Appendix — Rocky Mountain Motor Tariff Bureau, Inc. v. Clipper Exxpress

Appendix A—Court of Appeals’ Opinion

Appendix A

Court of Appeals’ Opinion

UNITED STATES COURT OF APPEALS

NINTH CIRCUIT

No. 78-3684

Clipper Exxpress, a corporation,

Plaintiff-Appellant,

vs.

Rocky Mountain Motor Tariff Bureau, Inc., Yellow

Freight Systems, Inc., Consolidated Freightways

Corporation of Delaware, Illinois-California Ex-

press Inc., IML Freight Inc., Pacific Inter-

mountain Express Co., T.1.M.E.—D.C. Inc.,

Consolidated Copperstate Lines, Garrett Freight

Lines, Inc., Navajo Freight Lines, Inc., N.W.

Transport Service, Inc., Ringsby Truck Lines,

Inc., Rio Grande Motor Way, Salt Creek Freight

Ways, Transcon Lines, United Buckingham

Freight Lines and Western Gillette, Inc.,

Defendants-Appellees.

[April 19, 1982]

As Amended July 29, 1982.

Appeal from the United States District Court

for the Northern District of California.

Before: WALLACE and ALARCON, Circuit Judges,

and von der HEYDT,”* District Judge’

ALARCON, Circuit Judge:

Plaintiff Clipper Exxpress (Clipper) appeals from the entry

of an order granting summary judgment for the defendant

* Honorable James A. von der Heydt, Chief United States District Judge,

District of Alaska, sitting by designation.

Appendix A— Court of Appeals’ Opinion

A-2

trucking companies and Rocky Mountain Motor Tariff Bureau

(RMMTB) [hereinafter jointly referred to as defendants].

Clipper sued defendants for various antitrust violations arising

from protests filed with the Interstate Commerce Commission

(ICC) by defendants with regard to certain shipping rates

published’ by Clipper. The district court granted summary

judgment for defendants based on (1) the Noerr-Pennington?

exception to the antitrust laws, which the district court held

cloaked the defendants’ actions with immunity, and (2) the

Keogh® doctrine, which the district court held barred the

recovery of damages in this antitrust action. We reverse and

remand for a trial on the merits because neither the Noerr-

Pennington exception nor the Keogh doctrine provide defenses

as a matter of law under these facts.

FACTS

Clipper is an I1CC-regulated freight forwarder, subject to

regulation under the Interstate Commerce Act (ICA). As a

freight forwarder, Clipper itself ships no goods, but rather

assembles and consolidates small shipments into single lots for

shipment by carrier compauies.

Defendants are ICC-regulated trucking companies and the

RMMTB. RMMTB is a rate bureau formed under the ICA. A

rate bureau is an organization formed by an agreement among

common carriers. Through the bureau the carriers act collec-

tively to initiate, consider and establish rates and fares for

members of the bureau. When acting in conformity with an

ICC-approved agreement, joint rate setting action is not subject

to the antitrust laws. 49 U.S.C. § 10706. RMMTB’s member-

ship consists of approximately 1,400 motor carriers, and repre-

sents approximately 80 percent of the transcontinental surface

transportation market.

1. Publishing is simply the act of filing a new rate with the ICC.

2. Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc.,

365 U.S. 127, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961); United Mine Workers v.

Pennington, 381 U.S. 657, 85 S.Ct. 1585, 14 L.Ed.2d 626 (1965).

3. Keogh v. Chicago & N. W. Ry. Co., 260 U.S. 156, 43 S.Ct. 47, 67 L.Ed.

183 (1922).

Appendix A—Court of Appeals’ Opinion

A-3

ICC rate regulation of freight forwarders such as Clipper is

provided in 49 U.S.C. § 1005, recodified as 49 U.S.C. §§ 10725,

10762. Under § 1005, a freight forwarder seeking a rate change

publishes a new rate. In the absence of a protest, the rate will

take effect automatically thirty days later. If there is a protest,

the ICC can suspend effectiveness of the rate while investigating

the protest. The ICC also retains power to suspend any new

rate sua sponte, but this power is rarely exercised.

In the late 1960’s, freight forwarding was a failing in-

dustry. The freight forwarding industry suffered heavy traffic

losses because of the competition presented from “shipper

associations” and “shipper agents” whose rates were unregu-

lated. An ICC investigation revealed that the freight forwar-

der’s economic predicament was due to the lower rates of these

unregulated associations. The ICC recommended that the

freight forwarders lower their rates to compete effectively with

the lower rates of unregulated associations.

In November 1970, Clipper, in order to compete with the

rates of the unregulated associations, published Tariff 55, a

lowered rate of $1,056 per 30,000 pound shipment. Clipper

hoped to eventually lower its rate to $842 per 30,000 pounds.

Clipper fully expected defendants to protest to the ICC any

lowered rate it published.* Clipper hoped that by publishing the

intermediate $1,056 rate instead of the lower $842 rate, the ICC

would not act on defendants’ anticipated protest by in-

vestigating and suspending implementation of Clipper’s new

rate. Clipper intended to lower its rate to 842 if the ICC did not

investigate and suspend the intermediate rate.

As expected, a few days after the $1,056 Tariff 55 was

published, RMMTB filed a protest to Tariff 55 with the ICC.

The ICC did not suspend the $1,056 rate, but did investigate

the rate over the next two years. During the course of the ICC

investigation, Clipper filed several amendments to Tariff

4. Clipper alleged that RMMTB had always tried to maintain the rates

of freight forwarders and carriers at an equal level (parity) and would take

forceful action—including protests—to maintain that parity.

Appendix A—Court of Appeals’ Opinion

A-4

55—which both extended the geographical coverage of the rate

and progressively lowered the rate. RMMTB protested each

amendment. The ICC found for Clipper throughout its in-

vestigation. The defendants exhausted all the ICC procedures

in order to prevent implementation of Tariff 55, and received

no relief. At the conclusion of this administrative process,

Clipper lowered Tariff 55 to the $842 level; defendants’ protest

to this rate was also unsuccessful.

THE PROCEEDINGS BELOW

In 1972 Clipper filed a complaint in district court against

RMMTB and various trucking companies, alleging antitrust

violations. In addition, to avoid the general principle that

genuine efforts to induce legislative or administrative action,

even if undertaken for the purpose of stifling competition, are

outside the scope of the antitrust laws, Clipper relied on three

theories in its pleadings. First, Clipper contended that defend-

ants’ protests of Tariff 55 were sham protests filed “for the

purpose of directly restricting, lessening, and prohibiting the

legitimate competition” of freight forwarders. Second, Clipper

contended$ that defendants attempted to influence ICC action

by supplying fraudulent information to the ICC. Clipper relied

on the Walker Process® doctrine, which extends antitrust liabi-

lity to one who commits fraud on a court or agency to obtain

competitive advantage. Finally, Clipper contended that the

protests were simply part of a larger independent antitrust

violation.’

5. This claim was asserted in an amended complaint filed February 3,

1977.

6. Walker Process Equip., Inc. v. Food Mach. & Chem. Corp., 382 U.S.

172, 86 S.Ct. 347, 15 L.Ed.2d 247 (1965).

7. It should be noted that the fact that a party successfully establishes

that the Noerr-Pennington exception is inapplicable does not entitle it to a

judgment. Such a showing would merely establish that defendant's conduct

was subject to the antitrust laws. “[T]he absence of an immunity does not

itself establish an antitrust offense. To prevail, the plaintiff must demonstrate

that any non-immune behavior meets the standard tests defining an antitrust

violation.” Areeda & Turner, Antitrust Law § 201 (1978).

Appendix A—Court of Appeals’ Opinion

A-5

Clipper claimed it sustained thirty million dollars of dam-

ages because of the actions of defendants and sought treble that

amount. These damages allegediy represented (1) the loss

incurred by Clipper in having to delay over two years before

instituting its final $842 rate; (2) the costs in having to respond

to the protests; and (3) business loss because of the instability

and uncertainty surrounding Clipper’s rates, due to the ICC

investigation. Clipper claims that shippers will not use a rate if

it is under ICC investigation.

Proceedings were stayed by the district court judge to

permit the ICC to rule on defendants’ protests. After the ICC

overruled all the protests, court proceedings were revived.

After denying two previous motions by the defendants for

a summary judgment, defendants’ third summary judgment

motion was granted on July 27, 1978, and entered on July 31,

1978. The district court held that the protests to the ICC were

immune as a matter of law, relying on Franchise Realty

Interstate Corp. v. San Francisco Local Joint Executive Board

of Culinary Workers, 542 F.2d 1076 (9th Cir. 1976), cert.

denied, 430 U.S. 940, 97 S.Ct. 1571, 51 L.Ed.2d 787 (1977).

Moreover, the district court held that Clipper was attempting to

collect damages which rest on assumptions as to ICC actions,

and held this was prohibited as a matter of law by Keogh v.

Chicago & N. W. Railroad Co., 260 U.S. 156, 43 S.Ct. 47, 67

L.Ed. 183 (1922).

JURISDICTION

The defendant-appellees contend that this court is without

jurisdiction over this appeal because Clipper did not file its

Notice of Appeal within the requirements of Rule 4(a) of the

Federal Rules of Appellate Procedure.

Timely filing of a Notice of Appeal is a prerequisite to this

court’s appellate jurisdiction. See Browder v. Director, Depart-

ment of Corrections, 434 U.S. 257, 264, 98 S.Ct. 556, 560, 54

Appendix A—Court of Appeals’ Opinion

A-6

L.Ed.2d 521 (1978). We find that this Notice of Appeal was

timely filed and we therefore hold that this court has jurisdic-

tion over this appeal.®

Rule 4(a) of the Federal Rules of Appellate Procedure

provides that a Notice of Appeal is to be filed within thirty days

of entry of judgment. The thirty-day period, however, is tolled

by the timely service of a Rule 59(e) motion to reconsider and

vacate the judgment. If a 59(e) motion is timely served, the

time for filing a Notice of Appeal is tolled and does not begin

running until the district court disposes of the 59(e) motion.

See Fed.R.App.P. 4(a)(4).9

Summary judgment for defendants was entered on July 31,

1978. Ten days later, on August 10, 1978, Clipper served a

notice of motion and a motion to reconsider and vacate the

order pursuant to Rule 59(e) of the Federal Rules of Civil

Procedure. supported by a memorandum of points and author-

ities. Clipper filed this motion in the district court on August 14,

1978. The motion was argued on September 11, 1978 and

denied on October 13, 1978. Twenty-four days after the denial,

on November 6, 1978, Clipper filed its Notice of Appeal.

Defendants contend that Clipper’s 59(e) motion was not

sufficient to toll the time for appeal on two grounds. First,

defendants contend that the material served by Clipper on

August 10 was incomplete, and therefore could not toll the time

for filing a Notice of Appeal. Specifically defendants contend

that because the motion itself stated that it was based on

affidavits, and affidavits were not served with the motion, the

8. Because we reverse the grant of summary judgment and remand for a

trial on the merits, we need not determine whether the district court judge

acted properly in denying Clipper’s 59(e) motion to vacate and reconsider.

9. Rule 59(e) provides that [a] motion to alter or amend the judgment

shall be served not later than 10 days after entry of the judgment.” See

Pacific Maritime Ass'n v. Quinn, 465 F.2d 108, 109 n.1 (1972) (service, not

filing, tolls the running of time to file notice of appeal). Clipper served its

59(e) motion on August 10, 1978, after a July 31, 1978 entry of judgment.

Thus, under the rules of time computations provided in Rule 6(a) of the

Federal Rules of Civil Procedure, this motion was served within the time

strictures established in 59(e).

Appendix A—Court of Appeals’ Opinion

A-7

motion was not a valid, complete 59(e) motion. Second,

defendants contend that Clipper’s 59(e) motion simply re-

hashes the arguments made in the summary judgment motion,

and therefore does not constitute a valid 59(e) motion. We

find no merit in either of these arguments.

A. Complete Motion

The defendants’ contention that Clipper’s 59(e) motion

was incomplete because the supporting affidavits were not filed

within the time for service is spurious. The 59(e) motion was

complete, valid, and sufficient to toll the running of time to file

the Notice of Appeal without the affidavits. Rule 59(e) itself

does not require supporting affidavits. The only indication in

the Federal Rules of Civil Procedure as to what is necessary to

constitute a valid motion is found in Rule 7(b)(1). Rule

7(b)( 1) states that a motion “shall be made in writing, shall

state with particularity the grounds therefor, and shall set forth

the relief or order sought.”’'9

10. Rule 6(d) of the Federal Rules of Civil Procedure states: “When a

motion is supported by affidavit, the affidavit shall be served with the

motion. ...” If, as here, a motion is complete without supporting affidavits,

there is no reason to determine whether compliance with this filing require-

ment is jurisdicitional when the affidavits are necessary to make the motion

complete. We note, however, the position of the Seventh Circuit in Schy v.

Susquehanna Corp., 419 F.2d 1112 (7th Cir.), cert. denied, 400 U.S. 826, 91

S.Ct. 51, 27 L.Ed.2d 55 (1970).

In Schy, the Seventh Circuit held that when the plaintiff did not complain

of untimeliness of filing affidavits at the district court level, any objection

based on that untimeliness was waived on appeal. /d. at 1116. It is

questionable whether any proper objection to the untimeliness of these

affidavits was raised at trial. Clearly, the defendant-appellees did not object

to the late filing of the affidavits. They commented only that the affidavits

came too late to substantively oppose the summary judgment. That is

irrelevant to the 59(e) motion. A defendant who is not a party to this appeal

questioned the timeliness of the affidavits under Rule 59(c) of the Federal

Rules of Civil Procedure. Rule 59(c) relates to filing affidavits to support a

motion for new trial, and does not apply to a 59(¢) motion.

Because we hold, however, that the 59(¢) motion was complete without

the affidavits we need not determine whether the 59(c) assertion was

sufficient to preserve the question of timeliness for appeal.

Appendix A—Court of Appeals’ Opinion

A-8

Clipper’s 59(e) motion as originally served set out the

grounds on which the motion was based with particularity.

Along with the motion, Clipper filed a 65-page document of

supporting points and authorities, which raised substantive

legal questions about the summary judgment motion without

the need for the additional factual support that the affidavits

would provide. This was more than sufficient to satisfy the

particularity requirement of Rule 7(b). Defendants cite Daily

Mirror, Inc. v. New York News, Inc., 533 F.2d 53 (2nd Cir.),

cert. denied, 429 U.S. 862, 97 S.Ct. 166, 50 L.Ed.2d 140 (1976),

and Martinez v. Trainor, 556 F.2d 818 (7th Cir. 1977), in

support of their contention that Clipper’s motion was in-

complete. Neither of these cases suggest that the motion filed

by Clipper was insufficient and invalid as a 59(e) motion.

Daily Mirror is clearly distinguishable from the instant

case. In Daily Mirror the plaintiffs filed a motion to vacate

under Rule 60(b) of the Federal Rules of Civil Procedure after

the trial judge granted summary judgment for defendants.

