Donald Kenneth Brown, Jr.
James Patrick Grohmann
O’Bryan, Brown & Toner, PLLC

COUNSEL FOR APPELLANTS,
TERRY MAUNEY; PHILLIP STEWART;
BETTIE STEWART; ELZIE WATSON;
and BRIDGETTE WATSON:

Stephen T. Porter

COUNSEL FOR APPELLEES:

Hans George Poppe, Jr.
Kirk A. Laughlin
The Poppe Law Firm

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