Petition — Drury v. Westborough Mall, Inc.
Supreme Court brief1983
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82-1642
No. cul
IN THE
Supreme Court of the United States
OcTOBER TERM, 1982
CHARLES L. Drury, Drury INDUSTRIES, INC.,
THE MAY DEPARTMENT STORES COMPANY,
WEsT PARK ASSOCIATES,
May CENTERS OF Cape, INc., MAY CENTERS,
Inc., and the City Or Cape GIRARDEAU, Missouri,
Petitioners,
Vv.
WESTBOROUGH MALL, INC., GEORGE STAPLES, JR.,
and WESTBOROUGH MALL ASSOCIATES,
Respondents.
PETITION FOR WRIT OF CERTIORARI
To the United States
Court of Appeals for the Eighth Circuit
THoMaAS C. WALSH
(Counsel of Record)
JOHN MICHAEL CLEAR
MICHAEL G. BIGGERS
500 North Broadway
St. Louis, Missouri 63102
(314) 231-8600
STEPHEN E. STROM
325 Broadway
Cape Girardeau, Missouri 63701
(314) 334-0555
Attorneys for Petitioners
BrYAN, CAVE, MCPHEETERS & MCROBERTS
FINCH, BRADSHAW, STROM & STEELE
Of Counsel
St. Louis Law Printing Co., Inc., 411 No. Tenth Street 63101 314-231-4477
QUESTIONS PRESENTED
1. May an inference of conspiracy, sufficient to avoid sum-
mary judgment, be drawn from unidentified, unauthenticated
hearsay documents which, even liberally construed, show
nothing more than the mere opportunity to conspire?
2. Did the Court of Appeals properly reject petitioners’
reliance on the First Amendment and the Noerr-Pennington
doctrine on the basis that petitioners ‘‘may not be protected by
Noerr because their legitimate lobbying efforts may have been
accomplished by illegal or fraudulent actions’’ which were never
pleaded, identified or proven?
3. Did the City Manager’s changing of the city zoning map
and statement of his inaccurate opinion that respondents had
lost their commercial zoning deprive them of a constitutionally
protected property interest or deprive them of any interest
without due process of law under Parratt v. Taylor, 451 U.S.
527 (1981), or Greenholtz v. Inmates of the Nebraska Penal and
Correctional Complex, 442 U.S. 1 (1979)?
STATEMENT OF INTERESTED PARTIES
As indicated in a letter filed with the Clerk of the Court, cer-
tain defendants below have not been listed as parties because
petitioners believe that they are not interested in the outcome of
the petition. Pursuant to that belief, there are no interested par-
ties who are not identified in the caption.
TABLE OF CONTENTS
CmssOs PHONE occ ccccccccccrscscetesvececes
Statement of Interested Parties ........00eeeee eee ees
TORN OL AGMMOTMNNG ccc cc ccccescccrcesecnsscsceds
CIR ov cece cccccesnncescovecsesssegenes
PI io cic back tvcanesstesstetscdarsdeseenxs
Constitutional Provision, Statutes, and Rule Involved . .
StMGMNOM OF THO CASS onc ccveccvccccccccscscvcccne
The History of ‘‘Westborough Mall’’............
The History of West Park Mall ...........6000005
The So-called ‘“‘Reverter’’ .....cccccccccccseees
The Basis of Federal Jurisdiction ...........6000e eee
Reasons for Granting the Writ .........60e cece eeees
I. The Conspiracy Standard Applied by the
Court of Appeals Is Inconsistent with Prior
Decisions of This Court and Renders Con-
spiracy Claims Immune from Summary
IND Ss dadecsacecacecavadseasieeens
Il. The Eighth Circuit Misconstrued and Misap-
plied This Court’s Decisions in Noerr and
PEE cov cca sabes sks su unokns couur’
i ee ee
Ill. The Eighth Circuit Decision Conflicts With
This Court’s Decisions Defining the Elements
of a § 1983 Claim Alleging a Deprivation of
Property Without Due Process of Law ......
RP rer rere eer re rer eee
Appendix A, Opinion of Eighth Circuit ..............
Appendix B, Opinion of District Court............6655
Appendix C, Judgment of Eighth Circuit and Order de-
ROE Nv cade scaduceevsvsvreses canes
Appendix D, Text of Constitutional Provision, Statutes
| Re re rr erry Peer Te
TABLE OF AUTHORITIES
Cases Cited
Adickes v. S.H. Kress & Co., 398 U.S. 144(1970)......
Admiral Theatre Corp. v. Douglas Theatre Co., 585 F.2d
cc Sree rer rrr rT rere
American Tobacco Co. v, United States, 328 U.S. 781
SUD aa eeu ctas bet ka tan ea co ec he rae ke aws
Beasley v. Potter, 493 F. Supp. 1059 (W.D. Mich. 1980)
Bruce Drug, Inc. v. Hollister Inc., 688 F.2d 853 (Ist Cir.
ES edie eVl ce bhahuedce cen beh car bed enna.
Crocker v. Hakes, 616 F.2d 237 (Sth Cir. 1980) ........
Davis-Watkins Co. v. Service Merchandise, 686 F.2d 1190
EE Gk does ne hek a4 8 bemw a bod oe 6 eee ae
A-4l
A-45
Dyer v. MacDougall, 201 F.2d 265 (2d Cir. 1952) ...... 13
Eastern Railroad Presidents Conference v. Noerr Motor
Freignt, Inc., 365 U.S. 127 (1961)... .ccccece 2,8,13,14,15
Edward J. Sweeney & Sons, Inc. v. Texaco, Inc., 637 F.2d
105 (3d Cir. 1980), cert. denied, 451 U.S. 911
AS atch Gah aahisd hs banwewn sh wOekines 12
First National Bank v. Cities Service Co., 391 U.S. 253
te tanaka ec ek eaves hikes seer beds ewes )
Flower Cab Co. v. Petitte, 685 F.2d 192 (7th Cir. 1982) . 18
Gorman Towers, Inc. v. Bogoslavsky, 626 F.2d 607 (8th
ea Sinks Cratoheakenwudn keene em kale 16
Greenholtz v. Inmates of the Nebraska Penal and Cor-
rectional Complex, 442 U.S. 1 (1979)... 66... cae. i,16,17
Gryger v. Burke, 334 U.S. 728 (1948) 0.0... 0.0... eee 18
Hagee v. City of Evanston, 530 F. Supp. 585 (N.D. Ill.
DE LOE TEE eNee Ss 6waesdsisdawiseaveennesnes 19
Hamilton v. Keystone Tankship Corp., 539 F.2d 684 (9th
ID 6 04.0 6000044000 50-005050460800005068 10
Impro Products, Inc. v. Herrick, 1982-2 CCH Trade Cases
4 64,906 (S.D. lowa 1982) 2.0... 6c eee 11
Logan v. Zimmerman Brush Co., 455 U.S. 422 (1982) .. 17
Lundeen v. Cordner, 354 F.2d 401 (8th Cir. 1966)...... 13
Miracle Mile Associates v. City of Rochester, 617 F.2d
MED oo s'o0 6 0454.6 0004000000005 0005 15
Pan-Islamic Trade Corp. v. Exxon Corp., 632 F.2d 539
(Sth Cir. 1980), cert. denied, 454 U.S. 927 (1981) .. 11
vi
Parratt v. Taylor, 451 U.S. 527 (1981) ............ i,2,15,17,18
Paul v. Davis, 424 U.S. 693 (1976)..............0005. 18
Reichenberger v. Pritchard, 660 F.2d 280 (7th Cir. 1981) 16
Rogin v. Bensalem Township, 616 F.2d 680 (3d Cir. 1980),
cert. denied, 450 U.S. 1029 (1981)............... 18
Sacramento Coca-Cola Bottling Co. v. Teamsters Local
150, 440 F.2d 1096 (9th Cir.), cert. denied, 404
EE iia a bus aa bisee ae ss os 6050 0s 15
Schwimmer v. Sony Corporation of America, 677 F.2d
946 (2d Cir.), cert. denied, 51 U.S.L.W. 3362
RES Ser ee 12
Spray-Rite Service Corp. v. Monsanto Co., 684 F.2d 1226
(7th Cir. 1982), cert. granted, 51 U.S.L.W. 3633
eas aw ea cb aa bh G8 eaKO obs ae 12,13
Tose v. First Pennsylvania Bank, N.A., 648 F.2d 879 (3d
Cir.), cert. denied, 454 U.S. 893 (1981) .......... 11
United Mine Workers v. Pennington, 381 U.S. 657 (1965) — 2,8,
13,14,15
United States v. Dibble, 429 F.2d 598 (9th Cir. 1970) ... 11
Valley Liquors, Inc. v. Renfield Importers, Ltd., 678 F.2d
UR coca Capsevesveaseertssevecs 12
Weit v. Continental Illinois National Bank & Trust Co.,
641 F.2d 457 (7th Cir. 1981), cert. denied, 455 U.S.
eee sci incu aaa need a6b.0% be 11,13
Wilmorite, Inc. v. Eagan Real Estate, Inc., 454 F. Supp.
1124 (N.D.N.Y. 1977), aff’d mem., 578 F.2d 1372
(2d Cir.), cert. denied, 439 U.S. 983 (1978) ....... 15
Vii
Woods Exploration & Producing Co. v. Aluminum Co.
of America, 438 F.2d 1286 (Sth Cir. 1971), cert.
Gonted,, SOO 0).S. 1067 CSTE) veins cadvcsesereven:
Zenith Radio Corp. v. Matsushita Electric Industrial Co.,
Ltd., 505 F.Supp. 1190(E.D. Pa. 1980)..........
Statutes and Regulations Cited
ke) POC rere trey rere errr ee ee Teer ee
SPE cia cc thancdasnaiinveahehesaseckee®
sO MEUEED Nos ok avcebie deus advndeadeonens
Rl hey PT ererte rrr eT rrre treet Te
EE hhc oebknencshacebvobsteheacrasars
Other Citations
Federal Rule of Civil Procedure 56(e) ................
ee eo ln as Sa bah nak eae
15
ony NN
No.
IN THE
Supreme Court of the United States
OctTorer TERM, 1982
CHARLES L. Drury, Drury INDUSTRIES, INC.,
THE May DEPARTMENT STORES COMPANY,
West Park ASSOCIATES,
May CENTERS OF Cape, INc., MAY CENTERS,
Inc., and the Ciry Or Cape GIRARDEAU, Missouri,
Petitioners,
v.
WESTBOROUGH MALL, INC., GEORGE STAPLES, JR.,
and WESTBOROUGH MALL ASSOCIATES,
Respondents.
PETITION FOR WRIT OF CERTIORARI
To the United States
Court of Appeals for the Eighth Circuit
Charles L. Drury, Drury Industries, Inc., The May Depart-
ment Stores Company, West Park Associates, May Centers of
Cape, Inc., May Centers, Inc., and the City of Cape Girardeau,
Missouri, defendants in the action below, respectfully pray that
a Writ of Certiorari issue to review the judgment of the United
States Court of Appeals for the Eighth Circuit filed on
November 12, 1982.
OPINIONS BELOW
The opinion of the Court of Appeals, filed on November 12,
1982, is reproduced in Appendix A. As modified on denial of
rehearing, it is reported at 693 F.2d 733. The Memorandum and
Order of the United States District Court for the Eastern
District of Missouri is reported at 532 F. Supp. 284 and is
reproduced in Appendix B.
~~
JURISDICTION
The judgment of the Court of Appeals was entered on
November 12, 1982, and a timely petition for rehearing was
denied on January 17, 1983. Copies of the judgment and the
order modifying one footnote in the initial opinion and denying
rehearing are reproduced in Appendix C. This petition was filed
within 90 days of January 17, 1983. The jurisdiction of this
Court is founded upon 28 U.S.C. § 1254(1).
CONSTITUTIONAL PROVISION, STATUTES AND
RULE INVOLVED
This case involves the proper application of the principles of
conspiracy law and the evidentiary requirements of Federal Rule
of Civil Procedure 56(e) in connection with material submitted
in Opposition to a motion for summary judgment made by
defendants charged with violating 15 U.S.C. §§ 1 & 2 and 42
U.S.C. § 1983. This case also involves the construction and ap-
plication of the First Amendment to the United States Constitu-
tion and the aforesaid statutes in light of Eastern Railroad
Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S.
127 (1961) (‘‘Noerr’’), United Mine Workers v. Pennington,
381 U.S. 657 (1965) (‘‘Pennington’’), and Parratt v. Taylor, 451
U.S. 527 (1981). The text of the pertinent parts of the applicable
constitutional and statutory provisions and rule are reproduced
in Appendix D.
STATEMENT OF THE CASE
As perceived by the Court of Appeals, this is basically a one-
issue case: Was there sufficient circumstantial evidence to with-
stand a motion for summary judgment on the question of
whether private parties involved in various ways in the develop-
ment of the West Park shopping mall conspired or agreed with
officials of the City of Cape Girardeau, Missouri, that the City
would stop respondents’ competing mall proposal by casting
=
doubt upon the status of its zoning long enough to allow the
West Park developers to secure tenants and obtain a head start
on construction? App. A at pp. A-16-A-17.' This single issue,
however, has spawned several important questions that have
been answered by the Eighth Circuit in such a way as to create
turmoil and uncertainty in the administration of the nation’s an-
titrust and civil rights laws. In order to address these questions
and the far-reaching errors in the conclusions of the Court of
Appeals, it is necessary to sketch the factual background of the
development of the two rival shopping malls.
The History of ‘‘Westborough Mall’’
In 1974, C-4 zoning for the site of plaintiffs’ proposed shop-
ping center was approved by the Cape Girardeau City Council
for the purpose of constructing a shopping mall containing
three major department stores (as anchor tenants) and a number
of small specialty shops (App. B at p. A-28). Sporadic leasing
attempts were made and rosy predictions were announced to
prospective tenants that Westborough Mall would begin con-
struction (giving a series of progressively delayed proposed
opening dates). But as of May 1979, nothing had been ac-
complished; construction of Westborough Mall by the
respondents in this case had progressed no further than the
preliminary planning stage, and the project was at a standstill.
By May 1979, George Staples had incurred debts of approx-
imately $600,000 and had no funds with which to pay either his
bank or his contractor (App. B at p. A-29).’? No anchor tenants
' In this Petition, the petitioners other than the City of Cape
Girardeau will be identified collectively as the ‘‘West Park
developers.’’
