Estes v. Dallas NAACP Appendix

    No. 85-1032

United States Court of Appeals
For the First Circuit

ISAAC MANEGO,
PLAINTIFF-APPELLANT,

V.

THE ORLEANS BOARD OF TRADE,
DAVID WILLARD,

THE CAPE COD FIVE CENTS SAVINGS BANK, INC.,
and

More than Ninety Other Persons, Known or Unknown, 
Individually and as They Are Members of the 

Orleans Board of Trade,
DEFENDANTS-APPELLEES.

ON APPEAL FROM A JUDGMENT OF THE UNITED STATES DISTRICT 

COURT FOR THE DISTRICT OF MASSACHUSETTS

BRIEF FOR ISAAC MANEGO, PLAINTIFF-APPELLANT

C h a r l e s  R a y  W eid m a n  
938 Main Street 
Chatham, MA 02633 
(617) 945-2782 

Attorney fo r  Plaintiff

Blanchard Press. Inc.. Boston, Mass. —Law Printers [617] 426-6690



TABLE OF CONTENTS

Page
Table of Authorities................................................................  i
Statement of the Issues to be Presented................................  1
Statement of the Case..............................................................  2
Argument...................................................................................  5

I. Res Judicata............................................................  5
II. Application of Rule 56 ...........................................  14
III. Co-conspirators Liability for Sham Actions. . . 21
IV. Application of the Noerr-Pennington Doctrine. 27

Conclusion.................................................................................. 32

T a b l e  o f  C it a t io n s  

Cases

A dickesv. S. H. Kress and Co., 398 U.S. 144, 176, (1970)
90 S.Ct. 1598..................................................................  14,28

Alexander v. National Farmers Organization, 687 F.2d
1173 (8th Cir., 1982)..................... .......................................  24

American Tobacco Co. v. U.S. 328 U.S. 781, 810 (1946)
66 S.Ct. 1125......................................................................... 25

Bradford  v. Richards II Mass. App. 595; 417 N.E. 2d
1234, (1981)........................................................................... 10

Clipper Express v. Rocky Mountain Motor Tariff Bureau,
690 F.2d 1240 (9th Cir., 1982)....................................  21,26

Coastal States Marketing, Inc., v. Hunt, 694 F.2d 1358,
1369 (5th Cir., 1983)............................................................ 23

Commercial Box & Lum ber Co., Inc, v. UniRoyal, Inc. 623
F.2d 371, 374 (5th Cir., 1980)........................................... 8, 11
Cromwell v. County o f Sac, 94 U.S. 351, 352 (1876)...............5



11 Table of Contents

E.J. Delaney Corporation v. Bonne Bell, Inc., 525 F,2d
296 (10th Cir., 1975)..............................................................  9

E.G. Duke ir Co., v. Foerster, 521 F.2d 1277 (3d Cir.,
1975)........................................................................................ 28

Dyer v. MacDougall, 201 F.2d 265 (2d Cir., 1952)........... 18
Eastern States Retail Lum ber Dealers Association v. U.S.,

234 U.S. 600 (1914); 34 S.Ct. 951....................................  8
Energy Conservation, Inc. v. Heliodyne, Inc., 698 F.2d,

386 (9th Cir., 1983)..............................................................  21
Federal Prescription Service v. American Pharmaceutical 

Assn., 663 F.2d 255 (D.C. Cir., 1981) Cert. Denied,
455 U.S. 928 (1982) 102 S.Ct. 1293.....................  29, 30, 32

Ferguson v. Omnimedia, Inc., 469 F.2d 194 (1st Cir.,
1972)...................................................................................  8, 28

First National Bank o f Arizona v. Cities Service Co., 391
U.S. 253, 88 S.Ct. 1575 (1968)........................................... 20

Isaacs'. Schwartz, 706F .2d 15, 17 (1st Cir., 1983). . . 5, 7, 8
Kellerman v. Askew, 541 F.2d 1089 (5th Cir., 1976)........  17
Kilgoar v. Colbert County Board o f Education, 578 F.2d

1033, 1035 (9th Cir., 1978).................................................  11
Lovely v. Laliberte, 498 F.2d 1261, 1262, (1st Cir.,

1974)...................................................................................... 5 ,6
Manego v. Cape Cod Five Cents Savings Bank et al, 692

F,2d 174 (1st Cir., 1982).................................................  5,11
Manego v. Orleans Board o f Trade et al, § 83-0045 (D.C.

Mass., Jan. 7, 1983)..................................  6 , 7 , 8 , 1 1 , 1 4 , 1 7
Manpower, Inc. v. Foley, 212 U.S.P.Q. 445 (D Mass. CA

No. 78-2713 N.A.), Dec. 5, 1980......................................  23
Ness v. Marshall, 660 F.2d 517, 519 (3d Cir., 1981) . . . . .  17
Pennington v. United Mine Workers o f America, 325 F.2d 

804, 811 (6th Cir., 1963) 381 U.S. 657 (1956) quoted in 
Von Kalinowski, Anti-Trust Laws & Regulations, Vol 2,
Sec. 9, 14, [4]...........................................   17

Poller v. Columbia Broadcasting System, 368 U.S. 464 82 
S.Ct. 486 (1962)...............................................  14 , 19 , 28 , 29

Page



Table of Contents iii

Page
Phelps Dodge Refining Corp. v. FTC, 139 F.2d 393 (2d

Cir.. 1943).............................................................................  30
Sartor v. Arkansas Construction Corp., 321 U.S. 620

(1944) 64 S.Ct. 724, 729.......................................................  18
Scooper Dooper, Inc. v. Kraftco Corp., 494 F.2d 840 (3d

Cir., 1974).............................................................................  6
Trucking Unlimited v. California Motor Transport Co.,

432 F.2d 755 (9th Cir., 1970) aff. 404 U.S. 506, 92
S.Ct. 609...............................................................................  21

U.S. v. The Haytian Republic, 154 U.S. 118, 129;
14 S.Ct. 992 (1894)..............................................................  10

U.S. v. U.S. Gypsum Co., 438 U.S. 422 (1978) 98 S.Ct.
2864 ........................................................................................ 25

Zell v. American Seating Co., 138 F.2d 641 (2d Cir.,

Statutes

15 USC §1 (Sherman Anti-Trust Act)....................................  3
Federal Rules of Civil Procedure:

Rule 56 ......................................................................  14,18,21
Rule 56(e)......................................................................  14, 15

Miscellaneous

Bauman, “A Rationale fo r  Summary Judgm ent,” 33 Ind.
L .J. 467 (1958) 481, 484...............................................  19,20

31 Frd 648, Advisory Committee Note to Rule 56(e)........  18
18 J. Moore’s, Federal Practice, 0.410 [1]...................  7, 10
Von Kalinowski, Anti-Trust Laws and Regulations, (1983)

Vol. 1, S.3.02(l)(3)a. Vol. 2, §9, 14 [4].....................  17, 25
18 J. Wright, Miller & Cooper Federal Practice and Pro­

cedure, § § 4406-4407 at 52, 63-64 ............................ 7 , 8 , 9
J. Wright, Miller, Kane, Federal Practice and Procedure,

Vol. 10A, Sec. 2727, § 2732........................................  14, 17
Restatement (Second) of Judgments § 24, Comment “a” 5, 9



United States Court of Appeals
For the First Circuit

No. 85-1032
ISAAC MANEGO,

PLAINTIFF-APPELLANT,

V.