60(b) motions, even if valid, do not toll the time for filing

notice of appeal. In footnote, the Daily Mirror court noted that

while under some circumstances a court has discretion to treat a

60(b) motion as a 59(e) motion, such treatment would be

inappropriate in this case. The court noted after deciding not to

consider the rule 60 motion as a rule 59 motion, that the papers

which were filed within the proper filing period were not a

complete motion because they did not deal with the merits of

the motion. It was only the late filed affidavits that dealt with

the merits of the challenged summary judgment. 533 F.2d at

56 n.4. Defendants’ reliance on Martinez v. Trainor is similarly

unpersuasive. The motion filed in Martinez was insufficient as a

complete motion. It noted, in less than a page, that the

defendants requested the court pursuant to 59(e) to “alter,

amend, or vacate” the earlier judgment. 556 F.2d at 819. The

motion did not set forth the grounds for the motion with any

particularity. It was, as noted by the Seventh Circuit, simply a

skeleton, which required later supplementation to satisfy the

particularity requirements of 7(b)(1). This is in marked

Appendix A—Court of Appeals’ Opinion

A-9

contrast to Clipper’s motion which, as noted above, satisfied the

particularity requirements of Rules of Civil Procedure. Defend-

ants’ contention that Clipper’s papers are insufficient to qualify

as a 59(e) motion is without merit.

B. Failure to Raise New Grounds

Defendants contend that Clipper’s motion, without affida-

vits, advances no new grounds for vacating the judgment.'' A

motion which simply rehashes arguments heard at trial, defend-

ants contend, does not properly lie under 59(e). Assuming

arguendo that Clipper’s 59(e) motion raises no new grounds, it

nevertheless constitutes a proper 59(e) motion.

Rule 59(e) provides a mechanism by which a trial judge

may alter, amend, or vacate a judgment. See Foman v. Davis,

371 U.S. 178, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962). Rule 59(e)

provides an efficient mechanism by which a trial court judge

can correct an otherwise erroneous judgment without impli-

cating the appellate process. As noted by this court in United

States v. Walker, 601 F.2d 1051, 1058 (9th Cir. 1979): “Errors

in the trial court may be most speedily corrected by the trial

judge. Frequently a trial judge has had to rule on difficult

questions under time pressures and without thorough briefing

by the parties. A motion for reconsideration may, in some

instances, avoid the necessity of an appeal.”'2 Clipper’s motion

ll. The defendants cite Durkin v. Taylor, 444 F.Supp. 879, 889-90

(E.D.Va.1977); Erickson Tool Co. v. Balas Collet Co., 277 F.Supp. 226, 234

(N.D.Ohio 1967), aff'd., 404 F.2d 35 (6th Cir. 1968); Chastain v. Kelley, 510

F.2d 1232, 1238 n.7 (D.C. Cir.1975), for the proposition that a 59(e) motion

is not proper if it advances no new grounds in seeking to vacate a judgment.

None of these cases involved the question of whether the motion tolled the

running of time to file notice of appeal. All were concerned with whether the

motion should have been granted. That is not at issue here. Furthermore, the

position of these cases, in holding that a 59(e) motion must raise new

grounds, is questionabie. There is much authority to the contrary. See Dove

v. Codesco, 569 F.2d 807, 809 ( 4th Cir. 1978); Sonnenblick Goldman Corp. v.

Norwalk, 420 F.2d 858, 859 (3d Cir. 1970); Parks v. “Mr. Ford”, 68 F.R.D.

305 (E.D.Pa.1975).

12. This Circuit, in determining whether a motion for a new trial was

timely, noted in dictum: “It is true that the motion for an extension of time

(footnote continued on following page)

Appendix A—Court of Appeals’ Opinion

A-10

enabled the trial judge to reconsider the validity of his judg-

ment, and to vacate or alter it as he saw fit. As such, it was

valid as a 59(e) motion.'3 Since Clipper filed its Notice of

Appeal within 30 days after the district judge denied its Rule

59(e) motion, we therefore have jurisdiction, pursuant to Rule

4(a), to review the order granting summary judgment for

defendants.

STANDARD OF REVIEW

Summary judgment is properly granted when there is no

genuine issue of material fact and the moving party is entitled

to a judgment as a matter of law. Gaines v. Haughton, 645

F.2d 761, 769-70 (9th Cir. 1981). All facts and inferences

drawn therefrom must be viewed in the light most favorable to

the non-moving party. The moving party has the burden to

establish the non-existence of any triable issue of fact. The

defendants, here, established the nonexistence of a material

issue of fact by making several admissions for the purposes of

the motion. In their memorandum accompanying the motion,

the defendants made the following admissions:

For the purposes of this motion, the court may assume

the existence of the conspiracy alleged in Clipper’s inter-

rogatory responses. It may further assume that everything

was done that Clipper says was done to further that

conspiracy.

(footnote continued from previous page)

within which to file a motion for new trial stated no grounds for which a new

trial would be sought; but the fact that this motion, considered as an inartfully

drawn motion for new trial was so defective that it could not properly be

granted, would not serve to render it non-existent. This court has held that in

order to suspend the running of the 30-day appeal period allowed by Rule

73(a) a motion for new trial need not be granted or even grantable.” Yanow

v. Weyerhaeuser S.S. Co., 274 F.2d 274, 283 (9th Cir. 1959) (en banc), cert.

denied, 362 U.S. 919, 80 S.Ct. 671, 4 L.Ed.2d 739 (1960).

Under this liberal approach, Clipper’s motion was clearly sufficient to toll

the time for filing a Notice of Appeal.

13. Because we hold that the record before the trial judge at the time the

summary judgment was granted did not support that judgment, we need not

consider the late filed affidavits in reaching our holding. Therefore, defen-

dants’ contention that the late filed affidavits could not be used to support

reversal of summary judgment need not be considered.

Appendix A—Court of Appeals’ Opinion

A-l1

Again, for the purpose of this motion, the court may accept

Clipper’s allegations as fact and assume that defendants

expressly agreed among themselves not to cut rates to

divert traffic from one another—or to put it more bluntly,

that they agreed that their rates would be exactly the same.

Such an agreement would be perfectly lawful and immu-

nized from antitrust liability.

This court may assu:ne for purposes of this motion

that the object behind each of the protests was just what

Clipper says it was—that the defendants who filed them

were simply trying to eliminate or destroy competition.

The defendants, not once but three times, expressly represented

to the district court that it could “assume for the purposes of

this motion” that they had done exactly what Clipper alleged in

its complaint. Their consistent position was that as a matter of

law, the conduct alleged in the complaint did not state a legally-

cognizable claim for damages under the antitrust laws. There-

fore, we need only decide whether the district court correctly

determined that, under the facts alleged, Clipper’s antitrust

claims were barred as a matter of law. As the district court

recognized in its order granting summary judgment for the

defendants, “[w]ith regard to the motions for summary judg-

ment, the issues are purely legal ones.”’'4

THE MERITS

As noted above, Clipper alleged in its complaint three

ways in which the defendants’ protests to the ICC constituted

antitrust violations. First, the protest was alleged to be a direct

14. Ordinarily, the proper mode of testing the legal sufficiency of the

allegations of a complaint is by way of a motion to dismiss for failure to state

a claim upon which relief can be granted, pursuant to Fed.R.Civ.P. 12(b)(6).

Such a motion can be made at any time, and normally will be made before

any substantial discovery has been conducted. However, where, as here,

evidence outside the record is submitted to and not excluded by the district

court, any such motion must be disposed of by way of the summary judgment

procedures specified in Rule 56(c). See Fed.R.Civ.P. 12(b).

Appendix A—Court of Appeals’ Opinion

A-12

interference with competitive activity, and a sham protest not

immune under the Noerr-Pennington doctrine. Second, in

protesting to the ICC, defendants allegedly furnished false

information to the ICC, Clipper’s business [sic]. Lastly,

defendants’ protest was simply an act in furtherance of an

independent rate-fixing violation of the antitrust laws. 'S

I. THE PROTESTS AND NOERR-PENNINGTON

IMMUNITY

Defendants contend that the district court properly found

that the protests before the ICC were immunized from antitrust

liability because of the Noerr-Pennington doctrine. Under the

Noerr-Pennington doctrine, bona fide efforts to obtain or in-

fluence legislative, executive, judicial or administrative actions

are immune from antitrust liability. See 7 von Kalinowski,

Antitrust Laws and Trade Regulation § 46.04 (1980). If the

purported effort to influence or obtain government action is in

reality only an attempt to interfere with the business relations-

hips of a competitor, however, the activity does not enjoy

antitrust immunity. Noerr, 365 U.S. at 144, 81 S.Ct. at 533.

The evolution of Noerr-Pennington immunity, and _ its

concomitant sham exception, begins in Eastern Railroad Presi-

dents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 81

15. In a short order granting RMMTB’s motion for summary judgment,

the district court held: (1) Clipper’s “claim, insofar as it is based on

defendants’ protests before the Interstate Commerce Commission, is barred

by the ...” Noerr-Pennington doctrine. “Plaintiff's attempt to invoke the

‘sham’ exception to that immunity. .. is. . . foreclosed by the narrow reading

of that exception announced in Franchise Realty Interstate Corp. v. San

Francisco Local Joint Executive Board of Culinary Workers... .” The district

court continued: “Furthermore, plaintiff's damage claims, which rest on

assumptions as to action that would have been taken by the ICC in the

absence of defendant’s alleged antitrust violations are barred by Keogh v.

Chicago & N. W. Ry. Co....” The district court order did not individually

consider the viability of the theories alleging that the furnishing of fraudulent

information constituted an antitrust violation and that the protest was simply

part of an independent antitrust violation.

Appendix A—Court of Appeals’ Opinion

A-13

S.Ct. 523, 5 LEd.2d 464 (1961).'® In Noerr, truck operators

and their trade association sued railroads, an association of

presidents of those railroads, and a public relations firm

alleging the defendants conspired to restrain trade in violation

of §§ 1 and 2 of the Sherman Act. Specifically it was alleged

that the defendants engaged in a “publicity compaign against

the truckers designed to foster the adoption and retention of

laws and law enforcement practices destructive of the trucking

business, to create an atmosphere of distaste for the truckers

among the general public, and to impair the relationships

existing between the truckers and their customers.” Jd. at 129,

81 S.Ct. at 525.

The defendants argued that their activities could not create

liability under the Sherman Act when they were only trying to

inform the public and the legislature of certain facts. The

Supreme Court agreed, noting “that no violation of the [Sher-

man] Act can be predicated upon mere attempts to influence

the passage or enforcement of laws.” Jd. at 135, 81 S.Ct. at

528. The Court held that even if the defendants’ sole purpose

in seeking to influence the passage and enforcement of laws was

to destroy the truckers’ business, the immunity remained. “The

right of the people to inform their representatives in govern-

ment of their desires with respect to the passage or enforcement

of laws cannot properly be made to depend upon their intent in

doing so.” Jd. at 139, 81 $ Ct. at 530.

In this same case the Court also recognized that a sham

attempt to influence governmental action would not be im-

mune: “There may be situations in which a publicity campaign,

16. An analysis of cases dealing with the Noerr-Pennington doctrine is

subject to the following caveat:

[Ejach case arising under the Sherman Act must be determined upon the

particular facts disclosed by the record, and that the opinions in those cases

must be read in the light of their facts and of a clear recognition of the

essential differences in the facts of those cases, and in the facts of any new

case to which the rule of earlier decisions is to be applied.” Maple

Flooring Mfrs. Ass'n v. United States, 268 U.S. 563, 579 [45 S.Ct. 578,

583, 69 L.Ed. 1093] (1925).

Appendix A—Court of Appeals’ Opinion

A-14

ostensibly directed toward influencing governmental action, is a

mere sham to cover what is actually nothing more than an

attempt to interfere directly with the business relationships of a

competitor and the application of the Sherman Act would be

justified.” Jd. at 144, 81 S.Ct. at 533.

The antitrust immunity established in Noerr for bona fide

attempts to influence governmental action was reaffirmed in

United Mine Workers v. Pennington, 381 U.S. 657, 85 S.Ct.

1585, 14 L.Ed.2d 626 (1965). In Pennington, a small coal

company cross-claimed against the UMW, trustees, and certain

large coal operators, alleging that they had conspired to restrain

and to monopolize interstate commerce in violation of §§ | and

2 of the Sherman Antitrust Act. The Union and large

companies agreed upon steps to exclude the marketing, produc-

tion and sale of non-union coal. Together they successfully

approached the Secretary of Labor to obtain a minimum wage

requirment for employees of contractors selling coal to the

TVA, making it difficult for small companies tc compete in

TVA term contracts. Other executive action was sought and

obtained.

The Court held that the acts seeking governmental action

were immune from antitrust liability. The Court noted that

“Noerr shields from the Sherman Act a concerted effort to

influence public officials regardless of intent or purpose.” Id. at

670, 85 S.Ct. at 1593. “[ T]he legality of the conduct ‘was not

at all affected by any anti-competitive purpose it may have

had,’ ... even though the ‘sole purpose in seeking to influence

the passage and enforcement of laws was to destroy... com-

petitors....”” Id. at 669, 85 S.Ct. at 1593.

In California Motor Transport Co. v. Trucking Unlimited,

404 U.S. 508, 92 S.Ct. 609, 30 L.Ed.2d 642 (1972), the Court

extended the Noerr-Pennington doctrine to attempts to in-

fluence administrative and judicial (adjudicatory) bodies,

while holding that a cause of action had been stated under the

“sham” exception. In Trucking, a group of highway carriers

Appendix A—Court of Appeals’ Opinion

A-15

operating in California sued a group of interstate highway

carriers, alleging violations under § 4 of the Clayton Act. The

first group of highway carriers alleged that the second group

conspired to institute state and federal proceedings to resist and

defeat applications by the first group to acquire operating rights

or to transfer or register those rights.

The Trucking Court held that the Noerr-Pennington doc-

trine doctrine protects genuine efforts to influence adjudicatory

bodies. The Court noted, however, that the allegations in that

case gave rise to a cause of action under the sham exception to

that doctrine. The Court noted that allegations that proceed-

ings were instituted without probable cause, and regardless of

merit, state a cause of action which falls within the exception to

Noerr. Although the Court did not set forth the parameters of

the sham exception, it did list examples of activity which might

come within the exception. '7

17. Yet unethical conduct in the setting of the adjudicatory process often

results in sanctions. Perjury of witnesses is one example. Use of a patent

obtained by fraud to exclude a competitor from the market may involve a

violation of the antitrust laws, as we held in Walker Process Equipment v.

Food Machinery & Chemical Corp., 382 U.S. 172, 175-77, 86 S.Ct. 347, 349-

50, 1S L.Ed.2d 247. Conspiracy with a licensing authority to climinate a

competitor may also result in an antitrust transgression. Continental Ore Co.

v. Union Cabide & Carbon Corp., 370 U.S. 690, 707, 82 S.Ct. 1404, 1414, 8

L.Ed.2d 777; Harman v. Valley National Bank, 339 F.2d 564 (CA 9 1964).

Similarly, bribery of a public purchasing agent may constitute a violation of

§ 2(c) of the Clayton Act, as amended by the Robinson-Patman Act. Rangen

Inc. v. Sterling Nelson & Sons, 351 F.2d 851 (CA 9 1965).

