F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
APR 7 2000
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT
CARDTOONS, L.C., an Oklahoma
Limited Liability Company,
Plaintiff - Appellant,
vs. No. 98-5061
MAJOR LEAGUE BASEBALL
PLAYERS ASSOCIATION, an
unincorporated association,
Defendant - Appellee.
ON REHEARING EN BANC
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OKLAHOMA
(D.C. No. CV-93-576-E)
James W. Tilly (and Craig A. Fitzgerald, with him on the briefs), Tilly &
Fitzgerald, Tulsa, Oklahoma, for Plaintiff - Appellant.
Russell S. Jones, Jr. (and William E. Quirk, Shughart, Thomson & Kilroy, P.C.,
Kansas City, Missouri, and James W. Weger, Jones, Givens, Gotcher & Bogan,
Tulsa, Oklahoma, with him on the briefs), for Defendant - Appellee.
Before SEYMOUR, Chief Judge, TACHA, BALDOCK, BRORBY, EBEL,
KELLY, HENRY, BRISCOE, LUCERO, and MURPHY, Circuit Judges.
KELLY, Circuit Judge.
This case requires us to determine whether threats of litigation between
purely private parties in a non-antitrust setting are immunized from liability under
the Noerr-Pennington doctrine or under the right to petition clause of the First
Amendment. Because purely private threats do not constitute a petition to the
government, we hold that they are not constitutionally protected.
Background
The facts are undisputed. In 1992, Cardtoons, L.C. (“Cardtoons”), an
Oklahoma limited liability company, took steps to produce parody baseball
trading cards which contained the images of major league baseball players. After
the cards were designed, Cardtoons contracted with Champs Marketing, Inc.
(“Champs”), an Ohio corporation, to print the cards for a set fee.
Major League Baseball Players Association (“MLBPA”) is the exclusive
collective bargaining agent for all active major league baseball players and is
responsible for enforcing the publicity rights of the players. In a June 18, 1993
letter to Cardtoons (“Cardtoons letter”), the MLBPA claimed that by producing
and selling the cards, Cardtoons was “violat[ing] the valuable property rights of
MLBPA and the players.” I R. at 8. The MLBPA threatened to “pursue its full
legal remedies to enforce its rights” if Cardtoons did not immediately cease
production of the cards. Id. at 9.
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On the same date, the MLBPA also sent a similar cease and desist letter to
Champs (the Champs letter). It is this letter that is the source of the present
controversy. In pertinent part, it stated:
We understand that you have and are in the
process of printing color drawings of active Major
League baseball players in baseball trading cards for
individuals associated with Cardtoons. This is to notify
you that we believe that the activities of those
individuals violate the valuable property rights of
publicity of the MLBPA and the players themselves.
Further, we believe that by printing the baseball trading
cards at the request of Cardtoons, you are participating
in Cardtoons’ illegal activities.
Accordingly, we request that you immediately
cease and desist the printing of baseball trading cards of
active Major League baseball players at the request of
Cardtoons or others who are not authorized to use the
likeness of active Major League baseball players.
If I do not hear from you immediately confirming
that you will agree to this request, I will have no
alternative but to take all necessary action to enforce the
rights of the players and the MLBPA against
infringement of their rights.
Id. at 10, 10A. Upon receiving the letter, Champs informed Cardtoons that it
intended to stop printing the cards.
On June 22, 1993, Cardtoons filed suit in federal district court seeking a
declaratory judgment that its cards did not violate MLBPA’s publicity rights and
also seeking damages based on alleged tortious interference with the Champs
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contract. MLBPA moved to dismiss for lack of subject matter jurisdiction and
filed counterclaims seeking declaratory and injunctive relief, as well as damages
for violation of its publicity rights. The court bifurcated the proceedings to first
resolve Cardtoons’ declaratory judgment request, finding that the damages issues
were dependent upon the legality of the parody cards.
The district court initially adopted a magistrate judge’s recommendations
and ruled in favor of the MLBPA. See Cardtoons, L.C. v. Major League Baseball
Players Ass’n, 838 F. Supp. 1501 (N.D. Okla. 1993). However, following the
Supreme Court’s decision in Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569
(1994), the district court concluded that the parody cards were protected under the
First Amendment. Accordingly, the court vacated its initial decision and entered
judgment in favor of Cardtoons. See Cardtoons, L.C. v. Major League Baseball
Players Ass’n, 868 F. Supp. 1266 (N.D. Okla. 1994) (“Cardtoons I”). This court
affirmed on appeal, determining that the cards were “an important form of
entertainment and social commentary that deserve First Amendment protection.”
Cardtoons, L.C. v. Major League Baseball Players Ass’n, 95 F.3d 959, 976 (10th
Cir. 1996) (“Cardtoons II”).
Cardtoons returned to the district court to pursue its damages claims against
the MLBPA. The court allowed Cardtoons to amend its complaint and assert new
claims for prima facie tort, libel and negligence. All of Cardtoons’ claims
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stemmed from the allegations contained in the Champs letter. The district court
concluded that the MLBPA was immune from liability under the Noerr-
Pennington doctrine and entered summary judgment for MLBPA on all of
Cardtoons’ claims. Cardtoons, L.C. v. Major League Baseball Players Ass’n, No.
93-C-576-E (N.D. Okla. Mar. 12, 1998) (“Cardtoons III”).
On appeal, a panel of this court upheld the grant of summary judgment.
Cardtoons, L.C. v. Major League Baseball Players Ass’n, 182 F.3d 1132 (10th
Cir. 1999) (“Cardtoons IV”). The panel majority determined that the Noerr-
Pennington doctrine applies apart from its roots in antitrust. In determining
whether immunity for writing the letters was appropriate, the panel majority
focused on the two part test enunciated in Professional Real Estate Investors, Inc.
v. Columbia Pictures, Inc., 508 U.S. 49, 60-61 (1993) (“PRE”).
In critical part, the panel majority held that Noerr-Pennington immunity
covered threats of litigation as well as the actual litigation itself. “We adopt the
legal and policy rationales that have informed other circuits’ extension of Noerr-
Pennington immunity to prelitigation threats, and hold that whether or not they
are consummated, such threats enjoy the same level of protection from liability as
litigation itself.” Cardtoons IV, 182 F.3d at 1137. The panel majority went on to
hold that the MLBPA had probable cause to threaten the lawsuit against Champs,
thus satisfying the PRE test. “Accordingly, the Champs letter enjoyed Noerr-
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Pennington immunity as a threat of litigation.” Cardtoons IV, 182 F.3d at 1139.
In dissent, Judge Ebel questioned whether Noerr-Pennington immunity
should be extended to cover purely private threats. Rather than apply the two-
part PRE test designed for litigation, Judge Ebel espoused a three part test for
threats of litigation. A party seeking Noerr-Pennington immunity must show that
the threat was (1) made in good faith; (2) was objectively reasonable; and (3) was
a “proximate prologue to actual or imminent litigation.” Cardtoons IV, 182 F.3d
at 1142 (Ebel, J., dissenting).
Cardtoons sought rehearing en banc, arguing that the panel majority
misapplied the Noerr-Pennington doctrine, and the case should be governed solely
by the First Amendment right to petition. In particular, it pointed to the decisions
in McDonald v. Smith, 472 U.S. 479 (1985) and Martin v. City of Del City, 179
F.3d 882 (10th Cir. 1999) as contrary to the panel opinion. We granted rehearing
en banc. For the reasons stated below, we reverse the panel and remand.
I. Noerr-Pennington Immunity
The Noerr-Pennington doctrine was first recognized in two antitrust cases:
Eastern R.R. Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127
(1961) and United Mine Workers v. Pennington, 381 U.S. 657 (1965). The
present case does not involve antitrust claims, and therefore, we must first address
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the applicability of Noerr-Pennington outside the antitrust context. 1
Noerr involved an extensive publicity campaign by the railroad industry
aimed at changing state law to place various restrictions on trucking in the long-
distance freight business. The trucking industry brought suit in antitrust, alleging
violations of §§ 1 and 2 of the Sherman Act. The Court held that the railroads
were immune from suit because “the Sherman Act does not apply to the activities
of the railroads at least insofar as those activities comprised mere solicitation of
governmental action with respect to the passage and enforcement of laws.”
Noerr, 365 U.S. at 138. 2
This immunity was based upon two grounds. See City of Lafayette v.
Louisiana Power & Light Co., 435 U.S. 389, 399 (1978) (noting the “two
correlative principles” on which Noerr immunity was established); see also
California Motor Transport Co. v. Trucking Unlimited, 404 U.S. 508, 510 (1972).
The first was a statutory interpretation of the Sherman Act.
To hold that the government retains the power to act in
1
This Court was faced with the issue but did not decide it in Quark, Inc. v.
Harley, Nos. 96-1046, 96-1048, 96-1061, 1998 WL 161035, at **7 (10th Cir.
March 4. 1998) (unpublished order and judgment) (“Assuming, without deciding,
that this circuit would extend the doctrine beyond the realm of antitrust litigation .
. . .”)
2
Pennington extended this immunity to the right to petition the executive
and California Motor Transport Co. v. Trucking Unlimited, 404 U.S. 508 (1972),
further extended the doctrine to cover petitioning the courts, the third branch of
government.
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[a] representative capacity and yet hold, at the same
time, that the people cannot freely inform the
government of their wishes would impute to the
Sherman Act a purpose to regulate, not business activity,
but political activity, a purpose which would have no
basis whatever in the legislative history of that Act.
Noerr, 365 U.S. at 137. The second basis for immunity was predicated on the
First Amendment right to petition.
Secondly, and of at least equal significance, such a
construction of the Sherman Act would raise important
constitutional questions. The right of petition is one of
the freedoms protected by the Bill of Rights, and we
cannot, of course, lightly impute to Congress an intent to
invade these freedoms.
Id. at 137-38. The Court has referred to these two prongs as “[i]nterpreting the
Sherman Act in the light of the First Amendment’s Petition Clause.” Federal
Trade Comm’n v. Superior Ct. Trial Law. Ass’n, 493 U.S. 411, 424 (1990).
The logical dilemma in applying Noerr-Pennington outside of the antitrust
context is that Noerr’s first rationale for immunity – an interpretation of the
Sherman Act – is not present. Supreme Court precedent gives us scant guidance
in resolving this issue. All of the cases in which the Supreme Court has applied
Noerr-Pennington immunity as such have involved antitrust claims. See e.g. PRE,
508 U.S. at 52; City of Columbia v. Omni Outdoor Advertising, 499 U.S. 365,
369 (1991); Superior Ct. Trial Law. Ass’n, 493 U.S. at 422; Allied Tube &
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Conduit Corp. v. Indian Head, Inc., 486 U.S. 492, 497 (1988); Pennington, 381
U.S. at 659; Noerr, 365 U.S. at 129.
To the extent that Supreme Court precedent can be read to extend Noerr-
Pennington outside of the antitrust context, it does so solely on the basis of the
right to petition. See Bill Johnson’s Restaurants, Inc. v. NLRB, 461 U.S. 731,
742-43 (1983) (immunizing employer’s law suit from NLRB injunction under the
right to petition); NAACP v. Claiborne Hardware, 458 U.S. 886, 913-14 (1982)
(granting First Amendment immunity to a nonviolent business boycott seeking to
vindicate economic and equal rights). See also PRE, 508 U.S. at 59 (noting that
the Court has “invok[ed Noerr] in other contexts” and has referenced it “by
analogy”). But see Omni Outdoor Advertising, 499 U.S. at 384 (granting
Noerr immunity to federal antitrust claims but permitting liability under state law
“trade libel” and other claims based on the same underlying conduct).
