United States of America et al v. Port of Benton County et al, No. 2:2017cv00191 - Document 249 (E.D. Wash. 2019)
Court Description: ORDER GRANTING MOTIONS FOR PARTIAL SUMMARY JUDGMENT RE: TORTIOUS INTERFERENCE AND FIRST AMENDMENT RETALIATION. Defendant the City of Richlands Motion for Summary Judgment Re: Tortious Interference (ECF No. 199 ) is GRANTED. Defendant the Port of Benton and Scott D. Kellers Motion for Partial Summary Judgment Re: First Amendment Retaliation (ECF No. 209 ) is GRANTED. Signed by Chief Judge Thomas O. Rice. (LLH, Courtroom Deputy)
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for that motion. ECF No. 85. Now, the Port moves for summary 6 judgment on the claim. ECF No. 209. 7 8 9 B. Discussion The Port argues Plaintiffs First Amendment Retaliation claim fails as a matter of law, reasoning that the Port is immune from suit under the Noerr- 10 Pennington doctrine because the complained-of threat was protected by the First 11 Amendment right to petition the Government for redress of grievances. ECF No. 12 209 at 14-17. The Court agrees. 13 “Under the Noerr–Pennington doctrine, those who petition any department 14 of the government for redress are generally immune from statutory liability for 15 their petitioning conduct.” Sosa v. DIRECTV, Inc., 437 F.3d 923, 929 (9th Cir. 16 2006) (citations omitted). In order to provide “breathing space required for the 17 effective exercise” of the First Amendment right, the doctrine extends to conduct 18 “incidental to the prosecution of the suit”, even if the suit is never ultimately filed. 19 Id. at 933-35 (quoting Columbia Pictures Indus., Inc. v. Prof’l Real Estate 20 Investors, Inc., 944 F.2d 1525, 1528–29 (9th Cir. 1991)). This includes ORDER GRANTING MOTIONS FOR PARTIAL SUMMARY JUDGMENT RE: TORTIOUS INTERFERENCE AND FIRST AMENDMENT RETALIATION ~ 8 1 communications between the parties “so long as they are sufficiently related to 2 petitioning activity.” Id. at 935. For example, sending demand letters and 3 threatening to file suit is protected conduct under the doctrine. See id. at 935-36; 4 Kearney v. Foley & Lardner, LLP, 590 F.3d 638, 645 (9th Cir. 2009). 5 “While the Noerr–Pennington doctrine originally arose in the antitrust 6 context, it is based on and implements the First Amendment right to petition and 7 therefore, with one exception [not relevant here], applies equally in all contexts.” 8 White v. Lee, 227 F.3d 1214, 1231 (9th Cir. 2000). Further, the doctrine applies to 9 both private and governmental actors. Sanghvi v. City of Claremont, 328 F.3d 532, 10 542–43 (9th Cir. 2003) (applying Noerr–Pennington doctrine to city defendant); 11 Manistee Town Ctr. v. City of Glendale, 227 F.3d 1090, 1092-94 (9th Cir. 2000) 12 (“This kind of petitioning may be nearly as vital to the functioning of a modern 13 representative democracy as petitioning that originates with private citizens.”). 14 However, among other exceptions not relevant here, the doctrine does not 15 extend immunity to “sham” litigation. Prof’l Real Estate Inv’rs, Inc. v. Columbia 16 Pictures Indus., Inc., 508 U.S. 49, 60 (1993). The sham litigation exception only 17 applies if “the lawsuit [is] objectively baseless in the sense that no reasonable 18 litigant could realistically expect success on the merits.” Id. “Only if challenged 19 litigation is objectively meritless may a court examine the litigant’s subjective 20 motivation.” Id. If the claim is objectively baseless, the court must then consider ORDER GRANTING MOTIONS FOR PARTIAL SUMMARY JUDGMENT RE: TORTIOUS INTERFERENCE AND FIRST AMENDMENT RETALIATION ~ 9 1 whether the party intended to use the “process—as opposed to the outcome of that 2 process—as a[] weapon[.]” See id. at 61 (quoting City of Columbia v. Omni 3 Outdoor Advert., Inc., 499 U.S. 365, 380 (1991) (emphasis in original)). 4 Here, the threat to file a claim requesting a determination of LET tax 5 obligations is clearly conduct incidental to the prosecution of a suit—the City did 6 not have to file suit to be afforded the protections. Besides questioning its 7 applicability to the Port, Plaintiffs apparently concede the doctrine applies to the 8 Port’s conduct. See ECF No. 221 at 16-17. However, Plaintiffs contend that the 9 sham litigation exception applies because the suit was baseless.1 ECF No. 221 at 10 17. The Court finds the underlying claim was not objectively baseless. 