No. 8 8 - 4 8 8
IN THE SUPREME COURT OF THE STATE OF MONTANA
BEE BROADCASTING ASSOCIATES, a
Montana limited partnership, by
and through ROSE COMMUNICATIONS,
INC., a Montana corporation and
the limited partnership's sole
general partner,
Plaintiff and Respondent,
VS.
WILLIAM REIER, KAREN L. REIER
and DOES I through X I inclusive,
Defendants and Appellants.
APPEAL FROM: The District Court of the Eighteenth Judicial Di.strict,
In and for the County of Gallatin,
The Honorable Thomas Olson, ,Tudge presidincf.
COUNSEL OF RECORD:
For Appellant:
William L. Madden; Goetz, Madden & Dunn, Rozeman, Montana
For Respondent:
E. Eugene Atherton; E Eugene Atherton, P.C., Kalispell, Montana
Submitted on Briefs: January 1 2 , 1 9 8 9
Decided: February 27, 1 9 8 9
b
Mr. Justice John Conway Harrison delivered the Opinion of the
Court.
This case comes to us on appeal after a dismissal of
pl-aintiff's complaint in the Eighteenth Judicial District,
Gal-latin County, the Honorable Thomas A. Olson presiding.
Appellants appeal the lower court's denial of Rule 11,
M.R.Civ.P., sanctions. We affirm.
Brieflv, the facts are as follows: On March 23, 1983,
respondent, Bee Broadcasting, obtained a permit from the
Federal Communications Commission (hereinafter FCC) to
construct television station KCTZ, Channel 7, in Rozeman,
Montana. However, respondent failed to begin construction
within the time permitted and requested an extension. On
August 7, 1984, the FCC denied the extension and cancelled
the permit. Respondent petitioned for reconsideration. On
September 27, 1984, appellant, Karen Reier, filed an
opposition to respondent's Motion for Reconsideration,
supporting the FCC's initial denial of a time extension and
expressing an interest in applying for the station assignment
once it again became available for public application.
Thereafter, the parties filed numerous pleadings and
counterpleadings before the FCC.
On June 15, 1987, appellant William Reier appeared
before the Bozeman City Commission to protest the issuance of
a conditional use permit for construction of microwave and
satellite antennas on a building used in connection with the
television studio and offices. The offices were to be used
by KCTZ. The commission granted the permit on June 22, 1987.
On July 28, 1987, respondent filed an action in the
District Court against appellants alleging tortious
interference with prospective business relations. In
response, appellants filed a comprehensive motion to dismiss,
for summary judgment and for sanctions. Appellants asserted
that their conduct before the FCC and the Bozeman City
Commission was protected by an absolute privilege of free
speech under Art. 11, sec. 6, Mont. Const. (1972) and
27-1-804, MCA. In turn, respondent urged the court to
adopt a "sham exception" to the general rule resembling that
accepted in federal antitrust cases. See, Eastern ailr road
Conference v. Noerr Motors (1961), 365 U.S. 1-27, 81 S.Ct.
523, 5 L.Ed.2d 464 (protected free speech unless the acti~ritv
"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 Motors, 365 U.S.
at 144).
After extensive briefing and oral argument, the lower
court dismissed the complaint for failure to establish a
prima facie case, concluding that appellants' actions were
protected free speech. While the court acknowledged the case
law supporting a "sham exception" to free speech rights, i.t
rejected an appl-ication in the instant case absent
legislative action. The request for sanctions was denied.
Appellants appeal from this denial, asserting the complaint
was frivolous and the case law absolutely inappropriate to
the circumstances.
Rule 11, M.R.Civ.P., provides in pertinent part:
Every pleading, motion, or other paper of
a party represented by an attorney shall
be signed by at least one attorney of
record in his individual name, whose
address shall be stated ... The
signature of an attorney or party
constitutes a certificate by him that he
has read the pleading, motion, or other
paper; that to the best of his knowledge,
information, and belief formed after
reasonable inquiry it is well grounded in
fact and is warranted by existing law or
a good faith argument for the extension,
modification, or reversal of existing
law, and that it is not interposed for
any improper purpose, such as to harass
or to cause unnecessary delay or needless
increase in the cost of litigation
.. . If a pleading, motion, or other
paper is signed in violation of this
rule, the court, upon motion or upon its
own initiative, shall impose upon the
person who signed it, a represented
party, or both, an appropriate sanction
...
More stringent than the original good faith formula, Rule 11.
imposes an "objective reasonableness" standard designed to
prevent needless litigation and avoid waste. Fec3.R.Civ.P. 11
advisory committee note. Accordingly, an attorney must make
a reasonable inquiry into the facts and law which serve as
the basis for his complaint. A party need not be correct in
his view of the law. Rather, " [tlhe pleader, at a minimum,
must have a 'good faith argument' for his or her view of what
the law is, or should be. " Zal.divar v. City of TJOS Anqeles
(9th Cir. 1986), 780 F.2d 823, 831.
The respondent asserted a "sham exception" to the free
speech rights claimed by appellants. Though readily applied
in antitrust cases, the lower court denied its application 5.n
the instant case, finding that "without I.egislative action,
the court is reluctant to limit or punish free speech.'"
Contrarv to appellants' assertions, the lower court did not.
reject respondent's claim "out o+ hand," nor find the
assertion so inappropriate as to constitute a Frivolous or
unreasonable claim. Rather, the court requested briefing and
argument to further educate on the merits of the issue. Only
after inquirv did the District Court reject respondent's
claim and dismiss the complaint. The granting of a motion to
dismiss is not djspositive on the issue of sanctions.
The decision to order sanctions in a given case rests
within the sound discretion of the district court. State ex
rel. Sorenson v. Roske (Mont. 1987), 745 P.2d 365, 44 St.Rep.
1854; Schmidt v. Colonial Terrace Associates (Mont. 1986),
723 P.2d 954, 43 St.Rep. 1489. The record reveals no abuse
of discretion.
Affirmed.
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We concur: