Baltimore Scrap Corp. v. David J. Joseph Co.

PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

BALTIMORE SCRAP CORPORATION, 

formerly known as Brooklyn

Salvage Corporation,

Plaintiff-Appellant,

v.

THE DAVID J. JOSEPH COMPANY, t/a

United Iron & Metal Company;

DAVID J. WORKUM, III; JOHN DOES

1-10; I. D. SHAPIRO; JAMES SHAPIRO;

CHARLES BAUM; UNITED HOLDINGS

COMPANY, INCORPORATED; UNITED

OPERATING COMPANY, INCORPORATED;

 No. 00-1141

UNITED INVESTMENT ENTERPRISES

PARTNERSHIP,

Defendants-Appellees.

FRANCIS X. DUGGAN; RICH &

HENDERSON, PC; DONALD LEVENSON;

MARLEN TRADING COMPANY; ISAAC

M. NEUBERGER; THOMAS M. WOOD,

IV; WARREN K. RICH; TIMOTHY R.

HENDERSON; DAVID B. IRWIN,

Movants.



Appeal from the United States District Court

for the District of Maryland, at Baltimore.

Benson E. Legg, District Judge.

(CA-96-827-L)

Argued: November 1, 2000

Decided: January 18, 2001

2 BALTIMORE SCRAP v. THE DAVID J. JOSEPH CO.

Before WILKINSON, Chief Judge, WILLIAMS, Circuit Judge,

and Frank J. MAGILL, Senior Circuit Judge of the

United States Court of Appeals for the Eighth Circuit,

sitting by designation.

Affirmed by published opinion. Chief Judge Wilkinson wrote the

opinion, in which Judge Williams and Senior Judge Magill joined.

COUNSEL

ARGUED: Lewis A. Noonberg, PIPER, MARBURY, RUDNICK &

WOLFE, L.L.P., Baltimore, Maryland, for Appellant. G. Jack Don-

son, TAFT, STETTINIUS & HOLLISTER, L.L.P., Cincinnati, Ohio;

Carter G. Phillips, SIDLEY & AUSTIN, Washington, D.C., for

Appellees. ON BRIEF: Kathleen A. Ellis, PIPER, MARBURY,

RUDNICK & WOLFE, L.L.P., Baltimore, Maryland; Charles S.

Hirsch, Robert A. Scott, BALLARD, SPAHR, ANDREWS &

INGERSOLL, L.L.P., Baltimore, Maryland, for Appellant. Daniel R.

Warncke, TAFT, STETTINIUS & HOLLISTER, L.L.P., Cincinnati,

Ohio; Robert J. Carson, Gary R. Jones, Baltimore, Maryland, for

Appellees; Thomas M. Wood, IV, Allan P. Hillman, NEUBERGER,

QUINN, GIELEN, RUBIN & GIBBER, P.A., Baltimore, Maryland,

for Appellees.

OPINION

WILKINSON, Chief Judge:

This antitrust case stems from a protracted dispute over Baltimore

Scrap Corp.’s attempt to install a scrap metal shredder in Baltimore,

Maryland in 1991. Baltimore Scrap alleges that the defendants vio-

lated the Sherman Act, 15 U.S.C. § 1 (1994), by surreptitiously

financing litigation in state court in order to prevent or delay Balti-

more Scrap’s entry into the market. The defendants argue that the

Noerr-Pennington doctrine immunizes those who petition the courts

BALTIMORE SCRAP v. THE DAVID J. JOSEPH CO. 3

from antitrust liability. The district court ruled that although the

defendants’ conduct was wrong, it was nonetheless protected by

Noerr-Pennington. See Baltimore Scrap Corp. v. The David J. Joseph

Co., 81 F. Supp.2d 602, 603 (D. Md. 2000). Because neither the sham

exception nor the fraud exception to Noerr-Pennington immunity

applies here, we affirm the judgment of the district court.

I.

