protected right to petition the government, thereby denying the government useful input from parties fearful of antitrust liability. See Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law 14 (Supp. 1992).
Furthermore, where, as here, the alleged injury stems from a competitor's success in influencing legislation, that injury is caused by the state legislatures' political decisions, not by the competitor itself. Although Defendant may have encouraged the legislatures' actions, the choice to enact massage therapy regulations constituted an independant governmental choice, comprising a supervening "cause," and breaking the link between Defendant's actions and any injury Plaintiff may have suffered. Id. at 14.
The First Amendment's protection of political efforts to encourage legislation extends even where a party possesses an anticompetitive motive in petitioning for legislation. The selfishness of a party's political motives is irrelevant. City of Columbia & Columbia Outdoor Advertising v. Omni Outdoor Advertising, 499 U.S. 365, 111 S. Ct. 1344, 1354, 113 L. Ed. 2d 382 (1991). Concerted efforts to influence legislatures are shielded from the reaches of the Sherman Act, regardless of anticompetitive intent or purpose. Id. at 1354 (citing United Mine Workers v. Pennington, 381 U.S. 657, 85 S. Ct. 1585, 14 L. Ed. 2d 626 (1965)). Accordingly, Defendant's successful efforts to encourage legislation are protected by the First Amendment, even if those efforts were motivated by anticompetitive animus.
In its response to Defendant's motion, Plaintiff argues, in an apparent attempt to assert the "sham" exception to Defendant's First Amendment protection, that Defendant should lose the protection because Defendant attempted to deny Plaintiff access to the regulatory process. However, Plaintiff's complaint contains assertions of no more than Defendant's successful attempts to encourage legislation.
Even if Defendant did attempt to deny Plaintiff access to the legislative petitioning system, the narrow "sham" exception would apply to Defendant's attempts only if Defendant had no reasonable expectation of obtaining the favorable legislation. See City of Columbia, 111 S. Ct. at 1354. Since, as Plaintiff emphasized in its complaint, many states actually adopted legislation like that encouraged by Defendant, Defendant cannot be said to have lacked any reasonable expectation that the legislatures would follow Defendant's recommendations.
Plaintiff further argues in its response that the "sham" exception should apply because Defendant used improper means (i.e., libel) when recommending the legislation which resulted in restrained competition. However, restraints which are generally not within the reach of the Sherman Act are not brought within its sweep by mere allegations that the restraints were accomplished by improper means under state law. Allied Tube & Conduit Corp. v. Indian Head, 486 U.S. 492 at 508, 100 L. Ed. 2d 497, 108 S. Ct. 1931 (1988).
The narrow scope of the "sham" exception stems from recognition that antitrust laws, "tailored as they are for the business world, are not at all appropriate for application in the political arena." Noerr, 81 S. Ct. at 531. Because they took place wholly within the political arena, Defendant's legislative efforts do not fall within the "sham" exception and, therefore, enjoy First Amendment protection.
Furthermore, actionable antitrust conspiracies must involve separate and unrelated entities, not closely held affiliates. Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752, 104 S. Ct. 2731, 81 L. Ed. 2d 628 (1984). Plaintiff contends that whether NCBTMB is indeed separate and unrelated is a question of fact which necessitates the denial of Defendant's motion. However, in its complaint, Plaintiff states "NCBTMB is an administrative affiliate of Defendant, its parent organization," and continues on to detail the close ties between NCBTMB and Defendant. (Compl. at 4.) Similarly, Plaintiff details the close ties between Defendant and COMTTA. Taking, as we must, all allegations in Plaintiff's complaint as true, Plaintiff has not alleged an actionable antitrust conspiracy and Count II of the complaint is dismissed.
III. RICO Count
Count IV of Plaintiff's complaint alleges that Defendant AMTA, in conjunction with NCBTMB and COMTTA, conspired to conduct an enterprise through a pattern of racketeering activity in violation of RICO, 18 U.S.C. § 1961. Plaintiff predicates its RICO claim on an assertion that Defendant transmitted fraudulent information through the United States mail. Plaintiff states that this mail fraud occurred when Defendant mailed its allegedly libelous literature to various state legislatures on two separate occasions, directing the legislatures to enact massage therapy regulations.
As discussed above in the antitrust context, the court recognizes that Defendant's communications with the legislatures are entitled to First Amendment protections, despite allegations that those communications contained libelous statements. Vital to our political system is the free trade of information between legislators and the public. In this marketplace of ideas, free trade means "free trade in the opportunity to persuade action, not merely to describe facts." N.A.A.C.P. et al. v. Claiborne Hardware Co. et al., 458 U.S. 886, 102 S. Ct. 3409, 3425, 73 L. Ed. 2d 1215 (1982) (quoting Thomas v. Collins, 323 U.S. 516, 537, 65 S. Ct. 315, 325, 89 L. Ed. 430 (1945)). In the context of the instant case, RICO should not be employed so as to raise the price of trade in the free speech marketplace. Allegations of nonviolent state law transgressions will not inject RICO implications into protected speech. See National Org. for Women, Inc. v. Scheidler, 897 F. Supp. 1047, 1995 U.S. Dist. LEXIS 10615, 1995 WL 469717 at *33 (N.D. Ill. 1995).
In addition, business rivals may not use the RICO statute to support a cause of action for injuries indirectly caused by mail fraud which was perpetrated against third parties. See Israel Travel Advisory Serv. v. Isr. Identity Tours, Inc. 61 F.3d 1250, 1995 U.S. App. LEXIS 18607, 1995 WL 425224, at *7 (7th Cir. 1995) (citing Lancaster Comm. Hosp. v. Antelope Valley Hosp. Dist., 940 F.2d 397, 405-06 (9th Cir. 1991)). Plaintiff seems to complain of a fraud perpetrated against the state legislatures but which caused injury to Plaintiff. Plaintiff was not the direct victim of the alleged fraud: the injury complained of stems directly from political decisions to legislate, not from the Defendant's conduct.
In drafting RICO, Congress did not intend to create a statutory sieve through which business rivals can filter the content of their competitors' communications with legislative bodies. Nor was it their intent to create protection for themselves from the content of unwanted, unsolicited, even if offensive, communications from private or commercial interests. A representative republic requires the uninpeded flow of information and ideas from its citizens. Although Plaintiff may have a common law remedy against Defendant, the alleged indirect injury does not give rise to a RICO remedy.
Therefore, because Plaintiff has failed to allege the predicate mail fraud and because of First Amendment considerations, Plaintiff's RICO Count is dismissed.
Accordingly, Defendant's motion to dismiss is granted with prejudice as to Counts II and IV. The court declines to exercise supplemental jurisdiction over Counts I and III.
IT IS SO ORDERED.
CHARLES RONALD NORGLE, SR., Judge
United States District Court
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