F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
APR 19 2005
UNITED STATES COURT OF APPEALS
PATRICK FISHER
TENTH CIRCUIT Clerk
GF GAMING CORPORATION, doing
business as Famous Bonanza and as
Easy Street Casino, a Colorado
corporation; BLUE SPRUCE
INVESTMENT CORPORATION, a
Colorado corporation; GRIMES
GAMING CORPORATION, a
Colorado corporation; ANNIE
OAKLEY’S EMPORIUM, INC., a
Colorado corporation; EUREKA
CREEK DEVELOPMENT, INC.,
a Colorado corporation; BABY
DOE DEVELOPMENT, INC.,
a Colorado corporation; PROLAND
MANAGEMENT, LLC, a Colorado
corporation; SHEFTEL No. 04-1177
CHARITABLE REMAINDER
UNITRUST, an entity domiciled in
Colorado; WILHELM LORENZ,
individually,
Plaintiffs,
and
GALACTIC GAMING, INC., a
Nevada corporation,
Plaintiff-Appellant,
v.
CITY OF BLACK HAWK,
COLORADO, a home rule city
and municipal corporation of
Colorado; BLACK HAWK CASINO
OWNERS ASSOCIATION, a
Colorado political committee;
HORSESHOE CASINO, LLC, doing
business as Canyon Casino, a
Colorado limited liability company;
BLACK HAWK BREWERY AND
CASINO, LLC, doing business as
Mardi Gras Casino, a Colorado limited
liability company; BLACK HAWK
GAMING AND DEVELOPMENT
CO., INC., a Colorado corporation;
BLACK HAWK DEVELOPMENT
NORTH, LLC, a Colorado limited
liability company; BH GATEWAY,
LLC, doing business as Jackpot
Springs, a Colorado limited liability
company; PROSPECTOR 141, LLC, a
Colorado limited liability company;
WOODMONT DEVELOPMENT
COMPANY, INC., a Texas
corporation; KATHRYN ECCKER,
individually and in her official
capacity as Mayor of the City of Black
Hawk; JAMES S. MALONEY,
individually and in his official
capacity as City Attorney for the City
of Black Hawk; LYNNETTE
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HAILEY, individually and in her
official capacity as City Manager for
the City of Black Hawk; SUSAN
BARNES, an individual domiciled in
Colorado, MEDILL BARNES, an
individual domiciled in Colorado;
LARY P. BROWN, an individual
domiciled in Colorado; PHYLLIS
BROWN, an individual domiciled in
Colorado; HERBERT W. BOWLES,
an individual domiciled in Colorado,
Defendants-Appellees.
GF GAMING CORPORATION, doing
business as Famous Bonanza and as
Easy Street Casino, a Colorado
corporation; BLUE SPRUCE
INVESTMENT CORPORATION, a
Colorado corporation; GRIMES
GAMING CORPORATION, a No. 04-1178
Colorado corporation; ANNIE
OAKLEY’S EMPORIUM, INC., a
Colorado corporation; EUREKA
CREEK DEVELOPMENT, INC., a
Colorado corporation; BABY DOE
DEVELOPMENT, INC., a Colorado
corporation; PROLAND
MANAGEMENT, LLC, a Colorado
corporation; SHEFTEL
CHARITABLE REMAINDER
UNITRUST, an entity domiciled in
Colorado; WILHELM LORENZ,
individually,
Plaintiffs-Appellants,
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and
GALACTIC GAMING, INC., a
Nevada corporation,
Plaintiff,
v.
CITY OF BLACK HAWK,
COLORADO, a home rule city
and municipal corporation of
Colorado; BLACK HAWK CASINO
OWNERS ASSOCIATION, a
Colorado political committee;
HORSESHOE CASINO, LLC, doing
business as Canyon Casino, a
Colorado limited liability company;
BLACK HAWK BREWERY AND
CASINO, LLC, doing business as
Mardi Gras Casino, a Colorado limited
liability company; BLACK HAWK
GAMING AND DEVELOPMENT
CO., INC., a Colorado corporation;
BLACK HAWK DEVELOPMENT
NORTH, LLC, a Colorado limited
liability company; BH GATEWAY,
LLC, doing business as Jackpot
Springs, a Colorado limited liability
company; PROSPECTOR 141, LLC,
a Colorado limited liability company;
WOODMONT DEVELOPMENT
COMPANY, INC., A Texas
corporation; KATHRYN ECCKER,
individually and in her official
capacity as Mayor of the City of Black
Hawk; JAMES S. MALONEY,
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individually and in his official
capacity as City Attorney for the City
of Black Hawk; LYNNETTE
HAILEY, individually and in her
official capacity as City Manager for
the City of Black Hawk;
SUSAN G. BARNES, an individual
domiciled in Colorado; MEDILL
BARNES, an individual
domiciled in Colorado; LARY P.