On July 15, 1991, Baltimore Scrap leased land in the city of Balti-

more in order to install a metal shredder there. Baltimore Scrap’s pro-

posed shredder caused great concern among two groups. The first was

comprised of citizen associations of Baltimore who opposed the

shredder on environmental grounds. These organizations voiced their

opposition to the Maryland Department of Environment and to the

Mayor of Baltimore in August of 1991.

The defendants, including The David J. Joseph Co. (DJJ), I.D. Sha-

piro, and the Shapiro family, composed the second group. The defen-

dants controlled the only other metal shredder in the Baltimore area.

DJJ and Shapiro wanted to ensure that their shredder maintained its

monopoly in that area. Unlike the citizen groups, however, DJJ and

Shapiro did not publicly voice their concerns about Baltimore Scrap’s

proposed shredder. Indeed, until their role was inadvertently revealed

in late March of 1993, the defendants’ plan to prevent Baltimore

Scrap from building a shredder was a closely-guarded secret.

In September of 1991, Baltimore Scrap applied for a zoning permit

from the Baltimore City Board of Municipal and Zoning Appeals. In

November, the leaders of the citizen groups testified against the per-

mit. One week later, the Board denied Baltimore Scrap’s application.

Baltimore Scrap appealed this decision to the Baltimore City Circuit

Court, which upheld the Board.

In May of 1992, Baltimore Scrap filed a new zoning application

with the Board. Because the Baltimore zoning code does not allow the

Board to consider "substantially the same proposal" until twelve

months after the previous application was denied, Baltimore Scrap

changed its application to add new protections against soil contamina-

tion at the site. The Board ruled that the application was different

4 BALTIMORE SCRAP v. THE DAVID J. JOSEPH CO.

enough to warrant a new hearing even though twelve months had not

elapsed since the previous denial of a permit. The Board then

approved a permit for Baltimore Scrap on August 6, 1992.

At this point, Shapiro decided to secretly fight the approval of the

permit. Shapiro’s attorney contacted another lawyer, David Irwin, to

handle the appeal. An employee from a different company co-owned

by Shapiro contacted Gloria Sipes. Sipes was the president of one of

the citizen groups, the Community of Curtis Bay Association. The

employee told Sipes that local businesses would pay for an attorney

if the citizen groups wanted to appeal the Board’s decision. The

employee told Sipes to contact David Irwin for the appeal. The caller

did not reveal her identity, or who she represented. Sipes consulted

with the other citizen groups, and they decided to accept the support

of their unknown benefactor. The citizen organizations did not ask

who was funding the appeal and "did not care" who paid the lawyer.

Irwin filed his appeal on behalf of the citizen groups on August 27,

1992. Irwin understood that DJJ and Shapiro controlled the appeal.

Baltimore Scrap moved to dismiss the appeal based upon the citizen

groups’ lack of standing. After the statutory appeal period expired,

Sipes moved to intervene in the lawsuit as an individual party. Judge

Ward of the Baltimore City Circuit Court ruled that the citizen groups

and Sipes all had standing, and granted Sipes’ motion to intervene. He

thus denied Baltimore Scrap’s motion to dismiss.

Chief Judge Hammerman, also of the Baltimore City Circuit Court,

heard the citizen groups’ appeal on the merits on January 7, 1993. He

agreed with Judge Ward that Sipes’ motion to intervene was timely.

After originally ruling for the citizen groups on the merits, Chief

Judge Hammerman eventually affirmed the Board’s decision to grant

Baltimore Scrap a permit once the Board clarified a technical point.

The citizen groups filed a motion with Chief Judge Hammerman to

stay his decision pending appeal.

Throughout this time, DJJ and Shapiro left no public trace of their

involvement in the lawsuit. In late March, however, a so-called "er-

rant fax" exposed the role of the defendants. This fax was supposed

to go to a lawyer working for DJJ and Shapiro, but instead was sent

to a friend of Baltimore Scrap’s president. On April 3, Irwin met with

BALTIMORE SCRAP v. THE DAVID J. JOSEPH CO. 5

representatives from the citizen groups involved in the lawsuit. He

told them that DJJ and Shapiro were funding the litigation. He asked

them whether they wanted to continue with the appeal. The citizen

groups decided to keep pursuing the appeal, despite the knowledge of

DJJ and Shapiro’s involvement.