* George Staples, Jr., is the principal plaintiff, together with a com-
pany which he manages, Westborough Mall, Inc., and a partnership
for which he acts as general partner, Westborough Mall Associates.
a
had agreed to lease space, and no leases with any tenant had
been executed (App. B at p. A-29). Moreover, respondents’
general contractor testified that he would not permit any con-
struction work to commence until Staples paid the bill of more
than $300,000 for grading on the site (App. B at p. A-33). He
further testified that he would have needed final working plans
and would have had to place orders for needed construction
materials at least three months in advance to permit construc-
tion to begin on May 1. But no plans had ever been prepared,
and no materials had been ordered (Id.).
Similarly, no financing for Westborough Mall had been ob-
tained or was seriously being sought. No applications for mall
financing were ever filed on respondents’ behalf, nor could any
such applications have been prepared until anchor tenants and
other small tenants were secured (App. B at p. A-33).
Based on these undisputed material facts in the record, the
district court correctly observed:
‘In sum, by mid-1979, Westborough Mall had no liquid
assets, no major department store tenants, no building
plans, no commitments for financing, and had [passed]
numerous projected target dates promised by Staples
throughout the years. In 1979, Westborough Mall was no
closer to viability than it was in 1973.’’ App. B at pp.
A-29-A-30.
The History of West Park Mall
West Park Mall, constructed by the West Park developers, is
located about one mile west of the site of the stillborn
Westborough Mall project (App. B at pp. A-31, A-40). The
developers decided in 1979 to apply for C-2 zoning for the West
Park site to permit grading work to begin and to test the waters
concerning the City’s attitude about commercial zoning for the
—
site.’ They represented to the City Council at the hearing on
their C-2 application that they would reapply for C-4 zoning as
promptly as possible after the plans for the center had become
final (App. B at p. A-31).
The request for zoning was vigorously opposed by Staples
and some of his partners at two public hearings, and several of
the partners made personal contacts with City Council members
io urge rejection of the proposal. The application, however, was
approved (App. B at pp. A-31-A-32).
A few months later, the developers prepared and filed an ap-
plication for C-4 zoning, as they had indicated they would.
After another set of public hearings, the West Park Mall site
received C-4 zoning. The mall opened in April 1981 and is now
in operation (/d.).
The public officials who approved the West Park zoning had
and have no ties or connections to the West Park developers.
Respondents took extensive depositions of each council member
and the City Manager, during which there was not even a hint of
any improper activity. Indeed, not even respondents went so far
as to suggest that the Councilmen acted out of selfish
motives—-there are no allegations of bribes or payoffs or any
economic gain. The undisputed testimony of each city official
was that he believed that a major shopping mall developed by
competent professionals would be in the best interests of the City
of Cape Girardeau and its citizens. Accordingly, the Council ap-
proved the application for the West Park zoning, as it had
previously granted such zoning to Staples and the Westborough
Mall group.
* One of the developers had secured an opinion in 1974 that at least
the first phases of a shopping center could be constructed on C-2 zon-
ing (App. B at p. A-31). A C-2 zoning application did not require that
the final plans for the center be submitted, and at the time it was filed,
the West Park developers had not finalized the layout of the center
sufficiently to prepare an application for C-4 zoning (/d.).
mn & aie
C. The So-called ‘‘Reverter’’
In April 1979, the City Manager of Cape Girardeau, W. G.
Lawley, received an inquiry from the City Engineer as to
whether Westborough Mall retained its C-4 classification
despite the lack of construction on the site. After considering
the matter, Lawley instructed the City Engineer to change the
zoning map to indicate that the C-4 zoning for the Westborough
site had expired (App. B at p. A-30), and he reported to the City
Council in an open meeting that he had reached this opinion
based on his interpretation of a provision of the City
Ordinance.‘
Without regard to the correctness of Lawley’s opinion on this
subject, the undisputed evidence of record established that these
actions were taken without the knowledge of any of the West
Park developers and that there was no prior agreement or
understanding of any sort that this activity would be conducted
(App. A at p. A-17; App. B at pp. A-30, A-32). Indeed, Lawley
testified unequivocally at his deposition that he had no discus-
sions of any type with any of the West Park developers before
forming his opinion concerning the ‘‘reverter.’”’
* It is beyond disputation that Westborough Mall has continually
been zoned C-4 and that no “‘reverter’’ occurred, because the property
had been accorded an exemption from the normal reverter provisions
of the City Zoning Code by the City Council (see App. A at p. A-3).
No ordinance or any other action by the City Council ever changed
Westborough Mall’s zoning or suggested that it had ‘‘reverted.’’
Lawley merely expressed his erroneous personal opinion in response
to a question. Indeed, in 1980 the Council reaffirmed that
Westborough Mall had always retained its C-4 zoning (App. A at pp.
A-10-A-11).
* The Court of Appeals held that a sinister .!ference of conspiracy
could be based on the fact that Lawley’s actions came only two days
after the City Council enacted the ordinance that allowed the West
Park Mall developers to begin construction. App. A at pp. A-17,
A-19. This ‘‘inference’’ is both untenable and at odds with the record.
— ym
In June 1979, Lawley responded to letters from respondents’
financial consultant by saying that ‘‘it is also the staff opinion
that the Westborough Mall site no longer carries a C -4 zoning
classification,’’ but he advised that ‘‘[ylou may wish your legal
staff to review the contents of the Ordinance in consideration of
the facts available in the loan file to satisfy yourself on the
validity of the above opinion.”’
There is no evidence that any of these events had any effect
on Westborough Mall. The Court of Appeals apparently realized
that respondents never doubted that they retained C-4 zoning
(App. A at p. A-11). Certainly Staples never took the alleged
‘*reverter’’ seriously. On April 19, 1979, Staples wrote to his
contractor, with a copy of the letter to his banker, reporting
that he had consulted with his lawyer and had been reassured
that Lawley’s opinion was inaccurate and that Westborough re-
tained its C-4 zoning:
‘*We were assured by [attorney] Jeffrey Vaughan that we
presently have C-4 zoning and we should not concern
ourselves with the same and should proceed with our
development as if the matter had not come up.”’
He also assured his financing consultant that he retained C-4
zoning.® Staples never brought the matter to the City Council or
sought any relief from what he now claims were the disastrous
effects of Lawley’s opinion (App. B at p. A-30). Yet, although
other allegations of injury were made in the three revisions to
Staples’ Complaint, the so/e cause of injury now alleged is that
the ‘‘reverter’’ caused the Westborough project to fail.
* The letter from Lawley to the consultant had nothing to do with
Westborough’s failure to secure financing. The consultant testified
that financing would be available only if certain documents (including
written commitments by anchor tenants to enter the mall) were
available. As noted, these documents never existed. Moreover, the
consultant remained willing to help after the Lawley letter if Staples
would clarify the zoning, but he soon left the mortgage brokerage
business for his own reasons and had no continued involvement in the
industry or with Staples.
in a
THE BASIS OF FEDERAL JURISDICTION
The jurisdiction of the district court was based on 28 U.S.C.
§§ 1331, 1337 and 1343.
REASONS FOR GRANTING THE WRIT
The Court of Appeals misapplied the well-established stan-
dard of proof for the existence of a conspiracy under both the
civil rights and antitrust laws. This misapplication was ag-
gravated by the court’s disregard for the rules of evidence and
Federal Rule of Civil Procedure 56. The result abrogates Rule
56(c) and permits a litigant to avoid a motion for summary
judgment by demonstrating no more than an opportunity to
conspire.
The Court of Appeals also misapprehended and misapplied
this Court’s cases conferring legal protection to private parties
for their efforts to influence government action. The decision
below creates an exception to Noerr-Pennington so massive and
so easily invoked that the entire doctrine has been effectively
scuttled.
This decision raises important questions of law with implica-
tions for all local governments and all private persons who deal
with those governments. The opinion of the Eighth Circuit
jeopardizes the orderly conduct of local government in connec-
tion with all zoning matters. It basically prevents any
businessman from meeting with local government officials to
explain his interests, to seek government action of any type, or
to complain about previous government conduct.
1. The Conspiracy Standard Applied by the Court of
Appeals Is Inconsistent with Prior Decisions of This
Court and Renders Conspiracy Claims Immune from
Summary Disposition.
—
The Court of Appeals concluded that there was a material
issue of fact in dispute solely because it believed that there was
sufficient evidence to permit an inference of a conspiracy to in-
terfere with respondents’ zoning. This decision is inconsistent
with the correct standard, announced by this Court in American
Tobacco Co. v. United States, 328 U.S. 781, 810 (1946), which
requires a plaintiff to submit competent evidence from which a
trier of fact could reasonably infer that the defendants had ‘‘a
unity of purpose or a common design and understanding, or a
meeting of minds in an unlawful arrangement.’’ See also
Adickes v. S. H. Kress & Co., 398 U.S. 144, 152 (1970) (requir-
ing an ‘‘understanding’’ between private persons and public of-
ficials to establish a conspiracy or private liability under § 1983).
And in First National Bank v. Cities Service Co., 391 U.S. 253,
290 (1968), the Court rejected the very rationale employed here
by the Eighth Circuit:
‘While we recognize the importance of preserving
litigants’ rights to a trial on their claims, we are not
prepared to extend those rights to the point of requiring
that anyone who files an antitrust complaint setting forth a
valid cause of action be entitled to a full-dress trial not-
withstanding the absence of any significant probative
evidence tending to support the complaint.”
In disregard of the need for proof of a ‘‘meeting of the
minds,”’’ the Court of Appeals concluded that a jury question is
created in antitrust and civil rights conspiracy cases merely
because the parties might have discussed the matter, even
though all the evidence of record demonstrated that they did not
do so. This is plainly the import of the court’s opinion wher it
states:
‘*The circumstantial evidence of such an illegal agreement
consists of the close relationship between defendant Drury
and city officials, the defendants’ concern about the pro-
gress of plaintiffs’ competing site, Drury’s notes to ‘stop
— 10—
them from building so maybe we get a chance to build,’
and the timing of the reverter of plaintiffs’ C-4 zoning only
two days after the city council enacted an ordinance that
allowed the West Park Mall developers to begin construc-
tion.’’ App. A at p. A-17.
This decision effectively renders conspiracy claims immune
from summary judgment or any other form of disposition short
of a plenary trial.
There is no evidence of any type that the defendants even
discussed Westborough Mall’s zoning, much less that they had
agreed among themselves to cause it to ‘‘revert.’’ In fact, the
record contains an uncontroverted affidavit that none of the
West Park developers knew anything about Lawley’s actions
until after they were reported in the press. Nevertheless, the
Eighth Circuit: (a) Inferred from ‘‘circumstantial’’ evidence
that the City officials gave the West Park proposal special zon-
ing treatment; (b) conjured up an unsubstantiated inference that
the defendants discussed the subject of respondents’ zoning;
and (c) then leaped to the unsupportable (and untrue) inference
that an illegal agreement was reached to interfere with
respondents’ zoning. This syllogism is particularly defective
because it is undisputed that the public officials had no
economic or other selfish interest in supporting the West Park
project (App. A at p. A-19), and there is no evidence that the
various officials involved ever discussed this subject in advance
with any of the West Park developers, much less conspired with
them (App. B at pp. A-30, A-32).’
’ The Court of Appeals reached its conclusions concerning the
*‘conspiracy”’ on the basis of imaginative inferences drawn from a few
unauthenticated, unidentified handwritten documents that had never
been the subject of any deposition testimony. They were put into the
“*record’’ by being attached to an affidavit of respondents’ counsel
identifying them as documents that had been produced by petitioners
during discovery. See App. A at p. A-6n.2. These notes are hearsay of
the rankest sort and were filed in plain violation of Rule 56(e). Such
materials are inadmissible to defeat a motion for summary judgment.
As the Ninth Circuit held in Hamilton v. Keystone Tankship Corp.,
539 F.2d 684, 686 (9th Cir. 1976):
wo tt an
The Eighth Circuit’s reversal of a summary judgment in these
circumstances directly conflicts with the holdings of other cir-
cuits that the mere opportunity to conspire cannot give rise to
an inference that a conspiracy exists. See Tose v. First Penn-
sylvania Bank, N.A., 648 F.2d 879, 894 (3d Cir.) (despite
numerous social and business relationships among defendants,
summary judgments and directed verdicts were proper because
‘*[p]roof of opportunity to conspire, without more, will not sus-
tain an inference that a conspiracy has taken place’’), cert.
denied, 454 U.S. 893 (1981); Weit v. Continental Illinois Na-
tional Bank & Trust Co., 641 F.2d 457, 462 (7th Cir. 1981)
(summary judgment; ‘‘[gliven the need for some degree of
cooperation .... the opportunity to conspire evidence [which in-
cluded close personal ties] lacks significant probative value’’),
cert. denied, 455 U.S. 988 (1982). See also Impro Products, Inc.
v. Herrick, 1982-2 CCH Trade Cases § 64,906, p. 72,606 (S.D.
Iowa 1982) (summary judgment; ‘‘[w]Jere motive and opportunity
sufficient, almost all business entities could be brought to
trial on antitrust claims by a wounded competitor’’). The opin-
ion below stands alone as the only one permitting a conspiracy
to be inferred on a record which negates any communication
**(T]here was no prope: foundation laid for the documentary
‘exhibits.’ Exhibits which have not had a proper foundation laid
to authenticate them cannot support a motion for summary
judgment.”’
See also, e.g., United States v. Dibble, 429 F.2d 598, 602 (9th Cir.
1970); Pan-Islamic Trade Corp. v. Exxon Corp., 632 F.2d 539, 556-57
(Sth Cir. 1980), cert. denied, 454 U.S. 927 (1981); Zenith Radio Corp.
v. Matsushita Electric Industrial Co., Ltd., 505 F. Supp. 1190,
1271-74 (E.D. Pa. 1980) (refusing to permit a party to resist summary
judgment by relying on unexplained handwritten diaries).
Hence, the opinion of the Court of Appeals also provides a roadmap
for litigants seeking to avoid summary judgment by counselling them
to dump voluminous unauthenticated documents into the record in an
effort to create an unverified impression of disputed material facts.
= 12 —
between the parties and which contains no evidence that makes
the inference of a conspiracy more reasonable than the in-
ference that the defendants were pursuing their own plans.
The conflict between the decision below and the approach of
the other circuits to the proof necessary to establish a conspiracy
is dramatically demonstrated by the treatment of conspiracy
allegations in cases brought by terminated distributors. The cir-
cuits have almost unanimously recognized that the receipt by a
manufacturer of complaints about one of its distributors from
competing dealers is insufficient to permit an inference that
there was a conspiracy between the manufacturer and those
other dealers to terminate the distributor. E.g., Schwimmer v.