There are many other forms of illegal and reprehensible practice which

may corrupt the administrative or judicial processes and which may result in

antitrust violations. Misrepresentations, condoned in the political arena, are

not immunized when used in the adjudicatory process. Opponents before

agencies or courts often think poorly of the other’s tactics, motions, or

defenses and may readily call them baseless. One claim, which a court or

agency may think baseless, may go unnoticed; but a pattern of baseless,

repetitive claims may emerge which leads the fact-finder to conclude that the

administrative and judicial processes have been abused. That may be a

difficult line to discern and draw. But once it is drawn, the case is established

that abuse of those processes produced an illegal result, viz., effectively

barring respondents from access to the agencies and courts. Insofar as the

administrative or judicial processes are involved, actions of that kind cannot

acquire immunity by seeking refuge under the umbrella of “political ex-

pression.” 404 U.S. at 512-13, 92 S.Ct. at 613.

Appendix A—Court of Appeals’ Opinion

A-16

In Otter Tail Power Co. v. United States, 410 U.S. 366, 93

S.Ct. 1022, 35 L.Ed.2d 359 (1973), on remand, 360 F.Supp.

451 (D.Minn. 1973), aff'd, 417 U.S. 901, 94 S.Ct. 2594, 41

L.Ed.2d 207 (1974), Otter Tail Power monopolized the dis-

tribution of power to various communities. Otter Tail pre-

vented those communities from creating their own marketing

organizations by instituting and supporting litigation designed

to prevent or delay the establishment of the municipal power

systems. The United States sued Otter Tail under the antitrust

laws. Rendering its decision before Trucking Unlimited had

been decided, the district court held that Otter Tail did not

enjoy Noerr immunity, because that immunity did not extend to

efforts to influence the administrative or judicial process.

The Supreme Court remanded in light of Trucking Unlim-

ited, noting that although Noerr immunity might be applicable

in this case, so might the sham exception. Jd. at 380, 93 S.Ct. at

1031. On remand, the district court held that Otter Tail’s

conduct fell within the sham exception.'® 360 F.Supp. 451

(D.Minn. 1973). The Supreme Court summarily affirmed. 417

U.S. 901, 94 S.Ct. 2594, 41 L.Ed.2d 207 (1974).

The defendants in the instant case argue on appeal that

their conduct does not fall within the sham exception because

the evidence shows the conduct was intended to influence

governmental action. At the district court, however, the

defendants admitted that for the purposes of this motion “the

object behind the protests [was]... simply... to eliminate or

destroy competition.”

It is unquestionably true, as defendants assert, that Noerr-

Pennington confers antitrust immunity for conduct genuinely

intended to influence governmental action. Whether something

18. The district court wrote: “[T]he repetitive use of litigation by Otter

Tail was timed and designed principally to prevent the establishment of

municipal electric systems and thereby to preserve defendant's monopoly . . .

the litigation comes within the sham exception to the Noerr doctrine as

defined by the Supreme Court in California Transport ....” 360 F.Supp. at

451 52 [sic].

Appendix A-—Court of Appeals’ Opinion

A-17

is a genuine effort to influence governmental action, or a mere

sham, is a question of fact. The facts here show, however, that

this conduct is not the type that is entitled to immunity; it is not

in fact conduct intended to influence governmental action.

Clipper, for the purposes of the summary judgment mo-

tion, has sufficiently shown that defendants’ protests were

spurious, baseless, and prosecuted without regard to their merit,

intended only to delay competitive action, not to influence

governmental action. The defendants, in advance of Clipper’s

filing reduced tariffs, agreed through RMMTB to institute

proceedings before the ICC for the purpose of restricting and

prohibiting competition from any freight forwarders. In

furtherance of this agreement, the defendants—particularly

RMMTB—would automatically protest any forwarder tariff,

regardless of the rate’s legality or competitive justification.

These protests were put forward in the interest of maintaining

parity between the rates of freight forwarders and motor

carriers and were prosecuted without regard to the merits of the

protest. Therefore, the defendants’ intent, admitted for the

purpose of their motion, was not to induce favorable adminis-

trative action from the ICC, but rather to saddle Clipper with

such onerous regulatory and administrative burdens that it

would be forced to withdraw the rates.

The defendants contend on appeal that their protests were

filed and prosecuted with the intent of influencing govern-

mental action. The defendants contend that the undisputed

facts establish that the protests were efforts to influence govern-

mental action. We disagree.

The fact that their intent was to prevent price competition

by Clipper is not determinative. Genuine efforts to induce

governmental action are shielded by Noerr even if their express

and sole purpose is to stifle or eliminate competition. However,

Clipper sought to bring its claims within the “sham” exception

by contending that the defendants protested rates automati-

cally, without regard to merit or possible success before the

Appendix A—Court of Appeals’ Opinion

A-18

ICC, and therefore without any intent to induce favorable

action by the ICC. These allegations fall within the sham

exception as a matter of law. Baseless protests, instituted

without regard to merit, are “nothing more than an attempt to

interfere directly with the business relationships of a com-

petitor.” Noerr, 365 U.S. at 144, 81 S.Ct. at 533.

On remand, Clipper will need to establish the facts sup-

porting this theory. However, we note that while the success or

failure of the protests is not singularly determinative of a party’s

intent, this Circuit regards such success or failure as indicative

of a party’s intent. See Ernest W. Hahn, Inc. v. Codding, 615

F.2d 830 at 841 n.13 (9th Cir. 1980). Here, defendants’

protests to Clipper’s reduced rates were unsuccessful. This,

combined with the assumed facts as to the defendants’ intent, is

enough to prevent the defendants from being cloaked with

Noerr immunity as a matter of law.

TRUCKING UNLIMITED’S APPLICATION OF THE

SHAM EXCEPTION

Defendants’ more substantial contention is that Trucking

Unlimited itself precludes application of the sham exception in

this case. Defendants contend that to fall within the sham

exception, Trucking requires that the alleged misconduct (1)

consist of a pattern of repetitive claims; (2) be baseless; and

(3) bar access to the governmental body. We disagree.

Although all of these elements can be found under the peculiar

facts of Trucking Unlimited, nothing in Trucking Unlimited

requires that all of these elements be present for the sham

exception to apply.

PATTERN OF REPETITIVE CLAIMS

Defendants claim that because they protested only one

tariff, Tariff 55, the sham exception does not apply and they

retain Noerr immunity. Assuming that defendants’ acts con-

Appendix A—-Court of Appeals’ Opinion

A-19

stituted only one protest, we do not find any merit in this

contention. '9

An examination of the theoretical underpinnings of Noerr-

Pennington and the sham exception indicates that it is unneces-

sary to allege and prove more than the institution of a single

suit or protest to invoke the sham exception.20 The Noerr-

Pennington doctrine is itself a judicially created exception to the

application of the antitrust laws based on the first amend-

ment.2' First amendment protection is extended and appli-

cation of the antitrust laws suspended because a legitimate

19. Whether defendants’ protests constitute one or multiple claims is a

matter of interpretation. There is one basic tariff—Tariff 55—involved here.

During the course of the investigation, however, Tariff 55 was modified by

Clipper many times. After each modification the defendants lodged a new

protest. Each protest was necessary to preserve the initial protest, or else the

newly revised Tariff 55 would go into effect, mooting the prior protest.

Whether this constitutes one or multiple claims in unclear. We need not reach

that question because we find the sham exception applicable even if there is

only a single claim involved.

20. The conduct which the Trucking Unlimited Court held to fall within

the sham exception constituted a pattern of repetitive claims. The defendant

highway carriers in Trucking Unlimited continually instituted state and

federal proceedings to defeat applications by other highway carriers to

acquire operating rights or to transfer or register those rights. In holding that

a cause of action under the sham exception was stated, the Court referred to

“a pattern of baseless, repetitive claims [which] may emerge [and lead] the

factfinder to conclude that the administrative and judicial process have been

abused.” 404 US. at 513, 92 S.Ct. at 613.

21. Noerr advanced at least three arguments for the exception, but did

not clearly adopt any. First, the Court noted that there is an “essential

dissimilarity” between agreements to seek government action and those

agreements traditionally condemned by the antitrust laws. This essential

dissimilarity, “even if not itself conclusive on the question of the applicability

of the [antitrust laws], does constitute a warning against treating the

defendants’ conduct as though it amounted to a common-law trade re-

straint.” 365 U.S. at 136-37. 81 S.Ct. at 528-29.

Second, the Court noted that finding liability for legitimate efforts to

effe st [sic] government “would substantially impair the power of government

to take actions through its legislative and executive that operate to restrain

trade.” Jd. at 137, 81 S.Ct. at 528. The nature of a representative

government requires that the government act on behalf of the people, and to

make representation work, requires that the people indicate their wishes to the

government.

(footnote continued on following page)

Appendix A—Court of Appeals’ Opinion

A-20

effort to influence government action is part of the guaranteed

right to petition. Trucking Unlimited, 404 U.S. at 510, 92 S.Ct

at 611.

The sham exception, on the other hand, reflects a judicial

recognition that not all activity that appears as an effort to

influence government is actually an exercise of the first amend-

ment right to petition. At times this activity, disguised as

petitioning, is simply an effort to interfere directly with a

competitor. In that case, the “sham” petitioning activity is not

entitled to first amendment protection, because it is not an

exercise of first amendment rights.

If the activity is not genuine petitioning activity, the

antitrust laws are not suspended and continue to prohibit the

violating activities. Because application of the antitrust laws is

not suspended, it will prohibit sham activity, whether that

activity consists of single or multiple sham suits. This analytical

framework does not permit a conclusion that single sham suits

are protected under Noerr.22

(footnote continued from previous page)

Finally, the Noerr Court noted that finding liability for legitimate efforts

to influence government would raise serious constitutional questions. The

right to petition government is guaranteed in the first amendment. Therefore,

it cannot be infringed by a statute, and the court will not “lightly impute to

Congress an intent to invade these freedoms.” /d. at 138, 81 S.Ct. at 530.

The Court in Pennington was no more definite about the basis for the

exception.

The Trucking Unlimited Court continually spoke to the first amendment

right to petition, while extending Noerr to attempts to influence courts and

administrative bodies, i.e., “The right of access to the court is indeed but one

aspect of the right of petition.” 404 U.S. at 510, 92 S.Ct. at 611. “Petitioners,

of course, have the right of access to the agencies and courts to be heard on

applications sought by competitive highway carriers. That right, as indicated,

is part of the right of petition protected by the First Amendment.” /d. at 513,

92 S.Ct. at 613.

22. The existence of multiple suits will undoubtedly make it easier to

prove that a party did not have the requisite legitimate intent to influence

government that is necessary to invoke the first amendment protections of

Noerr. We are not, however, concerned here with the ultimate ability of a

plaintiff to succeed at trial. Rather, we are concerned with a plaintiff's ability

(footnote continued on following page)

Appendix A— Court of Appeals’ Opinion

All

Indeed, the Court in Trucking Unlimited mentioned several

types of activity that could constitute antitrust violations, des-

pite the fact that only single instances of conduct are involved.

Specifically, the Court mentioned “[u]se of a patent obtained

by fraud to exclude a competitor from the market,” and

“bribery of a public purchasing agent,” 404 U.S, at 512-13, 92

§.Ct, at 612-13,29 These examples involve only a single act, yet

the Court notes that they are prohibited by the antitrust laws,

Given this language, and absent any contrary indication by the

Supreme Court, ® there is no reason to believe that the Court

(footnote continued from previous page)

to avoid summary judgment, As to proof at trial, it is entirely conceivable

that the requisite sham intent can be proven when there is only a single sham

suit,

23, We recognize that the fraud and bribery mentioned in Trucking

Unlimited do not involve the petitioning activity that is the heart of the Noerr-

Pennington doctrine. Defendants have not, however, presented any basis for

finding this distinetion relevant, The Trucking Unlimited Court iwelf weated

the fraud and bribery as analogous to the sham petitioning activity for the

purposes of antitrust liability,

24. In Vendo Co. v. Lekiro-Vend Corp,, 433 U.S. 623, 97 8.Ct. 2881, 53

L.Bd.2d 1009 (1977), the Supreme Court was given the opportunity to decide

whether the sham exception was applicable in a case in which only a single

suit was involved, The Supreme Court, in a three-opinion decision, avoided

the question, Vendo involved a federal litigant attempting to enjoin state

litigation, on the grounds that the single state suit constituted an antitrust

violation, A three-justice plurality opinion refused to enjoin the state suit,

holding an injunction was improper under the anti-injunction statute. The

(wo-justice concurring opinion wrote that an injunction was improper because

the single suit would not be sufficient to constitute a cause of action under the

sham exception, Four dissenters wrote that the suit was not barred by the

anti-injunction statute, and that a single claim was enough to constitute a

cause of action under the sham exception. The dissent noted, as we noted

above, that the Trucking Unlimited Court itself wrote that in certain cases

single acts constituted antitrust violations, Moreover, the dissent found no

language in Trucking Unlimited which would bar a claim based on a single

suit, We are convinced by the dissent.

Lower courts, in cases preceding Vendo Co. v. Lektro-Vend Corp., have

split on whether repetitive suits are necessary to have an actionable antitrust

violation, Compare Huron Valley Hosp. Inc. v. City of Pontiac, 466

F Supp. 1301, 1314 (B.D. Mich.1979); MCI Communications Corp. v. Ameri-

can Tel. & Tel. Co,, 462 F.Supp. 1072, 1103 (N. D1. 1978); Mountain Grove

Cemetery Assn, v. Norwalk Vault Co, [1977], 428 F.Supp. 951

(footnote continued on following page)

Appendix A-—Court of Appeals’ Opinion

A-22

intended to extend the sham exception only to cases involving

repetitive claims,®®

(footnote continued from previous page)

(D.Conn,1977); Central Bank af Clayton vy. Clayton Bank, 424 F Supp. 163,

167 (B.D.Mo,1976), afd, 553 F.2d 102 (8th Cir,), cert, denied, 433 US.

910, 97 S.Ct, 2978, 53, L.BdQd 1095 (1977) (all uiring multiple,

repetitive suits), with Feminist Women's Health Center vy. Mohammad, 586

F.2d 530, 543 0.6 (Sth Cir, 1978), cert, denied, sub nom, Palmer v. Feminist

Women's Health Center, 444 U8, 924, 100 §.Ct, 262, 62 L. Bd. 2d 180 (1979);

Colorado Petroleum Marketers Assn, ¥. Southland Corp, 476 F Supp. 373,

377-78 (D.Colo.1979); First Nat'l Bank af Omaha v. Marquette Nat'l Bank

1980], 482 F.Supp. 514 (D.Minn.1979); Technicon Medical Information

tems Corp. v. Green Bay Packaging Inc, [1980] 480 F Supp.l24

(B.D, Wis, 1979); Systems, Inc. v. Management Science America, Ine.

{von Trede RegRep, (CCH) Trade Cas.961,927, at 73,918

(N.D.11. 1978); Associated Radio Serv, v. Page Airways, Inc, 414 F.Supp.

