Monadnock View Holdings, LLC v. Town of Perterborough by wns87940


									                Monadnock View Holdings v. Town of Peterborough (D.N.H. 2006)

With thanks to Greg Garrett, below please find a summary of a recent case involving the state
action doctrine.

Monadnock View Holdings, LLC v. Town of Peterborough, Case No.: 05-cv-449-PB, 2006 WL
3750015 (D.N.H. Dec. 19, 2006).

In a recent opinion, the federal district court for the District of New Hampshire held that the
plaintiffs failed to state a claim, as the municipal defendant was entitled to immunity under the
state action doctrine, while the private defendant was immune from liability pursuant to the
Noerr-Pennington doctrine.

Plaintiff, Monadnock View Holdings, LLC ("MVH"), was engaged in the spring water bottling
business. It owned property in the Town of Peterborough, New Hampshire, but due to a pre-
existing zoning ordinance, MVH was precluded from effectively exploiting its property. To
remedy this situation, MVH requested a rezoning and two variances. The requests were denied.
Several of the individuals who sat on the various Town boards were interested in or otherwise
connected to Barking Dog Water, LLC ("Barking Dog"), which was one of MVH's competitors.
MVH filed suit against the Town, Barking Dog, and the allegedly conflicted individuals,
charging, inter alia, violations of the Sherman Act.

The court dismissed MVH's antitrust claim against the Town and the individual defendants,
holding that they were immune from antitrust liability under the state action doctrine (the court
also noted that the Local Government Antitrust Act of 1984 immunized the Town and individual
defendants, but did not base its holding on that Act). Although state action immunity normally
requires that (1) the challenged restraint is a clearly-articulated and affirmative expression of
state policy, and (2) the policy is actively supervised by the state, the court, relying on Town of
Hallie v. City of Eau Claire, 471 U.S. 34 (1985), found that the active supervision prong is
inapplicable when the defendant is a municipality. The court ruled that the New Hampshire
legislature affirmatively granted to municipalities the power to regulate planning and zoning
decisions, and that the New Hampshire legislature specifically provided that this authority should
displace competition. MVH, however, argued that the Town and individual defendants were
subject to the market participant exception to state action immunity. The court found otherwise,
as MVH had failed to allege that the Town was in the market to buy or sell spring water, and the
Supreme Court and First Circuit had held that there is no conspiracy exception to the state action

The court also dismissed the antitrust claim against Barking Dog, holding that the Noerr-
Pennington doctrine immunized the company from antitrust liability, because MVH merely
alleged that Barking Dog had solicited the government to take anticompetitive action. MVH
argued, however, that the "sham" exception to Noerr-Pennington applied. The court disagreed,
because that exception only applies when the defendant uses a governmental process as an
anticompetitive weapon; using a governmental process to obtain an anticompetitive outcome
does not give rise to the "sham"

DCDB01 20861542.1 03-Jul-07 17:15
exception. Barking Dog did not initiate any proceeding against MVH, but rather, MVH itself
initiated the municipal proceedings. MVH's real complaint centered around the outcome of
those proceedings, which did not form a basis to invoke the "sham" exception.

DCDB01 20861542.1 03-Jul-07 17:15

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