Court: District Court, D. Puerto Rico; July 25, 2016; Federal District Court
In the Order Granting in Part and Denying in Part Defendant’s First Motion for Summary Judgment, the United States District Judge addressed a federal and state antitrust action initiated by Puerto Rico Telephone Company, Inc. (PRTC) against San Juan Cable Company LLC, doing business as OneLink Communications. PRTC alleges that OneLink engaged in 'sham' litigation over four years to impede PRTC’s market entry, claiming this conduct violated antitrust laws under both the Sherman Act and the Puerto Rico Anti-Monopoly Act.
The Court ruled that OneLink is entitled to summary judgment for events protected under Noerr-Pennington immunity and for periods where no genuine disputes of material fact exist. However, the Court denied OneLink's motion for summary judgment regarding other timeframes where genuine material fact disputes remain, necessitating jury resolution.
The procedural history indicates that PRTC filed its initial complaint on November 22, 2011, followed by an amended complaint on December 16, 2011, with allegations of anti-competitive behavior by OneLink. OneLink attempted to dismiss the amended complaint, but the motion was denied by Judge Gelpi, who also denied a subsequent request for interlocutory appeal. Following extensive discovery, OneLink filed a motion for summary judgment on October 11, 2013, to which PRTC responded. The case experienced judicial reassignment after Judge Gelpi’s recusal on December 4, 2014.
Oral arguments for OneLink's motion for summary judgment occurred on May 31, 2016. PRTC initially applied for a video franchise in February 2008, which the Telecommunications Regulatory Board of Puerto Rico (TRB) unanimously denied in October 2008, citing evidence from a public hearing and noting OneLink's comments as an interested party. Between February and November 2008, OneLink did not initiate any litigation against PRTC.
PRTC submitted a second application for a video franchise on December 11, 2008. From January 2009 to November 2011, OneLink filed four motions with the TRB—three were denied, while one was a complaint naming the TRB as a defendant. A notable motion, filed on February 10, 2009, resulted in a district court order that indicated OneLink had a strong likelihood of success on the merits but was later dismissed as moot.
Due to OneLink's motions, the TRB postponed scheduled hearings initially set for February 2009 to March. On March 3, 2009, at OneLink’s request, the Puerto Rico Court of Appeals issued a stay on the TRB’s consideration of PRTC's second application, which was extended until March 31, 2009. After the stay was lifted, OneLink filed additional motions, including an emergency motion and opposition to PRTC's submissions, most of which were denied.
On May 20, 2009, the Puerto Rico Supreme Court issued another stay, which lasted until October 26, 2010, after which no litigation involving OneLink and PRTC was pending. TRB proceedings resumed on November 24, 2010, following the Supreme Court's rejection of OneLink's appeal, and PRTC supplemented its application on January 3, 2011.
On January 20, 2011, OneLink filed a motion to recuse TRB President Sandra Torres from the proceedings. Torres sought guidance from the Office of Government Ethics (OGE) of Puerto Rico, which concluded on March 29, 2011, that OneLink's claims lacked merit. The TRB scheduled a hearing on PRTC’s franchise application for April 27, 2011, after a total of ninety-seven days had elapsed since the recusal motion was filed. The TRB did not approve PRTC's second video franchise application until November 2011. Between the lifting of a judicial stay on October 26, 2010, and the approval in November 2011, OneLink had no pending litigation against PRTC.
On November 29, 2011, following the TRB's approval of PRTC's franchise application, OneLink sued the TRB in federal court, alleging violations of federal statutes. OneLink also requested a Temporary Restraining Order (TRO) to stay the approval. On December 2, 2011, the TRB agreed to postpone its approval until January 31, 2012, in exchange for OneLink and Choice Cable withdrawing their TRO request and ensuring advance notice before any franchise agreement actions.
The TRB approved PRTC's video franchise agreement on February 1, 2012, sixty-three days after OneLink's lawsuit was filed. Following this approval, OneLink filed three additional unsuccessful motions. On April 4, 2012, the TRB confirmed PRTC's authorization to operate its video service across Puerto Rico. The TRB criticized OneLink for engaging in a prolonged campaign to abuse the judicial process to maintain its monopoly in cable services, stating that OneLink's legal theories had been consistently unsupported by law in various forums.
PRTC incurred over $3.2 million in costs related to defending against petitions and lawsuits, alongside additional expenses for consultants, lawyers, and management during the approval process. OneLink, the defendant, argues for summary judgment, claiming that its lawsuits did not cause the injury PRTC alleges for its antitrust claim. Instead, OneLink attributes delays in the approval of PRTC’s franchise application to governmental actions, asserting that state actors, such as the Puerto Rico courts and the TRB, are immune from antitrust liability. OneLink cites the Noerr-Pennington doctrine, which protects litigation conduct under the First Amendment unless it directly causes injury through sham litigation, a scenario it claims does not apply here.
OneLink acknowledges filing two federal lawsuits concerning PRTC's construction of its video network before obtaining a government franchise but insists these did not impact the TRB's ability to process PRTC’s application due to a prior stay by Puerto Rican courts. Similarly, it filed two state lawsuits while the TRB proceedings were stayed, which were resolved without affecting the TRB's schedule. Once the stay was lifted, OneLink asserts that the TRB acted independently.