BROWN, an individual domiciled in
Colorado; PHYLLIS BROWN, an
individual domiciled in Colorado;
HERBERT W. BOWLES, an
individual domiciled in Colorado,
Defendants-Appellees.
Appeal from the United States District Court
for the District of Colorado
(D.C. No. 01-D-964 (MJW))
Diane Vaksdal Smith, Burg, Simpson, Eldredge, Hersh & Jardine, P.C.,
Englewood, Colorado (David P. Hersh, Burg, Simpson, Eldredge, Hersh &
Jardine, P.C., Englewood, Colorado, John F. Reha, Arckey & Reha, LLC,
Littleton, Colorado, with her on the briefs), for Plaintiffs-Appellants.
Robert F. Hill, Hill & Robbins, P.C., Denver, Colorado (Jennifer H. Hunt, Hill &
Robbins, P.C., Denver, Colorado, with him on the brief), for Defendants-
Appellees.
Scott D. Albertson and Eric E. Torgersen, Holley, Albertson & Polk, P.C.,
filed a brief for Defendant-Appellee Woodmont Development Company.
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Before LUCERO, McKAY, and MURPHY, Circuit Judges.
MURPHY, Circuit Judge.
I. INTRODUCTION
Plaintiffs-appellants, consisting mainly of businesses and property owners
in and around the Colorado city of Central City, sued the neighboring city of
Black Hawk; Black Hawk’s mayor, city attorney, and city manager; and several
casinos, associations, and individuals primarily in and around Black Hawk.
Plaintiffs allege that defendants engaged in a conspiracy to restrain and
monopolize trade in the limited gaming industry 1 in Gilpin County, Colorado, in
violation of federal and state antitrust laws. The United States District Court for
the District of Colorado granted defendants’ motion to dismiss pursuant to Fed. R.
Civ. P. 12(b)(6). This court has jurisdiction under 28 U.S.C. § 1291. Because
plaintiffs’ claims for injunctive and declaratory relief became moot after the
district court entered judgment in this case and defendants are immune from the
remaining claims for damages, this court concludes that the complaint fails to
state a claim on which relief can be granted. The decision of the district court is
1
Limited gaming is defined as “the use of slot machines and the card games
of blackjack and poker, each game having a maximum single bet of five dollars.”
Colo. Const. art. XVIII, § 9(4)(b).
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vacated as to the claims for injunctive and declaratory relief and affirmed as to
the claims for damages. The district court’s decision to dismiss certain state-law
claims with prejudice is also affirmed.
II. BACKGROUND 2
Pursuant to the Colorado constitution, limited gaming is permitted in the
state of Colorado only in the cities of Central City, Black Hawk, and Cripple
Creek. Colo. Const. art. XVIII, § 9(1). Central City and Black Hawk are
neighboring towns located approximately twenty-five miles west of Denver. At
the time the complaint was filed, visitors could reach Central City only by taking
Highways 119 and 279 through Black Hawk. Plaintiffs allege that casino
customers passing through Black Hawk on their way to Central City often faced
highway construction and detours engineered by Black Hawk in an attempt to
divert passengers away from Central City and into its own casinos.
To avoid the continuing loss of business to Black Hawk, Central City began
planning a new highway known as the “southern access road” that would bypass
Black Hawk and provide direct access to Central City from Interstate 70. A
2
Plaintiffs’ claims were dismissed by the district court pursuant to Fed. R.
Civ. P. 12(b)(6), and this court therefore “must take as true all well-pleaded
allegations in the plaintiff’s complaint.” Curtis Ambulance of Fla., Inc. v. Bd. of
County Comm’rs, 811 F.2d 1371, 1374 (10th Cir. 1987). Accordingly, the factual
background in this case will be drawn from plaintiffs’ second revised third
amended complaint, which is the operative pleading here.
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substantial portion of the area necessary for construction of the road was owned
by Proland Management, LLC (“Proland”), which desired to annex its property to
Central City in order to obtain municipal services. Central City began negotiating
an agreement with Proland under which the property would be annexed and
Proland would in turn pay for construction of the portion of the road crossing its
property.