THE ORLEANS BOARD OF TRADE,
DAVID WILLARD,

THE CAPE COD FIVE CENTS SAVINGS BANK, INC.,
AND

M o re  t h a n  N in e t y  O t h e r  P er so n s , K n o w n  or U n k n o w n , 

I n d iv id u a l l y  a n d  as T h e y  A r e  M e m b er s  o f  t h e  
O r l e a n s  B oard  o f  T r a d e , 

d e fe n d a n t s - a p p e l l e e s  .

o n  a p p e a l  fr o m  a ju d g m e n t  o f  t h e  u n it e d  st a t es  d istrict

COURT FOR THE DISTRICT OF MASSACHUSETTS

BRIEF FOR ISAAC MANEGO, PLAINTIFF-APPELLANT

STATEMENT OF ISSUES 
PRESENTED FOR REVIEW

1. Did the court err in barring action against David 
Willard and the Cape Cod Five Cents Savings Bank on the 
grounds of res judicata, if they engaged in a different con­
spiracy with different parties to violate the Sherman Act, than 
in the conspiracy alleged in the prior Civil Rights suit?



2

2. Did the court err in its application of Rule 56 of the 
FRCP (Summary Judgment) in shifting the burden to Plain­
tiff, where questions of conspiracy and state of mind are 
involved?

3. Did the court err in concluding the Board of Trade is 
not chargeable with the “sham” actions of its alleged co- 
conspirator Cape Cod Five Cents Savings Bank?

4. Did the court err in concluding that the actions of the 
Board of Trade are protected activities under the Noerr- 
Pennington Doctrine (First Amendment right of free speech 
and petition): especially in view of the presence and participa­
tion of a majority of the town selectmen (Board of Trade 
members Norgeot and Nickerson) at meetings of the Board of 
Trade at which the Board of Trade’s opposition to plaintiffs 
license application was discussed and unanimously voted, 
prior to the selectmen’s hearing on the matter?

STATEMENT OF THE CASE

Plaintiff-Appellant has brought a series of independent 
actions against various defendants, some of whom are defen­
dants in this action, arising out of the participation of these 
defendants in several allegedly unlawful and concerted activi­
ties, which had the purpose to prevent plaintiff from 
establishing and operating a disco business in the Town of 
Orleans, Massachusetts.

The first action sought a writ in the nature of mandamus 
from the Superior Court in Barnstable alleging that an Orleans 
Selectmen’s decision to deny plaintiff an entertainment license 
was arbitrary and capricious, because it was based on racial 
hostility evident in the community against Plaintiff, a black 
man. (R. 157). Summary judgment for defendants was 
granted without memorandum on August 18, 1979. (R. 170, 
374).

The second action was a civil rights complaint brought July 
1, 1980, (R, 10) in the U.S. District Court for the District of



3

Massachusetts under Federal Civil rights laws; namely, 42 
USC § 1981; 42 USC § 1983; 28 USC § 1331; 42 USC § 1985,
§ 1986 and § 1988. The suit named as defendants, the Cape 
Cod Five Cents Savings Bank, Inc.; George P. Marble, David 
B. Willard; T-Bears, Inc., d/b/a Lower Cape Sports Area, 
Paul M. Thibert; and Gaston L. Norgeot, Herbert F. Wilcox, 
Thomas B. Nickerson, individually and as they are members of 
the Board of Selectmen of the Town of Orleans on April 13, 
1982. Summary judgment was granted to all defendants, 
which judgment was taken on appeal by plaintiff to the First 
Circuit on October 28, 1982. (R. 142). The First Circuit 
affirmed the District Court’s judgment, Manego v. Cape Cod 
Five Cents Savings Bank, Inc.. 692 F .2d 174 (IstCir. 1982). In 
the memorandum accompanying this judgment the First Cir­
cuit Court stated, “had petitioner in this case provided suffi­
cient facts to create a material issue as to whether the denial of 
this license was because of his race, we w ould, as did the Court 
in Adickes, look unfavorably on a refusal by the Lower Court 
to allow him to pursue his claim that the denial w as the result 
of conspiracy.”

Thereupon, plaintiff filed on January 7, 1983, the case at 
bar in the U.S. District Court for the District of 
Massachusetts, (R. 177) pursuant to the Sherman Antitrust 
Act, 15 U.S.C. § 1 alleging that the Orleans Board of Trade 
unlawfully conspired with the Cape Cod Five Cents Savings 
Bank and David Willard, in restraint of trade to prevent plain­
tiff from establishing and operating a disco business in the 
Town of Orleans. On November 27, 1984, the U.S. District 
Court again granted summary judgment to defendant, from 
which this appeal is taken. (R. 557, 558).

In the case at bar, plaintiff furnished to the Court below, 
depositions, answers to interrogatories, affidavits, and other 
documents purporting to show that the Board of Trade did 
meet on January 9, 1979, and under the direction of its Presi­
dent, David Willard, thoroughly discussed and voted unani­



4

mously to oppose plaintiffs application for an entertainment 
license (R. 129); that the interests of the Bank, the Lower 
Cape Sports Center, and the Board of Trade were interlocked 
through the status of David Willard, who at the time was 
simultaneously Manager of the Bank, General Manager of the 
Sports Center, and President of the Orleans Board of Trade 
(R. 12); that Selectmen Gaston Norgeot and Thomas Nicker­
son who were also members of the Board of Trade (R. 434) 
were actually present at the Board of Trade Meeting held on 
January 9, 1979; that Selectman Thomas Nickerson was again 
present at the Board of Trade meeting held on February 13, 
1979 (R. 461), and reported on the scheduled hearing of the 
Board of Selectmen to be held on the following night, 
February 14, 1979, on Plaintiffs application for an entertain­
ment license (R. 464, 465); that plaintiffs application was 
denied at that hearing (R. 168); that the Lower Cape Sports 
Center subsequently sought and obtained from the Board of 
Selectmen a new entertainment license in order to expand its 
program into live music and dancing, and roller disco (R. 171, 
172); and that in May 1979, the bank brought and then 
withdrew on July 3, 1979, a sham lawsuit it had brought 
against plaintiff and the Orleans Board of Appeals to enjoin 
plaintiff from proceeding with the completion of his building 
and to revoke his Building Permit. (R. 20).