OneLink contends that PRTC has not demonstrated that its litigation caused any alleged injury, highlighting that delays in approval stemmed from PRTC's own failures and the TRB's procedural decisions. Specifically, it points to PRTC's inadequate application in February 2008, court-imposed stays, and TRB's internal processing timelines as reasons for the delays, all of which are unrelated to OneLink's actions. Moreover, OneLink emphasizes that PRTC must prove causation, arguing that governmental action disrupts the causal link necessary for establishing antitrust injury linked to private conduct.
Liability for 'sham' petitioning is only applicable if it directly causes market injury, and no liability arises from harm resulting solely from government actions requested by a private party. The concept of 'Noerr immunity' encompasses two principles: (1) no Sherman Act violation arises from legitimate governmental actions versus private actions, and (2) injuries from private petitioning are actionable only if deemed a sham; injuries from state actions are immune from liability. OneLink asserts that the sham exception is irrelevant when alleged injuries stem from government actions, as private parties cannot be held liable in such cases. OneLink cites First Circuit precedents to support its position and argues that the timeline of events demonstrates that any injury to PRTC arose from state actions rather than OneLink's actions. OneLink outlines relevant periods where it contends it incurred no liability due to the involvement of state actions, including the timeline of PRTC's franchise application and the TRB's decisions. In opposition, PRTC claims that OneLink's argument has been previously rejected by Judge Gelpi, and that OneLink's summary judgment motion is merely a rephrasing of earlier failed arguments.
PRTC asserts that the Court should not revisit previously decided matters based on the law of the case doctrine. PRTC argues that even if OneLink's defense is considered new, it is waived under Rule 8(c) because it was not raised in OneLink’s Answer and was not amended as per Rule 15(a). PRTC highlights that OneLink's claims of Noerr immunity and First Amendment protection do not involve the state action doctrine. PRTC contends that OneLink’s interpretation of the Parker case is flawed; Noerr immunity may apply even without achieving desired outcomes, but Parker immunity only applies when a party successfully influences state action. PRTC claims OneLink did not achieve successful outcomes, asserting that delays do not constitute such outcomes.
PRTC criticizes OneLink for failing to account for significant delays attributed to its "sham petitioning," identifying four motions and a complaint filed by OneLink between January and March 2009, which it describes as unsuccessful and baseless. PRTC also references subsequent motions that continued to create delays until a Supreme Court stay was issued. Additionally, PRTC characterizes an agreement among the TRB, OneLink, and Choice as extortion to delay PRTC’s franchise approval and points out OneLink's continued filing of unsuccessful motions through April 2012 that necessitated TRB clarification on PRTC's operational authority.
In response to OneLink's argument that Parker nullifies the "sham exception" under Noerr, PRTC claims this represents a misinterpretation of the law. PRTC differentiates between process and outcome, asserting that Noerr immunity applies to the use of governmental processes as anticompetitive tools, regardless of the outcome. Thus, PRTC contends that because any alleged injury was not a result of TRB decisions, Parker does not apply. Finally, PRTC argues that OneLink misreads the First Circuit's decision in Davric Maine, asserting it supports PRTC's claim for Noerr immunity.
PRTC contends that for Parker’s application to be valid, any competitive restraint must be clearly articulated as state policy and actively supervised by the State, as established in the Cal. Retail Liquor Dealers Ass’n v. Midcal Aluminum case. PRTC argues that OneLink fails to meet these criteria. Regarding causation, PRTC asserts that it need only demonstrate that OneLink’s actions were a material cause of its injury, referencing relevant case law that supports this position. PRTC claims that OneLink’s actions foreseeably prolonged regulatory proceedings, maintaining a causal link. Furthermore, PRTC alleges that OneLink's "illegal conduct" has resulted in over $3.2 million in legal costs due to defending against what it labels as "sham litigation," which it argues constitutes valid antitrust injury warranting a jury trial.
In response, OneLink disputes PRTC's assertion that Judge Gelpi's earlier rulings resolved the issues in PRTC's favor. OneLink maintains that, despite initial allegations, the developed factual record shows no evidence that its conduct caused the delays. It argues that while Judge Gelpi acknowledged PRTC's initial claims, the transition from a motion-to-dismiss to a summary judgment stage requires a substantiated factual basis. OneLink critiques PRTC's interpretation of legal concepts, asserting that judicial stays are considered valid governmental actions under Noerr, which grants them absolute immunity. It distinguishes between actions that are final and those that are interim, asserting that the delays caused by court orders are affirmative governmental acts rather than mere inaction.
OneLink contests PRTC’s assertion that the Parker precedent applies solely to actions by legislative or executive officers or courts in a legislative capacity, labeling this view as incorrect. Citing the First Circuit's ruling in Davric Maine Corp., OneLink argues that liability can be established even in cases initiated by the defendant, asserting that judicial actions constitute 'state action.' Additionally, OneLink distinguishes Midcal’s requirement for state policy under state supervision from the issue of 'petitioning immunity,' noting that Midcal involved harm from private actors as state agents, while in this case, the alleged harm arises from state actors allegedly acting at the request of private parties, granting the private petitioners immunity.
