Oregon Natural Resources Council v. Mohla

• Decision Date: 11 September 1991
• Docket Number: No. 90-35401,90-35401
• Citation: 944 F.2d 531
• Parties: 37 Cont.Cas.Fed. (CCH) P 76,170 OREGON NATURAL RESOURCES COUNCIL, Plaintiff-Counter-Defendant-Appellee, v. David MOHLA, etc., et al., Defendants. and AVISON TIMBER COMPANY, INC., Counterclaim Defendant-Third-Party Plaintiff-Appellant, v. Andrew KERR, Third-Party Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 531

944 F.2d 531

37 Cont.Cas.Fed. (CCH) P 76,170

OREGON NATURAL RESOURCES COUNCIL, Plaintiff-Counter-Defendant-Appellee, v. David MOHLA, etc., et al., Defendants. and AVISON TIMBER COMPANY, INC., Counterclaim Defendant-Third-Party Plaintiff-Appellant, v. Andrew KERR, Third-Party Defendant-Appellee.

No. 90-35401.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted July 9, 1991.

Decided Sept. 11, 1991.

William F. Lenihan, Schwabe, Williamson & Wyatt, Seattle, Wash., Mildred J. Carmack, Schwabe, Williamson & Wyatt, Portland, Or., for defendant-counterclaim-third party plaintiff-appellant.

Blair C. Stone and John W. Phillips, Heller, Ehrman, White & McAuliffe, Victor M. Sher, Sierra Club Legal Defense Fund, Seattle, Wash., for plaintiff-counter-defendant-appellee.

Appeal from the United States District Court for the District of Oregon.

Before GOODWIN, ALARCON and HALL, Circuit Judges.

CYNTHIA HOLCOMB HALL, Circuit Judge:

Avison Timber Company, Inc., (Avison) appeals the district court's grant of Oregon Natural Resources Council's (ONRC) motion to dismiss Avison's counterclaim and third-party complaint. District court jurisdiction over the counterclaim and third-party complaint was pendent to federal question jurisdiction over ONRC's complaint under 28 U.S.C. § 1331. We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm.

I

On December 2, 1988, ONRC filed suit against the United States Forest Service seeking to enjoin the bidding on a timber contract for a tract of land in the Mt. Hood National Forest known as the Badger Resell. When ONRC learned that the contract had been awarded to Avison, ONRC amended the complaint, adding Avison as an indispensable party and seeking to enjoin logging of the Resell.

In February 1989, Avison filed counterclaims against ONRC, alleging abuse of administrative and judicial process and interference with business relations. ONRC moved to dismiss pursuant to Fed.R.Civ.P 12(b)(6), claiming protection under the Noerr- Pennington doctrine. The district court dismissed the counterclaims on September 28, 1989, finding that ONRC's claims "involve the exercise of ONRC's right to petition the courts for redress against the government and are therefore protected by the First Amendment." The court found that Avison had not met the heightened pleading standards associated with the Noerr- Pennington doctrine.

In the original suit, the district court granted summary judgment to Avison and the Forest Service, finding that § 314 of the Forest and Rangeland Renewable Resource Planning Act, Pub.L. No. 100-446, 102 Stat. 1825 (1988), barred ONRC's challenge. We affirmed the district court's decision in a published opinion. Oregon Natural Resources Council v. Mohla, 895 F.2d 627 (9th Cir.), cert. denied, --- U.S. ----, 110 S.Ct. 2621, 110 L.Ed.2d 642 (1990).

II

We review the district court's grant of ONRC's motion to dismiss de novo. Boone v. Redevelopment Agency of San Jose, 841 F.2d 886, 889 (9th Cir.), cert. denied, 488 U.S. 965, 109 S.Ct. 489, 102 L.Ed.2d 526 (1988). A motion to dismiss should not be granted "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957). Normally we accept as true all of the plaintiff's factual allegations, along with all reasonable inferences in the plaintiff's favor. Hahn v. Codding, 615 F.2d 830, 840 (9th Cir.1980).

Where a claim involves the right to petition governmental bodies under Noerr- Pennington, however, we apply a heightened pleading standard. In Franchise Realty Interstate Corp. v. San Francisco Local Joint Executive Board, 542 F.2d 1076 (9th Cir.1976), cert. denied, 430 U.S. 940, 97 S.Ct. 1571, 51 L.Ed.2d 787 (1977), we required that the plaintiffs satisfy more than the usual 12(b)(6) standard, holding that "a complaint must include allegations of the specific activities" which bring the defendant's conduct into one of the exceptions to Noerr- Pennington protection. Id. at 1082. This heightened level of protection accorded petitioning activity is necessary to avoid "a chilling effect on the exercise of this fundamental First Amendment right." Id. Conclusory allegations are not sufficient to strip a defendant's activities of Noerr- Pennington protection. Boone, 841 F.2d at 893.

