MIAMI INTERN. REALTY CO. v. Town of Mt. Crested Butte

• Decision Date: 23 January 1984
• Docket Number: Civ. A. No. 83-K-25.
• Citation: 579 F. Supp. 68
• Parties: MIAMI INTERNATIONAL REALTY CO., Plaintiff, v. TOWN OF MT. CRESTED BUTTE, COLORADO, et al., Defendants.
• Court: U.S. District Court — District of Colorado

579 F. Supp. 68

MIAMI INTERNATIONAL REALTY CO., Plaintiff, v. TOWN OF MT. CRESTED BUTTE, COLORADO, et al., Defendants.

Civ. A. No. 83-K-25.

United States District Court, D. Colorado.

January 23, 1984.

COPYRIGHT MATERIAL OMITTED

B. Lawrence Theis, Walters & Theis, Denver, Colo., Robert F. Hill, and Bobbee J. Musgrave, Hill & Robbins, Denver, Colo., for plaintiff.

Hugh A. Burns, and Phillip S. Figa, Denver, Colo., Harrison F. Russell, Gunnison, Colo., for Crested Butte Mountain Resort, Inc.

Richard P. Slivka, and David L. Dain, Denver, Colo., for Mt. Crested Butte, James Dean, Richard Paynter and Robert Pino.

Ptarmigan Associates, Inc., pro se.

MEMORANDUM OPINION AND ORDER

KANE, District Judge.

Before me are three motions in this complex antitrust and civil rights case: plaintiff's to strike certain defenses and for partial summary judgment, and defendants' to dismiss three of the five claims for relief. The issues presented have been extensively and exhaustively briefed. Since oral argument would add nothing of substance to the delineation of the issues, I am prepared to rule.

FACTUAL BACKGROUND

Miami International is a Florida corporation. In late 1979 it entered into a joint venture agreement with some of the owners of the Eagles Nest Condominiums in Mt. Crested Butte, Colorado. By the terms of the agreement Miami was to market and sell time sharing intervals in the condominiums. Miami sought to effectuate this agreement by both national and local advertising. Its local advertising included in-person solicitations, canned speeches, leaflets, and wine and cheese parties. A great portion of these activities occurred in and about the town of defendant Mt. Crested Butte.

Mt. Crested Butte is not a large town. During the height of the ski season its population is swelled by thousands, many of whom, when not skiing, cluster and congregate in the heart of town. This area, known locally as the base area, has been a source of concern to the citizenry and council for a number of years. Traffic jams, pollution and a lack of proper sidewalks are the most visible problems.

The dispute between Miami and the city fathers can best be understood against the backdrop of exponential growth Mt. Crested Butte area has experienced in the past decade. With that growth came congestion, pollution and questions about the quality of life. The extent and manner in which future growth would be regulated exercised newspapers, politicians, citizens and visitors alike. Not surprisingly, Miami's interval ownership sales techniques were questioned and, in some cases, sharply criticized.

In April, 1982, Miami became concerned about the scope of several uncontested ordinances which might affect its ability to carry out its in-person solicitations. It therefore sought written permission from defendant Dean, Mt. Crested Butte's town manager, to conduct its soliciting in the Mt. Crested Butte base area. On April 6, 1982, however, the Mt. Crested Butte town council ended Miami's uncertainty by passing an anti-solicitation ordinance which made it illegal for anyone to solicit, peddle or hawk anything of value upon certain rights-of-way within the town of Mt. Crested Butte.¹ The right-of-way limitation is significant in this case because the town rights-of-way extend from the property lines on each side of the streets in the base area of the town. The ordinance made it impossible for Miami to continue its local advertising as it had planned.

Miami filed its complaint in this court on January 6, 1983 seeking damages and declaratory and injunctive relief to prevent the city from enforcing its anti-solicitation ordinance. I held an evidentiary hearing on February 9, 1983. Thereafter, I granted the plaintiff's motion for a preliminary injunction and held that defendants could not enforce the 1982 ordinance against Miami. In emergency session on February 15, 1983, Mt. Crested Butte passed an amended ordinance repealing the 1982 ordinance. With fewer restrictions and clearer definitions, the 1983 ordinance prohibited the same conduct as that passed in 1982.² I denied plaintiff's motion to modify the preliminary injunction on March 21, 1983, after hearing additional testimony on February 23, 1983.

In an amended complaint, Miami added as defendants the following entities and individuals: Crested Butte Mountain Resort, Inc., a Colorado corporation which owns and operates the Crested Butte ski area; James Dean, Mt. Crested Butte's town manager; Robert Pino, a member of the town council and a licensed real estate broker associated with defendant Ptarmigan Associates, Inc.; Tim Currin, a licensed real estate broker associated with Ptarmigan Associates, Inc.; and Ptarmigan Associates, Inc.