The circuits have followed suit, eliminating the Sherman Act rationale
outside of antitrust and focusing solely on the petition clause. For instance, the
Third Circuit in WE, Inc. v. City of Philadelphia, 174 F.3d 322, 326-27 (3d Cir.
1999) stated: “This court, along with other courts, has by analogy extended the
Noerr-Pennington doctrine to offer protection to citizens’ petitioning activities in
contexts outside the antitrust area as well. . . . [T]he purpose of Noerr-Pennington
as applied in areas outside the antitrust field is the protection of the right to
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petition.” The Fifth Circuit has noted that "[a]lthough the Noerr-Pennington
doctrine initially arose in the antitrust field, other circuits have expanded it to
protect first amendment petitioning of the government from claims brought under
federal and state laws . . . ." Video Int’l Production, Inc. v. Warner-Amex Cable
Communications, Inc., 858 F.2d 1075, 1084 (5th Cir. 1988). 3
While we do not question the application of the right to petition outside of
antitrust, it is a bit of a misnomer to refer to it as the Noerr-Pennington doctrine;
a doctrine which was based on two rationales. In our view, it is more appropriate
to refer to immunity as Noerr-Pennington immunity only when applied to antitrust
claims. 4 In all other contexts, including the present one, such immunity derives
3
See also Aaron R. Gary, First Amendment Petition Clause Immunity from
Tort Suits: In Search of a Consistent Doctrinal Framework, 33 Idaho L. Rev. 67,
95 (1996) (“Innumerable federal and state courts have concluded that the
Noerr-Pennington doctrine is rooted in the First Amendment right to petition and
therefore must be applied to all claims implicating that right, not just to antitrust
claims.”).
4
Bill Johnson’s is a good example of the need to distinguish between
antitrust cases based upon the two prongs of Noerr-Pennington and non-antitrust
cases based solely on the right to petition. The dissent characterizes Bill
Johnson’s as a direct application of Noerr-Pennington. However, such a
characterization would lead to a direct conflict between Bill Johnson’s and
Professional Real Estate Investors, Inc. v. Columbia Pictures, Inc., (PRE), 508
U.S. 49 (1993). Noerr-Pennington immunity, as defined in all of the
Noerr antitrust line of cases, is immunity from liability. PRE, in the context of
antitrust, held that a lawsuit is immune from liability unless it is a sham (i.e.
objectively unreasonable or reasonable but brought in bad faith). See 508 U.S. at
60. However, in Bill Johnson’s, the Supreme Court specifically declared, in the
context of an NLRA dispute, that an employer who brought a non-sham suit could
still be held liable, even though the right to petition protected the suit from being
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from the right to petition.
This distinction is not completely academic. Antitrust cases that grant
Noerr-Pennington immunity do so based upon both the Sherman Act and the right
to petition. These precedents, founded in part upon a construction of the Sherman
Act, are not completely interchangeable with cases based solely upon
the right to petition.
The Fifth Circuit antitrust decision in Coastal States Marketing, Inc. v.
Hunt, 694 F.2d 1358 (5th Cir. 1983) is a classic example of the difficulties which
can arise if this distinction is not made. MLBPA relies heavily upon this case for
the proposition that Noerr-Pennington immunity extends to prelitigation threats of
suit. In Coastal States, the plaintiff argued that defendants’ threats to litigate
could not be immunized under Noerr. “[B]ecause threats of litigation are not
enjoined. 461 U.S. at 748-49.
The conflict is apparent. Under the PRE standard, a plaintiff is immune
from liability based upon a simple showing of objective reasonableness. Under
Bill Johnson’s, objective reasonableness is not enough and a court must further
determine whether the plaintiff violated the law in bringing the suit. The only
way to reconcile these cases is to limit them to the contexts in which they arose.
PRE is an antitrust case; Bill Johnson’s is not.
This distinction is important for two reasons. First, it cautions against
describing Bill Johnson’s as an application of Noerr-Pennington immunity rather
than Petition Clause immunity. Second, and more importantly, it demonstrates
that PRE must be limited to the antitrust context. Outside of that context, the
Petition Clause protects objectively reasonable lawsuits from being enjoined, but
requires a court to look at the underlying statute to determine whether the initiator
of the suit can be held liable. Therefore, given the non-antitrust context of this
case, the dissent’s reliance on PRE in Part II, C is inapposite.
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directed to a government, they do not fall within the rationale of petitioning
immunity.” Coastal States, 694 F.2d at 1367. The Fifth Circuit rejected this
argument.
Given that petitioning immunity protects joint litigation,
it would be absurd to hold that it does not protect those
acts reasonably and normally attendant upon effective
litigation. The litigator should not be protected only
when he strikes without warning. If litigation is in good
faith, a token of that sincerity is a warning that it will be
commenced and a possible effort to compromise the
dispute.
Id.
If we were to refer to immunity based solely on the right to petition as
Noerr-Pennington immunity, it would be very tempting to apply Coastal States in
the present case. To do so, however, would be inappropriate. First, Coastal
States rejected the right to petition as a basis for Noerr. “Noerr was based on a
construction of the Sherman Act. It was not a first amendment decision.” Coastal
States, 694 F.2d at 1364-65 (footnote omitted). Second, and even more
instructive, the Fifth Circuit specifically noted that its use of the term “petitioning
immunity” went beyond the guarantees of the petition clause. “We reject the
notion that petitioning immunity extends only so far as the first amendment right
to petition and then ends abruptly.” Id. at 1366.
Coastal States’ grant of immunity to prelitigation threats was not based on
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the right to petition and, therefore, does not inform our decision in the present
non-antitrust case. 5 This is not to intimate that right to petition principles can
never be drawn from Noerr-Pennington antitrust cases. Rather, it is merely a
precautionary distinction designed to avoid drawing constitutional principles from
propositions founded upon statutory construction.
II. Right to Petition
We must now determine whether prelitigation threats communicated solely
between private parties are afforded immunity from suit by the right to petition
guaranteed by the First Amendment. We hold that they are not.
The First Amendment states: “Congress shall make no law respecting . . .
the right of the people . . . to petition the Government for a redress of
grievances.” The right to petition “is implicit in ‘[t]he very idea of government,
republican in form.’” McDonald v. Smith, 472 U.S. 479, 482 (1985) (quoting
United States v. Cruikshank, 92 U.S. 542, 552 (1876)). “Certainly the right to
petition extends to all departments of the Government. The right of access to the
courts is indeed but one aspect of the right of petition.” California Motor, 404
5
The same is true of McGuire Oil Co. v. Mapco, Inc., 958 F.2d 1552 (11th
Cir. 1992), an antitrust case which relied upon Coastal States in granting
immunity to threats of litigation. Although the Eleventh Circuit mentioned the
right to petition as one basis for Noerr-Pennington immunity, it specifically
protected the threats of litigation under an interpretation of the Sherman Act. See
McGuire Oil, 958 F.2d at 1560 (holding that “threats, no less than the actual
initiation of litigation, do not violate the Sherman Act”).
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U.S. at 510; see also City of Del City, 179 F.3d at 887.
However, the right to petition is not an absolute protection from liability.
In McDonald, petitioner wrote a letter to President Reagan accusing respondent
of fraud, blackmail, extortion, and the violation of various individuals’ civil
rights. Respondent was being considered for the position of United States
Attorney but was not appointed. He brought a libel suit against petitioner, who
claimed that the right to petition gave him absolute immunity in his statements to
the president. The Supreme Court disagreed.
To accept petitioner’s claim of absolute immunity would
elevate the Petition Clause to special First Amendment
status. The Petition Clause, however, was inspired by
the same ideals of liberty and democracy that gave us
the freedoms to speak, publish, and assemble. These
First Amendment rights are inseparable, and there is no
sound basis for granting greater constitutional protection
to statements made in a petition to the President than
other First Amendment expressions.
McDonald, 472 U.S. at 485 (citations omitted). The Court affirmed the lower
courts in allowing the libel action to proceed. “The right to petition is
guaranteed; the right to commit libel with impunity is not.” Id. See also City of
Del City, 179 F.3d at 889 (holding that right to petition is not absolute, and in
state employment context, employee must demonstrate that petition for which he
was fired involved matter of public concern).
If MLBPA were being sued for libelous statements made in a litigation
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document filed with the court, McDonald would clearly allow the libel suit to
continue as a matter of constitutional law. Compare Restatement (Second) of
Torts § 587 (1977) (“A party to a private litigation . . . is absolutely privileged to
publish defamatory matter concerning another in communications preliminary to a
proposed judicial proceeding, or in the institution of or during the course and as a
part of, a judicial proceeding in which he participates, if the matter has some
relation to the proceeding.”). Likewise, statements made in a letter threatening
litigation are not absolutely protected by the petition clause of the First
Amendment and are subject to the principles of state common law and state
statutory law.
However, even in the context of Cardtoons non-libel claims, it is clear that
the right to petition simply does not grant MLBPA immunity from suit. The
plain language of the First Amendment protects only those petitions which are
made to “the Government.” 6 As Judge Ebel noted in his dissent to the panel
opinion:
The MLBPA’s cease-and-desist letter to Champs
threatening suit was never sent to the government; did
not ask the government for any response or ‘redress of
grievances’; was not even known to the government
6
The dissent does not address this plain language, but instead relies upon
the concept of “breathing space,” the interest of private parties in vindicating
their legal rights, and public policy arguments in arguing that such private threats
should be constitutionally protected.
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prior to Cardtoons’ declaratory judgment action against
the MLBPA; and did not ever result in any litigation.
Cardtoons IV, 182 F.3d at 1141. A letter from one private party to another
private party simply does not implicate the right to petition, regardless of what the
letter threatens. Even the antitrust text cited by the panel majority notes that “a
mere threat directed at one’s competitor to sue or to seek administrative relief
does not involve or ‘petition’ the government . . . .” Philip E. Areeda & Herbert
Hovenkamp, Antitrust Law, § 205e at 237. See also Rodime PLC v. Seagate
Technology, Inc., 174 F.3d 1294, 1307 (Fed. Cir. 1999) (noting that meetings at
which defendant persuaded potential licensees to end license negotiations with the
plaintiff “had nothing to do with petitioning the government.”).
MLBPA asserts that the decisions of other circuits are to the contrary. See
Glass Equip. Dev., Inc. v. Besten, Inc., 174 F.3d 1337 (Fed. Cir. 1999); McGuire
Oil Co. v. Mapco, Inc., 958 F.2d 1552 (11th Cir. 1992); CVD, Inc. v. Raytheon
Co., 769 F.2d 842 (1st Cir. 1985); Coastal States Mktg., Inc. v. Hunt, 694 F.2d
1358 (5th Cir. 1983). These cases are distinguishable. First, CVD merely held
that “the threat of unfounded trade secrets litigation in bad faith is sufficient to
constitute a cause of action under the antitrust laws, provided that the other
essential elements of a violation are proven.” 769 F.2d at 851. We do not agree
with MLBPA that the First Circuit thereby implied that good faith threats are
immunized by Noerr-Pennington.