Sony Corporation of America, 677 F.2d 946, 953 (2d Cir.), cert.
denied, 51 U.S.L.W. 3362 (Nov. 8, 1982); Edward J. Sweeney &
Sons, Inc. v. Texaco, Inc., 637 F.2d 105, 111 (3d Cir. 1980),
cert. denied, 451 U.S. 911 (1981); Bruce Drug, Inc. v. Hollister
Inc., 688 F.2d 853 (1st Cir. 1982); Davis-Watkins Co. v. Service
Merchandise, 686 F.2d 1190 (6th Cir. 1982); Valley Liquors,
Inc. v. Renfield Importers, Ltd., 678 F.2d 742, 744 (7th Cir.
1982).
This Court has recently granted certiorari in one of the few
distributor termination cases deviating from the general rules
governing conspiracies. Spray-Rite Service Corp. v. Monsanto
Co., 684 F.2d 1226, 1238-39 (7th Cir. 1982), cert. granted, 51
U.S.L.W. 3633 (Feb. 28, 1983). The second question on which
certiorari was granted in Spray-Rite is whether a vertical price-
fixing conspiracy can be inferred solely from evidence that a
manufacturer received price complaints from a distributor’s
competitors and thereafter did not renew the distributor’s con-
tract. Because of the obvious similarities between Spray-Rite
and the instant case, they should be ordered argued and submit-
ted in tandem to assist the Court’s consideration of the issues
presented and to facilitate the consistent development of the law
of conspiracy.'
Finally, the decision below conflicts with several general prin-
ciples consistently used by the lower courts to evaluate cir-
cumstantial evidence. It violates the proposition that cir-
cumstantial evidence of a conspiracy must represent substantial
evidence of a violation, rising above mere suspicion or specula-
tion, and must be inconsistent with any other rational conclu-
sion. E.g., Weit v. Continental Illinois National Bank & Trust |
Co., supra, 641 F.2d at 463. The Eighth Circuit also fel! into the
forbidden habit of piling inferences on top of inferences. See
Admiral Theatre Corp. v. Douglas Theatre Co., 585 F.2d 877,
884 (8th Cir. 1978) (‘‘an inference which a jury is entitled to
draw must be based upon proven facts and not upon other in-
ferences’’). Moreover, the Eighth Circuit relied on an improper
‘*‘negative’’ inference—that the jury is entitled to disbelieve
otherwise uncontradicted sworn testimony—also in violation of
well-settled doctrine. See Dyer v. MacDougall, 201 F.2d 265,
268-69 (2d Cir. 1952); Lundeen v. Cordner, 354 F.2d 401,
406-09 (8th Cir. 1966). As noted above, not only is the ‘‘con-
spiracy’’ unproven, it is refuted by the uncontradicted
testimony of the alleged co-conspirators.
Il. The Eighth Circuit Misconstrued and Misapplied This
Court’s Decisions in Noerr and Pennington.
The sole basis for the Eighth Circuit’s rejection of the West
Park developers’ Noerr-Pennington defense to the antitrust
claims (Counts III, IV and VI of the Amended Complaint) was
the holding that these petitioners ‘‘may noi be protected by
Noerr because their legitimate lobbying efforts may have been
* Alternatively, this case should be held in abeyance pending
disposition of Spray-Rite and then remanded to the Court of Appeals
for reconsideration in light of this Court’s opinion in Spray-Rite.
in Sham
accompanied by illegal or fraudulent actions’ (App. A at p.
A-22, emphasis added). Neither the Eighth Circuit nor
respondents have pointed to any evidence of specific illegal or
fraudulent conduct by the West Park developers. As the Court
of Appeals concedes, moreover, there is no evidence whatsoever
of offers of personal financial gain or similar illegal conduct by
them.
The Court of Appeals has thus allowed a limited exception to
Noerr-Pennington to swallow the doctrine and to eviscerate the
salutary principle that private parties are encouraged to exercise
their first amendment rights and to petition governmental of-
ficials for favorable consideration. If the decision below were
correct, the Noerr-Pennington protection could be removed in
every case in which private parties were alleged to have sought
and obtained governmental action for an anticompetitive pur-
pose. It was precisely to avoid that result that the doctrine was
created.
To fall within the ‘‘exception’’ purportedly applied by the
Eighth Circuit, a plaintiff must adduce evidence of efforts to in-
terfere with his governmental benefits and those efforts must be
illegal or fraudulent, independent of the results of the City’s ac-
tion. There is no hint in the record of conduct by the West Park
developers that was directed at interfering with respondents’
zoning. Moreover, even if there were evidence of such conduct,
it is well established that Noerr-Pennington applies with equal
force to lobbying efforts aimed at denying governmental
benefits to another party. The fatal flaw in the Court of Ap-
peals’ decision is that there is no evidence whatsoever of in-
dependently unlawful conduct in the present record.’
* The unproven possibility that one petitioner suggested to city of-
ficials that a Famous Barr store would come to Cape Girardeau only if
West Park Mall were allowed to develop is conceded by the Court of
Appeals to be legal conduct and is certainly not evidence that city of-
ficials were induced ‘‘by means other than legitimate lobbying to il-
legally revert plaintiffs’ C-4 zoning.’’ Compare App. A at p. A-19 &
A review of the cases relied on by the Eighth Circuit
demonstrates that the decision below is inconsistent with the
decisions of the other circuits on this ‘‘exception’’ to Noerr-
Pennington. See Sacramento Coca-Cola Bottling Co. v.
Teamsters Local 150, 440 F.2d 1096, 1099 (9th Cir.), cert.
denied, 404 U.S. 826 (1971) (evidence of ‘‘threats, intimidation
and other coercive measures’’); Woods Exploration & Produc-
ing Co. v. Aluminum Co. of America, 438 F.2d 1286, 1296-98
(Sth Cir. 1971), cert. denied, 404 U.S. 1047 (1972) (false filing
with government agency).
The proper application of Noerr-Pennington in this situation
is aptly illustrated by Wilmorite, Inc. v. Eagan Real Estate,
Inc., 454 F. Supp. 1124 (N.D.N.Y. 1977), aff'd mem., 578 F.2d
1372 (2d Cir.), cert. denied, 439 U.S. 983 (1978). There, the
developers of two regional shopping malls sued the owners and
operators of other regional malls on the grounds that the defen-
dants brought litigation to prevent the grant of zoning and
building permits to the plaintiffs, allegedly in restraint of trade.
Summary judgment was granted for the defendants on the basis
of Noerr-Pennington and was summarily affirmed on appeal.
The Eighth Circuit opinion in this case is flatly inconsistent with
the Second Circuit’s analysis of these issues in Wi/morite and
n.6 with App. A at p. A-23. Similarly, the unsubstantiated possibility
that this developer offered to make a right-of-way available to the
public in September 1978 in connection with West Park Mall’s zoning
(App. A at p. A-7) does not constitute evidence of lobbying the City to
interfere with respondents’ zoning on other property seven months
later. Significantly, the theory adopted by the Eighth Circuit was
never pleaded or argued by respondents.
— on
the related case of Miracle Mile Associates v. City of Rochester,
617 F.2d 18 (2d Cir. 1980).'°
Ill. The Eighth Circuit Decision Conflicts with This
Court’s Decisions Defining the Elements of a § 1983
Claim Alleging a Deprivation of Property Without
Due Process of Law.
In the Court of Appeals, respondents’ sole allegation of a
violation of § 1983 (Counts I and II) was that they had been
deprived of procedural due process in connection with the alleged
**reverter.’’ In Parratt v. Taylor, 451 U.S. 527, 536-37 (1981),
this Court succinctly summarized the elements of a § 1983 claim
based on an alleged deprivation of property without procedural
due process: The defendants must act under color of state law,
there must be ‘‘property’’ involved, the alleged loss must
amount to a deprivation, and the deprivation must be without
due process of law. The Court of Appeals misapplied these con-
trolling requirements and created a conflict with Parratt and
other decisions of this Court because: (1) There was no
‘‘deprivation”’ of ‘‘property’’; and (2) the alleged deprivation
was not ‘‘without due process of law.’’
The Court of Appeals ignored this Court’s opinion in
Greenholtz v. Inmates of the Nebraska Penal and Correctional
Complex, 442 U.S. 1 (1979), and created a conflict with other
circuits when it held, without any real analysis, that ‘‘plaintiffs
were effectively deprived of their C-4 classification’’ (App. A at
p. A-13). Respondents were never deprived of their C-4 zoning
because it is undisputed that there was no effective reverter. See
Reichenberger v. Pritchard, 660 F.2d 280, 284-85 (7th Cir. 1981)
'° The Noerr-Pennington doctrine is equally applicable to
respondents’ civil rights and pendent tortious interference claims.
Gorman Towers, Inc. v. Bogoslavsky, 626 F.2d 607 (8th Cir. 1980).
The Court of Appeals’ faulty analysis of the doctrine also infected its
disposition of the appeal with respect to those claims.
in es
(no ‘‘deprivation’’ created by opposition to occupancy cer-
tificates and liquor licenses when plaintiffs continued opera-
tions). All respondents lost, at most, was freedom from er-
roneous statements of opinion by City officials and misconceived
ministerial changes in the zoning map. But there is no ‘‘prop-
perty’’ (or even ‘‘liberty’’) in the desire for freedom from ex-
pression of erroneous opinions as to the status of zoning. As
this Court stated in Greenholtz, supra, 442 U.S. at 7:
‘Decisions of the Executive Branch, however serious their
impact, do not automatically invoke due process protec-
tion; there simply is no constitutional guarantee that all ex-
ecutive decisionmaking must comply with standards that
assure error-free determinations.”’
The decision of the Court of Appeals also conflicts with Par-
ratt v. Taylor, supra, because in each case the availability of
post-deprivation remedies satisfies due process. The key to Par-
ratt is the Court’s conclusion:
‘**Although he has been deprived of property under color
of state law, the deprivation did not occur as a result of
some established state procedure. Indeed, the deprivation
occurred as a result of the unauthorized failure of agents
of the State to follow established state procedure.’’ 451
U.S. at 543 (emphasis added).''
'' Last term, in Logan v. Zimmerman Brush Co., 455 U.S. 422,
435-36 (1982), this Court reaffirmed that the ‘‘point’’ in Parratt was
that it dealt with a tortious loss of property as a result of an
unauthorized act rather than an established state procedure. Although
the lower courts have not been entirely uniform in their application of
Parratt to claims involving liberty interests or interests protected
directly by other provisions of the Constitution, the case at bar, in-
volving a procedural due process claim associated with a deprivation
of property, is squarely within the core holding of Parratt.
Here, the City Manager’s statements of opinion and his altera-
tion of the zoning map were admittedly unauthorized acts that
were not part of an established state or local procedure.
Respondents had available to them the remedy of requesting the
City Council to correct the City Manager’s error; they also
could have invoked state law to require the error to be corrected
by the courts (and compensated, if appropriate). The evidence
established that they eschewed these remedies because they
knew they had not been deprived of their zoning, and they
perceived the City Manager’s mistake as a fortuitous basis for
prolonging this litigation. Respondents cannot subvert Parratt
and create a deprivation that is ‘‘without due process of law’’
simply by ignoring their state-law options and thereby
bootstrapping their way into federal court under the Civil
Rights Act.
The decision of the Eighth Circuit is also inconsistent with a
long line of cases in this Court holding that a mere error or
violation of local law does not constitute a violation of due pro-
cess or an infringement of federal rights. See Paul v. Davis, 424
U.S. 693, 700 (1976); Gryger v. Burke, 334 U.S. 728, 731 (1948).
Finally, the Eighth Circuit’s failure to apply these principles
creates a conflict with the decisions in several other circuits. For
example, in Flower Cab Co. v. Petitte, 685 F.2d 192 (7th Cir.
1982), there was a temporary deprivation of the right to assign a
taxi-cab license by a city official who, without any
demonstrated authority, stopped processing applications for
transfers. The Seventh Circuit held that the plaintiffs had not
established that they would succeed at trial on their procedural
due process claim because under Parratt the loss was not the
result of an established state procedure. /d. at 193. See also
Rogin v. Bensalem Township, 616 F.2d 680, 694-95 (3d Cir.
1980) (no procedural due process violation in the denial of a
building permit), cert. denied, 450 U.S. 1029 (1981); Beasley v.
Potter, 493 F. Supp. 1059, 1072 (W.D. Mich. 1980) (no due pro-
cess violation in enforcement of zoning laws, including a letter
—
to plaintiffs’ bank alleging that the plaintiffs were violating a
zoning Ordinance). More generally, the Eighth Circuit decision
is at war with numerous cases holding that a claim of an error or
misapplication of state law by local officials does not constitute
a violation of § 1983. E.g., Crocker v. Hakes, 616 F.2d 237, 239
(Sth Cir. 1980) (per curiam) (improper application of zoning or-
dinance); Hagee v. City of Evanston, 530 F. Supp. 585, 587
(N.D. Ill. 1982) (illegal revocation of building permit).
CONCLUSION
For the reasons stated, a Writ of Certiorari should issue to
review the judgment of the Court of Appeals in this case.
Respectfully submitted,
THOMAS C. WALSH
(Counsel of Record)
JOHN MICHAEL CLEAR
MICHAEL G. BIGGERS
500 North Broadway
St. Louis, Missouri 63102
(314) 231-8600
STEPHEN E. STROM
325 Broadway
Cape Girardeau, Missouri 63701
(314) 334-0555
Attorneys for Petitioners
BRYAN, CAVE, McPHEETERS & McROBERTS
FINCH, BRADSHAW, STROM & STEELE
Of Counsel
April 1983
— A-l —
APPENDIX A
UNITED STATES COURT OF APPEALS
FOR THE EIGHTH CIRCUIT
No. 81-2314
Westborough Mall, Inc., a Corporation; George Staples, Jr.,
and Westborough Mall Associates, a Missouri Limited Partner-
ship, by and through George Staples, Jr., its Sole General Part-
ner,
Appellants,
Vv.
City of Cape Girardeau, Missouri, a Municipal Corporation;
Paul W. Stehr, Robert K. Herbst, Howard C. Tooke, Samuel
L. Gill, Gail L. Woodfin, W. G. Lawley, Charles L. Drury,
Drury Industries, Inc., a Corporation, May Department Stores
Co., a Corporation, West Park Associates, a Missouri Limited
Partnership, May Centers of Cape, Inc., a Corporation, and
May Centers, Inc., a Corporation,
Appellees.
Appeal from the United States District Court
for the Eastern District of Missouri
Submitted: May 19, 1982
Filed: November 12, 1982
a
Before HEANEY, Circuit Judge, HENLEY,* Senior Circuit
Judge, and BECKER,** Senior District Judge.
