Unpublished Disposition, 865 F.2d 1271 (9th Cir. 1988)

MEMORANDUM^* 

Appellants Victor W. Page and Laverta W. Page, mobile home park owners, sued the City of Rialto and a number of individuals, including the appellees Harold Giles, Thomas Spalton and John Bilyeu. Appellants alleged they had been deprived of their property without due process of law in violation of 42 U.S.C. § 1983 due to the adoption of a rent control ordinance which came into being as a result of a conspiracy between the appellees and city officials. Appellants also claimed the appellees violated section 1 of the Sherman Act by conspiring with city officials to fix prices by controlling rents. The district court dismissed the complaint as to the appellees, without leave to amend. This appeal followed.

JURISDICTION

We first consider whether we have jurisdiction to hear this appeal. The appellees are three of ten defendants in this action. The dismissal of the claims against the appellees did not end the litigation in the district court. The claims against the remaining defendants remained. As a result, the dismissal as to the appellees was not a final judgment under 28 U.S.C. § 1291, and was not appealable, unless the district court entered a Federal Rule of Civil Procedure 54(b) certification. Ethridge v. Harbor House Restaurant, Nos. 87-5776, 87-6379 (consolidated), slip op. at 14296-97 (9th Cir. Nov. 17, 1988); Anderson v. Allstate Ins. Co., 630 F.2d 677, 681 (9th Cir. 1980). The record before us does not reflect the filing of a Rule 54(b) certification by the district court. Accordingly, the appellants' notice of appeal was premature. Nonetheless, a premature notice of appeal may be cured by subsequent events. Unioil, Inc. v. E.F. Hutton & Co., 809 F.2d 548, 554 (9th Cir. 1986), cert. denied sub nom. Barton v. E.F. Hutton & Co., --- U.S. ----, 108 S. Ct. 83 (1987), cert. denied sub nom. Alioto & Alioto v. E.F. Hutton & Co., --- U.S. ----, 108 S. Ct. 85 (1987); Anderson, 630 F.2d at 681. A final judgment adjudicating all claims among all parties in this case was entered by the district court on September 29, 1988. This judgment cured the defect of the appellants' premature notice of appeal. Unioil at 554; Anderson at 681. Therefore, we have appellate jurisdiction under 28 U.S.C. § 1291.

FACTS

Appellants purchased a mobile home park in Rialto, California, on July 1, 1985. Over a year earlier, on March 20, 1984, the Rialto City Council had adopted an ordinance regulating rents which could be charged by mobile home park owners. Prior to adoption of the ordinance, the Rialto mayor appointed a task force to study mobile home park rent control. The task force heard recommendations from park owners and from mobile home owners, including the appellees who were members of a mobile home owners association and who subsequently rented space in appellants' mobile home park. The rent control ordinance was adopted. Appellants allege that the ordinance included task force recommendations more favorable to mobile home owners than to park owners, and that the ordinance was adopted as a result of a conspiracy between the appellees and city officials.

ANALYSIS

The district court concluded that the appellees' lobbying activities were protected from antitrust liability by the Noerr-Pennington exception to the Sherman Act. Under Noerr-Pennington, activities designed to influence public officials do not violate antitrust laws even if intended to reduce competition. United Mine Workers v. Pennington, 381 U.S. 657, 670 (1965) ("Pennington"); see also Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 135 (1961) (Sherman Act violation may not be predicated on mere attempt to influence passage of laws) ("Noerr "); Boone v. Redevelopment Agency of City of San Jose, 841 F.2d 886, 894 (9th Cir. 1988) (cultivation of close ties with officials is essence of lobbying); Subscription Television, Inc. v. Southern California Theatre Owners Ass'n, 576 F.2d 230, 233-34 (9th Cir. 1978) (Noerr-Pennington doctrine protects advocacy of legislation even where legislation is subsequently declared unconstitutional). Because the doctrine is designed to protect fundamental first amendment values, a complaint alleging that lobbying activities constitute antitrust violations must contain specific allegations which indicate the Noerr-Pennington doctrine does not apply. Boone at 894. "Conclusory allegations are insufficient to strip [defendants] of their Noerr-Pennington protection." Id. (citation omitted).

Appellants allege that Noerr-Pennington does not apply because the appellees' lobbying activities fall under the "sham" exception to the doctrine. Under this exception, parties lose their immunity if it can be shown that their lobbying effort was a "mere sham to cover what is actually nothing more than an attempt to interfere directly with the business relationships of a competitor...." Boone at 895, quoting Noerr, 365 U.S. at 144.

