Builders Flooring Connection, LLC v. Brown Chambless Architects, LLC

• Decision Date: 16 January 2014
• Docket Number: CIVIL ACTION NO. 2:11cv373-MHT (WO)
• Parties: BUILDERS FLOORING CONNECTION, LLC, Plaintiff, v. BROWN CHAMBLESS ARCHITECTS, LLC; et al., Defendants.
• Court: U.S. District Court — Middle District of Alabama

BUILDERS FLOORING CONNECTION, LLC, Plaintiff, v. BROWN CHAMBLESS ARCHITECTS, LLC; et al., Defendants.

CIVIL ACTION NO. 2:11cv373-MHT (WO)

DISTRICT COURT OF THE UNITED STATES FOR THE MIDDLE DISTRICT OF ALABAMA, NORTHERN DIVISION

DONE: January 16, 2014

OPINION AND ORDER

Plaintiff Builders Flooring Connection, LLC filed this action against defendant Wanda C. Blake and others, asserting a violation of the Sherman Antitrust Act, 15 U.S.C. § 1 et seq., as well as state-law claims of interference with business relations and misrepresentation. Blake is named in the antitrust count and one count of interference with business relations. Jurisdiction is proper under 28 U.S.C. §§ 1331 (federal question) and 1367 (supplemental).

This matter is now before the court on Blake's motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(1) and (6), based on (1) state-action immunity from the antitrust laws; (2) Eleventh Amendment immunity; and (3) Alabama state-sovereign immunity. The motion will be granted as to the antitrust claim and denied as to the only state-law claim against her.

I. MOTION-TO-DISMISS STANDARD

In considering a motion to dismiss, the court accepts the plaintiff's allegations as true, Hishon v. King & Spalding, 467 U.S. 69, 73 (1984), and construes the complaint in the plaintiff's favor, Duke v. Cleland, 5 F.3d 1399, 1402 (11th Cir. 1993). See also Sea Vessel, Inc. v. Reyes, 23 F.3d 345, 347 (11th Cir. 1994) (for the purposes of a "facial attack on the complaint" under rule 12(b)(1), "the allegations in [the] complaint are taken as true") (internal quotation marks omitted).

II. BACKGROUND

This case arises out of a dispute over bidding for flooring contracts. The plaintiff, Builders Flooring, alleges that a competitor, defendant Weiss Flooring, Inc., as well as its owner, defendant Robert P. Weiss, colluded with various architecture firms and individual architects, also named as defendants, to fix the bidding process to ensure Weiss Flooring would be awarded contracts for flooring projects.

Builders Flooring also alleges that Blake, vice-chancellor of financial affairs for Auburn University Montgomery ("AUM"), conspired with the other defendants "to rig the bid specifications so that Weiss Flooring would receive a substantial advantage toward being awarded the contracts." First Am. Compl. (Doc. No. 75) at 6. Specifically, Builders Flooring alleges that Blake conspired with defendant architecture-firm Goodwyn, Mills & Cawood, Inc. to rig the specifications for renovations at various AUM buildings. Id. at 9, 10.Blake was named in Count 1 (antitrust) and Count 3 (interference with business relations) of the first amended complaint.¹

The defendants moved to dismiss the case on the ground that the allegations in the complaint were insufficient to state a plausible claim for relief. The court summarily denied those motions. Blake also moved to dismiss on immunity grounds. The court initially denied that motion as well, and, after she filed a motion for reconsideration and to stay, Blake appealed the denial. Because the motion for reconsideration was pending, the court of appeals suspended the appellate case; it hassince been dismissed as moot. The court granted Blake's motion for reconsideration, vacated the denial of her motion to dismiss, and reinstated the motion to dismiss. The court subsequently heard oral argument on Blake's defense of immunity and requested supplemental briefing. The matter of Blake's entitlement to immunity is now ready for resolution.

III. DISCUSSION

As to the antitrust claim, Blake argues that she is immune under both the specific doctrine of state-action immunity from antitrust laws. As to the single state-law claim against her, she argues she is immune under the Eleventh Amendment and Alabama state-sovereign immunity, Ala. Const. Art. I, § 14. Finally, if the antitrust claim is dismissed, Blake argues that the court should decline to exercise its supplemental jurisdiction over her as to any remaining state-law claim.

A. Parker Antitrust Immunity

Blake first argues that she is entitled to "state-action" immunity from the federal antitrust laws as to Count 1. This so-called "Parker" immunity is grounded in Parker v. Brown, 317 U.S. 341 (1943). In Parker, the Supreme Court considered a challenge under the Sherman Act to a California regulatory program aimed at restricting competition among growers in order to maintain prices. 317 U.S. at 346. The Court rejected the argument that this regulatory scheme violated the Sherman Act. The Court concluded that the State "as sovereign" had "imposed the restraint as an act of government which the Sherman Act did not undertake to prohibit." Id. at 352. In other words, Parker immunity exempts from federal antitrust regulation any action that a State undertakes as sovereign. See F.T.C. v. Phoebe Putney Health Sys., Inc., 133 S. Ct. 1003, 1010 (2013) ("the Act should not be read to bar States from imposing market restraints 'as an act of government'") (quoting Parker, 317 U.S. at 352).