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Second, and most importantly, all four cases arise in the antitrust context.
As discussed earlier, both Coastal States and McGuire Oil grant immunity to
prelitigation threats under a construction of the Sherman Act, not the right to
petition. Neither Glass Equip. Dev. nor CVD even mention the right to petition.
Although Glass Equip. Dev. does appear to treat both “actual or threatened
infringement suits” the same for purposes of Noerr-Pennington immunity, 174
F.3d at 1344, we reject it, as well as the other three cases, to the extent they imply
that the mere threat of suit between private parties constitutes a petition to the
government.
The Supreme Court’s decision in Allied Tube & Conduit Corp. v. Indian
Head, Inc., 486 U.S. 492 (1988) also lends support to our conclusion. 7 That case
involved the National Fire Protection Association (NFPA), a private, voluntary
organization which publishes the National Electrical Code. “Revised every three
years, the Code is the most influential electrical code in the nation. A substantial
number of state and local governments routinely adopt the Code into law with
little or no change.” 486 U.S. at 495. Changes in the Code could be approved by
a simple majority vote of the members present at the NFPA’s annual meeting.
7
We acknowledge that Allied Tube is an antitrust case applying Noerr-
Pennington and are therefore careful to distinguish between propositions
grounded solely on the Sherman Act and those also grounded in the right to
petition.
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Respondent proposed amending the Code to include polyvinyl chloride conduit as
an approved type of electrical conduit. Petitioner, the Nation’s largest producer
of steel conduit, feared that such approval would harm its business. It recruited
over 150 people to attend the NFPA meeting and vote against the new proposal.
Polyvinyl chloride conduit was rejected by a mere four votes, and respondent
brought suit alleging violation of the Sherman Act.
Petitioner argued that it was immune from suit under Noerr-Pennington.
The Court disagreed. “In this case, the restraint of trade on which liability was
predicated was the Association’s exclusion of respondent’s product from the
Code, and no damages were imposed for the incorporation of that Code by any
government.” Allied Tube, 486 U.S. at 500.
Here petitioner’s actions took place within the context
of the standard-setting process of a private association.
Having concluded that the Association is not a ‘quasi-
legislative’ body, we reject petitioner’s argument that
any efforts to influence the Association must be treated
as efforts to influence a ‘quasi-legislature’ and given the
same wide berth accorded legislative lobbying.
Id. at 504. The Court specifically noted that communications with a private
organization “did not take place in the open political arena, where partisanship is
the hallmark of decisionmaking.” Id. at 506. Without a petition to the
government, “[t]he issue of immunity in this case thus collapses into the issue of
antitrust liability.” Id. at 509.
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The present case is similar in many respects. MLBPA communicated with
Champs in order to further its own business interests. Its efforts were successful
when Champs refused to print the parody cards. Cardtoons brought suit alleging
various violations of the law based upon MLBPA’s action. MLBPA raised Noerr-
Pennington as a defense. We hold, to paraphrase Allied Tube, that because there
was no petition of the government in the present case, the issue of immunity
collapses into the issue of state law liability. 8
While there are many persuasive policy arguments in favor of granting
immunity to private threats of litigation, these do not override the clear language
of the First Amendment. Such arguments are best addressed to the state
legislative bodies which can craft state law accordingly. See e.g. Gary, supra note
3, at 73-77 (noting that state common law typically shields certain litigation
activity from defamation and tortious interference suits).
In summary, we hold that when the basis for immunity is the right to
petition, purely private threats of litigation are not protected because there is no
8
We also note in passing that an almost identical claim to that raised in this
case was presented in Continental Ore Co. v. Union Carbide & Carbon Corp., 370
U.S. 690, 695 (1962) (plaintiffs claimed that “[d]efendants in 1943, by open
threats of reprisals, allegedly frustrated certain arrangements which Continental
had with the Climax Molybdenum Corporation for the manufacture of
ferrovanadium.”). Noerr immunity was discussed by the Court but was not
mentioned in regard to this claim.
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petition addressed to the government.
REVERSED and REMANDED.
98-5061, Cardtoons v. Major League Baseball Players Association
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LUCERO, Circuit Judge, with whom BRORBY and BRISCOE, Circuit Judges,
join, dissenting.
I cannot agree with the majority’s proposition that the First Amendment
protects an owner of intellectual property rights who blindsides an adversary with
a lawsuit claiming infringement of those rights, but fails to shield that same
owner when a more civilized notice and demand letter is sent in advance. Put
another way, there is no sound basis for the conclusion that a complaint will be
afforded immunity while a “cease-and-desist” letter will not, when both
documents contain identical allegations. The majority’s ruling encourages, nay
demands, more litigation; it requires intellectual property owners to bypass the
post office on the way to the court house and avoid the letter carrier in a rush to
get to the process server.
Today’s decision ignores the reality of intellectual property law, in which
the enforcement of legal rights, and thus the invocation of the litigation process,
is customarily commenced by a cease-and-desist letter. Consequently, the
practical result of the majority’s holding will be to force parties seeking to
prevent the wrongful infringement of their intellectual property rights to ambush
infringers with lawsuits or risk having to defend against retaliatory tort claims.
Noerr -Pennington , as that body of jurisprudence has come to be known, has been
applied to immunize from state tort claims objectively reasonable petitioning
activity invoking the courts. In furtherance of the First Amendment interest in the
vindication of legal rights and the constitutional requirement that the right to
petition be given the breathing space necessary to survive, the same immunity
should be afforded to objectively reasonable allegations of infringement and
threats of litigation contained in cease-and-desist letters.
I
The First Amendment guarantees “the right of the people . . . to petition the
Government for a redress of grievances.” U.S. Const. amend. I. Although the
Supreme Court has declared the right to petition to be “among the most precious
of the liberties safeguarded by the Bill of Rights,” United Mine Workers v.
Illinois State Bar Ass’n , 389 U.S. 217, 222 (1967), the Court has provided only
limited guidance as to the nature and scope of the protection the right affords.
A
The Supreme Court has provided some guidance as to the application of the
right to petition in cases developing the Noerr -Pennington doctrine. As originally
articulated by the Supreme Court, the Noerr -Pennington doctrine provides general
immunity from antitrust liability under the Sherman Act to private parties who
petition the government for redress of greivances, notwithstanding the anti-
competitive purpose or consequences of their petitions. See Eastern R.R.
Presidents Conference v. Noerr Motor Freight, Inc. , 365 U.S. 127, 135-38 (1961)
(establishing immunity for petitions to a state legislature); see also United Mine
-2-
Workers v. Pennington , 381 U.S. 657, 670 (1965) (extending Noerr immunity to
petitions to public officials). The Court emphasized in Noerr that “[t]he right of
petition is one of the freedoms protected by the Bill of Rights, and we cannot . . .
lightly impute to Congress an intent to invade these freedoms.” Noerr , 365 U.S.
at 137-38.
In California Motor Transport Co. v. Trucking Unlimited , 404 U.S. 508
(1972), the Court extended immunity to “the approach of citizens or groups of
them to . . . courts.” Id. at 510 (holding, in addition, that “[t]he right of access to
the courts is indeed but one aspect of the right of petition”) (citing Johnson v.
Avery , 393 U.S. 483, 485 (1969); Ex parte Hull , 312 U.S. 546, 549 (1941)). In
reaching this conclusion, the Court relied primarily on the constitutional
underpinnings of the doctrine:
We conclude that it would be destructive of rights of association and
of petition to hold that groups with common interests may not,
without violating the antitrust laws, use the channels and procedures
of state and federal agencies and courts to advocate their causes and
points of view respecting resolution of their business and economic
interests vis-a-vis their competitors.
Id. at 510-11 ; see also City of Lafayette v. Louisiana Power & Light Co. , 435
U.S. 389, 399 n.17 (1978) (noting that “[c]ases subsequent to Pennington have
emphasized the possible constitutional infirmity in the antitrust laws that a
contrary construction would entail in light of the serious threat to First
Amendment freedoms that would have been presented”) (citations omitted).
-3-
When applying the Noerr -Pennington doctrine in the antitrust context, this Circuit
has placed similar emphasis on the First Amendment rights the doctrine is
designed to protect. See, e.g. , Zimomra v. Alamo Rent-A-Car, Inc. , 111 F.3d
1495, 1503 (10th Cir. 1997) ; Instructional Sys. Dev. Corp. v. Aetna Cas. & Sur.
Co. , 817 F.2d 639, 650 (10th Cir. 1987). 9
Because of its foundation in the First Amendment right to petition, the
Supreme Court has applied the Noerr -Pennington doctrine, by analogy, outside of
its aborigine roots in antitrust law. In NAACP v. Claiborne Hardware Co. , 458
U.S. 886, 889-91 (1982), for example, merchants brought claims of common law
malicious interference with business and violations of state statutory labor and
antitrust laws against participants in a civil rights boycott. Comparing by analogy
those common law and statutory claims to the economic regulation at issue in
Noerr , the Court concluded that nonviolent boycotting activities were entitled to
similar First Amendment protections because “a major purpose of the boycott . . .
was to influence governmental action,” and, unlike the petitioning activity in
Noerr , the purpose was to vindicate important Fourteenth Amendment rights. See
9
I therefore reject the Fifth Circuit’s assertion that Noerr “was not a first
amendment decision.” Coastal States Mktg., Inc. v. Hunt, 694 F.2d 1358, 1364-
65 (5th Cir. 1983). Indeed, the Fifth Circuit itself has taken inconsistent
positions. See Video Int’l Prod., Inc. v. Warner-Amex Cable Communications,
Inc., 858 F.2d 1075, 1083 (5th Cir. 1988) (holding that the purpose of the Noerr-
Pennington doctrine is to protect the First Amendment right to petition the
government).
-4-
id. at 914-15. The following year, the Court again applied the Noerr -Pennington
doctrine outside of the antitrust context. In Bill Johnson’s Restaurants, Inc. v.
NLRB , 461 U.S. 731, 734 (1983), a restauranteur filed a civil suit seeking to
enjoin employees from picketing his restaurant. The employees responded by
filing a complaint with the National Labor Relations Board alleging the civil suit
was a retaliatory action in violation of the National Labor Relations Act
(“NLRA”), 29 U.S.C. § 158(a)(1) & (4). See id. at 734-35. The question before
the Supreme Court was whether, under the NLRA, the Board could enjoin the
civil suit against the employees. See id. at 740-43. Based on the right to petition
recognized in California Motor Transport , as well as a line of cases holding that
the NLRA does not preempt state civil remedies for conduct deeply rooted in
local concerns, the Court held that the Board could not enjoin a well-founded
lawsuit. See id.