This court narrowly interprets the sham exception. Subscription T.V., 576 F.2d at 233. Although appellants make the conclusory statement that lobbying by the appellees was a sham, they allege no facts to show how these activities were a sham. The appellants' complaint alleges appellees promised votes to city officials in return for their support of appellees' recommendations for the rent control ordinance. This allegation

goes to the very heart of the Noerr-Pennington doctrine. Successful petitioning of government often depends on the development of close relations between government officials and those who seek government benefits. Indeed, cultivating close ties with government officials is the essence of lobbying. Such conduct certainly falls within the ambit of the Noerr-Pennington doctrine.

Boone, 841 F.2d at 894.

Appellants further allege that a "public official exception" to the Noerr-Pennington doctrine may deny immunity to appellees. They contend that because city officials were co-conspirators with appellees in achieving adoption of the rent control ordinance, appellees lose their Noerr-Pennington immunity. Appellants cite Harman v. Valley Nat'l Bank of Arizona, 339 F.2d 564, 566 (9th Cir. 1964) in support of this proposition. This view of the law, however, was repudiated by the Supreme Court in Pennington and by this circuit in Sun Valley Disposal Co. v. Silver State Disposal Co., 420 F.2d 341, 342-43 (9th Cir. 1969). See Boone at 897 ("Noerr-Pennington cannot be circumvented by merely alleging that a government official was involved in the alleged conspiracy").

It is clear from the appellants' allegations and contentions that they can allege no set of facts which would strip the appellees of the protection afforded by the Noerr-Pennington doctrine.

To bring a claim under section 1983, appellants must allege appellees (1) acted under color of state law, and (2) deprived appellants of a right, privilege or immunity secured by the Constitution or federal law. 42 U.S.C. § 1983;¹  Weiss v. Willow Tree Civic Ass'n, 467 F. Supp. 803, 809 (S.D.N.Y. 1979).

Acts of private citizens generally do not constitute action "under color of state law." Taylor v. First Wyoming Bank, 707 F.2d 388, 389 (9th Cir. 1983). A private person may act "under color of state law," however, if he conspires with a state or municipal official to deprive others of federal rights. Tower v. Glover, 467 U.S. 914, 921 (1984); Weiss at 811. Appellants allege that the lobbying efforts of the appellees, private citizens, constituted "state action" because the appellees conspired with city officials to get them to enact an ordinance depriving appellants of property rights without due process of law. However, according to the complaint, the only object of the alleged conspiracy was passage of rent control legislation--a lawful activity. While a specific rent control ordinance may be invalid because it is unconstitutional as applied, see Hall v. City of Santa Barbara, 833 F.2d 1270, 1282 (9th Cir. 1986), the Supreme Court has upheld passage of rent control ordinances. Pennell v. City of San Jose, --- U.S. ----, 108 S. Ct. 849, 857 n. 6 (1988); Fisher v. City of Berkeley, 475 U.S. 260, 270 (1986). Therefore, even if it were true that the appellees, as private citizens, conspired with city officials to get a rent control ordinance adopted, the purpose of such a conspiracy would be perfectly legitimate. The appellants have not alleged any concerted action between the appellees and the city officials which deprived the appellants of a federal right, nor have they shown that they were deprived of any such right by "state action."

Appellees seek attorney fees for the cost of defending the section 1983 portion of this appeal. This court has discretion in a section 1983 action to award fees to the prevailing party "as part of the costs" under 42 U.S.C. § 1988. Bateson v. Geisse, 857 F.2d 1300, 1306 (9th Cir. 1988). This discretion, however, is not unlimited. Attorney fees may be awarded against a plaintiff in a section 1983 action only where the action is " 'meritless in the sense that it is groundless or without foundation.' " Dooley v. Reiss, 736 F.2d 1392, 1396 (9th Cir.) (quoting Hughes v. Rowe, 449 U.S. 5, 14 (1980)), cert. denied, 469 U.S. 1038 (1984).

Appellants' sole argument alleging a section 1983 claim against appellees rests on appellants' theory that appellees as private citizens conspired with city officials to enact a rent control ordinance, and that this conspiracy was sufficient to transform appellees' lobbying efforts into the state action required by section 1983. The Supreme Court has clearly held the adoption of a rent control ordinance is not an illegal or unconstitutional act. The Noerr-Pennington doctrine clearly protects the appellees' lobbying activities. We conclude, therefore, that the appellees are entitled to recover their attorney fees and costs for defending the section 1983 portion of the appellants' appeal to this court. The appellees' motion for such fees and costs should be presented to the district court for its consideration and determination.

AFFIRMED and REMANDED to the district court for an award of attorney fees to appellees for their defense of the section 1983 portion of appellants' appeal.