Under the Colorado constitution, municipalities may not annex land without
the agreement of more than fifty percent of the landowners in the area to be
annexed. Colo. Const. art. II, § 30(1)(b). 3 Proland acquired sufficient signatures
3
The Colorado constitution provides:
No unincorporated area may be annexed to a municipality unless one
of the following conditions first has been met:
(a) The question of annexation has been submitted to the vote of the
landowners and the registered electors in the area proposed to be
annexed, and the majority of such persons voting on the question
have voted for the annexation; or
(b) The annexing municipality has received a petition for the
annexation of such area signed by persons comprising more than fifty
percent of the landowners in the area and owning more than fifty
percent of the area, excluding public streets, and alleys and any land
owned by the annexing municipality; or
(c) The area is entirely surrounded by or is solely owned by the
annexing municipality.
Colo. Const. art. II, § 30(1).
-8-
to satisfy the requirements of the constitution and submitted its annexation
petition to Central City. In an attempt to block Proland’s petition, Black Hawk
allegedly conspired with the other defendants to purchase with public funds four
mining claims located within the area of the proposed annexation. Shortly before
Central City’s scheduled hearing on the petition, Black Hawk then sold undivided
one-percent interests in the mining claims to fourteen individuals and business
entities for $500 each. These conveyances were styled as “open space
preservation agreements,” but plaintiffs allege that their actual purpose was to
create enough landowners in the area of the proposed annexation to cause the
percentage of landowners approving of the annexation to drop below fifty percent.
The petition was thereby defeated, and Black Hawk instructed the holders of the
mining claims to reconvey their interests back to the city.
The complaint further alleges that Black Hawk pressured landowner H.
Thomas Winn to drop his petition to include a portion of his property in the
annexation by threatening not to issue a certificate of occupancy for a casino
Winn was planning to open in Black Hawk. When Winn withdrew his petition,
the contiguity necessary for annexation was destroyed. Winn’s withdrawal,
combined with the defeat of Proland’s annexation proposal, led Proland to
abandon its annexation efforts and its offer to fund construction of the road.
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Plaintiffs contend that once the road had been blocked, Black Hawk grew
to dominate the limited gaming market in Gilpin County while casinos and related
business in Central City fell into serious decline. A grand jury investigating the
conveyances of the undivided interest in the mining claims concluded that Black
Hawk’s actions violated the spirit of the Colorado constitution and election laws.
The grand jury’s report also concluded that the actions of Black Hawk city
officials constituted “misfeasance or malfeasance” and “misuse or misapplication
of public funds.” Because the practices were not specifically prohibited by state
law, however, the grand jury did not return an indictment.
Plaintiffs filed suit in the District of Colorado, raising a variety of claims
under the Sherman Act, 15 U.S.C. §§ 1, 2; the Colorado Antitrust Act, Colo. Rev.
Stat. §§ 6-4-104, 6-4-105; the Racketeer Influenced and Corrupt Organizations
Act, 18 U.S.C. § 1962; the Colorado Organized Crime Control Act, Colo. Rev.
Stat. § 18-17-104; and Colorado contract and tort law. Plaintiffs requested
declaratory and injunctive relief, compensatory damages, treble damages, punitive
damages, costs, and attorneys’ fees. Through a series of procedural rulings by the
district court and voluntary withdrawal of some of the claims by plaintiffs, the
district court dismissed all of plaintiffs’ claims except those based on federal and
state antitrust law. The court then held a hearing on the remaining issues and
granted defendants’ motion to dismiss the Sherman Act claims pursuant to Rule
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12(b)(6). The court elected not to exercise supplemental jurisdiction over the
Colorado Antitrust Act claims and dismissed these claims without prejudice. On
appeal, plaintiffs challenge only the dismissal of their Sherman Act and Colorado
Antitrust Act claims. 4
III. STANDARD OF REVIEW
This court reviews de novo the dismissal of a complaint under Rule
12(b)(6). S. Disposal, Inc. v. Texas Waste Mgmt., 161 F.3d 1259, 1261-62 (10th
Cir. 1998). In doing so, all facts alleged in the complaint are taken as true and all
reasonable inferences are indulged in favor of the plaintiffs. Curtis Ambulance of
Fla., Inc. v. Bd. of County Comm’rs, 811 F.2d 1371, 1374-75 (10th Cir. 1987).