III

The Noerr- Pennington doctrine was originally promulgated to protect efforts to influence legislative or executive action from liability under the Sherman Act. Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961); United Mine Workers v. Pennington, 381 U.S. 657, 85 S.Ct. 1585, 14 L.Ed.2d 626 (1965). ¹ The protection has been expanded to apply to petitions to courts and administrative agencies, California Motor Transp. v. Trucking Unlimited, 404 U.S. 508, 510, 92 S.Ct. 609, 611, 30 L.Ed.2d 642 (1972), ² as well as to preclude claims other than those brought under the antitrust laws. See Franchise Realty, 542 F.2d at 1082-83; In re IBP Confidential Business Documents Litig., 755 F.2d 1300, 1312 (8th Cir.1985).

Noerr- Pennington protection is not absolute. The Noerr court recognized an exception where a publicity campaign, "ostensibly directed toward influencing governmental action ... is a mere sham to cover what is actually nothing more than an attempt to interfere directly with the business relationships of a competitor." Noerr, 365 U.S. at 144, 81 S.Ct. at 533. In Trucking Unlimited, the Court elaborated on the limits of Noerr- Pennington protection, explaining that "there are ... forms of illegal and reprehensible practice which may corrupt the administrative or judicial process and which may result in antitrust violations." 404 U.S. at 513, 92 S.Ct. at 613.

Avison argues that Noerr- Pennington protection is inappropriate in this case because ONRC's suit against it falls within two of the examples of illegal or reprehensible activity noted in Trucking Unlimited. Avison alleges that the suit was part of a "pattern of baseless, repetitive claims" and that ONRC made knowing misrepresentations to the court. We address each allegation in turn.

A

Avison's first allegation is that ONRC's suit was part of a pattern of baseless claims. Avison asserts that in 1988, "ONRC filed administrative appeals with the Forest Service of at least 216 resales of bought out and defaulted timber contracts in Oregon National Forests, including the Badger Resell," as part of a scheme "to misuse and abuse governmental and judicial processes for the sole purpose of delaying the sale of federal timber without regard to whether bona fide grounds for opposing such sales existed." It characterizes ONRC's filing of this lawsuit as part of this "string of baseless and repetitive actions."

The repeated filing of baseless claims without regard to their merits may indicate that the judicial and administrative processes have been abused. Trucking Unlimited, 404 U.S. at 513, 92 S.Ct. at 613; Clipper Exxpress v. Rocky Mountain Motor Tariff Bureau, Inc., 690 F.2d 1240, 1254 (9th Cir.1982), cert. denied, 459 U.S. 1227, 103 S.Ct. 1234, 75 L.Ed.2d 468 (1983). To state a claim under the sham exception, however, more is required than a bare allegation of a history of failed appeals. The earlier administrative appeals are relevant only to the extent that they demonstrate that ONRC was improperly motivated in filing its lawsuit against Avison. In Pennington, the Supreme Court noted that genuine petitioning activities are "not illegal, either standing alone or as part of a broader scheme itself violative of the Sherman Act." 381 U.S. at 670, 85 S.Ct. at 1593 (emphasis added).

We therefore must examine whether Avison has sufficiently alleged that ONRC's lawsuit against it was a sham. See In re Burlington Northern, 822 F.2d 518, 526 (5th Cir.1987) ("The holding in Pennington requires attention to the narrow petitioning activity at issue. The fact finder must determine, as to the particular petition, whether the petitioner was engaged in a genuine attempt to influence governmental decisionmaking.") (emphasis added), cert. denied, 484 U.S. 1007, 108 S.Ct. 701, 98 L.Ed.2d 652 (1988).

Even though ONRC's attempt to enjoin logging of the Resell was defeated on summary judgment, Noerr- Pennington protection is appropriate so long as ONRC was genuinely seeking governmental action. See Franchise Realty, 542 F.2d at 1081 (The sham exception is "limited to situations where the defendant is not seeking official action ... so that the activities complained of are 'nothing more' than an attempt to interfere with the business relationships of a competitor."); Coastal States Marketing v. Hunt, 694 F.2d 1358, 1372 (5th Cir.1983) ("A litigant should enjoy petitioning immunity from the antitrust laws so long as a genuine desire for judicial relief is a significant motivating factor underlying the suit.").

As the Supreme Court has explained, "[t]he 'sham' exception to Noerr encompasses situations in which persons use the governmental process--as opposed to the outcome of that process--as an anticompetitive weapon." City of Columbia v. Omni Outdoor Advertising, Inc., --- U.S. ----, 111 S.Ct. 1344, 1354, 113 L.Ed.2d 382 (1991) (emphasis in original). Here, the mere filing of a lawsuit was insufficient to achieve ONRC's goal of preventing the sale and cutting of old growth timber. As Avison admits, ONRC was not merely attempting to keep Avison from cutting these trees, it was attempting to keep anyone from doing so. In order to succeed, ONRC needed the actual relief it was requesting from the courts. Thus, ONRC was not merely exploiting the governmental process; it was genuinely seeking judicial relief. ³

Avison concedes that ONRC wanted the injunctive relief it requested in the underlying suit. But it contends that ONRC knew it would be unable to obtain such relief....