1088 (N.D.Tex,1976) (all holding that a si suit is sufficient),

25, The commentators agree with this interpretation, See Fischel,

Antitrust Liability for Attempts to Influence Government Action: The Basis

and Limits af the Noerr- Pennington Doctrine, 45 U.Chi.L. Rev, 80, 110 (1977)

("The touchstone of the traditional sham exception—the absence of a

nuine intent to influence the government— suggests that although repeated

awsuits are highly probative, ‘hey are not necessary to constitute a sham.” )

(emphasis added); Balmer, Sham Litigation and the Antitrust Laws, 29

Buffalo L.Rev. 39, 55 56 [sic] (1980) ("The ‘patiern of baseless repetitive

claims’ canoes of California Motor Transport will be treated by some as

making multiple sham suits a prerequisite for antitrust liability. However, the

better analyses will be those which look behind this language to the

freseconts relied upon in California Motor Transport and which, like Justice

tevens’ dissent in Lekiro-Vend, view those words as an ‘illustration’ of an

antitrust violation and not a minimum standard. The single sham suit can be

a very significant restraint of ade or act in furtherance of monopolization,

and it should be prohibited by the Sherman Act. More importantly, ... the

constitutional guarantee of the right of petition which underlies Noerr-

Pennington immunity protects only legitimate suits and not sham litigation,

whether that litigation consists of one knowingly baseless complaint or

many.”) Our view that a single sham action is sufficient is not inconsistent

with the holding in Ad Visor, Inc. v. Pacific Telephone & Telegraph Co., 640

F.2d 1107 (9th Cir, 1981). In Ad Visor, we stated “Multiplicity, by itself,

does not vitiate the Noerr-Pennington protections.” Id, at 1109.

In support of this view, we relied upon the following language from

Justice Blackmun's concurring opinion in Vendo Co, v. Lektro-Vend Corp., 433

U.S. 623, 97S.Ct, 2881, 33 L.Bd.2d 1009 (1977): “Since I believe that federal

courts should be hesitant indeed to enjoin ongoing state court proceedings, |

am of the opinion that a pattern of baseless, repetitive claims or some

(footnote continued on following page)

Appendix A—Court af Appeals’ Opinion

A-23

Given the theory supporting both the Noerr-Pennington

doctrine and the sham exception, and absent any contrary

indication from the Supreme Court, we hold that a single suit,

or in this case a single protest, is sufficient to invoke the sham

exception,

BASELESS CLAIMS

Defendants contend that to come within the sham ex-

ception, plaintiff must allege and show that the claims prose-

cuted were baseless, Defendants claim that since their claims

were not baseless, the grant of summary judgment is proper,

We disagree, Assuming that baseless claims must be shown,

the record before the district court reveals that the defendants’

protests of Tariff 55 were baseless,

The defendants admitted arguendo that their protests were

filed automatically and without regard to merit, This estab-

lishes that defendants’ protests were baseless for the purposes

of the motion, Indeed, the fact that defendants lost all protests

establishes a sufficient showing of baselessness for the purposes

of a summary judgment motion, This is certainly sufficient to

present a triable issue of fact,

ACCESS DENIAL

Relying again on Trucking Unlimited, defendants contend

that Clipper cannot invoke the sham exception unless it estab-

lishes that defendants’ actions deprived Clipper of access to the

ICC, Defendants claim that because Clipper was successful

before the ICC in fighting the protests, and also made numer-

ous filings with the ICC during the protest period, Clipper was

not deprived of either actual or meaningful access to the ICC,

Defendants’ contention is erroneous.

(footnote continued from previous page)

equivalent showing of grave abuse of the state courts must exist before an

injunction would be proper.” 433 U.S. at 644 (emphasis added).

Thus, it is not the number of claims which is controlling, but whether the

evidence shows that the claim or claims filed constitute an abuse of process,

Where the facts are in dispute, this is a question for the trier of fact.

Appendix A—Court of Appeals’ Opinion

A-24

The defendants claim that Trucking Unlimited requires

access barring as a prerequisite to application of the sham

exception. In Trucking Unlimited the Court noted that the

plaintiffs alleged, in establishing a sham claim, that defendants

“petitioning” activity denied them free and unlimited access to

administrative and judicial tribunals. 404 U.S. at 511, 92 S.Ct.

at 612. The Court, in holding that a cause of action was stated

under the sham exception, based its decision on alternative

grounds—access barring and also the fact that the adminis-

trative and judicial process had been abused. /d. at 513, 92

S.Ct. at 613. In Trucking Unlimited, the concepts of access

barring and abuse of judicial process were treated inter-

changeably because the defendants’ intervention in the admin-

istrative process in that case involved both. Subsequent

decisions of the Supreme Court indicate that the access-barring

language of Trucking Unlimited referred only to the particular

circumstances in that case, and did not establish access barring

as a prerequisite to a sham exception suit.

In Otter Tail Power Co. v. United States, 410 U.S. 366, 93

S.Ct. 1022, 35 L.Ed.2d 359 (1973), on remand, 360 F.Supp.

451 (D.C. Minn.1973), aff'd mem. 417 U.S. 901, 94 S.Ct. 2594,

41 L.Ed.2d 207 (1974), the Court held that a cause of action

under the sham exception was made out in the absence of any

allegation of access barring. The Otter Tail defendants used

litigation to suppress competition, and in fact gave the plaintiffs

greater access to courts by instituting lawsuits. Ofter Tail

indicates that the term “access barring” refers only to one type

of abuse of judicial or administrative process and that “access

barring” need not be present for the maintenance of a suit

under the sham exception.26

26. In the following cases, the Court indicated that sham claims were

appropriate, even though access barring was absent. See Vendo Co. v. Lektro-

Vend Corp., 433 U.S. 623, 97 S.Ct. 2881, 53 L.Ed.2d 1009 (1977) (all three

opinions assume the filing of baseless lawsuits with the purpose of elimination

of competition could constitute an antitrust violation) (“sham litigation in

state courts may constitute an antitrust violation”) (plurality opinion) Jd. at

635 n.6, 97 S.Ct. at 2889 n.6; (pattern of baseless repetitive claims may

(footnote continued on following page)

Appendix A—Court of Appeals’ Opinion

A-25

Defendants contend that despite the Supreme Court’s

decision in Otter Tail, access barring is a prerequisite to a sham

suit in the instant case. They contend that (1) the cases where

access barring was not required are distinguishable from the

instant case, because in those cases there was no administrative

body involved to which access could be denied. Rather, in

those cases the petitioning activity was first directed to courts.

In this case, however, there was an administrative body (the

ICC) to which access could be denied; and (2) Franchise

Realty Interstate Corp. v. San Francisco Local Joint Executive

Board of Culinary Workers, 542 F.2d 1076 (9th Cir. 1976),

cert. denied, 430 U.S. 940, 97 S.Ct. 1571, 51 L.Ed.2d 787

(1977), requires access barring as an element of a sham claim.

We are not persuaded by either contention.

Neither Otter Tail nor any subsequent Supreme Court case

indicates that access barring is required when the petitioning

activity is directed towards an administrative body although it

is not required if the petitioning is directed to the courts.

Moreover, such a holding seems senseless. The same dangers

that the antitrust laws seek to prohibit flow from instituting

sham administrative proceedings as flow from instituting sham

judicial proceedings. Harassment of a rival through an admin-

istrative proceeding may have the same anticompetitive effect

as harassment through the court system. We therefore see no

reason to distinguish between cases in which there is primary

resort to an administrative body and cases where the primary

(footnote continued from previous page)

constitute antitrust violation) (concurring opinion) /d. at 643-44, 97 S.Ct. at

2893-94; (“illegal use of state court litigation as a method of monopolizing or

restraining trade is... a violation of the antitrust laws”) ( dissenting opinion)

Id. at 653, 97 S.Ct. at 2898; City of Lafayette vy. Louisiana Power & Light Co.,

435 U.S 389, 405, 98 S.Ct. 1123, 1132, 55 L.Ed.2d 364 (1978) ( anticompeti-

tive litigation in the courts can constitute antitrust violation); New Motor

Vehicle Bd. v. Orrin W. Fox Co., 439 U.S. 96, 110 0.15, 99 S.Ct. 403, 412 0.15,

58 L.Ed.2d 361 (1978) (“Dealers who press sham protests before the New

Motor Vehicle Board for the sole purpose of delaying the establishment of

competing dealerships may be vulnerable to suits under the federal an.itrust

laws”).

Appendix A—Court of Appeals’ Opinion

A-26

resort is to the court system. In fact, Trucking Unlimited, when

discussing the dangers of abuse of process, groups judicial and

administrative process together. 404 U.S. at 513, 92 S.Ct. at

613 (“the administrative and judicial processes have been

abused”).

Defendants also suggest that in Franchise Realty this court

held that access barring is a necessary element of a sham claim.

Defendants, however, ignore the most recent pronouncement of

this circuit. In Ernest W. Hahn, Inc. v. Codding, 615 F.2d 830

(9th Cir. 1980), this court found a cause of action under the

sham exception was stated despite the absence of access

barring. The Hahn court stated:

It has been suggested that Franchise Realty requires a

showing of some activity other than the alleged abuse of

process and perhaps a showing that the plaintiff has been

barred from meaningful use of the agency or tribunal. See

Handgards, Inc. v. Ethicon, Inc., 601 F.2d 986, 998 (9th

Cir. 1979) (Kennedy, J. concurring), cert. denied, 444 US.

1025, 100 S.Ct. 688, 62 L.Ed.2d 659 (1980). While

Franchise Realty may be read in this manner. . . in view of

what the decision itself says when discussing Otter Tail and

the later Supreme Court decision in Vendo, we decline to

follow this interpretation under the alleged facts in this

case.” 615 F.2d at 841 n.14,27

Defendants also contend that we must require proof of

access barring here if “the Noerr-Pennington doctrine is to

protect protest activities at all.” Defendants claim that if we did

not require access barring, every competitor who was adversely

27. Franchise Realty is very different from the instant case. In Franchise

Realty the defendants opposed plaintiffs’ applications for building permits.

The body which acted on the permits was “as much a political as an

adjudicatory Sody.” 542 F.2d at 1079. The defendants were successful in

their opposition. Here, in contrast, the defendants opposed the plaintiff's

applications in a pure adjudicatory body. As the Trucking court noted,

activity which is acceptable before a political body is not necessarily

acceptable before an administrative or judicial body. See 404 U.S. at 513, 92

S.Ct. at 613. Moreover, in the instant case, the defendants’ protests uniformly

failed.

Appendix A— Court of Appeals’ Opinion

A-27

affected by the filing of a protest would file an antitrust suit

against the protesting party. This increased litigation, defen-

dants claim, would deter the exercise of first amendment rights.

We disagree.

The Supreme Court in Otter Tail held that a sham

exception cause of action was stated, despite the absence of

access barring. We see no reason to hold otherwise here. All

laws create the possibility of litigation. Congress, in its wisdom,

enacted the antitrust laws. We have no cause here to second

guess the judgment of Congress. Defendants have not shown

how their first amendment rights have been infringed by the

antitrust laws, nor have they presented any reason to believe

that our holding will adversely affect the future exercise of first

amendment rights. To prove an antitrust violation under the

sham exception, a plaintiff must prove the usual elements of any

antitrust violation in addition to proving that a defendant’s

actions that ostensibly appear as petitioning activity were not

genuine efforts to influence governmental action; rather they

were nothing more than an attempt to interfere directly with the

business relationships of a competitor. This is a heavy burden.

Neither the first amendment nor the antitrust laws require that

we make it any heavier by adding the requirement of access

barring.

We have found no precedent nor any reason to require

access barring before the sham exception can be invoked.?8

Thus, we conclude that to invoke the sham exception, some

28. The commentators have also agreed with our interpretation.

See R. Bork, The Antitrust Paradox, 354 (1978) (Certainly, in a proper

case, a proved intent not to bar competitors from the courtroom but, by the

litigation of baseless claims, to bar them from a market or to delay their entry

should suffice for @ violation of the Sherman Act”); Areeda & Turner,

Antitrust Law 9 203b at 41 (1978) (“Because the would-be competitors {in

Trucking Unlimited| had first to obtain a license from an administrative

agency, the Court spoke of defendants’ alleged misbehavior as revealing ‘a

purpose to deprive the competitors of meaningful access to the agencies and

courts.” But harassment of rivals through administrative adjudication would

seem equally reprehensible and anti-competitive whether or not the actual or

potential rival would himself be obliged to seck a license to enter the market

in question.”’)

Appendix A—Court of Appeals’ Opinion

A-28

abuse of process, although not necessarily access barring, must

be alleged. Because it was sufficiently alleged here, the

summary judgment was improper.

FRAUD

In its amended complaint Clipper alleged that the defend-

ants provided the ICC with fraudulent information in con-

nection with the rate protests, and that therefore the defendants

were liable for treble damages under the Sherman Act.29

Specifically Clipper claimed that the defendants, “[t]o give

29. The defendants, in a footnote in their brief, also claim that the action

for fraud is barred by the statute of limitations. Section 4B of the Clayton Act,

15 U.S.C. §15b, provides the applicable four-year statute of limitations.

Defendants contend that the first fraud claim was asserted in an amended

complaint six years after the alleged fraud occurred, and five years after the

action was filed, and is accordingly barred by the four-year statute of

limitations in the Clayton Act. Even if we assumed the truth of all

defendants’ allegations, we would not agree with their conclusion that the

fraud claim is barred by the statute of limitations.

Rule 15(c) of the Federal Rules of Civil Procedure provides in pertinent

part: “Whenever the claim or defense asserted in the amended pleading

arose out of the conduct, transaction, or occurrence set forth or attempted to

be set forth in the original pleading, the amendment relates back to the date

of the original pieading.” Under the relation back doctrine of Rule 15(c),

the allegations of a new theory in an amended complaint will not be time

barred if the theory involves the same transaction, occurrence, or core of

operative facts involved in the original claim. See 3 Moore’s Federal Practice

7 :15.15[3], at 15-194 (3d ed. 1980); Wright & Miller, 6 Federal Practice and

Procedure § 1496 (1971). In the instant case, the initial complaint alleged

antitrust violations involving the defendants’ protests to the ICC. The fraud

claim in the amended complaint also alleged antitrust violations arising from

the protests. The protests involve a single transction or occurrence. Therefore,

the claims involving fraud relate back to the filing of the first complaint, and

are not time barred.

We are mindful that the relation back doctrine of Rule 15(c) is to be

liberally applied. Moreover, as recognized by the Fifth Circuit: “This

liberality is particularly persuasive in antitrust suits where there is ample

opportunity for discovery and other pretrial procedures.” Woods Exploration

& Producing Co., Inc. vy. Aluminum Co. of America, 438 F.2d 1286, 1300 (Sth

Cir. 1971), cert. denied, 404 U.S. 1047, 92 S.Ct. 701, 30 L.Ed.2d 736 (1972).

Here, the initial complaint clearly put defendants on notice that their

conduct involving the protests was being challenged in court; the purposes of

the statute of limitations were satisfied. In the absence of any evidence of

prejudice to defendants caused by the late filing of the fraud claim, there is no

reason to find it time barred.