OneLink further refutes PRTC’s claim that a ruling in its favor wouldn't resolve the case and would leave PRTC entitled to fees and costs. It argues that without liability for delaying PRTC's market entry, PRTC's claim for legal fees fails, as those costs alone do not threaten competition. OneLink emphasizes that PRTC has not demonstrated any independent injury to competition related to these costs, which it argues is essential for an antitrust claim. While acknowledging that legal costs could contribute to antitrust injury if they financially incapacitated a competitor, OneLink contends that PRTC is not in such a position, as it lacked authorization to operate its video business during the relevant timeframe due to an unapproved franchise agreement.
OneLink seeks at least partial summary judgment, asserting that even limited relief would promote judicial economy and efficiency. It proposes evaluating six time periods for analysis, recommending that two periods be assessed under Noerr and Allied Tube, while the rest focus on whether genuine factual disputes exist regarding OneLink’s alleged 'sham' conduct affecting TRB proceedings. OneLink urges the Court to examine each period and grant summary judgment where evidence does not support liability.
In response, PRTC maintains that OneLink's motion should be denied based on the law of the case doctrine, arguing that OneLink has not introduced new evidence or facts since its previous motion. PRTC also contends that the Court would set a precedent by ruling that delays from procedural decisions during sham litigation constitute an 'outcome' and protected state action under Parker v. Brown. Furthermore, it critiques OneLink's assertion that all judicial actions are inherently 'state action,' referencing Supreme Court precedent that states judicial actions are exempt from Sherman Act liability only when a state supreme court acts legislatively rather than judicially.
PRTC challenges OneLink's claims as baseless and lacking legal support, asserting that the Court should take judicial notice of TRB's writings, which PRTC argues substantiate its position that OneLink's petitioning was designed to hinder PRTC's market entry. PRTC cites legal standards for summary judgment, stating that it is warranted when there is no genuine dispute over material facts, referencing relevant case law to clarify the definitions of "material" and "genuine" disputes. The burden then shifts to the nonmovant to present specific evidentiary facts to create a trialworthy issue. The Court must view facts favorably for the nonmoving party but dismiss unsupported claims and insufficiently probative evidence.
PRTC invokes the law of the case doctrine to oppose OneLink’s summary judgment motion, noting that Judge Gelpi previously ruled against OneLink on similar grounds. OneLink counters that a more developed record shows its actions did not delay PRTC's market entry and argues that earlier dismissals do not preclude later acceptance of those arguments at the summary judgment stage. The law of the case doctrine suggests that once a court establishes a legal rule, it should remain consistent throughout the case, although it does not restrict the court's authority to reconsider prior decisions. The doctrine aims to enhance judicial efficiency by avoiding re-litigation of settled matters, and it covers both explicitly decided issues and those resolved by necessary implication.
Courts typically hesitate to revisit prior decisions unless extraordinary circumstances arise, such as a determination that the initial ruling was "clearly erroneous and would work a manifest injustice." Interlocutory orders, including those that deny motions to dismiss, can be reconsidered without establishing them as the law of the case. The First Circuit emphasizes that a ruling denying a motion to dismiss does not preclude subsequent summary judgment based on evidence outside the complaint. However, a summary judgment motion cannot rely on the same grounds as a previously denied motion to dismiss. The presence of new evidence can justify deviation from the law of the case.
In this context, OneLink's motion to dismiss was based on two arguments: (1) immunity under the Noerr-Pennington doctrine, and (2) PRTC's failure to properly plead an antitrust injury. OneLink pointed out that PRTC’s Amended Complaint did not specify any instances of OneLink's filings not aimed at achieving a favorable outcome and argued that the complaint merely portrayed typical Noerr-Pennington activities. Furthermore, OneLink claimed that the "sham" exception to the Noerr-Pennington immunity had not been adequately pled by PRTC. The court, guided by First Circuit authority, will compare the evidence and arguments from OneLink's motion to dismiss with those in its pending summary judgment motion.
A split of authority exists regarding whether a "pattern" of repetitive litigation can be considered "objectively baseless" to invoke the "sham" exception. OneLink contended that the Court should reject the cases supporting this view or, if accepted, argued that the Amended Complaint failed to demonstrate a sufficient "pattern" of litigation due to inadequate volume allegations. They claimed PRTC did not establish antitrust injury, asserting that injuries must stem from the petitioning process itself rather than its outcome. OneLink described PRTC's claims of using legal processes to impose costs and delays as conclusory, referencing specific paragraphs of the Amended Complaint.
Judge Gelpi ruled against OneLink's assertion of immunity under the Noerr-Pennington doctrine, determining that PRTC had alleged enough proceedings to constitute a pattern, citing multiple dates and appeals as evidence. He noted OneLink's acknowledgment of opposing PRTC in seven proceedings while failing to mention appeals in those cases, which the court deemed sufficient for a pattern. Judge Gelpi also rejected OneLink's argument regarding antitrust injury, finding that PRTC's allegations indicated harm from the process of litigation, not merely its outcome. OneLink's subsequent motion for reconsideration was denied.
In ongoing arguments, OneLink claimed entitlement to summary judgment despite the "sham" exception, asserting that delays resulted from government actions, thus exempting private parties from liability under Parker. Judge Gelpi had not previously ruled on this matter, and OneLink now argues for immunity under Noerr-Pennington following the completion of discovery.
