Ozee v. American Council on Gift Annuities, Inc.

• Decision Date: 12 June 1998
• Docket Number: Nos. 96-11332,96-11439,s. 96-11332
• Citation: 143 F.3d 937
• Court: U.S. Court of Appeals — Fifth Circuit
• Parties: 1998-1 Trade Cases P 72,177 Dorothy L. OZEE, etc., et al., Plaintiffs, Boyd L. Richie, as Guardian of the Estate of Louise T. Peter, on Behalf of Louise T. Peter Individually and on Behalf of All Others Similarly Situated, Plaintiff-Appellee, v. The AMERICAN COUNCIL ON GIFT ANNUITIES, INC., Individually and as Successor to the Committee On Gift Annuities, an Unincorporated Association, The Lutheran Church-Missouri Synod, The Lutheran Foundation of Texas, Baptist Foundation of Texas, Gray, Plant, Mooty, Mooty & Bennett, General Conference Corporation of Seventh-Day Adventists, d/b/a General Conference of seventh-Day Adventists, Anderson University, Inc., d/b/a Anderson University, Mount Holyoke College, Good Shepherd Home Foundation, Northwestern University, University of Colorado Foundation, Inc., The Salvation Army, A New York Corporation, The Salvation Army, A Georgia Corporation, The Salvation Army, A California Corporation, The Salvation Army, An Illinois Corporation, United Church of Christ, Planned Giving Services, Inc., d/b/a Planned Giving Services, Planned Giving Resources, Hay/Huggins Company, Inc., Prerau & Teitell, Vassar College, American Baptist Foreign Mission Society, St. Olaf College, Wittenberg University, Evangelical Lutheran Church in America, The Moody Bible Institute of Chicago, d/b/a Moody Bible Institute, The American Bible Society, and American Leprosy Missions, Inc., Defendants-Appellants, Dan Morales, Appellants. In re AMERICAN COUNCIL ON GIFT ANNUITIES, INC., et al., Petitioners.

Page 937

143 F.3d 937

1998-1 Trade Cases P 72,177

Dorothy L. OZEE, etc., et al., Plaintiffs Boyd L. Richie, as Guardian of the Estate of Louise T Peter, on Behalf of Louise T. Peter Individually and on Behalf of All Others Similarly Situated, Plaintiff-Appellee, v. The AMERICAN COUNCIL ON GIFT ANNUITIES, INC., Individually and as Successor to the Committee On Gift Annuities, an Unincorporated Association, The Lutheran Church-Missouri Synod, The Lutheran Foundation of Texas, Baptist Foundation of Texas, Gray, Plant, Mooty, Mooty & Bennett, General Conference Corporation of Seventh-Day Adventists, d/b/a General Conference of seventh-Day Adventists, Anderson University, Inc., d/b/a Anderson University, Mount Holyoke College, Good Shepherd Home Foundation, Northwestern University, University of Colorado Foundation, Inc., The Salvation Army, A New York Corporation, The Salvation Army A Georgia Corporation, The Salvation Army, A California Corporation, The Salvation Army, An Illinois Corporation United Church of Christ, Planned Giving Services, Inc., d/b/a Planned Giving Services, Planned Giving Resources, Hay/Huggins Company, Inc., Prerau & Teitell, Vassar College, American Baptist Foreign Mission Society, St. Olaf College, Wittenberg University, Evangelical Lutheran Church in America, The Moody Bible Institute of Chicago, d/b/a Moody Bible Institute, The American Bible Society, and American Leprosy Missions, Inc., Defendants-Appellants, Dan Morales, Appellants. In re AMERICAN COUNCIL ON GIFT ANNUITIES, INC., et al., Petitioners.

Nos. 96-11332, 96-11439.

United States Court of Appeals, Fifth Circuit.

June 12, 1998.

Rehearing and Suggestion for Rehearing En Banc Denied Sept. 15, 1998.

Ronald David Wells, Dallas, TX, Scott Robert Jacobs, Akin, Gump, Strauss, Hauer & Feld, Dallas, TX, Lonny D. Morrison, Morrison & Shelton, Wichita Falls, TX, for Ozee and Richie.