In light of Claiborne Hardware and Bill Johnson’s Restaurants , there can be
little doubt that Noerr -Pennington immunity, as amplified by California Motor
Transport , is mandated by the First Amendment right to petition, irrespective of
any independent statutory basis it might also have, and “ Noerr -Pennington
immunity” has evolved into an umbrella term for First Amendment petitioning
immunity. Cf. First Nat’l Bank of Boston v. Bellotti , 435 U.S. 765, 792 n.31
(1978) (citing California Motor Transport and Noerr for the proposition that “the
-5-
First Amendment protects the right of corporations to petition legislative and
administrative bodies”); NAACP v. Button , 371 U.S. 415, 430-31 (1963) (citing
Noerr ’s First Amendment protection of the railroads’ governmental solicitations
to support the proposition that the First Amendment also protects associating for
litigation purposes) . 10 Consistent with the Supreme Court’s constitutional
characterization of the doctrine, numerous other courts have applied Noerr-
Pennington immunity, either directly or by analogy, to shield defendants from
state tort claims. See, e.g. , Cheminor Drugs, Ltd. v. Ethyl Corp. , 168 F.3d 119,
128-29 (3d Cir. 1999) ; Video Int’l Prod., Inc. v. Warner-Amex Cable
Communications, Inc. , 858 F.2d 1075, 1082-84 (5th Cir. 1988); Havoco of Am.,
Ltd. v. Hollobow , 702 F.2d 643, 649-50 (7th Cir. 1983) ; Missouri v. National
Org. of Women , 620 F.2d 1301, 1319 (8th Cir. 1980); Pennwalt Corp. v. Zenith
10
Nor is the application of petitioning immunity limited to associational or
political activity. The Court has long held that “[t]he grievances for redress of
which the right of petition was insured, and with it the right of assembly, are not
solely religious or political ones.” Thomas v. Collins, 323 U.S. 516, 531 (1945);
see also Illinois State Bar Ass’n, 389 U.S. at 223 (rejecting the contention that
“the principles announced in Button were applicable only to litigation for political
purposes”) (citing Brotherhood of R.R. Trainmen v. Virginia, 377 U.S. 1, 8
(1964)). For example, in Bill Johnson’s Restaurants, 461 U.S. at 743, the Court
afforded immunity to an individual litigant seeking to vindicate private economic
interests. Although in Martin v. City of Del City, 179 F.3d 882, 886 (10th Cir.
1999), we held that a government employee alleging he was terminated in
retaliation for petitioning for the redress of grievances must show that the petition
touches on matters of public concern, Martin’s public concern requirement is
inapplicable here because it was developed in light of the government’s
substantial interest in maintaining an efficient workplace.
-6-
Lab., Inc. , 472 F. Supp. 413, 423-24 (E.D. Mich. 1979), appeal dismissed , 615
F.2d 1362 (6th Cir. 1980); Sierra Club v. Butz , 349 F. Supp. 934, 937-39 (N.D.
Cal. 1972); Pacific Gas & Elec. Co. v. Bear Stearns & Co. , 791 P.2d 587, 595-98
(Cal. 1990); Protect Our Mountain Env’t, Inc. v. District Court , 677 P.2d 1361,
1364-69 (Colo. 1984) (en banc).
I agree with the Fifth Circuit that “[t]here is simply no reason that a
common-law tort doctrine can any more permissibly abridge or chill the
constitutional right of petition than can a statutory claim such as antitrust.” Video
Int’l Prod. , 858 F.2d at 1084. Therefore, I would conclude that the MLBPA is
shielded from Cardtoons’s state tort claims insofar as those claims arise from its
protected petitioning activity. 11
This conclusion requires the resolution of two
further questions: Does the Champs letter constitute petitioning activity within
the scope of the First Amendment; and if so, to what extent does the Petition
Clause protect MLBPA from state tort claims premised on the Champs letter?
B
The First Amendment refers to “petitions to the government.” The
paradigmatic petition to the courts is a complaint. Cf. McDonald v. Smith , 472
11
To the extent Grip Pak, Inc. v. Illinois Tool Works, Inc., 694 F.2d 466,
471-72 (7th Cir. 1982), holds to the contrary, I would reject the holding of that
case. We also note that another panel of that circuit overlooked or ignored the
Grip Pak decision in reaching a result consistent with our own. See Havoco of
Am., Ltd., 702 F.2d at 649-50.
-7-
U.S. 479, 484 (“[F]iling a complaint in court is a form of petitioning activity.”).
At issue in this case, however, is a cease-and-desist letter between private parties
alleging infringement of intellectual property rights and threatening a lawsuit.
Based on the interests served by the Petition Clause and the requirement that First
Amendment rights be given “breathing space,” the concept of petitioning activity
must embrace such a cease-and-desist letter.
The Supreme Court has not considered this precise issue, but has suggested
that the application of immunity to activities, such as threats of litigation,
incidental to the normal processes of litigation would be consistent with its
holdings. See Allied Tube & Conduit Corp. v. Indian Head, Inc. , 486 U.S. 492,
503 (1988)(holding a “claim of Noerr immunity cannot be dismissed on the
ground that the conduct at issue involved no ‘direct’ petitioning of government
officials, for Noerr itself immunized a form of ‘indirect’ petitioning”) (citation
omitted); cf. Continental Ore v. Union Carbide & Carbon Corp. , 370 U.S. 690,
707 (1962) (distinguishing Noerr because the defendant in the case at bar was
“engaged in private commercial activity, no element of which involved seeking to
procure the . . . enforcement of laws”). More significantly, “[t]he first
amendment interests involved in private litigation” as articulated in Bill
Johnson’s Restaurants , 461 U.S. at 743, support a concept of petitioning activity
that includes actions incidental to litigation . These interests include
-8-
“compensation for violated rights and interests, the psychological benefits of
vindication, [and] public airing of disputed facts.” Id. So conceived, the right to
petition the courts serves, in the context of private litigation, the purpose of
vindicating legal rights. Put another way, conduct inducing administrative and
judicial action “is protected by the firmly rooted principle, endemic to a
democratic government, that enactment of and adherence to the law is the
responsibility of all.” Brownsville Golden Age Nursing Home, Inc. v. Wells , 839
F.2d 155, 160 (3d Cir. 1988) (applying petitioning immunity to the defendant’s
notification to government agencies and mobilization of public awareness
concerning violations of the law at a nursing home).
Cease-and-desist letters threatening recourse to the judicial process if the
alleged infringement of intellectual property rights continues, no less than
complaints seeking redress for such an infringement, promote the interests served
by the right to petition the courts: They vindicate legal rights and promote
adherence to important laws of commerce. Cease-and-desist letters are frequently
used by businesses and individuals to protect and vindicate their intellectual
property rights. See generally Ronald B. Coolley, Notifications of Infringement
and Their Consequences , 77 J. Pat. & Trademark Off. Soc’y 246, 246 (1995)
(describing notification to suspected intellectual property infringers as a “common
reaction” of rights holders). While the immediate purpose of cease-and-desist
-9-
letters may not be compensation or psychological benefit, cf. Bill Johnson’s
Restaurants , 461 U.S. at 743, they nonetheless seek vindication and financial gain
through the protection of significant economic interests. They do so by
demanding adherence to the law, a demand every citizen has the right to assert.
Cf. Brownsville , 839 F.2d at 160. And although this demand is made directly,
rather than via a governmental mechanism, its significance and efficacy are
derived from the existence of laws creating and protecting intellectual property
rights and the existence of courts to enforce those laws, not the brooding threat of
force. Nothing could better demonstrate this point than the fact that the notice of
wrongdoing provided by the Champs letter is a condition precedent to MLBPA
bringing a colorable claim against Champs for contributory infringement of
publicity rights. See, e.g. , Misut v. Mooney , 475 N.Y.S.2d 233, 236 (N.Y. Sup.
Ct. 1984); Maynard v. Port Publications, Inc. , 297 N.W.2d 500, 507 (Wis. 1980).
In sum, the Champs letter constitutes a use of “the channels and procedures of
state and federal . . . courts to advocate [the author’s] causes and points of view
respecting resolution of [its] business and economic interests vis-a-vis [its]
competitors.” California Motor Transport , 404 U.S. at 511.
Applying petitioning immunity to widely-used methods of enforcing legal
rights that precede any direct communication with the courts is also compelled by
the Supreme Court’s pronouncement that First Amendment rights require
- 10 -
“breathing space” to survive. See New York Times Co. v. Sullivan , 376 U.S. 254,
272 (1964); Button , 371 U.S. at 433. That principle was applied, although not by
name, in Brotherhood of R.R. Trainmen v. Virginia Bar Ass’n , 377 U.S. 1 (1964).
Rejecting the Bar Association’s effort to enjoin a union from advising members to
obtain legal counsel before settling injury claims and referring them to selected
attorneys, the Court held that “[t]he State can no more keep these workers from
using their cooperative plan to advise one another than it could use more direct
means to bar them from resorting to the courts to vindicate their legal rights. The
right to petition the courts cannot be so handicapped.” Id. at 7; see also United
Trans. Union v. State Bar , 401 U.S. 576, 585-86 (1971); Feminist Women’s
Health Ctr., Inc. v. Mohammad , 586 F.2d 530, 543 (5th Cir. 1978). The
application of the concept of “breathing space” to the right to petition the courts
is not limited to situations in which actions incidental to litigation implicate
associational rights. See Pacific Gas & Elec. , 791 P.2d at 595-98 (applying the
concept of “breathing space” without reference to associational rights in reaching
the conclusion that the Petition Clause prohibits premising tort liability on the
defendant’s conduct inducing another to bring a meritorious lawsuit); cf. South
Dakota v. Kansas City Southern Indus., Inc. , 880 F.2d 40, 53 (8th Cir. 1989)
(holding, without reference to associational rights, that the defendant’s assumed
- 11 -
assistance to litigants in the underlying suit “did not, as a matter of law, constitute
‘sham’ petitioning and was fully protected by the first amendment”).
Like the incidental litigation activity in the cases just cited, cease-and-
desist letters notifying the recipient of the infringement of intellectual property
rights and threatening legal action, “must also be protected if the right of access
to the courts is to have significance.” The Consortium, Inc. v. Knoxville Int’l
Energy Exposition , 563 F. Supp. 56, 59 (E.D. Tenn. 1983) (citing Pennwalt Corp. ,
472 F. Supp. at 413). As discussed, such letters are often the first formal step in
the process of enforcing the law of intellectual property and vindicating economic
interests. Frequently this step is quickly followed by the filing of a complaint
with a court, be it by the rights holder for damages and injunctive relief or the
recipient for declaratory judgment. See Coolley at 246. That is precisely what
occurred in this case. Upon receiving the Cardtoons letter and notice of the
Champs letter, Cardtoons preempted the threatened litigation by filing an action
for declaratory relief, and MLBPA responded with counterclaims. By permitting
liability under state common law for allegations and threats contained in cease-
and-desist letters, while prohibiting liability for identical allegations made in a
complaint filed with a court, the majority ignores the central role cease-and-desist
letters play in the enforcement of intellectual property rights. The resulting
bright-line rule chills the right to petition the courts by handicapping activity
- 12 -
immediately precedent to, and intimately associated with, recourse to the judicial
process. 12 It is just such a result that the concept of “breathing space,” born of
the practical reality of the environment in which First Amendment rights are
exercised, is meant to prevent.