Judge Gelpi did not have access to the complete evidentiary record during his ruling, which was limited to establishing a "pattern of litigation." OneLink is contending that it is entitled to summary judgment even if PRTC proves a cognizable antitrust injury, arguing that such injury is solely linked to state action, a point on which Judge Gelpi did not rule. The law of the case doctrine only applies to issues previously decided; thus, PRTC's argument relying on this doctrine would not be successful, as interlocutory orders, including those denying motions to dismiss, can be reconsidered by the trial court and do not become the law of the case.
PRTC also seeks to have OneLink's new defense deemed waived under Federal Rule of Civil Procedure 8(c), asserting that OneLink failed to raise this defense in its Answer, did not amend its pleadings as required, and did not indicate its intent to raise the defense during discovery. OneLink had only raised Noerr-Pennington immunity and First Amendment protections in its Answer, which PRTC argues are not related to the state action doctrine. Under Rule 8(c)(1), a party must state any affirmative defenses in response to a pleading, while Rule 15(a) allows for amendments with consent or court approval. Courts have classified state action immunity as an affirmative defense, placing the burden of proof on the asserting party. Generally, failing to plead an affirmative defense results in waiver and exclusion of related evidence, intended to provide the opposing party with notice and opportunity to challenge the defense.
However, exceptions exist for cases where the defendant raises the defense without undue delay, and the plaintiff is not prejudiced, or if the circumstances for the defense did not arise at the time of the answer. Nearly a month after the denial of OneLink's motion for reconsideration, OneLink filed its Answer.
OneLink has asserted nine affirmative defenses, including Noerr-Pennington immunity and First Amendment protection, while not mentioning Parker immunity or state action immunity in their Joint Initial Scheduling Memorandum. The Court will not apply the doctrine of waiver for several reasons. Firstly, it is unclear if state action immunity is recognized as an affirmative defense in the First Circuit, which would typically necessitate its assertion to avoid waiver. Secondly, even if it is an affirmative defense, the Court views OneLink’s reference to Parker immunity as a motion to amend pleadings. The Court has discretion in granting such motions and finds that OneLink raised the defense without undue delay or prejudice to PRTC. Notably, this defense was introduced during summary judgment rather than immediately before trial, mitigating any potential prejudice. PRTC adequately responded to the Parker immunity defense, suggesting no unfair disadvantage. The Court, therefore, relaxes the doctrine of waiver and will consider OneLink's argument regarding immunity from antitrust liability under Parker and Noerr-Pennington.
The Supreme Court's ruling in Parker v. Brown established that the Sherman Act does not restrain state actions or officials acting under state direction, as the Act is intended to regulate private parties. The Parker decision recognized that governmental actions, which may restrict competition for public purposes, are not subject to antitrust laws, leading to the extension of immunity to municipalities and state agencies regulating private conduct.
Parker immunity, initially established in cases against state officials, applies to actions involving private parties and state agencies regulating private conduct. Municipalities qualify for this immunity when their activities are authorized by state law. The key to evaluating antitrust actions lies in the nature of the challenged activity rather than the defendant's identity. To extend Parker immunity to private parties or state agencies, the Supreme Court set forth a two-prong test: first, the alleged restraint must be clearly articulated and affirmatively expressed as a state policy, which must be established by state legislature or supreme court; second, the policy must be actively supervised by the state. This supervision prevents private anti-competitive conduct from being masked as state action. In the Midcal case, the Court ruled against Parker immunity because, while the state had a clear policy for resale price maintenance, it failed to actively supervise the pricing practices, thus allowing private price-fixing arrangements to undermine competition. Subsequent cases have applied this two-prong test to assess the applicability of Parker immunity, confirming that explicit state authorization and oversight are essential for immunity to be granted.
The Piano Movers Association case established that a furniture and piano movers association successfully demonstrated the first requirement for Parker immunity, as the relevant state statute indicated the state’s intent to support collective rate setting among motor carriers. The case was remanded for further assessment of the second requirement. In Cent. Telecomms. Inc. v. TCI Cablevision, the court expressed doubt that a cable company met the Midcal criteria due to a lack of a clear policy from the Missouri legislature to eliminate competition, although it deemed the argument waived.
The Noerr-Pennington doctrine, originating from the Supreme Court's Noerr case, states that attempts to influence legislation or law enforcement do not violate the Sherman Act, as they are considered valid governmental actions. This principle was extended to include judicial and state administrative actions in California Motor Transport Co. v. Trucking Unlimited. While Noerr-Pennington immunity is broad in the context of legislative activities, it does not protect against misrepresentations in legal proceedings. Furthermore, the Noerr Court warned that immunity is not absolute; actions that appear to be aimed at influencing government but are instead attempts to disrupt a competitor's business could lose immunity under the Sherman Act. Judge Gelpi characterized a "sham" petitioning as actions taken without a genuine belief in a favorable outcome, aimed solely at delaying or obstructing another party.
A "sham" litigation is defined by a two-part test established in *Professional Real Estate Investors, Inc. v. Columbia Pictures Industries, Inc.*, requiring that a lawsuit be both objectively baseless and subjectively motivated by an anticompetitive purpose. First, a lawsuit is objectively baseless if no reasonable litigant could expect success on its merits; if a reasonable litigant could, the lawsuit is immune under Noerr immunity principles, and any antitrust claims based on it must fail. The existence of probable cause—a reasonable belief that a claim may be valid—precludes a finding of sham litigation. Moreover, a winning lawsuit is inherently a reasonable petition for redress, thus not a sham.