Ruben Brochner, McKool Smith, Charles W. Cunningham, Dallas, TX, Robert R. Elkin, Lonny D. Morrison, Morrison & Shelton, Wichita Falls, TX, Ronald David Wells, Dallas, TX, for Richie.

Judy C. Norris, Thompson & Knight, Dallas, TX, for The American Council on Gift Annuities, Inc., Lutheran Church-Missouri Synod Texas Dist., Planned Giving Services, Inc., Planned Giving Resources, Prerau & Teitell and General Conference Corp. of Seventh-Day Adventists.

Walter H. Mizell, Richard T. McCarroll, Brown, McCarroll & Oaks Hartline, Austin, TX, for Lutheran Church Missouri Synod Texas Dist., Lutheran Foundation of Texas and Lutheran Church Missouri Synod Foundation.

Richard G. Braman, Minneapolis, MN, for Gray, Plant, Mooty, Mooty and Bennett.

Patrick R. Cowlishaw, Kurt Allen Schwarz, Cohan, Simpson, Cowlishaw & Wulff, Dallas, TX, for Salvation Army, A New York, Illinois, California and Georgia Corp.

Noel M. B. Hensley, George W. Bramblett, Jr., Kerry McHugh Breaux, Haynes & Boone, Dallas, TX, for Baptist Foundation of Texas.

James Allen Harrison, Russell Hendrix Roden, Gwinn & Roby, Dallas, TX, for Southern Baptist Convention.

Susan Abbott Schwartz, Land, Omahana & Kopka, Dallas, TX, for General Conference Corp. of Seventh-Day Adventists and Loma Linda University.

John H. McElhaney, Susan Louise Karamanian, Dallas, TX, for Anderson University, Mount Holyoke College, Smith College, Vassar College, St. Olaf College and Wittenberg College.

William Gray Compton, Dallas, TX, for Good Shepherd Home Foundation.

Jay M. Vogelson, Dallas, TX, Geraldine M. Alexis, Sidley & Austin, Chicago, IL, for Northwestern University.

Thomas D. Graber, Langley & Branch, Dallas, TX, for American Baptist Foundation, Evangelical Lutheran Church in America and American Baptist Foreign Mission Society.

Charles Murray Barnard, Wichita Falls, TX, for University of Colorado Health Sciences Center.

James D. Blume, Dallas, TX, for United Church of Christ.

Patricia J. Villareal, Chrysta L. Castaneda, Jones, Day, Reavis & Pogue, Dallas, TX, for Hay-Huggins Co., Inc.

George G. Olsen, Barnaby W. Zall, Williams & Jensen, P.C., Washington, DC, for United States Representative Henry J. Hyde and other members of the 104th Congress of the United States of America.

Robert Junell, Carrollton, TX, pro se.

Kenny Marchant, Carrollton, TX, pro se.

John Montford, Carrollton, TX, pro se.

David Sibley, Carrollton, TX, pro se.

Jody L. Rudman, Asst. Atty. Gen., Dallas, TX, Thomas P. Perkins, Jr., Austin, TX, for Morales.

Robert Charles Walters, Russell Yager, Vinson & Elkins, Dallas, TX, for American Bible Society and American Leprosy Missions, Inc.

Appeals from the United States District Court for the Northern District of Texas.

ON REMAND FROM THE SUPREME COURT OF THE UNITED STATES

Before REAVLEY, SMITH and EMILIO M. GARZA, Circuit Judges.

JERRY E. SMITH, Circuit Judge:

An annuitant's guardian sued a collection of charities and universities, alleging that they conspired to fix rates of return on charitable gift annuities. We dismissed defendants' appeals for want of jurisdiction and imposed sanctions. See Ozee v. American Council on Gift Annuities, Inc., 110 F.3d 1082 (5th Cir.1997). The Supreme Court vacated and remanded for further consideration in light of the Charitable Donation Antitrust Immunity Act of 1997, Pub.L. No. 105-26, 111 Stat. 241 (1997) (to be codified at 15 U.S.C. § 37-37(a)). See American Bible Soc'y v. Richie, --- U.S. ----, 118 S.Ct. 596, 139 L.Ed.2d 486 (1997). We now dismiss plaintiff's antitrust claims, reinstate the sanctions, grant the motion to intervene, and remand for determination of whether any state law claims survive.

