Boone v. Redevelopment Agency

841 F.2d 886
CourtCourt of Appeals for the Ninth Circuit
DecidedMarch 1, 1988
DocketNo. 87-15046
StatusPublished
Cited by10 cases

This text of 841 F.2d 886 (Boone v. Redevelopment Agency) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Boone v. Redevelopment Agency, 841 F.2d 886 (9th Cir. 1988).

Opinion

WALLACE, Circuit Judge:

Boone and others (developers) appeal from an order dismissing their antitrust and civil rights action against the Redevelopment Agency of the City of San Jose (agency), the City of San Jose, and the Koll [889]*889Company (Koll). We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm.

I

This case involves a decision by the agency and the City Council of San Jose (council) not to construct a multi-story parking garage at a certain location in downtown San Jose. The agency is a municipal corporation created under California’s Community Redevelopment Law, Cal.Health & Safety Code §§ 33000-33738 (redevelopment act), for the purpose of facilitating urban renewal in the downtown San Jose area. On November 17, 1978, the council, on recommendation of the agency, enacted a comprehensive plan for combatting urban blight in the city’s downtown area. Under the plan, the city was to finance construction of a multi-story parking garage.

The developers are in the real estate business and, pursuant to the city’s redevelopment plan, began construction of an office building in downtown San Jose in mid-1983. They allege that they began construction of this building with the understanding that the city would provide them with adequate parking in the proposed downtown parking building. Because of this understanding, the developers did not construct adequate on-site parking.

Koll is also a real estate developer. On March 29, 1984, the council approved an amendment to the redevelopment plan, which allowed Koll to build an office building in downtown San Jose. This amendment required the relocation of the proposed municipal parking garage to the periphery of the redevelopment area. The developers allege that in return for not protesting the amendment, unnamed city officials promised to reserve a section of the relocated municipal parking structure for the developers’ exclusive use. Unlike the developers, Koll planned and constructed adequate on-site parking for its building.

The developers allege that after they finished construction of their building, the city reneged on its promise to provide them with parking in the proposed municipal garage. The developers subsequently brought suit against Koll, the agency, and the city which included claims under the Sherman and Clayton Antitrust Acts, 15 U.S.C. §§ 1, 2, 16, and the equal protection and due process clauses of the fourteenth amendment, alleging that Koll had conspired with members of the agency and the council to relocate the proposed parking structure and not to give the developers exclusive parking in that structure, in order to force the developers to sell their building to Koll at a bargain price. This “forced sale,” in turn, would allegedly have given Koll a monopoly on office space in the downtown San Jose area.

The district court dismissed the developers’ initial and first amended complaints with leave to amend. The first two claims for antitrust and civil rights violations in their second amended complaint were dismissed with prejudice for failure to state a claim upon which relief could be granted. Fed.R.Civ.P. 12(b)(6). The pendent claims for promissory reliance and inverse condemnation were dismissed without prejudice so that they could be pursued in state court. The developers then timely filed this appeal from dismissal of the first two claims.

II

We review the dismissal of an action for failure to state a claim de novo. Fort Vancouver Plywood Co. v. United States, 747 F.2d 547, 552 (9th Cir.1984). Reading the allegations in the complaint in a light most favorable to the nonmovant, and taking all of the allegations in the complaint as being true, see Western Reserve Oil & Gas Co. v. New, 765 F.2d 1428, 1430 (9th Cir.1985) (Western Reserve), cert. denied, 474 U.S. 1056, 106 S.Ct. 795, 88 L.Ed.2d 773 (1986), we will affirm only if “it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957).

We discuss first the claims against the city and agency and then the claim against Koll.

[890]*890A.

The city and agency argue that they are immunized from liability by the state action exception from the antitrust laws created in Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943) (Parker). The basis of the state action exception is that the free market principles embodied by the Sherman Antitrust Act must give way to the countervailing principles rooted in federalism and state sovereignty that states must be free to act upon local concerns, even if these actions have anticompetitive results. See id. at 350-51, 63 S.Ct. at 313. This exception was later expanded to protect municipalities in Community Communications Co. v. City of Boulder, 455 U.S. 40, 51-52, 102 S.Ct. 835, 840-41, 70 L.Ed.2d 810 (1982) (Boulder). The Court ruled in Boulder that anticompetitive acts of a municipality that would normally give rise to liability under the Sherman Act are shielded if the municipality acted pursuant to a “clearly articulated and affirmatively expressed” state policy to displace competition with regulation. Id.; see also Hallie v. City of Eau Claire, 471 U.S. 34, 39, 105 S.Ct. 1713, 1716, 85 L.Ed.2d 24 (1985) (Hallie ). Pursuant to this test, we must undertake a two-part inquiry to determine whether state action immunity applies. We must first determine whether the California legislature authorized the challenged actions of the city and the agency. Then we must determine whether the legislature intended to displace competition with regulation. Both elements are prerequisites to proper application of the state action exception to municipal action.

A state policy is considered clearly articulated and affirmatively expressed if the statutory provision empowering the municipality’s action plainly shows that “the legislature contemplated the kind of action complained of.” Hallie, 471 U.S. at 44, 105 S.Ct. at 1719, quoting City of Lafayette v. Louisiana Power & Light Co., 435 U.S. 389, 415, 98 S.Ct. 1123, 1138, 55 L.Ed.2d 364 (1978).

Applying these principles to the instant case, the city and agency argue that they are immunized because all of their actions were carried out under the state authority of the redevelopment act. The purpose of the redevelopment act was to combat what the state legislature perceived to be a “serious and growing menace” created by blighted areas. Redevelopment Act § 33035(a).

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841 F.2d 886, Counsel Stack Legal Research, https://law.counselstack.com/opinion/boone-v-redevelopment-agency-ca9-1988.