IV. DISCUSSION
Section 1 of the Sherman Act prohibits “[e]very contract, combination in
the form of trust or otherwise, or conspiracy, in restraint of trade or commerce
among the several States.” 15 U.S.C. § 1. Section 2 of the Sherman Act prohibits
“monopoliz[ing], or attempt[ing] to monopolize, or combin[ing] or conspir[ing]
with any other person or persons, to monopolize any part of the trade or
commerce among the several States.” 15 U.S.C. § 2. Plaintiffs’ second revised
third amended complaint alleges that defendants violated both of these statutory
4
Plaintiffs also argue the district court erred in declining to dismiss certain
state-law tort claims without prejudice. See infra Section IV.E.
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provisions by (1) purchasing and subdividing the mining claims in order to block
Proland’s annexation petition, and (2) pressuring Winn to pull out of the proposed
annexation. 5 In dismissing plaintiffs’ Sherman Act claims, the district court
concluded the complaint did not state sufficiently specific allegations of antitrust
injury to confer standing on the plaintiffs. 6 The court also concluded that some of
5
The complaint also contains allegations that Black Hawk’s Las Vegas-style
casinos violate a provision of the Colorado constitution requiring limited gaming
to be conducted in structures conforming to the architectural styles of the state’s
historic gambling towns. Colo. Const. art. XVIII, § 9(3)(b). Plaintiffs, however,
explicitly disavowed reliance on these allegations in the district court. Plaintiffs
similarly disavowed reliance on allegations that Black Hawk frequently engaged
in road construction and detours in an effort to deter prospective Central City
customers. Although they attempt to revive these allegations on appeal, this court
will not consider arguments waived or abandoned in the district court. O’Connor
v. City & County of Denver, 894 F.2d 1210, 1214 (10th Cir. 1990).
Furthermore, plaintiffs did not argue before the district court and do not
argue on appeal that their antitrust claims are supported by allegations in the
complaint that defendants threatened other unnamed property owners with
“adverse consequences” if they did not assist the effort to defeat the annexation,
interfered with city council elections, threatened Central City with protracted
litigation if the annexation was completed, presented “sham” objections in
opposition to the proposed annexation, and interfered with the sale of municipal
bonds. Accordingly, this court will not consider these allegations in deciding
whether the complaint can survive a motion to dismiss under Rule 12(b)(6).
6
Plaintiffs argue the district court erred in failing to consider the contents
of the grand jury report attached to the complaint in deciding whether the
complaint stated an antitrust claim. Written documents attached to a complaint
are properly treated as part of the pleadings for purposes of ruling on a motion to
dismiss. Hall v. Bellmon, 935 F.2d 1106, 1112 (10th Cir. 1991). The district
court, however, specifically stated at the hearing on the Rule 12(b)(6) motion that
it had referred to the report when considering the sufficiency of plaintiffs’ claims.
In any event, this court has consulted the report and concludes that the grand
jury’s findings are merely redundant to the allegations in the complaint. See Issa
(continued...)
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the defendants were immune from antitrust liability under the Noerr-Pennington
doctrine.
This court can affirm the district court’s dismissal on any ground
sufficiently supported by the record. Issa v. Comp USA, 354 F.3d 1174, 1178
(10th Cir. 2003). For somewhat different reasons than those relied on by the
district court, this court also concludes that the complaint fails to state a claim on
which relief can be granted.
A. Injunctive and Declaratory Relief
This court need not reach the merits of plaintiffs’ claims for injunctive and
declaratory relief because those claims became moot after the district court
entered judgment in this case. Plaintiffs acknowledged at oral argument that
Central City completed building the southern access road after the district court
dismissed the case, and that their claims for injunctive relief have therefore
become moot. In addition, the claims for declaratory relief have also become
moot because a declaratory judgment would no longer have any effect on
defendants’ behavior. See Utah Animal Rights Coalition v. Salt Lake City Corp.,
371 F.3d 1248, 1256-57 (10th Cir. 2004) (holding that an action for declaratory
6
(...continued)
v. Comp USA, 354 F.3d 1174, 1178 (10th Cir. 2003) (“[B]ecause the legal
sufficiency of a complaint is a question of law, we may affirm the district court’s
dismissal order if we independently determine that plaintiff failed to state a
claim.” (quotation, citation, and alteration omitted)).
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relief was moot when the requested declaration involved past conduct not likely
to recur). Without expressing any opinion on the merits, this court therefore
dismisses plaintiffs’ claims for injunctive and declaratory relief and vacates the
judgment of the district court as to these claims.