5

ARGUMENT

I. RES JUDICATA

D id t h e  c o u r t  err in  ba rr in g  a c t io n  a g a in s t  D avid 

W illa r d  a n d  C a p e  C od F iv e  C e n t s  Sa vin gs B a n k  o n  grounds

OF RES JUDICATA, IF THEY ENGAGED IN A DIFFERENT CONSPIRACY 
WITH DIFFERENT PARTIES TO VIOLATE THE SHERMAN ACT, THAN 

THE CONSPIRACY ALLEGED IN THE PRIOR ClVIL RIGHTS SUIT?

The court erred in barring the instant action against David 
Willard and the Cape Cod Five Cents Savings Bank on the 
ground o f res judicata where the causes o f action were not the 
same.

The District court in the decision below found that the 
actions against David Willard (“Willard ) and the Cape Cod 
Five Cents Savings Bank (“The Bank”) were barred on the 
ground of res judicata. That finding was based on the inter­
pretation of the case at bar and Manego v. Cape Cod Five 
Cents Savings Bank et al., 692 F.2d 174 (1st Cir. 1982) as set­
ting forth the same cause of action. That interpretation is not 
only factually questionable, but based on a legal standard 
which results in injustice for cases such as the one at the bar.

It has been long undisputed that for the doctrine of res 
judicata to apply, the subsequent case must be based on the 
same cause of action as in the original case, e.g., Cromwell v. 
County o f Sac, 94 U.S. 351, 352 (1876). The District Court’s 
decision with regard to res judicata relies heavily on a broad 
definition of “cause of action which it names the trans­
actional” approach.

The transactional approach to a cause of action, or claim, is 
to view the claim as coinciding with the factual transaction. 
Restatement (Second) § 24, Comment “a,” or “series of trans­
actions”, Isaac v. Schwartz, 706 F.2d 15, 17 (1st Cir., 1983) 
from which it sprang, regardless of the number or variety of 
legal theories which might arise from it. The Appeals Court in 
Lovely v. LaLiberte, 498 F.2d 126 (1st Cir., 1974) uses the



6

phrase “operative nucleus of fact” to mean transaction in this 
sense. The District Court below, utilizing this standard, found 
that the instant action against Willard and the Bank was 
barred.

First of all, if one were to accept the “transactional 
approach” without question, it is doubtful whether it applies 
so as to bar the instant action. In support of its application to 
the case at bar, the District Court states:

“The present complaint differs only in that it names addi­
tional defendants (The Board of Trade), and alleges that 
the Bank planned to offer entertainment of (sic) its 
facility similar to that which Plaintiff Manego would 
have provided at his disco.”

Manego v. Orleans Board o f Trade et al., No. 83-0045 
(D.C. Mass., Jan. 7, 1983) (R. 537). Not only are the above 
differences in the “operative nucleus of fact” discrepancies 
between the instant and prior action, but they are hardly in­
substantial.

By adding the Board of Trade and all of its members as 
defendants, the Plaintiff/Appellant identifies a new and dif­
ferent conspiracy from the one alleged in the prior action. 
(R. 96). With the description of the intent of the Bank to pro­
vide an entertainment facility comparable to Manego’s pro­
posed disco in his complaint in the instant action, Manego pro­
vides evidence for an entirely distinct, factual basis for that 
second, and different conspiracy—a conspiracy to restrain 
trade.

The Court dismisses the above as insignificant, i.e., it con­
siders the two cases as deriving from the same “operative 
nucleus of fact.” Actually, the additions and changes to 
Manego’s allegations from the prior action to the present one 
are among the most important facts supporting his case. As 
they are “controlling” facts, it is not appropriate that res 
judicata apply to bar the instant action. Scooper-Dooper, Inc. 
v. Kraftco Corporation , 494 F.2d 840 (3rd Cir., 1974).



7

It is important to note that the two cases from the First Cir­
cuit cited bv the District Court to support its use of the trans­
actional approach, Lovely v. LaLiherte, 498 F.2d 1262, 
supra, and Isaac v. Schwartz, 706 F.2d 15, supra, are both 
distinguishable on their facts from the instant matter. Both 
cases involve a first and second suit in which the parties are 
identical. That is not so here. Further, the first and second 
suits of both cases concern the identical fact situations: an 
eviction from a mobile home park and a failure to readmit a 
law student, respectively. In Lovely and in Isaac only the 
theories of recovery changed. Here, although many of the 
facts are the same, the “operative nucleus of fact” has 
undergone a marked alteration.

Thus, it can be seen that, if the transactional approach is 
accepted as the appropriate standard by which to judge the 
case at bar, it offers, at most, doubtful justification for the 
application of the doctrine of res judicata.

The question which must be addressed at this point is 
whether the broad “transactional approach” ought to be 
applied to the instant claim. It is acknowledged by the District 
Court that “(t)he exact contours of claim preclusion (res 
judicata) are a subject of much discussion and disagreement.” 
Manego v. The Orleans Board o f Trade et al. See 18 J. Wright, 
Miller & Cooper, Federal Practice and Procedure 
§§ 4406-4407 at 52, 63, 64 and 18 J. Moore’s Federal Practice, 
H 0.410(1).

In other words, the transactional approach is simply one 
approach among many in an area of ongoing conceptual 
development. What constitutes a “claim” or “cause of action” 
is not easily definable and has yet to be carved in stone by any 
court or legal scholar.

The transactional definition of a claim is expansive; it in­
cludes within one cause of action what formerly, or under a 
different approach, would be two or more causes of action.



8

When it errs, it errs on the side of over-inclusiveness. Thus, it 
might bar an action which deserved to be heard.

The weakness of the transactional approach is that it fails to 
account for the uniqueness of cases. For example, a plaintiff 
may have a valid reason for filing separate suits from the same 
or similar factual background. Compelling maximum joinder 
of claims to prevent res judicata would be unfair to such plain­
tiffs. 18 J. Wright, Miller & Cooper, supra §§ 4407 at 52. The 
court in Commercial Box ir Lum ber Co., Inc. v. Uniroyal, 
Inc., 623 F.2d 371 (5th Cir., 1980) acknowledged just such a 
valid reason. It noted that the Plaintiff could have combined 
its two actions, both based on the same purchase contract, but 
was not required to.

Another aspect of the unfairness of the transactional 
approach is illustrated by the instant action, where the case 
concerns a conspiracy. It is common knowledge that more 
often than otherwise, direct evidence of a conspiracy is not 
readily available. Eastern States Retail Lum ber Dealers 
Association v. U.S., 234 U.S. 600; 34 S.Ct. 951 (1914),
Ferguson v. Omnimedia, Inc.. 469 F.2d 194 (1st Cir., 1972). 
However, under the transactional approach, a court will look 
at the first lawsuit filed, see a common “nucleus of fact”— 
absent a few essential details—with the second lawsuit—and 
declare the underlying claims to be the same. That is, 
whatever claims were not litigated in the first action, both 
could have and should have been litigated at that stage. See 
Manego v. Orleans Board o f Trade et ah, supra at (R. 539, 
542) and Isaac Schwartz, supra at 17:

“The issue is not whether the plaintiff in fact argued his 
claims in the (first) proceedings, but whether he could 
have.”

