author: FLANNERY, District Judge.

text:
    ATTORNEY GENERAL OF the UNITED STATES, Plaintiff, v. THE IRISH PEOPLE, INC., Defendant.
    Civ. A. No. 76-1518.
    United States District Court, District of Columbia.
    June 14, 1985.

      Brian K. Ahearn, Dept, of Justice, Crim. Div., Washington, D.C., for plaintiff Attorney General of U.S.
    Charles S. Sims, American Civil Liberties Union, New York City, Mark Lynch, Susan Shaffer, American Civil Liberties Union, Project on National Security and Civil Liberties, Washington, D.C., for defendant.
   MEMORANDUM OPINION

FLANNERY, District Judge.

This matter is before the court on cross-motions for summary judgment on the remaining issue in this case, the defendant’s selective prosecution affirmative defense. This issue was specifically reserved in this court’s earlier Order, see Memorandum Opinion, July 6, 1984. The government brought this action to require the defendant, a New York corporation that publishes The Irish People, a weekly newspaper, to register as the agent of a foreign principal under the Foreign Agents Registration Act of 1938 as amended (“FARA”), 22 U.S.C. § 611 et seq. The government claims that The Irish People is an agent of the Irish Northern Aid Committee (“INAC”), which in turn, is the registered agent of the Irish Republican Army (“IRA”). See Attorney General v. INAC, 530 F.Supp. 241 (S.D.N.Y.1981), aff'd, 668 F.2d 159 (2d Cir.1982).

In its Memorandum Opinion filed on July 6, 1984 this court disposed of all but one of the issues in this case, 595 F.Supp. 114 (D.D.C.1984). In that opinion the court held that The Irish People was controlled by INAC, and that defendant has been published on behalf of INAC and the IRA. Further, the court refused to find that this prosecution violated defendant’s first and fourteenth amendment rights. The court specifically reserved discussion of the remaining defense, selective prosecution, until such time as the court could make representative findings of fact with respect to assertedly privileged documents important to the defense of selective prosecution. On August 31, 1984, this court filed its Memorandum of Fact and Conclusions of Law with respect to those documents. In its Second Motion for Summary Judgment defendant has, in effect, reopened the “control” question decided in this court’s July 6, 1984 Opinion. Further, defendant argues that the plaintiff's attempt to have it register under FARA constitutes selective prosecution.

I. Discussion.

A. New Facts on the Issue of Control

In its second motion for summary judgment, defendant claims that “recently learned facts regarding the organization and legal status of The Irish People, Inc.— principally facts preceding this Court’s July 6, 1984 opinion, but of which counsel was unaware—demonstrate that the Court’s conclusion that the defendant is a ‘foreign agent’ within [FARA] cannot stand.” Defendant’s Memorandum of Law in Support of its Second Motion for Summary Judgment at 1 [hereinafter cited as Def. Mem.]. First, defendant explains that The Irish People as a corporation was dissolved by operation of law on December 31, 1980. Second, INAC officers Michael Flannery, Jack McCarthy, and Robert McCann have not had signature power over The Irish People’s checking accounts since May, 1984. Third, since May, 1984 only Anne Egan, Edward Brady, and Martin Galvin have had and exercised control over The Irish People's finances. In its opposition, the government points out that Mr. Galvin remains an official of INAC, its National Director of Publicity. Defendant concedes that Galvin maintains this position but submits a statement by Galvin that when he edits The Irish People he does not consider that he is, and he is not, acting for INAC. Defendant argues that these new facts undermine the court’s decision of July 6, 1984 that The Irish People is controlled by INAC. In that opinion, the court relied on the signature power, and coincidence of directors between The Irish People and INAC. The court also relied on the subsidization through “advertising” of The Irish People by INAC. Defendant now argues that since the court found the advertising money objectionable only in conjunction with the coincidence of officers and financial control, see Memorandum Opinion of July 6, 1984 at 7, that the advertising factor is no longer sufficient to establish control. The court is not persuaded that these “new facts” should cause it to reconsider its earlier determination. As plaintiff points out, the fact remains that “Defendant is edited by the Irish Northern Aid Committee’s National Director of Publicity, Martin Galvin, and that it continues to rely on the large financial subsidies from INAC for its survival.” Plaintiff’s Response to Defendant’s Second Motion for Summary Judgment at 7. The court in its July 6, 1984 opinion also pointed to the fact that the two entities shared office space and a telephone number from February 23, 1975 to March 1, 1976. During that period The Irish People paid no rent to INAC. Correspondence signed by INAC officials describes The Irish People as “our weekly newspaper,” Memorandum Opinion at 9, and a letter dated December 1, 1977 from INAC officials to the Boston Unit of INAC referred to the command of their sponsors in Ireland to keep the newspaper going. Id. The court will deny defendant’s motion to reconsider its conclusions in its July Memorandum.

B. Selective Prosecution

The Supreme Court has recently restated the familiar basis for a selective prosecution claim:

[T]he decision to prosecute may not be “ ‘deliberately based upon an unjustifiable standard such as race, religion, or other arbitrary classification’ ” ... including the exercise of protected statutory and constitutional rights____

Wayte v. United States, — U.S.-, 105 S.Ct. 1524, 1531, 84 L.Ed.2d 547 (1985). As the Court of Appeals for the Ninth Circuit has explained:

In order to prevail in this allegation [of selective prosecution] appellant must bear the burden of proving at least a prima facie case. This requires that appellant first demonstrate that others similarly situated generally have not been prosecuted for conduct similar to that for which he was prosecuted. Secondly, appellant must show that his selection was based on an impermissible ground such as race, religion or his exercise of his first amendment right to free speech.

United States v. Scott, 521 F.2d 1188, 1195 (9th Cir.1975), cert. denied, 424 U.S. 955, 96 S.Ct. 1431, 47 L.Ed.2d 361 (1976) (involving alleged failure to file income tax forms).

1. Selection

In the section of Judge Wilkey’s opinion in Attorney General of the United States v. The Irish People, Inc., 684 F.2d 928 (D.C.Cir.1982), cert. denied, 459 U.S. 1172, 103 S.Ct. 817, 74 L.Ed.2d 1015 (1983), that is the opinion of the court, the court explained that a “demonstration of selection is indispensable for the defense and ... the burden of so demonstrating lies squarely on the defendant.” Id. at 946. The court explained that selection requires the defendant to “demonstrate that others similarly situated generally have not been prosecuted for conduct similar to that for which he was prosecuted.” Id. (quoting United States v. Scott, supra). Defendant attempts to meet the selection prong by arguing that “other American individuals or groups who share at least the salient characterics [sic] of the defendant so far as FARA is concerned, apart from their disfavored political views, are ‘similarly situated,’ and a proper measure of comparison for selective prosecution claims.” Def. Mem. at 18 (emphasis in original). It claims that although Betty Williams and Mairead Corrigan, founders and leaders of the Community of the Peace People, another group involved in Northern Ireland, have registered under the Act, “these registrants filed wholly non-responsive registration statements, yet none was apparently the subject of enforcement by the Attorney General.” Def. Mem. at 16-17 (emphasis in original). But these groups have registered and thus are not similar to The Irish People which has never registered. Defendant further asserts that FARA has not been enforced against the Catholic Bishops in the United States, Jewish American groups with close ties to Israel, and pro-Solidarity Polish-Americans. In this case, the court does not decide whether the selection prong has been met. In order to succeed on a selective prosecution claim, the defendant must show both selection and improper motive. Because the court finds that defendant has not met the second prong, demonstrating improper motive, the court need not decide whether the selection prong has been met in this case.

2. Improper Motive

If defendant can be found to have met the “selection” prong of the prima facie case for selective prosecution, it must then establish that the selection is “deliberately based upon an unjustifiable standard such as race, religion, or other arbitrary classification ... including the exercise of protected statutory and constitutional rights ----” Wayte, supra, 105 S.Ct. at 1531 (citations omitted). To be sure, “[t]he conscious exercise of some selectivity in prosecuting individuals for similar conduct is permissible.” United States v. Diggs, 613 F.2d 988, 1003 (D.C.Cir.1979), cert. denied, 446 U.S. 982, 100 S.Ct. 2961, 64 L.Ed.2d 838 (1980) (emphasis added) (citing Oyler v. Boles, 368 U.S. 448, 456, 82 S.Ct. 501, 506, 7 L.Ed.2d 446 (1962); United States v. Bell, 506 F.2d 207, 222 (D.C.Cir.1974); United States v. Berrios, 501 F.2d 1207, 1211 (2d Cir.1974)). In the specific context of FARA, this circuit noted in Attorney General that the text of the Act and its legislative history “permit use of limited resources to target those alleged agents deemed most dangerous or powerful (i.e., saboteurs, terrorists).” 684 F.2d at 956. What would be impermissible would be to use the power of prosecution “selectively to manage the information put before the American people in debates over foreign policy.” Id. The circuit court continued:

If the district court were to identify evidence which colorably shows that this newspaper was singled out for enforcement while those expressing views on the other side of the controversy were left alone and “ ‘the prosecution was undertaken with the motive to suppress’ protected expression,” ... the defendants would have made the requisite color-able showing of selective prosecution.

