Puerto Rico Tele. Co., Inc. v. San Juan Cable LLC , 874 F.3d 767 ( 2017 )

United States Court of Appeals
For the First Circuit
No. 16-2132
PUERTO RICO TELEPHONE COMPANY, INC.,
Plaintiff, Appellant,
v.
SAN JUAN CABLE LLC,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. John A. Woodcock, Jr.,* U.S. District Judge]
Before
Torruella, Kayatta, and Barron,
Circuit Judges.
Patrick J. Pascarella, Jr., with whom Benjamin C. Sassé and
Tucker Ellis LLP were on brief, for appellant.
Jacob (Yaakov) M. Roth, with whom Brinton Lucas, Thomas
Demitrack, Brian K. Grube, Jones Day, Orlando Fernandez, and
Orlando Fernandez Law Offices were on brief, for appellee.
October 31, 2017
* Of the District of Maine, sitting by designation.
KAYATTA, Circuit Judge. Puerto Rico Telephone Company,
Inc., (PRTC) sought permission from the Puerto Rico
Telecommunications Regulatory Board (TRB) to offer internet
protocol television service to the residents of Puerto Rico. At
the time, San Juan Cable LLC, doing business as "OneLink," provided
cable television service to residents of several municipalities in
Puerto Rico, including San Juan. Not eager to face competition,
OneLink petitioned the TRB and other government officials and
tribunals, including Commonwealth and federal courts, to deny,
slow down, or otherwise impede PRTC's efforts. After eventually
obtaining the needed permission from the TRB, PRTC filed this
antitrust action claiming that OneLink's interference with PRTC's
permitting efforts constituted unlawful monopolization and
attempted monopolization in violation of both the Sherman Act, 15
U.S.C. § 2, and the Puerto Rico Anti-Monopoly Act, P.R. Laws Ann.
tit. 10, §§ 257–276. Granting summary judgment to OneLink, the
district court concluded that OneLink's actions were immunized
from suit under the Noerr-Pennington doctrine, which conditionally
protects the right to petition the government. See E. R.R.
Presidents Conference v. Noerr Motor Freight, Inc. (Noerr), 365
U.S. 127 (1961); United Mine Workers of Am. v. Pennington
(Pennington), 381 U.S. 657 (1965). In so ruling, the district
court rejected PRTC's argument that the facts could support a
finding that OneLink abused its right to petition and could be
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found liable under the so-called "sham" exception to the Noerr-
Pennington immunity. See Cal. Motor Transp. Co. v. Trucking
Unlimited, 404 U.S. 508, 511–12 (1972) (extending both Noerr-
Pennington immunity and the sham exception to petitioning of courts
and administrative agencies). For the following reasons, we agree
with the district court that the facts in this case could not
subject OneLink to liability under the sham exception.
I.
A.
The parties' disagreement on appeal begins with
OneLink's win-loss record in its multi-tribunal petitioning
activity aimed at impeding PRTC's efforts to secure permission to
compete against OneLink. A detailed description of OneLink's
filings with the TRB, the Puerto Rico courts, and the federal
courts, its communications with Puerto Rico officials and federal
officials, and the resolutions of those filings and communications
can be found in the district court's two published opinions. See
P.R. Tel. Co. v. San Juan Cable Co. (PRTC I), 196 F. Supp. 3d 207,
215–24 (D.P.R. 2016); P.R. Tel. Co. v. San Juan Cable Co.
(PRTC II), 196 F. Supp. 3d 248, 253–98 (D.P.R. 2016). PRTC claims
that those filings and communications collectively constituted
twenty-four "petitions" in the form of requests that a court or
other government tribunal, agency, or official take action adverse
to PRTC's license application, and that OneLink failed to prevail
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on any of those petitions. OneLink avoids taking a firm position
on its win-loss record apart from suggesting that the district
court's count (four wins out of thirteen petitions) was closer to
the mark.
The parties' divergent counts flow from disagreements
about whether to treat motions filed in the course of a single
proceeding as separate petitions, and whether to rank an
interlocutory procedural win as a loss if the proceeding ultimately
resulted in a decision against OneLink. Thus, for example, the
district court counted OneLink's request to intervene in the second
franchise proceeding before the TRB along with several other
motions filed in connection with that request as a single petition,
see PRTC II, 196 F. Supp. 3d at 324, 337, while PRTC argues that
each motion filed with the TRB constitutes a separate petition.