Second, if a lawsuit is deemed objectively baseless, the court must investigate the litigant’s subjective intent, determining whether the lawsuit was aimed at undermining a competitor's business relationships using the governmental process as an anticompetitive tool. An example includes submitting frivolous objections to a competitor's license application to incur costs and delays rather than seeking a denial. To overcome Noerr immunity for a single lawsuit, a plaintiff must prove both the objective and subjective elements of sham litigation. Repetitive lawsuits with insubstantial claims may also indicate sham litigation, as a pattern of such claims can demonstrate abuse of judicial processes, potentially barring access to agencies and courts.
Actions involving administrative or judicial processes cannot claim immunity under the guise of 'political expression.' The Fourth Circuit interprets California Motor Transport to indicate that both the subjective intent of the litigant and the objective merits of the lawsuits are pertinent, alongside other indicators of bad-faith litigation that may signal abuse of the legal system. Circuit Courts assess patterns of litigation by examining a defendant's success rate as circumstantial evidence of their motivations. For instance, in Waugh Chapel, a finding of a sham was supported by a defendant winning only one out of fourteen cases, whereas in Hanover, a poor track record across four actions suggested filings were not genuinely aimed at redressing grievances. Conversely, in USS-POSCO, where fifteen out of twenty-nine lawsuits were successful, the court found no sham. The Third Circuit states that a significant number of meritous filings indicates a lack of a policy of indiscriminate filing, while a high percentage of baseless suits suggests otherwise. Additionally, Circuit Courts have differentiated between the application of California Motor Transport, which addresses series of sham petitions, and PRE, which pertains to single sham petitions. Judge Kozinski clarifies that under PRE, if a suit has objective merit, it cannot be deemed a sham, whereas California Motor Transport highlights the broader implications of multiple lawsuits lacking merit, which may act as a restraint on trade and are reflective of harassment rather than genuine grievances.
The First Circuit has not yet clarified the principles of pattern sham petitioning as established in California Motor Transport and its relationship with the Noerr-Pennington (PRE) doctrine. In the absence of such guidance, this Court adopts the interpretations from the Second, Third, Fourth, and Ninth Circuits. OneLink argues it cannot be liable for its numerous filings over four years, even if deemed "sham" petitions, because any harm to PRTC resulted from government actions, which are immune. OneLink's argument has three main points: (1) sham petitioning does not apply under Parker when government action is involved; (2) judicial stays and delays by Puerto Rican courts and the TRB are protected by Noerr-Pennington immunity; and (3) PRTC's claims fail due to lack of causation.
PRTC contends that OneLink must satisfy the Midcal two-prong test for Parker immunity, which it argues OneLink has not met, claiming there is no Puerto Rican state policy to suppress competition in the cable television market. PRTC also argues that there is no active supervision of any anti-competitive state policy. OneLink counters that the Midcal test is irrelevant, asserting that its immunity stems from the state actors' involvement, and private petitioners are immune from liability for injuries caused by government action.
The Noerr Court referenced Parker, noting that valid government action does not violate the Sherman Act and emphasizing the right of citizens to inform the government without fear of repercussion. OneLink's interpretation that the "sham" exception is nullified by Parker is not supported by these references. Instead, the Supreme Court's interpretation in Omni illustrates that the "sham" exception aims to address situations where the governmental process is misused as an anti-competitive weapon. OneLink's multiple filings, including six denials, raise questions about the legitimacy of its claims, implying that if mere denials could be construed as government action, the sham exception could be rendered meaningless.
OneLink asserts that based on the Supreme Court's ruling in Allied Tube, governmental actions that restrain trade shield those urging such actions from antitrust liability, indicating that the "sham exception" is irrelevant in cases stemming from government actions. The Court disagrees, clarifying that Allied Tube addresses Noerr-Pennington immunity, not Parker immunity, which are distinct legal concepts. Noerr-Pennington immunity covers unsuccessful attempts to influence government actions, while Parker immunity applies to those benefiting from government restraint without solicitation. The Court emphasizes that the broader Noerr-Pennington immunity is rooted in First Amendment considerations and does not require the two-prong Midcal test, which is necessary for Parker immunity. OneLink's reliance on legal precedents, such as Sandy River Nursing Care, is deemed inappropriate as the case involved legislative action not present here. The Court concludes that OneLink, as a private party, has not sufficiently demonstrated entitlement to Parker immunity, particularly as it must adhere to the Midcal requirements.
OneLink cannot claim Parker immunity as it has not demonstrated compliance with the Midcal framework, with the Court expressing skepticism about its ability to do so. Furthermore, the Court concludes that "sham" petitioning does not negate Parker immunity legally. Regarding judicial stays as valid government action, the Court references the Allied Tube case, which establishes that valid governmental actions granting immunity from antitrust liability must arise from government, not private actions. OneLink argues that its advocacy for stays, which were granted by Puerto Rico courts, should afford it absolute immunity from claims related to those stays. PRTC counters that a judicial stay does not constitute a "successful outcome" under Allied Tube. The Sixth Circuit’s 2004 ruling in Knology is discussed, where immunity was granted after a stay was issued, despite the district court's contrary view. The Sixth Circuit treated the lawsuit and the stay as a unified petitioning activity protected by the First Amendment and Noerr-Pennington doctrine. The Court aligns with OneLink's argument that the issuance of stays at its request invokes immunity under Noerr-Pennington, dismissing PRTC's claim of distinction based on local ordinance specifics. Similar to Knology, OneLink did not stay anything; rather, the Puerto Rico courts independently halted PRTC's progress.