Id. (citations omitted).

Defendant in this case faces the difficulty of distinguishing, as a practical matter, permissible reasons from impermissible ones. Despite the potential difficulty of the task, the fact remains that the constitutionality of FARA as written is not in question on this motion, and that the burden remains on the defendant to show that in this case the decision to prosecute was based on an impermissible motive.

On cross-motions for summary judgment, then, defendant necessarily argues either that as a matter of law plaintiff acted with an impermissible motive, or that a factual issue exists as to the purpose of the selection. Plaintiff necessarily argues that this court can decide as a matter of law that defendant has not shown that an issue of fact exists, which, if resolved in its favor, would meet the heavy burden of making a prima facie case of selective prosecution.

None of the facts asserted by defendant, however, adequately supports a conclusion that FARA was used in order to suppress constitutionally protected activity. Defendant claims not to have found a “smoking gun,” but rather relies on “circumstantial” evidence to make its case. The facts relied on by defendant in its Statement of Material Facts under Local Rule 1—9(i), can be broken into four broad categories. The first category of facts cited by defendant consists of those facts that concern the involvement of allies in either making requests of this country, or receiving information from authorities in this country. See Facts # 10, 12, 14, 15, 17, 27, 31, 32. Defendant’s second category of facts consists of representations concerning investigation of wholly legal activities. See Facts # 8, 11, 19, 20, 28. Defendant’s third category of facts consists of those facts that broadly assert the State Department’s interest in the use of FARA to solve the “Irish problem,” and the State Department’s use of its powers to control entry into this country to speak on behalf of pro-IRA causes. See Facts # 15,16, 17, 18, 22, 25, 26. Defendant’s final category of facts consists of those facts which suggest internal FBI criticism of either methods used, or the conclusion that The Irish People is independent of INAC. See Facts # 9, 23, 29, 30.

The court finds that the circumstantial evidence relied on by defendant does not produce a factual issue that precludes the awarding of summary judgment in favor of the plaintiff. Considering the facts relied on by defendant in their entirety, the court concludes that there is nothing to suggest that FARA was being used to suppress speech or constitutionally protected political activity. Many of the facts relied on show little more than the unremarkable conduct of foreign policy in connection with what were apparently perceived to be serious terrorist activities. Other facts, such as the alleged exclusion of speakers, have no bearing on the issue of whether the government sought to suppress this defendant’s speech or political activity through the use of FARA. Still other facts, such as internal FBI conclusions and criticisms strike the court as wholly irrelevant to a determination that this current case is improperly motivated. The closest defendant comes to demonstrating a factual issue is when it purports to show the use of FARA to solve the “Irish problem”, but there is no supporting evidence that the Irish problem was the speech of The Irish People, or its legitimate political fundraising. In fact, there is evidence that the Irish problem was the perception by some of our allies that money was being raised in this country to support terrorism in Northern Ireland.

This latter point bears elaboration because much of defendant's case depends on it. Two documents on which defendant relies do mention the use of FARA to alleviate the Irish problem in the United States. See Serials 91 & 93. The Irish People is mentioned in neither of these documents. Even accepting, however, that this FARA prosecution was brought in some measure to alleviate the Irish problem, these documents do not in the least suggest that the problem was the speech or legitimate political activity of the defendant. Serial 93, for example, which is described on its face as a memorandum from an F.S. Putnam to E.S. Miller, dated Sept. 26, 1973, refers to a meeting at which the FARA option was discussed. That memorandum states very clearly that the purpose of this meeting was to “review the responsibility of the various Government agencies regarding the investigation of militant Irish activities in the United States.” (emphasis added). The other document, serial 91, is also a memorandum from F.S. Putnam to E.S. Miller, dated Sept. 17, 1973 which declared:

It is noted that the violence in Northern Ireland is mainly attributable to the Irish Republican Army (IRA), an illegal militant Roman Catholic organization which is divided into two wings, the Provisional Wing, which is directly involved in terrorist activities in Northern Ireland and the Official Wing, which is inclined toward revolutionary activities in line with the Marxist-Leninist ideology. The primary fund raising organization for the Provisionals in the U.S. is the INAC which has registered as its foreign principal the Northern Aid Committee (NAC) of Ireland.

Later in the same memorandum FARA and the Irish problem are referred to:

The Irish situation has become a serious problem and source of embarrassment to the U.S. The State Department is continuing to receive pressure from the GOI and State is seeking assistance to alleviate the U.S. problem; however, it is apparent that State is not aware of the investigative responsibilities of the various U.S. agencies and has turned to the FBI for assistance in alleviating this problem. Our primary investigative effort in this regard is in connection with the [FARA], and we have no investigative jurisdiction with regard to the purchase of weapons and explosives or the use of mails for soliciting contributions. It is felt that the assistance being sought by State is a task not only for the FBI, but other investigative agencies such as Customs, Bureau of Alcohol, Tobacco & Firearms, INS, CIA, etc.

Finally, defendant relies strongly on serial 251, an “airtel” from the FBI Director to “SAC, New York and Legat, London” dated February 23, 1976:

For the information of New York and Legat, London, FBIHQ representatives attended an inter-agency conference on 2/6/76 initiated by the Criminal Division of the Department. The purpose of this meeting was to determine what additional actions could be taken concerning alleged gun-running and fund raising by the Irish Republican Army (IRA).
New York, in compliance with the Departmental request, should attempt to determine if members or officers of the Irish Northern Aid Committee headquartered at New York, are utilizing funds raised in the U.S. for illicit purposes. New York should also attempt to determine any relationship between the Irish Northern Aid Committee and the Provisional IRA.
In addition, New York should conduct the investigation requested by the Department concerning the newspaper, the Irish People, published at New York. The relationship between the Irish People and the Irish Northern Aid Committee is to be determined and the specific questions set out in the Department’s letter of 1/26/76 should be answered. (emphasis added).

An earlier memorandum from the FBI Director, similarly expressed concern over the possible relation between INAC, a registered agent, and The Irish People. See Serial 104.

It is difficult to see how these documents, the strongest ones for defendant’s case, which express explicitly concern over U.S. dollars being raised in this country by a foreign terrorist organization raises an inference that FARA is being used in this case to suppress the speech of The Irish People. Defendant also argues that political fund raising is protected activity and thus the use of FARA to stem fundraising presents the illicit motive here. But defendant can point to no document or circumstances from which it can be inferred that the action to seek registration of this defendant was motivated by a desire to suppress legitimate political fundraising of The Irish People. Serial 251 refers to fundraising in this country by the IRA, not to legitimate political fundraising of this defendant. But the documents do refer to gun-running, illicit purposes, militant and terrorist activities.

II. Conclusion.

Defendant seeks to paint this as a case in which the government is attempting “selectively to manage the information put before the American people in debates over foreign policy,” Attorney General, supra, at 956, or alternatively as one in which this government seeks to cut off the flow of funds to support such speech. To be sure, these are legitimate concerns to which federal courts must be attuned. Yet defendant’s entire argument ignores the fact that registration under FARA does not prevent the exercise of constitutional rights. If successful, the Justice Department’s nine year attempt to have this defendant register under the Act results in registration and reporting under a constitutional statute—nothing more, nothing less. This is not to say that an attempt to use FARA to suppress speech, even though of dubious efficacy, could be tolerated. But the court here is concerned with what is being asked of this defendant in this case and the motives for that request. The defendant has attempted to paint a picture of unconstitutional dimensions with facts that tend to obscure the issue before the court because so many of those facts have so little to do with FARA or the defendant in this action. Those facts do not add up to support a finding that a factual issue exists as to whether the Justice Department was improperly motivated in seeking the registration of The Irish People.

      . In one of this court’s earlier opinions in this matter, Attorney General of the United States v. The Irish People, Inc., 502 F.Supp. 63 (D.D.C.1980), rev’d, 684 F.2d 928 (D.C.Cir.1982), cert. denied, 459 U.S. 1172, 103 S.Ct. 817, 74 L.Ed.2d 1015 (1983), this court suggested that perhaps the Scott selection standard was not appropriate in a case such as this. 502 F.Supp. at 65. The court of appeals, however, squarely rejected this suggestion. 684 F.2d at 946-47.

      . Those on the other side have registered under the Act, thus the type of impropriety suggested here by Judge Wald cannot be said to exist in this case.

      . Thus, while Judge Wald speaks in Attorney General of the permissibility of targeting “those alleged agents deemed most dangerous or powerful," 684 F.2d at 956, Judge Wilkey points out that "the danger and power of an agent is definable only in political terms ....” Id. at 934-35 n. 20 (Wilkey, J., pt. II.A). The majority in Attomey General expressed concern that in this case "issues of constitutionally improper motivation surface disturbingly.” Id. at 956 (emphasis in original). Judge Wilkey, however, demonstrates persuasively that the very nature and purpose of the Act make it inevitable that the Justice Department will be called upon to make decisions to prosecute based on considerations which may result in "issues of constitutionally improper motivation surfacing] disturbingly.”