Baltimore Scrap argued in its opposition to the motion to stay that

the lawsuit was a fraud because DJJ and Shapiro were the real parties

in interest. Irwin responded in his pleadings that the notion that the

defendants directed the conduct of this case or drafted the previous

motion was "preposterous, inflammatory, and not based in reality."

Irwin emphasized in open court during an April 23 hearing on the

motion to stay that the citizen groups were the only parties he repre-

sented. When Chief Judge Hammerman questioned Irwin about the

errant fax, Irwin told the judge that nothing in the errant fax "says my

law firm is involved with" DJJ and Shapiro. Irwin stated to the court,

"I continue to deny, as my papers do, that I am representing anyone

but the people represented here." Chief Judge Hammerman denied

Irwin’s motion to stay because he thought that the citizen groups did

not have a likelihood of success on appeal. In reaching this decision,

Chief Judge Hammerman observed that he saw the hand of the defen-

dants in the lawsuit, and that "they have gone from the role of an

interested observer to the role of an active participant."

Despite the denial of the motion to stay, the citizen groups

appealed to the Maryland Court of Special Appeals. In a twelve-page

opinion, the Court of Special Appeals denied the appeal. See Sipes v.

Board of Municipal and Zoning Appeals, 635 A.2d 86 (Md. Ct. Spec.

App. 1994). It called the case "dead on arrival in the circuit court"

because the citizen groups did not have standing since they were nei-

ther an aggrieved party nor a taxpayer. Id. at 97; accord id. at 89.

Although Sipes as an individual did have standing, her motion to

intervene was time-barred as a logical extension of the citizen groups’

lack of standing. Id. at 94. The citizen groups did not pursue an appeal

from this decision. Baltimore Scrap’s shredder became fully opera-

tional in July, 1993.

Baltimore Scrap sued DJJ, the Shapiro family, and the Shapiro

family’s companies. The complaint alleged violations of the Sherman

Act, 15 U.S.C. § 1, violations of Maryland antitrust law, Md. Code

6 BALTIMORE SCRAP v. THE DAVID J. JOSEPH CO.

Ann. Com. Law. II §§ 11-204 et seq., and various state common law

tort claims including malicious use of process, abuse of process, and

fraud. The district court found that the defendants’ actions were "de-

ceitful," "underhanded," and "morally wrong." Baltimore Scrap

Corp., 81 F. Supp.2d at 603. Nevertheless, the district court dismissed

Baltimore Scrap’s claims because of the defendants’ Noerr-

Pennington immunity. See id. Baltimore Scrap now appeals.

II.

The Noerr-Pennington doctrine guarantees citizens their First

Amendment right to petition the government for redress without fear

of antitrust liability. See Eastern R.R. Presidents Conference v. Noerr

Motor Freight, Inc., 365 U.S. 127, 136-39 (1961); United Mine Work-

ers of Am. v. Pennington, 381 U.S. 657, 669 (1965). In Noerr, the

Supreme Court held that "the Sherman Act does not prohibit two or

more persons from associating together in an attempt to persuade the

legislature or the executive to take particular action with respect to a

law that would produce a restraint or a monopoly." Noerr, 365 U.S.

at 136. Indeed, the Court emphasized that "[t]he right of petition is

one of the freedoms protected by the Bill of Rights, and we cannot,

of course, lightly impute to Congress an intent to invade these free-

doms." Id. at 138.

Antitrust law was thus not intended to impose a barrier between the

people and their government. Because it is "neither unusual or illegal

for people to seek action on laws in the hope that they may bring

about an advantage to themselves and a disadvantage to their compet-

itors," the Supreme Court has made clear that the Sherman Act gener-

ally does not prohibit the petitioning of public bodies for relief. Id. at

139. Indeed, an "anticompetitive purpose [does] not illegalize" con-

certed attempts to influence public officials "even though the resulting

official action damaged other competitors at whom the conduct was

aimed." Pennington, 381 U.S. at 669.