Appendix A—Court of Appeals’ Opinion

A-29

their sham protests the appearance of merit and thereby subvert

the purpose of § 15a(3)9°,... knowingly understated their

costs; they knowingly overstated the forwarders’ costs; they

deliberately misrepresented to the ICC that Clipper’s charges

were substantially below defendants’ charges and therefore

constituted ‘destructive competition’ in violation of national

transportation policy; and they made countless other mis-

representations of both fact and law....”

The district court’s order did not specifically deal with the

fraud issue; hence it did not address a rule of law known as the

Walker Process doctrine, which provides antitrust liability for

the commission of fraud on administrative agencies, for pre-

datory ends. We therefore remand to the district court for a

determination of whether the defendants’ actions constituted an

antitrust violation in that they perpetrated fraud on an adminis-

trative agency, for predatory ends.

Imposing antitrust liability for supplying fraudulent infor-

mation in an administrative proceeding derives from Walker

Process Equipment, Inc. v. Food Machinery & Chemical Corp.,

382 U.S. 172, 86 S.Ct. 347, 15 L.Ed.2d 247 (1965). In Walker

Process the question was “whether the maintenance and

enforcement of a patent obtained by fraud on the Patent Office

may be the basis of an action under § 2 of the Sherman Act,

30. 49 U.S.C. §15a(3), recodified as 49 U.S.C. §10704(d), provides:

In a proceeding involving competition between carriers of different

modes of transportation ... the Commission, in determining whether a

rate is lower than a reasonable minimum rate, shall consider the facts

and circumstances attending the movement of the traffic by the carrier or

carriers to which the rate is applicable. Rates of a carrier shall not be

held up to a particular level to protect the traffic of any other mode of

transportation, giving due consideration to the objectives of the national

transportation policy. . . .

Section 15a(3) has been held to require the protesting carrier mode to

establish that it has the inherent cost advantage. This may be shown by

comparing fully allocated costs and establishing that the proposed rate is

below protestants’ fully allocated costs. See JCC v. New York, New Haven &

Hartford R.R. Co., 372 U.S. 744, 83 S.Ct. 1038, 10 L.Ed.2d 108 (1963);

American Commercial Lines Inc., v. Louisville & Nashville R.R. Co., 392 US.

571, 88 S.Ct. 2105, 20 L.Ed.2d 1289 ( 1968).

Appendix A—Court of Appeals’ Opinion

A-30

and therefore subject to a treble damage claim by an injured

party under § 4 of the Clayton Act.” Jd. at 173, 86 S.Ct. at

348. The Supreme Court held that “the enforcement of a

patent procured by fraud on the Patent office may be violative

of § 2... provided the other elements necessary to a § 2 case

are present.” /d. at 174, 86 S.Ct. at 3489"

This Circuit has never clearly extended the Walker Process

doctrine to cases not arising in a patent context.32 We are

directly presented with the issue. We hold that the fraudulent

furnishing of false information to an agency in connection with

an adjudicatory proceeding can be the basis for antitrust

liability, if the requisite predatory intent is present and the other

elements of an antitrust claim are proven.

As the Supreme Court noted in Trucking Unlimited, the

adjudicatory sphere is much different from the political sphere.

There is an emphasis on debate in the political sphere, which

could accommodate false statements and reveal their falsity. In

the adjudicatory sphere, however, information supplied by the

31. The Walker Process doctrine is not limited to fraud on the Patent

Office. The fact that Walker Process provides a rule of general applicability

was intimated in Trucking Unlimited, in which Justice Douglas wrote that

“[m ]isrepresentations, condoned in the political arena, are not immunized

when used in the adjudicatory process.” 404 U.S. at 513, 92 S.Ct. at 613.

32. See, e.g., Mt. Hood Stages, Inc. v. Greyhound Corp., 555 F.2d 687,

696 (9th Cir. 1977), vacated and remanded on other grounds 437 U.S. 322,

98 S.Ct. 2370, 57 L.Ed.2d 239 (1978).

The lengthy [jury] instructions contained two brief passages apparently

inspired by Walker Process Equipment, Inc. v. Food Machinery &

Chemical Corp.,... and California Motor Transport Co. v. Trucking

Unlimited. ... Greyhound argues that these passages permitted imposi-

tion of liability if the jury found no more than that Greyhound had

perpetrated a fraud on the Commission or had acted in bad faith in the

administrative and related judicial processes, rendering those Processes

ineffective. ... At most... the only question raised by these passages is

whether the doctrine of Walker Process applies outside the patent field.

When the passages are read in light of the parties’ contentions, the

evidence in the case, and the instructions as a whole, however, we do not

believe they present even this issue. (emphasis added) (citations

omitted ).

Appendix A—Court of Appeals’ Opinion

A-31

parties is relied on as accurate for decision making and dispute

resolving. The supplying of fraudulent information thus threat-

ens the fair and impartial functioning of these agencies and

does not deserve immunity from the antitrust laws. See, e.g.,

Israel v. Baxter Laboratories, Inc., 466 F.2d 272, 275-80 (D.C.

Cir.1972).

Because of the admissions made in defendants’ memo-

randum accompanying its motion for summary judgment, we

must assume as proven that the defendants knowingly provided

the ICC with fraudulent information in connection with their

rate protests in determining whether a claim based on the

furnishing of fraudulent information is stated sufficiently to

withstand summary judgment. Clipper’s specific allegations

which as judicial admissions are to be accepted as proven are

set forth above. We find that these assumed facts are sufficient

to establish a triable cause of action under the antitrust laws.

Defendants contend, however, that no cause of action

based on fraud is stated because: (1) their acts and statements

are immune under the first amendment; (2) the ICC ultimately

found for Clipper and therefore the defendants’ acts did not

defraud the ICC; and (3) access barring is required and

Clipper was not denied access to the ICC. We are not

persuaded by any of these contentions.99

There is no first amendment protection for furnishing with

predatory intent false information to an administrative or

adjudicatory body. The first amendment has not been inter-

preted to preclude liability for false statements. For example,

defamatory statements can be made the basis for liability. See

New York Times Co. v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11

33. Defendants also contend that Clipper’s claim of fraud is refuted in

the record, because the ICC began its investigation into Clipper’s Tariff 55

before defendants made their fraudulent representations. Even if this is true,

the fraud may have resulted in a longer, more in depth, investigation. We

express no opinion here on the ultimate merits of the fraud claim. We are

holding here only that a cause of action for fraud is presented —whether it can

be proven is not our concern at this point.

Appendix A—Court of Appeals’ Opinion

A-32

L.Ed.2d 686 (1964). 18 U.S.C. § 1001 imposes criminal

penalties for knowingly and wilfully concealing or mis-

representing material facts before any department or agency of

the United States. Courts uniformly punish perjury. As the

Supreme Court stated in Gertz v. Robert Welch, Inc., 418 US.

323, 340, 94 S.Ct. 2997, 3007, 41 L.Ed.2d 789 (1974); “there is

no constitutional value in false statements of fact.” Contrary to

defendants’ assertions, there is simply no basis to hold that

deliberately misrepresenting facts to an administrative body for

anti-competitive purposes enjoys blanket first amendment

protection.

Defendants contend that if first amendment protection is

not extended to their statements, robust debate would be

chilled. While we recognize that under certain circumstances

allowing the imposition of liability for statements can hamper

debate, see New York Times Co. v. Sullivan, 376 U.S. 254, 84

S.Ct. 710, 11 L.Ed.2d 686 (1964), this possibility does not

require that all such statements be immunized from liability. It

may suggest that a court should adopt a stricter standard of

proof, or certain additional elements should be required. See

id. (interes: in public debate requires that to establish defama-

tion by media against public official, plaintiff show statement

was made with knowledge of or reckless disregard for falsity).

Regardless of degree of protection which might be found

appropriate for protecting defendants’ statements from antitrust

liability, those limits have been exceeded here. Clipper claims

defendants knew the falsity of their statements, and made those

statements in a deliberate attempt to mislead a regulatory body.

We can conceive of no stricter standard than that satisfied by

the facts alleged by Clipper. We see no reason to extend first

amendment protection here.

Defendants contend that no cause of action for fraud is

stated because the ICC rejected defendants’ arguments and

found for Clipper, and therefore the ICC was not defrauded by

the defendants. This analysis is deficient. First, neither Walker

Process, nor subsequent cases, see Israel v. Baxter Laboratories,

Appendix A—Court of Appeals’ Opinion

A-33

466 F.2d 272 (D.C.Cir. 1972); Woods Exploration & Producing

Co. v. Aluminum Co. of America, 438 F.2d 1286 (Sth Cir.

1971), cert. denied, 404 U.S. 1047, 92 S.Ct. 701 30 L.Ed.2d 736

(1972), require that the body on whom the fraudulent mis-

tatements are pressed ultimately believe those statements.

Moreover, the underlying theoretical basis of the Walker

Process doctrine does not support such a narrow interpretation

of the doctrine.

Walker Process recognizes that fraudulently supplying

information can result in monopolization, and therefore violate

the antitrust laws. The doctrine is not concerned with whether

the body intended to be influenced by the information is

ultimately defrauded; a cause of action is established so ‘ong as

the elements of an antitrust claim are alleged and the violation

is executed through fraudulently supplying information.

Whether the body is ultimately defrauded by the information

may affect the extent of the monopolization—and thus affect

damages.

We find significant support for our findings in both policy

and practice. Adjudicatory procedures will not always ferret

Out misrepresentations. Administrative bodies®4 and courts,

however, rely on the information presented by the parties

before them. They seldom, if ever, have the time or resources

to conduct independent investigations. The recognition, how-

ever, of a private right of action based on the fraudulent

misrepresentation, might be sufficient incentive to induce

parties not to fraudulently misrepresent facts.

34. We note that in an amicus brief the ICC has urged us to find that

deliberate misrepresentations of material facts to the ICC will make out an

aatitrust claim if other elements of an antitrust claim are present. The ICC

states that “many government agencies the size of the [ICC] have only a

small staff to monitor the actions of litigants and must rely on the parties to

tell the truth. Thus, a misrepresentation could go undected unless another

party who becomes aware of the wrongdoing comes forward and reports it to

public authorities. The incentive provided by treble damage recovery [of

antitrust laws] would give parties a monetary inducement to bring to light

such wrong-doing.”

Appendix A—Court of Appeals’ Opinion

A-34

Moreover, we are not persuaded that Clipper should be

deprived a remedy and defendants should be immunized from

liability simply because Clipper was not denied access to the

ICC. There is simply no basis for requiring a denial of access to

the agency as a prerequisite for an antitrust claim for fraud.

Defendants contend that both Trucking Unlimited and Fran-

chise Realty require access barring in this context. Neither of

these cases, however, involved claims arising from the furnish-

ing of fraudulent information for predatory purposes. More-

over, Otter Tail establishes, as noted earlier, that an antitrust

claim based on litigation can exist without access barring. The

grant of summary judgment on this claim was not proper.

IV. OVERALL SCHEME

Clipper alleges, finally, that the defendants engaged in a

rate fixing conspiracy, part of which involved defendants’

protests to the ICC, and that this conspiracy constitutes a

separate violation of the antitrust laws independent of any

petitioning activity that might enjoy Noerr immunity. For

several years the defendants engaged in a practice by which

they refrained from offering lower rates to each other’s custom-

ers. This practice was enforced by censure, and if necessary, by

vigorous protests against competitive rate publications. Clipper

contends that this conduct constitutes a horizontal conspiracy to

fix prices and allocate the relevant market, per se violative of

the Sherman Act. Moreover, defendants prosecuted deliber-

ately false protests against Clipper’s lower rates to enforce and

protect their illegal price fix/customer allocation. Clipper thus

contends that the defendants’ prosecution of litigation in furthe-

rance of their unlawful scheme constituted an antitrust viola-

tion, and the overall scheme was noi excused by immunity

provisions in the ICA nor Noerr immunity.

The defendants assert that § 5a of the ICA, 49 U.S.C. §5b,

recodified as 49 U.S.C. § 10706, provides immunity for this

conspiracy to fix rates. Furthermore, the defendants contend

that the Noerr-Pennington doctrine protects petitioning activity

whether or not that activity is in furtherance of an independent

Appendix A— Court of Appeals’ Opinion

A-35

antitrust violation, In its summary judgment order, the district

court did not specifically consider the viability of this “overall

scheme” contention,

An antitrust violation does not enjoy immunity simply

because an element of that violation involves an action which

itself is not illegal. In Trucking Unlimited the Court empha-

sized the existence of liability for antitrust violations, even

though an integral part of the violation may involve otherwise

legal and protected activity.

The court stated:

Petitioners, of course, have the right of access to the

agencies and courts to be heard on applications sought by

[competitors], That right, as indicated, is part of the right

to petition protected by the First Amendment. Yet that

does not necessarily give them immunity from the antitrust

laws,

It is well settled that First Amendment rights are not

immunized from regulation when they are used as an

integral part of conduct which violates a valid statute, 404

U.S, at 513-14, 92 S.Ct. at 613,

Similarly, we hold that when there is a conspiracy prohibit-

ed by the anti-trust laws, and the otherwise legal litigation is

nothing but an act in furtherance of that conspiracy, general

antitrust principles apply, notwithstanding the existence of

Noerr immunity. In so holding we are acting consistently with

the theoretical underpinnings of the Noerr doctrine. As we

noted above, Noerr immunity is based on the first amendment

right to petition and to seek to influence governmental action.

See Trucking Unlimited, 404 U.S. at 510 12, 92 S.Ct. at 611 12

[sic], When, however, the petitioning activity is but a part of a

larger overall scheme to restrain trade, there is no overall

immunity, As the Court noted in Trucking Unlimited:

First Amendment rights may not be used as the means or

the pretext for achieving “substantive evils”... which the

Appendix A—Court of Appeals’ Opinion

A-36

legislature has power to control, Certainly the con-

stitutionality of the antitrust laws is not open to debate. ...

If the end result is unlawful, it matters not that the means

used in violation may be lawful. 404 U.S, at 515, 92 S.Ct.

at 614,

We agree. If Clipper can prove that the defendants

engaged in activities which violated the antitrust laws, those

violations do not become immune simply because the defen-

dants used legal means—protests before the ICC—as a means

to enforce the violations.

We find significant support for our holding in Supreme

Court and circuit court decisions, United States v. Singer

Manufacturing Co., 874 U.S.174, 83 S.Ct, 1776, 10 L.Bd.2d 823

(1963), held that a cause of action under the antitrust laws was

stated when an integral part of the violation was prosecution of

patent infringement actions, In Singer, the defendants con-

spired to eliminate Japanese competition from the American

sewing machine market. To eliminate this competition, the

defendants assigned patents and prosecuted patent in-

fringement actions against Japanese competitors. The Supreme

Court held that this aggregation of patents and prosecution of

infringement suits constituted an actionable violation of the

antitrust laws.

The instant case is analogous to Singer. Here, the allega-

tion is that the defendants conspired to fix rates and allocate

customers, and used the protest mechanism of the ICC to

further this conspiracy. Protests before the ICC are legitimate

mechanisms for enforcing rights. Even if the protests to the

iC were legitimate, if they were part of a larger antitrust

conspiracy, the conspiracy is subject to the antitrust laws.