      . Defendant states in its statement of facts not in dispute that an "FBI investigative memorandum found that ‘The Irish People is independent of the Irish Northern Aid Committee,' and noted that ‘INAC does not approve of some of the articles in The Irish People,'" Fact #29 (quoting serial 270). This statement mischaracterizes serial 270 in which the above quoted statements are identified as coming from a source who provided the above information. Thus, this serial does not support a view that this was the official FBI position.

      . Serials referred to are from FBI File 97-5299 and are collected in the Defendant’s Notice of Filing dated April 22, 1985.
      Although the point is not entirely clear, the defendant appears to characterize serials 91 and 93 as Justice Department memoranda. Whether that is so or not does not affect the court’s decision that they do not hint at improper motive.

      . The questions here mentioned are not referred to or relied on by defendant in its memorandum or its statement of facts not in dispute.

      . Defendant apparently attempts to raise a separate claim that "registration would violate the First Amendment because this action was instituted to harass and suppress Defendant’s rights.” Defendant's Reply Memorandum in Support of its Motion for Summary Judgment at 5. That claim fails for the same reason that the selective prosecution claim fails: no evidence of harassment based on constitutional rights.


source: Caselaw Access Project

author: GILMORE, District Judge.

license: Public Domain

text:
    HURON VALLEY HOSPITAL, INC., A Michigan non-profit corporation, Plaintiff, v. CITY OF PONTIAC, a Michigan municipal corporation; City of Pontiac Hospital Building Authority, a Michigan municipal corporation; Pontiac Osteopathic Hospital, a Michigan non-profit corporation; Crittenton Hospital, a Michigan non-profit corporation; Sisters of Mercy Corporation, a Michigan non-profit corporation; Comprehensive Health Planning Council of Southeastern Michigan, a health systems agency; North Oakland County Planning Steering Committee, a planning group under the auspices of Greater Detroit Area Health Council, Inc., a Michigan corporation; United States Department of Health and Human Services, an executive agency of the United States; Margaret Heckler, as Secretary of the Department of Health and Human Services; Bailus Walker, Jr.; Maurice S. Reizen, M.D.; Herman A. Ziel, M.D.; Richard Reihmer; Paul Masseron, and Terence E. Carroll, Defendants.
    No. 78-72970.
    United States District Court, E.D. Michigan, S.D.
    June 17, 1985.

      Lesinski, Kroll, Murphy & O’Neil by T. John Lesinski, Michael E. Murphy, Detroit, Mich., John P. Morris, Arizona State University College of Law, Tempe, Ariz., Kohn, Milstein, Cohen & Hausfeld by Jerry S. Cohen, Washington, D.C., for plaintiff.
    Miller, Canfield, Paddock & Stone by Larry J. Saylor, Detroit, Mich., for defendants City of Pontiac and City of Pontiac Hosp. Building Authority.
    Dykema, Gossett, Spencer, Goodnow & Trigg by Roger K. Timm, Detroit, Mich., for defendants Pontiac Osteopathic Hosp. and Crittenton Hosp.
    Martin, Maxwell, Smith, Buhl & Hanson, P.C. by Robert A. Maxwell, Bloomfield Hills, Mich., for defendants Sisters of Mercy Corp.
    Riley and Roumell by Timothy M. Guerriero, Detroit, Mich., for defendants Comprehensive Health Planning Council of Southeastern Michigan, Paul Masseron and Terence E. Carroll.
    Long, Preston, Kinnaird & Avant by Grady Avant, Jr., Detroit, Mich., for defendants North Oakland County Planning Steering Committee, Greater Detroit Area Health Council, Inc.
    Charles Sorenson, Dept, of Justice, Civ. Div., Washington, D.C., for defendants U.S. Dept, of Health and Human Services and Margaret Heckler.
    Edwin M. Bladen, Asst. Atty. Gen., Lansing, Mich., for defendants Balius Walker, Jr., Maurice S. Reizen, M.D., Herman A. Ziel, M.D., Richard Reihmer.
   OPINION

GILMORE, District Judge.

Once again, this matter is before the Court upon motions to dismiss and/or for summary judgment. The basic facts are set forth in this Court’s prior opinion, Huron Valley Hospital, Inc. v. City of Pontiac, 585 F.Supp. 1159 (E.D.Mich.1984).

Here, the four state defendants, present and former officials of the Michigan Department of Public Health (MDPH) (Balius Walker, Jr., Richard Reihmer, Maurice S. Reizen, M.D., and Herman A. Ziel, M.D.) and the hospital defendants (Pontiac General Hospital, Pontiac Osteopathic Hospital, Crittenton Hospital, and the Sisters of Mercy Corporation) have filed motions to dismiss and for summary judgment. The MDPH, as an entity, was dismissed by stipulation on February 18, 1983.

I. STATE DEFENDANTS

A. Statute of Limitations

The first motion by the state defendants claims that the action is untimely under applicable statutes of limitation. The limitations period for an antitrust claim is four years under 15 U.S.C. § 15b, and for a 42 U.S.C. § 1983 claim, the applicable statute is Michigan’s three year limitation on personal injury claims, M.C.L.A. § 600.5805(8). See Wilson v. Garcia, 471 U.S. -, 105 S.Ct. 1938, 85 L.Ed.2d 254.

The state defendants were named in a proposed amended complaint, but the amendment was denied by Judge Kennedy in 1979 Therefore, they did not become defendants in this action until they were named in the amended complaint filed on November 15, 1983. Thus, the crucial date for any antitrust claim is four years before that, or November 15, 1979, and for any civil rights claim, November 15, 1980, in the absence of tolling. These defendants argue that the latest act that even arguably could gave rise to a cause of action was the failure of MDPH to issue a second certificate of need for an additional 150 beds in the hospital within 90 days after the request for it was filed on June 1, 1978—90 days representing the time within which the MDPH was required to act upon an application for a Certificate of Need (CON) under 42 C.F.R. § 100.101. In other words, the defendants argue that plaintiffs cause of action accrued, if at all, on August 30, 1978 at the latest, thus barring both the Section 1983 claim and the antitrust claim.

This argument overlooks the fact that both the district court and the court of appeals held that this action was not ripe for adjudication until the state administrative and judicial proceedings were complete. Indeed, the case was stayed at the direction of the Court of Appeals for two years. The state proceedings were not completed until October 27, 1982, when the MDPH finally issued plaintiff a CON in a reasonable amount.

In addition, plaintiff has alleged that these defendants engaged in a continuing conspiracy to prevent the construction of this hospital that extended at least until April of 1982 as to these defendants. Although defendants argue that the allegations of continuing conspiracy have not been pled with sufficient particularity, the complaint does contain several general allegations of continuing conspiracy, and the Sixth Circuit has held that a complaint may be dismissed as time-barred under Fed.R. Civ.P. 12(b)(6) only if “the statement of the claim affirmatively shows that plaintiff can prove no set of facts that would entitle him to relief.” Ott v. Midland-Ross Corp., 523 F.2d 1367, 1369 (6th Cir.1975) (emphasis in original). This Court cannot say that the complaint in this case shows such a deficiency on its face. In addition, the Supreme Court held, in Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 338, 91 S.Ct. 795, 806, 28 L.Ed.2d 77 (1971), that in a “continuing conspiracy to violate the antitrust laws ... each time a plaintiff is injured by an act of the defendants a cause of action accrues to him to recover the damages caused by that act and that, as to those damages, the statute of limitations runs from the commission of the act,”

Finally, these claims are not barred by the statute of limitations because they relate back to the date of the filing of the original complaint, November 16, 1978. Because the original complaint described alleged illegal acts on the part of MDPH, the state agency of which these defendants were officials, and because the amended complaint proposed in January 1979 named these defendants individually and sought to add a Section 1983 claim, the requirements of Fed.R.Civ.P. 15(c) for relation back of an amendment are met as to these defendants. Therefore, for the reasons given, there is no basis for dismissing these defendants because of the running of the statute of limitations. The suit is timely as to them.

B. Res Judicata

These defendants next claim that plaintiffs Section 1983 claims could and should have been raised in prior state proceedings, and that plaintiffs failure to do so is res judicata in this action. This assertion is without merit. The state proceedings were simply appeals from administrative determinations, limited under the state Administrative Procedures Act to a determination of whether the administrative decision was supported by competent, substantial evidence on the record taken as a whole. Avon Township v. Boundary Commission, 96 Mich.App. 736, 293 N.W.2d 691 (1980); Murphy v. Oakland County Dept. of Health, 95 Mich.App. 337, 290 N.W.2d 139 (1980). That fact distinguishes this case from Allen v. McCurry, 449 U.S. 90, 101 S.Ct. 411, 66 L.Ed.2d 308 (1980), and Migra v. Warren City School District Board of Education, 465 U.S. 75, 104 S.Ct. 892, 79 L.Ed.2d 56 (1984), which held that any claims which either were or could have been litigated in a prior state proceeding were barred in a subsequent federal Section 1983 action, because the state proceedings in those cases afforded the opportunity to raise the issue on which the Section 1983 claims were based.

Plaintiff did raise some due process arguments during the state proceedings in this case. Those allegations were limited, however, to defects in the administrative process, and did not encompass the broad allegations of conspiracy raised by the Section 1983 claim in the instant case.