Likewise, the district court counted as a win the issuance of an
order to show cause why a temporary restraining order should not
issue by a federal district court in a suit that was ultimately
dismissed as moot, see id. at 279–80, 325, 338, while PRTC argues
that merely securing a show cause order is not a win.
For our purposes, we need not resolve these disputes
concerning OneLink's win-loss record. Rather, we can assume, as
PRTC argues, that OneLink's various filings can be viewed as
twenty-four separate petitions, and that none resulted in a
meaningful victory. We must also assume, though, that all twenty-
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four filings were "objectively reasonable" in the sense that a
"reasonable litigant could realistically expect success on the
merits." Prof'l Real Estate Inv'rs, Inc. v. Columbia Pictures
Indus., Inc. (PREI), 508 U.S. 49, 60 (1993). We make this latter
assumption because the district court so found after examining
each of OneLink's various filings, see PRTC II, 196 F. Supp. 3d at
325-35, and PRTC has waived any challenge to those findings. PRTC
did not make any such challenge in its main brief on appeal. See
Sparkle Hill, Inc. v. Interstate Mat Corp., 788 F.3d 25, 29 (1st
Cir. 2015) ("[W]e do not consider arguments for reversing a
decision of a district court when the argument is not raised in a
party's opening brief."); see also Nat'l Foreign Trade Council v.
Natsios, 181 F.3d 38, 60 n.17 (1st Cir. 1999) ("We have repeatedly
held that arguments raised only in a footnote or in a perfunctory
manner are waived."). It also failed to make any case for excusing
the waiver in its reply brief1 or at oral argument. Indeed, the
entire oral argument proceeded on the assumption that the district
court's findings that all the petitions were objectively
reasonable would stand. Although we can excuse waiver of this
sort in certain cases, this is not such a case. Assessing the
merits of OneLink's petitions requires detailed analyses of a large
1Although the reply brief contains arguments in two footnotes
that some of the petitions were not objectively reasonable, it
does not make any effort to explain why this court should excuse
PRTC's failure to make these arguments in its opening brief.
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number of different filings. We decline to undertake those
analyses without briefing.2
B.
PRTC's waiver of any argument that some of OneLink's
numerous filings were baseless creates an immediate obstacle to
PRTC's ability to maintain this lawsuit. The general rule is that
a defendant cannot be held liable under the Sherman Act for
petitioning the government, including by filing a lawsuit. See
Cal. Motor Transp., 404 U.S. 510–13. PRTC relies on an important
exception to that rule, known as the "sham" exception. See id.
(citing, inter alia, Noerr, 365 U.S. at 144). In PREI, however,
the Supreme Court held that a lawsuit, even when employed as an
anticompetitive weapon, could only fall within the sham exception
if the suit was "objectively baseless in the sense that no
reasonable litigant could realistically expect success on the
merits." 508 U.S. at 60–61. We assume, as do the parties, that
PREI also applies to a petition filed before an administrative
agency or another executive official. See 508 U.S. at 59–60 ("We
dispelled [in Columbia v. Omni Outdoor Advertising, Inc., 499 U.S.
2As indicated above, PRTC does argue that the district court
erred in finding that OneLink actually prevailed on four petitions.
PRTC also claims that the district court neglected to assess one
petition filed by a third party because it erroneously deemed the
petition not to have been funded by PRTC. PRTC does not, however,
argue in its main brief that any of those five petitions were
actually baseless in the sense of lacking any reasonably realistic
prospect of success.
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365 (1991)] the notion that an antitrust plaintiff could prove a
sham merely by showing that its competitor's purposes were to delay
[the plaintiff's] entry into the market and even to deny it a
meaningful access to the appropriate . . . administrative and
legislative fora.")(internal quotation marks omitted, brackets and
ellipsis in original). Given PRTC's failure to argue that any one
of OneLink's petitions was objectively baseless, it is clear that
no single petition could support the imposition of antitrust
liability on OneLink. Accordingly, PRTC must predicate its appeal
on the contention that the serial nature of OneLink's petitioning
materially distinguishes this case from PREI; that is to say, a
jury could find OneLink liable for launching a fusillade of
ultimately unsuccessful petitions even if no one petition was
sufficiently baseless to fit within the "sham" exception under
PREI. We therefore turn next to that contention.
C.