Noerr-Pennington immunity from antitrust laws extends to peti-

tioning the courts as well. See California Motor Transport Co. v.

Trucking Unlimited, 404 U.S. 508, 510-11 (1972). Federal antitrust

law is thus generally not an appropriate means of collaterally attack-

ing state judicial judgments because of Noerr-Pennington’s holding

BALTIMORE SCRAP v. THE DAVID J. JOSEPH CO. 7

that the rights of petition and association trump any anticompetitive

effects that might occur from asking the government for redress. Any

other rule would allow the specter of satellite litigation to restrict the

primary right of citizens to seek justice from the judicial system.

III.

Noerr-Pennington immunity from lawsuits has two main excep-

tions, however — "sham litigation" and, arguably, fraudulent litiga-

tion. See Professional Real Estate Investors, Inc. v. Columbia

Pictures Indus., 508 U.S. 49, 60, 61-62 n.6 (1993) (PRE); accord

Noerr, 365 U.S. at 144. Baltimore Scrap argues that both exceptions

operate to strip the defendants of any Noerr-Pennington immunity.

A.

We address the sham exception to Noerr-Pennington immunity

first. Sham litigation must meet a two-part test. See PRE, 508 U.S. at

60-61. First, the lawsuit must be objectively baseless. A lawsuit is

objectively baseless only if "no reasonable litigant could realistically

expect success on the merits." PRE, 508 U.S. at 60. If an objective

party can "conclude that the suit is reasonably calculated to elicit a

favorable outcome, the suit is immunized under Noerr, and an anti-

trust claim premised on the sham exception must fail." Id. By defini-

tion, a winning lawsuit is a "reasonable effort at petitioning for

redress and therefore not a sham." Id. at 60 n.5. Second, in the event

the challenged litigation is found to be objectively baseless, the law-

suit must further conceal an attempt to interfere directly with the busi-

ness relationships of a competitor. Id. at 60-61. Because the litigation

at issue in this case was not objectively baseless, our analysis stops

after the first prong of the test.

Lawsuits are not objectively baseless simply because a litigant lost.

In PRE, the Supreme Court held that Columbia Pictures had a reason-

able basis for believing it might win a copyright infringement case

despite the fact that the Ninth Circuit dismissed the lawsuit as a mat-

ter of law. See PRE, 508 U.S. at 63-65. The Court pointed to the fact

that two other circuits expressly declined to follow the Ninth Circuit’s

holding as well as the criticism that the Ninth Circuit’s opinion

engendered among commentators. See id. Even in the absence of this

8 BALTIMORE SCRAP v. THE DAVID J. JOSEPH CO.

contrary authority, the Court held that Columbia Pictures would have

been entitled to press a novel claim if a similarly situated litigant

could have perceived some likelihood of success. See id. at 65.

Baltimore Scrap argues that the litigation was a sham because the

defendants knew that the citizen groups did not have standing and

Sipes did not timely move to intervene. Baltimore Scrap cites In re

Burlington Northern, Inc., 822 F.2d 518 (5th Cir. 1987), and Land-

marks Holding Co. v. Bermant, 664 F.2d 891 (2d Cir. 1981), to sup-

port its claim. In Burlington Northern, railroad companies allegedly

tried to prevent or delay the construction of a coal pipeline by engag-

ing in sham petitioning of the courts. See 822 F.2d at 521. Some of

the railroad companies knew that they had no standing or had no rea-

sonable basis for asserting standing. Still, they joined in the lawsuit.

See id. at 530. The court held that the defendants’ actions were not

protected by Noerr-Pennington because the litigation was baseless.

Id. In Landmarks Holding, owners of a shopping mall sued a compet-

ing shopping mall knowing that they lacked the standing to do so. See

664 F.2d at 893. These owners also subsidized litigation by various

citizens to stop the competing mall without the citizens’ knowledge

that the shopping mall owners were funding the lawsuit. See id. at

893-94. The court held that because all the lawsuits were meritless,

Noerr-Pennington did not protect the defendants’ actions. See id. at

896.