HEANEY, Circuit Judge
This action was brought by Westborough Mail, Inc., and
others to challenge actions taken by the City of Cape Girardeau,
city officials and various private individuals and business con-
cerns involved with the development of the West Park Mall, a
shopping center located in the City of Cape Girardeau. The
Westborough Mall developers claimed that the city illegally
acted to deprive them of their zoning rights without due process
of law. They also alleged that city officials and the West Park
Mall developers illegally conspired to preclude competition by
improperly reverting the C-4 zoning the Westborough
developers had obtained to construct the Westborough Mall
and then granting development rights to the West Park group.
Finally, they asserted that two ordinances rezoning the West
Park Mall property were illegal.
On October 27, 1981, the district court entered summary
judgment in favor of the city and the West Park Mall
developers. Although we agree with the district court that the
Westborough developers lack standing to challenge the zoning
changes granted to the West Park group, we find there is suffi-
cient evidence that the city deprived the Westborough
developers of their zoning rights without notice or a hearing to
preclude a judgment as a matter of law. We also believe there
are genuine issues of material fact regarding the existence of an
illegal agreement between city officials and the West Park Mall
* Judge Henley assumed senior status June 1, 1982.
** The Honorable WILLIAM H. BECKER, United States Senior
District Judge, Western District of Missouri, sitting by designation.
— *
developers to intentionally interfere with the progress of the
Westborough Mall. We therefore reverse the district court in
part and remand for a trial on the merits of these claims.
Our holding is based upon the established rule that summary
judgment is justified only when, viewing the facts and in-
ferences that may be derived therefrom in a light most favorable
to the nonmoving party, the court is convinced there is no
evidence to sustain a recovery under any discernible cir-
cumstances. Ralph’s Distributing Co. v. AMF, Inc., 667 F.2d
670, 672 (8th Cir. 1981); Vette Co. v. Aetna Casualty & Surety
Co., 612 F.2d 1076, 1077 (8th Cir. 1980). The burden is thus on
the defendants to establish their right to judgment as a matter of
law: there must be no genuine issue of material fact and no
room for doubt or controversy. See id.; St. Louis County Bank
v. United States, 674 F.2d 1207, 1209 (8th Cir. 1982). A review
of the facts in this case demonstrates why, in view of these stan-
dards, the district court erred in granting summary judgment.
Both plaintiff George Staples, Jr., and defendant Charles
Drury, President of Drury Industries, Inc., had expressed in-
terest in developing a shopping mall in the City of Cape
Girardeau in the early 1970’s. In 1973, Staples entered into a
long-term lease on approximately sixty-seven acres of land for
the purpose of constructing a regional shopping facility, re-
ferred to as Westborough Mall. On June 5, 1974, the Cape
Girardeau City Council enacted ordinance 904, which rezoned
the Westborough Mall property to C-4, a zoning change that the
owners of the property had applied for upon the mayor’s sug-
gestion to Staples that C-4 zoning was required for the develop-
ment of a regional facility. This ordinance exempted the property
from another local ordinance, Chapter 30, § 31, subsection (e)
of the Code of Ordinances, which provided that if a shopping
center was not constructed on property rezoned C-4 within three
years, the zoning would automatically revert to the classifica-
tion in force prior to the establishment of the C-4 district.
—
It was not until several years after the plaintiffs obtained C-4
zoning that Drury Industries, Inc., and May Centers of Cape,
Inc., formed a partnership to develop a competing center, the
West Park Mall. The West Park Mall was to be located on land
owned by Drury that was less than one mile from the
Westborough site.' The gravamen of plaintiffs’ complaint is
that the city and the West Park Mall developers conspired to
preclude competition by the plaintiffs by illegally reverting their
C-4 zoning. The plaintiffs claim that this action was taken to
allow the May-Drury defendants the opportunity to secure
tenants and begin operation of the West Park Mall.
The district court held that there was no evidence of a con-
spiracy and, further, that any action taken by the city or the
private defendants regarding the status of plaintiffs’ zoning had
no effect on the viability of plaintiffs’ project, since plans for
the development of Westborough Mall had not materialized and
the project was in essence a failure. The plaintiffs argue that the
existence of an illegal conspiracy may be inferred from the
nature of the relationship between city officials and defendant
Charles Drury and from the improper actions taken by the city
to revert plaintiffs’ C-4 zoning only two days after granting the
defendants’ zoning petition, actions which allowed the defen-
dants to complete their financing plans for the West Park Mall
development. The plaintiffs also contend that there is a genuine
issue Of material fact as to the viability of their project, which
renders summary judgment inappropriate.
The facts that support plaintiffs’ position may be summarized
as follows: Commencing in 1973, plaintiff Staples attempted to
' The defendants concede that the two sites are equal in terms of
development potential. The district court apparently assumed for pur-
poses of deciding defendants’ motions for summary judgment that
Cape Girardeau was a ‘‘one shopping mall town.’’ We adopt this
assumption as well.
— ~~
secure tenants for the Westborough Mall, especially anchor (or
major) tenants such as J. C. Penney, Sears or Famous Barr. No
major tenants expressed interest, however, and Staples aban-
doned his plans for approximately two years. Then, in
September, 1976, Staples formed Westborough Mall
Associates, a limited partnership, to develop the Westborough
Mall site. The partnership raised $800,000 and received a
building permit from the city in June, 1977. That same month,
the city council enacted ordinance 1204, which corrected certain
legal descriptions of the Westborough property and confirmed
that the property was zoned C-4.
Site work on the Westborough project also began in 1977.
Water drainage systems were installed, a survey was conducted
and grading and other surface improvements were made. By
December, 1978, the plaintiffs had expended more than $1
million on the development. No anchor tenants had yet commit-
ted themselves to the project, but letters of interest from many
smaller stores had been received. Steps were being taken to
secure additional financing to begin construction of the mall
shell, and because of the reluctance of any major store to
become a tenant, the plaintiffs were investigating a new anchor
store concept—an “‘Elite’’ store composed of a number of small
tenants.
Defendant Drury’s plans for a shopping mall in Cape
Girardeau were also proceeding during this time period. Drury
sought to enter into a joint venture with the May defendants,
who were experienced shopping mall developers. His discus-
sions with May officials culminated in at least a tentative agree-
ment with them to proceed to develop the West Park Mall in
1977. The agreement was a beneficial one in several respects,
one of which was the probability of obtaining a Famous Barr
store as an achor tenant because Famous Barr was a subsidiary
=- Ab=—
of May. An October, 1977, memorandum’ by Drury to the
Drury Industries Board of Directors suggested:
Participation by [May Stores] in the center does not
automatically guarantee that a Famous Barr store will be in
the center. However, the track record is that [May] is not
involved in any center that does not have a first-line May
department store in it. A Famous Barr store in Cape
Girardeau is a calculated risk. With [May] participation in
our center, however, it is very doubtful that Famous Barr,
in the event it does not go in our center, will go in any other
competitive center in our market area.
Drury’s contribution to the joint venture included assistance
in dealing with city officials. Indeed, Drury had received a letter
from the city attorney as early as 1974, about the same time that
plaintiff Staples was informed by the mayor that C-4 zoning was
required to build a shopping mall, which indicated that Drury
could proceed to develop his center with C-2 or regular commer-
> Many of the facts in support of plaintiffs’ claims are contained in
documents produced by the defendants in discovery and submitted by
the plaintiffs to the district court. The plaintiffs’ requests for addi-
tiona! time for discovery to depose the private defendants were denied
by the district court. The plaintiffs allege on appeal that the district
court erred in this refusal. We find no abuse of discre on. See Moore
v. Sylvania Electric Products, Inc., 454 F.2d 81, 83 (8th Cir. 1972).
The defendants challenge any reliance upon the documents submit-
ted by the plaintiffs, alleging that they are an unauthenticated
‘“*thodge-podge”’ of notes that are inadmissible hearsay and should not
be considered in evaluating the district court’s grant of summary judg-
ment. The district court ruled that it considered ‘‘all the evidence sub-
mitted,’’ and we believe the documents are sufficiently reliable for us
to determine whether the record as a whole supports the district
court’s decision in this case. See generally Alexander Dawson, Inc. v.
NLRB, 586 F.2d 1300, 1302-1303 (9th Cir. 1978).
—_
cial zoning.’ As Drury later disclosed to May officials, his
strategy was ‘‘low key.’’ In 1977, he informed them that he
already had talked with defendant Lawley, the city manager,
and planned to talk with the mayor privately about obtaining
C-2 zoning on all of the West Park Mall property. Drury believed
that C-2 zoning would allow plans for the shopping mall to pro-
ceed in secret for as long as possible, thus avoiding any
challenge by plaintiffs or others who might seek to thwart the
development.
The evidence supports plaintiffs’ suggestion that Drury and
Lawley, the city manager, worked closely together to obtain the
zoning change required for the West Park Mall property. After
a September, 1978, meeting with Lawley and the city building
commissioner and engineer, Drury told May officials that he
had ‘‘tacit city approval for C-4 zoning for the shopping center
site in exchange for the Silver Spring Road extension’’ right-of-
way that he owned. Moreover, Drury reassured May officials
that because the ‘‘center is desired by the powers that be,’’ there
was no risk in initially seeking C-2 zoning and worrying about
the C-4 zone later. Indeed, a schedule adopted by the defen-
dants for obtaining the necessary zoning was characterized by
Drury as ‘‘C-2 zoning per Lawley schedule.”’
Finally Drury himself prepared the city manager’s report to the
city council concerning the West Park Mall’s application for
C-2 and then C-4 zoning. Lawley merely edited Drury’s draft of
this report prior to submitting it to the council on February 6,
1979. Drury’s draft explicitly stated his desire to apply for C-2
* The city attorney’s letter suggested that a C-4 classification was
preferable, however, and Drury appears to have recognized that C-4
zoning would ultimately be required for a regional shopping facility.
The city attorney’s letter gave Drury the option of performing initial
work with only C-2 zoning.
—
zoning ‘‘with no mention of a subsequent or follow-up C-4
rezoning request.’’
Drury’s zoning ‘‘strategy’’ raised some concerns with anchor
tenants he was trying to attract to the West Park Mall, however.
Notes of a phone conversation produced by Drury indicate that
Drury’s ability to obtain the required C-4 zoning was questioned
by at least one prospective anchor tenant, J. C. Penney, even
though Drury attempted to be very reassuring. ‘‘[Z]oning will
not be a problem,’’ Drury’s notes stated, although because of
plaintiffs’ C-4 zoning, the J. C. Penney spokesperson could
‘thardly believe [Cape Girardeau] will zone * * * a second shop-
ping center site.”’
Penney’s concern regarding the West Park Mall zoning was
important to the May-Drury defendants, since neither the plain-
tiffs nor the defendants had yet been successful in attracting an-
chor tenants. The West Park Mall was in direct competition
with plaintiffs’ Westborough Mall for these tenants, and the
evidence in the record demonstrates that the defendants carefully
monitored the plaintiffs’ progress. For example, a June 6, 1978,
memorandum from a May Official states that because ‘‘Cape
Girardeau cannot support two centers,’’ Famous Barr should
decide quickly whether it was interested in participating in the
West Park Mall. The memo suggested that because of reports
concerning plaintiffs’ competing site, ‘‘{oJur partner, Charles
Drury is insisting we attempt to firm up both J. C. Penney and
Sears now, followed immediately by Dillards if Famous Barr
has not made up its mind by the end of this month.”’
Drury’s concern about plaintiffs’ progress is also reflected in
his notes in September, 1978—the same month he met with city
officials concerning the West Park Mall’s rezoning application.
These notes somewhat cryptically state, ‘‘Staples—trouble—
tack zoning.’’ Drury also wrote in February, 1979, ‘‘stop them
from building so we maybe get a chance to build.”’ The plain-
tiffs allege that this is exactly what happened in April of 1979.
—_"
On April 4, 1979, the city council approved defendant
Drury’s C-2 zoning application for the West Park Mall, after a
hearing at which the plaintiffs and others objected to the
change. On April 5, plaintiff Staples filed suit in state court to
challenge the city council’s action. The next day, Lawley, the city
manager, announced to the press that plaintiffs’ zoning had
reverted from C-4 to residential. The local television news and
the Cape Girardeau newspaper carried the story. On April 11,
1979, after conferring with the city attorney, Lawley instructed
the city engineer to change the city’s master zoning map to show
a reversion of the Westborough site from C-4 to its original zon-
ing. The engineer followed these directions.
Lawley presented his opinion that plaintiffs’ C-4 zoning had
reverted by operation of Chapter 30, § 31, subsection (e) of the
Code of Ordinances to the city council on April 13. Lawley said
that because the plaintiffs had not built a shopping mall on their
property within three years of the original C-4 grant in 1974,
this ordinance operated to automatically revert their zoning to
the classification in force prior to the establishment of the C-4
district. Lawley stated that the reverter would be applied to
plaintiffs’ property until he was ordered otherwise by the city
council or a court. Although the city council discussed the issue,
no action was taken at this meeting.
Thus, on April 20, 1979, a May official was able to report toa
J. C. Penney official not only that the defendants’ C-2 applica-
tion had been granted, but also that
* Lawley was wrong; plaintiffs’ zoning was exempt from the ap-
plication of the reverter ordinance in the Cape Girardeau Code of Or-
diances. The defendants argue that because the plaintiffs knew
Lawley was wrong and failed to bring the error to his attention, they
somehow waived their right to challenge his actions. This argument is
clearly without merit.
— A-10 —
the City Council has reviewed the file of the zoning pro-
ceedings on the Westborough site. In doing so, they have
concluded that because of the wording of the zoning
regulations, requiring essential completion of the project
within three (3) years from the date of an enactment of the
C-4 ordinance, and since no construction on the site has
begun, that the C-4 zoning on the Westborough site has ex-
pired and ground has reverted to its previous zoning status
of M-1, light industrial, and R-1, residential. In a conver-
sation with the City Manager, he informed me that he is
revising the zoning map to reflect this change. He has also
directed the engineering department not to issue a building
permit for the Westborough project. It is probable that
this action will be challenged and will ultimately be resolved
in court. However, this would effectively preclude any
development by the Westborough group until this issue is
resolved.
On May 23, 1979, plaintiffs’ financier, Green, wrote to the city
manager requesting clarification of the status of the
Westborough Mall’s zoning. Lawley replied that, in his opinion,
the C-4 zoning had reverted, and he enclosed a copy of the zon-
ing ordinances and the official zoning map, which reflected the
reversion, with his response. Green accordingly notified the
plaintiffs that he was suspending his attempts to obtain perma-
nent financing for plaintiffs’ project until the zoning issue was
resolved.