In pursuit of its effort to distinguish PREI, PRTC tries
to find company in the decisions of several other circuits that
have construed California Motor Transport and PREI as compatibly
establishing different tests depending on whether more than one
petition is challenged as abusive. In brief, this argument first
restricts PREI's "objectively baseless" requirement to cases
involving a single petition rather than a series of petitions. To
assess a series of petitions, the argument relies instead on
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language in California Motor Transport describing as outside the
scope of Noerr-Pennington immunity the "institut[ion of]
proceedings and actions . . . with or without probable cause, and
regardless of the merits of the cases," 404 U.S. at 512. As
construed by PRTC, this argument also reads "with or without
probable cause" and "regardless of the merits," id., as including
both petitions brought "with . . . probable cause" and with
"merit[]" where the defendant's decision to file the series of
petitions paid no heed to whether they had merit. So framed, the
argument views PREI very much through the lens of Justice Stevens's
concurrence. See PREI, 508 U.S. at 73 (Stevens, J., concurring in
the judgment) ("Repetitive filings, some of which are successful
and some unsuccessful, may support an inference that the process
is being misused. In such a case, a rule that a single meritorious
action can never constitute a sham cannot be dispositive." (citing
Cal. Motor Transp., 404 U.S. 508)).
The circuit court opinions to which PRTC points--that is
to say opinions of the four circuits to have addressed similar
arguments directly--all in one way or another adopt some variant
of this view of the respective applicability of PREI and California
Motor Transport. See Hanover 3201 Realty LLC v. Vill.
Supermarkets, Inc., 806 F.3d 162, 179–81 (3d Cir. 2015), cert.
denied, 136 S. Ct. 2451 (2016); Waugh Chapel S., LLC v. United
Food & Commercial Workers Union Local 27, 728 F.3d 354, 363–64
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(4th Cir. 2013) (doing so in the context of the Noerr-Pennington
doctrine as applied to an unfair labor practices claim); Primetime
24 Joint Venture v. Nat'l Broad. Co., 219 F.3d 92, 100–01 (2d Cir.
2000); USS-POSCO Indus. v. Contra Costa Cty. Bldg. & Constr. Trades
Council, AFL-CIO (USS-POSCO), 31 F.3d 800, 810 (9th Cir. 1994)
(concluding that PREI and California Motor Transport "appl[y] to
different situations").
We find ourselves quite skeptical of the notion that a
defendant's willingness to file frivolous cases may render it
liable for filing a series of only objectively reasonable cases.
Although presented with a record involving the filing of only one
lawsuit, the court in PREI wrote nothing to suggest that its ruling
would have been different had the defendant filed a series of
objectively reasonable suits. Rather, the Court addressed the
more categorical question "whether litigation may be a sham merely
because a subjective expectation of success does not motivate the
litigant," and ruled that "an objectively reasonable effort to
litigate cannot be a sham regardless of subjective intent." 508
U.S. at 57. Similarly, in describing California Motor Transport,
PREI trained its attention not on the difference between a single
suit and a series of suits, but rather on the difference between
"objectively reasonable claims" and "a pattern of baseless,
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repetitive claims." Id. at 58.3 Nor is there any pragmatic reason
to presume that PREI's protections for nonfrivolous petitioning
activity disappear merely because the defendant exercises its
right to engage in such activity on multiple occasions. One large
lawsuit or intervention in an agency proceeding can impose much
more of a burden on a competitor than might a series of smaller
claims. Also, where a party files a large number of petitions--
here twenty-four according to PRTC--and every single one is
objectively reasonable, we struggle to see how a jury could
reasonably conclude that the party was filing petitions
"regardless of the merits of the cases." Cal. Motor Transp., 404
U.S. at 512. To the contrary, the larger the sample size provided
by the accumulating petitions, none of which are objectively
baseless, the more likely it is that the serial litigant must have
exercised a fair amount of discretion in eschewing frivolous
claims. Cf. USS-POSCO, 31 F.3d at 811 ("The fact that more than
half of all the actions as to which we know the results turn out
to have merit cannot be reconciled with the charge that the unions
were filing lawsuits and other actions willy-nilly without regard
to success."). And while some circuits treat less skeptically
3
California Motor Transport does at the same time remain
independently relevant to misconduct, such as fraud, bribery or
threats, in connection with the filing of claims, baseless or not.
404 U.S. at 512-13. See also id. at 518 (Stewart, J., concurring)
(chronicling threats).
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than do we the notion that PREI does not apply fully to the filing
of a series of suits, none of those circuits have ever sustained
a finding of liability while simultaneously determining that no
frivolous petitions were filed.
Of course the absence of any outright victory in so many
forays similarly makes it quite clear that the likelihood of
prevailing was not paramount in OneLink's calculus when deciding
whether to petition. But the task here is to identify sham
litigation, not probable winners. And while we can see the logic
inherent in reasoning that a nonfrivolous suit might be viewed
differently when flown in a flock of frivolous suits, we see little
logic in concluding that an exercise of the right to file an
objectively reasonable petition loses its protection merely
because it is accompanied by other exercises of that right.
This is not a case in which it could reasonably be said
that the petitioning activity provided no reasonable prospect of
a benefit to OneLink apart from inflicting costs on PRTC. See
PREI, 508 U.S. at 68–69 (Stevens, J., concurring in the judgment)
("The label 'sham' . . . . might also apply to a plaintiff who had
some reason to expect success on the merits but because of its
tremendous cost would not bother to achieve that result without
the benefit of collateral injuries imposed on its competitor by
the legal process alone."). Rather, had OneLink received the
relief for which it petitioned, it would have received the benefits
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of lawfully delaying or restricting the entry of a competitor into
its market. Nor is this a case in which a monopolist deterred
competition by threatening to file suits without regard to their
merit, as in California Motor Transport. We therefore need not
decide how we would rule in either of those sorts of cases.
II.
For the foregoing reasons, we affirm the district
court's orders granting summary judgment in favor of OneLink.4
-Concurring Opinions Follows-
4 PRTC does not dispute that Noerr-Pennington immunity applies
to the claim under the Puerto Rico Anti-Monopoly Act. It has also
not argued that the district court should have remanded the Puerto
Rico claims instead of granting summary judgment on those claims
along with the federal claims. We also need not consider PRTC's
argument that the district court erred in its finding on causation
in the first summary judgment decision. Our holding accepts that
Noerr-Pennington immunity applied to each petition because of its
objective reasonableness, not because of its causal role.
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BARRON, Circuit Judge, with whom TORRUELLA, Circuit
Judge, joins, concurring. The parties ask us to decide -- one way
or the other -- whether a monopolist may be held liable under
antitrust law for filing a series of petitions against a competitor
(whether in a court or in an administrative proceeding) when no
single one of those filings is baseless.5 An unequivocal "no"
would close off the so-called "sham" exception to Noerr-Pennington
immunity in such a case. And, in doing so, such an answer would
afford litigious monopolists a potentially significant safe harbor
from antitrust liability. In particular, it would protect even a
monopolist that used a barrage of filings to make an upstart's own
attempt to petition for an operating license so costly that the
upstart must give up its attempt to compete for market share.
But, in affirming the grant of summary judgment in the
defendant's favor, we do not establish such a limit on the scope
of the sham exception. We avoid doing so because we do not hold
that the "objectively baseless" requirement for triggering the
sham exception set forth in the single-petition case of
Professional Real Estate Investors, Inc. v. Columbia Pictures
Industries, Inc., 508 U.S. 49, 60 (1993), necessarily applies to
5
The case concerns an alleged monopoly violation under both
the Sherman Act, 15 U.S.C. § 2, and the Puerto Rico Anti-Monopoly
Act, P.R. Laws Ann. tit. 10, § 260. Puerto Rico's anti-
monopolization provision corresponds with that of the Sherman Act,
and the parties have not suggested that the provisions are
interpreted differently.
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each and every case involving a pattern of petitioning. We instead
rely on a more record-based, case-specific line of reasoning that,
as I read our opinion, leaves open the possibility that, PREI
notwithstanding, a monopolist might be liable under the antitrust
laws for engaging in a pattern of petitioning, even though no
single filing in that pattern is objectively baseless. I agree
with this prudent approach. I write separately, however, to say
more about the particular type of pattern petitioning case to which
I have alluded, for it is not expressly mentioned in our opinion
and bears some resemblance to the case at hand.
I.
The Sherman Act seeks to "preserv[e] free and unfettered
competition as the rule of trade." N. Pac. Ry. Co. v. United
States, 356 U.S. 1, 4 (1958). To further that aim, Congress used
broad terms in the Act "in order to prevent creative monopolists
from escaping liability by adopting ever new forms of combinations
or anticompetitive conduct." 2 Julian O. von Kalinowski et al.,
Antitrust Laws and Trade Regulation § 25.01 (2d ed. 2017).
