601 F.2d 1040 (9th Cir. 1979), 77-1017, City of Rohnert Park v. Harris

Docket Nº:77-1017.
Citation:601 F.2d 1040
Party Name:CITY OF ROHNERT PARK, a municipal corporation, Plaintiff-Appellant, v. Patricia Roberts HARRIS, as Secretary of the United States Department of Housing and Urban Development, City of Santa Rosa, a municipal corporation, Urban Renewal Agency of the City of Santa Rosa, a public body, corporate and politic, and Ernest W. Hahn, Inc., a California Corpo
Case Date:July 24, 1979
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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601 F.2d 1040 (9th Cir. 1979)

CITY OF ROHNERT PARK, a municipal corporation, Plaintiff-Appellant,

v.

Patricia Roberts HARRIS, as Secretary of the United States

Department of Housing and Urban Development, City of Santa

Rosa, a municipal corporation, Urban Renewal Agency of the

City of Santa Rosa, a public body, corporate and politic,

and Ernest W. Hahn, Inc., a California Corporation,

Defendants-Appellees.

No. 77-1017.

United States Court of Appeals, Ninth Circuit

July 24, 1979

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[Copyrighted Material Omitted]

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Wm. M. Brinton, San Francisco, Cal., for plaintiff-appellant.

Carl D. Lawson, Washington, D. C., Wm. N. Willens, Torrance, Cal., Richard E. Brandt, Sacramento, Cal., John J. Powers, III, Washington, D. C., for defendants-appellees.

Appeal from the United States District Court for the Northern District of California.

Before WRIGHT and KILKENNY, Circuit Judges, and PFAELZER, [*] District Judge.

EUGENE A. WRIGHT, Circuit Judge:

The court's opinion of May 9, 1979 has been withdrawn. The appellant's petition for rehearing and suggestion for rehearing en banc have been denied. The following replaces the court's earlier disposition.

The City of Rohnert Park sought to enjoin the appellees, City of Santa Rosa, the Urban Renewal Agency of Santa Rosa (Agency), the Department of Housing and Urban Development (HUD), and Ernest W. Hahn, Inc. from developing a regional shopping center as part of an urban renewal project. Rohnert Park asserted that the shopping center project violated §§ 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2 (West Supp.1978), as a restraint of trade and as the product of an alleged conspiracy or attempt to monopolize retail merchandise space in the Santa Rosa trade area. The plaintiff also alleged that Santa Rosa sold the urban renewal land, with HUD approval, at less than fair value in violation of the Housing and Development Act of 1965, 42 U.S.C. § 1460(c)(4) (1969).

Upon the appellees' motions for summary judgment, the district court found that Rohnert Park had failed to substantiate its antitrust allegations. Rohnert Park appeals.

FACTS

Rohnert Park and Santa Rosa, located within seven miles of one another, each wanted to develop a regional shopping center. Rohnert Park's master plan, adopted in 1966, designated areas within its boundaries

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as a commercial zone. The facilities proposed for the zone included a regional shopping center. The city owns two parcels within the commercial zone. Through the use of special assessment funds, it has improved the zone to render it suitable for development.

Santa Rosa's regional shopping center plan is part of an urban renewal and redevelopment project in the downtown area. The original urban renewal site, developed pursuant to the California Community Redevelopment Law, Cal. Health & Safety Code § 33000, Et seq. (West 1973), was expanded after an earthquake created additional blighted land in need of redevelopment.

Hahn was selected to develop the project. A tentative agreement entered into by the Agency and Hahn prescribed the terms of sale and conditions of development. In consideration for the site, Hahn agreed to pay $2 million, to construct and maintain parking facilities at its expense, and to make them available to the public.

Following the Agency's tentative agreement with Hahn, this suit was filed together with others, including a validating proceeding brought by Codding Enterprises 1 in state court. See Codding Enterprises, et al. v. Urban Renewal Agency of the City of Santa Rosa, et al., Nos. 79465, 79762, 81799, 84237 (Sonoma County Superior Court, unpublished opinion filed Dec. 7, 1976), Rev'd and remanded in part, 1 Civil 41188 (Ct.App., unpublished opinion filed Apr. 26, 1978), Hearing denied, (Sup.Ct., June 28, 1978). 2 In the validating proceeding, the superior court held, Inter alia, that there were no state antitrust violations and that the sale price set forth in the tentative agreement was fair and equitable and not in violation of 42 U.S.C. § 1460(c) (4). That holding was not disturbed on review by the state court of appeals.