This Circuit has embraced the Singer holding, at least in

the context of patent infringement suits, In Handgards, Inc. v.

Ethicon, Inc., 601 F.2d 986, 994 (9th Cir, 1979), cert denied,

444 U.S, 1025, 100 §.Ct, 688, 62 L.Bd.2d 659 (1980), this court

stated that;

Appendix A— Court of Appeals’ Opinion

A-37

Kobe | Kobe, Inc. v. Dempsy Pump Co., 198 F.2d 416 (10th

Cir. ), cert. denied, 344 U.S, 837, 73 S.Ct. 46, 97 L.Ed. 651

(1952)] and its progeny, among which is Rex Chainbelt

| Rex Chainbelt, Inc. v. Harco Products, Inc, §12 F.2d 993

(9th Cir.), cert, denied, 423 U.S. 831, 96 S.Ct. 52, 46

L.Ed.2d 49 (1975)], hold that a patentee may incur

antitrust liability for even the good faith prosecution of a

valid patent where it is shown that the infringement suit

“was brought in furtherance and as an integral part of a

plan to violate the antitrust laws.” 601 F.2d at 994,

(Citations omitted), See also Mach-Tronics, Inc. vy. Zir-

poli, 316 F.2d 820, 830-31 (9th Cir, 1963),

The fact that the Ninth Circuit cases involving enforcement

litigation as an integral part of an overall scheme which violates

the antitrust laws arise in the context of patent litigation does

not intimate that such a theory is only viable in the patent

context.*5 We see no reason for refusing to extend the rationale

of these patent-antitrust cases to overall antitrust schemes in

other contexts,

The Tenth Circuit has extended the Singer doctrine to

protests involving the ICC, In Webb v. Utah Tour Brokers

Association, 568 F.2d 670 (10th Cir, 1977), the Tenth Circuit

held that antitrust liability attached to tour operators who used

protests to the ICC as a means to further an illegal boycott, In

finding liability the Webb court stated:

It is apparent that in the case at bar the trial court was

correct in recognizing that the activities of the defendants

went far beyond the use of legal procedures in order to

protect the public interest. The activities here were

designed to and succeeded in bringing about a boycott of

the plaintiffs, which reduced their competitive significance

and caused a substantial loss.

35, Rather, it is indicative only of the uneasy, but recurring, interplay

between patent law, which authorizes monopolies, and antitrust law, which

prohibits and punishes monopolies, See Handgards, 601 F.2d at 992 0,10.

Appendix A—Court of Appeals’ Opinion

A-38

Accordingly, we must conclude that the governing law is

that set forth in the boycott cases rather than the ex-

emption decisions in Noerr Motor Freight, Inc. and its

progeny. Id. at 676.

The defendants contend, however, that Noerr-Pennington

protects petitioning activity even if it is a part of an independent

antitrust violation. As support, defendants cite Pennington:

“Joint efforts to influence public officials do not violate the

antitrust laws even though intended to eliminate competition.

Such conduct is not illegal, either standing alone or as part of a

broader scheme itself violative of the Sherman Act.” 381 U.S.

at 670, 85 S.Ct. at 1593.

Contrary to the defendants’ assertions, this statement does

not provide them with Noerr immunity for an overall and

independent antitrust violation. This statement, rather, pro-

vides immunity only for the narrow petitioning activity, if done

with the requisite intent to influence government action. Clip-

per, in this cause of action, is not challenging merely the

petitioning activity. Rather, it challenges the defendants’ entire

course of conduct, which allegedly resulted in the price fixing

and trade restraints. No one has contended that the alleged

price-fix conspiracy was intended to influence governmental

actions. The defendants’ actions do not enjoy immunity, even

though a part of the actions may have involved protected first

amendment petitioning. The reach of the Noerr-Pennington

doctrine is not that extensive, and the antitrust laws are not that

impotent.

Clipper, aided by the judicial admissions of the defend-

ants, has established that defendants conspired to fix prices and

restrain trade, and that this conspiracy was in part enforced by

protests to the ICC. Clipper has therefore stated a claim for

relief as a matter of law. The defendants contend, however,

that whatever conspiracy they engaged in was protected by § 5a

of the ICA. Section 5a of the ICA provides immunity from the

antitrust laws for collective rate agreements in certain circum-

stances. In ruling on the defendants’ summary judgment

Appendix A—Court of Appeals’ Opinion

A-39

motion, the district court did not determine whether such

circumstances existed here. Clipper, in its briefs, contends that

there was no such ICA immunity here. On the record this court

is not in a position to determine the existence of § 5a immunity.

That determination involves the resolution of disputed issues of

fact, including the need for ICC approval of questioned rates,

the existence of ICC approval of the rate bureau agreement, the

extent of any such approval, and, assuming approval, the

existence of any activities by the defendants beyond that

approval. We therefore remand this issue to the district court to

determine whether the defendants’ activities enjoyed § Sa

immunity for the alleged conspiracy to price-fix and restrain

trade.

DAMAGES

Clipper alleged that the defendants’ conduct caused Clip-

per to be damaged in the amount of thirty million dollars, and

it asked for treble that amount. Clipper’s damage claim rests

on three distinct theories: (1) once Clipper published and

defendants protested the $1,056 rate, Clipper was effectively

barred from publishing its $842 rate until the investigation of

the $1,056 rate was resolved in Clipper’s favor—two years

later. Clipper seeks the damages resulting from the two-year

delay in publishing the $842 rate; (2) Clipper seeks to recover

costs incurred in defending against defendants’ sham protests;3®

and (3) the ICC investigation of the $1,056 rate, caused by the

defendants’ protests, placed a “cloud” on the legality of that

rate during the time it was under investigation. Shippers will

not generally use a rate when it is under investigation. Clipper

seeks to recover for the business lost or deterred by this cloud.

Defendants respond that Clipper’s damage claim is barred

by Keogh v. Chicago & N.W. Ry. Co., 260 U.S. 156, 43 S.Ct. 47.

36. In their brief, defendants contend that Clipper’s costs in defending

against the protests were quite small, and they imply that because they were

small, they are noncompensatory. We are not here concerned with the

amount of damage. That is a question for the trier of fact. Our sole concern is

whether the theory on which damages are claimed is viabie.

Appendix A—Court of Appeals’ Opinion

A-40

67 L.Ed. 183 (1922)37 The district court agreed with the

defendants, holding: “Furthermore, plaintiff's damage claims,

which rest on assumptions as to action that would have been

taken by the ICC in the absence of defendants’ alleged antitrust

violations, are barred by Keogh v. Chicago & N.W. Ry. Co....”

(citation omitted). We disagree.

In Keogh a shipper sued several carriers, alleging that the

carriers had conspired to set arbitarily high rates, and that this

conspiracy violated the antitrust laws. The plaintiff claimed

that the rate filed by the carrier defendants was illegal, even

though the rate had received ICC approval. Plaintiff sought as

damages the difference between the rate which had received

ICC approval and some hypothetical, unset rate that would

have been in effect, absent the conspiracy. The Court held that

no antitrust action was stated; the exclusive remedy was held to

be contained in the Act to Regulate Commerce (now the ICA).

The Commerce Act provided for a damage recovery with illegal

rates. The court further noted that the challenged rate was

legal, having received ICC approval. They also noted that

judicial antitrust relief here would frustrate the intent of

Congress—Congress having passed the Commerce Act to insure

37. Defendants also contend that Clipper’s damage claim is not

compensable because Clipper caused its own injury by deliberately adopting

a piecemeal filing strategy before the defendants undertook to protest. It is

clear that the only antitrust damages that are recoverable are those which are

caused by the defendants’ illegal conduct. See Kapp v. Nat'l Football League,

586 F.2d 644, 648 (9th Cir. 1978), cert. denied, 441 U.S. 907, 99 S.Ct. 1996,

60 L.Ed.2d 375 (1979). This causation problem, however, is properly

determined by the trier of fact. Whether defendants’ acts damaged Clipper,

and the extent of that damage, is not before us at this time.

The defendants also contend that because RMMTB and not the individ-

ual motor carrier defendants filed the protests, only RMMTB could have any

liability. The defendants contend that for a member of an association to be

liable for an association's acts in violaton of antitrust laws the member must

have “knowlingly, intentionally and actively participated in an individual

capacity in the scheme.” Kline v. Coldwell, Banker & Co., 508 F.2d 226, 232.

The liability of the individual defendants is not now before this court.

Our sole concern at this time is whether a triable cause of action is stated. If

so, it will be up to the trier of fact to determine, under the applicable law,

which defendants are liable, and the extent of that liability.

Appendix A—Court of Appeals’ Opinion

A-41

uniform rates. Judicial relief would result in a lower rate to

plaintiff than to other shippers, and thus be a discriminatory

rebate. Finally, the court noted that judicial relief here would

require the court to speculate on the level the rate would have

been set by carriers and approved by the ICC absent the

conspiracy, thereby assuming what ICC action would be.

None of these decisional bases appear in the instant case.

Keogh is not even arguably applicable as a bar to Clipper’s

second and third damage claims. Clipper’s second damage

claim is for the costs of defending against the protests. There is

no applicable ICC remedy to recover these costs. An award of

these costs by a court would not interfere with the ICC, nor

would it be discriminatory. Finally, awarding these damages

does not require the court to make any assumptions as to ICC

actions.

The same analysis applies to Clipper’s third damage claim

to recover for profits lost because of the “cloud” on Clipper’s

rate while it was under investigation. There is no ICC remedy

applicable. Awarding damages for this would not interfere

with the regulatory framework of the ICC. Finally, although it

might be hard to prove these damages, the proof does not

require that any assumptions about ICC action be made.

Finally, Keogh does not apply to bar Clipper’s first damage

claim. Clipper claims that it was damaged because the

defendants’ protests prevented Clipper’s filing of the $842 rate

for two years. Unlike Keogh, there is no remedy under the ICA

for Clipper’s claim. Moreover, it is not a question of a

challenge to the legality of a rate approved by the ICC. Here,

the claim is that defendants’ actions delayed for two years the

filing of a rate—which the ICC ultimately approved. Relief

here would not disturb any uniform rates; it would do nothing

to ICC-approved rate structure. Finally, judicial relief here

would not involve the speculation that was at issue in Keogh. In

Keogh there was no evidence of what the legal ICC approved

rate would be absent the conspiracy. Here the allegations

indicate that Clipper would have filed an $842 rate, and the

Appendix A—Court of Appeals’ Opinion

A-42

subsequent ICC approval suggests that rate might have been

approved two years earlier. Of course, there is no certainty the

rate would have been approved. The speculation involved in

the instant case, however, in no way approaches the degree of

speculation disallowed in Keogh. There is, therefore, no reason

to find that Keogh bars this damage claim.

There are a myriad of cases that deal with the interplay of

regulation and antitrust law.9® None of these cases precludes

Clipper’s damage claim. These cases have been careful to note

that courts should not displace antitrust law for regulation, in

the absence of a clear conflict between antitrust law and

regulation. There is no clear conflict here between antitrust and

regulation. We therefore find that there is a damage remedy

for the antitrust violation.

REVERSED and REMANDED.

38. See, ¢.g., Hughes Tool Co. v. Trans World Airlines, Inc., 409 US.

363, 93 S.Ct. 647, 34 L.Ed.2d 577 (1973) (when agency (CAB) had power to

approve monopolistic practice and did in fact approve the practice, no

antitrust action would lie); Far East Conference v. United States, 342 US.

570, 72 S.Ct. 492, 96 L.Ed. 576 (1952) (when challenged conference

agreement had been approved by U.S. Shipping Board under authority of

Shipping Act of 1916, no antitrust action based on challenge to conference

agreement would lie). See also United States Navigation Co. v. Cunard §.S.

Co., 284 U.S. 474, 52 S.Ct. 247, 76 L.Ed. 408 (1932); Pan American World

Airways, Inc. y. United States, 371 U.S. 296, 83 S.Ct. 476, 9 L.Ed.2d 325

(1963).

See Keogh v. Chicago & N. W. Ry. Co., 260 U.S. 156, 43 S.Ct. 47, 67

L.Ed, 183 (1922) (ICC vested with pervasive rate setting power; court cannot

intervene if it would upset rate structure ); Georgia v. Penn. R.R. Co., 324 US.

439, 65 S.Ct. 716, 89 L.Ed, 1051 (1945) (ICC has pervasive power over rate

setting; court interference would result in unjust discrimination contrary to

Congressional intent; Court noted that ICA does not provide remedies for the

correction of all of the abuses of rate-making which might constitute

violations of antitrust laws.

Appendix B

District Court’s Order Granting Summary Judgment

B-43

UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

No. C-72-863 AJZ

Clipper Exxpress, a corporation,

Plaintiff,

Vs.

Rocky Mountain Motor Tariff Bureau, Inc., et al.,

Defendants,

[July 27, 1978]

ORDER GRANTING MOTIONS FOR SUMMARY

JUDGMENT AND TO DISMISS

All defendants other than Lee Way Motor Freight, Inc.

have filed a single motion for summary judgment. Defendant

Lee Way has filed a separate motion for summary judgment, as

well as a motion to dismiss for insufficient service of process.

With regard to the motions for summary judgment, the

issues are purely legal ones. Plaintiffs claim, insofar as it is

based on defendants’ protests before the Interstate Commerce

Commission, is barred by the doctrine developed in Eastern

Railroad 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). Plaintiff's attempt to invoke

the “sham” exception to that immunity, as defined in California

Motor Transport Co. v. Trucking Unlimited, 404 U.S. 508

(1972), is, under the undisputed facts in this case, foreclosed by

the narrow reading of that exception announced in Franchise

Appendix B— District Court's Order Granting

Summary Judgment

B-44

Realty Interstate Corp v. San Francisco Local Joint Executive

Board of Culinary Workers, 542 F.2d 1076 (9th Cir.), cert.

denied, 430 U.S. 940 (1977),

Furthermore, plaintiffs damage claims, which rest on

assumptions as to action that would have been taken by the

ICC in the absence of defendants’ alleged antitrust violations,

are barred by Keogh v. Chicago & N.W. Ry. Co., 260 U.S. 156

(1922).

All defendants are therefore entitled to summary judgment

in their favor. Moreover, the motion of Lee Way for dismissal

for insufficient service of process must also be granted in view of

the circumstances under which that defendant entered this

lawsuit.

IT 1S THEREFORE OrpDeRED that the motions of all defend-

ants for summary judgment are granted.

Ir 1s FURTHER OrperReD that the motion of defendant Lee

Way for dismissal for insufficient service of process is granted.

Dated: July 27, 1978

/s/_ ALPonso J. ZiRPOLI

United States District Judge

Appendix C

District Court’s Order Denying Motion to

Vacate Judgment

C-45

UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

No. C-72-863 AJZ

Clipper Exxpress, a corporation,

Plaintiff,

VS.

Rocky Mountain Motor Tariff Bureau, Inc., et al.,

Defendants.

