Ve-Ri-Tas, Inc. v. Advertising Review Council of Metropolitan Denver, Inc., VE-RI-TA

• Decision Date: 28 December 1977
• Docket Number: INC,VE-RI-TA,No. 76-1525,76-1525
• Citation: 567 F.2d 963
• Parties: 1977-2 Trade Cases 61,801 and Pat Walker's of Colorado, Inc., Appellants, v. ADVERTISING REVIEW COUNCIL OF METROPOLITAN DENVER, INC., Rocky Mountain Better Business Bureau, Inc., Advertising Club of Denver, W. Dan Bell, William L. Cook, Jerry Gart, Willa Brown, Robert E. Jordan, Galen E. Broyles, Marilyn Massey, Gordon R. Yates, Albert Fay Hill, Celestino G. Mendez, Jean Larson, Roy L. Jansen, Don Puffer, and George Truesdell, Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 963

567 F.2d 963

1977-2 Trade Cases 61,801

VE-RI-TAS, INC. and Pat Walker's of Colorado, Inc., Appellants, v. ADVERTISING REVIEW COUNCIL OF METROPOLITAN DENVER, INC., Rocky Mountain Better Business Bureau, Inc., Advertising

Club of Denver, W. Dan Bell, William L. Cook, Jerry Gart,

Willa Brown, Robert E. Jordan, Galen E. Broyles, Marilyn

Massey, Gordon R. Yates, Albert Fay Hill, Celestino G.

Mendez, Jean Larson, Roy L. Jansen, Don Puffer, and George

Truesdell, Appellees.

No. 76-1525.

United States Court of Appeals, Tenth Circuit.

Argued and Submitted Aug. 5, 1977.

Decided Dec. 28, 1977.

David S. Koslow, Los Angeles, Cal. (Robert C. Hawley, Denver, Colo., Harrison W. Hertzberg, Los Angeles, Cal., Ireland, Stapleton, Pryor & Holmes, Denver, Colo., and Hertzberg, Kaplan & Koslow, Los Angeles, Cal., of counsel, with him on the brief), for appellants.

Thomas Kelley, of Yegge, Hall & Evans, Denver, Colo. (John D. Phillips, Jr., Denver, Colo., with him on the brief), for appellees.

Before SETH, Chief Judge, HOLLOWAY and BARRETT, Circuit Judges.

SETH, Chief Judge.

The plaintiffs asserted three separate claims based on violations of the Fourteenth Amendment, the antitrust laws, and in placing a burden on interstate commerce. The facts were fully developed during the course of extensive discovery, and both sides filed motions for summary judgment. The parties agreed that the record was complete. The trial court granted defendants' motion for summary judgment, and the plaintiffs appeal.

The plaintiffs assert that there was color of state law or state action as a consequence of a symbiotic relationship between the defendants and the governmental authorities as described in Gilmore v. City of Montgomery, 417 U.S. 556, 94 S.Ct. 2416, 41 L.Ed.2d 304; United States v. Price, 383 U.S. 787, 86 S.Ct. 1152, 16 L.Ed.2d 267; and Burton v. Wilmington Parking Authority, 365 U.S. 715, 81 S.Ct. 856, 6 L.Ed.2d 45. The trial court concluded that defendants' acts were not under color of state law, and that there was no public function by them under 42 U.S.C. § 1983.

The trial court found that defendants, the Colorado Attorney General, and the Denver District Attorney were all directing their efforts toward protection of the buying public. The record shows that the official agencies and the defendants were exchanging information, and were referring matters concerning deceptive advertising to each other. All were going in much the same direction, and their areas of interest and activity overlapped. The trial court found, however, that the complaint filed by the District Attorney against Pat Walker's of Colorado, Inc., was the result of the exercise of independent judgment of the prosecutor, and that alone.

The plaintiffs also assert that under Hudgens v. NLRB, 424 U.S. 507, 96 S.Ct. 1029, 47 L.Ed.2d 196, the defendants were performing a public function. This "public function" issue is a difficult one to resolve. The standards sought to be imposed by the defendants are those of public concern and regulation. As the trial pointed out, the two functions overlap. The District Attorney refers complaints to the BBB, and it refers matters to the District Attorney, as mentioned above. It is not really "self-regulation." Appellees' brief states that there are some 20,000 businesses in the area and some 815 belong to the BBB. All the 20,000 probably do not advertise, but the 815 are seeking to regulate primarily nonmembers. It is thus hard to tell who the "self" is.

Probably the most significant or revealing aspect of the BBB District Attorney relationship is the fact that if a nonmember refuses to change the advertisements it has been running or to stop them, the matter is referred to the District Attorney. This is...