In addition to sustaining the vitality of the fundamental right to petition and
furthering the interests that right is intended to serve, the acknowledgment that
Petition Clause immunity applies to cease-and-desist letters such as the one before
us is consistent with sound public policy. As commentators have observed, this
acknowledgment facilitates efforts to resolve disputes before resort is had to
litigation. See Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law § 205e at
237 (rev. ed. 1997) (arguing that withholding immunity from prelitigation
12
This immediate association with the judicial process distinguishes the
Champs letter from the activity at issue in Allied Tube and Conduit Corp., 486
U.S. at 492. The Court in Allied held that efforts to influence the standard-setting
process of a private trade association did not enjoy Noerr immunity. See id. at
509-10. However, it “expressly limited [its holding] to cases where an
economically interested party exercises decisionmaking authority in formulating a
product standard for a private association that comprises market participants,” id.
at 511 n.13 (citation and internal quotations omitted), indicating that this holding
would not encompass, and therefore not preclude from immunity, efforts to
influence “all private standard-setting associations.” Id. With such repeated and
explicit limitations, it is clear the Court did not foreclose the application of
immunity to all indirect petitioning activities, such as to non-governmental
associations as in Allied, or, as here, to cease-and-desist letters. On the contrary,
as discussed, the Court emphasized a “claim of Noerr immunity cannot be
dismissed on the ground that the conduct at issue involved no ‘direct’ petitioning
of government officials, for Noerr itself immunized a form of ‘indirect’
petitioning.” Id. at 503 (citation omitted).
- 13 -
communication would curb practices that “provide useful notice and facilitate the
resolution of controversies”); Herbert Hovenkamp, Federal Antitrust Policy §
18.3d at 644 (1994) (immunizing prelitigation threats is vital to “[o]ur entire
dispute resolution process[, which] is designed to encourage people to resolve
their differences if possible before litigating”).
Applying petitioning immunity to a cease-and-desist letter is not novel.
Within the antitrust context, numerous courts have applied Noerr -Pennington
immunity to claims arising from cease-and-desist letters, threats of litigation, and
other pre-litigation enforcement efforts. See, e.g., Glass Equip. Dev., Inc. v.
Besten, Inc. , 174 F.3d 1337, 1343-44 (Fed. Cir. 1999); CVD, Inc. v. Raytheon
Co. , 769 F.2d 842, 850-51 (1st Cir. 1985) ; Miller Pipeline Corp. v. British Gas
PLC , 69 F. Supp. 2d 1129, 1138 (S.D. Ind. 1999); PrimeTime 24 Joint Venture v.
National Broad. Co., Inc. , 21 F. Supp. 2d 350, 356 (S.D.N.Y. 1998); The
Consortium , 563 F. Supp. at 59; Outboard Marine Corp. v. Pezetel , 474 F. Supp.
168, 174 (D. Del. 1979); cf. Alexander v. National Farmers Org. , 687 F.2d 1173,
1200 (8th Cir. 1982) (noting that there may be situations in which threats of
litigation against a competitor’s customers would be protected under Noerr -
Pennington ). Likewise, outside of the antitrust context, federal district courts
have afforded immunity from state common law claims based on similar pre-
litigation efforts to enforce legal rights. See, e.g. , Matsushita Elec. Corp. v. Loral
- 14 -
Corp. , 974 F. Supp. 345, 359 (S.D.N.Y. 1997); Aircapital Cablevision, Inc. v.
Starlink Communications Group, Inc. , 634 F. Supp. 316, 325 (D. Kan. 1986);
Pennwalt Corp. , 472 F. Supp. at 424.
In order to provide breathing space to the First Amendment right to petition
the courts, further the interests that right was designed to serve, and promote the
public interest in efficient dispute resolution, I would follow other federal courts
and accord cease-and-desist letters alleging infringement of intellectual property
rights and threatening legal recourse the same level of immunity from tort liability
as a complaint making the same allegations.
C
That immunity is not, of course, absolute. In determining the proper scope
of petition clause immunity for activities invoking the judicial process, the Noerr -
Pennington doctrine once again provides the starting point. While broad and
extensive, Noerr -Pennington immunity is not a shield for a petitioner whose
conduct, although “ostensibly directed toward influencing governmental action, 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 , 365 U.S. at 144.
The Supreme Court has established a two-part definition of sham litigation:
First, the lawsuit must be objectively baseless in the sense that no
reasonable litigant could realistically expect success on the merits. If
an objective litigant could conclude that the suit is reasonably
calculated to elicit a favorable outcome, the suit is immunized under
- 15 -
Noerr , and an antitrust claim premised on the sham exception must
fail. Only if challenged litigation is objectively meritless may a court
examine the litigant’s subjective motivation. Under this second part
of our definition of sham, the court should focus on whether the
baseless lawsuit conceals “an attempt to interfere directly with the
business relationships of a competitor,” Noerr , 365 U.S. at 144,
through the “use [of] the governmental process—as opposed to the
outcome of that process—as an anti-competitive weapon,” Columbia
v. Omni Outdoor Advertising, Inc. , 499 U.S. 365, 380 (1991). This
two-tiered process requires the plaintiff to disprove the challenged
lawsuit’s legal viability before the court will entertain evidence of
the suit’s economic viability.
Professional Real Estate Investors, Inc. v. Columbia Pictures Indus., Inc. , 508
U.S. 49, 60-61 (1993). To ascertain “baselessness,” a court must consider
whether the litigant had “probable cause” to initiate the legal action. Id. at 62. If
there is probable cause, the defendant automatically enjoys Noerr -Pennington
immunity, and the second, subjective motivation prong of the Professional Real
Estate test becomes irrelevant. See id. at 63. Probable cause to sue may exist
when the law is unsettled or when an “action [is] arguably ‘warranted by existing
law’ or at the very least [is] based on an objectively ‘good faith argument for the
extension . . . of existing law.’” Id. at 65 (quoting Fed. R. Civ. P. 11).
In establishing the requirements for the sham exception to the
Noerr -Pennington doctrine, the Court emphasized that “[w]hether applying Noerr
as an antitrust doctrine or invoking it in other contexts , we have repeatedly
reaffirmed that evidence of anti-competitive intent or purpose alone cannot
transform otherwise legitimate activity into a sham.” Professional Real Estate ,
- 16 -
508 U.S. at 59 (emphasis added). As an example of the emphasis on objective
reasonableness as the linchpin of petitioning immunity outside the antitrust
context, Professional Real Estate cites Bill Johnson’s Restaurants , 461 U.S. at
743. In that case, the Court held “[t]he filing and prosecution of a well-founded
lawsuit may not be enjoined as an unfair labor practice, even if it would not have
been commenced but for the plaintiff’s desire to retaliate against the defendant
for exercising rights protected by the [National Labor Relations] Act.” Bill
Johnson’s Restaurants , 461 U.S. at 743. 13
Thus, the Supreme Court has
consistently held that petitioning activity invoking the judicial process is
deserving of protection unless it is objectively baseless and motivated by an
unlawful purpose.
In accordance with Professional Real Estate , I would conclude that MLBPA
is entitled to immunity from all of Cardtoons’s state tort claims arising from the
Champs letter unless the allegations of wrongdoing and threats of litigation
contained in the letter were objectively baseless, in the sense of lacking probable
cause, and employed primarily for improper purposes.
Such a holding would be consistent with McDonald v. Smith , 472 U.S. 479
(1985), in which the Court addressed whether petitioning activity directed to the
13
Bill Johnson’s Restaurants went on to hold that the employee could
proceed with his or her unfair labor practices case if the employer did not prevail
in its state law claim. 461 U.S. at 747.
- 17 -
executive branch of government—specifically, a letter to the President—should
be immune from a state tort claim of libel. Relying on White v. Nicholls , 44 U.S.
266 (1845), and New York Times Co. v. Sullivan , 376 U.S. 254 (1964), the Court
held that the petitioning activity was not immune from liability for libel if carried
out with actual malice, that is, “‘falsehood and the absence of probable cause.’”
McDonald , 472 U.S. at 484 (quoting White , 44 U.S. at 291); see also New York
Times , 376 U.S. at 279-80 (defining actual malice as “with knowledge that it was
false or with reckless disregard of whether it was false or not”). In a statement of
particular relevance to this case, the Court noted that its conclusion that the First
Amendment does not provide absolute immunity for petitions to the government
was consistent with the principle at the heart of the Noerr -Pennington sham
litigation test: “‘[B]aseless litigation is not immunized by the First Amendment
right to petition.’” McDonald at 484 (quoting Bill Johnson’s Restaurants , 461
U.S. at 743; citing California Motor Transport , 404 U.S. at 513) . 14
To the extent there are any practical differences between McDonald ’s
“actual malice” standard and Professional Real Estate ’s “objectively baseless”
14
Contrary to the majority’s suggestion, McDonald’s conclusion that
individuals do not enjoy absolute immunity from state common law claims arising
from statements made in petitions to the government does not mean that there is
no constitutional protection from such claims. Rather, McDonald makes it clear
that state libel actions arising from petitioning activity cannot proceed unless the
elements of libel are consistent with the constitutionally-mandated actual malice
standard. 472 U.S. at 484-85.
- 18 -
standard, I would find the latter more applicable to petitioning activity invoking
the judicial process through allegations of wrongdoing. Moreover, I reject
Cardtoons’s suggestion that at the very least the McDonald standard should be
applied in determining whether MLBPA is immune from the libel claim.
Applying different standards to determine a defendant’s immunity from different
tort claims arising from the same petitioning activity would inject unnecessary
confusion into the analysis of Petition Clause immunity, and perhaps even
undermine such immunity by producing conflicting results . In this case, for
example, Cardtoons labels as libelous the assertion in the Champs letter that
“[MLBPA] believe[s] that the activities of [Cardtoons] violate the valuable
property rights of publicity of the MLBPA and the players themselves.”
(Appellant’s App. at 10.) This statement is coextensive with the allegations of
wrongdoing—participating in those activities—on which the threats of litigation
are based. Doctrinal consistency requires that the issue of whether these
statements will be afforded Petition Clause immunity be determined by a single
standard—the objectively baseless standard. 15
II
15
To the extent a libel claim is based on assertions in a cease-and-desist
letter other than the legal and factual bases for the allegations of infringement and
threats of litigation, the McDonald standard might be appropriate.
- 19 -
Applying this analytical framework to the case at bar, I agree with the
district court’s conclusion that the allegations of infringement and threats of
litigation contained in the Champs letter were objectively reasonable. Therefore,
I would affirm.
- 20 -
F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
JUN 29 1999
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT
CARDTOONS, L.C., an Oklahoma
Limited Liability Company,
Plaintiff - Appellant,
v.
No. 98-5061
MAJOR LEAGUE BASEBALL
PLAYERS ASSOCIATION, an
unincorporated association,
Defendant - Appellee.
Appeal from the United States District Court
for the Northern District of Oklahoma
(D.C. No. 93-CV-576-E)
James W. Tilly (Craig A. Fitzgerald with him on the briefs), Tilly & Associates,
Tulsa, Oklahoma, for Plaintiff - Appellant.
Russell S. Jones, Jr. (William E. Quirk and Leslie A. Greathouse of Shughart
Thomson & Kilroy, Kansas City, Missouri, and James E. Weger of Jones, Givens,
Gotcher & Bogan, Tulsa, Oklahoma, with him on the brief), Shughart Thomson &
Kilroy, Kansas City, Missouri, for Defendant - Appellee.
Before EBEL, McWILLIAMS and LUCERO, Circuit Judges.
LUCERO, Circuit Judge.
This case requires us to decide whether Noerr-Pennington immunity can
attach to threats of litigation made with probable cause. Applying the
“objectively baseless” test articulated in Professional Real Estate Investors, Inc.
v. Columbia Pictures, Inc., 508 U.S. 49 (1993), the district court concluded that
the non-consummated threats of a lawsuit made by the Major League Baseball
Players Association to Cardtoons and Champs Marketing, Inc., enjoy Noerr-
Pennington protection. We exercise jurisdiction pursuant to 28 U.S.C. § 1291,
and affirm.