In response, the federal courts have adopted a "common-
law approach" in construing the limits that the antitrust laws
place on the efforts of market incumbents to leverage their power
to unfairly restrict competition. Leegin Creative Leather
Products, Inc. v. PSKS, Inc., 551 U.S. 877, 899 (2007). Courts
thus generally analyze restraint-of-trade claims according to the
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"rule of reason," which in operation is hardly a rule at all, and
instead requires the "finder of fact [to] decide whether the
questioned practice imposes an unreasonable restraint on
competition, taking into account a variety of factors." State Oil
Co. v. Khan, 522 U.S. 3, 10 (1997). And, likewise, courts apply
what amounts to a quite similar "'common law' against
monopolizing." Berkey Photo, Inc. v. Eastman Kodak Co., 603 F.2d
263, 272 (2d Cir. 1979).
At the same time, market participants, including
monopolists, enjoy a broad right to petition their government under
the First Amendment. See E. R.R. Presidents Conference v. Noerr
Motor Freight, Inc., 365 U.S. 127, 138 (1961). This right protects
not only lobbying the legislature but also litigating in court and
participating in administrative proceedings. See California Motor
Transport Co. v. Trucking Unlimited, 404 U.S. 508, 510 (1972).
Recognizing that courts "cannot . . . lightly impute to
Congress an intent to invade these freedoms," Noerr, 365 U.S. at
138, the Supreme Court established the Noerr-Pennington doctrine.
See United Mine Workers of America v. Pennington, 381 U.S. 657,
669 (1965); Noerr, 365 U.S. at 136. That doctrine generally makes
petitioning activity immune from antitrust liability, subject,
however, to the important exception that immunity is not available
to petitioning activity that is just a "sham" for impermissible
anti-competitive conduct. Noerr, 365 U.S. at 144.
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Courts thus necessarily confront the following
difficulty in defining the scope of the sham exception. A decision
to immunize monopolists from antitrust liability for their filings
-- by narrowly construing the exception's scope -- surely protects
the First Amendment right of petition. But, such a decision also
may provide unnecessarily broad protection and thereby unduly
impede the "free and unfettered competition" that Congress wished
to foster when it broadly empowered courts to hold monopolists
accountable for their anti-competitive schemes. N. Pac. Ry. Co.,
356 U.S. at 4.
To navigate this difficulty, it is important not to view
the sham exception as a rigid rule. Rather, we should construe
that exception -- just as we construe the antitrust laws generally
-- in accord with a rule of reason. I am therefore reluctant to
conclude that the "objectively baseless" requirement set forth in
PREI, which involved a single filing in a particular context,
necessarily governs every type of case involving the filing of a
series of petitions.
Heightened antitrust concerns might arise in particular
pattern cases that would warrant an approach that is more sensitive
to circumstance, so as to provide greater protection of competition
from monopolistic schemes. Nor is it clear to me that such a
common-law like approach to defining shams would invariably trench
on First Amendment rights. After all, the tort of abuse of process
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is itself sensitive to circumstance, but, presumably, the First
Amendment is not infringed just because the tort imposes liability
on some suits that have some merit. See, e.g., Poduska v. Ward,
895 F.2d 854, 857 (1st Cir. 1990); Restatement (Second) of Torts
§ 682 cmt. a (Am. Law Inst. 1977).
I also am not convinced that precedent forecloses this
more context-sensitive approach to pattern cases. I note that
PREI concerned an attempt to apply the sham exception to the filing
of a single copyright infringement suit, 508 U.S. at 52, and thus
did not directly address whether a pattern of filings outside that
context might raise distinct concerns. And while the Court did
speak broadly in setting forth the "objectively baseless"
requirement in that case, id. at 60-66, three concurring Justices
did not appear to read that decision to set forth a holding that
imposed the baseless requirement to pattern cases. See id. at 66
(Souter, J., concurring); Id. at 67 (Stevens, J., concurring).
Nor have we or any other circuit held that PREI
automatically imposes its "objectively baseless" requirement in
each and every pattern case. In fact, the four circuits to have
addressed the issue generally apply a "holistic" analysis that
broadly considers a variety of factors in pattern cases to
determine whether what is claimed to have been the exercise of the
right of petition was really just a sham for concealing anti-
competitive conduct. See Hanover 3201 Realty, LLC v. Vill.