The state defendants also claim that the earlier dismissal with prejudice of MDPH, of which these defendants were officials, is res judicata to them as individuals. The settlement agreement expressly provides, however, that “such dismissal is not intended, and shall not be construed to effect the liability, if any, of any of MDPH’s officials, employees or agents, but is intended to apply to the Department, as an agency of government, only.”

Therefore, it is clear that plaintiffs claims are not barred by res judicata.

C. 11th Amendment

These defendants next assert that this suit is actually against the Michigan state treasury, and is therefore barred by the 11th Amendment’s prohibition on suits against the states in federal court. While it is true that a suit against a state official which seeks damages from the public treasury is generally barred by the 11th Amendment, the Supreme Court has held that “damages against individual defendants are a permissible remedy in some circumstances notwithstanding the fact that they hold public office.” Scheuer v. Rhodes, 416 U.S. 232, 238, 94 S.Ct. 1683, 1687, 40 L.Ed.2d 90 (1974). In the Scheuer case, the Court held that an award of money damages from a state official may be permissible if the defendant cannot show that his actions were characterized by good faith and reasonableness, and reversed the dismissal of a § 1983 action against the Governor of Ohio and other high state officials on 11th Amendment grounds. The Court noted that Section 1983 was intended to remedy precisely such “[mjisuse of power, possessed by virtue of state law and made possible only because the wrongdoer is clothed with the authority of state law.” 416 U.S. at 243, 94 S.Ct. at 1690 (quoting United States v. Classic, 313 U.S. 299, 326, 61 S.Ct. 1031, 1043, 85 L.Ed. 1368 (1941)).

The Michigan Court of Appeals has already found that there have been abuses of discretion and actions exceeding statutory authority amounting to a denial of due process and equal protection in Huron Valley Hospital, Inc. v. State Health Facilities Commission, 110 Mich.App. 236, 244-46, 312 N.W.2d 422 (1981). Further, the complaint contains allegations of conspiracy which put defendant’s good faith squarely into contention. Therefore, dismissal under 11th Amendment immunity would be inappropriate at this time.

D. “State Action” Antitrust Immunity

The state defendants claim immunity from antitrust liability under the so-called “state action” exemption, which derives from the 1943 Supreme Court case of Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943), in which the Court held that states are immune from antitrust liability when they act as sovereigns. In California Retail Liquor Dealers Ass’n. v. Midcal Aluminium, Inc., 445 U.S. 97, 100 S.Ct. 937, 63 L.Ed.2d 233 (1980), the Supreme Court set forth a two-part test to determine whether the exemption should apply. It held that the challenged restraint must be “clearly articulated and affirmatively expressed as state policy” and must be “ ‘actively supervised’ by the State itself.” 445 U.S. at 105, 100 S.Ct. at 943.

Here, plaintiff has challenged the good faith of the state defendants, and a state court has held that MDPH exceeded and abused its statutory authority and denied plaintiff due process and equal protection. Therefore, it cannot be said that the actions of these defendants were taken pursuant to a clearly articulated state policy. The Seventh Circuit observed that:

[I]t has generally and sensibly been held that where the activities of a governmental unit are outside the scope of the antitrust laws, the officials charged with performing those activities enjoy the same protections____ Even in such cases, however, it has sometimes been recognized that an official’s actions ultra vires or in bad faith might present a different question.

Kurek v. Pleasure Driveway and Park District, 557 F.2d 580, 591 (7th Cir.1977).

It is precisely such allegations of actions taken ultra vires and in bad faith that distinguish the instant action from Southern Motor Carriers Rate Conference v. U.S., — U.S. -, 105 S.Ct. 1721, 85 L.Ed.2d 36 (1985). In Southern Motor Carries, the United States filed suit to enjoin the practice of joint ratemaking by private trucking collectives, a practice that was authorized by state public service commissions. The Court found the practice immune from antitrust liability under the state action exemption, but it is important to note that there were no allegations that the private parties acted in bad faith or exceeded what had been authorized by the public service commissions. The challenge in Southern Motor Carriers was to the very practice of private collective ratemaking. In the instant action, by contrast, plaintiff challenges the certificate of need procedures only as applied to it, and it was the handling of this plaintiff’s CON application that the Michigan Court of Appeals found constituted a due process violation.

Furthermore, the decision of the Supreme Court in Hoover v. Ronwin, - U.S. -, 104 S.Ct. 1989, 80 L.Ed.2d 590 (1984), provides little help to these defendants. That case dealt with a challenge to state bar admission process, and the Court held that, where the challenged state action is that of the state legislature or supreme court, it need not address the issues of “clear articulation” or “active supervision.” Such a holding is inapplicable to these officials because they act neither as a legislature nor as a supreme court. They are officials of a state administrative agency.

E. Harlow v. Fitzgerald Qualified Immunity

Defendants next claim that under Harlow v. Fitzgerald, 457 U.S. 800, 102 S.Ct. 2727, 73 L.Ed.2d 396 (1982), they are shielded from liability. Harlow held that “government officials performing discretionary functions, generally are shielded from liability for civil damages insofar as their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known.” 457 U.S. at 818, 102 S.Ct. at 2738.

In the Sixth Circuit, Harlow qualified immunity is an affirmative defense. In Alexander v. Alexander, 706 F.2d 751 (6th Cir.1983), the court held:

[A] Section 1983 defendant retains the burden of pleading the qualified immunity defense ..., and proving either that the law was not clearly established at the time of plaintiffs alleged injury, or, if the law was clearly established, that he neither knew nor should have known of the relevant legal standard due to extraordinary circumstances ... Since the district court placed the burden of proving the qualified immunity defense on the wrong party, we remand this case to the district court for reconsideration of this issue in light of this opinion.

Id. at 754.

The Court does not think that the defendants have carried their burden of proof on this issue so as to require summary judgment. In this case, the Michigan Court of Appeals found that defendants’ interpretation of the statute was “based on extremely tenuous notions about statutes which were not clearly related to the certificate of need statute.” Huron Valley Hospital, Inc. v. Michigan State Health Facilities Commission, 110 Mich.App. 236, 248-49, 312 N.W.2d 422 (1981). Further, even after defendants were ordered to issue the certificate of need by the Oakland County Circuit Court, they issued one for an amount that the court later determined to be unreasonably low. It finally took a writ of mandamus from this Court in Huron Valley Hospital, Inc. v. City of Pontiac, 585 F.Supp. 1159 (E.D.Mich.1984), to secure Section 1122 approval for the plaintiff. In light of these facts, it cannot be said as a matter of law that defendants are entitled to qualified immunity under Harlow.

F. Plaintiffs Claim Under 1$ U.S.C. § 1983

Defendants make three claims seeking to dismiss the Section 1983 claim. They first argue that plaintiff had no protectible property interest in a certificate of need or in Section 1122 approval. Secondly, they assert that plaintiff has not carried its burden under Parratt v. Taylor, 451 U.S. 527, 101 S.Ct. 1908, 68 L.Ed.2d 420 (1981), of pleading and proving that state remedies are inadequate to accord due process. Finally they maintain that there is no state action that would give rise to a Section 1983 claim. The Court will deal with these claims seriatim.

Defendants’ first argument is that plaintiff has no protectible property interest in a certificate of need or in Section 1122 approval under Board of Regents v. Roth, 408 U.S. 564, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972) since a mere “unilateral expectation” of a property interest is not sufficient without a “legitimate claim of entitlement to it.” 408 U.S. at 577, 92 S.Ct. at 2709. They further argue that, since a holder of an existing liquor license does not have a property interest in its renewal under Michigan law, (see Bundo v. Walled Lake, 395 Mich. 679, 238 N.W.2d 154 (1976)), plaintiff similarly can have no protectible property interest in a certificate of need or in Section 1122 approval for an entirely new hospital, and is akin to a first-time license seeker who has only a “unilateral expectation.”

Defendants’ argument may have been accurate characterization of plaintiff’s position in 1976 when it first sought approval, but it is no longer accurate as of today. Michigan courts determined that plaintiff was entitled to a certificate of need and ordered that one be issued, and defendants continued to resist. Indeed, the state courts have already held that plaintiff was denied due process in the consideration of its application. It is clear that plaintiff has raised sufficient factual issues to survive a motion to dismiss on this question.

Defendants next assert that plaintiff has not carried its burden under Parratt v. Taylor, 451 U.S. 527, 101 S.Ct. 1908, 68 L.Ed.2d 420 (1981), of pleading and proving that state remedies are inadequate to accord due process. Parratt, however, is not on point. In Parratt, a state employee negligently lost a prisoner’s hobby kit, and the court concluded that a post-deprivation tort action provided a constitutionally sufficient remedy. Here, plaintiff has alleged a concerted effort by both state employees and private parties to deprive it of its due process guarantees. An argument similar to defendants’ was made in Logan v. Zimmerman Brush Co., 455 U.S. 422, 102 S.Ct. 1148, 71 L.Ed.2d 265 (1982), and the Court observed: “This argument misses Parratt’s point. In Parratt, the Court emphasized that it was dealing with a ‘tortious loss of ... property as a result of a random and unauthorized act by a state employee ... not a result of some established state procedure.’ ” 455 U.S. at 435-36, 102 S.Ct. at 1157-58. The Logan Court held that a Section 1983 action was proper.