PRTC's claim that the stays were merely procedural is countered by Noerr's distinction between private and governmental acts, rather than procedural and substantive orders. The Supreme Court's Noerr decision emphasizes that attempts to influence legislation, even if they result in injury to the opposing party, are not inherently illegal. OneLink's subjective intent in filing motions to stay is deemed irrelevant, as those motions are not considered "objectively baseless." A winning lawsuit is a legitimate effort to seek redress and thus not a sham, establishing that OneLink is entitled to legal immunity.
Evidence shows that on March 3, 2009, the Puerto Rico Court of Appeals stayed the TRB's review of PRTC's franchise application until March 31, 2009, and on May 20, 2009, the Puerto Rico Supreme Court extended this stay until October 26, 2010. The Noerr-Pennington doctrine bars PRTC from claiming damages related to these stays or presenting evidence of harm caused by them. Furthermore, PRTC's claims regarding OneLink's Cable Act Complaint and the TRO motion filed on February 10, 2009, are also barred, as OneLink demonstrated a strong likelihood of success, leading to the case's dismissal as moot.
OneLink argues that PRTC fails to establish causation, asserting that any delays in approving PRTC's franchise were due to PRTC's own actions and the courts' decisions, not OneLink's litigation efforts. Antitrust plaintiffs must show damages linked to an antitrust violation, but they need only prove that the violation was a material cause of their injury. The causation element is closely tied to whether OneLink qualifies for Noerr-Pennington immunity.
The Court will analyze six time frames from February 2008 to April 4, 2012, to assess any genuine disputes of material fact regarding allegations that OneLink engaged in “sham” litigation. This review excludes previously discussed periods related to motions to stay and a ruling by Judge Gelpi. The Court will consider whether PRTC can demonstrate a pattern of meritless claims filed by OneLink, which could support claims of sham litigation.
In the first period, February to November 2008, PRTC's initial application for a video franchise was denied by the TRB. The Court found no evidence that OneLink's actions during this time constituted sham litigation, as its comments to the TRB were legitimate.
The second period, December 11, 2008 to March 3, 2009, involved PRTC's second application and OneLink's four motions to the TRB. The Court determined that a reasonable jury might find these motions were intended to delay PRTC's market entry, suggesting possible sham litigation, especially noting that some motions were denied or not ruled upon.
In the third period, April 7 to May 1, 2009, OneLink's three motions to the TRB were similarly scrutinized. The Court again found that a reasonable jury could conclude these filings were aimed at stalling PRTC rather than securing a favorable ruling.
Finally, during January 20 to April 6, 2011, OneLink's motion to recuse President Torres was deemed without merit by the OGE, and the Court found insufficient evidence from PRTC to support claims of sham litigation during this period.
Overall, the Court is focused on whether the evidence shows that OneLink’s actions were intended as anti-competitive tactics rather than legitimate legal advocacy.
PRTC failed to provide evidence that the TRB delayed scheduling a hearing pending a response from the OGE or that OneLink advocated for such a delay, rendering such assertions speculative. The Court previously established that OneLink did not argue for the TRB to postpone actions while waiting for the OGE’s decision. Between November 29, 2011, and January 31, 2012, OneLink filed a separate lawsuit against the TRB, which resulted in the TRB agreeing to delay PRTC's franchise agreement approval in exchange for OneLink and Choice withdrawing their request for a Temporary Restraining Order (TRO). The Court inferred that the lawsuit was intended to stall PRTC's market entry rather than to achieve a favorable court outcome, supported by the terms of the settlement that delayed approval for nearly two months and required notice to OneLink before TRB actions.
Further, from February 1, 2012, to April 4, 2012, OneLink filed three additional motions, including a petition for reconsideration and a motion to stay PRTC’s application approval. The Court concluded that these filings were also aimed at delaying PRTC’s market entry instead of seeking a favorable resolution from the TRB. There was a reasonable inference that OneLink, aware of the impending TRB review and approval of PRTC's franchise agreement, filed motions to further delay the process. The Court noted that a jury could find that OneLink's actions imposed substantial costs on PRTC, totaling over $3.2 million, with some filings occurring even after the franchise agreement was approved.
Filing frivolous objections to a competitor's license application serves as an anticompetitive tactic aimed at incurring expenses and delays, rather than genuinely seeking to deny the license. The Court identifies that there are genuine disputes regarding whether OneLink's filings were “sham” litigation intended to hinder PRTC's market entry, which could be a significant cause of PRTC's alleged injuries. In cases where the facts underlying a sham litigation claim are disputed, the issue of Noerr-Pennington immunity should be determined by a jury. The Court also addresses PRTC's request for judicial notice of legal documents from the TRB, rejecting it for purposes beyond establishing the existence of those documents due to hearsay concerns. The Court grants in part and denies in part Defendant’s Motion for Summary Judgment, favoring OneLink for specific periods while denying it for others. The Court emphasizes its duty to view facts in the light most favorable to PRTC, even if OneLink disputes them, and clarifies a timeline discrepancy regarding PRTC's license application denial.