Blake argues that she is entitled to Parker immunity. As the complaint alleges, she was at all relevant times the vice-chancellor of financial affairs for AUM. First Am. Compl. (Doc. No. 75) at 4. She provided bid specifications for buildings and renovations, including the specifications for renovations that Builders Flooring alleges she rigged. Id. at 4, 9, 10. It is well established that AUM, as a public university, is an arm of the State of Alabama. See Cardwell v. Auburn Univ. Montgomery, 941 F. Supp. 2d 1322, 1328 (M.D. Ala. 2013) (Fuller, J.), and cases cited. Thus, Blake argues, her actions as alleged were acts of the State of Alabama, and she therefore is entitled to the State's Parker immunity.

Blake's argument finds strong support in Saenz v. Univ. Interscholastic League, 487 F.2d 1026, 1027 (5th Cir. 1973).² In Saenz, the plaintiff sued the University Interscholastic League ("UIL") and the State Director ofits Slide Rule Contest, a Mr. Lenhart. Saenz had wanted to enter his "Accuraspeed" slide rule in the contest and alleged that Lenhart "defined UIL regulations arbitrarily to exclude the Accuraspeed slide rule." Id. Saenz also sued a competitor, Ridgeway, which was allowed to enter the contest. Saenz alleged that his exclusion "stemmed from the defendants' conspiracy to thwart Accuraspeed's potential competition with Ridgway's product and originated in a financial relationship between Ridgway and Lenhart." Id. In other words, Saenz alleged that Lenhart personally conspired to rig the UIL's regulations in order to benefit Ridgway. Similarly, in this case, Builders Flooring has alleged that Blake personally conspired to rig the bid specifications in order to benefit Weiss Flooring.

The former Fifth Circuit Court of Appeals granted Parker immunity to UIL and Lenhart. It concluded that the UIL, "[a]s an integral part of the University of Texas at Austin," constituted "a governmental entity outside theambit of the Sherman Act." Id. at 1028. The court found that, "This shield of immunity, of course, is not limited to governmental agencies alone but extends as well to officers or agents of the State." Id. (citing Parker, 317 U.S. at 350-51). "As the state director of the UIL's Slide Rule Contest," the court continued, "Lenhart was clearly acting within the scope of his duties in determining that Saenz's Accuraspeed failed to meet the requirements of a 'standard slide rule' and in submitting this decision to the UIL's Legislative Committee for ratification." Id.

Saenz is factually and legally directly on point in this case. As noted above, AUM, like UIL, is part of the State. See Cardwell, 941 F. Supp. 2d at 1328. Therefore, under Saenz's rule, AUM shares in the State's Parker immunity. Similarly, Builders Flooring has conceded that its suit arises out of Blake's actions as vice-chancellor. Therefore she, like Lenhart, is entitled to share in AUM's immunity.

This conclusion is only bolstered by the fact the university officer in Saenz, like Blake, was accused of a private conspiracy to rig the rules for some personal motive. Despite that alleged malfeasance, the Saenz court granted Lenhart immunity; therefore, Builder Flooring's allegation that Blake privately conspired with the architects does not affect her entitlement to immunity. If Saenz is good law, then Blake is immune.

Builders Flooring does not dispute that Saenz is on point; instead, it argues that subsequent developments (both by the Supreme Court and the Fifth and Eleventh Circuits) have established that only the legislatures and supreme courts of States are ipso facto entitled to immunity; all others must make the additional showing of at least a clearly articulated and affirmatively expressed state policy. Builders Flooring therefore argues that Saenz is no longer good law.

The court is sympathetic to Builders Flooring's argument. Saenz was decided 40 years ago, prior to nearlyall of Parker's progeny; and, even at that time, the court granted immunity without engaging in any significant legal analysis. In the intervening years, the Supreme Court has addressed Parker immunity in a variety of circumstances and has articulated three different analyses for the applicability of Parker immunity.

First, the Supreme Court has granted ipso facto immunity, with no further analysis required, in very limited circumstances: only where the challenged action was undertaken by the State's legislature or supreme court, acting in a legislative capacity. See Hoover v. Ronwin, 466 U.S. 558, 567-68 (1984) ("under the Court's rationale in Parker, when a state legislature adopts legislation, its actions constitute those of the State and ipso facto are exempt from the operation of the antitrust laws," and "a state supreme court, when acting in a legislative capacity, occupies the same position") (citation omitted). Second, in the case of private parties who seek to shield their anticompetitive conductin Parker immunity, the Court has...