Scott v. City of Sioux City, Iowa

• Citation: 736 F.2d 1207
• Decision Date: 08 June 1984
• Docket Number: No. 83-1934,83-1934
• Parties: 1984-1 Trade Cases 66,050 Gene P. SCOTT, Joyce A. Scott, Arnold W. Madsen, Mary G. Madsen, John A. Connolly, Frank Fitch, As Trustees of the John L. Connolly Trust, Appellants, v. CITY OF SIOUX CITY, IOWA, Metro Center, Inc., George Cole, Margaret Prahl, William Gross, Loren Callendar, Thomas Lindblom, Donald L. Lawrenson, Larry Clausen and Jan Albertson, Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

Page 1207

736 F.2d 1207

1984-1 Trade Cases 66,050

Gene P. SCOTT, Joyce A. Scott, Arnold W. Madsen, Mary G Madsen, John A. Connolly, Frank Fitch, As Trustees of the John L. Connolly Trust, Appellants, v. CITY OF SIOUX CITY, IOWA, Metro Center, Inc., George Cole Margaret Prahl, William Gross, Loren Callendar Thomas Lindblom, Donald L. Lawrenson Larry Clausen and Jan Albertson, Appellees.

No. 83-1934.

United States Court of Appeals, Eighth Circuit.

Submitted Feb. 14, 1984.

Decided June 8, 1984.

Lance A. Coppock, Edward W. Remsburg, Ahlers, Cooney, Dorweiler, Haynie & Smith, Des Moines, Iowa, for appellees, City of Sioux City, Iowa and council members; James Abshier, City Atty., Sioux City, Iowa, of counsel.

David E. Vohs, William L. Heubaum, Bikakis, Heubaum, Titus, Vohs & Storm, Sioux City, Iowa, for appellants.

Before LAY, Chief Judge, and HEANEY and BOWMAN, Circuit Judges.

HEANEY, Circuit Judge.

The appellants, owners of land near the southern city limits of Sioux City, Iowa, challenge the district court's grant of summary judgment to the defendant city and its council members in their action under the federal antitrust law, 15 U.S.C. Secs. 1 and 2; the Civil Rights Act, 42 U.S.C. Sec. 1983; and the Iowa Competition Law, Iowa Code Ann. Sec. 553.4 (West Supp.1983). The city council passed zoning ordinances which allegedly prevented the appellants from commercially developing their land on the city's periphery. The appellants allege the ordinances were the product of an agreement between the council and a downtown developer, Metro Center, Inc., to prevent competition with planned downtown redevelopment. The district court held that the city and its council were immune from antitrust liability under the state action doctrine; that the council members had absolute legislative immunity from the action brought under section 1983; and that the constitutional claims against the city were legally unsupportable. We affirm.

I. BACKGROUND

Iowa passed an urban renewal law in 1957, Iowa Code Ann. Secs. 403.1-403.20 (West 1976). The stated policy of that statute is to halt the physical decay of Iowa cities and the accompanying growth of urban social problems. The statute provides that each local government may formulate a workable program for using private and public resources to further urban renewal goals. Every city has the authority to prepare, adopt and revise from time to time a general plan for the physical development of the municipality as a whole. Section 403.6 delegates to every municipality the "powers necessary or convenient to carry out and effectuate the purposes and provisions of the urban renewal law," id. at Sec. 403.6, including the power to execute contracts for redevelopment, and to "zone or rezone any part of the public body," id. at Sec. 403.12(1).

Sioux City officials and businesses have been increasingly concerned with downtown development since the mid-1960's. In 1964, a committee of downtown businesses and community leaders submitted a plan to the city council evaluating alternatives for maintaining a viable business climate in the city. The city council appointed a Central City Committee to formulate recommendations for orderly development of the central business district. The city applied for At the time the city council contracted with Metro Center, its president was Howard Weiner who had been a member of the Sioux City Council from January of 1973 to November 7, 1973. Weiner lost his bid for re-election to the city council and became president of Metro Center three weeks later. Metro Center submitted the sole bid to redevelop three parcels in the CBD-W. Its proposal included plans for a major hotel, department stores, a convention center and related commercial development. Under the redevelopment contract, the city was obligated to obtain federal grants for the CBD-W area, secure real estate, clear the property for redevelopment, and provide streets, sidewalks, street lights and other urban utilities. In return, Metro Center was obligated to purchase the property from the city, build the commercial facilities it had proposed, procure financing and secure tenants.

funds from the federal government to prepare a General Neighborhood Renewal Plan encompassing 215 acres and to plan a three-block total clearance project know as Central Business District-East (CBD-E). Eventually, the city acquired real estate in the CBD-E, offered it for redevelopment to private parties, and issued bonds for the construction of parking garages and other improvements. Meanwhile, an eleven-block area adjacent to the CBD-E was also targeted for redevelopment and designated the Central Business District-West (CBD-W). The city applied for federal assistance to survey and plan this area in 1966 but did not receive the funds until 1971. The city thereafter proceeded with active redevelopment of the CBD-W and entered into redevelopment agreements with a private developer, Metro Center, Inc., ¹ in February of 1974.