{October 13, 1978]

ORDER DENYING MOTION TO VACATE JUDGMENT

On September 14, 1978, this court heard the motion of

plaintiff to reconsider the court’s order of July 27, 1978,

granting motions for summary judgment and to vacate the

judgment entered pursuant to that order on July 31, 1978. At

the hearing of said motion the Interstate Commerce Commis-

sion was granted leave to appear as amicus and to argue in

support of plaintiffs motion.

After having heard and considered the arguments of

counsel and the papers and briefs filed in support thereof, and

being fully advised in the premises, the court remains of the

view that plaintiff's attempt to invoke the “sham” exception to

the immunity doctrine developed in Eastern Railroad Presi-

dents Conference vy. Noerr Motor Freight, Inc., 365 U.S. 127

(1961), and United Mine Workers of America v. Pennington,

381 U.S. 657 (1965), is foreclosed by the Ninth Circuit's

reading of that exception in Franchise Realty Interstate Corp. v.

San Francisco Local Joint Executive Board of Culinary Work-

Appendix C— District Court’s Order Denying Motion

to Vacate Judgment

C-46

ers, 542 F.2d 1076 (9th Cir.), cert. denied, 430 U.S. 940

(1977). Such narrow reading of the exception relied upon by

plaintiff was recently approved in Mark Aero, Inc. v. Trans

World Airlines, Inc., 1978-2 Trade Reg. Rep. (CCH) 62,135

(8th Cir., July 6, 1978), wherein the court said:

.. All of these actions are joint efforts to influence govern-

mental action. As such they fall within the Noerr umbrella

and cannot give rise to Sherman Act liability.

It matters not that the sole purpose alleged to underlie

the attempt to influence governmental action was to ham-

per a competitor’s business activities. . . .

Id. at 75,006.

...In the case before us it is alleged that the defendants

have engaged in a publicity campaign involving the media

and various citizens groups, that they have induced the

Aviation Department of the City to refuse to make appli-

cation to the FAA for approval of a master security plan,

that they have made and induced others to make false and

misleading statements to, and used “economic coercion”

on, the City Council. These actions may all be admitted,

and we take them as true, but what is being complained

about is genuine political activity, protected by the first

amendment rights of free speech and freedom of peti-

tion.55,.. [Footnote 35 is a specific reference to and

approval of Franchise Realty Interstate Corp. |

Id. at 75,007.

IT IS HEREBY ORDERED that the motion to vacate the

summary judgment entered on July 31, 1978, is denied.

Dated: October 13, 1978

/s/ ALFONSO J. ZIRPOLI

United States District Judge

Appendix D

Court of Appeals’ Order Denying Rehearing

D-47

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

No. 78-3684

D.C.No. C-72-863 AJZ

Clipper Exxpress, a corporation,

Plaintiff-Appellant,

VS.

Rocky Mountain Motor Tariff Bureau, Inc., Yellow

Freight Systems, Inc., Consolidated Freightways

Corporation of Delaware, Illinois-California Ex-

press, Inc., IML Freight, Inc., Pacific Inter-

mountain Express Co., T.I1.M.E.—D.C., Inc.,

Consolidated Copperstate Lines, Garrett Freight

Lines, Inc., Navajo Freight Lines, Inc., N.W.

Transport Service, Inc., Ringsby Truck Lines,

Inc., Rio Grande Motor Way, Salt Creek Freight

Ways, Transcon Lines, United Buckingham

Freight Lines and Western Gillette, Inc.,

Defendants-Appellees.

[October 6, 1982]

ORDER

Before: WALLACE and ALARCON, Circuit Judges

and von der HEYDT,* District Judge

The panel as constituted above has voted to deny the

petition for rehearing and to reject the suggestion for rehearing

en banc.

* Honorable James A. von der Heydt, Chief United States District Judge,

District of Alaska, sitting by designation.

Appendix D—Court of Appeals’ Order

Denying Rehearing

D-48

The full court has been advised of the suggestion for

rehearing en banc, and no judge of the court has requested a

vote on the suggestion for rehearing en banc. Fed.R. App. P.

35(b).

The petition for rehearing is denied and the suggestion for

rehearing en banc is rejected.

The Opinion (Slip op. April 19, 1982 at p. 1580) is

amended as follows:

At Slip op. p. 1590, second column, line 25 ( first indented

quotation ), after said quotation add:

Again, for the purpose of this motion, the court may accept

Clipper’s allegations as fact and assume that defendants

expressly agreed among themselves not to cut rates to

divert traffic from one another—or to put it more bluntly,

that they agreed that their rates would be exactly the same.

Such an agreement would be perfectly lawful and immu-

nized from antitrust liability.

At Slip op. p. 1598, the following should be added to

Footnote 25:

Our view that a single sham action is sufficient is not

inconsistent with the holding in Ad Visor, Inc. v. Pacific

Telephone & Telegraph Co., 640 F.2d 1107 (9th Cir.

1981). In Ad Visor, we stated “Multiplicity, by itself, does

not vitiate the Noerr-Pennington protections.” /d. at 1109.

In support of this view, we relied upon the following

language from Justice Blackman’s [sic] concurring opinion

in Vendo Co. v. Lektro-Vend Corp., 433 U.S. 623, 97 S.Ct.

2881, 33 L.Ed. 1009 (1977): “Since I believe that federal

courts should be hesitant indeed to enjoin ongoing state

court proceedings, I am of the opinion that a pattern of

baseless, repetitive claims or some equivalent showing of

Appendix D—Court of Appeals’ Order

Denying Rehearing

D-49

grave abuse of the state courts must exist before an

injunction would be proper.” 433 U.S. at 644 (emphasis

added ).

Thus, it is not the number of claims which is controlling,

but whether the evidence shows that the claim or claims

filed constitute an abuse of process. Where the facts are in

dispute, this is a question for the trier of fact.

Appendix E

Constitutional and Statutory Provisions Involved

E-50

The First Amendment to the United States Constitution

provides as follows:

Congress shall make no law respecting an estab-

lishment of religion, or prohibiting the free exercise there-

of; or abridging the freedom of speech, or of the press; or

the right of the people peaceably to assemble, and to

petition the Government for a redress of grievances.

49 U.S.C. § 10708(a)( 1) provides as follows:

(a)(1) The Interstate Commerce Commission may

begin a proceeding to determine the lawfulness of a

proposed rate, classification, rule, or practice immediately,

On its Own initiative or on application of an interested party

when—

(A) a new individual or joint rate or individual

or joint classification, rule, or practice affecting a rate

is filed with the Commission by a common carrier,

other than a rail carrier, under this subtitle; or

(B) anew or reduced rate or rule or practice that

causes a reduction of a rate is filed with the Commis-

sion by a contract carrer under this subtitle.

49 U.S.C. § 10761(a) provides as follows:

(a) Except as provided in this subtitle, a carrier

providing transportation or service subject to the jurisdic-

tion of the Interstate Commerce Commission under chap-

ter 105 of this title shall provide that transportation or

service only if the rate for the transportation or service is

contained in a tariff that is in effect under this subchapter.

That carrier may not charge or receive a different com-

pensation for that transportation or service than the rate

specified in the tariff whether by returning a part of that

Appendix E—Constitutional and Statutory Provisions Involved

E-51

rate to a person, giving a person a privilege, allowing the

use of a facility that affects the value of that transportation

or service, or another device.

49 U.S.C. § 10762(a)(1) provides as follows:

(a)(1) A carrier providing transportation or service

subject to the jurisdiction of the Interstate Commerce

Commission under chapter 105 of this title (except a motor

common carrier) shall publish and file with the Commis-

sion tariffs containing the rates and (A) if a common

carrier, classifications, rules, and practices related to those

rates, and (B) if a contract carrier, rules and practices

related to those rates, established under this chapter for

transportation or service it may provide under this subtitle.

A motor common carrier shall publish and file with the

Commission tariffs containing the rates for transportation it

may provide under this subtitle. The Commission may

prescribe other information that motor common carriers

shall include in their tariffs. A motor contract carrier that

serves only one shipper and has provided continuous

transportation to that shipper for at least one year or a

motor carrier of property providing transportation under a

certificate to which the provisions of section

10922(b)(4)(E) of this title apply or under a permit to

which the provisions of section 10923(b)(5) of this title

apply may file only its minimum rates unless the Commis-

sion finds that filing of actual rates is required in the public

interest.

Appendix F

Conflicting Decisions on the Sham Exception to

Noerr-Pennington Immunity

F-52

I. “Pattern of Repetitive Claims” Requirement

“(We hold that a single suit, or in this case a single

protest, is sufficient to invoke the sham exception.”

—Clipper Exxpress, App. A, p. A-23, 674 F.2d at 1267

A. CASES REQUIRING MORE 8B. CASES STATING THAT A

THAN A SINGLE SUIT OR

PROTEST TC INVOKE SHAM

EXCEPTION.

1. Mid-Texas Communica-

tions Systems, Inc. v. Ameri-

can Telephone & Telegraph

Co., 615 F.2d 1372, 1384

n.9 (Sth Cir.), cert. denied,

449 U.S. 912 (1980):

“[ Plaintiff] has not alleged

a consistent pattern whereby

[defendant] refused _ inter-

connection requests in all cases

and then raised points of proce-

dure for the purposes of delay

before the FCC.... Thus, the

situation is unlike [ Trucking Un-

limited]... .”

2. Taylor Drug Stores, Inc. v.

Associated Dry Goods Corp.,

$60 F.2d 211, 213 (6th Cir.

1977) (per curiam):

“This was the only suit in-

itiated by defendants-appellees

then or later against the plain-

tiff.... This case is clearly dis-

tinguishable from [ Trucking

Unlimited|.”

3. Johns-Manville Corp. v.

Guardian Industries, Corp.,

1981-1 Trade Cases

9 64,054, at 76,426-427

(E.D. Mich. Apr. 27,

1981):

SINGLE SUIT OR PROTEST

IS SUFFICIENT TO INVOKE

SHAM EXCEPTION.

1. Feminist Women’s Health

Center, Inc. v. Mohammed,

586 F.2d 530, 542 ( Sth Cir.

1978), cert. denied, 444

U.S. 924 (1979):

“[A] triable issue of fact

remains as to whether the [de-

fendants’ single} letter of com-

plaint... was but a sham effort

to influence government action.”

2. Sage International, Ltd. v.

Cadillac Gage Co., 507 F.

Supp. 939, 946 (E.D. Mich.

1981):

“(T]he better view is that

there is no per se requirement of

successive ill-founded suits to

support a sham litigation claim.”

3. First National Bank of Om-

aha v. Marquette National

Bank of Minneapolis, 482

F. Supp. 514, 520 (D.

Minn. 1979), aff'd, 636

F.2d 195 (8th Cir. 1980),

cert. denied, 450 U.S. 1042

(1981):

“[Ojne lawsuit may be

sufficient in some cases to bring

a defendant's conduct within the

‘sham exception’... .

Appendix F—Conflicting Decisions on the Sham Exception to

Noerr-Pennington Immunity

“[DJefendants’ allegations

do not fit the sham exception;

they do not allege anything

approaching [a] pattern of abu-

sive litigation....”

4. Reaemco, Inc. v. Allegheny

Airlines, 496 F. Supp. 546,

557 (S.DN.Y. 1980):

“[T]here is no allegation

that defendants engaged in a

repetitive pattern of con-

duct.... Thus [plaintiff] can-

not invoke the sham ex-

ception....”

5. §.M. Arnold, Inc. v. Union

Carbide Corp., 487 F. Supp.

1182, 1184 (E.D. Mo.

1980):

“The absence of an alleged

repetitive pattern of sham litiga-

tion... serves to reinforce the

Court’s determination that

plaintiffs acted in good faith as a

matter of law.”

6. Mountain Grove Cemetary

Association v. Norwalk

Vault Co. of Bridgeport,

Inc., 428 F. Supp. 951, 955-

56 (D. Conn, 1977):

“If the institution of a single

lawsuit could be the predicate

for an antitrust viola-

tion... then no business organi-

zation could seek a judicial

determination of its rights vis-a-

vis a competitor without asses-

sing the antitrust implications of

its contemplated legal action.”

F-53

4. Technicon Medical Infor-

mation Systems Corp. v.

Green Bay Packaging, Inc.,

480 F. Supp. 124, 127

(E.D. Wis. 1979):

“(T]he bringing of one

lawsuit in bad faith or without

probable cause is sufficient to

bring the action within the sham

exception....”

5. Colorado Petroleum Mar-

keters Association v. South-

land Corp., 476 F. Supp.

373, 379-80 (D. Colo.

1979):

“[We] conclude that a

single lawsuit can provide the

basis for invoking the ‘sham ex-

ception’....”

6. Outboard Marine Corp. v.

Pezetel, 474 F. Supp. 168,

175 n.9 (D. Del. 1979):

“{T}he Supreme Court has

strongly suggested that one

harassing piece of litigation may

be enough to invoke the protec-

tion of the antitrust laws under

the [sham] exception.”

7. Cyborg Systems, Inc. v.

Management Science Amer-

ica, Inc., 1978-1 Trade

Cases § 61,927, at 73,918

Appendix F—Conflicting Decisions on the Sham Exception to

Noerr-Pennington Immunity

F-54

7. Strategic Marketing Ser-

vices, Inc. v. Cut & Curl,

Inc., 1977-2. Trade Cases

9 61,788, at 73,243 (D.

Conn. Dec. 22, 1977):

“As defendants contend,

the bringing of a single lawsuit,

even for an anti-competitive

purpose, is not actionable under

the antitrust laws.”

8. Central Bank of Clayton v.

Clayton Bank, 424 F. Supp.

163, 167 (E.D. Mo. 1976),

aff'd without op., 553 F.2d

102 (8th Cir.), cert. denied,

433 U.S. 910 (1977):

“In the instant case, there

was Only one lawsuit.”

9. Bethlehem Plaza v. Camp-

bell, 403 F. Supp. 966, 970

(E.D. Pa. 1975):

“Here, we are not faced

with a pattern of litigation, but

with one lawsuit....”

“These opinions [in Vendo

Co.] suggest that a majority of

the Court would find that the

sham litigation exception can be

applied to a case involving only

one lawsuit.”

8. Associated Radio Service

Co. v. Page Airways, Inc.,

414 F. Supp. 1088, 1096

(N.D. Tex. 1976), aff'd,

624 F.2d 1342 (Sth Cir.

1980), cert. denied, 450

U.S. 1030 (1981):

“Defendants urge that fil-

ing one state suit...is in-

sufficient as a matter of law to

constitute abuse of the legal pro-

cess.... [However,] plaintiff

need only show that the Defend-

ant instituted litigation with the

purpose of achieving a collateral

and unlawful objective....”

Appendix F—Conflicting Decisions on the Sham Exception to

Noerr-Pennington Immunity

F-55

C. CASES LEAVING OPEN THE ISSUE WHETH-

ER A SINGLE LAWSUIT INVOKES SHAM

EXCEPTION.

1. Hydro-Tech Corp.v. Sundstrand Corp., 673

F.2d 1171, 1177 (10th Cir. 1982):

“[ W]e need not address ourselves here to the

further question as to whether a single sham law-

suit is sufficient basis for a subsequent antitrust

action....”

