846 F2d 71 Hillman Flying Service Inc v. City of Roanoke G II G C Piedmont Aviation Hillman Flying Service Inc

846 F.2d 71

1988-1 Trade Cases 68,069

HILLMAN FLYING SERVICE, INC., Plaintiff-Appellant,
The CITY OF ROANOKE, James G. Harvey, II, Member, City
Council, Jack G. Smith, Chmn., Airport Commission, Claude
Smith, Member, Airport Commission; Robert C. Poole,
Manager, Roanoke Regional Airport, Defendants-Appellees,
PIEDMONT AVIATION, Joe Culler, Vice Pres., Piedmont
Aviation, George Litchard, Manager, Piedmont
Aviation, Defendants.
HILLMAN FLYING SERVICE, INC., Plaintiff-Appellant,
PIEDMONT AVIATION, Joe Culler, Vice President, Piedmont
Aviation, George Litchard, Manager, Piedmont
Aviation, Defendants-Appellees,
The City of Roanoke, James G. Harvey, II, Member, City
Council, Jack G. Smith, Chmn., Airport Commission, Claude
Smith, Airport Commission, Robert C. Poole, Manager, Roanoke
Regional Airport, Defendants.

Nos. 87-3037, 87-3137.

United States Court of Appeals, Fourth Circuit.

Argued Jan. 4, 1988.
Decided April 21, 1988.

Unpublished Disposition
NOTICE: Fourth Circuit I.O.P. 36.6 states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Fourth Circuit.

Sydney Strother Smith, III, for appellant;

Anthony Francis Troy (James S. Crockett, Jr., Mays & Valentine, Wilburn C. Dibling, Jr., City Attorney, Mark A. Williams, Assistant City Attorney on brief), Robert Martin Lichtman (James F. Johnson, John D. Eure, Johnson, Ayers & Matthews on brief) for appellees.

Before WIDENER and K.K. HALL, Circuit Judges, and FRANK W. BULLOCK, Jr., United States District Judge for the Middle District of North Carolina, sitting by designation.


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Hillman Flying Service, Inc. ("Hillman") filed suit against the City of Roanoke, Virginia ("Roanoke"), Piedmont Aviation, Inc. ("Piedmont"), and individual representatives of each alleging violations of federal and state law. Specifically, Hillman claimed that Piedmont and Roanoke officials engaged in a conspiracy to restrict competition at Roanoke Airport, which resulted in Piedmont obtaining a monopoly over the fixed-base operations at the airport, all in violation of the Sherman Anti-Trust Act, 15 U.S.C. Secs. 1 and 2, and the Virginia Anti-Monopoly and Anti-Business Conspiracy Acts. Hillman also brought a claim under 42 U.S.C. Sec. 1983 alleging that Roanoke and its officers abridged Hillman's federal constitutional and statutory rights arising under the first and fourteenth amendments and the Airport and Airway Improvement Act of 1982, 49 U.S.C. Sec. 2210. Finally, Hillman claimed that actions by Piedmont employees constituted a pattern of racketeering activity in violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. Sec. 1962.


The district court dismissed the entire action against both sets of defendants in separate orders ruling that the allegations in the complaint failed to state a federal claim upon which relief could be granted, Fed.R.Civ.P. 12(b)(6). See Hillman Flying Service, Inc. v. City of Roanoke, 652 F.Supp. 1142, 1144 (W.D.Va.1982). Hillman appeals both orders of dismissal, but does not pursue the RICO claim against Piedmont nor its allegations regarding Roanoke's violation of Hillman's first amendment right to free speech. The appeals have been consolidated.


We agree with the district court that all defendants are protected by various defenses and immunities on each federal claim and we affirm.



Hillman Flying Service provides support services to air carriers. Currently Hillman is classified as a specialized fixed-base operator ("FBO") at Roanoke Airport and provides limited services to carriers there. Piedmont Aviation is classified as a general FBO at Roanoke Airport, which entitles it to provide fuel service in addition to other ground services. Piedmont is currently the only general FBO at the Roanoke Airport, despite Hillman's continued efforts to attain that classification.


