set up appointments under false pretenses to keep legitimate patients from making appointments, and established competing pregnancy testing and counseling facilities in the vicinities of the clinics.
Defendants Joseph Scheidler, Andrew Scholberg, Timothy Murphy, and the Pro-Life Action League, Inc. filed a motion to dismiss plaintiffs' second amended complaint for failure to state a claim upon which relief may be granted. For the reasons stated below, the motion is granted in part and denied in part.
I. COUNT I: SECTION ONE OF THE SHERMAN ANTITRUST ACT
Count I of plaintiffs' complaint alleges that defendants Scheidler, Ryan, Terry, Scholberg, Murphy, Wojnar, Migliorino, PLAL, PDAL, Operation Rescue, Project Life, and Vital-Med have restrained trade in violation of section one of the Sherman Act, 15 U.S.C. § 1. Defendants argue that the objective of their activities is "closing clinics by affecting public opinion, consumers' choices, physicians' revulsion, and legislators' votes," and "to convince others for non-economic reasons that the entire private abortion market ought to be banned, or 'decommodified.'" (Mem. in Support, pp. 13, 24.) Defendants assert that their activity "is non-economic but social, moral and political." (Id. at 24.)
The threshold question is whether the Sherman Act was intended to cover the conduct alleged here. Given the unique issue presented by this case, guidance can be gleaned from an examination of United States Supreme Court cases concerning the application of antitrust laws to anticompetitive political conduct.
In Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 81 S. Ct. 523, 5 L. Ed. 2d 464 (1961), the Supreme Court held that concerted efforts to restrain or monopolize trade in order to petition government officials are protected from antitrust liability. In Noerr, the defendant railroads engaged in a publicity campaign with the purpose of fostering the adoption and retention of laws that would be destructive of the trucking business. Id. 81 S. Ct. at 527. The Court characterized the publicity campaign as political activity and held that the "proscriptions of the [Sherman] Act, tailored as they are for the business world, are not at all appropriate for application in the political arena." Id. at 531. The Court refused to extend the Act to regulate political activities simply because they "have a commercial impact and involve conduct that can be termed unethical." Id. Significantly, the Court pointed out the "essential dissimilarity" between the publicity campaign and "agreements traditionally condemned by § 1 of the [Sherman] Act." Id. at 529.
Noerr immunity has been most recently discussed by the Supreme Court in Allied Tube & Conduit Corp. v. Indian Head, Inc., 486 U.S. 492, 108 S. Ct. 1931, 100 L. Ed. 2d 497 (1988) and F.T.C. v. Superior Court Trial Lawyers Ass'n, 493 U.S. 411, 110 S. Ct. 768, 769, 107 L. Ed. 2d 851 (1990) (hereinafter " D.C. Lawyers "). In Allied Tube, members of the steel industry packed an annual meeting of a private standard-setting association with new members solely to vote against a new type of electrical conduit that posed an economic threat to steel conduit. 108 S. Ct. at 1934-35. The Court found that the Noerr doctrine can immunize indirect as well as direct petitioning of the government. Id. at 1938. Applying Noerr, the Court focused on the context and nature of the anticompetitive behavior. The Court compared the conduct at issue with conduct classically condemned by the Sherman Act. The Court denied petitioner the use of Noerr immunity because petitioner's activity was the type of commercial activity that has traditionally had its validity determined by the antitrust laws themselves. Id. at 1939. Unlike Noerr, the behavior was not political activity that has traditionally been regulated with extreme caution or activity that bears little if any resemblance to the combinations normally held violative of the Sherman Act. Id. at 1940.