I
Cardtoons, L.C. (“Cardtoons”), produces parody trading cards that feature
caricatures of active major league baseball players. 1 Cardtoons contracted with
Champs Marketing, Inc. (“Champs”), an Ohio corporation, to print the cards.
Major League Baseball Players Association (“MLBPA”), the exclusive collective
bargaining agent for all active major league baseball players, is the assignee of
the publicity rights of current players and handles licensing agreements
authorizing the use of their identities.
1
A more thorough description of the humorous cards, as well as the less
humorous litigation surrounding the cards’ production, can be found in Cardtoons,
L.C. v. Major League Baseball Players Assoc., 95 F.3d 959, 962-64 (10th Cir.
1996).
-2-
In a letter to Cardtoons dated June 18, 1993 (“Cardtoons letter”), MLBPA
claimed that by producing and selling the cards, Cardtoons was “violat[ing] the
valuable property rights of MLBPA and the players.” The MLBPA threatened to
“pursue its full legal remedies” if Cardtoons refused to cease production and sale
of the cards. Appellant’s App. at 8-9. In a similar letter dated the same day
(“Champs letter”), MLBPA also threatened Champs with litigation if it did not
stop “participating in Cardtoons’s illegal activities.” Appellant’s App. at 10.
Upon receipt of the letter, Champs notified Cardtoons that it intended to stop
printing the cards.
Four days later, Cardtoons filed suit in federal district court for a
declaratory judgment on the issue of whether its cards violated MLBPA’s publicity
and intellectual property rights. Also seeking injunctive relief, 2 Cardtoons asked
the court to bar MLBPA from interfering with Champs and other third parties
involved in the production and sale of the cards. Additionally, the suit alleged that
MLBPA had tortiously interfered with Cardtoons’s contractual relations with
Champs. MLBPA moved to dismiss the complaint for lack of
2
As part of its request for injunctive relief, Cardtoons sought a temporary
restraining order and preliminary injunction to prevent MLBPA from interfering
with Cardtoons’s contractual relations with Champs. Cardtoons subsequently
withdrew its request for these additional remedies when they were rendered moot
by Champs’s decision to stop producing the cards.
-3-
subject matter jurisdiction, and filed counterclaims seeking declaratory judgment,
injunctive relief, and damages under Oklahoma’s publicity rights statute, Okla.
Stat. tit. 21 § 839.1 and 839.2 (1993).
Unless Cardtoons was entitled to produce and sell the cards, as alleged in
the claim for declaratory judgment, it could not recover damages on the tortious
interference claims. Therefore, the parties agreed that before the adjudication of
Cardtoons’s tort claim, a magistrate judge should conduct an evidentiary hearing
and issue a report limited to Cardtoons’s declaratory judgment claim and
MLBPA’s counterclaims.
Concluding that Cardtoons’s activities violated the baseball players’ rights
of publicity under Oklahoma law, the magistrate recommended judgment on these
claims in favor of MLBPA. The district court initially adopted the
recommendation. See Cardtoons, L.C. v. Major League Baseball Players Ass’n,
838 F. Supp. 1510 (N.D. Okla. 1993). Following the Supreme Court’s decision in
Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994), however, the district
court concluded that the parody cards enjoyed First Amendment protection
against MLBPA’s infringement claims. Accordingly, the court vacated its initial
decision and entered judgment for Cardtoons. See Cardtoons, L.C. v. Major
League Baseball Players Ass’n, 868 F. Supp. 1266 (N.D. Okla 1994) (“Cardtoons
I”). We affirmed, holding that the parody cards are “an important form of
-4-
entertainment and social commentary that deserve First Amendment protection.”
Cardtoons, L.C. v. Major League Baseball Players Assoc., 95 F.3d 959, 976 (10th
Cir. 1996) (“Cardtoons II”).
Having prevailed on the declaratory judgment claim, Cardtoons returned to
the district court to pursue its claims for damages against MLBPA. In addition to
the claim for tortious interference with contract, Cardtoons asserted new claims for
prima facie tort, libel, and negligence, all stemming from the allegations contained
in the Cardtoons and Champs letters. Concluding that both letters were immune
from liability under the “Noerr-Pennington” doctrine, the district court granted
summary judgment for MLBPA and dismissed all of Cardtoons’s state
law claims. See Cardtoons, L.C., v. Major League Baseball Players Ass’n, No. 93-
C-576-E (N.D. Okla. Mar. 12, 1998) (“Cardtoons III”). Cardtoons challenges the
court’s application of the Noerr-Pennington doctrine and appeals the grant of
summary judgment. 3 Cardtoons also appeals the court’s decision to stay
discovery pending its ruling on MLBPA’s motion for summary judgment.
3
In its briefs, Cardtoons seems to appeal the grant of summary judgment
only with respect to the Champs letter. We note, however, that our conclusions
would not change if the appeal also involved the Cardtoons letter.
-5-
II
As originally articulated, the Noerr-Pennington doctrine provides general
immunity from antitrust liability to private parties who petition the government for
redress, notwithstanding the anticompetitive purpose or consequences of their
petitions. See Eastern Railroad Presidents Conference v. Noerr Motor Freight,
Inc., 365 U.S. 127, 135-38 (1961) (establishing immunity for petitions to state
legislature); see also United Mine Workers of America v. Pennington, 381 U.S.
657, 670 (1965) (extending Noerr immunity to petitions of public officials). The
Court later extended Noerr-Pennington immunity to the right of access to courts.
See California Motor Transport Co. v. Trucking Unlimited, 404 U.S. 508, 510
(1972) (citations omitted). Moreover, because it emanates from the First
Amendment right of petition, see Bright v. Moss Ambulance Service, Inc., 824
F.2d 819, 821 n.1 (10th Cir. 1987) (quoting City of Lafayette, La. v. Louisiana
Power & Light Co., 435 U.S. 389, 399 (1978)), Noerr-Pennington immunity stands
independent of its aborigine roots in antitrust, see, e.g., Bill Johnson’s
Restaurants, Inc. v. NLRB, 461 U.S. 731, 742-43 (1983) (immunizing employer
from prosecution for unfair labor practice even if an otherwise valid suit against
employee is driven by a retaliatory motive); NAACP v. Claiborne Hardware Co.,
458 U.S. 886, 913-14 (1982) (immunizing a nonviolent business boycott seeking to
vindicate economic and equal rights); South Dakota v. Kansas City Southern
-6-
Indus., Inc., 880 F.2d 40, 50 (8th Cir. 1989) (immunizing defendant from claim of
interference with contractual relations).
Although broad and extensive, Noerr-Pennington immunity is not a shield
for a petitioner whose conduct, although “ostensibly directed toward influencing
governmental action, is a mere sham to cover what is actually nothing more than
an attempt to interfere with the business relationships of a competitor.” Noerr,
365 U.S. at 144. The Supreme Court has established a two-part definition of sham
litigation:
First, the lawsuit must be objectively baseless in the sense that no
reasonable litigant could realistically expect success on the merits. If
an objective litigant could conclude that the suit is reasonably
calculated to elicit a favorable outcome, the suit is immunized under
Noerr, and an antitrust claim premised on the sham exception must
fail. Only if challenged litigation is objectively meritless may a court
examine the litigant’s subjective motivation. Under this second part
of our definition of sham, the court should focus on whether the
baseless lawsuit conceals “an attempt to interfere directly with the
business relationships of a competitor,” Noerr, 365 U.S. at 144,
through the “use [of] the governmental process—as opposed to the
outcome of that process—as an anticompetitive weapon,” Columbia v.
Omni Outdoor Advertising, Inc., 499 U.S. 365, 380 (1991). This
two-tiered process requires the plaintiff to disprove the challenged
lawsuit’s legal viability before the court will entertain evidence of the
suit’s economic viability.
Professional Real Estate Investors, Inc. v. Columbia Pictures, Inc., 508 U.S. 49,
60-61 (1993).
-7-
To ascertain “baselessness,” a court must consider whether the litigant had
“probable cause” to initiate the legal action. Id. at 62. If there is probable cause,
the defendant automatically enjoys Noerr-Pennington immunity, and the second,
subjective motivation prong of the Professional Real Estate test becomes
irrelevant. See id. at 63. Probable cause to sue may exist when the law is
unsettled or when an “action [is] arguably ‘warranted by existing law’ or at the
very least [is] based on an objectively ‘good faith argument for the extension . . .
of existing law.’” Id. at 65 (quoting Fed. R. Civ. P. 11).
Neither the Supreme Court nor this circuit has directly addressed the issue
of whether Noerr-Pennington immunity attaches to the mere threat of a law suit.
Confronted with this issue, however, three other circuits have concluded that
prelitigation threats of suit enjoy the same immunity as litigation itself, so long as
the threats are not shams. See McGuire Oil Co. v. Mapco, Inc., 958 F.2d 1552,
1558-60 (11th Cir. 1992); CVD, Inc. v. Raytheon Co., 769 F.2d 842, 850-51 (1st
Cir. 1985); Coastal States Mktg., Inc. v. Hunt, 694 F.2d 1358, 1367 (5th Cir.
1983). In so holding, the Fifth Circuit reasoned that “it would be absurd to hold
that [petitioning immunity] does not protect those acts reasonably and normally
attendant upon effective litigation. The litigator should not be protected only
when he strikes without warning.” Coastal States, 694 F.2d at 1367.
Commentators have agreed with this extension and have further developed the
-8-
policy rationales behind it. See, e.g., Phillip E. Areeda & Herbert Hovenkamp,
Antitrust Law § 205e at 237 (rev. ed. 1997) (withholding immunity from
prelitigation communication would curb practices that “provide useful notice and
facilitate the resolution of controversies”); Herbert Hovenkamp, Federal Antitrust
Policy § 18.3d at 644 (1994) (immunizing prelitigation threats is vital to “[o]ur
entire dispute resolution process[, which] is designed to encourage people to
resolve their differences if possible before litigating”). 4
We adopt the legal and policy rationales that have informed other circuits’
extension of Noerr-Pennington immunity to prelitigation threats, and hold that
whether or not they are consummated, such threats enjoy the same level of
protection from liability as litigation itself. 5 In addition, when considering
4
Applying Noerr-Pennington protection to prelitigation threats is especially
important in the intellectual property context, where warning letters are often
used as a deterrent against infringement. See, e.g, Matsushita Electronics Corp.
v. Loral Corp., 974 F. Supp. 345, 359 (S.D.N.Y. 1997) (concluding that policing
letters sent to suspected patent infringers enjoyed Noerr-Pennington immunity);
Thermos Co. v. Igloo Products Corp., 1995 WL 842002, *4 (N.D. Ill. Sept. 27,
1995) (same, for policing letters to alleged trademark infringers); see generally
Ronald B. Coolley, Notifications of Infringement and Their Consequences, 77 J.
Pat. & Trademark Off. Soc’y 246, 246 (1995) (describing notification of
suspected intellectual property infringers as a “common reaction” of rights
holders).