Roanoke Code Sec. 4-45 establishes the two categories of FBO's and provides that only general FBO's may sell petroleum products. Section 4-53 establishes minimum floor and land space standards for providing the various services. Hillman contends that the space requirements for fuel service violate the equal protection clause of the Fourteenth Amendment to the United States Constitution. Hillman also claims that Piedmont and Roanoke used Section 4-53 to prevent other service providers from becoming general FBO's and competing with Piedmont, and that this conspiracy resulted in Piedmont achieving a monopoly over fuel services at Roanoke Airport.


In support of the conspiracy allegation Hillman claims that city officials and their families received benefits from Piedmont in return for retaining the space requirements and refusing to lease sufficient space to Hillman or any other would-be general FBO. In addition, Hillman contends that Piedmont employees attempted to perpetuate their monopoly by engaging in theft and sabotage of Hillman property, and by coercing people believed to be Hillman clients.



For purposes of this appeal from dismissal under Rule 12(b)(6) we take Hillman's material allegations against Piedmont and the City of Roanoke as true. Jenkins v. McKeithen, 395 U.S. 411, 421, reh'g denied, 396 U.S. 869 (1969). Dismissal of each claim was inappropriate unless it appeared beyond doubt that Hillman would be unable to prove any set of facts which would entitle it to relief on that claim. Conley v. Gibson, 355 U.S. 41, 45-46 (1957).

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With respect to the anti-trust claims against Roanoke we adopt the reasoning of the district court, 652 F.Supp. at 1145-46, and find that the doctrine of state action immunity applies to passage and enforcement of Roanoke Code Sec. 4-53. Although not explicit, the regulatory authority over airports conferred on municipalities by Virginia Code Secs. 5.1-31, 5.1-33, and 5.1-40 is broad enough to permit Roanoke to enter into leases with service providers as it sees fit, and to provide regulations concerning airport operation. The Code provisions also reflect some restriction on the free market for aviation service providers. Therefore, Roanoke's implementation of fuel service space requirements and its decisions regarding leasing of space were in accordance with a "clearly articulated state policy" as defined in Town of Hallie v. City of Eau Claire, 471 U.S. 34, 47 (1985), and are protected by state action immunity.


Recovery of damages against Roanoke on Hillman's federal anti-trust claims is also proscribed by the Local Government Anti-Trust Act, 15 U.S.C. Sec. 35. Moreover, subsequent to the district court's dismissal of this action the City of Roanoke sold the airport to a separate corporate body, the Roanoke Regional Airport Commission. Consequently, even if Hillman stated a claim against Roanoke neither monetary nor injunctive relief could now be granted.


The district court did not err in finding that Hillman failed to state a claim for which it could recover against Piedmont. Piedmont's efforts to convince Roanoke officials to pass, retain or enforce the city ordinances are protected under the so-called Noerr-Pennington doctrine, even if made with the sole purpose of eliminating competition. See Eastern Railroad President's Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 138-39 (1961); United Mine Workers of America v. Pennington, 381 U.S. 657, 670 (1965). The acts alleged in the complaint are insufficient to invoke the "sham" exception to Noerr-Pennington. Noerr, 365 U.S. at 144; California Motor Transport Co. v. Trucking Unlimited, 404 U.S. 508, 511-12 (1972).


As the district court found, Piedmont also cannot be held liable for entering into contracts and providing services in accordance with the Roanoke code, even if it obtained monopoly power by doing so. State action immunity extends to private parties when the clearly articulated state policy is also accompanied by active state supervision. California Retail Liquor Dealers Ass'n v. Midcal Aluminum, Inc., 445 U.S. 97, 105 (1980). Since the ordinance was pursuant to state policy, Piedmont's contracting and performance under that ordinance, as enforced by city and airport officials, should also be protected. In short, a private company should not be liable for lobbying lawfully and then fully complying with the resulting law.


The only alleged conduct by Piedmont which would not be protected by either Noerr-Pennington or state action immunity is the direct interference with Hillman's business, by theft, sabotage or coercion of prospective clients. However, because Hillman could not have become a general FBO unless the city changed its position, those allegations, even if true, were not the cause of any anti-trust injury. Therefore they do not state a federal claim for which relief can be granted. Hillman's recourse is to bring a tort action in state court.