The case at bar differs substantially from both Burlington Northern

and Landmarks Holding. First, both these cases were decided before

the Supreme Court enunciated its test for sham litigation in PRE. Sec-

ond, and more importantly, in both cases the defendants knew or rea-

sonably should have known that they lacked standing and therefore

that their claims were baseless.

In this case, an objective litigant could reasonably expect to

achieve success on the merits. Although the zoning lawsuit was even-

tually dismissed due to lack of standing, Judge Ward ruled for the cit-

izen groups on the standing issue and allowed Sipes to intervene.

Chief Judge Hammerman indicated that after his independent

research, he probably would agree with Judge Ward if he needed to

rule on standing. The Court of Special Appeals disagreed, but only

after making a "logical extension" of its intervention rule and after a

BALTIMORE SCRAP v. THE DAVID J. JOSEPH CO. 9

reasoned opinion. Sipes, 635 A.2d at 94. As the district court noted,

the "success before two judges of the Circuit Court for Baltimore City

demonstrates a reasonable basis" for the litigation position. 81 F.

Supp.2d at 614. The fact that the Court of Special Appeals ultimately

dismissed the lawsuit on the standing issue makes no difference in

deciding whether an objective litigant could reasonably expect to

have success on the merits. Judged by this latter standard, the zoning

litigation was not a sham.

B.

Baltimore Scrap maintains, however, that Noerr-Pennington analy-

sis is inapplicable to this case because DJJ and the Shapiro family did

not petition the government since they were not parties to the zoning

litigation. Baltimore Scrap argues that Noerr-Pennington protects liti-

gants only, not third parties who covertly funded the lawsuit. See

PRE, 508 U.S. at 60 ("If an objective litigant could conclude that the

suit is reasonably calculated to elicit a favorable outcome . . . .")

(emphasis added).

PRE is not so restrictive as to protect only the litigant from later

antitrust liability. See Liberty Lake Investments, Inc. v. Magnuson, 12

F.3d 155, 157-59 (9th Cir. 1993). The fact that a third party funded

the litigation cannot govern the analysis of the objective merit of a

lawsuit. See id. As the Sixth Circuit put it, "[I]t would avail an anti-

trust plaintiff nothing to show that the defendant had surreptitiously

caused a front man to institute a lawsuit against the plaintiff, even if

the suit proved to be without merit, absent a showing of clear abuse

of process." Opdyke Investment Co. v. City of Detroit, 883 F.2d 1265,

1273 (6th Cir. 1989).

Baltimore Scrap again relies on Burlington Northern for the propo-

sition that a third party who does not have standing to pursue a law-

suit in its own right does not receive Noerr-Pennington immunity. See

Burlington Northern, 822 F.2d at 531. In Burlington Northern, Union

Pacific Railroad did not join the litigation against the coal pipeline

company as a party. However, it provided legal assistance to the state

of Nebraska. Most parties, as well as the district court, did not know

of Union Pacific’s involvement in the lawsuit. See id. at 530-31. The

court held that if Union Pacific did not have standing against the pipe-

10 BALTIMORE SCRAP v. THE DAVID J. JOSEPH CO.

line company in its own right, it would not receive the protection of

Noerr-Pennington. See id. at 531 and n.11.

Baltimore Scrap argues that since the defendants in this case like-

wise did not have standing to pursue the appeal, they do not receive

Noerr-Pennington immunity. We are wary of relying on Burlington

Northern, however, given the fact that the Supreme Court in PRE spe-

cifically disapproved of Burlington Northern in fashioning its two-

part sham litigation test. See PRE, 508 U.S. at 55 n.3. Indeed, post-

PRE cases with similar facts have recognized that the defendant’s

standing to bring a lawsuit is not germane in deciding whether the

lawsuit itself was objectively meritless. See, e.g., Liberty Lake, 12

F.3d at 155. In Liberty Lake, a developer named Harry Magnuson

solicited and financed straw parties to prosecute an environmental

challenge against a competing business. See Liberty Lake, 12 F.3d at

158. The Liberty Lake court undertook the normal, two part analysis

for sham litigation despite the fact that Magnuson was behind the liti-

gation. See id. at 157-58. In a case decided before PRE, this circuit

declined as well to deny Noerr-Pennington immunity to non-litigants.