The most recent Supreme Court case on Noerr immunity confirms the pivotal role that traditional anticompetitive conduct plays in the doctrine's application. In D.C. Lawyers, 493 U.S. 411, 110 S. Ct. 768, 769, 107 L. Ed. 2d 851 (1990), a group of lawyers in private practice who regularly acted as court-appointed counsel for indigent defendants in District of Columbia criminal cases agreed to stop providing such representation until the District increased group members' compensation. The Court held that the agreement was a boycott that "constituted a classic restraint of trade within the meaning of Section 1 of the Sherman Act." Id. 110 S. Ct. at 774. The horizontal agreement between the lawyers, who were in competition with one another prior to the boycott, constituted a "constriction of supply [which] is the essence of price fixing . . . [and] . . . was unquestionably a 'naked restraint' on price and output." Id. at 774-75. Once again, the Court's denial of Noerr immunity was based on its classification of the agreement as "classic" anticompetitive conduct as distinguished from political activity.
The court finds great similarity between this case and another case to which NOW was a party. State of Missouri v. Nat'l Organization for Women, Inc., 620 F.2d 1301 (8th Cir. 1980), involved a convention boycott organized by NOW against all states that had not ratified the proposed Equal Rights Amendment. The court asked whether Congress intended to protect free and fair competition from political or social activities that can have the same effect upon competition as the commercial activities of a trust against a business. Id. at 1305. After a thorough analysis of the legislative history of the Sherman Act, the court concluded that it was anticompetitive conduct with commercial objectives that Senator Sherman had in mind as the concern of the bill, not anticompetitive conduct by noncompetitors motivated by noneconomic concerns. Id. at 1309. The Eighth Circuit in State of Missouri performed an equally thorough study of the relevant case law, the results of which confirmed the court's earlier conclusion that the Sherman Act was intended to regulate anticompetitive conduct that has financial, economic, or commercial objectives. Id. at 1313. The court found that, although NOW's boycott was an economic device, it was used in a non-competitive political arena in order to influence legislation and, as such, is not proscribed by the Sherman Act. Id. at 1315.
Similarly, a woman's right to have an abortion is a social or political issue -- one of the most complex and contentious in American society today. The parties each have clear and loudly publicized views on the issue of abortion. Defendants' actions are not financially or commercially motivated. Defendants have an ultimate objective -- legislation prohibiting abortions -- and an intermediate goal -- injury to abortion clinics. The intermediate goal is one of inflicting economic harm with the hope of achieving the ultimate objective. The intended harm to the relationships between the clinics and their customers parallels the intended injury to the relationship in the Noerr case itself between the truckers and their customers. Since the injurious restraint is incidental to a valid effort to influence governmental action, the activity enjoys antitrust immunity even if unethical and deceptive methods have been used. See Allied Tube, 108 S. Ct. at 1936-37. Congress has traditionally exercised extreme caution in legislating with respect to problems relating to the conduct of political activities. Noerr, 81 S. Ct. at 531. All of this caution would go for naught if this court permitted an extension of the Sherman Act to regulate the activities at issue simply because those activities have a commercial impact and involve conduct that can be termed unethical. See id.
Furthermore, unlike traditional antitrust matters (such as the situations presented in Allied Tube and D.C. Lawyers), the activities alleged here are not between competitors.
Allied Tube concerned an agreement between competitors in the conduit industry. D.C. Lawyers involved an agreement between competing attorneys. Even in Noerr, where immunity was granted, there was an agreement between commercial competitors in the long-distance freight hauling business. Here, as in State of Missouri, none of the parties are commercial competitors. The "essential dissimilarity" between the alleged conduct and the conduct traditionally regulated by antitrust laws is of a greater magnitude in this case than that in Noerr itself. Thus, the Supreme Court's reasons in Noerr for not applying antitrust laws apply with greater weight to this case, which involves political opponents, not commercial competitors, and political objectives, not marketplace goals.
For these reasons, the Court finds that the Sherman Act does not apply to the defendants' anticompetitive actions alleged in the complaint. Accordingly, Count I must be dismissed.
II. RICO COUNTS
A. SECTION 1962(a)
Count II of plaintiffs' complaint alleges a violation of 18 U.S.C. § 1962(a), which makes it
unlawful for any person who has received any income derived, directly or indirectly, from a pattern of racketeering activity . . . to use or invest, directly or indirectly, any part of such income or the proceeds of such income, in acquisition of any interest in, or the establishment or operation of, any enterprise. . . .