The West Park Mall developers then obtained a second rezon-
ing of their property from C-2 to C-4 on August 1, 1979. Over
the next year, the plaintiffs were unable to progress in the
development of Westborough Mall. Work on the West Park
Mall project continued and the mall ultimately was opened in
1981. It was not until September 17, 1980, almost a year and a
half after the master zoning map was changed, that the city
— A-ll —
council adopted ordinance 1599, which ‘‘reaffirmed’’ that the
Westborough Mall site was zoned C-4. As the plaintiffs had
believed throughout, this ordinance confirmed that because the
plaintiffs’ C-4 grant was specifically exempted from the applica-
tion of Chapter 30, § 31, subsection (e), no automatic reverter
could be applied to the Westborough Mall site.
In view of these facts and the inferences that reasonable per-
sons might draw from them, the plaintiffs contend on appeal
that the district court erred in granting summary judgment on
all seven counts of their complaint. We will consider each of the
plaintiffs’ allegations in turn.
In Count | of their complaint, the plaintiffs allege that the City
of Cape Girardeau, the city manager and five city council
members violated 42 U.S.C. § 1983. The plaintiffs challenge the
district court’s grant of summary judgment as to this count on
the grounds that the court erroneously held that the city is im-
mune from suit under section 1983, the city took no official ac-
tion with respect to plaintiffs’ zoning for the mall, and the acts
of the defendants had no detrimental effect on plaintiffs’
development.
In Gorman Towers, Inc. v. Bogoslavsky, 626 F.2d 607 (8th
Cir. 1980), we held that local officials who acted in a legislative
capacity were immune from suit under section 1983. /d. at
613-614. Our ruling was based in part upon the recognition that
municipalities may be held liable for unconstitutional conduct.
Id. at 613. See Owen v. City of Independence, 445 U.S. 622, 657
(1980). The plaintiffs do not contend that the district court
misapplied Gorman with respect to the individual city officials.
Rather, they interpret the court’s ruling as granting the city
itself immunity, and argue that this holding must be reversed.
— = on
The city acknowledges that it may be liable under section 1983
if official action was taken to deprive the plaintiffs of their con-
stitutional rights, and we believe that the district court’s opinion
does not hold to the contrary. In our view, the district court based
its grant of summary judgment in favor of the city primarily on
its view that no official action was taken by the city with respect
to the alleged reversion of plaintiffs’ C-4 zoning. On appeal, the
city has argued that no official action was taken because the city
manager’s actions concerning the C-4 reversion were merely ex-
pressions of his own opinion and did not result in any change in
the status of plaintiffs’ zoning. In context of a motion for sum-
mary judgment, this contention cannot be accepted.
As chief executive officer of the city, the city manager is
responsible for enforcing the city’s zoning ordinances. See Mo.
Rev. Stat. § 78.610(2). After conferring with the city attorney,
city manager Lawley acted pursuant to this authority and
directed that the official zoning map be changed to reflect a
reversion of the zoning on plaintiffs’ Westborough Mall site
from C-4 to its prior classification. Lawley also instructed that
no building permit should be issued for the mall. The city
engineer followed these directions.
Moreover, although the city manager is ‘‘subject to the direc-
tion and supervision of the council,”’ id., Lawley communicated
his opinion that Chapter 30, § 31, subsection (e) applied to
revert plaintiffs’ C-4 zoning to the city council, and told them of
his instructions to the city engineer. The council enacted no or-
dinance explicitly ratifying Lawley’s conduct, but an ordinance
would not necessarily be required if the council agreed with
Lawley’s position. The city’s argument that a city manager’s ac-
tion becomes official policy only upon the enactment of a
resolution by the council is thus unpersuasive in this situation,
since by knowing inaction, the city may have ratified Lawley’s
action here.
— A-13 —
The official zoning map of the city was changed to eliminate
plaintiffs’ C-4 zoning. Lawley, the mayor and the city engineer
publicly stated that the plaintiffs had lost their C-4 zoning, and
Lawley reiterated this position in his letter to plaintiffs’ finan-
cier. This erroneous reversion was corrected when the city
enacted ordinance 1599 ‘‘reaffirming’’ plaintiffs’ right to C-4
zoning, but from April, 1979, to September, 1980, the plaintiffs
were effectively deprived of their C-4 classification.
We therefore find that the district court erred in its summary
judgment that the city took no official action with regard to
Westborough Mall zoning. The actions by city officials in this
case were not merely isolated incidents, see Landrigan v. City of
Warwick, 628 F.2d 736, 746-747 (Ist Cir. 1980), but rather may
have represented the official policy of the city concerning the
status of plaintifs’ zoning. See Black v. Stephens, 662 F.2d 181,
191 (3d Cir. 1981), cert. denied, 102 S.Ct. 1646 (1982); Quinn v.
Syracuse Model Neighborhood Corp., 613 F.2d 438, 448 (2d
Cir. 1980). We find the plaintiffs have presented sufficient
evidence that the reversion of their zoning ‘‘was caused by the
official conduct of * * * those whose acts may fairly be said to
represent official policy,’” Owen v. City of Independence, 589
F.2d 335, 337 (8th Cir. 1978), to preclude a grant of summary
judgment on this ground.
The district court also appeared to base its grant of summary
judgment on its findings that the city manager’s actions ‘‘had
no detrimental effect on Westborough Mall’s development in
light of the Mall’s prior history and potential by April, 1979,”’
and that there was ‘‘no evidence of a link between the acts of
either [the city defendants or the West Mall developers] to
damages suffered by plaintiffs.’’ As the district court correctly
noted, the plaintiffs owed money to the Penzel Construction
Company and to the Bank of New Madrid, had been unsuc-
cessful in securing anchor tenants and had not yet filed an ap-
= Ah
plication for the financing necessary to develop the
Westborough Mall when the city announced in April, 1979, that
the plaintiffs’ C-4 zoning had reverted to residential and
manufacturing classifications.
We agree with the plaintiffs, however, that the district court
failed to view the evidence in a light most favorable to them
when it concluded as a matter of law that the plaintiffs’ interests
were in no way damaged by defendants’ actions. The district
court, in essence, held that the evidence compelled the conclu-
sion that the Westborough Mall failed because of plaintiffs’
poor business skills. In making this judgment, the court made
**a choice of inferences to be drawn from the subsidiary facts”’
presented by both parties, United States v. Diebold, 369 U.S.
654, 655 (1962), a choice which is impermissible on a motion for
summary judgment.
Our review of the record leads us to conclude that there is a
genuine issue of material fact as to the viability of plaintiffs’
development. Staples’ testimony,’ Green’s testimony and
documents produced by the defendants could reasonably sup-
port the conclusion that the Westborough Mall failed to attract
major tenants and to obtain further financing because the land
lost its C-4 designation at the same time that a com-
petitor—defendants’ West Park Mall development—was
granted the required zoning to develop a regional shopping
facility. The plaintiffs had invested over $1 million in the
* The defendants characterize Staples’ testimony as ‘‘self-serving
and conclusory opinions and conjecture,’’ which they argue cannot
serve as a basis for denying summary judgment. Unlike the situations
presented in the cases cited by the defendants, see, e.g., Pan-Islamic
Trade Corp. v. Exxon Corp., 632 F.2d 539, 556-557 (Sth Cir. 1980),
cert. denied, 454 U.S. 927 (1981); Thornhill Publishing Co. v. General
Telephone & Electronics Corp., 594 F.2d 730, 738 (9h Cir. 1979),
there are specific facts which support the plaintiffs’ view of the effect
of the reverter, however.
— A-1S —
Westborough Mall project; site preparations had been made
and letters of interest had been received. The defendants viewed
plaintiffs’ progress as a potential threat to their plans.
Moreover, there is evidence that temporary financing could
perhaps have been obtained to construct the Westborough Mall
shell, even without an anchor tenant committed to the project,
had plaintiffs been given the opportunity to develop the ‘‘Elite”’
store concept. The plaintiffs’ financier halted his efforts to ob-
tain such financing after the zoning controversy developed.
Before the reverter in April of 1979, the plaintiffs had a
valuable leasehold interest in the only land in Cape Girardeau
that was zoned for an integrated shopping center and on which
site improvements had already been made. Assuming Cape
Girardeau is a ‘‘one shopping mall town,”’ this interest should
have been marketable, yet the evidence suggests that the plain-
tiffs may have been unable to sell their leasehold after the an-
nouncement of the reversion, as a result of the ‘‘cloud’’ that
had been placed over the status of the zoning of their property.
The plaintiffs have thus presented facts that they were damaged
by the applicaton of the reverter to their property through
September, 1980, when the council enacted ordinance 1599 reaf-
firming their entitlement to the C-4 classification. We therefore
find that the district court erred in concluding as a matter of law
that the plaintiffs were not daamged in any way by the reverter,
and accordingly we hold the court erred in granting summary
judgment on Count | of plaintiffs’ complaint.
Il.
Counts 2 through 4 of plaintiffs’ complaint contain various
allegations of a conspiracy between the city defendants and the
West Park Mall developers regarding the reverter of plaintiffs’
C-4 zoning and the grant of C-2 and then C-4 zoning to the
private defendants: Count 2 alleges a conspiracy between the city
and the West Park Mall developers to deprive the plaintiffs of
— A-16 —
their constitutional rights; Count 3 alleges a conspiracy among
all the defendants to restrain trade in violation of section 1 of
the Sherman Act; and Count 4 alleges a conspiracy to
monopolize the shopping center market in violation of section 2
of the Sherman Act. In granting summary judgment on these
claims, the district court stated that the ‘‘plaintiffs have been
unable to unearth a shred of evidence linking an improper act of
the City defendants to the private developers’ efforts to build
West Park Mall.”’
The plaintiffs concede that ‘‘the evidence of conspiracy is not
direct and overwhelming,’’ and we agree with this statement.
Nonetheless, the elements of a conspiracy are rarely established
through means other than circumstantial evidence, see, e.g.,
Crowe v. Lucas, 595 F.2d 985, 993 (Sth Cir. 1979), cert. denied,
102 S.Ct. 1251 (1982), and summary judgment is only war-
ranted when ‘‘the evidence is so one-sided as to leave no room
for any reasonable difference of opinion as to how the case
should be decided.’’ Admiral Theatre Corp. v. Douglas Theatre
Corp., 585 F.2d 877, 883 (8th Cir. 1978) (citations omitted). The
court must be convinced that the evidence presented is insuffi-
cient to support any reasonable inference of a conspiracy. /d. at
884. See Poller v. Columbia Broadcasting System, 368 U.S. 464,
472-473 (1962).
Our review of the record in view of these standards convinces
us that the district court erred in its conclusion that there was no
evide ‘ce of a conspiracy between the city officials and the May-
Drury defendants.
In order to establish a cause of action based upon a con-
spiracy in this case, the plaintiffs had to show with at least cir-
cumstantial evidence that the private developers made a deal
with the city or with at least some of the city officials whereby
the city would act to stop plaintiffs’ Westborough Mall by
casting doubt upon the status of their zoning long enough to
— Al? =
allow the defendants’ West Park Mall to secure tenants and to
obtain a sufficient ‘‘head start’’ on construction. The cir-
cumstantial evidence of such an illegal agreement consists of the
close relationship between defendant Drury and city officials,
the defendants’ concern about the progress of plaintiffs’ com-
peting site, Drury’s notes to ‘’stop them from building so maybe
we get a chance to build,’’ and the timing of the reverter of
plaintiffs’ C-4 zoning only two days after the city council
enacted an ordinance that allowed the West Park Mall
developers to begin construction.
Defendant Drury has filed an affidavit stating that no Drury
defendants ‘‘knew in advance about, participated in, or con-
tributed to Mr. Lawley’s opinion’’ regarding the C-4 reversion,
and Lawley has denied the existence of any agreement to assist
the West Park Mall developers by taking plaintiffs’ zoning from
them, but we find there is sufficient evidence of a possible con-
spiracy to illegally revert plaintiffs’ zoning to withstand a mo-
tion for summary judgment.
The preferential treatment accorded Drury by city officials is
illustrated by the facts concerning the West Park Mall zoning.
Drury was confident that zoning would not present a problem
for his development plans at a very early date, even though the
plaintiffs had obtained a C-4 classification and the defendants
believed that Cape Girardeau could only support one shopping
mall facility. Drury was allowed to proceed under a C-2
classification, while the plaintiffs were advised that a C-4 zone
was required. Drury’s feeling that the West Park Mall was
‘desired by the powers that be’’ suggests that he had struck an
agreement with city officials that would ensure his mall’s suc-
cess. Although proof of private meetings with city officials may
not be sufficient evidence of any improper arrangements,
Drury’s involvement with city officials went beyond such
meetings: Drury obtained a ‘‘tacit’’ agreement for C-4 zoning
— A-18 —
prior to any city council action concerning either the C-2 or C-4
zoning changes that he requested, he wrote most of the city
manager’s report to the city council concerning his rezoning re-
quest, and he referred to his zoning application plans as ‘‘C-2
per Lawley schedule.’’
We wish to emphasize that this preferential treatment alone
would not be grounds for a cause of action by the plaintiffs: the
relationship between the city and Drury is, however, evidence
from which a trier of fact could infer the existence of a con-
spiracy to deprive the plaintiffs’ of their zoning rights.
Other circumstantial evidence of an illegal agreement to
revert the plaintiffs’ C-4 zoning includes the defendants’ desire
to stop plaintiffs’ development, or at least slow it down, so that
West Park Mall could be brought to a stage where it could effec-
tively overcome competition by the plaintiffs. Prior to the
reverter announcement, the record shows that the May-Drury
defendants considered the Westborough Mall to be a ‘‘com-
peting site’’—indeed, they concede there is no inherent advan-
tage to their location over that of the plaintiffs. They acted to
secure anchor tenants as quickly as possible when it appeared
that the plaintiffs might be in a position to sign such tenants.
The plaintiffs had begun site preparations and had obtained
both the required zoning and a building permit from the city
when Drury’s notes in February, 1979, state ‘‘stop them from
building so we maybe get a chance to build.”’
The May-Drury defendants do not deny that the reversion of
plaintiffs’ zoning was of great benefit to them. Only days after
the reverter was announced, they told J. C. Penney officials,
who had doubted Drury’s ability to obtain council approval for
another C-4 district in the City of Cape Girardeau, that the
reverter would effectively preclude any development of the
Westborough Mall until the status of plaintiffs’ zoning was
resolved in court.
— Ald —
Finally, the timing of the reverter supports an inference of a
conspiracy to delay plaintiffs’ project by reverting their C-4
zoning. Ordinance 904, enacted in 1974, granted the plaintiffs a
C-4 classification and specifically stated that the grant was ex-
empt from the requirement of the city’s reverter ordinance. Yet,
in 1979, two days after the defendants obtained C-2 zoning on
all of their property, and two years after the automatic reverter
would have gone into effect, the city manager reviewed the
Westborough file, missed the explicit reference to the exemp-
tion, forgot about its existence even though he was the city
manager at the time the ordinance was enacted, and announced
that, in his opinion, the plaintiffs’ C-4 zoning had reverted to its
prior classification.