While it is true that plaintiff alleges that these defendants acted ultra vires, this situation is much closer to a deprivation as a result of state procedure itself, as in Logan, than to mere negligence as in Parratt. Parratt goes only to unauthorized deprivation of property. This case involved the alleged abuse of established state procedure, with the knowledge and cooperation of state officials, and the complaint therefore is sufficient.

Finally, defendants maintain that any part they may have played in the denial of plaintiff’s Section 1122 approval is not a proper subject for a Section 1983 action, because their role was limited to making an initial review and submitting a recommendation to HHS, and thus the denial was not state, but federal, action. This Court has already determined in its prior opinion granting summary judgment as to Count III of the complaint that:

The MDPH and the Michigan Attorney General clearly believed, and correctly, that its decision-making process regarding both the CON and Section 1122 application were the same. It denied them both initially for the same reasons. It clearly believed that the decisions of the Michigan courts regarding the CON application were equally valid and binding on the state’s consideration of the Section 1122 application.

Huron Valley Hospital, Inc. v. City of Pontiac, 585 F.Supp. 1159, 1163 (E.D.Mich. 1984).

The amended complaint alleges a comprehensive effort by state officials and private parties to prevent the construction of this hospital, and therefore involves sufficient state action for a Section 1983 claim.

II. HOSPITAL DEFENDANTS

A. 12 U.S.C. § 1983 Claim

These defendants argue that plaintiff has no property interest protectible in a Section 1983 action and, therefore, they should be dismissed. For the same reasons stated, supra, with reference to the state defendants, this argument is without merit.

The hospital defendants additionally argue that any state action for the purpose of a Section 1983 claim cannot extend to them, since they are private actors not clothed with the authority of state law.

It is clear, however, that plaintiff’s allegations of actions by these defendants involving both state and private actors are sufficient to invoke Section 1983 against these defendants. In Adickes v. S.H. Kress & Company, 398 U.S. 144, 152, 90 S.Ct. 1598, 1605, 26 L.Ed.2d 142 (1970) the Supreme Court held, quoting United States v. Price, 383 U.S. 787, 794, 86 S.Ct. 1152, 1156, 16 L.Ed.2d 267 (1966), that: “[pjrivate persons, jointly engaged with state officials in the prohibited action, are acting ‘under color’ of state law for purposes of the statute____ It is enough that [the accused] is a willful participant in joint activity with the State or its agents.”

In 1980, in Dennis v. Sparks, 449 U.S. 24, 101 S.Ct. 183, 66 L.Ed.2d 185 (1980), the Court held that allegations of a conspiracy with a judge are sufficient to defeat a motion to dismiss for failure to allege state action on the part of private parties, even where the judge is dismissed from the action as entirely immune. See also Macko v. Bryon, 641 F.2d 447 (6th Cir.1981), reversing a grant of summary judgment where a conspiracy was alleged between two prosecutors and several private parties, although the prosecutors were dismissed as immune. See also Tarleton v. Meharry Medical College, 717 F.2d 1523, 1533-34 (6th Cir.1983), in which the court reversed the grant of summary judgment for private defendants in a suit alleging both antitrust and Section 1983 violations, quoting Burton v. Wilmington Parking Authority, 365 U.S. 715, 722, 81 S.Ct. 856, 860, 6 L.Ed.2d 45 (1961): “[o]nly by sifting facts and weighing circumstances can the non-obvious involvement of the State in private conduct be attributed its true significance.”

B. Failure to Allege a Conspiracy With Sufficient Particularity

These defendants contend that the complaint should be dismissed because the allegations of antitrust conspiracy in the amended complaint are not specific enough. It is true that the allegations are not extremely specific, but the Supreme Court has stated a policy against summary disposition of antitrust conspiracy claims in Poller v. CBS, 368 U.S. 464, 473, 82 S.Ct. 486, 491, 7 L.Ed.2d 458 (1962): “We believe that summary procedures should be used sparingly in complex antitrust litigation where motive and intent play leading roles, the proof is largely in the hands of the conspirators, and hostile witnesses thicken the plot.” See A.B.A. Antitrust Section, Antitrust Law Developments 3 (2d Ed.1984). The Sixth Circuit has cited Poller in reversing the summary dismissal of the antitrust claim in Tarleton v. Meharry Medical College, supra, noting that summary dismissal should be granted only “very sparingly” under this “rigorous standard.”

Therefore, this Court is not prepared to dismiss plaintiff's claims of conspiracy for failure to plead with sufficient particularity-

C. Antitrust Immunity Under Noerr-Pennington

The hospital defendants claim the case should be dismissed under the NoerrPennington doctrine, which holds that joint efforts to influence public officials do not violate the antitrust laws, even though intended to eliminate competition. United Mine Workers v. Pennington, 381 U.S. 657, 85 S.Ct. 1585, 14 L.Ed.2d 626 (1965). This doctrine is intended to preserve the first amendment right to petition the government. See Eastern R.R. Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961); California Motor Transport Co. v. Trucking Unlimited, 404 U.S. 508, 92 S.Ct. 609, 30 L.Ed.2d 642 (1972).

It should be noted, however, that an exception to this doctrine has been created where the attempt to influence government is “a mere sham to cover what is actually nothing more than an attempt to interfere directly with the business relationships of a competitor.” Noerr, supra, 365 U.S. at 144, 81 S.Ct. at 533. The Supreme Court has noted that the line between legitimate conduct and a sham “may be a difficult line to discern and draw.” California Motor Transport, supra, 404 U.S. at 513, 92 S.Ct. at 613. The allegations in this case go beyond the mere filing of one lawsuit, which the Sixth Circuit recently found protected under the NoerrPennington doctrine in City of Cleveland v. Cleveland Electric, 734 F.2d 1157 (6th Cir.1984), but are more analogous to the sort of abuse of process in barring access to agencies or courts that the court stated would fall within the sham exception.

The Second Circuit held in Litton Systems, Inc. v. AT & T, 700 F.2d 785, 809 n. 36 (2d Cir.1983) that the sham exception to the Noerr-Pennington doctrine is applicable in the situation known as “agency capture,” where the regulated become the regulators. This is precisely the situation alleged in the complaint in this action, and taking the allegations as true for the purpose of this motion, as the Court must, the Court finds that Noerr-Pennington does not apply to these defendants, and does not provide a basis for dismissal.

D. Statute of Limitations

Although the requirements of Fed. R.Civ.P. 15(c) are not met as to these hospital defendants, since they were not named in the amended complaint proposed in January 1979, plaintiffs allegations of a continuing conspiracy are even more significant for them, because they are alleged to have taken a more active role in the continuing effort to deny plaintiff Section 1122 capital expenditure approval. Specifically, these defendants are alleged to have conducted a series of ex parte requests for reconsideration of MDPH’s Section 1122 approval, which succeeded in convincing HHS to revoke its previously-issued approval.

Since the conspiracy is alleged to have involved these defendants up until this Court’s issuance of a writ of mandamus in April 1984, these allegations clearly are sufficient to enable plaintiff to survive a statute of limitations challenge from the hospital defendants.

III. LOCAL GOVERNMENT ANTITRUST ACT OF 1984

Defendants City of Pontiac and City of Pontiac Hospital Building Authority also move for a partial summary judgment as to Count I, which alleges violation of the Sherman Antitrust Act. These defendants rely upon the Local Government Antitrust Act of 1984, Pub.L. No. 98-544, 98 Stat. 2750 (codified at 15 U.S.C. § 35).

Section 3(a) of that Act provides that no damages may be recovered under the Clayton Act from any local government or official or employee thereof acting in an official capacity.

Section 3(b) of the Act, however, limits its application. That section provides:

Subsection (a) shall not apply to cases commenced before the effective date of this Act unless the defendant establishes and the court determines, in light of all the circumstances, including the stage of litigation and the availability of alternative relief under the Clayton Act, that it would be inequitable not to apply this subsection to a pending case. In consideration of this section, existence of a jury verdict, district court judgment, or any stage of litigation subsequent thereto, shall be deemed to be prima facie evidence that Subsection (a) shall not apply.

This action was filed originally in November 1978, and Judge Kennedy granted defendants’ motion for summary judgment in March 1979. Huron Valley Hospital, Inc. v. City of Pontiac, 466 F.Supp. 1301 (E.D. Mich.1979). The Sixth Circuit vacated that decision, 666 F.2d 1029 (6th Cir.1981), and remanded in December 1981 for a stay pending the completion of state administrative and judicial proceedings. Plaintiff filed a proposed amended complaint on November 15, 1983, and when the stay was lifted in December of that year, the amended complaint was accepted for filing.

Discovery is well under way in this case. Plaintiff filed its first request for production of documents on August 1, 1984, and defendants have filed requests for production of documents and interrogatories. There are also discovery motions pending before this Court’s magistrate.