Plaintiffs allege that defendants received contributions in support of their racketeering activities and that defendants invested that income in the various defendant organizations to further the illegal goals of the organizations. (Complaint, paras. 100-104).
In order to state a claim under § 1962(a), income must be "derived, directly or indirectly, from a pattern of racketeering activity." Plaintiffs claim that the donations received from defendants' supporters were derived from defendants' illegal acts. Plaintiffs state that "it is well-known that the more outrageous and highly-publicized the activities are, the more likely the RICO Defendants and the enterprises are to receive large donations." (RICO Case Statement, p. 22.) The court believes that the receipt of donations from supporters of the defendant organizations does not constitute income derived from a pattern of racketeering activity. The racketeering activity alleged in the complaint is extortion. The extortion was addressed, either directly or indirectly, at clinics and employees and patients of those clinics. Supporters of defendant organizations were not extorted, either directly or indirectly, into contributing to the organizations. While supporters may have contributed in order to promote the extortionate activities of defendants, their contributions in no way were derived from the pattern of racketeering alleged in the complaint. See Hemmings v. Barian, 822 F.2d 688, 692 (7th Cir. 1987) (§ 1962(a) claim fails because the income received was not derived from the racketeering activity alleged in the complaint, but instead was income from sources that were proper and aboveboard). Thus, plaintiffs' RICO claim under § 1962(a) must fail.
B. SECTION 1962(c)
Count III of plaintiffs' complaint alleges a violation of 18 U.S.C. § 1962(c). A violation of § 1962(c) requires (1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity. Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 105 S. Ct. 3275, 3285, 87 L. Ed. 2d 346 (1985). In addition, the plaintiff only has standing if, and can only recover to the extent that, he has been injured in his business or property by the conduct constituting the violation of § 1962(c). Id.
Defendants contend that RICO requires that the predicate acts or the enterprise be economically motivated. The circuits which have explicitly addressed this issue are in conflict on the need for an economic motive. As noted by Justice White, the Second and Eighth Circuits require a profit-making element, while the Third Circuit does not. McMonagle v. Northeast Women's Center, Inc., 493 U.S. 901, 110 S. Ct. 261, 107 L. Ed. 2d 210 (1989) (denial of petition for writ of certiorari) (White, J., dissenting).
The Second Circuit has held that either the predicate acts of racketeering or the enterprise must have some financial motive. United States v. Ferguson, 758 F.2d 843, 853 (2d Cir. 1985); United States v. Bagaric, 706 F.2d 42, 55 (2d Cir. 1983); United States v. Ivic, 700 F.2d 51, 65 (2d Cir. 1983). However, the economic motive need not surmount all other motives. Bagaric, 706 F.2d at 55.
In Ivic, the Second Circuit held that subsection 1962(c) has an economic motive requirement. Id. at 60. The court discussed the use of the term "enterprise" in 1962(a) and (b),
concluding that "the term 'enterprise' [in subsections (a) and (b)] quite clearly refers to . . . the sort of entity which one joins to make money. . . . An 'enterprise', as used in these subsections, is evidently an organized profit-seeking venture." Id. The court adhered to the rule that when the same word is used in the same section of an act more than once, and the meaning is clear in one place, it will be assumed to have the same meaning in other places. Id. Thus, the court found a requirement for a profit-generating motive in subsection (c).
The Eighth Circuit has also held that an enterprise must be directed toward an economic goal. United States v. Flynn, 852 F.2d 1045, 1052 (8th Cir. 1988); United States v. Anderson, 626 F.2d 1358, 1372 (8th Cir. 1980). In Anderson, the Eighth Circuit stated:
We hold that Congress intended the phrase 'a group of individual's associated in fact although not a legal entity,' as used in its definition of the term 'enterprise' in section 1961(4), to encompass only an association having an ascertainable structure which exists for the purpose of maintaining operations directed toward an economic goal that has an existence that can be defined a part from the commission of the predicate acts constituting the 'pattern of racketeering.'