Allright Colorado, Inc. v. City and County of Denver

• Decision Date: 01 July 1991
• Docket Number: Nos. 89-1379,90-1003,s. 89-1379
• Citation: 937 F.2d 1502
• Parties: 1991-1 Trade Cases 69,484 ALLRIGHT COLORADO, INC.; Continental Airport Parking, Inc.; Ennis, Inc., dba Monaco Parking; Phchodaux Howdy International Group, Inc., dba Premier Parking Inc., Plaintiffs-Appellants, Cross-Appellees, v. The CITY AND COUNTY OF DENVER, a governmental subdivision of State of Colorado dba SMART; John Mrozek, in his capacity as manager of Public Works; George Doughty, in his capacity as director of Aviation of Stapleton, Defendants-Appellees, Cross-Appellants.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1502

937 F.2d 1502

1991-1 Trade Cases 69,484

ALLRIGHT COLORADO, INC.; Continental Airport Parking, Inc.;

Ennis, Inc., dba Monaco Parking; Phchodaux Howdy

International Group, Inc., dba Premier Parking Inc., Plaintiffs-Appellants, Cross-Appellees, v. The CITY AND COUNTY OF DENVER, a governmental subdivision of

State of Colorado dba SMART; John Mrozek, in his capacity

as manager of Public Works; George Doughty, in his capacity

as director of Aviation of Stapleton, Defendants-Appellees,

Cross-Appellants.

Nos. 89-1379, 90-1003.

United States Court of Appeals, Tenth Circuit.

July 1, 1991.

Richard L. Shearer (Langdon J. Jorgensen, with him on the briefs), Calkins, Kramer, Grimshaw & Harring, Denver, Colo., for plaintiffs-appellants, cross-appellees.

Helen Eckardt Raabe, Asst. City Atty. (Dean Speirs, Asst. City Atty., and B. Lawrence Theis, Walters & Theis, with her on the briefs), Denver, Colo., for defendants-appellees, cross-appellants.

Before McKAY, ANDERSON, Circuit Judges, and CHRISTENSEN, ^* District Judge.

STEPHEN H. ANDERSON, Circuit Judge.

Plaintiffs, four corporations which provide remote lot parking and courtesy shuttle bus service to airline customers at Stapleton International Airport ("Stapleton" or "Airport") in Denver, Colorado, appeal the dismissal of their antitrust and 42 U.S.C. Sec. 1983 suit against the City and County of Denver ("Denver" or "City") and two city employees. They alleged that Denver's proposed adoption of new Rules and Regulations imposing certain fees on the operation of their shuttle buses and requiring them to sign certain agreements, in conjunction with other alleged restrictions on plaintiffs' operations at Stapleton, violated section two of the Sherman Act, 15 U.S.C. Sec. 2, as well as the equal protection, due process and commerce clauses of the United

States Constitution and certain provisions of Denver's City Charter. Upon the conclusion of plaintiffs' case in their trial to the court, the district court granted defendants' Fed.R.Civ.P. 41(b) motion to dismiss. Plaintiffs appealed that dismissal, and defendants cross-appealed the district court's refusal to find their actions immune from suit under the antitrust laws. We affirm.

BACKGROUND

Plaintiffs (Allright Colorado, Inc., Continental Airport Parking, Inc., Ennis, Inc. d/b/a Monaco Parking, and Phchodaux Howdy International Group, Inc., d/b/a Premier Parking, Inc.) are Colorado corporations engaged in the business of operating remote parking lots at Stapleton and providing a courtesy shuttle bus service between those lots and the terminals at Stapleton. Allright has been engaged in that business since 1978. The other plaintiffs entered the business in 1985 and 1986. Stapleton is a proprietary enterprise owned and operated by Denver, a governmental subdivision of the State of Colorado. Defendant John Mrozek was the Manager of Denver's Department of Public Works at the time of trial. His duties included the management and operation of the Airport and the public roads adjacent to the Airport. Defendant George Doughty was the Director of Aviation for Stapleton. Doughty's responsibilities included the immediate management and operation of the Airport, including adjacent public roads. Mrozek was Doughty's supervisor.

This case concerns Denver's operation of parking lots and an accompanying shuttle bus service at Stapleton. In its early stages, the shuttle bus parking service at Stapleton was exclusively offered by private parties such as plaintiffs. ¹ In 1983, Denver began operation of Shuttle Lot # 1 with accompanying shuttle bus service. It established Shuttle Lot # 2 in 1984 and Shuttle Lot # 3 in 1985. Shuttle Lot # 1 was dedicated to other uses in 1986. Its shuttle bus service is called SMART (Stapleton Mass Rapid Transit). While SMART and plaintiffs now charge comparable prices for daily parking, evidence at trial showed that in 1985 and 1986, SMART charged somewhat less than plaintiffs.