It is defendants’ contention that Section 3(a) of the Act should apply in spite of 3(b), arguing that, even though this is a 1978 case, it is still in an early stage of litigation because of the long stay and the appeals that have been had. Therefore, defendants argue, it would be inequitable not to apply the bar against antitrust damage awards from Section 3(a). Defendants also argue that plaintiff has alternative relief available, namely an injunction against all defendants and money damages from all of the other defendants.

Defendants further cite legislative history suggesting that one measure of an early stage of litigation is whether the case is still in discovery as opposed to a case that has already proceeded to judgment. They also cite a floor colloquy suggesting that a court might consider the existence or sufficiency of monetary damages from other defendants who would remain liable, and of injunctive relief as possible “alternative relief” that might be sufficient to invoke the Section 3(a) ban on the pending case. It is clear from the language of the Act that the burden is on the defendant to establish that Section 3(a) bars an action against local government pending at the time of enactment. The defendant has the burden of establishing the availability of alternative relief under the Clayton Act, and the inequitability of not applying Section 3(a) to the pending case. The existence of a jury verdict, district court judgment, or any stage of litigation subsequent thereto is deemed prima facie evidence that the Section 3(a) ban should not apply.

The Court feels that the defendant has failed to meet this heavy burden imposed by the statute. First of all, there has been a district court judgment entered in this case. The fact that it was vacated does not take away from the fact that Judge Kennedy in 1979 granted a motion for summary judgment. It is further clear that, in light of the very checkered career of this case in the state courts of Michigan (see discussion in Huron Valley Hospital, Inc. v. City of Pontiac, 585 F.Supp. 1159 (E.D.Mich.1984), and the determinations made by this Court in that opinion), the equities clearly do not favor application of the Section 3(a) bar to damages.

It is clear that the decision as to whether to apply the bar is to be made on a case-by-case basis, considering all of the factors that may be relevant. Even in this old case, there has been a lot of activity, and while it is true that there have been stays and delays in the litigation, that discovery is still under way, and that the final pretrial conference is not set until December 17, 1985, the case has been in the courts since 1978 and plaintiffs have not been dilatory or remiss in pursuing this litigation. Further, it is clear that injunctive relief against these hospital defendants would not be sufficient relief for allegations of antitrust and civil rights conspiracy dating back to 1978.

Those allegations are that the defendants who now seek summary judgment were involved in much more than simply carrying out their assigned duties on behalf of the public with certain unintended and consequential effects in restraint of trade, and, for the purpose of this motion, those allegations must be taken as true. Plaintiff has alleged that these defendants were instrumental in conspiring with private parties and with agents of the state to deprive it of its right to due process of law, with the goal of stifling competition. Under these circumstances, defendants have failed to show that it would be inequitable not to apply the Section 3(a) bar on monetary damages and attorney fees.

Therefore, for the reasons stated, Section 3(a) of the Local Government Antitrust Act of 1984 will not be invoked.

All motions to dismiss and/or summary judgment are denied. Appropriate orders may be presented.

      . See Huron Valley Hospital, Inc. v. City of Pontiac, No. 78-72970 (E.D.Mich. Jan. 29, 1979).

      . The defendants first assert that the applicable limitation period should be the 60 day period for appealing an adverse administrative determination under the Michigan Administrative Procedures Act, M.C.L. § 24.304. This argument is without merit. Burnett v. Gratton, 468 U.S.-, 104 S.Ct. 2924, 82 L.Ed.2d 36 (1984), held that a six-month state statute of limitations on filing employment discrimination complaints with an administrative agency was inappropriate for actions under the Civil Rights Acts (42 U.S.C. § 1981 et. seq.).

      . Huron Valley Hospital, Inc. v. City of Pontiac, 466 F.Supp. 1301 (E.D.Mich.1979), reversed on other grounds, 666 F.2d 1029 (6th Cir.1981).

      . Id. 666 F.2d 1029 (6th Cir.1981).

      . These defendants concede the amended complaint arose out of the same transaction or occurrence, but rely on Ringrose v. Engelberg Huller Co., Inc., 692 F.2d 403 (6th Cir.1982), for the proposition that Rule 15 does not allow the addition of a new party after the statute would otherwise have run. Defendants assert that the rule permits an amendment to relate back only if it seeks to change a party who is already in the action—in essence, only when correcting a misnomer. Ringrose does not support such a narrow construction of Rule 15, since the court remanded the case for a determination of whether service on a predecessor corporation was sufficient to give such notice that the two successor corporations would not be prejudiced in their defenses on the merits, indicating that the real concern was with the adequacy of the notice given. See also 6 C. Wright & A. Miller, Federal Practice & Procedure, § 1498, at 512 (1971) where they note a split on the issue, but see "no justification” for such a restrictive interpretation as defendants urge, so long as the notice requirement is satisfied.

      . See discussion of prior state proceedings in Huron Valley Hospital, Inc. v. City of Pontiac, 585 F.Supp. 1159, 1161-62 (E.D.Mich 1984).

      . M.C.L. § 24.201 et. seq.

        . See Huron Valley Hospital, Inc. v. State Health Facilities Commission, 110 Mich.App. 236, 244-46, 312 N.W.2d 422 (1981).


author: DIANA E. MURPHY, District Judge.

text:
    Robert L. CORRIGAN, Plaintiff, v. BURLINGTON NORTHERN RAILROAD, INC., Defendant.
    Civ. No. 4-84-5.
    United States District Court, D. Minnesota, Fourth Division.
    June 17, 1985.

      Kevin Shea and Terence J. McCloskey, Johnson, Sands, Lizee, Fricker & McCloskey, Minneapolis, Minn., for plaintiff.
    Douglas Werner, St. Paul, Minn., for defendant.
   MEMORANDUM OPINION AND ORDER

DIANA E. MURPHY, District Judge.

Plaintiff, Robert L. Corrigan, brought this action for damages against defendant, Burlington Northern Railroad, Inc. (Burlington Northern) alleging that it negligently and inadequately protected him from developing contact dermatitis. Jurisdiction is alleged under the Federal Employers Liability Act (FELA), 45 U.S.C. §§ 51 et seq. The matter is now before the court upon defendant’s motion for summary judgment.

Background

The pertinent facts appear to be as follows. Plaintiff began to work for the predecessor of defendant, Great Northern, in 1943. Sometime in 1965, he began experiencing rashes on his hands and arms while working as a machinist helper. He then sought medical treatment from a Great Northern doctor, Dr. Lynch, who told him that he had dermatitis. In July 1967, plaintiff was referred to doctors David W. Anderson and Harold G. Ravits by a railroad claims agent. Plaintiff states that he saw these doctors intermittently for treatment of what was diagnosed as a “skin rash” or “eczema”. He says that he was not treated by any other doctors between July 1967 and January 1982 for his ailment. Defendant notes that plaintiff had a routine physical check-up in February 1972 where he acknowledged that he had been suffering from eczema since 1965.

In June 1976, plaintiff was transferred to the Jackson Street wheel shop of Burlington Northern. He worked on the wheel machine and had little contact with solvents and oil. The next year he was again transferred, this time to the Northtown shop. His duties at this shop caused him to be regularly exposed to grease, oils, and solvents. After six or eight months of work at this shop, plaintiff broke out with skin rashes and filed an injury report. Dated January 20, 1978, the report describes the injury as “skin rash to hands and arms.” Plaintiff states that a Burlington Northern claims agent then told his shop to keep him away from grease and oil. Subsequently, however, plaintiff was assigned to work as an “index cutter”, which also entailed contact with grease and oils on a regular basis.

In June 1982, plaintiff sought treatment from Joseph G. Brennan, M.D. because of a severe skin rash on his hands, feet and lower legs. Burlington Northern notes that plaintiff reported to Dr. Brennan that he had had dermatitis for seventeen years. Dr. Brennan determined that plaintiff had severe dermatitis and a sensitization reaction. Because of this sensitization, Dr. Brennan stated that “even an infinitesimal amount of irritant” could cause a flare up with varying degrees of severity. In Dr. Brennan’s opinion, plaintiff’s occupational dermatitis and “sensitization status” caused him to be 20 percent permanently disabled. Dr. Brennan recommended that he cease working with industrial chemicals. Plaintiff states that he ceased employment with Burlington Northern about April 3, 1983 because its officials “forced” him to quit since he was unable to work with grease, oils or other solvents without adverse skin reaction. He was awarded disability benefits beginning on that date.

On January 3, 1984, plaintiff filed this suit. Burlington Northern then filed its motion for summary judgment.

Discussion

In passing upon a motion for summary judgment, the court is required to view the facts in a light most favorable to the non-moving party, and the movant has the burden of establishing that no genuine issue of material fact remains and that the case may be decided as a matter of law. Butter v. Buechler, 706 F.2d 844, 846 (8th Cir.1983); Ralph’s Distributing Co. v. AMF, Inc., 667 F.2d 670 (8th Cir.1981). The non-moving party is entitled to the benefit of all reasonable inferences to be drawn from the underlying facts disclosed in pleadings and affidavits. Vette Co. v. Aetna Casualty & Surety Co., 612 F.2d 1076 (8th Cir.1980). The nonmoving party may not merely rest upon allegations or denials of the party’s pleadings, but must set forth specific facts by affidavits or otherwise showing that there is a genuine issue for trial. Burst v. Adolph Coors Co., 650 F.2d 930, 932 (8th Cir.1981).