B. Noerr-Pennington Immunity
In addition to their claims for injunctive and declaratory relief, plaintiffs
also request monetary relief including compensatory damages, treble damages,
punitive damages, costs, and attorneys’ fees. To the extent these claims are based
on allegations that the non-governmental defendants 7 conspired with Black Hawk
officials to block the proposed annexation, the claims are barred by the Noerr-
Pennington doctrine.
The Noerr-Pennington doctrine was established by the Supreme Court in a
line of cases beginning with E. R.R. Presidents Conference v. Noerr Motor
Freight, Inc. 365 U.S. 127 (1961). The Court in these cases has held that “[t]he
federal antitrust laws [] do not regulate the conduct of private individuals in
seeking anticompetitive action from the government.” City of Columbia v. Omni
7
The non-governmental defendants are the Black Hawk Casino Owners
Association; Horseshoe Casino, LLC d/b/a Canyon Casino; Black Hawk Brewery
and Casino, LLC d/b/a Mardi Gras Casino; Black Hawk Gaming and Development
Co., Inc.; Black Hawk Development North, LLC; BH Gateway, LLC d/b/a Jackpot
Springs; Prospector 141, LLC; Woodmont Development Co., Inc.; Susan Barnes;
Medill Barnes; Lary Brown; Phyllis Brown; and Herbert Bowles.
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Outdoor Adver., Inc., 499 U.S. 365, 379-80 (1991). The doctrine arises from the
Court’s conclusion that the Sherman Act was not intended to derogate the First
Amendment right of citizens to petition the government for a redress of
grievances. Noerr, 365 U.S. at 136-39.
Aside from the allegations that certain defendants purchased interests in
mining claims from the city, 8 there are no allegations in the complaint that non-
governmental defendants engaged in any anticompetitive act other than the act of
conspiring with Black Hawk officials. The complaint alleges that it was the city
of Black Hawk, not the private defendants, that acquired the mining claims,
divided them, and sold them with the purpose of blocking the proposed
annexation. In addition, the complaint alleges that the decision whether to issue a
certificate of occupancy to Winn “rested exclusively with Defendant Black Hawk”
and that it was “Black Hawk, through its elected and/or appointed officials” that
pressured Winn to pull out of the proposed annexation.
Standing alone, plaintiffs’ allegations that the non-governmental defendants
conspired with Black Hawk officials to block the southern access road is
essentially an allegation that defendants met with city officials and urged them to
take anticompetitive action. For purposes of Noerr-Pennington, there is no
distinction between petitioning government officials and conspiring with them.
8
These claims are discussed in Section IV.C.b, infra.
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City of Columbia, 499 U.S. at 375, 383 (“It would be unlikely that any effort to
influence legislative action could succeed unless one or more members of the
legislative body became . . . co-conspirators in some sense with the private party
urging such action.” (quotations omitted)); Boone v. Redevelopment Agency, 841
F.2d 886, 894 (9th Cir. 1988) (“[C]ultivating close ties with government officials
is the essence of lobbying.”). The defendants’ alleged conspiracy with Black
Hawk therefore amounts to nothing more than lobbying of government officials,
which is immune from Sherman Act liability under the Noerr-Pennington
doctrine.
Plaintiffs’ argument that defendants’ alleged conspiracy was undertaken
solely for the purpose of restraining trade is irrelevant, because “Noerr shields
from the Sherman Act a concerted effort to influence public officials regardless
of intent or purpose.” United Mine Workers v. Pennington, 381 U.S. 657, 670
(1965); see also City of Columbia, 499 U.S. at 380 (“That a private party’s
political motives are selfish is irrelevant . . . .”). Even if defendants’ sole motive
for petitioning the Black Hawk officials was to injure competition, the conduct
would still be protected by the Noerr-Pennington doctrine. See Noerr, 365 U.S.