THE ANTITRUST VIOLATIONS

In this suit, Rohnert Park alleges that the appellees engaged "in a scheme to develop a regional shopping center" in violation of federal antitrust laws. 3 The district court granted summary judgment for the appellees on the ground that the plaintiff failed to show material facts from which a trier of fact could find ongoing violations of the antitrust laws.

We need not reach the question whether summary judgment was appropriate on that ground. We conclude, instead, that the district court should have dismissed the action because Rohnert Park lacked standing.

Rohnert Park did not seek damages for the alleged antitrust violations. It sought only injunctive relief under § 16 of the Clayton Act, 15 U.S.C. § 26 (West Supp.1978). That section provides in pertinent part:

Any person, firm, corporation, or association shall be entitled to sue for and have injunctive relief, in any court of the United States having jurisdiction over the parties, against threatened loss or damage by a violation of the antitrust laws, . . . when and under the same conditions and principles as injunctive relief against threatened conduct that will

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cause loss or damage is granted by courts of equity, . . .

In State of Hawaii v. Standard Oil Company of California, 431 F.2d 1282, 1284-85 (9th Cir. 1970), Aff'd, 405 U.S. 251, 92 S.Ct. 885, 31 L.Ed.2d 184 (1972), we noted that the standing requirements under § 16 of the Clayton Act are broader than those under § 4 of the Act, which provides for recovery of treble damages only by a party injured in his business or property by reason of an antitrust violation. 15 U.S.C. § 15 (1973).

To have standing under § 16, a plaintiff must show (1) a threatened loss or injury cognizable in equity (2) proximately resulting from the alleged antitrust violation. Buckley Towers Condominium, Inc. v. Buchwald, 533 F.2d 934, 938 (5th Cir. 1976), Cert. denied, 429 U.S. 1121, 97 S.Ct. 1157, 51 L.Ed.2d 571 (1977); In Re Multidistrict Vehicle Air Pollution M. D. L. No. 31, 481 F.2d 122, 130 (9th Cir.), Cert. denied, Morgan v. Automobile Mfgrs. Ass'n, 414 U.S. 1045, 94 S.Ct. 551, 38 L.Ed.2d 336 (1973). 4

Rohnert Park alleges that if a regional shopping center is constructed as part of the Santa Rosa urban renewal project, it will discourage the development of a similar center in Rohnert Park. Relying upon In Re Multidistrict, 481 F.2d at 130-31, it argues that this threatens injury to interests cognizable in equity, for which it is entitled to § 16 relief.

In In Re Multidistrict we discussed two types of interests which can confer § 16 standing upon a state: the interests of citizens asserted by the state as Parens patriae and the state's own proprietary interests. We found that plaintiff states had standing as Parens patriae to seek equitable relief under § 16 in a suit alleging a conspiracy by the automobile industry to suppress antipollution technology.

Rohnert Park essentially asserts standing here as Parens patriae on behalf of its property owners, taxpayers, and inhabitants who might be injured by the loss of investment profits and tax revenues if the center is not built in Rohnert Park. Its argument fails because "political subdivisions such as cities and counties, whose power is derivative and not sovereign, cannot sue as Parens patriae, . . ." In Re Multidistrict, 481 F.2d at 131.

Political subdivisions may, however, "sue to vindicate such of their own proprietary interests as might be congruent with the interests of their inhabitants." Id. Rohnert Park asserts two such proprietary interests. First, it contends that it acted in a proprietary capacity in raising and disbursing the special assessment funds used to improve the commercial zone. It cites no authority supporting the contention that this is a sufficient proprietary interest under § 16, and we decline to so hold. 5

Second, Rohnert Park argues that as the owner of property within the commercial zone, it possesses the requisite proprietary interests. Part of that property, however, is designated as a library site and the remainder

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had been set aside for expansion of a waste water facility. It is not clear from the record whether any of this land will be available for commercial use or whether its value will be affected by the location of the regional shopping center.

Because it cannot assert the interests of its citizens, and its own proprietary interest is speculative, Rohnert Park fails to show an interest cognizable in equity, the first requirement for standing under § 16. Even if it could establish such an interest, it fails to meet the second requirement for § 16 standing. It has shown...

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