It is true that no city official appears to have a direct financial
interest in the West Park Mall, but Drury’s association with the
May defendants may have allowed him to offer the city a
Famous Barr store if the West Park Mall were allowed to
develop according to Drury’s plans, which the plaintiffs in ef-
fect could not.* Or, perhaps the city was interested in Drury’s
right-of-way, which he may have offered the city in exchange
for the ‘‘tacit’’ agreement for a C-4 district in September, 1978.
Under all of these circumstances, giving the plaintiffs the
benefit of the reasonable inferences that may be derived
therefrom, we believe the district court erred in concluding as a
matter of law that no conspiracy existed. The inference that
* Famous Barr is a subsidiary of the May Company. In a February
14, 1979, phone conversation with a May official regarding Drury’s
strategy to obtain the required zoning changes for the West Park Mall,
Drury stated, “*[w]e’ll have to talk to these people quietly—we can’t
bring this out in the open meeting, but * * * if we have to, we'll pro-
duce the letter from Famous saying * * * this is the only site in Cape
Girardeau that they will * * * [locate in].’’ While this conduct alone is
not illegal, it is evidence from which a trier of fact could infer an il-
legal agreement with the city to revert the plaintiffs’ zoning.
—
defendant city officials and the West Park Mall developers con-
spired to deprive the plaintiffs of their legal right to C-4 zoning
and to block their development plans is not an irrational one.
Although the facts in support of such a conspiracy are not con-
clusive, they also are not ‘‘meaningless,’’ as the defendants con-
tend.
In sum, our review of the facts presented thus far convinces
us that the defendants were not entitled to a summary judgment
in their favor under section 1983 or under sections | or 2 of the
Sherman Act. Although the record is not fully developed, we
believe the district court erred in granting summary judgment
on the grounds that there was no official action by the city
regarding the status of plaintiffs’ zoning, that there was no
evidence of a conspiracy, and that there was no evidence that the
actions of the defendants had a detrimental effect on the viability
of the plaintiffs’ project or the value of their leasehold interest.
The city may be liable to the plaintiffs under section 1983 if the
plaintiffs establish at trial that the city acted under color of state
law to deprive them of their property rights without due pro-
cess. See generally Parratt v. Taylor, 451 U.S. 527, 535 (1981).
The West Park Mal! defendants may also be liable under section
1983 if the plaintiffs can prove the existence of a conspiracy
with the city to deprive them of these rights.
Moreover, we cannot say at this stage that the plaintiffs’ an-
titrust claims are wholly without merit. The plaintiffs may
recover under their section 1 Sherman Act claim if they prove at
trial that there was an agreement between the city officials and
the West Park Mall developers which was intended to harm or
unreasonably restrain trade; that as a direct result plaintiffs
have been injured; and that the damages sustained are capable
of reasonable ascertainment and are not speculative or conjec-
tural. Rosebrough Monument Co. v. Memorial Park Cemetary,
666 F.2d 1130, 1138 (8th Cir. 1981), cert. denied, 107 S.Ct. 2915
(1982); Admiral Theatre Corp. v. Douglas Theatre Co., supra,
— A-21 —
585 F.2d at 883-884. The defendants may also be liable under
section 2 of the Sherman Act for a conspiracy to monopolize the
shopping center market if the plaintiffs can establish: (1) the ex-
istence of a conspiracy, (2) overt acts in furtherance of the con-
spiracy, (3) a substantial amount of commerce, and (4) a
specific intent to monopolize.’ See generally 2 Von Kalinowski,
Antitrust Laws and Trade Regulation, § 6.01[1]&[3] (1982); 3
id., § 7.01.
The defendants assert that even if the plaintiffs successfully
prove all the elements of a section 1983 or an antitrust violation,
the district court’s grant of summary judgment should be
upheld because all the defendants were protected from liability
under the Noerr-Pennington and Parker v. Brown doctrines.
We disagree. The Noerr-Pennington doctrine exempts from the
” Count 6 of plaintiffs’ complaint also alleged an illegal monopoly
in violation of section 2 of the Sherman Act. Assuming arguendo that
the regional shopping center market in Cape Girardeau is the relevant
market for antitrust purposes and that Cape Girardeau would only
support one shopping center, the defendants argue that the plaintiffs’
monopolization claim must fail as a matter of law because the West
Park Mall defendants are ‘‘natural monopolists’’ who succeeded
through fair competition. These defendants boldly assert that they
**succeeded simply because they knew what they were doing and plain-
tiffs failed because they didn’t.’’ We rejected the district court’s con-
clusion to this effect above. When the facts are viewed in a light most
favorable to the plaintiffs, there is evidence to support the inference
that the defendants achieved their ‘‘monopoly’’ through ‘‘exclu-
sionary, unfair, or predatory means.’’ Hecht v. Pro-Football, Inc.,
570 F.2d 982, 991 (D.C. Cir. 1977), cert. denied, 436 U.S. 956 (1978).
See Superturf, Inc. v. Monsanto Co., 660 F.2d 1275, 1277, 1279 (8th
Cir. 1981). While ‘‘a natural monopoly market does not of itself im-
pose restrictions on one who actively, but fairly, competes for it,’’ in
this case there is an ‘‘affirmative showing of conduct from which a
wrongful intent can be inferred.’’ Union Leader Corp. v. Newspapers
of New England, Inc., 284 F.2d 582, 584 (Ist Cir. 1960), cert. denied,
365 U.S. 833 (1961) (citations omitted). Hence, the district court erred
in granting summary judgment against the plaintiffs on their illegal
monopolization claim.
=
antitrust laws lobbying and other joint efforts by private in-
dividuals to obtain legislative or executive action. See United
Mine Workers v. Pennington, 381 U.S. 657 (1965); Eastern
Railroad Presidents Conference v. Noerr Motor Freight, Inc.,
365 U.S. 127 (1961). See generally 7 Von Kalinowski, Antitrust
Laws and Trade Regulation, supra, § 46.04. This exemption is
based upon the First Amendment and hence extends to any
legitimate use of the political process by private individuals,
even if their intent is to eliminate competition. United Mine
Workers v. Pennington, supra, 381 U.S. at 670. The plaintiffs
argue the Noerr exemption does not apply in this case because
government officials are alleged participants in the conspiracy.
See Duke & Co. v. Foerster, §21 F.2d 1277, 1281-1283 (3d Cir.
1975). This coconspirator exception has been criticized,
however, see, e.g., Metro Cable Co. v. CATV of Rockford,
Inc., 516 F.2d 220, 229-230 (7th Cir. 1975), and we decline to
base our decision on the presence of the government as a defen-
dant herein.
Rather, we find that the defendants may not be protected by
Noerr because their legitimate lobbying efforts may have been
accompanied by illegal or fraudulent actions. See Sacramento
Coca-Cola Bottling Co. v. Chauffeurs, Teamsters & Helpers
Local 150, 440 F.2d 1096, 1099 (9th Cir.), cert. denied, 404 U.S.
826 (1971); Woods Exploration & Producing Co. v. Aluminum
Co. of America, 438 F.2d 1286, 1296-1298 (Sth Cir. 1971), cert.
denied, 404 U.S. 1047 (1972). The Noerr-Pennington doctrine
was not ‘‘intended to protect those who employ illegal means to
influence their representatives in government.’’ Sacramento
Coca-Cola Bottling Co. v. Chauffeurs, Teamsters & Helpers
Local 150, supra, 440 F.2d at 1099. See generally 7 Von
Kalinowski, Antitrust Laws and Trade Regulation, supra,
§ 46.04[3] at 46-55. In Gorman Towers, Inc. v. Bogoslavsky,
supra, we recognized that actions beyond ‘“‘traditional political
activity’? may not be protected by the Noerr exemption. /d., 626
— A-23 —
F.2d at 615. Because the plaintiffs have presented facts that sup-
port an inference of unlawful conduct—city officials may have
been induced by the May-Drury defendants by means other
than legitimate lobbying to illegally revert plaintiffs’ C-4 zon-
ing—the Noerr doctrine may not be relied upon to support the
district court’s grant of summary judgment. See Federal
Prescription Service, Inc. v. American Pharmaceutical Ass’n,
663 F.2d 253, 266 (D.C. Cir. 1981), cert. denied, 102 S.Ct. 1293
(1982).
We also disagree with the district court’s holding that the
state action exemption established in Parker v. Brown, 317 U.S.
341 (1943), precludes any liability by the defendants as a matter
of law. Parker immunity is intended to exempt from the an-
titrust laws state actions that are anticompetitive in nature.
**(W)here a restraint upon trade or monopolization is the result
of valid governmental action * * * no violation of the [Sherman]
Act can be made out.’’ Eastern Railroad Presidents Conference
v. Noerr Motor Freight, Inc., supra, 365 U.S. at 136. The
Parker doctrine applies to municipal action ‘‘in furtherance or
implementation of clearly articulated and affirmatively expressed
state policy.’ Community Communications Co. v. City of
Boulder, 50 U.S.L.W. 4144, 4147 (1982). Even if zoning in
general can be characterized as ‘‘state action,’’ see Sound, Inc.
v. American Telephone & Telegraph Co., 631 F.2d 1324, 1334
(8th Cir. 1980) (factors relevant to determining ‘‘state action’’),
a conspiracy to thwart normal zoning procedures and to directly
injure the plaintiffs by illegally depriving them of their property
is not in furtherance of any clearly articulated state policy. See
Stauffer v. Town of Grand Lake, 1981-1 CCH Trade Cases
§ 64,029 at 76,330 (D. Colo., October 9, 1980); Mason City
Center Associates v. City of Mason City, 468 F. Supp. 737,
741-744 (N.D. la. 1979). See also Guthrie v. Genesee County,
494 F. Supp. 950, 955-958 (W.D. N.Y. 1980).
Ill.
Finally, we must address plaintiffs’ contentions that the
district court erred in granting summary judgment against them
on their state law claims: Count 5, which alleged a conspiracy to
interfere with plaintiffs’ valid business relationships and con-
tract rights; and Count 7, which challenged the ordinances grant-
ing C-2 and C-4 zoning to the defendants. The district court
dismissed Count 5 by holding that the efforts of the West Park
Mall developers were legitimate business activities and that
plaintiffs’ mall failed because of their poor business skills, not
because of any actions by the defendants. Because of our find-
ing that the district court erred i Making these conclusions as a
matter of law, we also reverse the grant of summary judgment
as to Count 5 of plaintiffs’ complaint. We believe there are gen-
uine issues of material fact as to whether the defendants illegally
conspired to thwart plaintiffs’ efforts to develop Westborough
Mall and whether the reversion of plaintiffs’ C-4 zoning caused
the plaintiffs’ development to fail. As we have previously
stated, we decline to apply the Noerr-Penningion doctrine
under the circumstances of the present case, and, therefore, re-
ject defendants’ argument that it supplies an alternative ground
for upholding the district court’s grant of summary judgment
on this count. Cf. First National Bank v. Marquette National
Bank, 482 F. Supp. 514, 524-525 (D. Minn. 1979), aff'd, 656
F.2d 191 (8th Cir. 1980), cert. denied, 450 US.. 1042 (1981)
(Noerr-Pennington doctrine protects the defendants from
liability on tortious interference claim ‘‘to the extent that plain-
tiffs’ claims are based upon lobbying and litigation activities
[and] there are no genuine issues as to any material facts’’).
Count 7 of plaintiffs’ complaint challenged the
reasonableness of the rezoning of the West Park Mall. The
district court held that the plaintiffs had no standing to challenge
the change in defendants’ zoning and in any case found or-
dinances 1437 and 1369 to be valid. We affirm the district
court’s grant of summary judgment on this count because we
— A-25 —
agree that the plaintiffs lack standing under state law to object
to the ordinances at issue.
Missouri law currently provides that in order to have stand-
ing, the plaintiffs must be aggrieved parties—that is, they ‘‘must
demonstrate a specific and legally cognizable interest in the sub-
ject matter of the [challenged] decision and that [they have]
been directly and substantially affected thereby.’’ Pa/mer v. St.
Louis County, 591 S.W.2d 39, 41 (Mo. App. 1979) (citations
omitted). See Mo. Rev. Stat. § 89.110. Competitive disadvan-
tage alone does not give rise to standing, Schmitt v. City of
Hazelwood, 487 S.W.2d 882, 888 (Mo. App. 1972), and
although plaintiffs’ leasehold is less than one mile from the
West Park Mall, they have failed to demonstrate how the city’s
rezoning of defendant’s property—apart from the reversion of
plaintiffs’ C-4 zoning—affects a protectable interest of the
plaintiffs beyond mere competitive disadvantage. See Palmer v.
St. Louis County, supra, 591 S.W.2d at 41. The plaintiffs’ land
is not directly adjacent, contiguous to, or within sight of defen-
dants’ land. See, e.g., Schweig v. City of St. Louis, 569 S.W.2d
215, 220-221 (Mo. App. 1978) (and cases cited therein).
The harm allegedly suffered by the plaintiffs as a result of the
city defendants’ actions occurred because of the reversion of
their C-4 zoning. Although the fact that defendants’ property
was rezoned is related to the damage to plaintiffs’ interests, the
rezoning alone would not have caused any special injury to
them other than affording them competition. Thus, we affirm
the district court’s grant of summary judgment in favor of all
defendants on Count 7 of plaintiffs’ complaint.’ Because we
agree that the plaintiffs lack standing under current state law,
we need not consider the district court’s rulings on the substan-
tive issues raised by the plaintiffs.
* It has been suggested that Missouri law on the issue of standing
may be undergoing some change. If any such change occurs prior to
the entry of final judgment by the district court, the court is free to
reconsider its decision that plaintiffs lack standing in view of the new
developments in state law.
—_
IV.
In conclusion, we reverse the district court’s grant of sum-
mary judgment on Counts | through 6 of plaintiffs’ complaint.
The district court, in holding that the plaintiffs were not entitled
to judgment on these claims as a matter of law, weighed the
evidence presented without giving the plaintiffs the benefit of
the reasonable inferences that could be made from the facts
presented; genuine issues of material fact preclude summary
disposal of these counts. The district court correctly held that
the plaintiffs lack standing to challenge the West Park Mall
rezoning under current state law and we, therefore, affirm the
grant of summary judgment in favor of all defendants on Count
7 of plaintiffs’ complaint.
A true copy.
Attest:
CLERK, U. S. COURT OF APPEALS, EIGHTH
CIRCUIT.
— A-27 —
APPENDIX B
IN THE UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF MISSOURI
SOUTHEASTERN DIVISION
No. S 80-105 C
Westborough Mall, Inc., a Corporation, George Staples, Jr.,
and Westborough Mall Associates, a Missouri Limited Partner-
ship, by and through George Staples, Jr., its sole general part-
ner,
Plaintifs,
VS.
