Oberndorf v. City and County of Denver
| Decision Date | 29 March 1990 |
| Docket Number | 88-2928,Nos. 88-2599,s. 88-2599 |
| Citation | 900 F.2d 1434 |
| Parties | 1990-1 Trade Cases 68,979 Donald OBERNDORF; Leo Stern; Harry Paul Wertheimer; Carol Brodie, Trust Administrator for Edith O. Wertheimer Trust; Dottie Hammel; and Block 173 Associates, a Colorado General Partnership, Plaintiffs-Appellants, v. The CITY AND COUNTY OF DENVER: The City Council of the City & County of Denver, by its council members of the City Council (not as individuals but as members of the City Council), T.J. Hackworth, J.L. Sandos, Stephanie A. Foote, Paul L. Swalm, John J. Silchia, Nieves Peres McIntire, Hiawatha Davis, Jr., Salvadore Carpio, Cathy Donohue, William R. Roberts, Robert L. Crider, Cathy Reynolds, William A. Scheitler: The Denver Urban Renewal Authority; Federico Pena, as Mayor of the City and County of Denver: and BCE Development Properties, Inc., a Colorado corporation fka Oxford Properties, Inc., Defendants-Appellees. |
| Court | U.S. Court of Appeals — Tenth Circuit |
James A. Clark, Baker & Hostetler (Bruce D. Pringle and Theodore Shih of Baker & Hostetler, Kenneth L. Starr and Michael Touff of Holmes & Starr, with him, on the briefs), Denver, Colo., for plaintiffs-appellants.
David R. Hammond, Davis, Graham & Stubbs (Dale R. Harris and Neil Peck of Davis, Graham & Stubbs, Stephen H. Kaplan, City Atty., Robert M. Kelly, Donald E. Wilson, and Karen A. Aviles, Asst. City Attys., Marlin D. Opperman, William M. Schell and Linda A. Surbaugh of Opperman & Associates, P.C., with him, on the briefs), Denver, Colo., for defendants-appellees.
Before McKAY, MOORE, and ANDERSON, Circuit Judges.
Plaintiffs-appellants appeal a summary judgment order which dismissed with prejudice all of their antitrust and civil rights claims against the defendants. We conclude that the district court properly found that there was no genuine issue of material fact in dispute. Because that court correctly applied the substantive law, we affirm.
This case arises from the proposed Centerstone redevelopment project in downtown Denver. The plaintiffs-appellants, the Oberndorf family and Block 173 Associates (landowners), opposed the project which would have been constructed in part on their land. 1 The landowners also objected to the corresponding urban renewal plan adopted by the Denver Urban Renewal Authority (DURA) and the Denver City Council from which the Centerstone project emanates. The defendants-appellees are the City and County of Denver (the City), the City Council, Federico Pena, the Mayor of the City and County of Denver, Colorado, DURA, (collectively the Municipal defendants); and BCE Development Properties, Inc. (BCED). Seeking injunctive relief, a declaratory judgment, and damages, landowners claim alleged antitrust violations based on Secs. 1 and 2 of the Sherman Anti-Trust Act, 15 U.S.C. Secs. 1 and 2 and alleged civil rights claims under 42 U.S.C. Sec. 1983. The district court's thorough recitation of the facts of this case obviates further recitation here. See Oberndorf v. City and County of Denver, 696 F.Supp. 552, 554-56 (D.Colo.1988). Therefore, we set out only those facts which are essential for this opinion.
In early 1983, the City and the Denver Partnership, Inc. (DPI), a non-profit civic and downtown business organization, began courting national retail developers and department stores in an effort to revitalize downtown Denver. City officials and DPI determined that some sort of public/private partnership with substantial public financing would be necessary to create a multiblock retail project on the Sixteenth Street Mall. In the summer of 1983, DPI formed the Sixteenth Street Retail Development Task Force to assist in forming such a partnership. Although the City and DPI contacted several potential developers, only BCED demonstrated sufficient interest and capacity to develop such a project. BCED proposed a two or three-block project to be constructed on Blocks 196, 173, and 206, including the block on which an existing department store is now located.
Following a December 1984 announcement by Mayor Pena and BCED about the proposed Centerstone project, discussions among the City, BCED and others continued, focusing on available forms of public financing. It was determined that the best method was "tax increment financing," a form of public funding that allows sale of municipal bonds to raise money for public improvements. Under Colorado law, this funding vehicle is available only as part of an urban renewal plan. See Urban Renewal Auth. v. Byrne, 618 P.2d 1374 (Colo.1980). The City began taking actions to adopt an urban renewal plan as set forth at Colo.Rev.Stat. Secs. 31-25-101 to 31-25-115 (1986).