Initially, plaintiffs had unrestricted access to the Stapleton terminal, using the roads adjacent to the airport. ² Although the evidence was not clear as to exact dates, at some point after plaintiffs commenced business, Denver imposed restrictions on all commercial operators at Stapleton, requiring them to use certain designated commercial lanes and pick-up locations. In late 1984 or early 1985, Stapleton imposed permit fees on plaintiffs' activities at the Airport. SMART buses were exempted from the permit fees. Subsequently, Denver required plaintiffs to use different access routes than its own shuttle buses used, and allocated pick-up locations at the terminal. Plaintiffs allege, and the district court found, that SMART buses have the more favorable pick-up locations. Additionally, the district court found that the routes imposed on plaintiffs' shuttle buses are less favorable. ³ In 1988, Denver installed access gates on the commercial lanes and required all commercial operators to use electronic cards to access the commercial lanes.

In addition to the above restrictions on plaintiffs' activities at Stapleton, Denver has allegedly further disadvantaged plaintiffs by granting to its own SMART buses the exclusive right to advertise on Stapleton property, the exclusive right to use public rights-of-way for signs directing travellers to its own lots, the exclusive right to use the Stapleton information radio to advertise, and a more favorable representation on the Airport directory. The In 1989, defendants took the actions which prompted this lawsuit. By letter dated May 17, 1989, they informed plaintiffs that they planned to adopt new Rules and Regulations which would: (1) impose access fees on commercial operators at the airport, including plaintiffs; and (2) require commercial operators such as plaintiffs to sign permit agreements in which they would consent to pay the new access fees or lose their access cards and be thereby barred from the airport terminal. Denver's own SMART buses would not be required to pay any such fees. The fees were based upon the time spent at the lower level of the Airport terminal building where passengers were picked up. Thus, plaintiffs' shuttle buses incurred added costs if they lingered at the terminal to assure that their buses were always available for travellers. Because it was exempt from the fees, SMART could always have a bus waiting for travellers. The access fee imposed on plaintiffs was approximately 50% higher than that imposed on certain other private shuttle bus operators (i.e. shuttle bus operators between hotels, ski resorts, car rental companies or other comparable businesses and the airport) who use the same commercial lanes and routes. The permit agreement also required plaintiffs to disclose financial information and customer lists to the Manager of Public Works, and imposed certain other allegedly onerous burdens on plaintiffs. The Department of Public Works adopted the Rules and Regulations on June 12, 1989 and they were to take effect on July 1, 1989.

evidence presented at trial established that, during this time period, SMART experienced a significant increase in its share of the remote shuttle bus parking market, whereas plaintiffs experienced a decline. ⁴

Plaintiffs filed this lawsuit on June 20, 1989, alleging that, by all of the above actions, "the City has consistently used its governmental authority and power to systematically bestow unfair and illegal competitive advantages upon SMART, to the detriment and exclusion of the Plaintiffs." Complaint at 5, R.Vol. I Tab 1. Plaintiffs argue that defendants engaged in those activities in order to monopolize or attempt to monopolize the Airport parking market in violation of section two of the Sherman Act, 15 U.S.C. Sec. 2. ⁵ They further allege that the permit and access fees constitute an undue burden on interstate commerce, and that the allegedly unfavorable treatment of plaintiffs violates the due process and equal protection clauses of the Fourteenth Amendment. Finally, they argue that the fees are in fact taxes which were not properly enacted under the City Charter, and that the permit agreements are adhesion contracts invalid as contrary to public policy. They sought injunctive relief, damages and attorneys' fees and costs. ⁶

Defendants filed a Fed.R.Civ.P. 12(b)(6) motion to dismiss, followed by a motion for summary judgment. Trial to the court was held on November 20-22, 1989. At the close of plaintiffs' case, the court granted The court rejected plaintiffs' due process and equal protection claims because it concluded defendants' classification of commercial operators for the purposes of different fee schedules and other disparate treatment satisfied the rational basis test. Plaintiffs do not appear to challenge the dismissal of their interstate commerce claim or their pendent state law claims. The court found against defendants, however, on their claim of immunity under the state action immunity doctrine of Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943). Plaintiffs timely appealed the dismissal of their claims and defendants cross-appealed the court's decision that defendants were not immune from antitrust suit.

                defendants' Fed.R.Civ.P. 41(b) motion to dismiss on the ground that plaintiffs had "shown no right to relief."    It ruled that plaintiffs had failed to establish that there was a dangerous probability of success in monopolizing the relevant market and that defendants had a specific intent to monopolize.  Plaintiffs' attempt to monopolize claim was therefore dismissed.  The court held that plaintiffs' monopolization claim failed apparently because plaintiffs failed to prove monopoly power. 7
                

DISCUSSION

I. State Action Immunity.

Defendants cross-appeal the district court's refusal to hold them immune on state action immunity grounds from an antitrust suit, arguing that the state has expressly authorized local entities to own and operate airports, including all...