See Hospital Building Co. v. Rex Hospital, 691 F.2d 678 (4th Cir.

1982) (non-litigants who caused a government entity to file litigation

entitled to jury charge of Noerr-Pennington immunity).

In this case, we need not decide whether the defendants themselves

had independent standing to pursue the zoning litigation in state court

because the standing of third parties does not control the sham litiga-

tion analysis. Funding of litigation by a non-party can be petitioning

to the same extent that filing a lawsuit itself is petitioning. See Liberty

Lake, 12 F.3d at 157-59; Opdyke, 883 F.2d at 1273. Indeed, non-

parties often provide aid to litigants, whether through financial back-

ing, legal assistance, amicus briefs, or moral support. The fact that an

amicus brief, for example, might be filed by a non-party with some

anti-competitive aim does not strip from the amicus its Noerr-

Pennington right to petition the courts. The realities often are that liti-

gation cannot be entirely financed out of the pocket of the party bring-

ing suit. And the costs of supporting a party’s right of access to public

bodies need not entail the defense of a collateral antitrust suit. To hold

that only parties who have standing in their own right receive the pro-

tection of Noerr-Pennington immunity is to artificially restrict that

BALTIMORE SCRAP v. THE DAVID J. JOSEPH CO. 11

doctrine by penalizing even the lawful support of objectively merito-

rious actions.

Such a limited rule would also severely curtail the rights of all citi-

zens to petition the government and to associate with others who do

so. The First Amendment freedoms of petitioning and of association

protect groups who for whatever reason want to contribute to a law-

suit openly or to stand apart from public view while another party

files a lawsuit, assuming no rule or statute independently requires dis-

closure of the aid. Accordingly, because the litigation was not objec-

tively baseless, and because the source of funding this lawsuit in no

way affected the legitimacy of the claims advanced, the district court

correctly held that the lawsuit was not sham litigation. As that court

noted, Baltimore Scrap has "fail[ed] to show how the legal questions

raised by the citizens groups in the zoning appeal would have lacked

objective merit had the role of the defendants been known." 81 F.

Supp.2d at 615-16.

IV.

Baltimore Scrap argues in the alternative that even if the lawsuit

was not sham litigation, the defendants’ actions do not deserve Noerr-

Pennington immunity because of the fraud exception to Noerr-

Pennington.

In PRE, the Supreme Court specifically left open the question of

whether a fraud exception to Noerr-Pennington exists. "We need not

decide here," the Court stated, "whether and, if so, to what extent

Noerr permits the imposition of antitrust liability for a litigant’s fraud

or other misrepresentations." PRE, 508 U.S. at 62 n.6. If a fraud

exception to Noerr-Pennington does exist, it extends only to the type

of fraud that deprives litigation of its legitimacy. See Cheminor Drugs

v. Ethyl Corp., 168 F.3d 119, 123-24 (3d Cir. 1999) ("While we do

not condone misrepresentations in a judicial setting, neither will we

deprive litigants of immunity derived from the First Amendment’s

right to petition the government if the alleged misrepresentations do

not affect the core" of the litigant’s case.); Liberty Lake, 12 F.3d at

158-59 (PRE "does not obviate application of the Court’s two-part

test for determining sham litigation in the absence of proof that a

party’s knowing fraud upon, or its intentional misrepresentations to,

12 BALTIMORE SCRAP v. THE DAVID J. JOSEPH CO.

the court deprive the litigation of its legitimacy."). Alleged frauds that

"do not infect the core" of a case will receive Noerr Pennington

immunity because regardless of the alleged fraud, the outcome would

have been the same. Cheminor, 168 F.3d at 123. If a judgment is not

procured by fraud or deceit, it cannot fall within any fraud exception

to Noerr-Pennington. See PRE, 508 U.S. at 61-62 n.6; Liberty Lake,

12 F.3d at 158-59. Because Baltimore Scrap cannot show that the

state court judgment was procured by fraud or deceit, we need not

reach the question of whether a fraud exception to Noerr-Pennington

still exists after PRE.