11 12 1 13 [suit] was baseless is a disputed question of fact.” ECF No. 221 at 17 (generally 14 citing to ECF No. 85). This is patently false. See ECF No. 85. Plaintiffs 15 otherwise contend the issue is precluded by the law of the case doctrine because 16 the City raised the issue of Noerr-Pennington immunity in defending against 17 Plaintiffs’ previous motion for summary judgment. ECF No. 221 at 13-14. 18 However, the law of the case doctrine clearly does not apply—the Court did not 19 even address the issue because it was not necessary in resolving the motion. See 20 ECF No. 108. Plaintiffs contend the “Court previously recognized that whether or not the ORDER GRANTING MOTIONS FOR PARTIAL SUMMARY JUDGMENT RE: TORTIOUS INTERFERENCE AND FIRST AMENDMENT RETALIATION ~ 10 1 “The intent of the [LET] is to ensure that lessees of property owned by 2 public entities bear their fair share of the cost of governmental services when the 3 property is rented to someone who would be subject to property taxes if the lessee 4 were the owner of the property.” Wash. Admin. Code 458-29A-100. For lease 5 agreements in effect over ten years without being renegotiated – as is the case here 6 – the Department of Revenue determines taxable rent by, in essence, considering 7 the fair market value of the leased property: 8 9 10 11 12 [T]he department may establish a taxable rent computation for use in determining the tax payable under authority granted in this chapter based upon the following criteria: (i) Consideration must be given to rental being paid to other lessors by lessees of similar property for similar purposes over similar periods of time; (ii) consideration must be given to what would be considered a fair rate of return on the market value of the property leased less reasonable deductions for any restrictions on use, special operating requirements or provisions for concurrent use by the lessor, another person or the general public. 13 RCW 82.29A.020(2)(a), (g); see MAC Amusement Co. v. State Dep’t of Revenue, 14 95 Wash. 2d 963, 968 (1981) (the text of RCW 92.29A.020 “suggests that taxable 15 rent is at least that rent paid for similar property used for similar purposes”). 16 Here, as the Court previously recognized, the amount of rent paid by TCRY 17 is grossly disproportionate to the value of the leasehold. Most notably, TCRY pays 18 a small fraction in rent (less than $12,000 per month for the trackage, a large 19 warehouse, and railroad equipment) compared to the amount paid in 2002 to lease 20 ORDER GRANTING MOTIONS FOR PARTIAL SUMMARY JUDGMENT RE: TORTIOUS INTERFERENCE AND FIRST AMENDMENT RETALIATION ~ 11 1 the same property ($288,000 per year2) before the parties agreed TCRY would 2 maintain the trackage at its sole expense. While Plaintiffs’ point to a decision that 3 maintenance expenditures are not included in determining the contract rate, this is 4 essentially irrelevant. What matters is the fair rental value. And while Plaintiffs 5 point out that the lease is for the non-exclusive use of the trackage, ECF No. 221 at 6 20, it is beyond credible to argue the paltry amount of money paid in rent is 7 remotely close to the fair rental value, especially in light of the fact the 2002 8 contract rate was for the same, non-exclusive use of the trackage. 3 Plaintiffs’ other 9 complaints are completely without merit. 10 Having determined the claim was not objectively baseless, the Port is 11 entitled to summary judgment on Plaintiffs’ First Amendment Retaliation claim. 12 // 13 // 14 // 15 // 16 17 18 2 The value currently is undoubtedly significantly higher. At oral argument, counsel for the Port represented the annual rental value is near $1.2 million. 19 3 20 Port acquired the trackage subject to those rights. UP and BNSF had contract rights to the trackage since the 1950s and the ORDER GRANTING MOTIONS FOR PARTIAL SUMMARY JUDGMENT RE: TORTIOUS INTERFERENCE AND FIRST AMENDMENT RETALIATION ~ 12 1 2 3 4 ACCORDINGLY, IT IS HEREBY ORDERED: 1. Defendant the City of Richland’s Motion for Summary Judgment Re: Tortious Interference (ECF No. 199) is GRANTED. 2. Defendant the Port of Benton and Scott D. Keller’s Motion for Partial 5 Summary Judgment Re: First Amendment Retaliation (ECF No. 209) is 6 GRANTED. 7 8 9 The District Court Executive is directed to enter this Order and furnish copies to the parties. DATED December 20, 2019. 10 11 THOMAS O. RICE Chief United States District Judge 12 13 14 15 16 17 18 19 20 ORDER GRANTING MOTIONS FOR PARTIAL SUMMARY JUDGMENT RE: TORTIOUS INTERFERENCE AND FIRST AMENDMENT RETALIATION ~ 13
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