at 138-40. Nor does Noerr’s “sham” exception apply to this case. The sham
exception is applicable when “persons use the governmental process–as opposed
to the outcome of that process–as an anticompetitive weapon.” City of Columbia,
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499 U.S. at 380. The exception thus “involves a defendant whose activities are
not genuinely aimed at procuring favorable government action at all,” such as a
defendant who files “frivolous objections to the license application of a
competitor, with no expectation of achieving denial of the license but simply in
order to impose expense and delay.” Id. (quotation omitted). In this case,
however, it was the outcome of defendants’ lobbying (i.e., Black Hawk’s decision
to block the annexation petition) rather than the process of that lobbying that
gives rise to the alleged antitrust injuries. The sham exception is therefore
inapplicable here, and the non-governmental defendants are immune from liability
under Noerr-Pennington for their petitioning of the Black Hawk officials. 9
C. Local Government Antitrust Act
a. The Black Hawk Officials
Although the Noerr-Pennington doctrine establishes that the non-
governmental defendants are not liable for requesting that Black Hawk engage in
anticompetitive activities, it does not resolve the question whether city officials
9
Plaintiffs’ citation to FTC v. Superior Court Trial Lawyers Ass’n is
inapposite. 493 U.S. 411 (1990). In that case, plaintiffs alleged that court-
appointed defense attorneys had engaged in an anticompetitive boycott in order to
force the District of Columbia government to increase their compensation. Id. at
414. Unlike Superior Court Trial Lawyers Ass’n, the alleged restraint of trade in
this case was not the “means by which [defendants] sought to obtain favorable
legislation,” but rather the “intended consequence of public action.” Id. at 425-
26.
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Kathryn Eccker, Lynnette Hailey, and James Maloney are liable for acceding to
these requests. 10 Defendants’ claims for monetary relief against Black Hawk
officials, however, are nevertheless barred by the Local Government Antitrust Act
of 1984. 15 U.S.C. §§ 34-36 (“LGAA”).
Congress passed the LGAA in response to “an increasing number of
antitrust suits, and threatened suits, that could undermine a local government’s
ability to govern in the public interest.” See Tarabishi v. McAlester Reg’l Hosp.,
951 F.2d 1558, 1564 (10th Cir. 1991) (quotation omitted). The act provides that
“[n]o damages, interest on damages, costs, or attorney’s fees may be recovered
under section 4, 4A, or 4C of the Clayton Act (15 U.S.C. 15, 15a, or 15c) from
any local government, or official or employee thereof acting in an official
capacity.” 15 U.S.C. § 35(a). The provisions of the Clayton Act cited by the
LGAA provide the private damages remedy for violation of the Sherman Act.
Crosby v. Hosp. Auth., 93 F.3d 1515, 1536 (11th Cir. 1996). According to the
10
In addition to Eccker, Hailey, and Maloney, the city of Black Hawk was
also named as a defendant in the initial complaint but was later dismissed as a
party on plaintiffs’ initiative. The trial court also dismissed claims against
Aldermen David Spellman, Haller Midcap, and Tom Kerr, who were identified in
the original complaint as agents of defendant Black Hawk Development North,
LLC. Without supporting argument, plaintiffs ask this court to reinstate the
claims asserted against these three defendants as agents of Black Hawk. This
court declines the invitation to reinstate these defendants in light of its conclusion
that Black Hawk officials are in any event immune from liability under the Local
Government Antitrust Act of 1984.
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complaint, Eccker, Hailey, and Maloney were at “all times relevant” the mayor,
city attorney, and city manager of Black Hawk. These defendants are therefore
“official[s] or employee[s]” of local government and are immune from damages
for violations of the Sherman Act.
Plaintiffs nevertheless argue the city officials were not “acting in an
official capacity” within the meaning of the LGAA because they acted beyond the
scope of their authority and pursuant to their personal interests when they entered
into a conspiracy to block the southern access road. The legislative history of the
LGAA, however, demonstrates that Congress intended the phrase “acting in an
official capacity” to be given broad meaning encompassing all “lawful actions,
undertaken in the course of a defendant’s performance of his duties, that
reasonably can be construed to be within the scope of his duties and consistent
with the general responsibilities and objectives of his position.” Sandcrest
Outpatient Svcs., P.A. v. Cumberland County Hosp. Sys., Inc., 853 F.2d 1139,
1145 (4th Cir. 1988). In this case, plaintiffs do not allege that the city officials
lacked the authority to cause the city of Black Hawk to sell the undivided
interests in the mining claims or to withhold Winn’s certificate of occupancy.
Their only contention is that in exercising these legitimate powers the city
officials acted pursuant to an illegitimate motive. The LGAA, however, “makes
no provision for consideration of a defendant’s motives.” Id. at 1146 (rejecting
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the “argument that allegations of a conspiracy convert otherwise authorized
conduct into unauthorized conduct”); see also Cohn v. Bond, 953 F.2d 154, 159
(4th Cir. 1991) (“An allegation of conspiracy is akin to an allegation that
[defendants’ conduct] was done in bad faith or with malice,” which is “clearly
irrelevant in determining the application of the immunity.” (quotation omitted));
Thatcher Enters. v. Cache County Corp., 902 F.2d 1472, 1477 (10th Cir. 1990).