The Court established October 29, 2008, as a key date in the proceedings. PRTC acknowledged OneLink's paragraph 3 but provided a qualified response, emphasizing that the TRB's decision involved 22 determinations of fact, including OneLink's comments opposing the franchise application. The Court confirmed the record’s assertion that OneLink was an interested party but did not support the claim that OneLink objected to the application, as the relevant finding did not substantiate this assertion.
PRTC's paragraph 1 originally claimed that OneLink's motions and complaint were "unsuccessful"; OneLink contested this claim while admitting the filing dates. OneLink noted that PRTC failed to demonstrate that the Urgent Motion to Dismiss filed on February 25, 2009, had been ruled on by the TRB, and highlighted a ruling from Judge Gelpi that indicated OneLink had a strong likelihood of success regarding a temporary restraining order, although the complaint was eventually dismissed due to mootness.
The Court clarified that three motions presented to the TRB were deemed "unsuccessful" and included procedural details regarding the Cable Act Complaint, subsequently accepting PRTC's paragraph as modified. In response to PRTC’s paragraph 2, which indicated that the TRB postponed hearing dates due to OneLink's intervention, OneLink denied the assertion, claiming the rescheduling was a result of PRTC’s motions. The Court reviewed the January 21, 2009, Resolution and Order and determined that both parties’ motions influenced the rescheduling of the hearing, thus overruling OneLink’s denial.
PRTC's paragraph 4 claimed that the TRB had to address five "objectively baseless" filings by OneLink during a critical period. The Court noted that this assertion was an argument rather than a factual statement, referencing legal precedent that nonmoving parties cannot rely solely on conclusory allegations.
PRTC's evidence fails to substantiate its claims regarding OneLink’s filings being "objectively baseless." PRTC admitted a point made by OneLink but qualified it by noting that the Puerto Rico Court of Appeals stayed proceedings at OneLink's request and later lifted the stay on April 24, 2009. The Court provided contextual facts, clarifying that when the stay was lifted on March 31, 2009, the TRB had not ruled on OneLink's pending Urgent Motion to Dismiss PRTC's application. OneLink denied that the TRB considered this motion during the relevant period, and the Court adjusted PRTC's claim to reflect that no decision had been made at the time the stay was lifted, overruling OneLink's denial.
PRTC's assertion that the TRB was hindered by OneLink's petitions until a May 20, 2009 stay was also unsupported by evidence and thus excluded from consideration. OneLink's admission of another PRTC claim included a qualified response about the notification of a decision made on November 24, 2010, which was not communicated until December 21, 2010. PRTC’s claim regarding a two-year delay leading to a supplement of its application was denied by OneLink, which argued that the TRB mandated the supplement. OneLink contended that PRTC did not provide evidence linking the delay to its actions or to OneLink's influence. PRTC cited the same Application Supplement to support its position.
PRTC is supplementing its original application due to changes in facts over the past two years, as directed by the Board. The TRB's November 24, 2010 Resolution instructed PRTC to express its position following the lifting of a stay, but did not mandate a supplemental application; PRTC opted to do so. The Court finds that PRTC's evidence does not indicate that the supplementation was due to delays. Any interpretation suggesting that the TRB was unable to set a hearing date was overruled, acknowledging that no hearing date had been set prior to the Motion to Recuse being filed. OneLink's claim that consideration of the franchise application should be on hold until the motion was resolved was rejected, as they did not argue this point in their motion.
In paragraph 11, PRTC stated that the TRB sought a formal ethics opinion from the OGE, which OneLink denied, claiming the inquiry stemmed from a letter by President Torres. The Court concluded that the OGE's response addressed both President Torres and the TRB, allowing for a reasonable inference that the inquiry was indeed official. The Court adjusted paragraph 11 to reflect that the letter originated from President Torres and clarified that the OGE did address OneLink's claims, concluding that President Torres could remain involved in the franchise application process without recusal.
The Court addressed the Motion to Recuse filed by OneLink, noting that despite PRTC's assertion that the motion was under consideration by the TRB and OGE for ninety-seven days, the evidence did not support this claim. OneLink argued that the motion was never formally considered by the OGE, and the Court agreed, confirming that the OGE was only responding to an inquiry from President Torres of the TRB. Nonetheless, the Court acknowledged that the motion was filed with the TRB, and ninety-seven days elapsed before the hearing on the franchise application. The Court adjusted PRTC's paragraph 13, sustaining OneLink's denial in part. PRTC also admitted that OneLink contributed to the costs of a complaint filed by Puerto Rico Cable Acquisition Corp against PRTC but qualified its response by stating that OneLink was not a party in that litigation. The Court found insufficient evidence to support PRTC's claims regarding the TRB's status and overruled its qualified response, emphasizing the need to resolve factual disputes in favor of PRTC under applicable legal standards.
The October 27, 2011 complaint identifies Choice Cable T.V. as the sole complainant, without mentioning OneLink, raising questions about their agreement to share filing costs if only one is named. Attorney Frix references two cases: the October complaint with the TRB and a federal case with both OneLink and Choice as plaintiffs, both sharing costs. The "Summary of Current Invoices" distinguishes charges for each complaint. The Court overrules PRTC's qualified response regarding OneLink's federal lawsuit, agreeing with OneLink's denial of the claim that it filed suit while the TRB was reviewing the franchise agreement. PRTC clarified that the TRB postponed approval until January 31, 2012, rather than February, and contested OneLink's actions as extortion regarding the delay; however, the Court found no evidence supporting PRTC's assertion and adjusted the date accordingly. PRTC's claims of extortion and other assertions were dismissed due to lack of supporting evidence, with the Court emphasizing the importance of record citations in factual statements.