The transactional approach does not take into account the 
special problems of conspiracy. To wit, much of the time the 
Plaintiff could not have brought the second claim any sooner



9

than he did. Except for hearsay, the evidence, “those few 
essential details,” simply was not there. The approach the 
District Court has taken with the instant case has focused on 
and found similar discrete parts of the alleged conspiracy 
rather than the phenomenon as a whole. This does the Plain­
tiff/Appellant’s case an injustice for:

“The character and effect of a conspiracy is not to be 
judged by viewing its separate parts, but only by looking 
at it as a whole.”

E. ]. Delaney Corp. v. Bonne Bell, Inc.. 525 F.2d 296 (10th 
Cir., 1975).

The unfairness and inappropriateness of the transactional 
approach to the case at bar, as a conspiracy case, is w'ell articu­
lated in 18 J. Wright, Miller & Cooper, supra, §§ 4407, at 
63-64. While discussing the possibilities for defining “claim” or 
“cause of action,” the authors write:

“Each area of substantive law' has its own distinctive 
implications for expectations, reliance and repose. Each 
area generates its own special problems of practice in 
pretrial and trial settings. These differences of the real 
world and the lawyer’s wmrld must be sought out and 
accounted for in the process of prescribing the dimensions 
of the claims or causes of action spawned by the substan­
tive principles.”

The transactional definition of “cause of action” does not 
take into account the special problems of a conspiracy case. It 
is, therefore, not appropriate for such an action, such as the 
case at bar.

Although the Restatement (Second) of Judgments § 24, 
Comment “a” asserts that the transactional definition is the 
“present trend,” and it is followed in certain First Circuit deci­
sions, it is not the only approach available. The alternative is 
to decide on a case by case basis whether the claims are the



10

same. This would alleviate the unfairness of the transactional 
definition in unusual cases. For if the transactional definition 
were applied universally,

• then a judgment upon one cause of action would be 
conclusive as to every other cause of action at the time, 
although not embraced in a suit, and although the parties 
were not obliged to join it therein. This would destroy the 
right of parties to sue separately upon distinct causes of 
action and would be subversive of the entire theory of the 
thing judged.”

U.S. v. The Haitian Republic, 154 U.S. 118, 129, 14 S.Ct. 992 
(1894).

Other courts have applied narrower definitions to “cause of 
action” in the interests of fairness, and this has served to point 
out the as yet unresolved nature of the debate.

“There are many cases that hold that a number of separate 
claims or causes of action can arise from essentially the 
same set of facts. The cases that adumbrate the distinc­
tion between a single claim based on different theories, 
and separate claims arising from the same nucleus of 
operative act are not easy to reconcile.” 18 Moore’s 
Federal Practice, Par. 0.410(1).

The Masachusetts Appeals Court indicated that a common 
transaction alone might not be sufficient to unify two claims in 
Bradford v. Richards, 11 Mass. App. 595; 417 N.E.2d 1234 
(1981). There, although the court found common facts under­
lying the two actions, it declined to find that the causes of 
action were the same. In a thorough discussion of the doctrine 
of Res Judicata in Massachusetts, the Appeals Court offered a 
lengthy list of example cases where that doctrine applied. Not 
one of the cases listed was a conspiracy case.



11

Commercial Box, supra, cited Kilgoar v. Colbert County 
Board o j Education, 578 F.2d 1033 (5th Cir., 1978) for the 
proposition:

“Plaintiffs are not barred from presenting any ground for 
relief arising out of conduct not complained of in the 
prior lawsuits.”

Id. at 1035.

However, in Kilgoar the conduct complained of occurred 
subsequent to the first lawsuit, whereas in Commercial Box, 
the wrongful conduct occurred both prior to and during the 
first action. Thus, it can be seen that the case-by-case 
approach to the definition of a single “cause of action” is also 
in the process of developing.

It is this clear that the District Court determination that the 
two actions, Manego v. Cape Cod Five Cents Savings Bank, 
supra, and Manego v. The Orleans Board o j Trade et al.-, 
supra, were based on the same cause of action is founded on a 
legal standard that is both factually inapplicable and legally 
unjust to the case at bar. Res Judicata does not apply to the 
instant action against Willard and the Bank.

The Fifth Circuit has also indicated a willingness to examine 
each case carefully rather than apply the broad transactional 
definition regardless of circumstance. In Commercial Box ir 
Lum ber Co., Inc. v. Uniroyal, Inc., 623 F.2d 371 (5th Cir., 
1980), the Appeals Court refused to apply res judicata, despite 
the fact that the two actions were based on the same purchase 
contract. The first section was for loss caused by Uniroyal’s 
change in destination of its order, the second for Uniroyal’s 
wrongful deduction of discounts from the same contract. The 
court recognized that the Plaintiff had a valid reason for 
bringing two separate actions. Id. at 374, fn. 2, supra:



12

“and Not only were these issues not raised, but they are 
in no way germane or related to the challenge made in 
the first suit. The issue in the present case is based upon a 
different cause of action than that alleged in the first 
lawsuit. Likewise, the matter involved in the present case 
is not one that could have been established in the first 
case in light of that case’s legal and factual bases.” 
(Emphasis added).

Id. at 394.

This is clearly the case here: given the legal and factual 
bases for the second legal or instant action, the matter could 
not be established in the first case. Thus, res judicata should 
not apply.

The court below also misreads Plaintiffs reasons for his 
delay in filing his antitrust action (R. 542).

Plaintiff does not claim that the delay was the result of his 
lack of knowledge of the Bank’s plans to develop its Sports 
Center’s entertainment facilities, but, rather because of the 
Plaintiffs lack of probative evidence about the alleged con­
spiratorial meeting of the Board of Trade under the direction 
of Bank Manager cum Sports Center’ General Manager cum 
Board of Trade President David Willard, at which meeting 
two Orleans Selectmen / Board of Trade members were 
present.

Prior to the admission of facts concerning said meeting, as 
set forth in David Willard’s affidavit served on Plaintiff only 
one business day before the dispositive hearing on Plaintiffs 
civil rights case on April 12, 1982 (R. 237, 243), Plaintiff had 
only hearsay knowledge of such a meeting (R. 82, 83, 84).

Even so, the court below points out that under the liberal 
federal rules of discovery and amendment, Plaintiff might 
have amended his civil rights complaint to add an anti-trust 
count prior to judgment of appeal, if only he had done more 
discovery (R. 542).