Burlington Northern contends that 45 U.S.C. § 56 bars plaintiff’s action since he did not commence his suit within three years from the day his cause of action accrued. It argues that he knew he had a work-related disease called dermatitis in 1965, and should have brought suit at that time.

Plaintiff asserts, by contrast, that although he knew he had a skin condition in 1965, he did not know that he had contact dermatitis which could lead to systematic sensitization and disablement. He argues, therefore, that his cause of action did not accrue until, at the earliest, Dr. Brennan diagnosed his condition as disabling contact dermatitis on November 11, 1982. In addition, plaintiff states that his injury resulted from the continuing negligence of the defendant in assigning him to jobs which regularly exposed him to solvents and grease. He argues that the statute of limitations only runs in such cases from the time the wrong ceased. In the instant case, the wrong did not cease, according to plaintiff, until his last exposure to those harmful substances on April 3, 1983.

45 U.S.C. § 56 sets the limitation period for cases brought under the FELA and provides: In cases involving industrial diseases, the cause of action accrues “when the accumulated effects of the deleterious substance manifest themselves.” Urie v. Thompson, 337 U.S. 163, 170, 69 S.Ct. 1018, 1024, 93 L.Ed. 1282 (1949). Thus, the statute of limitations is tolled until the employee is aware or should be aware of his condition. Id., Fletcher v. Union Pac.R. Co., 621 F.2d 902, 906 (8th Cir.1980), cert. denied, 449 U.S. 1110, 101 S.Ct. 918, 66 L.Ed.2d 839 (1981).

No action shall be maintained under this chapter unless commenced within three years from the day the cause of action accrued.

Defendant argues that plaintiff was told in 1965 that he had work related contact dermatitis and cites the statements of Drs. Ravits and Anderson made in late 1984 and early 1985 to that effect. It also relies on Felix v. Burlington Northern, Inc., 355 F.Supp. 1107 (D.Minn.1973), and Emmons v. Southern Pacific Transp. Co., 701 F.2d 1112 (5th Cir.1983), for authority that the cause of action accrued on the day plaintiffs work-related symptoms first appeared, regardless of whether the full extent of the injury is known at the time, or that the injury is diagnosed as work-related by a doctor.

These cases are factually distinguishable, however. Felix v. Burlington Northern, Inc., 355 F.Supp. 1107 (D.Minn.1973) dealt not with an occupational disease, but with injuries resulting from a traumatic accident. Similarly, the court in Emmons v. Southern Pacific Transp. Co., 701 F.2d 1112 (5th Cir.1983), found that plaintiffs problem was related to a preexisting condition and was not “true occupational disease.” 701 F.2d at 1122.

Construing the evidence most favorably to plaintiff, the court finds that a material issue of fact remains as to when plaintiff became aware that he had work-related contact dermatitis. While plaintiff gave a statement back in 1965 about a “skin condition” he contracted, the record at this point does not clearly show that he knew that this rash was the same skin disease for which he now claims damages. See Gulf, Colorado & Santa Fe Railway Co. v. McClelland, 355 F.2d 196 (5th Cir.1966). Cf. Coots v. Southern Pacific Co., 49 Cal.2d 805, 322 P.2d 460 (1958) (Limitations period under FELA did not begin to run for injuries due to dermatitis until condition became quite severe and debilitating). Nor do the reports filed by Drs. Anderson and Ravits after plaintiff began this litigation demonstrate that plaintiff was informed that he had contact dermatitis prior to Dr. Brennan’s 1982 report. Various other railroad reports filed over the years allude merely to a “skin rash” or “eczema”.

Additionally, summary judgment is inappropriate because plaintiff may be able to recover under a theory of negligent assignment. Where injury results from a negligent act and the injury occurs by reason of continued negligence, “a recovery may be had for damages caused by the continuing negligence although a cause of action based on the original negligent act is barred.” Fletcher v. Union Pac. R. Co., 621 F.2d 902, 907-908 (8th Cir.1980), cert. denied, 449 U.S. 1110, 101 S.Ct. 918, 66 L.Ed.2d 839 (1981). Under this theory, the FELA statute of limitations may be tolled until the final day the employee was subjected to the conditions causing injury. Id. at 908; Fowkes v. Pennsylvania R.R., 264 F.2d 397 (3d Cir.1959). Viewing the record in a light most favorable to plaintiff, the court finds that plaintiff's duties involved exposure to oils, grease, and solvents until his last day of work on April 3, 1983. Accordingly, plaintiff’s January 3, 1984 filing would be timely as to the negligent assignment claim. Plaintiff is therefore entitled to present to the jury the issues of whether defendant’s assignment of his duties was in fact negligent and whether the assignment caused his present condition.

Since the court has determined that summary judgment is inappropriate because issues of material fact remain as to when the cause of action accrued and the negligent assignment claim, it need not address plaintiff’s arguments as to waiver and estoppel.

ORDER

Accordingly, based on the above and all the files, records, and proceedings herein,

IT IS HEREBY ORDERED that defendant’s motion for summary judgment is denied.


text:
    CARLSON T.V., Plaintiff, v. CITY OF MARBLE and Thomas Communications, Defendants.
    Civ. No. 5-84-91.
    United States District Court, D. Minnesota, Fourth Division.
    June 17, 1985.

      Mark Knutson, Duluth, Minn., for plaintiff.
    Pierre N. Regnier, Jardine, Logan & O’Brien, St. Paul, Minn., for defendant City of Marble.
    Michael Flom, Gray, Plant, Mooty, Mooty & Bennett, Minneapolis, Minn., for defendant Thomas Communications.
   MEMORANDUM OPINION AND ORDER FOR JUDGMENT

DIANA E. MURPHY, District Judge.

Plaintiff, Carlson T.V. & Appliance (Carlson), brought this action for damages and injunctive relief against defendants, City of Marble, Minnesota, and Thomas Communications, Inc. (Thomas), alleging violations of the antitrust laws, the Minnesota public bidding statute, Minn.Stat. § 412.311, and the Minnesota Cable Communications Act, Minn.Stat. §§ 238.01, et seq. Jurisdiction is alleged under 28 U.S.C. §§ 1331, 1332. The matter is now before the court upon the motions of defendants for summary judgment and for attorney’s fees. Background

This dispute arises out of the decision of the City to operate its own cable television system and to accept the bid of Thomas rather than that of Carlson to construct the system. Carlson bases its claims on the City’s operation of the system to the exclusion of a private system and on the City’s rejection of its bid to construct the system.

Marble is a small town in Northern Minnesota, and on July 12,1982, its city council passed a resolution to operate its own cable system. At the same time, the council voted to set up the system outside the scope of the Minnesota Cable Television Act, Minn.Stat. § 238.01 et seq. (the Act). Bids were received for the construction of the system from Carlson and Thomas, but both bids were rejected. The project was rebid. Then on October 11, 1982 the contract was awarded to Thomas at a public city council meeting.

The City asserts that it rejected the bid of Carlson, a low bid, on advice of counsel •because it did not have a bid bond as required by the published notice. Carlson asserts that it had been informed by the mayor of Marble that all of the requirements for the second bid were contained in the second set of specifications. Those specifications did not contain any requirement for a bid bond. Carlson offered immediately to obtain a bond, but that offer was refused by the City. When Carlson subsequently submitted a bid bond, its offer was again refused by the City. Carlson was aware that the contract was awarded to Thomas on October 11, 1982, and it was notified in October 1982 of the beginning of the actual construction of the project in November 1982. The system became operational as of April 1, 1983. Thomas was paid in excess of $108,000 for its work under the contract. This action was filed by Carlson in March of 1984.

Discussion

In passing upon a motion for summary judgment, the court is required to view the facts in the light most favorable to the nonmoving party, and the movant has the burden of establishing that no genuine issue of material fact remains and that the case may be decided as a matter of law. Buller v. Buechler, 706 F.2d 844, 846 (8th Cir.1983); Ralph’s Distributing Co. v. AMF, Inc., 667 F.2d 670 (8th Cir.1981). The nonmoving party is entitled to the benefit of all reasonable inferences to be drawn from the underlying facts disclosed in pleadings and affidavits. Vette Co. v. Aetna Casualty & Surety Co., 612 F.2d 1076 (8th Cir.1980). However, the nonmoving party may not merely rest upon allegations or denials of the party’s pleadings, but must set forth specific facts by affidavits or otherwise showing that there is a genuine issue for trial. Burst v. Adolph Coors Co., 650 F.2d 930, 932 (8th Cir.1981).

Antitrust Claim

The City moves for summary judgment on count one on the grounds that it is exempt from federal antitrust laws under the state action doctrine. It argues that a municipality is exempt from the antitrust laws under the state action doctrine when the state itself has directed or authorized the anticompetitive practice. It argues that the state action doctrine is applicable in the present case, because the State of Minnesota has authorized, in two separate statutes, municipalities to own and operate their own cable system. See Minn.Stat. §§ 465.70, 238.08.