City of Cape Girardeau, Missouri, a Municipal Corporation,
Paul W. Stehr, Robert K. Herbst, Howard C. Tooke, Samuel
L. Gill, Gail L. Woodfin, W. G. Lawley, Charles L. Drury,
Drury Industries, Inc., a Corporation, May Department Stores
Co., a Corporation, West Park Associates, a Missouri Limited
Partnership, May Centers of Cape, Inc., a Corporation, and
May Centers, Inc., a Corporation,
Defendants.
MEMORANDUM AND ORDER
(Filed October 27, 1981)
This matter is before the Court upon the motions of Charles
L Drury, Drury Industries, Inc. (Drury defendants), the May
Department Stores Company, the May Centers, Inc., the May
Centers of Cape, Inc. (May defendants), Paul W. Stehr, Robert
Herbst, Howard C. Tooke, Samuel L. Gill, Gail L. Woodfin,
W. G. Lawley, the City of Cape Girardeau, Missouri, and West
Park Associates, for summary judgment on each count of plain-
tiffs’ seven count complaint which includes alleged violations of
—
42 U.S.C. § 1983 (Count 1), a conspiracy to violate plaintiffs’
constitutional rights as inade actionable under the same statute
(Count 2), a violation of the Sherman Act, 15 U.S.C. § 1 (Count
3), a violation of 15 U.S.C. § 2 for a conspiracy to monopolize
(Count 4), an alleged conspiracy to interfere with plaintiffs’
valid business relationships (Count 5), a Sherman Act count
against five members of the Cape Girardeau City Council
(Count 6) and the prayer for declaratory judgment and injunc-
tive relief, to-wit: the striking down of two ordinances of the
Cape Girardeau City Council (Count 7) pursuant to Rule 56 of
the Federal Rules of Civil Procedure.
The cause of events which gave rise to this suit surrounded the
failure of one group of developers and the success of another
group in their efforts to build a regional shopping center in
Cape Girardeau, Missouri. Plaintiff, Westborough Mall, Inc.,
is a Missouri corporation which in 1973 leased approximately
sixty seven (67) acres of land in Cape Girardeau, Missouri, at
Bloomfield Road and Missouri Highway 61 (Kingshighway).
George Staples, Jr., a principal of Westborough Mall
Associates, a Missouri limited partnership, was the prime mover
and organizer of the Westborough Mall project which involved
the building and managing of a major retail shopping center on
the above mentioned site. Staples made several attempts to
secure ‘‘anchor’’ tenants for the Mall project—major depart-
ment stores which would enhance the attractiveness of the pro-
ject to other tenants and retail customers. In June of 1974,
Westborough Mall, Inc. was granted C-4 zoning by the City of
Cape Girardeau which provided for the construction of an
enclosed integrated shopping mall containing three major
department store tenants, as well as other small specialty shop
tenants. Staples continued to solicit a supporting commitment
from major department stores but was unsuccessful and shelved
his development plans for approximately two years. In 1976,
Staples formed a limited partnership which raised $800,000 con-
— A-29 —
tributed by various local limited partners in a further effort to
salvage the project.
By mid-1977 Staples arranged for site preparation including
grading work to be done by the Penzel Construction Company
of Jackson, Missouri. Due to unforeseen and substantial rock
formations on the property, the grading project proved to be
considerably more difficult and expensive than had been
originally contemplated. By late 1978 the Penzel Construction
Company was claiming approximately $300,000 owed by
Staples which had not been paid. Soon after the receipt of the
first unpaid bills Staples removed his wife, son and daughter as
general partners of the limited partnership. Penzel asserted
mechanic’s lies against the Westborough Mall property and filed
suit against Westborough Mall Associates in May, 1979 seeking
to collect more than $312,000. This group also was indebted to
the Bank of New Madrid, Missouri in the sum of Two Hundred
Eighty Six Thousand Dollars ($286,000). At this time the part-
nership had no liquid assets and no letters of commitment from
any major tenants.
In June, 1978, Staples had agreed with Penzel Construction
Company that the Company was to construct a shell building on
the site. This contract contained a forfeiture clause which pro-
vided that if financing for the mall had not been arranged by
May 1, 1979 Westborough Mall Associates was to forfeit $5,000
to Penzel. As of that date no commitment had been obtained
for financing and the grading bill had not been paid. Penzel, a
limited partner in Staples’ Westborough Mall Associates, had to
institute a suit against the partnership and Staples in state court
in an attempt to collect the $5,000 penalty and the unpaid
grading bill. Such bill has not been paid to date. In fact, no
substantial, successful preparations had been made at that time,
and no building plans have ever been prepared for any structure
at the Westborough Mall site. In sum, by mid-1979,
——
Westborough Mall had no liquid assets, no major department
store tenants, no building plans, no commitments for financing,
and had past numerous projected target dates promised by
Staples throughout the years. In 1979, Westborough Mall was
no closer to viability than it was in 1973.
The City Manager of Cape Girardeau, Missouri, defendant
W. G. Lawley, was referred to in an article in the April 18, 1979
issue of the Southeast Missourian—a local daily newspaper—as
questioning the validity of Westborough’s C-4 zoning due to a
requirement in the Cape Girardeau zoning code which provided
that construction had to commence within three years of the
grant of C-4 zoning or the zoning would lapse. Lawley later
ordered the zoning maps of the City changed so as to reflect that
C-4 zoning for Westborough Mall had lapsed and instructed the
City Engineer of Cape Girardeau not to issue building permits
for the Westborough site. There exists no evidence at this time
before this Court which would indicate that any of the moving
defendants knew anything of Lawley’s opinion or his acts prior
to the time they were reported in the newspaper, or in any way
prompted him to act as he did. In fact, Lawley was unaware that
the C-4 zoning given to the Westborough Mall site contained an
exemption to this three year requirement, and consequently the
Westborough group actually enjoyed C-4 zoning throughout
this time frame.
Staples argues that this action by Lawley had a substantial
chilling effect on the prospect of the Westborough Mall project
attaining major tenants and financing. Nevertheless, Staples
continued to reassure his partners and armed with his own belief
that Westborough Mall’s C-4 zoning remained in effect and his
attorney’s opinion to that effect, he professed an intention to
proceed with the project as if Lawley had never made his
statements. Staples never petitioned or in any way approached
the City for a clarification or reaffirmation of his C-4 zoning.
— A-31 —
On May 14, 1979 Westborough Mall, Inc. agreed to sell the
leasehold interest it held in the site, yet no sale has ever been ef-
fected.
The Mall eventually built in the City of Cape Girardeau, the
West Park Mall, is located at Route K and Mount Auburn
Road. The site was owned by Drury Industries which in late
1978 entered into a partnership agreement with the May Centers
of Cape, Inc. At the time of the execution of this agreement
there existed no arrangement whereby May Department Store
or Famous Barr, major retail department stores, would be
located in the shopping center. Famous Barr although had ex-
pressed some interest in entering the Cape Girardeau market but
as early as 1976 had decided not to open a store there.
The City Attorney of Cape Girardeau had assured Drury that
a shopping center could actually be constructed on C-2 zoning
and Drury requested the City to rezone to C-2 those portions of
the site which were not already so zoned. When the application
for C-2 zoning was submitted, the finalized layout of the shop-
ping center had not been sufficiently completed in order to file an
application for C-4 zoning. The developers told the City that
C-4 zoning would be requested as soon the plans had become
sufficiently finalized.
Pursuant to governing ordinances, a public hearing was held
before the Planning and Zoning Commission of Cape
Girardeau concerning this C-2 application. This request was
vehemently opposed by Staples and his business associates, but
the Planning and Zoning Commission recommended the ap-
proval of the application. Further, public hearings were held
before the City Council in accordance with the applicable
regulations, and the Council on April 4, 1979 approved the C-2
zoning. A few months later the developers prepared and filed an
application for C-4 zoning, and again after extensive public
hearings before both the Planning and Zoning Commission and
— A-32 —
the City Council, the Council voted to grant C-4 zoning to the
West Park Mall site. The West Park Mall is now largely a reality
with two major anchor tenants and the vast majority of its rent-
able space being occupied.
Counts | and 2 of the amended complaint state a claim for
damages and attorney’s fees under 42 U.S.C. § 1983. Count |
refers only to the City officials and Count 2 to all of the defen-
dants. Count 2 is an allegation that all of the defendants acted
pursuant to an agreement and conspiracy under ‘‘color of state
law to deprive plaintiffs of their rights...secured to them by the
Fourteenth Amendment of the United States Constitution.”
The deprivation of plaintiffs’ rights secured by the due process
and equal protection clauses in the Constitution resulted from
the active subversion of the development of Westborough Mall
while developing the West Park Mall. The acts which con-
stituted this deprivation where the statements of Lawley concern-
ing the lapse of the C-4 zoning of Westborough Mall and the
securing of the City Council’s ordinances 1437(C-2) and
1469(C-4) permitting the development of West Park Mall.
The City Manager’s statement of his own opinion concerning
the lapse of Westborough Mall zoning, in this Court’s view, had
no detrimental effect on Westborough Mall’s development in
light of the Mall’s prior history and potential by April, 1979.
The City had taken no official action with regard to
Westborough Mall zoning. Staples assured all his business
associates that this was merely an individual’s opinion and that
no City Council member had unequivocably stated that
Westborough Mall zoning had in fact lapsed. Furthermore,
upon reviewing all the evidence submitted to this Court upon
this motion, it is clear that there is no indication that any of the
private defendants knew of or in any way solicited Lawley’s opin-
ion concerning the lapse of Westborough Mall’s zoning. Plain-
tiffs’ inability to execute the development of Westborough Mall
— A-33 —
can most certainly be traced to their inability to attract major
financial backing or raise the interest of even one major anchor
tenant. Westborough Mall’s own financial agent, Charles
Green, testified that more than Sixteen Million Dollars
($16,000,000) would be necessary to build the Mall, and that the
group had never so much as filed a loan application due to its in-
ability to attract major tenants. By April, 1979 Westborough
Mall owed Penzel Construction Company over $300,000. Car!
Penzel testified that his company refused to build any structures
until the grading bill was paid. Also Westborough Mall had no
construction contracts let by April, 1979, nor had building plans
been drawn up, and no evidence indicates that Staples and his
group had in its employ anyone capable of doing so. It is
therefore clear to this Court that the Westborough Mall was in
the severe administrative and financial difficulty which assured
its demise long before the difficulties arose which allegedly were
experienced due to the acts of the defendants.
After extensive discovery in this cause including the deposi-
tions of Lawley, the City Engineer, and all the Councilmen
defendants, plaintiffs have been unable to unearth a shred of
evidence linking an improper act of the City defendants to the
private developers’ efforts to build West Park Mall. Also no
evidence of a link between the acts of either group to damages
suffered by plaintiffs has been established.
The allegation that the May and Drury defendants deprived
plaintiffs of due process and equal protection rights by obtain-
ing C-4 commercial zoning for West Park Mall meets its demise
when viewed in light of the decision of the Eighth Circuit Court
of Appeals in Gorman Towers, Inc. v. Bogoslavsky, 626 F.2d
607 (8th Cir. 1980). Gorman Towers dealt with a suit against
various public officials, landowners and a landowner’s attorney
all of whom allegedly conspired to rezone a portion of real
estate from multiple to single family dwellings thereby depriving
a A-34 =
the developers of equal protection under the Fourteenth
Amendment. The Eighth Circuit held in part that the private
citizens and their attorney who sought the change in zoning
were absolutely privileged by the First Amendment in their suc-
cessful attempts to persuade the city officials of Fort Smith,
Arkansas to downzone the property involved and thereby effec-
tively kill a proposed apartment complex. The active opponents
of the housing project pressed upon the Eighth Circuit a theory
of derivative immunity protecting the individual defen-
dants—that immunity derived from the absolute immunity en-
joyed by the city officials, see Harley v. Oliver, 404 F.Supp.
450, 454 (W.D. Ark. 1975), aff’d on other grounds, 539 F.2d
1143, 1145-46 (8th Cir. 1976), and also on a general grounds of
insufficiency of the pleadings, but the Court failed to reach
these issues ‘‘...for we adopt the district court’s holding that the
private citizens and their lawyer were absolutely privileged by
the First Amendment to petition for the zoning amendment that
caused plaintiff’s damages.’ Gorman Towers at 614. The City
and the Councilmen defendants enjoy an absolute federal com-
mon law immunity from suit under 28 U.S.C. § 1983 for the
Eighth Circuit in Gorman Towers held the absolute immunity
enjoyed by state and regional legislators under Lake Country
Estates, Inc. v. Tahoe Regional Planning Agency, 440 U.S. 391
(1979) extended to local legislators. Gorman Towers at 612, 613.
Plaintiffs’ claim of deprivation of equal protection flies in the
face of the facts surrounding the consideration by the Cape
Girardeau City Council and the Cape Girardeau Planning and
Zoning Commission of Ordinances 1437 and 1469 (C-2 and C-4
zoning for West Park Mall) in that the Westborough Mall
developers had every opportunity to oppose West Park Mall’s
petitions for rezoning and indeed exercised every such oppor-
tunity with vigor. After the Westborough group exhausted the
legitimate political means by which they could contest the
rezoning, and all concerned parties were heard, the City Council
— A-35 —
voted to grant West Park Mall the same competitive opportunity
which Westborough had enjoyed for many years, that is C-4
zoning. Any causal link between the failure of the Westborough
Mall project and the West Park Mall rezoning is simply nonexis-
tert. The Westborough group had better than six years to secure
financing, attract major tenants and provide for the construc-
tion of their project prior to the West Park rezoning, but none
of these essential elements of the success of a modern shopping
mall had been secured. It is therefore proper that summary
judgment be granted on Count 2 of plaintiffs’ complaint.
Plaintiffs have further alleged that these private defendants
have conspired to restrain trade in violation of § 1 of the Sher-
man Act, 15 U.S.C. § 1 in Count 3; conspiracy to monopolize
the regional shopping center marketing in the Cape Girardeau,
Missouri metropolitan area in contravention of § 2 of the Sher-
man Act, 15 U.S.C. § 2 in Count 4; and further in Count 6a
violation of the aforementioned statute in a creation of a
monopoly in the operation of a regional shopping center in
Cape Girardeau.