Baltimore Scrap alleges three instances of fraud that deprive the lit-

igation of legitimacy: 1) the defendants’ clandestine funding of the

citizen groups; 2) the misstatements that Irwin made to Chief Judge

Hammerman at the April 23, 1993 hearing about the defendants’ role

in financing the lawsuits; and 3) the fabricated environmental issues

that the citizen groups supposedly raised in their pleadings. Like the

district court, we in no way condone the actions of the defendants.

Whether to condemn their activities, however, is a different question

than whether to abrogate Noerr-Pennington immunity for conduct

that does not deprive the lawsuit of legitimacy. In achieving an over-

all public benefit like the right to petition, any immunity will shield

individual instances of conduct that might otherwise be actionable.

None of the defendants’ alleged frauds infected the core of the law-

suit’s legitimacy.

Baltimore Scrap first argues that the defendants’ failure to inform

the citizen groups who was funding the lawsuit deprives the litigation

of legitimacy. Specifically, Baltimore Scrap contends that if DJJ or

the Shapiro family had revealed its involvement in the litigation, the

citizen groups would not have accepted the funding and the lawsuit

would have been dropped. Baltimore Scrap specifically points to the

testimony of Gloria Sipes, who testified that had she known the

defendants were behind the lawsuit, she would not have taken their

money. Even if these allegations are true, they do not rise to the level

of fraud on the courts. This alleged fraud was solely between the par-

ties. The defendants’ failure to tell the citizen groups that they were

behind the litigation did not deceive the courts because the courts

were not the target of this alleged deception. As the district court

noted, Baltimore Scrap’s "central problem, which it is unable to over-

BALTIMORE SCRAP v. THE DAVID J. JOSEPH CO. 13

come, is that the arguments presented by the citizens groups were

legitimate, both objectively and subjectively." 81 F. Supp.2d at 617.

The citizen groups can of course sue the defendants for fraud.

Whether such an action by the citizen groups against the defendants

for fraud would be successful is another matter. First, and most

importantly, the citizen groups were not duped into pursuing a claim

they did not want to litigate. In fact, the citizens’ objections to Balti-

more Scrap’s metal shredder existed well before the defendants

offered to pay for further litigation. Soon after the citizens learned of

the proposed shredder, they voiced their opposition. They attended a

meeting with the Maryland Department of Environment on August

12, 1991 to protest the shredder. They wrote a letter to the mayor of

Baltimore on August 26 urging him to block its installation. The citi-

zens were extremely worried about the environmental damage that the

shredder could cause, especially the increase in air pollution, the

release of potentially toxic chemicals, and the potential of higher can-

cer rates.

Indeed, the citizen groups knew that "local businesses" were pay-

ing for the litigation. Despite knowing this fact, they decided to take

the money because, as Sipes testified, they "[did] not care" who

funded the lawsuit. Moreover, the defendants revealed their involve-

ment to the citizen groups on April 3, 1993. After learning that the

defendants were funding the litigation, the citizen groups nevertheless

decided to continue their appeal. In sum, the evidence concerning the

defendants’ secret funding of the lawsuit, construed in the light most

favorable to Baltimore Scrap, fails to rise to the level of fraud among

the parties. It falls far short of showing the type of fraud upon the

court that would deprive the litigation of its legitimacy.

Second, Baltimore Scrap contends that Irwin’s alleged misrepre-

sentations to the court about the role of the defendants in the lawsuit

constitutes fraud that deprives the litigation of legitimacy. For pur-

poses of summary judgment, we of course assume all facts in the light

most favorable to Baltimore Scrap. The problem with Baltimore

Scrap’s argument remains, however, that Irwin’s alleged misstate-

ments were simply not material. Chief Judge Hammerman, before he

ruled, stated that he saw the hand of the defendants in the lawsuit.

