Commercial Litigation and Arbitration

Noerr-Pennington Doctrine Applies to Government’s Condemnation Litigation, Including Discovery Conduct — Protection Extends to Counsel — Sham Exception Applies Even If Plaintiff was Not Diligent in Seeking to Uncover Sham

The plaintiff Kearney v. Foley & Lardner, LLP, 2009 U.S. App. LEXIS 20950 (9th Cir. Sept. 18, 2009) alleged that, in a prior state court condemnation proceeding, the condemning governmental entity and its counsel falsely denied the existence of, and failed to produce in discovery, test results that bore directly on the value of the property. The governmental entity and its counsel claimed Noerr-Pennington immunity:

The district court ... dismiss[ed] Kearney's federal claims under the Noerr-Pennington doctrine because the conduct on which Kearney relied to establish liability was incidental to First Amendment-protected petitioning activity. The court further held that the complaint did not fit into the "sham exception" to that doctrine because Kearney had not supported the position that defendants' alleged intentional misrepresentations to the court "depriv[ed] the condemnation proceeding of its legitimacy." ***

The Noerr-Pennington doctrine derives from the Petition Clause of the First Amendment and provides that "those who petition any department of the government for redress are generally immune from statutory liability for their petitioning conduct." ... It initially emerged in the antitrust context. See E. R.R. Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127 (1961); United Mine Workers v. Pennington, 381 U.S. 657 (1965). Recognizing that the "'right to petition extends to all departments of the government'" and includes access to courts, the Supreme Court extended the doctrine to provide immunity for the use of "'the channels and procedures'" of state and federal courts to advocate causes. ***

The Supreme Court has since held that Noerr-Pennington principles "apply with full force in other statutory contexts" outside antitrust..... In doing so, the Court adopted a three-part test to determine whether the defendant's conduct is immunized: (1) identify whether the lawsuit imposes a burden on petitioning rights, (2) decide whether the alleged activities constitute protected petitioning activity, and (3) analyze whether the statutes at issue may be construed to preclude that burden on the protected petitioning activity. ***

Not all petitioning activity is immunized, however. A "sham" exception to the doctrine developed to prevent the immunization of conduct that used "governmental process . . . as an anticompetitive weapon." ... The Ninth Circuit has held that a defendant's activities may fall into this exception if they include making intentional misrepresentations to the court that then "deprive[s] the litigation of its legitimacy." ***

As an initial matter, Kearney claims that the doctrine was meant to protect a citizen's right to petition the government, and never intended to bar suit by a private citizen against government officials. In support of her argument, she cites Manistee Town Ctr. v. City of Glendale, 227 F.3d 1090 (9th Cir. 2000), for the principle that the immunization of government officials or entities has been limited to cases in which those officials are lobbying other government officials on behalf of their constituents. She argues that a case of government initiated litigation against a citizen does not fit within the rationale supporting immunity for lobbying.

As a matter of first impression, the Manistee court held that Noerr-Pennington could apply to government entities or officials because the city officials' lobbying efforts amounted to a petition on behalf of citizens.... There is no reason, however, to limit Manistee's holding to lobbying efforts. In a representative democracy, the court recognized that branches of government often "act on behalf of the people" and "intercede" to "advance their constituents' goals, both expressed and perceived." ... Such intercession is just as likely to be accomplished through lawsuits — the very act of petitioning — as through lobbying.... Furthermore, an eminent domain proceeding is consistent with the principles laid out inManistee: a governmental entity acts on behalf of the public it represents when it seeks to take private property and convert it to public use. Cf. New West, L.P. v. City of Joliet, 491 F.3d 717, 721-22 (7th Cir. 2007) (holding that Noerr-Pennington applies to a municipality's condemnation action).

We find that a governmental entity or official may receive Noerr-Pennington immunity for the petitioning involved in an eminent domain proceeding. The agents of that litigation — employees and law firms and lawyers — may benefit from the immunity as well. ***

Since we have already determined above that the underlying litigation here was protected, it follows that the misconduct Kearney alleges in the discovery communications surrounding that litigation and the trial advocacy of that litigation likewise comes within Noerr-Pennington. Kearney argues that, in so saying, we would be broadening the notion of what conduct is "incidental" beyond what our precedents have recognized. We disagree and do not find "incidental" so narrow. Discovery communications have already been recognized as "incidental," ... and, like trial advocacy, are a "common . . . feature of modern litigation." ... . Defendants' alleged instruction to CTE not to prepare a report with the test results is perhaps more far afield. However, the testing was completed in preparation for the valuation trial, and so statements to those completing the testing would be incidental to that litigation as well....

Instead of looking to Kearney's allegations, the district court's ruling seems based in large part on its belief that Kearney did not do enough to discover the test results she sought from Defendants. It is unclear why Kearney's behavior on this point should matter since the Noerr-Pennington doctrine is concerned with the immunization of petitioning conduct and strips immunization in certain cases where a sham is perpetrated by that petitioner. See Clipper Exxpress v. Rocky Mountain Motor Tariff Bureau, Inc., 690 F.2d 1240, 1261 (9th Cir. 1982) (holding there is "no first amendment protection for furnishing with predatory intent false information to an . . . adjudicative body"). Thus, the concerns behind the doctrine have everything to do with the petitioner and little to do with the other party's conduct. Even if, as the court found, Kearney could have done more to discover the test results, the sufficiency of Kearney's efforts is a question of fact not properly dealt with at the pleading stage, and does nothing to negate allegations of Defendants' misrepresentations to the court and jury on the central issue in the litigation.

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