Il. Test of “Baselessness”

“[ T]he fact that defendants lost all protests! establishes a

sufficient showing of baselessness.”

—Clipper Exxpress, App. A, p. A-23, 674 F.2d at 1267

A. CASES HOLDING’ THAT

LACK OF ULTIMATE SUC-

CESS ON THE MERITS DOES

NOT ESTABLISH BASELESS-

NESS.

1. Miracle Mile Associates v.

City of Rochester, 617 F.2d

18, 21 (2d Cir. 1980):

“[ Plaintiffs’] argument that

some of these proceedings could

only delay and not ultimately

defeat [plaintiffs’ proposed]

construction of the shopping

mall [does} not render those

efforts frivolous.”

2. United States v. American

Telephone & Telegraph Co.,

524 F. Supp. 1336, 1363-64

(D.D.C. 1981):

CASES HOLDING’ THAT

LACK OF ULTIMATE SUC-

CESS ON THE MERITS MAY

ESTABLISH BASELESSNESS.

1. Ernest W. Hahn, Inc. v.

Codding, 615 F.2d 830, 841

(9th Cir. 1980):

“Another factor we rely up-

on is that each one of the vari-

ous lawsuits has been decided

against [defendant]. This cer-

tainly is the hallmark of in-

substantial claims... .”

2. Baxter Travenol Labora-

tories, Inc. v. Le May, 536

F. Supp. 247, 252 (S.D.

Ohio 1982):

1. The Court of Appeals having assumed that “all protests” were

equivalent to a single protest, this statement applies to loss of a single protest.

App. A, pp. A-18-A-19, 674 F.2d at 1265.

Appendix F— Conflicting Decisions on the Sham Exception to

Noerr-Pennington Immunity

F-56

“(T]he evidence shows little

more than that... the FCC ultima-

tely ruled against Bell. The sham

exception ... must be narrowly con-

strued so as not to chill the rights of

individuals and corporations to ac-

cess to courts and to legislative and

regulatory bodies. This principle

would be hindered by a ruling which

exposed an entity to antitrust liability

on the basis that an official body

found its contentions to be ... with-

out merit.”

C. CASES HOLDING THAT

ULTIMATE SUCCESS ON

THE MERITS ESTABLISHES

THAT LITIGATION ACTIVI-

TIES WERE NOT BASELESS.

1. Taylor Drug Stores, Inc. v.

Associated Dry Goods Corp.,

560 F.2d 211, 213 (6th Cir.

1977 )( per curiam ):

“The record clearly dis-

closes that they prevailed in that

litigation... . This case is clear-

ly distinguishable from [| Truck-

ing Unlimited\.”

2. Horseman's Benevolent &

Protection Association v.

Pennsylvania Horse Racing

Commission, 530 F. Supp.

1098, 10 (ED. Pa,

1982):

“[T]here are no specific

factual allegations of sham ac-

tivity.... On the contrary, the

gravamen of the complaint is

that the [defendant]... was

successful in influencing the

Commission. . . .”

“(Tjhe termination of the

litigation in favor of the antitrust

plaintiff, while not a_ rigid

requirement in all circum-

stances, is strong evidence, and

probably dispositive of, the issue

of the allegedly ‘baseless’ nature

of litigation.”

. CASES HOLDING’ THAT

ULTIMATE SUCCESS ON

THE MERITS DOES NOT ES-

TABLISH THAT PROTEST

OR SUIT WAS NOT BASE-

LESS.

1. Sunergy Communities, Inc.

v. Aristek Properties, Lid.,

535 F. Supp. 1327, 1331

(D. Colo. 1982):

“(Success is, in any event,

only one factor to consider in

determining whether an action is

a‘sham’....”

2. Ross v. Bremer, 1982-2

Trade Cases 964,746, at

71,618 (W.D. Wash.

March 16, 1982):

“This court does not believe

that success alone can be consid-

ered determinative that a course

of lawsuits will be protected un-

der Noerr-Pennington.”

3. Outboard Marine Corp. v.

Pezetel, 474 F. Supp. 168,

179 (D. Del. 1979):

“( Plaintiff) argues that the

fact that [it] was successful be-

fore the agency... takes [it]

out from under... the ‘sham’

exception.... [There is no

support for] plaintiffs posi-

a

Appendix F —Conflicting Decisions on the Sham Exception to

Noerr-Pennington Immunity

3. Town of Massena v. Nia-

gara Mohawk Power Corp.,

1980-2 Trade Cases

9 63,526, at 76,818

(N.D.N.Y. Sept. 8, 1980):

“(Defendant] was success-

ful in this action and the lawsuit

may not therefore be character-

ized as a ‘sham,'”

CASES HOLDING’ THAT

LACK OF PROBABLE CAUSE

TO SUE OR PROTEST DOES

NOT ESTABLISH BASELESS-

NESS.

1. Hydro-Tech Corp. v.

Sundstrand Corp., 673 F.2d

1171, 1176 (10th Cir,

1982):

“(T]he term ‘sham’ is

something more than a mere

‘absence of probable cause.’ ”

F-57

F. CASES HOLDING’ THAT

LACK OF PROBABLE CAUSE

TO SUE OR PROTEST ES-

TABLISHES BASELESSNESS.

|. Mid-Texas |Communica-

tions Systems, Inc. v. Ameri-

can Telephone & Telegraph

Co., 618 F.2d 1372, 1384

n.10 (Sth Cir. ), cert. denied,

449 US, 912 ( 1980):

.

“| Plaintiff must prove | that

[defendant] opposed |[plain-

tiffs] informal complaint before

the FCC and demanded a hear-

ing without any probable cause

and totally regardless of the

merits... .”

2. Chest Hill Co, v. Guttman,

1981-2 Trade Cases

964,417, at 75,055 (S.D.

Ohio May 29, 1981):

“The test, then, in

determining whether the anti-

trust defendants have engaged

in a ‘pattern of baseless

claims’... is whether they had

probable cause in filing the

claims.”

Appendix F— Conflicting Decisions on the Sham Exception to

Noerr-Pennington Immunity

F-58

3. S. M. Arnold, Ine, v.

Union-Carbide Corp., 487

F. Supp. 1182, 1184 (B.D.

Mo. 1980):

“Defendant has miscon-

strued the ... ‘sham ex-

ception’.... Without now ad-

dressing the merits of plaintiffs’

complaint, it may be noted that

it was not made without prob-

able cause,”

G. CASES EMPLOYING A “GENUINE DIS-

PUTE,” “LEGITIMATE CONCERN,” OR

“REASONABLE BASIS TO SUE OR PROTEST”

TEST OF BASELESSNESS.

1. Alexander v. National Farmers Organization,

687 F.2d 1173, 1200 (8th Cir, 1982):

“(We cannot say that the legal claims...

were so groundless as to come within the ‘sham

litigation’ exception.... There were genuine dis-

putes regarding . . . solicitation methods.”

2. Landmarks Holding Corp. v. Bermant, 664

F.2d 891, 897 (2d Cir. 1981):

“(T]he defendants had no reasonable basis

for their appeals from the decision of the [city

planning and zoning commission]... .”

3. WIXT Television, Inc. v. Meredith Corp., 506

F. Supp. 1003, 1032 (N.D.N.Y. 1980):

“| Defendant's] reasons for objecting to plain-

tiff’s application are far from . . . ‘baseless’... . the

possible ‘ghosting’ problem caused by the new

antenna was a ‘legitimate concern’ to plaintiff's

competitors.”

4. City of Newark v. Delmarva Power & Light

Co., 497 F. Supp. 323, 327 (D. Del. 1980):

“Because plaintiffs purchase electric power at

wholesale from [defendant], they clearly have a

legitimate interest in defendant's wholesale tariff

proceedings before the Commission.”

5. Pennwalt Corp. v. Zenith Laboratories, Inc.,

472 F. Supp. 413, 424 (E.D. Mich. 1979),

appeal dism'd without op., 615 F.2d 1362 (6th

Cir. 1980):

Appendix F—Conflicting Decisions on the Sham Exception to

Noerr-Pennington Immunity

F-59

“There has been nothing to suggest that

[plaintiff] did not have valid claims against the

[defendants! who have been joined in this law-

suit.... This is not what is meant by a sham.”

6. Foret v. Point Landing, Inc., 1976-2 Trade

Cases 7 61,106, at 70,012 (E.D. La. Oct. 1,

1976):

“(| Defendant's] applications were a part of a

legitimate protection of its interests... .”

Ill. Requirement of “Access-Barring”

“We have found no precedent nor any reason to require

access barring before the sham exception can be invoked.”

—Clipper Exxpress, App. A, p. A-27, 674 F.2d at 1269

A. CASES REQUIRING ACCESS

BARRING BEFORE SHAM

EXCEPTION IS INVOKED.

1. Federal Prescription Ser-

vice, Inc. v. American

Pharmaceutical _—Associa-

tion, 663 F.2d 253, 262

(D.C. Cir. 1981), cert. de-

nied, 102 S. Ct. 1293

(1982):

“What is needed... is

proof that the [defendants]...

effectively barred [plaintiffs]

access to these [ governmental |

processes... .”

2. Miracle Mile Associates v.

City of Rochester, 617 F.2d

18, 21 (2d Cir. 1980);

“*[A]ccess-barring is the

cornerstone to the sham ex-

ception.’ ”

B. CASES HOLDING THAT AC-

CESS BARRING IS NOT RE-

QUIRED TO INVOKE SHAM

EXCEPTION,

|. Ernest W. Hahn, Inc. vy.

Codding, 615 F.2d 830, 841

n.14 (9th Cir, 1980):

“It has been suggested that

Franchise Realty requires a

showing... that the plaintiff has

been barred from meaningful

use of the agency or tribunal... .

[W]e decline to follow this in-

terpretation....”

2. Outboard Marine Corp. v.

Pezetel, 474 F, Supp. 168,

178 (D. Del. 1979):

“None of the cases... ap-

pear to concur with plaintiff's

interpretation that the ‘sham’ ex-

ception can only be successfully

Appendix F—Conflicting Decisions on the Sham Exception to

Noerr-Pennington Immunity

F-60

3. City of Mishawaka v. Amer- invoked when literal exclusion

ican Electric Power Co., 616 from the agency proceedings has

F.2d 976, 982-83 (7th Cir. occurred.”

1980), cert. denied, 450

U.S. 960 (1981):

“As in [ Trucking Unlimit-

ed|, the [plaintiffs]... are

being denied effective access to

timely consideration by the fed-

eral commission... .”

4. Mark Aero, Inc. v. Trans

World Airlines, Inc., 580

F.2d 288, 297 (8th Cir.

1978):

“(What is being com-

plained about.... [does not]

‘bar access’ in the sense em-

ployed in [ Trucking Unlimited}.

5. Webby. Utah Tour Brokers

Association, 568 F.2d 670,

674 (10th Cir. 1977):

“[U ]tilization of the court

or the administrative agency to

the extent of monopolizing the

available process could con-

stitute a sham.”

6. Metro Cable Co. v. CATV

of Rockford, Inc., 516 F.2d

220, 232 (7th Cir. 1975):

“Allegations that the coun-

cil or its committees did not hold

hearings do not amount to alle-

gations of effective denial of ac-

cess to the city council.”

7. United States v. American

Telephone & Telegraph Co.,

524 F. Supp. 1336, 1362-64

(D.D.C. 1981):

“(T]he sham exception is

not satisfied by a mere

showing of anticompetitive in-

tent... there must also be

proof that those being

charged... effectively barred

access to [governmental pro-

cess}....”

8. Bustop Shelters, Inc, v. Con-

venience & Safety Corp.,

521 F. Supp. 989, 995

(S.D.N.Y. 1981):

“{ T]he key to the sham ex-

ception .. . is barring a competitor

‘from meaningful access to

adjudicatory tribunals....’”

9. WIXT Television, Inc. v.

Meredith Corp., 506 F.

Supp. 1003, 1033 (N.D.

N.Y. 1980):

“The mere allegation of de-

nial of access... does not remove

this [First Amendment] shield,

especially where plaintiff has been

given every opportunity to pursue

its rights before the very same

government agency it asserts it

has been denied access to.”

10. Yellow Atlantic Contain-

er Line, 498 F. Supp.

105, 110 (E.D. Mo.

1980), aff'd, 668 F.2d

350 (8th Cir. 1981), cert

denied, 102 S, Ct. 2039

(1982):

“There is no allegation that

the plaintiffs access... has been

barred or impeded in any way. In

fact, plaintiff alleges that it is cur-

rently a party to [the Commission

proceedings |.”

Appendix F—Conflicting Decisions on the Sham Exception to

Noerr-Pennington Immunity

F-61

Appendix F—Conflicting Decisions on the Sham Exception to

Noerr-Pennington Immunity

F-62

11. City of Newark v. Del-

marva Power & Light

Co., 497 F. Supp. 323,

327 (D. Del. 1980):

“( Plaintiffs] are not alleged

to have impeded [defendant's]

access to the Commission or in-

deed to have done anything

other than participate on an

adversary basis before the Com-

mission in accordance with its

rules.”

12. Reaemco, Inc. v. Allegheny

Airlines, 496 F. Supp. 546,

556 (S.D.N.Y. 1980):

“The core element of this

... Sham exception ... is the

effective exclusion of a party

from access to the decision-

making process.”

13. Town of Massena v. Nia-

gara Mohawk Power Corp.,

1980-2 Trade Cases

1 63,526, at 76,818

(N.D.N.Y. Sept. 8, 1980):

“(Fljar from denying

{plaintiff} free and unlimited

access... the defendant has

compelled [plaintiff] to fully

avail itself of these adjudicatory

processes... .”

14. First National Bank of Om-

aha v. Marquette National

Bank of Minneapolis, 482

F. Supp. 514, 521 (D.

Minn. 1979), aff'd, 636

F.2d 195 (8th Cir. 1980),

cert. denied, 450 U.S. 1042

(1982):

“(P }laintiffs have not made

any assertion that [defendant]

Appendix F—Conflicting Decisions on the Sham Exception to

Noerr-Pennington Immunity

F-63

sought to bar its competitors

from meaningful access to

adjudicatory tribunals... .”

15. Wilmorite, Inc. v. Eagan

Real Estate, Inc., 454 F.

Supp. 1124, 1134-35

(N.D.N.Y. 1977), aff'd

without op., 578 F.2d 1372

(2d Cir. 1978), cert. denied,

439 U.S. 983 (1978):

“[Aljccess-barring is the

cornerstone to the sham ex-

ception.”

16. Central Bank of Clayton vy.

Clayton Bank, 424 F. Supp.

163, 167 (E.D. Mo. 1976),

aff'd without op., 553 F.2d

102 (8th Cir.), cert. denied,

433 U.S. 910 (1977):

“Plaintiff was not effec-

tively barred from access to the

agencies and courts... .”

17. First Delaware Valley Citi-

zens Television, Inc. y.

CBS, Inc., 398 F. Supp.

917, 923-24 (E.D. Pa.

1975):

“If these allegations could

be proved... they most ob-

viously have not deterred the

plaintiff from having free and

unlimited access to the FCC.”