City of Columbia v. Omni Outdoor Advertising Inc.

Syllabus After respondent Omni Outdoor Advertising, Inc., entered the billboard market in petitioner Columbia, South Carolina, petitioner Columbia Outdoor Advertising, Inc. (COA), which controlled more than 95% of the market and enjoyed close relations with city officials, lobbied these officials to enact zoning ordinances restricting billboard construction. After such ordinances were passed, Omni filed suit against petitioners under §§ 1 and 2 of the Sherman Act and the State's Unfair Trade Practices Act, alleging, inter alia, that the ordinances were the result of an anticompetitive conspiracy that stripped petitioners of any immunity to which they might otherwise be entitled. After Omni obtained a jury verdict on all counts, the District Court granted petitioners' motions for judgment notwithstanding the verdict on the ground that their activities were outside the scope of the federal antitrust laws. The Court of Appeals reversed and reinstated the verdict.

Held: 1. The city's restriction of billboard construction is immune from federal antitrust liability under Parker v. Brown, 317 U.S. 341, 352, 63 S.Ct. 307, 314, 87 L.Ed. 315-which held that principles of federalism and state sovereignty render the Sherman Act inapplicable to anticompetitive restraints imposed by the States "as an act of government"-and subsequent decisions according Parker immunity to municipal restriction of competition in implementation of state policy, see, e.g., Hallie v. Eau Claire, 471 U.S. 34, 38, 105 S.Ct. 1713, 1716, 85 L.Ed.2d 24. Pp. 370-379. (a) The Court of Appeals correctly concluded that the city was prima facie entitled to Parker immunity for its billboard restrictions. Although Parker immunity does not apply directly to municipalities or other political subdivisions of the States, it does apply where a municipality's restriction of competition is an authorized implementation of state policy. South Carolina's zoning statutes unquestionably authorized the city to regulate the size, location, and spacing of billboards. The additional Parker requirement that the city possess clear delegated authority to suppress competition, see, e.g., Hallie, supra, 471 U.S., at 40-42, 105 S.Ct., at 1717-18, is also met here, since suppression of competition is at the very least a foreseeable result of zoning regulations. Pp. 370-373. (b) The Court of Appeals erred, however, in applying a "conspiracy" exception to Parker, which is not supported by the language of that case. Such an exception would swallow up the Parker rule if "conspiracy" means nothing more than agreement to impose the regulation in question, since it is both inevitable and desirable that public officials agree to do what one or another group of private citizens urges upon them. It would be similarly impractical to limit "conspiracy" to instances of governmental "corruption," or governmental acts "not in the public interest"; virtually all anticompetitive regulation is open to such charges and the risk of unfavorable ex post facto judicial assessment would impair the States' ability to regulate their domestic commerce. Nor is it appropriate to limit "conspiracy" to instances in which bribery or some other violation of state or federal law has been established, since the exception would then be unrelated to the purposes of the Sherman Act, which condemns trade restraints, not political activity. With the possible exception of the situation in which the State is acting as a market participant, any action that qualifies as state action is ipso facto exempt from the operation of the antitrust laws. Pp. 374-379. 2. COA is immune from liability for its activities relating to enactment of the ordinances under Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 141, 81 S.Ct. 523, 531, 5 L.Ed.2d 464, which states a corollary to Parker: The federal antitrust laws do not regulate the conduct of private individuals in seeking anticompetitive action from the government. The Court of Appeals erred in applying the "sham" exception to the Noerr doctrine. This exception encompasses situations in which persons use the governmental process itself-as opposed to the outcome of that process-as an anticompetitive weapon. That is not the situation here. California Motor Transport Co. v. Trucking Unlimited, 404 U.S. 508, 512, 92 S.Ct. 609, 612, 30 L.Ed.2d 642, distinguished. Omni's suggestion that this Court adopt a "conspiracy" exception to Noerr immunity is rejected for largely the same reasons that prompt the Court to reject such an exception to Parker. Pp. 379-384. 3. The Court of Appeals on remand must determine (if the theory has been properly preserved) whether the evidence was sufficient to sustain a verdict for Omni based solely on its assertions that COA engaged in private anticompetitive actions, and whether COA can be held liable to Omni on its state-law claim. P. 384. 891 F.2d 1127 (CA4 1989), reversed and remanded. SCALIA, J., delivered the opinion of the Court, in which REHNQUIST, C.J., and BLACKMUN, O'CONNOR, KENNEDY, and SOUTER, JJ., joined. STEVENS, J., filed a dissenting opinion, in which WHITE and MARSHALL, JJ., joined, post, p.. Joel I. Klein, Washington, D.C., for petitioners. A. Camden Lewis, Columbia, S.C., for respondent. Justice SCALIA delivered the opinion of the Court.