5
The dissent would bifurcate the test for granting Noerr-Pennington
immunity by applying the more lenient Professional Real Estate standard when a
party files suit, while requiring a party who merely issues a threat to demonstrate
that he acted both in “good-faith” and as a “proximate prologue to actual or
imminent litigation.” Diss. Op. at 6. This approach creates an incentive to
-9-
whether prelitigation threats enjoy Noerr-Pennington immunity, we conclude that
we must apply the two-part sham test of Professional Real Estate. 6
III
“We review the grant or denial of summary judgment de novo, applying the
same legal standard used by the district court pursuant to Fed. R. Civ. P. 56(c).”
Kaul v. Stephan, 83 F.3d 1208, 1212 (10th Cir. 1996) (citation and internal
quotation omitted). Summary judgment is appropriate “if the pleadings,
litigate, and would not, as the dissent maintains, protect poorly financed entities
like Champs from “private bullying communication.” Diss. Op. at 4. Instead,
such companies would become more vulnerable to ruinous lawsuits, as the
threatening letter takes the form of a legal complaint.
6
All of the prelitigation cases from other circuits were decided before
Professional Real Estate, and provide us with no uniform standard to determine
when a threat to litigate is worthy of Noerr-Pennington protection. See, e.g.,
McGuire Oil, 958 F.2d at 1560-61 & n.12 (applying subjective test and
objectively baseless test); CVD, 769 F.2d at 851 (applying both a “bad faith” test
and a test for clear and convincing evidence that the defendant’s claim was
objectively baseless); but see Coastal States, 694 F.2d at 1372 (“A litigant should
enjoy petitioning immunity from the antitrust laws so long as a genuine desire for
judicial relief is a significant motivating factor underlying the suit.”). We note,
however, that to the extent these cases are inconsistent with Professional Real
Estate, they are unfaithful to the Noerr-Pennington doctrine. See Professional
Real Estate, 508 U.S. at 57, 60 (describing the “objective reasonableness” test as
part of the “original formulation” of the Noerr-Pennington sham exception, and
declaring that “fidelity to precedent compels us to reject a purely subjective
definition of ‘sham’”). Indeed, the Eleventh Circuit, when applying a test for
sham litigation after the Supreme Court had granted certiorari but before it had
decided Professional Real Estate, implied that whatever test the Supreme Court
articulates for granting immunity for litigation under Noerr-Pennington must
similarly apply to prelitigation threats. See McGuire Oil, 958 F.2d at 1560-61 &
n.12.
-10-
depositions, answers to interrogatories, and admissions on file, together with the
affidavits, if any, show there is no genuine issue as to any material fact and that
the moving party is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c).
In the Noerr-Pennington context, “a court may decide probable cause as a matter
of law” at the summary judgment stage when a defendant raises Noerr-Pennington
immunity as a defense and the predicate facts are undisputed. Professional Real
Estate, 508 U.S. at 63.
A
If MLBPA had probable cause to threaten Champs with litigation, the
Champs letter enjoys Noerr-Pennington immunity under the Professional Real
Estate test. To determine whether there was probable cause, we must first
consider the validity of the underlying threatened action—the infringement suit
against Cardtoons for its parody cards—and then turn to the validity of a cause of
action against Champs as the printer of the cards.
Prior to our decision in Cardtoons II, the only federal appellate court
decision addressing the constitutional tensions inherent in a celebrity parody
provided some legal support for MLBPA’s allegations against Cardtoons. See
Cardtoons II, 95 F.3d at 970 (discussing White v. Samsung Electronics American,
Inc., 971 F.2d 1395 (9th Cir. 1992)). At the time of its prelitigation threats against
Champs, MLBPA therefore had probable cause to believe that Cardtoons’s parody
-11-
cards infringed its publicity rights. Furthermore, as Cardtoons II demonstrates,
MLBPA’s infringement claim was premised on a reasonable argument that its
publicity rights outweighed Cardtoons’s free speech rights. See Cardtoons II, 95
F.3d at 970-76 (applying balancing test and concluding that Cardtoons’s speech
rights prevail over MLBPA’s property rights). Therefore, although MLBPA’s
infringement claim did not prevail, our prior adjudication shows that “a similarly
situated reasonable litigant could have perceived some likelihood of success.”
Professional Real Estate, 508 U.S. at 65. As such, the district court could
reasonably conclude that MLBPA’s threats against Cardtoons were “an objectively
plausible effort to enforce rights” and deserved Noerr-Pennington protection. Id.
Cardtoons argues that even if MLBPA’s threats against Cardtoons enjoy
immunity, our decision in Cardtoons II does not resolve the issue of whether
Noerr-Pennington immunity attaches to the Champs letter. In Cardtoons II, we
applied Oklahoma’s statutory right of publicity law. Here, Cardtoons asserts,
Ohio’s common law of publicity rights controls because Ohio is the locus of
Champs’s conduct and its state of residence, and therefore has the most
significant contacts to the torts alleged. Ohio’s “incidental use” exception to the
right of publicity, Cardtoons contends, provides MLBPA with less protection for
its publicity rights than it enjoyed under Oklahoma law. Under Ohio law,
therefore, MLBPA lacked probable cause for its threats against Champs.
-12-
Ohio law recognizes an incidental use exception to its right of publicity law
that applies when a person’s name or likeness is used “for purposes other than
taking [commercial] advantage of his reputation, prestige, or other value
associated with him.” Zacchini v. Scripps-Howard Broadcasting Co., 351 N.E.2d
454, 459 n.4 (Ohio), rev’d on other grounds, 433 U.S. 562 (1977) (quotation and
internal citation omitted). In our prior adjudication, we specifically noted that
Oklahoma’s right of publicity statute also contains a provision that is analogous to
the concept of “incidental use.” See Cardtoons II, 95 F.3d at 968. We discern no
marked difference between the incidental use exception in Oklahoma and Ohio. In
both states the applicability of the exception turns on the degree to which a
defendant derives commercial benefit from its use of the plaintiff’s name or
likeness. See 12 Okla. Stat. tit. § 1449(E) (1999) (stating that whether the use of a
person’s “likeness [is] so directly connected with commercial” activity as to
constitute a violation of the right of publicity presents a question of fact);
Zacchini, 351 N.E.2d at 458 n.4 (stating that although the incidental use exception
under Ohio law does not apply to the commercial exploitation of another’s
likeness, the mere fact that a defendant “seeks to make profit” from his endeavor
is not enough to establish commercial use).
Moreover, MLBPA had a colorable claim for infringement under Ohio law.
One Ohio court has applied the incidental use exception in a situation in which the
-13-
defendant used an Olympic athlete’s name and likeness in the context of accurate,
historical information on disposable drinking cups. See Vinci v. American Can
Co., 591 N.E.2d 793, 794 (Ohio Ct. App. 1990). Because this use was not meant
to support or promote the cups, the court found it to be merely incidental. See id.
In our conclusion in Cardtoons II that the Oklahoma incidental use exception was
inapplicable to the parody cards, we noted that “the players were specifically
selected for their wide market appeal,” and the use of their likeness was “directly
connected with a proposed commercial endeavor.” Cardtoons II, 95 F.3d at 968.
Accordingly, MLBPA’s claim would not have been foreclosed under Ohio law.
Even if MLBPA had probable cause to assert a claim of infringement
against Champs in Ohio, Cardtoons argues, MLBPA lacked probable cause for the
Champs letter because as a printer, Champs was a passive actor and is liable as a
contributory tort infringer only if it knew or had reason to know that it was aiding
and abetting an infringement. See, e.g., Misut v. Mooney, 475 N.Y.S.2d 233, 236
(N.Y. Sup. Ct. 1984); Maynard v. Port Publications, Inc., 297 N.W.2d 500, 507
(Wis. 1980). The Champs letter, however, provided the very notice that Misut and
Maynard require. Cardtoons cannot argue that Champs was not liable unless it had
-14-
notice of an infringement, while also contending that MLBPA rendered itself
ineligible for Noerr-Pennington immunity by providing the required notice. 7
We therefore need not resolve the conflict of law and publicity rights issues
that Cardtoons raises, because under either potentially controlling legal regime,
MLBPA would have had probable cause on its infringement claim against Champs.
Accordingly, the Champs letter enjoyed Noerr-Pennington immunity as a threat of
litigation.
B
Cardtoons contends that Noerr-Pennington immunity does not extend to its
libel claim against MLBPA, which is based not on the MLBPA’s threat of
litigation but on the allegations in the Champs letter that Cardtoons violated the
law. Specifically, the Champs letter states, “[MLBPA] believe[s] that the
activities of [Cardtoons] violate the valuable property rights of publicity of the
MLBPA and the players themselves.” Appellant’s App. at 10. The letter contains
no further statements of fact or law concerning Cardtoons and its activities, except
to characterize them as “illegal.” Id.
Moreover, the law of contributory infringement in the publicity rights
7
context is not so settled that it would foreclose MLBPA from making a good faith
argument for the extension of existing law by asserting a claim against Champs.
See 1 J. Thomas McCarthy, The Rights of Publicity and Privacy § 3.7[E] (1999)
(arguing that contributory infringement of a publicity right by a “passive actor” is
a colorable claim for which there should be liability).
-15-
We hold that a defendant like MLBPA, who has probable cause to threaten
litigation and makes no assertion beyond the legal and factual bases for the threats,
may enjoy Noerr-Pennington immunity from a claim of libel. This holding is not
inconsistent with McDonald v. Smith, 472 U.S. 479 (1985). There, the Court held
that the First Amendment does not provide absolute immunity for petitions to the
government that express libelous and damaging falsehoods. See id. at 485. In so
holding, the Court relied on the principle at the core of the Noerr-Pennington
doctrine that “‘baseless litigation is not immunized by the First Amendment right
to petition.’” Id. at 484 (quoting Bill Johnson’s Restaurants, 461 U.S. at 743)).
We have already concluded that MLBPA’s threats of litigation were not
baseless because it had probable cause to assert a publicity rights infringement
claim against Cardtoons. The statements that Cardtoons labels as libelous are
coextensive with the threats of litigation to which we have already attached
Noerr-Pennington immunity. If Cardtoons’s argument prevails, a defendant
would be exposed to libel claims even if his litigation or threat to litigate were
supported by probable cause. By allowing an alternative cause of action against
petitions that are otherwise eligible for immunity, the argument renders Noerr-
Pennington a nullity.
-16-
IV
-17-
Cardtoons argues that it was prejudiced by the district court’s stay of
discovery pending its adjudication of MLBPA’s summary judgment motion. It
claims the stay barred it from attempting to discover whether MLBPA had any
intent to pursue legal action against Champs, and whether MLBPA had performed
any research on potential legal claims prior to issuing the threatening letters.
Furthermore, Cardtoons claims that it hoped to discover evidence of MLBPA’s
subjective intent to dissuade Champs from performing its legitimate duties under
its contract with Cardtoons.
Under the Professional Real Estate test, however, MLBPA’s subjective
intent would have been relevant only if its threats were objectively baseless.
MLBPA presented sufficient predicate facts to demonstrate to the district court
that as a matter of law, MLBPA had probable cause to threaten suit against
Cardtoons and Champs, and that therefore its threats were not objectively baseless.
Having affirmed the district court’s conclusion that MLBPA is immune from all of
Cardtoons’s state law claims, we must affirm the district court’s stay of discovery.
See Professional Real Estate, 508 U.S. at 65-66 (holding that without proof that
defendant’s infringement action was objectively baseless, circuit court correctly
denied request for further discovery).