Critical to the entire project are the provisions of Section 31-25-107(1) that no urban renewal plan shall be undertaken unless the appropriate authority, here the City Council, determines that the area is blighted. In December 1985, the City Council passed a resolution ordering DURA to begin preparing an urban renewal plan and conducting a blight study to analyze a fifteen-block area in downtown Denver. In March 1986, the study concluded, finding numerous blight factors existed in the defined space. DURA also prepared a proposed urban renewal plan for the fifteen-block area.
In May 1986, the City Council considered the proposed urban renewal plan at a public meeting. Landowners and their representatives appeared and opposed the plan, disputing the existence of blight in the area. Enacting Ordinance 309, the City Council approved the plan.
In August 1987, DURA issued an Offering Prospectus and solicited proposals from prospective developers for redevelopment of all or part of the fifteen-block urban renewal area. Four prospective developers submitted proposals, but only those of BCED concerned the blocks on which BCED hoped to build the Centerstone project. DURA selected BCED and Centerstone for Phase I of the urban renewal plan.
Landowners then began this action, claiming the defendants illegally conspired to misrepresent the three-block area as blighted so that the property could be condemned under the Colorado Urban Renewal Law. They further claimed the urban renewal plan eliminated competition among buyers and developers in the three-block real estate market and thus amounted to a restraint of trade in violation of Secs. 1 and 2 of the Sherman Anti-Trust Act. Landowners also asserted claims under 42 U.S.C. Sec. 1983 that the plan was a regulatory taking of property in violation of the due process and equal protection clauses of the Constitution.
Following discovery, all defendants filed summary judgment motions which the district court granted, dismissing all of the landowners' claims with prejudice. Oberndorf, 696 F.Supp. at 561. Shortly thereafter, the district court granted defendant DURA's motion to dismiss its counterclaims, and final judgment was entered for the defendants and against landowners. The landowners appeal the summary judgment order.
This court reviews a summary judgment order de novo. Burnette v. Dow Chemical Co., 849 F.2d 1269, 1273 (10th Cir.1988). We review the record in the light most favorable to the non-moving party to determine if a genuine issue of material fact was in dispute; if not, we must determine if the substantive law was correctly applied. Osgood v. State Farm Mut. Auto. Ins. Co., 848 F.2d 141, 143 (10th Cir.1988).
In Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943), the Supreme Court held that the Sherman Act did not apply to the anticompetitive conduct of a state acting through its legislature. Subsequently, the Court rejected the proposition that municipalities are similarly immune from antitrust liability simply by their status as subdivisions of the state. City of Lafayette, La. v. Louisiana Power & Light Co., 435 U.S. 389, 98 S.Ct. 1123, 55 L.Ed.2d 364 (1978). Rather, to obtain exemption, municipalities must demonstrate that their anticompetitive activities were authorized by the state "pursuant to a state policy to displace competition with regulation or monopoly public service." Id. at 413, 98 S.Ct. at 1137. The municipality need not point to a specific, detailed legislative authorization, but must show that it acted in accordance with a "clearly articulated and affirmatively expressed ... state policy" to displace competition with regulation. Id. at 410, 415, 98 S.Ct. at 1135, 1138. See also Community Communications Co. v. City of Boulder, Colo., 455 U.S. 40, 51-52, 102 S.Ct. 835, 840-841, 70 L.Ed.2d 810 (1982). "A state policy is considered clearly articulated and affirmatively expressed if the statutory provision empowering the municipality's action plainly shows that 'the legislature contemplated the kind of action complained of.' " Town of Hallie v. City of Eau Claire, 471 U.S. 34, 44, 105 S.Ct. 1713, 1719, 85 L.Ed.2d 24 (1985) (quoting City of Lafayette, La., 435 U.S. at 415, 98 S.Ct. at 1138).
The district court found the cited actions of the defendants complied with the requirements of the Colorado Urban Renewal Law and were undertaken pursuant to a clearly articulated and affirmatively expressed state policy as embodied in that law. Therefore, the district court held that the defendants were immune from liability and granted summary judgment. In addition, the court found that the evidence of conspiracy produced by the landowners did not reach the required threshold level and that the undisputed evidence indicated that the defendants' actions were consistent with their permissible independent interests in pursuing the Centerstone project as an effort to revitalize the Denver economy.
Arguing that the district court refused to consider evidence that the legislative record was a sham, landowners contend that the district court applied the wrong legal standard by limiting consideration to a facial review of the legislative record made by the City Council...
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