13

Plaintiffs response is that where newly discovered facts give 
rise to allegations of a new and independent cause of action re­
quiring new parties to be added, such as a violation of Sec­
tion 1 of the Sherman Act, and upon which event the Plaintiff 
is deemed to have the right and standing to amend his com­
plaint, then Plaintiff also has acquired the right and standing 
to file a new independent action. That, indeed, was the choice 
made by the Plaintiff in this case.

Plaintiff argues that the court below is in error when it 
attempts to extend the res judicata doctrine beyond issues 
which “were raised” or “could have been raised to issues 
which “might have been raised” if more discovery had been 
pursued, the right questions asked and answered and pro­
bative documents sought and produced.

Finally, the Board of Trade and its members are necessary 
defendants in Plaintiffs antitrust action. Its members repre­
sent the very co-conspirators who were essential to Plaintiff s 
allegations of conspiracy among businessmen to restrain trade 
and thus constitute far more than a “mere addition of new 
defendants in a subsequent action.” (R. 542). Plaintiff neither 
raised nor could have successfully raised the antitrust issue in 
his prior civil rights complaint, because he had no probative 
evidence to support such an allegation, but only hearsay 
knowledge.

The attempt by the court below to expand the application of 
res judicata doctrine to issues which might have been raised if 
more evidence had been produced, constructs an unfairly long 
and slippery slope for Plaintiff to climb, especially in a con­
spiracy case such as found here.



14

II. APPLICATION OF RULE 56

D id t h e  c o u r t  err in  its  a p p l ic a t io n  o f  R u l e  5 6  o f  t h e  

FRCP (s u m m a r y  ju d g m e n t ) in  s h if t in g  t h e  bu r d en  to  P l a i n ­

t i f f  WHERE QUESTIONS OF CONSPIRACY AND STATE OF MIND ARE 

INVOLVED?

The lower court erred in its application o f FRCP 56 by fin ­
ding its own facts and shifting the burden to plaintiff, ichere 
questions o f conspiracy and credibility were involved.

In the District Court decision below, the court concedes 
that conspiracy and antitrust claims are generally inappro­
priate for summary judgment. Adickes v. S. H. Kress and C o., 
398 U.S. 144, 176 (1970) 90 S.Ct. 1598, Poller v. Columbia 
Broadcasting System, 368 U.S. 464 (1962), 82 S.Ct. 486. It 
then goes on to state that the case at bar falls within an excep­
tion to that rule. That is: “(W)here a moving party in an anti­
trust conspiracy case has shown that the facts relied upon in 
the opposing party’s allegations are not susceptible to the inter­
pretation which he sought to give them, Rule 56 (e) puts the 
burden on the opposing party to produce evidence in support 
of his allegations.” Manego v. Orleans Board o f Trade et al, 
|83-0045 (R, 552). While the court accurately described Rule 
56 (e), its application to the instant case was clearly erroneous. 
The burden should never have shifted to the Plaintiff.

In order to reach Rule 56 (e), the District Court had to find 
that the moving party had met its burden under the rule. It is 
well settled that the party moving for summary judgment has 
the burden of demonstrating that the Rule 56 test: “there is no 
genuine issue as to any material fact” is satisfied. J. Wright, 
Miller & Kane, Federal Practice and Procedure, Civil 2d, 
§ 2727; Adickes v. S. H. Kress and Co., supra at 1608. The 
court found that this burden was met by relying on the affi­
davits of the moving party.



15

Ordinarily a court’s reliance on affidavits is enough to shift 
the burden between parties under Rule 56 (e). However, 
where the case concerns state of mind and credibility, as it 
does in an antitrust action, and the affidavits are strictly self- 
serving when provided and sworn to only by movants 
themselves, then reliance becomes highly questionable.

Indeed such affidavits exhibit many of the same earmarks of 
probative weakness as would the sworn denials of the prover­
bial inhabitants of the henhouse that “there ain’t nobody in 
here but us chickens.”

The Board of Selectmen stated that they voted to deny 
Plaintiffs entertainment license due to traffic and noise prob­
lems. (R. 168,228). Plaintiff argues that the circumstantial 
evidence does not support their version of events. (R. 500, 
501).

Plaintiff s proposed site was situated right next to the town 
dump in a sparsely settled area, 1000 ft. from the nearest 
residential home, and was going to be soundproofed. The 
Traffic Study prepared by Sherman Reed, also a member of 
the Board of Trade, which had already voted to unanimously 
oppose Plaintiff’s disco, based his Committee’s estimation of a 
traffic problem on the fact that young people, who would 
patronize a disco, are prone to use drugs and alcohol. (R. 173). 
This finding had no basis in fact, since Plaintiff’s liquor license 
had already been denied and abandoned and Plaintiff indi­
cated to the Selectmen that he was willing to operate without 
it. (R. 153, 499). The Traffic Study Committee also found that 
problems could be created by the increased traffic due to the 
Plaintiff s operation of the disco. (R. 173, 175). Their findings 
were made notwithstanding the fact that 25 new businesses 
have been licensed and developed in close proximity to Plain­
tiffs site, after the denial of Plaintiff’s entertainment license. 
These businesses include a plastics company, two dog kennels, 
two landscaping businesses, a car wash, a printing company, a 
fish processing company, a boat manufacturer, and 15 storage 
garages. (R. 500, 501).



16

In addition, the roller disco and ballroom dancing offered 
by the Center would have produced noise (music) at night in 
much the same way Mr. Manego’s disco would have.

The characterization of the grant of the entertainment 
license to the Center, a few months after Plaintiff’s application 
had been denied, as a renewal of an existing license is specious 
to say the least. The new license was not a mere renewal. In 
addition to ice skating, it was for roller skating, music and 
dancing, neither of which activities had ever been before 
offered at the Center. (R. 171, 172). The Center had to com­
pletely renovate the floor in order to make music, dancing and 
roller skating possible, (R. 353, 513), despite the obvious con­
tradictions in the affidavit of Selectman Wilcox, who states 
that he voted to “reissue” an amusement license to the new 
owner of an “existing business,” the Lower Cape Sports 
Center. This, he says, was not a license to open a disco, but 
only to maintain an ice skating business. (R. 228, 334).

The Center had just been sold and the license had expired 
three months before. Rather than maintain an existing failing 
business, a new expanded business was proposed, a great sum 
of money was invested; all of that energy and money was ex­
pended to make the floor compatible to dancing and roller 
skating. (R. 513). This would have placed Mr. Manego and 
the Center in a highly competitive position. The fact that no 
alcohol was served or that the ballroom-dancing program, and 
for that matter the roller-disco program, failed to draw 
customers and was discontinued, is irrelevant.

Mr. Manego’s disco was also going to be alcohol-free which 
would have allowed him to cater to the same groups that the 
Bank catered to at the Center. (R. 499). As Plaintiff remarked 
in his first deposition: “Dancing is dancing. (R. 95). We may 
disco in one place and roller-disco in the next, but it is all one 
and the same.”