Carlson argues that its claim should withstand the motion for summary judgment. It argues that a municipality is subject to the antitrust laws unless it acts pursuant to a clearly articulated and affirmatively expressed state policy and there is active state supervision of the anti-competitive activity. It argues that no such active state supervision exists here because the City opted out of the Minnesota Cable Communications Act. It presents nine reasons why summary judgment should not be granted including that the City did not accept bids from it for the operation of the system and that the City’s operation is a monopoly.

The state action doctrine as it applies to municipalities has recently been clarified by the Supreme Court. See Town of Hallie v. City of Eau Claire, - U.S. -, 105 S.Ct. 1713, 85 L.Ed.2d 24 (1985). Town of Hallie makes it clear that municipalities are exempt from the antitrust laws if their anticompetitive activities were authorized “pursuant to state policy to displace competition with regulation or monopoly public service.” Id. at 1716. Thus, the City’s operation of its own cable system is exempt from antitrust scrutiny if it constitutes municipal action in furtherance or implementation of clearly articulated and affirmatively expressed state policy. Id.; Community Communications Co. v. City of Boulder, 455 U.S. 40, 102 S.Ct. 835, 70 L.Ed.2d 810 (1982). Additional requirements are imposed where the anticompetitive conduct is by private parties, but a municipality need only satisfy the above test. Town of Hallie, 105 S.Ct. at 1720; Southern Motor Carriers Rate Conference v. United States, — U.S.-, 105 S.Ct. 1721, 1727 & n. 20, 85 L.Ed.2d 36 (1985).

The City cites two separate statutory provisions to support its assertation that its allegedly anticompetitive activity constitutes state action. Minn.Stat. § 465.70 provides that any statutory city:

may own, construct, acquire, purchase, maintain and operate within its corporate limits a television signal distribution system for the purpose of - receiving, transmitting, and distributing television impulses and television energy, including audio signals and transient visual images, to the inhabitants of the city. This system shall be considered a public utility.

Minn.Stat. § 238.08, which is part of the Cable Communications Act, provides as follows:

Nothing in this chapter shall be construed to limit any municipality from the right to construct, purchase, and operate a cable communications system.

The statutes clearly contemplate that a city may engage in anticompetitive behavior. It is a foreseeable, and indeed the likely, result of granting the City the right to establish and operate its own cable system that it will do so to the exclusion of a private system. Town of Hallie, 105 S.Ct. at 1718-19. The statutory provisions plainly show a “clearly articulated and affirmatively expressed” state policy to displace competition with regulation or monopoly public service. See id.; Central Iowa Refuse Systems, Inc. v. Des Moines Metropolitan Area Solid Waste Agency, 715 F.2d 419 (8th Cir.1983), cert. denied, — U.S. -, 105 S.Ct. 1864, 85 L.Ed.2d 158 (1985); Hopkinsville Cable T.V., Inc. v. Pennyroyal Cablevision, Inc., 562 F.Supp. 543 (W.D.Ky.1982). Accordingly, the City is exempt from antitrust scrutiny, and its motion for summary judgment on count one should be granted.

Other Claims

Both defendants seek summary judgment on the claims alleged in count two under the public bidding statute, Minn. Stat., § 412.311, and the Minnesota Cable Communications Act, Minn.Stat, § 238.01, et seq.

Carlson characterizes count two as a claim for wrongful award of contract. It asserts that since it submitted the lowest bid it should have been awarded the contract. It claims that its failure to submit a bid bond was not a sufficient basis to deny it the contract. It also argues that the statutes asserted in count two were violated because the City conspired with Thomas to assure that plaintiff would not be awarded the contract. In support of this contention it cites an alleged comment by one city council member, the manner in which the bid was awarded, and the failure of Thomas to install the specified equipment. Beyond that, the affidavit of Heinz Carlson, one of the owners of Carlson T.V. & Appliance alleges a conflict of interest in that Lloyd Cogswell was employed by the City to assist in the bid process and also was hired by Thomas to assist in the installation of the system.

Defendants argue that Carlson has no standing to assert a claim under the public bidding statute, that it cannot recover lost profits, and that in any event the claim is barred by laches. The City asserts that it properly removed itself from the requirements of the Cable Communications Act and therefore is entitled to summary judgment on any claim asserted under the Act. Thomas argues that it also is exempt from the Act because it merely installed the system and does not own or operate it.

The general rule for the letting of public contracts is that an unsuccessful bidder is not entitled to damages. Telephone Assoc., Inc. v. St. Louis County Bd., 364 N.W.2d 378 (Minn.1985); 10 McQuillin, The Law of Municipal Corporations, § 29.83 (3d ed. 1981). This is because the authority for letting public contracts is derived for the public benefit and is not intended as a direct benefit to the contractor. Id.

Nevertheless, Telephone Associates allowed the recovery of some damages because “proper challenges to the bid-letting process should be encouraged.” Telephone Associates, 364 N.W.2d at 382. The court held that the unsuccessful bidder should not have to bear the expense of its actions, at least during such time as it proceeded diligently. Id. The court allowed the recovery of the costs incurred in preparing the unsuccessful bid and its expenses, including reasonable attorney fees. It specifically excluded loss of profit from any recoverable damages.

Carlson cannot recover damages under the reasoning of Telephone Associates. Rather, its claim falls under the general rule that an unsuccessful bidder is not entitled to damages. Damages were allowed in Telephone Associates because the bidder had proceeded diligently and on a timely basis in challenging the bid process. Id. In contrast, Carlson did not file this action challenging the bid process until almost a year and one-half after the construction of the system began, and a year after construction was completed. This delay occurred even though Carlson had an attorney with him when his bond was rejected and had knowledge that the system was being constructed. Carlson was available to commence the litigation at all times and has presented no reasons for his delay. Because Carlson was not diligent in his challenge of the bid process he is not entitled to recover any damages.

Carlson’s action is also barred by the defense of laches. There are two criteria for dismissal for laches: (1) unreasonable delay in bringing the suit and (2) prejudice to the defendant caused by such delay. See Funchie v. Packaging Corp. of America, 494 F.Supp. 662 (D.Minn.1980). For the reasons stated above, the delay in filing this action was unreasonable under the circumstances of this case. The delay was prejudicial to the defendants because the bid award was finalized and- the construction of the cable system was undertaken. By the time the action was filed the system was fully operational, Thomas’ role was long completed, and the bid procedure could not be undone.

The defendants are also entitled to summary judgment on the allegations made under the Cable Communications Act. Carlson does not specify in its complaint or memorandum any particular section of the Act that it alleges was violated. The affidavit of Heinz Carlson claims that the actions of defendants violate Minn.Stat. § 238.15 which prohibits any financial interest in a bidding party not only by board members, but also their employees.

The court must first address the thresh-hold issue of whether the Act is even applicable to the defendants. The Act applies only to “Cable communications systems” and “Cable communications companies” operating in Minnesota. Minn.Stat. § 238.-03. A city can remove itself from the provisions of the Act if it has greater than 50, but fewer than 1,000 subscribers, and its governing body votes by resolution to do so. The City properly voted by resolution in July of 1982, to remove itself from the provisions of the Act, thus it is exempt from the Act’s coverage. Similarly since Thomas merely installed the system and does not own, control, operate, manage, or lease the system, it also does not fall under the coverage of the Act.

ORDER

Accordingly, based on the above and all the files, records, and proceedings herein,

IT IS HEREBY ORDERED that

1. The motion of defendant, the City of Marble, Minnesota, for summary judgment is granted, and the complaint against it is dismissed with prejudice.

2. The motion of defendant, Thomas Communications, Inc., for summary judgment is granted, and the complaint against it is dismissed with prejudice.

3. The motion of defendant, Thomas Communications, Inc., for attorney’s fees is denied.

LET JUDGMENT BE ENTERED ACCORDINGLY.

      . A written resolution of its withdrawal from the Act was passed in November, 1982.

      . Construction began on the project in November of 1982 and was completed in April of 1983. This action was filed March 26, 1984.

      . Minn.Stat. § 238.02, subd. 3 provides that the definition of “Cable communications system" does not include:
      (a) a system which serves fewer than 50 subscribers or a system which serves more than 50 but fewer than 1,000 subscribers if the governing bodies of all political subdivisions served by the system, vote, by resolution, to remove the system from the provisions of this chapter. Any system which serves more than 50 but fewer than 1,000 subscribers that has been removed from the provisions of this chapter shall be returned to the provisions of this chapter if the governing bodies of fifty percent or more of the political subdivisions served by the system vote, by resolution in favor of the return;

      . Carlson argues that while the City may be excluded from the definition of a cable communication system it should nevertheless fall under the provisions of the Act as a cable communication company. A cable communication company is “any person owning, controlling, operating, managing or leasing a cable communications system within the state.” Minn.Stat. § 238.02, subd. 2. By its resolution the City has removed itself from the provisions of the Act. Minn.Stat. § 238.02, subd. 3(a). It is not within the definition of a cable communication company because it is not engaging in any of the covered activities with a cable communications system.

      . While defendants are entitled to summary judgment, Carlson's complaint and opposition to these motions were not frivolous or in bad faith. Accordingly, the motion of Thomas for attorney’s fees should be denied.