I.

The facts and proceedings are set forth at length in our prior opinion. See 110 F.3d at 1088-90. To summarize briefly: The defendants were accused of suppressing competition in the market for charitable gift annuities. A purchaser of a charitable gift annuity receives a fixed stream of income in exchange for his "donation" to the charity; the annual payout is referred to as the charitable gift annuity rate, which rate the defendants were accused of fixing.

Dorothy Ozee (later replaced by Boyd Richie) sued the charities on behalf of Louise Peter, an elderly woman who purchased these annuities. She asserted a claim under § 1 of the Sherman Act and added supplemental Texas state law claims. The defendants, having lost their initial motion to dismiss, persuaded Congress to pass a bill aimed at squelching this suit. The Charitable Gift Annuity Antitrust Relief Act of 1995 ("Relief Act") provided that

it shall not be unlawful under any of the antitrust laws, or under a State law similar to any of the antitrust laws, for 2 or more persons described in section 501(c)(3) of Title 26 that are exempt from taxation under section 501(a) of Title 26 to use, or to agree to use, the same annuity rate for the purpose of issuing 1 or more charitable gift annuities.

15 U.S.C. § 37(a) (1996). ¹ The defendants collectively filed a motion to dismiss; defendant Northwestern University filed a motion for summary judgment. The district court denied these motions, see Richie v. American Council on Gift Annuities, 943 F.Supp. 685 (N.D.Tex.1996), and the defendants appealed.

We concluded that we lacked jurisdiction to entertain the appeal under the collateral order doctrine. Our reasoning was based on the fact that Richie's amended complaint alleged a conspiracy involving organizations not exempt under § 501(c)(3); the allegations therefore were not covered by the plain language of the Relief Act, which did not encompass "hybrid" conspiracies between exempt and non-exempt organizations. See Ozee, 110 F.3d at 1091-92. We sanctioned the defendants under FED.R.APP.P. 38 for filing a frivolous appeal, noting that in pursuing their collateral appeal, the defendants had blithely ignored the nature of the claim and the basis of the district court's ruling. We ordered the defendants and Northwestern University to pay Richie $15,000 in partial compensation of his costs and attorneys' fees. See Ozee, 110 F.3d at 1097. ²

II.

The defendants sought relief from our decision in both Congress and the Supreme Court. Congress acted first, once again enacting a statute targeting the instant lawsuit. The Charitable Donation Antitrust Immunity Act of 1997 ("Immunity Act"), signed into law on July 3, 1997, amended the Relief Act. The section entitled "Immunity" provides:

[A]ny person subjected to any legal proceeding for damages, injunction, penalties, or other relief of any kind under the antitrust laws, or any State law similar to any of the antitrust laws, on account of setting or agreeing to rates of return or other terms for, negotiating, issuing, participating in, implementing, or otherwise being involved in the planning, issuance, or payment of charitable gift annuities or charitable remainder trusts shall have immunity from suit under the antitrust laws, including the right not to bear the cost, burden, and risk of discovery and trial....

15 U.S.C. § 37(b) (1998). The statute also directs, more generally, that "the antitrust laws, and any State law similar to any of the antitrust laws, shall not apply to charitable gift annuities or charitable remainder trusts." 15 U.S.C. § 37(a). Finally, Congress provided that the Immunity Act have retroactive application to all judicial actions pending on its enactment date. See Pub.L. No. 105-26, § 3, 111 Stat. 241, 247 (1997). After enactment of the statute, the Supreme Court granted the defendants' petitions for writs of certiorari, vacated the judgment, and remanded for further consideration in light of the Immunity Act. See American Bible Soc'y v. Richie, --- U.S. ----, 118 S.Ct. 596, 139 L.Ed.2d 486 (1997).

III.

Richie concedes that the Immunity Act applies to the instant case. We agree. The Immunity Act amends the Relief Act by affording a far broader exemption to organizations engaging in anticompetitive behavior related to the issuance or payment of charitable gift annuities. Specifically, the Immunity Act expands the ...