The District Court held that Plaintiff failed to contradict 
Defendant’s assertion that the subsequent grant of the license



17

to the Sports Center was a legitimate exercise of the 
Selectmen’s licensing authority. Plaintiff argues that the cir­
cumstantial evidence gives credence to his allegation that the 
grant was a subsequent act in furtherance of the conspiratorial 
scheme in restraint of trade.

Here, there are obvious questions of credibility and intent. 
It is well-settled law that where intent is an element of the 
cause of action—generally to be inferred from the facts and 
conduct of the parties: “courts should not draw factual in­
ferences in favor of the moving party and should not resolve 
any genuine issue of credibility.” Ness v. Marshall, 660 F.2d 
517, 519 (3rd Cir. 1981).

The existence of conspiracy may be sufficiently strong, to 
raise a factual question for the jury even though there is no 
direct evidence that a conspiracy existed. Pennington v. 
United Mine Workers o f America, 325 F.2d 804, 811 (6th Cir. 
1963) reviewed on other grounds: 381, U.S. 657 (1956), cited 
in Von Kalinowski, Antitrust Laws and Trade Regulations, 
Vol. 2. § 9, 14, [4], In antitrust cases questions of motive or in­
tent, credibility and conspiracy frequently prevent Summary 
Judgment from being entered, since these issues involve sub­
jective questions regarding state of mind that can only be 
decided after a full trial. J. Wright, Miller, Kane, Federal 
Practice and Procedure, Vol. 10A, § 2732.

In any event, upon reviewing all the evidence before it, the 
court below found the “facts” of the case by summarizing the 
affidavits of the movants. Manego v. Orleans Board o f Trade 
et al. (R. 546). The factual allegations of the movants which 
differ from those of the Plaintiff amount to no more than mere 
denials of the latter. Id ., that is, they all state that they never 
engaged in those acts which would have created a conspiracy 
to prevent the Plaintiff from establishing a business in their 
town. A party moving for Summary Judgment cannot sustain 
his burden by denying the allegations in his opponent’s 
pleadings. Kellerman v. Askew, 541 F.2d 1089 (5th Cir.,



18

1976). By choosing to believe the account of the movants 
rather than that of the Plaintiff, the Court overstepped its 
authority under FRCP 56.

In a motion for Summary Judgment, “if a fact asserted by 
the plaintiff is contradicted by the defendant, the facts as 
stated by the plaintiff are to be taken as true.” Zell v. 
American Seating Co., 138 F.2d 641 (2nd Cir,, 1943). The 
lower court here did the opposite. Further, “if defendant’s 
evidence creates issues of credibility, the case must go to trial 
and not be resolved at the Summary Judgment level.” Sartor v. 
Arkansas Construction Corp., (1944) 44 S.Ct. 724, 729; 321 
U.S. 620; D yerv. MacDougall, 201 F.2d 265 (2nd Cir., 1952).

The District Court’s treatment of the credibility of the 
parties deserves close scrutiny. First of all, after citing the 
“facts” as set forth in the movants’ affidavits, the Court states: 
“These are denials of conspiracy from a Selectman, the Presi­
dent of the Board of Trade, and an Officer and an employee of 
the Bank.” (R. 547). The Court here seems to imply that these 
denials are therefore credible because of the social rank of the 
affiants, all defendants in the suit.

Because the Court is basing its findings on the denials of the 
movants, the credibility of the respective parties becomes the 
paramount question. A defendant’s rank within a community 
or place of employment is hardly an adequate basis on which 
to judge credibility. Instead, a court generally needs to ex­
amine the individual’s demeanor and/or performance under 
cross examination at trial. This is confirmed in the Advisory 
Committee Note to the 1962 Amendment to Rule 56 (e), 31 
F.R.D. 648:

“Where an issue as to a material fact cannot be resolved 
without observation of the demeanor of witnesses in 
order to evaluate their credibility, summary judgment is 
not appropriate.”



19

Whether the movants engaged in activities which amounted to 
a conspiracy against the Plaintiff, which they deny is, of 
course, a “material fact.”

Secondly the Court appears to demean the Plaintiffs version 
of the facts, due to the Plaintiffs ignorance of what transpired 
among the various alleged co-conspirators. (R. 548). This 
ignorance is, rather than a reason to disbelieve the Plaintiff, 
the reason to deny the motion for summary judgment and 
move the case to trial.

As so unequivocally held in Poller v. CBS 368 U.S. 464 
(1962), 82 S.Ct. 468, summary judgment should be used 
“sparingly” in antitrust actions where “the proof is largely in 
the hands of the alleged conspirators.” It is inherent in a con­
spiracy case that the plaintiff is not going to have access to 
many of the facts he needs to prove; the conspirators 
themselves have exclusive control over that information. 
Because of this difficulty of proof, plaintiffs in conspiracy 
actions often must rely, at least initially, on circumstantial 
evidence.

Admittedly, plaintiff in the case at bar is relying primarily 
on circumstantial evidence. The District Court reviewed both 
this evidence and the evidence presented by the defendants, 
the alleged conspirators, and chose to believe the latter. It can­
not be doubted that the Court found the movants’ materials 
more probative because of their first-hand knowledge. This 
however, is the nature of the conspiracy: those charged have 
the best knowledge of the facts of their alleged wrongdoing.

It is the court’s role then to regard the movants’ evidence 
with a healthy suspicion. Bauman, “A Rationale fo r  Summary 
Ju dgm en t/’ 33 Ind. L.J,  467 (1958) at 481.

“Moreover, if the moving party’s proof is less convincing, 
as in cases where he relies on his own testimony or has 
exclusive knowledge of the transaction, the burden of 
providing evidence may not shift to the opponent.”



20

Thus, it appears that the District Court declined to consider 
the credibility of the movants to be a serious issue, despite the 
fact that they were and still are in exclusive control of the facts 
needed to prove Plaintiffs case. They are motivated by self- 
interest in seeking to have the suit against them dropped, and 
the court does not have the ability to observe them in an adver­
sarial trial setting. None of the usual protections are in place 
for the administration of justice, and all of the reasons arise to 
be wary of the truth of the movants’ allegations. Nonetheless, 
the District Court believed them sufficiently to deprive the 
Plaintiff of his day in Court.

The lower court cited First National Bank o f Arizona v. 
Cities Service Co. 391 U.S. 253, 88 S.Ct. 1575 (1968) in sup­
port of its shifting the burden to Plaintiff. In that case, the 
court found an “absence of any significant probative evidence 
tending to support the complaint.” Id. at 1593. Such a situa­
tion is clearly distinguishable from the instant matter. Here 
the Plaintiff has shown a series of facts which not only “tend 
to” but, in fact, directly support the allegations in his com­
plaint.