The appellants acquired their property along the southern limits of Sioux City in 1962. In 1966, the city annexed the property and apparently zoned it to permit commercial development. In May of 1974, soon after the city entered into the contract with Metro Center, the appellants sold 19 acres of this land to General Growth Properties, a real estate development company, for the development of a regional shopping center. The appellants retained approximately 70 acres of adjoining land which they allege they planned to develop commercially to take advantage of business drawn to the regional shopping center. As part of the purchase agreement, the appellants agreed to construct roads to facilitate the area development. When the transaction was complete, the parties publicly announced General Growth's plans to develop a regional shopping center.

The prospect of a regional shopping center competing for commercial tenants with the downtown project concerned Weiner, the president of Metro Center. Weiner states in his deposition that he talked to council members about the importance of limiting commercial development outside the downtown and specifically about the threat posed by General Growth's plan for a regional shopping center. On July 22, 1974, the city council enacted the Interim Development Ordinance which temporarily suspended unplanned development within the city pending the completion of the Plan and Zoning Commission's comprehensive review of the general plan and zoning ordinance. The interim ordinance did not change any zoning classifications, but it restricted the issuance of building permits, approval of site plans in designated areas, and certain types of residential and commercial development.

In November, 1975, appellant Gene Scott requested a "preplat" conference with the planning department and an informal review of the proposed development of his property under the Interim Development Ordinance. The Community Development Director advised the council that the request was in conflict with the provisions and policy of the interim ordinance. On February 17, 1976, the city council granted a conditional variance for preparation of a grading plan only. Scott never applied for a building permit or variance under either the interim ordinance or the permanent ordinance enacted by the city council on August 2, 1976. The permanent ordinance The appellants filed their original complaint on January 19, 1979. The complaint alleged violations of the Sherman Act, 15 U.S.C. Secs. 1 and 2, and was amended December 3, 1981 to allege a violation of the Civil Rights Act, 42 U.S.C. Sec. 1983. The appellants contended that the city and its council members conspired with Weiner and Metro Center to prevent the appellants from developing their land around General Growth's planned regional shopping center. On December 15, 1982, the district court rejected the defendants' first motion for summary judgment holding that the state action immunity doctrine of Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943), did not shield the municipal defendants and that, in view of this Court's decision in Westborough Mall v. City of Cape Girardeau, 693 F.2d 733 (8th Cir.1982), cert. denied, --- U.S. ----, 103 S.Ct. 2122, 77 L.Ed.2d 1303 (1983), appellants' civil rights claim presented a question for the jury. On May 3, 1983, the court also denied a renewed motion for summary judgment in which the defendants contended that the Iowa Urban Renewal Law provided state authorization sufficient to trigger state action immunity. The court subsequently reconsidered that denial in light of our then-recent opinion, Gold Cross Ambulance & Transfer v. City of Kansas City, 705 F.2d 1005 (8th Cir.1983), cert. filed, 52 U.S.L.W. 3039 (1983), and granted the defendants' summary judgment motion on June 17, 1983. This appeal followed.

also left appellants' property with a zoning classification that does not allow for the development of a regional shopping center and other retail commercial developments.

II. ANTITRUST CLAIMS

The initial issue in this case is whether the state action doctrine shields the municipal defendants from liability for violations of the federal antitrust laws. ²

A. State Action Doctrine.

The Supreme Court established state action immunity from the federal antitrust laws in Parker v. Brown, supra, 317 U.S. at 350-351, 63 S.Ct. at 313. It held a California marketing program enacted by the state legislature was exempt from challenge under the Sherman Act because the program "derived its authority from the legislative command of the state." Id. at 350, 63 S.Ct. at 313. Because neither the Sherman Act itself nor its history suggested an intent to restrain state legislative action, the Court declined to extend the reach of antitrust liability to include such action:

In a dual system of government in which, under the Constitution, the states are sovereign, save only as Congress may constitutionally...