For these reasons, this court concludes that the Black Hawk officials are
immune from monetary liability for Sherman Act violations.
b. The Private Defendants
Although the Noerr-Pennington doctrine establishes that the non-
governmental defendants are not liable for their lobbying of Black Hawk, it does
not establish whether these defendants are also immune to claims for monetary
relief based on allegations that they purchased the undivided interests in mining
claims for the purpose of blocking the proposed annexation. 11 The purchase of
these mining claims was allegedly an act independent of the petitioning of Black
Hawk officials and was not part of an attempt to influence government action.
11
The complaint alleges that the following defendants purchased undivided
one-percent interests in the mining claims in exchange for payments of $500:
Susan Barnes, Medill Barnes; Lary Brown; Phyllis Brown; Herbert Bowles;
Geraldine Bowles; Eagle Gaming, LLC; Black Hawk Brewery, LLC; 101 Main
Street, LLC; Black Hawk Gaming and Development Co., Inc.; Black Hawk
Development North, LLC; BH Gateway, LLC; Woodmont Development Co., Inc.;
and Prospector 141, LLC.
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Because holding defendants’ liable for their purchase of the mining interests
would not implicate their First Amendment right to petition government, this
activity is not subject to protection under the Noerr-Pennington doctrine. Like
the Black Hawk officials, however, these defendants are nevertheless immune
from monetary liability under the LGAA.
The LGAA precludes monetary damages “in any claim against a person
based on any official action directed by a local government.” 15 U.S.C. § 36(a).
In determining whether the action of a private individual constitutes “official
action directed by a local government” for purposes of the LGAA, other circuits
have applied by analogy the Supreme Court’s precedents on the question whether
a private individual’s action is entitled to state-action immunity under Parker v.
Brown, 317 U.S. 341 (1943). See Crosby, 93 F.3d at 1536; Cohn, 953 F.2d at
157; Sandcrest, 853 F.2d at 1143. In Parker, the Supreme Court held that the
Sherman Act was not “intended to restrain state action or official action directed
by a state.” Parker, 317 U.S. at 351. The Court subsequently extended the
holding in Parker to private individuals acting at the direction of the state, setting
forth a two-part test for determining whether such an individual should not be
subjected to liability. California Retail Liquor Dealers Ass’n v. Midcal
Aluminum, Inc., 445 U.S. 97, 105 (1980). First, “the challenged restraint must be
one clearly articulated and affirmatively expressed as state policy.” Id. (quotation
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omitted). Second, “the policy must be actively supervised by the State itself.” Id.
(quotation omitted).
The Conference Report to the LGAA, explicitly agreed to by both houses of
Congress, explains that the phrase “official action directed by” found in Parker
and subsequent cases interpreting it “shall apply by analogy to the conduct of a
local government in directing the actions of non-governmental parties, as if the
local government were a state.” H.R. Conf. Rep. No. 98-1158, reprinted in 1984
U.S.C.C.A.N. 4602, 4627; see also Sandcrest, 853 F.2d at 1143. Applying the
two-part test by analogy to the private defendants here, the relevant questions
therefore become: (1) whether the challenged restraint was the clearly articulated
and affirmatively expressed policy of Black Hawk, and (2) whether the policy was
actively supervised by Black Hawk. See Crosby, 93 F.3d at 1536 (“[W]e apply by
analogy the Parker doctrine to the relationship between the [local government
entity] (i.e., the entity under the LGAA which is analogous to the State in the
state action immunity context) and the individual [defendants] (i.e., the entities
under the LGAA which are analogous to private parties in the state action
immunity context).”).
The “clear articulation” requirement of Midcal’s first prong is satisfied if
the provisions in question “plainly show that the legislature contemplated the kind
of action complained of.” Town of Hallie v. City of Eau Claire, 471 U.S. 34, 44
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(1985) (quotations omitted). This requirement is met by analogy in this case,
when plaintiffs allege not only that Black Hawk contemplated the anticompetitive
effects of selling the mining interests, but that the city affirmatively participated
in the conspiracy to block construction of the road. The “active supervision” test
of the second Midcal prong “requires that state officials have and exercise power
to review particular anticompetitive acts of private parties and disapprove those
that fail to accord with state policy.” Patrick v. Burget, 486 U.S. 94, 101 (1988).