By shifting the burden to Plaintiff in the case at bar, the 
District Court is setting a dangerous precedent for future anti­
trust and conspiracy actions. Its decision could in effect 
guarantee failure at the summary judgment level whenever a 
plaintiff brings such a case supported only or primarily by cir­
cumstantial evidence. Yet, by its very nature, the plaintiffs 
knowledge of the matter may be limited to the circumstantial, 
and the movants’ evidence may be incapable of being con­
troverted at summary judgment.

The motion for summary judgment presents a great tempta­
tion for judges to usurp the role of the jury. Such is the reason 
why, in its origins, motions for summary judgment were 
limited to cases involving bills of exchange, promissory notes 
and checks. Bauman, supra, at 473. In these cases, only incon­
trovertible documentary evidence could be used in support of



21

the motion. It would be unfortunate indeed if the lower 
court’s decision in the instant action initiated a trend towards 
a looser application of a procedure with such great potential to 
harm plaintiffs in our justice system.

The District Court exceeded its authority under FRCP 56 in 
shifting the burden to plaintiff where the movants’ evidence 
consisted of self-serving statements of questionable credibility.

III. CO-CONSPIRATORS LIABILITY 
FOR SHAM ACTIONS

D id t h e  C o u r t  err in  c o n c lu d in g  t h e  B oard  o f  T rad e is

NOT CHARGEABLE WITH THE ‘SHAM’ ACTIONS OF ITS ALLEGED CO­

CONSPIRATOR C a p e  C od F iv e  C e n t s  Sa vin g s  B a n k ?

THE SHAM EXCEPTION ; BASELESS SUITS

The District Court failed to examine and to apply to the 
Defendant Orleans Board of Trade the baseless suit exception 
to the Moerr-Pennington Doctrine first enunciated in Truck­
ing Unlimited v. California Motor Transport Company, 432 
F.2d 755 (9th Cir., 1970) off. 404 U.S. 506, 92 S.Ct. 609 
which prohibits “baseless repetitive claims” designed to 
discourage and ultimately to prevent the plaintiffs from invok­
ing the processes of the administrative agencies and courts. Id. 
at 1512. The court, however, agreed with the plaintiff that 
subsequent developments have held that a single unit is suffi­
cient to invoke the sham exception, e.g., Clipper Express v. 
Rocky Mountain Motor Tariff Board, 690 F.2d 1240 (9th Cir., 
1982), Energy Conservation, Inc. v. Heliodyne, Inc.. 698 F.2d 
386 (9th Cir., 1983).

Basing its reasoning on Clipper Express, the Energy Court 
found that the baseless claim was used for an unlawful pur­
pose, i.e., to “competitively harm the plaintiff.” Id. at 389. 
The Court stated that “these allegations may be sufficient to 
state a claim of abuse of judicial process on the grounds that 
the lawsuit was initiated for an unlawful purpose and the



22

defendants committed specific acts outside the judicial process 
in furtherance of that purpose.” Id.

As the Plaintiff argued below, the lawsuit brought by the 
Defendant Bank to revoke Manego’s legitimately issued 
building permit was “clearly instituted for an unlawful pur­
pose.” On March 8, 1979 the Orleans Building Inspector issued 
a building permit to Plaintiff for construction of his proposed 
disco. Shortly thereafter, Plaintiff hired a building contractor, 
Roger Hulick, and began construction of a building on his 
land. At about the same time Mr. Hulick was advised by an 
agent for Nickerson Lumber Company, Charles Darling, that 
the Cape Cod Five Cents Savings Bank had requested the firm 
to cease delivery of materials to Mr. Manego. (R. 125). Mr. 
Hulick also began to receive warnings from Defendant Cape 
Cod Five Cents Savings Bank concerning arrears on his per­
sonal loan at the Bank. (R. 125). (The fact that Mr. Darling 
now denies he ever made such a statement to Mr. Hulick does 
not diminish the importance of the allegation. It raises a 
matter of credibility which in keeping with tradition of our 
judicial system becomes the province of the trier of fact).

In April 1979, reacting to the issuance of the building per­
mit to Plaintiff, the Bank appealed the Building Inspector’s 
action to the Orleans Zoning Board of Appeals. (R. 201). The 
Board, on May 23, 1979, confirmed the granting of the Plain­
tiffs building permit. Defendant Bank then caused to be filed 
in Barnstable Superior Court a suit to enjoin the Plaintiff from 
proceeding with the construction of his building and to revoke 
the action of the Orleans Board of Appeals in granting the 
Plaintiffs building permit. (R. 201). This baseless action was 
withdrawn on July 3, 1979 when the Bank transferred owner­
ship of the Sports Center to the former employee, Paul 
Thibert. (R. 201).

The Court went on to state the fact that the suit was subse­
quently dropped after the Bank’s sale of the Sports Center did 
not support an inference that the object of the suit was



23

unlawful. Moreover, the Court noted that the “sham” was 
allegedly perpetuated by the Bank, not the Board of Trade. 
(R. 550). Therefore, the Court reasoned, absent evidence that 
the Board of Trade conspired with the Bank concerning the 
suit, it was irrelevant to the issue of the Board’s immunity 
under Noerr and its progeny. The Court then ruled that the 
Plaintiff neither offered much evidence nor alleged that a con­
spiracy existed with regard to the suit.

What is at issue is the Bank’s sham administrative and 
judicial actions to revoke Plaintiff’s duly-issued building per­
mit and enjoin construction of his competitive enterprise. In 
Manpower, Inc. v. Foley, 212 U.S.P.Q. 445 (D. Mass. C.A. 
No. 78-2713-MA Dec. 5, 1980) the court found that:

“the fact that (plaintiff) has prevailed on its claims in this 
action, at a minimum, created a presumption that the 
action was brought in a good faith effort to vindicate 
(plaintiffs) legal rights.”

Id. at 449.

Here the Defendant Bank failed in its administrative actions 
and is therefore, not entitled to the presumption that the 
actions were bona fide. Conversely, the presumption then 
becomes that their actions, as a result of this failure, were 
motivated by bad faith, as it was stated in Coastal States 
Market, Inc. v. Hunt, 694 F.2d 1358, 1369 (5th Cir., 1983),

“The number of lawsuits filed without success is itself cir­
cumstantial evidence of sham.”

The Bank’s withdrawal from the suit in Barnstable Superior 
Court after they had divested themselves of a direct economic 
interest in the Sports Center, the application for and receipt of 
an entertainment license authorizing music and dancing, in 
addition to skating, does support an inference of sham. 
(R. 201). In Coastal States the Fifth Circuit held that where



24

the Hunt Brothers, who were engaged in a dispute with Libya 
over rights to exploit an oilfield, were engaged in litigation, 
parties who were accepting delivery of said oil and who subse­
quently dropped the suits after settlement with Libya, then 
the fact that the suits were dropped was circumstantial 
evidence of sham. The presumption was rebutted, however, 
when this Court adjudicated that there was a bona fide legal 
question of ownership, the existence of which was illuminated 
by other evidence. Id. at 1369.