The City of Roanoke was also entitled to dismissal of the claims brought under 42 U.S.C. Sec. 1983.


Roanoke Code Sec. 4-53 does not violate the equal protection clause of the fourteenth amendment. As the district court found, the minimum space requirements are rationally related to Roanoke's legitimate interest in airport safety. Since the provision affects neither fundamental rights nor suspect classifications this relationship is sufficient, see New Orleans v. Dukes, 427 U.S. 297, 303 (1976) (per curiam); Massachusetts Board of Retirement v. Murgia, 427 U.S. 307, 314 (1976) (per curiam), and the court need not "resort to close distinctions" and inquire into whether Section 4-53 achieved the desired objective in the least restrictive way. Allied Stores of Ohio, Inc. v. Bowers, 358 U.S. 522, 527-28 (1959).


Hillman's claim that Roanoke violated its right to procedural due process by failing to administer the city ordinances fairly must also fail. "The requirements of procedural due process apply only to the deprivation of interests encompassed by the Fourteenth Amendment's protection of liberty and property." Board of Regents v. Roth, 408 U.S. 564, 569 (1972). Entitlements created by statute or contract may be within the class of protected property interests, id. at 577, but the Roanoke City Code did not create such an entitlement for Hillman. We agree with the district court that Section 4-45 merely recognizes two classes of FBO's and sets out the activities each may undertake, 652 F.Supp. at 1148. Neither 4-45 nor any other provision of the Roanoke Code requires Roanoke to license either class, nor does the city code establish comprehensive procedures for doing so. Therefore, Hillman did not have a property right to general FBO status, and failure to confer such status was not a violation of procedural due process.


Finally, the district court properly dismissed Hillman's Section 1983 claim based on Roanoke's alleged violation of the Airport and Airway Improvement Act of 1982 ("Airport Improvement Act"), specifically 49 U.S.C. Sec. 2210(a)(2). Even if Roanoke failed to honor the assurances made to the Secretary of Transportation by granting Piedmont an exclusive right, Hillman was not entitled to bring an action under Section 1983. 652 F.Supp. at 1148.


Section 1983 is not available where Congress foreclosed private enforcement of a statute or where the statute is not of a type which creates enforceable rights in individuals. Wright v. Roanoke Redev. & Housing Auth., --- U.S. ----, 107 S.Ct. 766, 93 L.Ed.2d 781, 788 (1987) (citing Pennhurst State School & Hospital v. Halderman, 451 U.S. 1 [1981] and Middlesex County Sewerage Auth. v. National Sea Clammers Ass'n, 453 U.S. 1 [1981]. The district court correctly found that in passing the Airport Improvement Act Congress anticipated enforcement by the Secretary of Transportation. 652 F.Supp. at 1149. The assurances were made to the Secretary, who was given broad general power and discretion to carry out the provisions and purposes of the Act. 49 U.S.C. Sec. 2218.


In addition, the Secretary established regulations under the Airport and Airway Development Act of 1970, 49 U.S.C. Sec. 1701 et seq. (repealed 1982), providing for complaints to be filed with the Federal Aviation Administration ("FAA"), which would decide whether to dismiss the complaint or take some enforcement action. See 14 C.F.R. Sec. 13.5(a), (h)-(j) (1987); see also 14 C.F.R. Sec. 13.20 (1987). Although the Airport and Airway Development Act was replaced in 1982 by the Airport Improvement Act, most of the provisions are similar, especially those pertaining to the powers of the Secretary of Transportation, and the regulations directing complaints to the FAA remain in effect.


Therefore, we need not address the second issue of whether the Airport Improvement Act is of a type which creates enforceable rights because any rights Hillman may have under that statute must be pursued with the FAA, and not under 42 U.S.C. Sec. 1983.1 But see New York Airlines v. Dukes County, 623 F.Supp. 1435 (D.Mass.1985) (holding that violations of Section 2210 may give rise to a claim under 42 U.S.C. Sec. 1983).


Since each of the federal claims were properly dismissed, the district court was fully justified in dismissing the pendent state anti-trust claims as well. United Mine Workers v. Gibbs, 383 U.S. 715, 726 (1966).




Hillman apparently sought relief from the FAA, but the result of that effort does not appear in the record before this court