The district court’s opinion is AFFIRMED.
-18-
No. 98-5061, Cardtoons, L.C. v. Major League Baseball Players Assoc.
EBEL, Circuit Judge, dissenting
Although I agree with much of the majority opinion, I respectfully dissent
from its holding that (1) prelitigation threats, “whether or not they are
consummated . . . enjoy the same level of protection from liability as litigation
itself” under the First Amendment doctrine of Noerr-Pennington ; and (2) “when
considering whether prelitigation threats enjoy Noerr-Pennington immunity . . . we
must apply the two-part sham test” of Professional Real Estate Investors, Inc. v.
Columbia Pictures, Inc. (PRE), 508 U.S. 49 (1993). Maj. Op. at 9. The first
holding is flawed because it assumes that all threats of litigation between private
parties constitute petitions to the government (which is solely what Noerr-
Pennington protects). The second holding is flawed because PRE determines only
whether an acknowledged governmental petition is a sham undeserving of Noerr-
Pennington immunity, but does not determine whether purely private
communications that never go to the government should be considered a
governmental petition in the first place. Therefore, granting Noerr-Pennington
immunity to all prelitigation threats that satisfy PRE ’s sham test wrongly extends
Noerr-Pennington by immunizing a whole host of prelitigation threats that cannot
meet even the threshold criteria of facially presenting a petition to the
government. Considered together, the majority’s holdings may be read to stand
for the proposition that all private correspondence between private parties that
threaten objectively reasonable litigation shall be deemed to be petitions to
government entitled to Noerr-Pennington immunity. To state this proposition is to
refute it.
Starting with fundamentals, the Noerr-Pennington doctrine, which provides
immunity for petitions to the government, derives from the First Amendment right
“to petition the government for a redress of grievances.” U.S. Const. amend. I
(emphasis added). The Supreme Court has established that actual litigation is a
form of petitioning the government protected by the First Amendment. See
California Motor Transport Co. v. Trucking Unlimited , 404 U.S. 508, 510-11
(1971) (defendants entitled to Noerr-Pennington for instituting state and federal
proceedings because right to petition includes “right of access to the courts”);
PRE , 508 U.S. at 60 (litigation is protected under Noerr-Pennington if it is not
sham). However, it is an unwarranted leap neither compelled by the text of the
First Amendment, nor the Noerr-Pennington line of cases from the Supreme Court
or our circuit, to conclude that all purely private correspondence threatening suit
constitutes a “petition [to] the government” under the First Amendment. 1
1
In fact, the majority admits that “[n]either the Supreme Court nor this
circuit has directly addressed the issue of whether Noerr-Pennington immunity
attaches to the mere threat of a law suit.” Maj. Op. at 8.
-2-
Indeed, the facts of this case belie any suggestion that the MLBPA actually
petitioned the government with regard to the threatening letter at issue
here—specifically, the letter to Champs. The MLBPA’s cease-and-desist letter to
Champs threatening suit was never sent to the government; did not ask the
government for any response or “redress of grievances”; was not even known to
the government prior to Cardtoons’ declaratory judgment action against the
MLBPA; and did not ever result in any litigation. It seems an unreasonable stretch
to shield this purely private correspondence between the MLBPA and Champs
under the Noerr-Pennington aegis as a petition to the government.
Besides this textual problem, according Noerr-Pennington immunity to
purely private correspondence poses practical problems. First, the government has
supervisory power to prevent the misuse of actual petitions to the government.
With litigation, for example, a district court has power under Fed. R. Civ. P. 11 to
supervise pleadings, motions, and other representations “present[ed] to the court,”
and to issue sanctions for violations of the rule. In contrast, the government has
much more limited power to regulate the misuse of purely private correspondence
because such correspondence will seldom be brought to the government’s
attention.
Second, the majority’s extension of Noerr-Pennington immunity to
prelitigation threats will prove difficult to implement. How far back in time
-3-
should Noerr-Pennington immunity extend prior to an actual petition to the
government? Litigation is often preceded by lengthy communications of an
increasingly acrimonious nature. How early into the process would the majority
extend immunity? Would the majority go back to include the first tentative
statement of disagreement over the interpretation of a contract, perhaps even
before litigation is contemplated? Would it apply Noerr-Pennington even earlier
to the structuring of business deals in the first instance, where considerations of
potential litigation are often spoken or unspoken factors? Does the word
“litigation” have to be explicitly mentioned in the communication in order for it to
be privileged, or may it be implied?
Here, all these difficult questions are enormously compounded because no
litigation ever actually resulted between the MLBPA and Champs. The
threatening cease-and-desist letter from the MLBPA did not at any time—even to
today—culminate in an actual petition to the government against Champs. Indeed,
Cardtoons suggests that the MLBPA commonly uses such threats of expensive
litigation to bully poorly-financed entities who might tarnish the image of
professional baseball players— regardless of whether the MLBPA has any
intention to petition the government with a follow-up lawsuit. If this claim can be
proven, then it escapes me why such private bullying communication should
receive Noerr-Pennington immunity as if it were a petition to the government just
-4-
because it may state some theoretical but objectively supported claim. When a
large company has a practice of threatening others in purely private
correspondence without any intent or custom to follow through with actual
litigation, there is no basis for awarding Noerr-Pennington immunity under the
fiction that the company has petitioned the government. Granting Noerr-
Pennington immunity to this type of correspondence declares open season for
companies to engage in libelous, anticompetitive, or otherwise unlawful
communications without fear of legal repercussion.
These textual and practical problems illustrate the imprudence of extending
Noerr-Pennington immunity to all prelitigation threats. Simply put, if all such
threats between private parties constitute petitions to the government, as the
majority premises, then the First Amendment’s protection of the right “to petition
the government” is transmogrified into a generalized constitutional immunity for
private disputes not involving the government in any form. Rather than suffer
such a revision of the First Amendment, I would revise the majority’s premise.
Noerr-Pennington should protect only prelitigation threats that have a
strong and compelling nexus to actual litigation such that the threat may be
considered an incipient part of a petition to the government. To prove this nexus,
I would require the party invoking Noerr-Pennington to show that its prelitigation
-5-
threat was a (1) good-faith, (2) objectively reasonable, and (3) proximate
prologue to actual or imminent litigation. 2
Each element of this three-part test is essential to properly limit the reach
of Noerr-Pennington with respect to prelitigation threats. First , the prelitigation
threat must be in good faith to ensure that Noerr-Pennington immunity would not
protect a private party who sends a threatening communication without any actual
bona-fide intent to petition the government. This good-faith requirement is
consistent with all circuit cases applying Noerr-Pennington to threats of litigation,
as these cases implicitly require such threats to be in good-faith. See McGuire
Oil Co. v. Mapco, Inc. , 958 F.2d 1552, 1559-60 (11th Cir. 1992) (stating that
sham exception subjects to antitrust liability defendant whose activities, including
threats of litigation, “are not genuinely aimed at procuring favorable government
action at all” (emphasis added; quotations omitted)); CVD, Inc. v. Raytheon Co. ,
769 F.2d 842, 851 (1st Cir. 1985) (“[W]e hold that the threat of unfounded trade
secrets litigation in bad faith is sufficient to constitute a cause of action under the
antitrust laws, provided that the other essential elements of a violation are
proven.” (emphasis added)); Coastal States Marketing, Inc. v. Hunt , 694 F.2d
This test differs from the majority’s test because the majority would grant
2
Noerr-Pennington immunity solely on the ground of an objectively reasonable
basis for the threat without also requiring that the threat be in good faith and
proximate to actual or imminent litigation.
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1358, 1367, 1372-73 (5th Cir. 1983) (finding threats of litigation and ensuing
litigation protected by petitioning immunity because they were in good faith);
Alexander v. National Farmers Org. , 687 F.2d 1173, 1200, 1203 (8th Cir. 1982)
(refusing to grant Noerr-Pennington immunity to “a broad pattern of litigation
threats and harassment” where they were not “in good faith ” but rather “clearly
constitute[d] bad faith unlawful harassment” (emphasis added)); cf. American
Potato Dryers v. Peters , 184 F.2d 165, 173 (4th Cir. 1950) (in pre- Noerr-
Pennington case, holding that “threats of suit . . . made in good faith ” were not
antitrust violations (emphasis added)).
Furthermore, contrary to what the majority intimates, see Maj. Op. at 9-10
n.5, 16-17, this requirement is consistent with PRE ’s two-part sham test. That
test engages in a subjective inquiry only if the litigation first is determined to be
objectively baseless. See PRE , 508 U.S. at 60. By its facts and terms, however,
PRE applies to litigation , i.e., an actual lawsuit. See id. (“We now outline a two-
part definition of ‘sham’ litigation . First, the lawsuit must be objectively
baseless . . . . Only if the challenged litigation is objectively meritless may a
court examine a litigant’s subjective motivation.” (emphasis added).) PRE ’s sham
litigation test determines whether a petition to the government (in lawsuit form)
qualifies for Noerr-Pennington immunity. However, PRE provides no guidance
on whether or when a prelitigation threat between private parties
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constitutes as a petition to the government. Hence, before we can apply PRE to
determine which prelitigation threats, as petitions to the government, merit Noerr-
Pennington immunity, we first must decide which prelitigation threats amount to
petitioning activity. Requiring good-faith in this threshold inquiry, therefore,
does not conflict with PRE , as PRE does not come into play until after the
prelitigation threat is determined to be a petition to the government. 3
On the
other hand, granting Noerr-Pennington immunity to all prelitigation threats that
satisfy PRE , without winnowing out threats that cannot qualify as petitions to the
government, erroneously extends Noerr-Pennington immunity beyond First
Amendment activity.
Second , the objectively reasonable test is necessary to prevent Noerr-
Pennington immunity from attaching to prelitigation threats that would have no
basis as an actual petition, and therefore should not receive protection as
petitioning activity. This element is coextensive with the objective prong of PRE .
Third , the proximity element ensures that Noerr-Pennington would
immunize only those communications that are attendant to imminent or actual
3
As a result, the majority is wrong to imply that PRE contradicts the earlier
circuit cases requiring threats of litigation to be in good faith in order to receive
Noerr-Pennington immunity. While PRE may limit those cases to the extent that
they also require actual litigation to be brought in good faith without first
inquiring into objective baselessness, PRE does not touch upon the subjective test
for whether threats of litigation should receive petitioning immunity.
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litigation and consequently may be considered an initial part of the petitioning
process. If no petition actually results, it should be more difficult to establish
proximity because the party claiming immunity should have to show some
intervening cause that aborted an otherwise imminent petition.
Applied to the instant case, the three-part test cannot be met. Although I
agree with the majority that the prelitigation threat in the MLBPA’s letter to
Champs had an objective basis, I do not believe the record in its undeveloped
state allows us to determine whether the MLBPA’s correspondence with Champs
was in good-faith or proximate to actual litigation. As Cardtoons complains, the
district court stayed discovery on the MLBPA’s subjective intent regarding its
threats pending summary judgment. I therefore would reverse the district court’s
entry of summary judgment in favor of the MLBPA on the ground that the
MLBPA enjoyed Noerr-Pennington immunity, and remand to allow Cardtoons to
proceed with discovery on the MLBPA’s subjective intent in threatening Champs
with litigation, and the proximity of that threat to actual litigation.
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