Omni Outdoor Advertising, Inc. v. Columbia Outdoor Advertising, Inc.

• Decision Date: 15 December 1989
• Docket Number: No. 88-1388,88-1388
• Citation: 891 F.2d 1127
• Parties: 1989-2 Trade Cases P 68,872 OMNI OUTDOOR ADVERTISING, INC., Plaintiff-Appellant, v. COLUMBIA OUTDOOR ADVERTISING INC.; J. Willis Cantey; the City of Columbia, Defendants-Appellees.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 1127

891 F.2d 1127

1989-2 Trade Cases P 68,872

OMNI OUTDOOR ADVERTISING, INC., Plaintiff-Appellant, v. COLUMBIA OUTDOOR ADVERTISING INC.; J. Willis Cantey; the City of Columbia, Defendants-Appellees.

No. 88-1388.

United States Court of Appeals, Fourth Circuit Argued May 9, 1989.

Decided Dec. 15, 1989.

Rehearing and Rehearing En Banc Denied Feb. 15, 1990.

Arthur Camden Lewis (Keith M. Babcock, Lewis, Babcock, Pleicones & Hawkins, Randall M. Chastain on brief), for plaintiff-appellant.

Harry Augustus Swagart, III (Swagart & Lengel, P.A., on brief), James Shelton Meggs, City Atty. (Roy D. Bates, City Atty., Heyward E. McDonald, McDonald, McKenzie, Fuller, Rubin & Miller, David W. Robinson, II, Robinson, McFadden & Moore, P.A., Columbia, S.C., on brief), for defendants-appellees.

Before SPROUSE and WILKINS, Circuit Judges, and HADEN, Chief District Judge. ^*

SPROUSE, Circuit Judge:

The underlying action involves a claim by a billboard company that a rival billboard company and a city government successfully conspired to keep it out of the city. Suit was initiated in 1982 by appellant Omni Outdoor Advertising, Inc. (Omni) against the alleged conspirators, Columbia Outdoor Advertising, Inc. (COA), J. Willis Cantey, and the City of Columbia, South Carolina (City), for violation of sections 1 and 2 of the Sherman Antitrust Act, 15 U.S.C. §§ 1-2, as well as pendent state claims. Omni sought treble damages under section 4 of the Clayton Act, 15 U.S.C. § 15, and damages under various state laws, including the South Carolina Unfair Trade Practice Act (UTPA), S.C.Code Ann. § 39-3-30 (Law. Co-op.1985). In addition to monetary damages, Omni sought injunctive relief, costs and attorneys' fees.

The case went to trial on an issue of Sherman Act section 1 restraint of trade, multiple issues of section 2 monopolization and an issue of unfair trade practices under the South Carolina UTPA. The jury, after a three-week trial in 1986, returned a verdict in favor of Omni, finding both the City of Columbia and COA liable for violations of sections 1 and 2 of the Sherman Act and finding COA had violated the South Carolina Unfair Trade Practices Act.

The district court awarded damages against COA in the amounts of $600,000 for violation of section 1 of the Sherman Act, $400,000 for violation of section 2 of the Sherman Act, and $11,000 for violation of the South Carolina Unfair Trade Practices Act. Judgment was entered for Omni on February 7, 1986, for those amounts. Because the district court had earlier granted the City a Local Government Antitrust Act, 15 U.S.C. §§ 34-36, exclusion from damages liability, the verdict against the City awarded no monetary damages. The trial court did not then act on Omni's motion for injunctive relief against the City. The defendants timely moved for a judgment notwithstanding the verdict or for a new trial. Some two-and-a-half years later, in November 1988, the district court granted the City's and COA's motions for judgment notwithstanding the verdict and denied Omni's motions for injunctive relief and for an order trebling the damages and attorneys' fees. Omni now appeals the grant of the JNOV and the denial of its motions.

We consider the evidence bearing on the resolution of the issues on appeal in a light most favorable to support the jury verdict. Foster v. Tandy Corp., 828 F.2d 1052, 1055 (4th Cir.1987). Our expression of the evidence is, of course, shaped by the requirements of that rule.

For a period of more than forty years, COA had conducted its outdoor advertising business in the Columbia market. ¹ It enjoyed a dominant position, owning more than ninety-five percent of the off-premises billboards in the area. Omni first tried to enter the outdoor advertising market in Columbia in 1981. It surveyed the Columbia market and determined that, COA's dominant position notwithstanding, local regulations and market gaps favored Omni's entry into the market. When informed of Omni's entry, officials of COA became alarmed and attempted to insure continuation of COA's dominant position. They investigated Omni's background of performance in other communities. COA's chairman traveled to other communities and acquired and studied copies of ordinances from other cities that imposed restrictions on outdoor advertising.

Omni's evidence showed the personal and political influence of COA's owners with state and city officials, COA threats to use that influence to block Omni from the Columbia billboard market, private meetings between COA owners and city officials, and open hostility expressed towards Omni by city officials. Representatives of both Omni and COA met with Columbia administrators and attended meetings of the Columbia City Council, presenting their views concerning provisions of the billboard ordinances then under consideration.

On March 24, 1982, the City Council passed an ordinance which placed a moratorium on all billboard construction unless the Council expressly consented to construction, effectively blocking Omni from entering the market. A state court declared that ordinance unconstitutional. The Council passed a new ordinance on September 22, 1982, which favored COA's dominant position in the Columbia market and restricted Omni's ability to compete.

Omni, at trial and on this appeal, complained that the ordinances injured it and benefited COA by preventing Omni from constructing billboards in areas where COA already had boards. Omni alleged that COA and officials of the City of Columbia brought about passage of the ordinance in furtherance of a conspiracy to "restrain, hinder and suppress competition" between Omni and COA in the marketing of off-premises outdoor advertising space in interstate commerce. Omni also alleged that the defendants conspired to maintain a monopoly in the relevant market area to the detriment of competition, and that the City and COA did monopolize.

The district court granted the City judgment notwithstanding the verdict on the ground that the City was entitled to immunity from Sherman Act liability as established for states by the Supreme Court's decision in Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943) and applied to municipalities by Parker's progeny, e.g., Community Communications Co. v. City of Boulder, 455 U.S. 40, 102 S.Ct. 835, 70 L.Ed.2d 810 (1982); Town of Hallie v. City of Eau Claire, 471 U.S. 34, 105 S.Ct. 1713, 85 L.Ed.2d 24 (1985).

Omni, on appeal, contends that the City is not entitled to Parker immunity because South Carolina's authorization for the City's billboard regulation did not extend to utilizing such regulation for anticompetitive purposes. Omni contends alternatively that the City is not entitled to Parker immunity because it was not acting pursuant to statutory purpose (i.e., for the public good) but solely in conspiracy with COA to drive Omni out of the billboard business and thereby restrain competition in the industry. The City, of course, disagrees with both of Omni's contentions. It argues that it is protected by Parker's "state action" exemption, that there is no "conspirator" exception to Parker immunity, and that even if there were, the evidence in this case was not sufficient to have submitted that issue to the jury.

I

State Action Immunity

Parker v. Brown

In Parker, the Supreme Court found California's anticompetitive agricultural marketing program immune from scrutiny under the Sherman Act, holding that Congress did not intend to include official state actions in the Sherman Act's prohibitory ambit. Parker, 317 U.S. at 350-52, 63 S.Ct. at 313-14. In subsequent decisions, however, the Court concluded that municipal action was not necessarily the equivalent of state action for the purposes of the Parker doctrine and developed criteria for determining when municipalities come under the doctrine's protective umbrella. City of Lafayette v. Louisiana Power & Light Co., 435 U.S. 389, 98 S.Ct. 1123, 55 L.Ed.2d 364 (1978), Community Communications Co. v. City of Boulder, 455 U.S. 40, 102 S.Ct. 835, 70 L.Ed.2d 810 (1982); and Town of Hallie v. City of Eau Claire, 471 U.S. 34, 105 S.Ct. 1713, 85 L.Ed.2d 24 (1985). See generally Cantor v. Detroit Edison Co., 428 U.S. 579, 96 S.Ct. 3110, 49 L.Ed.2d 1141 (1976); California Retail Liquor Dealers Ass'n v. Midcal Aluminum, 445 U.S. 97, 100 S.Ct. 937, 63 L.Ed.2d 233 (1980).

The rules governing the initial determination of whether a municipality was engaged in state actions for Parker purposes have crystallized in Town of Hallie. There, the Supreme Court held that the defendant City of Eau Claire was protected by the Parker doctrine because its conduct was adequately authorized by state policy even though the state did not actively supervise implementation of the policy. The plaintiff town alleged that the city used its monopoly over sewage treatment to gain an additional unlawful monopoly over sewage collection and transportation services in adjacent unincorporated towns. Wisconsin statutes granted authority to cities to construct, add to, alter, and repair sewage systems, and this authority included the power to "describe with reasonable particularity the district to be [served]." 471 U.S. at 41, 105 S.Ct. at 1717. The statutes, moreover, granted cities governing public utilities the right to fix by ordinance "the limits of such service in unincorporated areas" and stated that these municipal utilities "shall have no obligation to serve beyond the area so delineated." Id. These authorizations to regulate, the Court concluded, were sufficient to satisfy the clear articulation requirement of the state action test. Id. at 44, 105 S.Ct. at 1719.

The Supreme Court said:

Municipalities ... are not beyond the reach of the antitrust laws by virtue of their status because they are not themselves sovereign. Rather, to obtain exemption, municipalities must demonstrate that their anticompetitive activities were authorized by the State pursuant to state...