The purpose of this test is “to determine whether the State has exercised sufficient
independent judgment and control so that the details of the [state action] have
been established as a product of deliberate state intervention, not simply by
agreement among private parties.” FTC v. Ticor Title Ins. Co., 504 U.S. 621,
634-35 (1992). Here, because Black Hawk was the owner of the mining claims, it
necessarily had the power to review and disapprove of the sale of the claims to
the private defendants. The act of purchasing the undivided interests in the
mining claims therefore constitutes “official action directed by a local
government” for purposes of the LGAA.
As with the city officials, plaintiffs’ allegations that the private defendants
were engaged in a conspiracy to further private interests is irrelevant to the
question whether they are entitled to immunity under the LGAA. See City of
Columbia, 499 U.S. at 374; Allright Colorado, Inc. v. City & County of Denver,
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937 F.2d 1502, 1511 (10th Cir. 1991) (“The availability of Parker immunity . . .
does not depend on the subjective motivation of the individual actors.” (quotation
omitted)). Regardless of their intent, the private defendants are therefore immune
from liability under the LGAA for their purchase of the mining interests.
D. Colorado Antitrust Act
Because the district court properly dismissed all of plaintiffs’ federal
claims, it was within its discretion in declining to exercise supplemental
jurisdiction over plaintiffs’ state-law claims under the Colorado Antitrust Act.
See 28 U.S.C. § 1367(c)(3); Exum v. United States Olympic Committee, 389 F.3d
1130, 1138-39 (10th Cir. 2004). The court therefore did not err in dismissing the
state antitrust claims without prejudice.
E. State-Law Tort Claims
As a final matter, plaintiffs argue the district court erred in dismissing with
prejudice its state-law claims for intentional interference with prospective
business advantage, civil conspiracy, and intentional interference with contractual
relations. Plaintiffs explicitly withdrew these claims with prejudice as to
defendants David Spellman, Haller Midcap, Tom Kerr, Kathryn Eccker, James
Maloney, and Lynnette Hailey. As to the remaining defendants, plaintiffs
withdrew the claims without stating whether the withdrawal was to be with or
without prejudice. The district court ordered the claims dismissed with prejudice.
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Plaintiffs then filed a motion for “clarification” of the district court’s order. The
district court denied the motion and reasserted that the dismissal was with
prejudice.
Plaintiffs argue that voluntary dismissal of a claim by a plaintiff is without
prejudice “[u]nless otherwise stated in the notice of dismissal.” Fed. R. Civ. P.
41(a)(1). As defendants correctly point out, however, Rule 41(a)(1) applies only
to a voluntary dismissal by a plaintiff that was filed “at any time before service by
the adverse party of an answer or of a motion for summary judgment,” or that is
“signed by all parties who have appeared in the action.” Id. Otherwise, “an
action shall not be dismissed at the plaintiff’s instance save upon order of the
court and upon such terms and conditions as the court deems proper.” Fed. R.
Civ. P. 41(a)(2). Because defendants filed answers prior to plaintiffs’ voluntary
dismissal of their tort claims, plaintiffs conceded in the district court that a court
order was necessary for the voluntary dismissal to be effective. For claims that
must be dismissed pursuant to court order, Rule 41(a)(2) provides that the
dismissal is to be without prejudice “[u]nless otherwise specified in the order.”
Id. In this case, the court’s order dismissing the tort claims specified that
dismissal was with prejudice as to all defendants.
When a party seeking to voluntarily dismiss a claim pursuant to Rule
41(a)(2) is silent as to whether the dismissal should be with or without prejudice,
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the district judge is required to interpret the motion one way or the other. United
States ex rel Stone v. Rockwell Int’l Corp., 282 F.3d 787, 810-11 (10th Cir. 2002).
This court reviews the district court’s interpretation for abuse of discretion. Id.
The district court in interpreting plaintiffs’ voluntary dismissal here relied on the
procedural history of the case, including plaintiffs’ apparent concession that the
dismissal was with prejudice and failure to present any arguments to the contrary.
Plaintiffs present no explanation on appeal as to how the court abused its
discretion in making this determination. This court therefore declines to reverse
the district court on this ground.
V. CONCLUSION
Because plaintiffs’ claims for injunctive and declaratory relief became
moot after the district court entered judgment in this case, this court DISMISSES
those claims for lack of jurisdiction and VACATES the judgment of the district
court as to those claims. This court AFFIRMS the judgment of the district court
as to the claims for monetary relief and the dismissal with prejudice of plaintiffs’
claims for intentional interference with prospective business advantage, civil
conspiracy, and intentional interference with contractual relations.
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