Indeed, he presumed the defendants were involved before he issued

14 BALTIMORE SCRAP v. THE DAVID J. JOSEPH CO.

his opinion against the citizen groups and the defendants. The result

would have been the same even if Irwin had admitted the defendants’

role because no judicial ruling was based on the erroneous assumption

that the citizens alone were pursuing the appeal and fully funding the

litigation.

If Irwin did indeed misrepresent facts to the court, the proper rem-

edy here is through Maryland law, whether it be through the sanction-

ing process of the state bar, see, e.g., Md. R. Prof. Conduct 3.3 ("A

lawyer shall not knowingly make a false statement of material fact or

law to a tribunal."), Md. R. Prof. Conduct 8.4 ("It is professional mis-

conduct for a lawyer to . . . engage in conduct involving dishonesty,

fraud, deceit, or misrepresentation [or] engage in conduct that it preju-

dicial to the administration of justice."), Md. R. 16-812 (adopting the

Maryland Rules of Professional Conduct), Attorney Grievance

Comm’n of Maryland v. Middleton, 756 A.2d 565, 573-74 (Md. App.

2000) (upholding state bar’s indefinite suspension of a lawyer

because of intentional misrepresentations to a court since "candor and

truthfulness are two of the most important moral character traits of a

lawyer") (internal quotations omitted); the state Rules of Civil Proce-

dure, see Md. R. 1-311 (stating that the effect of a lawyer’s signature

on the pleadings is to represent "that to the best of the attorney’s

knowledge, information, and belief there is good ground to support"

what was written, and imposing potential disciplinary action for "a

wilful violation of this Rule"), Md. R. 1-341 (awarding attorney’s fees

if "the conduct of any party in maintaining or defending any proceed-

ing was in bad faith . . ."), Md. R. 2-535 (allowing court to revise the

judgment "in case of fraud, mistake, or irregularity"), Md. Code Ann.

Cts. & Jud. Proc. § 6-408 (1998) (same); or another similar process.

The states are perfectly capable of handling malfeasance in their own

courts. Federal antitrust law is simply not the proper vehicle to punish

an attorney’s misconduct in state court.

Baltimore Scrap finally charges that the defendants fabricated envi-

ronmental issues that caused the litigation to be deprived of legiti-

macy. Even if true, however, the lawsuit was not decided on

environmental grounds. Rather, the lawsuit revolved around the issues

of standing and intervention. In no way did the so-called environmen-

tal fabrications infect the core of the litigation’s legitimacy.

BALTIMORE SCRAP v. THE DAVID J. JOSEPH CO. 15

We reiterate that the Supreme Court has not approved a fraud

exception to Noerr-Pennington immunity at all. See PRE, 508 U.S. at

61-62 n.6; Cheminor, 168 F.3d at 123-24. Yet the fraud exception as

Baltimore Scrap conceives it would have wide ranging implications

for our federal system as well as the Noerr-Pennington doctrine. A

broad fraud exception would allow federal collateral litigation over

conduct in state courts that never affected the core of a state judg-

ment. It is simply not the role of federal courts hearing antitrust law-

suits to reconsider the underlying validity of a state zoning contest.

We would have to immerse ourselves in the minutiae of state civil

proceedings and in effect relitigate the claims that the state courts

have already decided. For the federal courts to entertain this type of

antitrust action would impermissibly impact the right to petition a

coordinate system of justice. Such concerns weigh heavily against

creating any broad exception to the immunity created by Noerr and

its numerous progeny.

V.

The replay of state law zoning disputes is not normally the proper

function of antitrust litigation, especially when the alleged fraud did

not deprive the litigation of its underlying legitimacy and when the

lawsuit is not objectively meritless. We hold as a matter of law that

the defendants’ actions do not warrant the dissolution of Noerr-

Pennington immunity. For the foregoing reasons, the judgment of the

district court is

AFFIRMED.