Having recognized above that there exists a total lack of
evidence linking any acts committed by defendants to any of the
statements by Lawley concerning the downzoning of the
Westborough Mall tract, and Staples’ total lack of concern
about such statemients as well as the questionable effect or validity
of such statements, plaintiffs’ claim boils down to its illegal
monopoly creation. This Court further reasons that this claim
must fail since imposing liability on private parties in this in-
stance would undermine their right to petition their legislature
for favorable legislation. This right has been refined and
secured by the Supreme Court in their adoption of Noerr-
Pennington doctrine in Eastern Railroad Presidents Conference
v. Noerr Motor Freight, Inc., 365 U.S. 127 (1961) and United
Mineworkers of America v. Pennington, 381 U.S. 657 (1965).
— A-36 —
This immunity protects even persons having anti-competitive in-
tent in seeking to effectuate legislation favoring their own
economic interests. Further, although the plaintiffs claim to
have been subjected to prejudicial or unreasonable legislative
acts, the facts indicate that the Board of Zoning Commissioners
and the City Council merely voted to extend the same zoning
opportunities to West Park Mall previously enjoyed by the
Westborough Mall project. The decisions were based upon the
substantiated view that the West Park group was simply better
organized, financed, and could more readily deliver on its prom-
ise to build a regional shopping mall in Cape Girardeau if given
an opportunity. Therefore, the acts of these defendants in seek-
ing to obtain through the legislative process an equal opportunity
to that which the Westborough developers had long enjoyed are
not within the scope of the antitrust laws. Finally, in Parker v.
Brown, 317 U.S. 341 (1943), the Supreme Court held that the
Sherman Act does not bind the states and in no way restrains
state acts such as the passage of the ordinances challenged
herein. Even a pure monopoly—if a competition between one
firm and another for the placement of a regional shopping mall
in a specific area can be labeled the establishment of the
monopoly—is immunized if the monopoly is established under
state law. Ladue Local Lines, Inc. v. Bi-State Development
Agency, 433 F.2d 131 (8th Cir. 1970). See also California Retail
Liquor Dealers Association v. MidCal Aluminum, Inc., 445
U.S. 97 (1980).
Pursuant to the guidelines established in the California Retail
case, the state action immunity clearly extends to the zoning or
rezoning powers of the municipalities in Missouri, See State of
Missouri ex rel Ellis v. Liddle, 520 S.W.2d 644 (Mo. App.
1975), § 89.020 et seq. RSMo 1978. This Court would question
the validity of plaintiffs’ argument that this case even concerns a
**monopoly’’ under the antitrust laws. When it is axiomatic to
all parties involved that only one enterprise can succeed in a cer-
a AS? =
tain area due to natural market conditions, costs of production,
and total dollar demand, it can hardly be said that the success of
one enterprise bestows upon the other a cause of action in an-
titrust. This limitation is brought to bear even more heavily in
this case where the private defendants sought only the same
competitive environment—that is the same zoning—as the
plaintiffs had enjoyed for some five years.
The competition which took place between the plaintiffs and
defendants occurred before an open legislative body which af-
forded both parties full rights to express themselves in public
hearings and legitimately determined to give both parties equal
access to the relevant shopping center market. See Hecht v. Pro-
Football, Inc., 570 F.2d 982 (D.C. Cir. 1977), cert. denied 436
U.S. 956 (1978). In sum, there exists no evidence of anti-
competitive conduct by the defendants and therefore as a matter
of law plaintiffs’ monopoly claims must fail.
Plaintiffs Count 5 alleges a conspiracy to interfere with plain-
tiffs’ valid business relationships and expectancies. Plaintiffs set
out the persons with whom these relationships were enjoyed as
only the (potential) tenants of Westborough Mall and ‘‘others’’.
In outlining the elements of the tort of intentional interference
in business relationships in Salomon v. Crown Life Ins. Co.,
536 F.2d 1233 (8th Cir. 1976), the Eighth Circuit held that the
defendants’ behavior in the potential interference must be
without justification. Cases interpreting this requirement in-
cluding Salomon specify that actions taken in defendants’ own
economic interest—absent some wrongdoing—cannot con-
stitute a tortious interference. This requirement clearly provides
for the inevitable conflicts inherent in the free enterprise system.
See Francis Chevrolet Co. v. General Motors Corp., 602 F.2d
227 (8th Cir. 1979). The efforts of the West Park group to build
a shopping mall were justifiable as being legitimate business ac-
tivity and not predatory or directly destructive of the
— A-38 —
Westborough plan. This Court further notes that its finding
that the Westborough Mall project failed not due to the acts of
defendants but rather due to the legitimate competitive suc-
cesses of the West Park group and the inability of plaintiffs to
execute its own business undertaking, Count 5 must also fail as
a matter of law.
Plaintiffs’ amended complaint Count 7 alleges that or-
dinances 1437 and 1469 are void for various reasons. The
Missouri Court of Appeals in Schmitt v. City of Hazelwood,
487 S.W. 2d 882 (Mo. App. 1972) faced a similar question to the
issue herein when it decided whether the operator of a car wash
had standing to challenge a special use permit granted by the city
to allow a competitor to also operate a car wash. The court
reasoned that ‘‘they (zoning ordinances) promulgate a scheme
of development and the municipality and preserve the character
of the neighborhoods and the interest of the public in general.’’,
Schmitt at 888, and upheld the dismissal of the plaintiff’s com-
plaint. The Cape Girardeau Zoning Commission determined
that the effect of the zoning of West Park would not be
detrimental to the public health, safety and morals or general
welfare of the community, the scheme of development of the
community, or threaten the preservation of the character of the
surrounding neighborhood contrary to the public interest. As
the Court noted in Schmitt at 888 ‘‘comprehensive zoning or-
dinances are not intended to confer business monopolies on in-
dividuals’’. This is precisely what Westborough Mall seeks to ef-
fectuate by attack on ordinances 1437 and 1469, and since com-
petitive disadvantage flowing from a zoning ordinance is not the
particular interest which gives rise to standing on behalf of the
disadvantaged firm to challenge that zoning, Count 7 must fail
as a matter of law. See also Palmer v. St. Louis County, 591
S.W.2d 39 (Mo. App. 1979).
A review of the exhibits and documents defendants put forth
which were reviewed by the City Planning and Zoning Commis-
— A-39 —
sion when considering these two requests, fully indicates that in
the course of the hearings held and the presentations made by
all concerned parties, the zoning requests were reviewed in detail
and thoroughly scrutinized. There exists no evidence that any city
official acted with a disregard for the public welfare, in an ar-
bitrary or capricious manner, or in any way advancing their own
personal interests. It cannot be said that these legislative acts
clearly were not even fairly debatable or that an abuse of discre-
tion occurred beyond a reasonable doubt. See Tealin Company
v. City of Ladue, 541 S.W.2d 544 (Mo. banc 1976) and Kellogg
v. Joint Counsel of Women’s Auxiliaries Welfare Assn., 265
S.W.2d 374 (Mo. 1954).
Plaintiffs object to the West Park zoning in that it contradicts
a 1977 ‘comprehensive plan’ for zoning for the City of Cape
Girardeau, that there would exist an adverse impact on traffic
and drainage in the surrounding area, that the passage of the or-
dinance would affect the value of certain property in the City,
that the ordinance would constitute spot zoning, and that defen-
dants were part of a larger illegal scheme or conspiracy. This
Court notes that based upon the deposition testimony submitted
to this Court it is certain that the ‘comprehensive plan’ has
never been adopted by the City and therefore is not binding
upon it. Further, the plan is expressed in terms of goals and op-
tions for future development and is not in itself a zoning code
which would bind the Council when faced with the West Park
Mall zoning applications. There is no evidence that the traffic
and drainage problems which would allegedly arise from the
rezoning would have actually taken place. The decrease in the
value of other land is not a proper or sufficient grounds with
which to overturn a rezoning decision of a city. Treme v. St.
Louis County, 609 S.W.2d 706, 714 (Mo. App. 1980).
Equally frail is plaintiff's argument that these ordinances
constitute spot zoning. The application of West Park Mall and
the zoning of the surrounding areas indicate that the C-2 and
aan ii a
C-4 zoning for the tract did not constitute ‘‘unique treatment
contrary to like property in the same general location’’, Wheeler
v. City of Berkeley, 485 S.W.2d 707, 711 (Mo App. 1972). By its
very nature, all zoning will render a particular parcel distinctive
from surrounding land in terms of its permissible use. But it can
in no way be said that the C-2 and C-4 zoning for the West Park
Mall project was out of line with surrounding lands. In fact,
plaintiff’s argument that this particular tract zoning constituted
spot zoning would be equally applicable to its own site which
enjoyed C-4 zoning since 1974 and was less than a mile away.
With regards to plaintiffs’ allegation that the rezoning or-
dinances were part of a larger illegal scheme as alleged in
previous counts is fatally defective in that after voluminous
discovery being had, there exists no evidence of any such illegal
scheme.
Lastly, plaintiffs’ claims of a denial of due process or a
deprivation of equal protection of the law are not valid grounds
for enjoining the zoning ordinances since these claims
legitimately arise only if these zoning ordinances do not bear a
‘substantial relation to the public help, safety, morals, or
general welfare’’. Village of Euclid v. Ambler Realty Co., 272
U.S. 365, 387 (1926). Since zoning is rationally related to a
legitimate state interest and the two contested ordinances are
not irrational either in their distinction between the West Park
site and other sites nor in its application to the Westborough
Mall and West Park Mall projects, plaintiffs’ equal protection
and substantive due process claims must also fail as a matter of
law. Massachusetts Board of Retirement v. Murgia, 427 U.S.
307 (1976); Williamson v. Lee Optical Co., 348 U.S. 483 (1955)
For the above stated reasons, it is proper that summary judg-
ment be entered on plaintiffs’ seven count complaint.
Dated this 27th day of October, 1981.
/s/ H. Kenneth Wangelin
United States District Judge
— A-41 —
APPENDIX C
UNITED STATES COURT OF APPEALS
FOR THE EIGHTH CIRCUIT
No. 81-2314
September Term, 1982
Westborough Mall, Inc., a Corporation, George Staples, Jr.,
and Westborough Mall Associates, a Missouri Limited Partner-
ship, by and through George Staples, Jr., its sole general part-
ner,
Appellants,
vs.
City of Cape Girardeau, Missouri, a Municipal Corporation,
Paul W. Stehr, Robert K. Herbst, Howard C. Tooke, Samuel
L. Gill, Gail L. Woodfin, W. G. Lawley, Charles L. Drury,
Drury Industries, Inc., a Corporation, May Department Stores
Co., a Corporation, West Park Associates, a Missouri Limited
Partnership, May Centers of Cape, Inc., a Corporation, and
May Centers, Inc., a Corporation,
Appellees.
JUDGMENT
(Filed November 12, 1982)
This appeal from the United States District Court for the
Eastern District of Missouri was considered on a designated
record from the United States District Court and on briefs of
the respective parties and was argued by counsel.
After consideration, it is ordered and adjudged that the judg-
ment of the said District Court in this cause be, and the same is
hereby, reversed in part and affirmed in part.
— A-42 —
It is further ordered that this cause is remanded to the said
District Court for proceedings consistent with this Court’s opin-
ion.
November 12, 1982
Order entered in accordance with opinion:
/s/ Robert D. St. Vrain
Clerk, U.S. Court of Appeals, 8th Circuit.
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UNITED STATES COURT OF APPEALS
FOR THE EIGHTH CIRCUIT
No. 81-2314
September Term 1982
Westborough Mall, Inc., etc., et al,
Appellants,
vs.
City of Cape Girardeau, Missouri, etc., et al,
Appellees.
Appeal from the United States District Court
for the Eastern District of Missouri
It is here ordered by the Court that the attached revised page
27 modifying opinion should be substituted for previous page 27
filed in this Court’s opinion on November 12, 1982.
It is further ordered that petition for rehearing and petition
for rehearing en banc be and is hereby denied.
January 17, 1983
A True Copy:
ATTEST:
Clerk, U.S. Court of Appeals, Eighth Circuit
— po
competition. Thus, we affirm the district court’s grant of sum-
mary judgment in favor of all defendants on Count 7 of plain-
tiffs’ complaint.' Because we agree that the plaintiffs lack stand-
ing under current state law, we need not consider the district
court’s rulings on the substantive issues raised by the plaintiffs.
IV.
In conclusion, we reverse the district court’s grant of sum-
mary judgment in favor of the city and the private defendants
on Counts | through 6 of plaintiffs’ complaint.’ The district
court, in holding that the plaintiffs were not entitled to judg-
ment on these claims as a matter of law, weighed the evidence
presented without giving the plaintiffs the benefit of the
reasonable inferences that could be made from the facts
presented; genuine issues of material fact preclude summary
disposal of these counts. The district court correctly held that
the plaintiffs lack standing to challenge the West Park Mall
rezoning under current state law and we, therefore, affirm the
grant of summary judgment in favor of all defendants on Count
7 of plaintiffs’ complaint.
A true copy.
Attest:
CLERK, U. S. COURT OF APPEALS, EIGHTH
CIRCUIT.
* It has been suggested that Missouri law on the issue of standing
may be undergoing some change. If any such change occurs prior to
the entry of final judgment by the district court, the court is free to
reconsider its decision that plaintiffs lack standing in view of the new
developments in state law.
* We affirm the district court’s grant of summary judgment in
favor of the individual city officials. See Gorman Towers, Inc. v.
Bogoslavsky, 626 F.2d 607, 613-614 (8th Cir. 1980).
2.
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APPENDIX D
U.S. Const. amend. I:
‘Congress shall make no law respecting an establishment
of religion, or prohibiting the free exercise thereof; 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.”’
15 U.S.C. § 1:
‘Every contract, combination in the form of trust or
otherwise, or conspiracy, in restraint of trade or commerce
among the several States, or with foreign nations, is
declared to be illegal ....”’
15 U.S.C. § 2:
‘‘Every person who shall monopolize, or attempt to
monopolize, or combine or conspire with any other person
or persons, to monopolize any part of the trade or com-
merce among the several States, or with foreign nations,
shall be deemed guilty of a felony ....’’
42 U.S.C. § 1983:
**Every person who, under color of any statute, ordinance,
regulation, custom, or usage, of any State or Territory or
the District of Columbia, subjects, or causes to be sub-
jected, any citizen of the United States or other person
within the jurisdiction thereof to the deprivation of any
rights, privileges, or immunities secured by the Constitu-
tion and laws, shall be liable to the party injured in an ac-
tion at law, suit in equity, or other proper proceeding for
redress.”’
—~ oan
Federal Rule of Civil Procedure 56(e):
‘Supporting and opposing affidavits shall be made on per-
sonal knowledge, shall set forth such facts as would be ad-
missible in evidence, and shall show affirmatively that the
affiant is competent to testify to the matters stated therein.
Sworn or certified copies of all papers or parts thereof
referred in an affidavit shall be attached thereto or served
therewith.”’
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.