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Supermarkets, Inc., 806 F.3d 162, 180-81 (3d Cir. 2015); Waugh
Chapel South, LLC v. United Food & Commercial Workers Union Local
27, 728 F.3d 354, 363–64 (4th Cir. 2013); see also Primetime 24
Joint Venture v. Nat'l Broad. Co., 219 F.3d 92, 101 (2d Cir. 2000);
USS-POSCO Indus. v. Contra Costa Cty. Bldg. & Constr. Trades
Council, AFL-CIO, 31 F.3d 800, 810–11 (9th Cir. 1994).
Finally, PREI did not purport to overrule California
Motor, which rejected the dismissal of an antitrust complaint that
challenged a pattern of petitioning as a sham without alleging
that any of the defendants' underlying filings was baseless. The
Court held that the case could proceed to trial, 404 U.S. at 516,
even though the complaint alleged merely that the defendants had
publicly announced and then implemented a policy of opposing "with
or without probable cause, and regardless of the merits" any of
the plaintiffs' applications for licenses that the plaintiffs
needed in order to enter the market at all. Id. at 512.
II.
Assuming, then, that PREI's "objectively baseless"
requirement does not necessarily control the outcome of this case,
there is still the question whether PRTC has provided enough
evidence of sham petitioning to survive OneLink's motion for
summary judgment. PRTC's case does not much resemble either type
of pattern case involving only non-baseless filings that our
opinion expressly identifies as ones that might survive PREI. See
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Ct. Op. at 11-12. But, PRTC does contend that its allegations are
close enough to those involved in California Motor to warrant
application of the sham exception, and that argument merits further
consideration.
PRTC's case is not on all fours with California Motor in
that PRTC does not allege that OneLink made a public threat to
make baseless filings like the antitrust defendant in California
Motor allegedly did. But, I am not convinced that the scope of the
sham exception described in California Motor is necessarily
limited by the fact that the complaint in that case alleged such
a public threat.
In California Motor, the complaint alleged that certain
incumbent trucking companies had set up a trust fund to finance
opposition to their would-be competitors' applications for truck
operating rights, informed their would-be competitors that they
intended to oppose "every application" "with or without probable
cause and regardless of the merits," and then made a slew of
adverse filings, seemingly in accord with that threat. 404 U.S.
at 518 (Stewart, J., concurring). Faced with that alleged abuse
of the governmental process, California Motor reasoned that the
right of petition under the First Amendment does not extend to the
use of that right to deprive would-be competitors of their own
right of petition to secure a right to enter the market and thereby
take on the monopolist. Id. at 513–15 (majority opinion).
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The Court drew that fairly uncontroversial proposition
from Associated Press v. United States, 326 U.S. 1 (1945), which
held that the Associated Press's exclusive membership policies
could still incur antitrust liability because the freedom to
publish protected by the First Amendment does not extend to a
"freedom to combine to keep others from publishing." California
Motor, 404 U.S. at 514 (quoting Associated Press, 326 U.S. at 20).
And, it is not clear to me that the Court, in relying on that
logic, was suggesting that a campaign of harassing litigation aimed
at destroying a would-be market entrant's effort to petition for
a license to operate -- by making it too costly to pursue -- is
any less a sham just because no public threat of baseless filings
is made.
Nor is it clear to me that PREI requires that we limit
California Motor's reach to cases involving such threats. After
all, PREI did not involve an attempt by an incumbent market actor
to destroy a rival's right to petition for a license to compete
for a share of the incumbent's market. Rather, in PREI, various
movie studios filed a copyright infringement action against hotel
operators who rented videodiscs of the studios' movies to hotel
guests and sought to develop a market for the viewing of the videos
at other hotels. 508 U.S. at 51-52. The hotel operators then
counterclaimed that the studios' suit was a sham because that claim
for copyright protection, even though potentially meritorious,
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"cloaked" the studios' effort to monopolize and restrain trade in
video entertainment services at hotels. Id. at 52.