Against these defendants five claims for relief are made, based upon the following statutory and constitutional provisions: 15 U.S.C. § 1, the Sherman Act; the First Amendment; Article I, § 10 of the Constitution, the Bill of Attainder clause; 42 U.S.C. § 1985(3); and 42 U.S.C. § 1983.

MOTION TO DISMISS

Crested Butte Mountain Resort, Inc. (CBMR) moves to dismiss counts I (Sherman Act), IV (§ 1985(3)), and V (§ 1983). Defendants Mt. Crested Butte, Dean, Paynter and Pino have joined in the motion. For the reasons discussed below, I deny the motion as to count I, grant it and dismiss with prejudice as to count IV, and grant the motion with leave to amend as to count V.

Count I

CBMR's motion to dismiss presents a deceptively narrow issue: Did the restraints purportedly placed on Miami's business of selling time-share intervals substantially and adversely affect interstate commerce so as to confer subject matter jurisdiction on this court?³

To defeat a motion to dismiss for lack of subject matter jurisdiction, a plaintiff must make factual allegations which,

if proved, would sustain each of three underlying findings: (i) the presence of interstate commerce; (ii) the existence of a substantial and adverse effect on interstate commerce; and (iii) the requisite nexus between the challenged activities of defendants and the effect on the relevant channel of interstate commerce.

Cardio-Medical Assoc., Ltd. v. Crozer-Chester Med. Ctr., 552 F.Supp. 1170, 1176 (E.D.Pa.1982). The Tenth Circuit, in a somewhat different formulation, requires a plaintiff to "identify the relevant channels of interstate commerce and their relationship to the challenged activities." Mishler v. St. Anthony's Hosp. Systems, 694 F.2d 1225, 1227-28 (10th Cir.1981). Mishler also makes it clear that motions to dismiss are looked on with disfavor in such situations and should only be granted where a plaintiff can prove no set of facts to show the required effect upon interstate commerce. 694 F.2d at 1227.

As an initial step, Miami must "identify the element or elements of interstate commerce implicated in the case." 552 F.Supp. at 1176. The channels of interstate commerce which Miami identifies include: 1) commerce in interstate financing of real estate; and 2) commerce in the local residential real estate market arising out of the interstate movement of people. With this approach Miami seeks to come within the ambit of McLain v. Real Estate Board of New Orleans, Inc., 444 U.S. 232, 100 S.Ct. 502, 62 L.Ed.2d 441 (1980), and its progeny.

There is a sharp disagreement in the federal courts on whether the interstate movement of people is sufficient a stream of commerce for jurisdictional purposes. In the area of hospital privileges, the better view seems to be that "the travel of patients in interstate commerce is so remote from and incidental to the provision of medical care that it will almost never be a relevant channel of interstate commerce in denial of hospital staff privileges cases." Cardio-Medical, 552 F.Supp. at 1189. This is not the view of the Tenth Circuit. It treats McLain as eliminating any doubt that "an interstate flow of people seeking a purely local service can have a substantial effect on interstate commerce." Crane v. Intermountain Health Care, Inc., 637 F.2d 715, 726 n. 4 (10th Cir.1981) (en banc).

Permitting the interstate flow of people to be considered as a channel of interstate commerce in the real estate area is more defensible, in my view, than in the area of hospital privileges. Travel in interstate commerce is far more likely to result in the purchase of local real estate than in the use of local medical services. This is so whether the travel is one-way or for vacation. Out of state financing and interstate travel as channels in interstate commerce have been relied upon in a number of real estate related cases. United States v. Foley, 598 F.2d 1323, 1330-31 (4th Cir.1979); Mortensen v. First Federal Savings and Loan Ass'n, 549 F.2d 884, 887-88 (3rd Cir. 1977); Bartleys Town and Country Shops, Inc. v. Dillingham Corp., 530 F.Supp. 499 (D.Haw.1982); Stauffer v. Town of Grand Lake, Colo., 1980-81 Trade Cas. (CCH) ¶ 64,029 (D.Colo.1980) (Arraj, J.). I therefore accept for the purpose of this motion the presence of interstate commerce.

Next I must determine if there is a nexus between the challenged activities of the defendants and interstate commerce, such that there is a substantial and adverse effect on interstate commerce. The parties do not agree on the proper standard of my review of the complaint and the facts in it. I do not think, however, that Miami must make a particularized showing of the nexus between the challenged activities and interstate commerce. Nor must Miami show that its activities directly induced the flow of interstate commerce. Crane v. Intermountain Health Care, Inc., 637 F.2d 715 (10th Cir.1981) (en banc).

Miami primarily challenges the passing of the 1982 anti-soliciting ordinance, which made it impossible to do in-person solicitations in the Mt. Crested Butte base area. Additionally, Miami alleges that the defendants have:

threatened to arrest and on one occasion in fact did arrest Plaintiff's agents for various alleged violations of

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