PRTC refers to the time frame from November 29, 2011, when OneLink initiated a federal lawsuit, to February 1, 2012, when the TRB approved PRTC's franchise agreement. OneLink acknowledged this timeline in its denial, claiming it was “impossible to admit.” The Court modified PRTC's paragraph 18 to specify these dates. In paragraph 19, PRTC noted the TRB's approval date, but OneLink denied the paragraph, arguing that PRTC failed to provide evidence linking the filings to any delay in the franchise approval or PRTC's ability to commence its video service. The Court did not find any implied connection in the facts and overruled OneLink's denial on this point. OneLink also contended that one of four referenced filings occurred prior to the franchise approval while the other three were made after the approval, opposing PRTC's application. The Court agreed regarding the first filing being prior to approval but noted that the other three were post-approval and not disputed by OneLink. Consequently, the Court revised the wording for clarity.
OneLink's paragraph 12 stated that since February 8, 2012, PRTC had a valid video franchise, which PRTC denied, asserting that OneLink continued to file motions related to the franchise after the February approval. The TRB's April 4, 2012, Order dismissed these motions and confirmed PRTC’s authorization to operate its video service under the name Claro TV. The Court, viewing the evidence favorably for PRTC, acknowledged the TRB's approval date, the continuation of OneLink's motions post-approval, and the TRB's April 4, 2012 decision affirming PRTC's operational rights. In paragraph 20, PRTC stated the TRB clarified PRTC's authorization to operate, which OneLink disputed, claiming lack of evidence from PRTC to support the assertion that clarification was necessary.
The Court accepted OneLink's request to remove a specific phrase from PRTC's paragraph 20, thereby admitting the revised paragraph. PRTC's paragraphs 21 through 27 contain multiple quotations from TRB legal memoranda and orders, which the Court has summarized. For instance, paragraph 21 references a TRB statement from October 20, 2009, regarding OneLink's misuse of the judicial appeals process to hinder the TRB's evaluation of cable-TV franchise applications. Additional quotations are provided in paragraphs 22, 23, 26, and 27, with paragraph 24 citing a TRB decision from April 4, 2012, that criticized OneLink's legal challenges as unsupported by law. OneLink objected to these paragraphs on two grounds: they are irrelevant to legal causation and constitute inadmissible hearsay. According to Rule 56, only admissible evidence can be considered for summary judgment. However, at oral argument, OneLink conceded that TRB orders and their reasoning were admissible. The Court agreed that TRB findings could be considered but maintained that the statements from paragraphs 21-23 and 26-27 are inadmissible hearsay if offered for their truth.
The TRB's written arguments are inadmissible for their truth under Rule 803(8)(A) once it assumed an advocacy role rather than that of an adjudicator. However, these statements are admissible to demonstrate OneLink’s awareness of the TRB's belief that OneLink's actions were intended to misuse the judicial process to delay PRTC's franchise application approval and maintain its monopoly. Despite this, the Court does not consider the TRB's statements relevant to causation since they are not admitted for truth.
The TRB's agency findings and orders are admissible for their truth under Federal Rule of Evidence 803(8)(A), as affirmed in Davignon v. Hodgson, where a state labor commission’s decision was accepted. The TRB's evaluation of OneLink's litigation merits is relevant, but the Court emphasizes that state law resolutions of litigation merits do not determine the federal question of a litigant’s First Amendment right to petition. The TRB's conclusions regarding OneLink's alleged abuse of the judicial process lack persuasiveness because they were made without reference to PRE or California Motor Transport principles, leading the Court to assign them little weight in its causation analysis.
PRTC claimed it spent over $3.2 million defending against what it termed sham petitions and lawsuits, with OneLink only admitting to the total amount spent but denying the terms “sham” and “elongated.” The Court partially sustains OneLink's denial regarding these terms as they are seen as arguments rather than facts. However, it denies OneLink’s denial of PRTC's additional costs, as supporting evidence was provided. OneLink contested PRTC's claim of "hijacking" a hearing in 2008 but argued that such attendance could not have plausibly delayed the approval process. The Court acknowledges that the right to petition extends across all branches of government, including administrative agencies.
Access to the courts is a facet of the right to petition, as established in **California Motor Transport Co. v. Trucking Unlimited**. When a court is the target of a petition, the "sham exception" to litigation is interpreted broadly, per **Livingston Downs Racing Ass'n Inc. v. Jefferson Downs Corp.** Judge Gelpi's orders indicate that the court will adopt interpretations from the Second and Ninth Circuits, which have determined that the "objectively baseless" standard does not apply to patterns of repetitive litigation. This interpretation predates the **Waugh Chapel** and **Hanover** decisions, which emphasize that both the subjective motives of the litigant and the objective merits of the suits are relevant when assessing sham litigation patterns. OneLink's actions urging Puerto Rican courts to take anti-competitive measures fall under the **Noerr-Pennington** doctrine. The court notes that litigation costs incurred by PRTC, totaling $3.2 million, are significant, especially considering both parties are affiliated with successful parent corporations.