PREI thus did not face an alleged clash of petition
rights remotely like in California Motor. PREI confronted only
the stark contention that challenged petitioning activity is a
sham for anticompetitive conduct if one market participant
petitions to secure its legal right in order to maintain an
economic advantage over a competitor (in that case by vindicating
the right not to have its intellectual property infringed) by
filing a non-frivolous suit. In PREI, the Court quite
understandably reasoned that an anti-competitive motive in seeking
legal relief is not in and of itself enough to make the request
for relief an abuse of the right of petition. Id. at 59. Such
reasoning flows quite naturally from the logic underlying Noerr-
Pennington immunity, which protects the First Amendment rights of
all market actors to seek competitive advantage through the non-
frivolous assertion of legal rights that, if vindicated, would
prove to be economically beneficial.
Thus, in my view, PREI does not necessarily compel the
conclusion that, in a pattern case more akin to California Motor,
each filing in a series must be baseless to make the petitioning
activity a sham. The antitrust violation -- if it exists -- in a
pattern case of that kind inheres in the monopolist's use of the
petitioning process to make the costs of the rival's petitioning
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activity so high that the rival cannot secure the legal relief
that would enable it actually to become a competitor. And, for
that reason, there is no claim in such a case, as there was in
PREI, that the antitrust violation inheres merely in the
monopolist's desire to disadvantage the competitor by actually
winning legal relief. Simply put, while there is no question after
PREI that a monopolist may use its petitioning right to seek to
win, I have my doubts about whether PREI also means that a
monopolist may use that same right to ensure -- by seeking to
deprive a rival of its own petitioning right -- that the monopolist
cannot lose.
Of course, in the abstract, I suppose that a monopolist
could use even a single filing in this concerning manner. And, I
acknowledge that PREI's "objectively baseless" requirement would
bar holding the monopolist liable for that filing, if it is not
frivolous. But, even so, California Motor suggests that, for a
monopolist to be effective in this regard, it will need to file
multiple petitions, as opposed to a single one. Thus, the fact
that PREI imposed an "objectively baseless" requirement in a case
involving a single copyright infringement claim does not suggest
to me that this same requirement necessarily applies to the kind
of seemingly abusive serial filing that I have just described.
Here, however, PRTC does not have the kind of direct
evidence of OneLink's attempt to destroy PRTC's right to petition
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for a license to compete that the California Motor plaintiffs had
in consequence of the public threat that the incumbent trucking
companies had allegedly made. Nor does PRTC identify other
comparable evidence.
Instead, PRTC relies on circumstantial evidence from
which, PRTC alleges, a jury could permissibly infer that OneLink
filed its underlying petitions without regard to merit. PRTC
points to OneLink's poor win-loss record in the underlying
proceedings and the fact that (in PRTC's estimation) the relief
sought was, in any event, unlikely to be of much benefit. But,
PRTC concedes that each filing had some merit, and it is difficult
to deny the value of the legal relief sought where, as is alleged
here, a market incumbent seeks procedural rights to challenge a
putative competitor's application for an operating license and
injunctive relief against that would-be competitor's construction
and funding of rival services.
The only other evidence that PRTC asks us to consider is
that OneLink abandoned its "efforts to intervene and challenge
PRTC's license" once its adversary obtained the license, the
licensing board's observations concerning OneLink's litigiousness,
and the possibility that OneLink financed half of another market
incumbent's lawsuit seeking to enjoin PRTC from developing the
infrastructure to enter their market. But, no circuit has actually
permitted a suit to go forward in which the underlying petitions
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were not baseless and there was no clear and convincing evidence
that an alleged monopolist sought to "use the governmental
process. . . as an anticompetitive weapon." City of Columbia v.
Omni Outdoor Advert., Inc., 499 U.S. 365, 380 (1991). And for
good reason, given the First Amendment interests at stake. Cf.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252-56 (1986)
("[W]here the New York Times 'clear and convincing' evidence
requirement applies, the trial judge's summary judgment inquiry as
to whether a genuine issue exists will be whether the evidence
presented is such that a jury applying that evidentiary standard
could reasonably find for either the plaintiff or the defendant.");
New York Times Co. v. Sullivan, 376 U.S. 254, 285-86 (1964)
(establishing a clear-and-convincing standard of proof for a
public official's libel claim, in light of the defendant's First
Amendment rights).
For these reasons, I am convinced that if we were to let
this suit proceed, we would be tilting the balance too far against
OneLink's right of petition. Accordingly, I join the Court's
opinion, which affirms the District Court's grant of summary
judgment but reserves for future cases a fuller accounting of
whether and when a series of non-baseless petitions might
constitute a sham within the meaning of the Noerr-Pennington
doctrine.
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