In Alexander v. National Farmers Organization, 687 F.2d 
1173 (8th Cir. 1982), certain milk cooperatives attempted to 
drive out of business a new arrival which they viewed as a 
competitor. The Coops threatened litigation and in some cases 
sued others who had consented to buy National Farmers 
Organization (NFO) milk. Beatrice, when served with a com­
plaint by the Coops which alleged that Beatrice was a co­
conspirator with NFO in an antitrust conspiracy to eliminate 
“responsible cooperatives” like Mid-Am, terminated its agree­
ment to purchase NFO milk. The Court stated the fact that:

“Mid-Am voluntarily dismissed Beatrice as a defendant 
after Beatrice had stopped purchasing NFO milk speaks 
volumes.”

The Defendant Bank’s withdrawal of the suit after it had ex­
changed its direct economic interest for a security interest and 
later, through the procurement of a “renewed” license, en­
abling its former employee to endeavor to get the arena out of 
the red, is analogous.

In all three instances, litigation, administrative action or the 
threat of litigation was voluntarily dismissed after liquidation 
of the Defendant’s economic issue of interest. (In Alexander 
and Coastal States this type of activity, unexplained, was 
prima facie circumstantial evidence of predatory sham).

The sham actions of the Defendant Bank are clearly im­
putable to the Defendant Board of Trade. Contrary to the



25

District Court’s finding, Plaintiff had alleged a conspiracy be­
tween the Bank and the Board of Trade Members (including 
two members who also constituted a majority of the Board of 
Selectmen).

Plaintiff has alleged that at a meeting of the Board of Trade, 
the Defendants entered into a conspiracy to block Plaintiff 
from building and operating his proposed disco. A conspiracy 
is defined as an agreement by two or more persons, evidenced 
by either word or conduct to do an unlawful act, or to use 
unlawful means to do an unlawful act: Von Kalinowski, Anti­
trust Laws and Trade Regulations, Vol. 1, Sec. 3.02[1] (1983):

“where the circumstances are such as to warrant a jury in 
finding that the conspirators had a unity of purpose or a 
common design and understanding, or a meeting of 
minds in an unlawful arrangement, the conclusion that a 
conspiracy is established is justified.’’

American Tobacco Company v. U.S., 328 U.S. 781, 810 
(1946).

It is well-settled law that the action of one conspirator is im­
puted to all of the members of the conspiracy who fail to 
timely disassociate themselves from the conspiracy. Antitrust 
defendants may rebut proof of concerted action by demon­
strating that the alleged combination or conspiracy was aban­
doned. Von Kalinowski, supra, at Sec. 3.02(3)[a] in U.S. v. 
Gypsum Company, 438 U.S. 422 (1978). The Supreme Court 
has articulated a standard for establishing abandonment or 
withdrawal from a conspiracy. The defendants may prove 
withdrawal by showing “affirmative acts inconsistent with the 
object of the conspiracy and communicated in a manner 
reasonably calculated to reach co-conspirators.” Id. at 464.

The Defendants are otherwise liable jointly and severally 
for the actions taken in furtherance of the objective of the con­
spiracy by their co-conspirators, the Bank. There is no



26

evidence that the Board of Trade withdrew from the con­
spiracy, either before or after the Bank initiated the sham— 
administrative and legislative suits against the issuance of 
Manego’s building permit. The fact that Defendant Willard 
acted in his capacity as President of the Board and Agent and 
Orleans Branch Manager for the Bank further thickens the 
plot. (R. 199). The District Court, therefore, was incorrect in 
finding that the sham actions of the Bank did not affect Defen­
dant Board of Trade’s ability to rely on Noerr-Pennington as a 
defense.

THE SHAM EXCEPTION: MEANINGFUL ACCESS

The District Court held that Plaintiff failed to prove his 
argument that he was deprived of meaningful access to the 
licensing process because the activities of the Defendants made 
the Selectmen’s hearing a sham, or that Defendants’ actions 
were anything other than a genuine attempt to influence 
governmental action. (R. 551).

In Clipper Express the Court found a valid “sham ’ excep­
tion when the alleged conspirators deprive the “competitor of 
meaningful access” to the agencies and the Courts:

“Such a purpose or intent if shown, would be to 
discourage and ultimately prevent the respondents for in­
voking the processes of the administrative agencies and 
courts and thus fall within the exception to Noerr. ”

Id. at 1259.

The Plaintiff has argued above that the Board of Trade 
Meeting and the Defendants subsequent behavior is probative 
of conspiracy as a matter of law; that the law is clear on the 
matter of the baseless suits filed by the Defendant Bank and 
that unless a conspirator withdraws from the conspiracy, all 
action taken in furtherance of the conspiratorial objective are



27

imputable to all conspirators. Furthermore, the Board of 
Selectmen, members of the alleged conspiracy, by attending 
and participating in the Board of Trade meeting, sat in pre­
judgment on the merits of an entertainment license they were 
already compromised to defeat. Later, the Board of Trade 
went through the motions of transmitting a letter to the Select­
men voicing opposition to the disco, which opposition had 
already been made known to them privately when they 
formed the conspiracy. Another Board of Trade member, 
Sherman Reed, Head of the Selectmen’s own appointed traffic 
study committee, also opposed the operation of Plaintiffs 
disco because of the “traffic hazard” it would create. It was on 
his report the Selectmen claim to rely as grounds for their 
denial of Plaintiffs entertainment license. (R. 173).

For all of these reasons, the Court below erred in concluding 
that the Board of Trade is not chargeable with the sham 
actions of its co-conspirator, Cape Cod Five Cents Savings 
Bank.

IV. APPLICATION OF THE 
NOERR-PENNINGTON DOCTRINE

D id t h e  C o u r t  err in  c o n c lu d in g  t h a t  t h e  a c t io n s  o f  t h e  

B oard  o f  T ra d e a r e  pr o t ec t ed  a c t iv it ie s  u n d er  t h e  Noerr- 
Pennington Doctrine. ( F irst  A m e n d m e n t  rig h t  o f  fr e e  
s p e e c h  a n d  p e t it io n ) , ESPECIALLY IN VIEW' OF t h e  p r e s e n c e  a n d  

PARTICIPATION OF A MAJORITY OF THE TOWN SELECTMEN (BOARD

o f  T rad e m e m b e r s  N org eo t  a n d  N ic k er so n ) a t  m eet in g s  o f  

t h e  B oard  o f  T rad e a t  w h ic h  t h e  B oard  o f  T ra d e’s o p p o s i­

t io n  to  P l a i n t if f ’s l ic e n s e  a p p l ic a t io n  w a s  d iscussed  a n d  

u n a n im o u s l y  v o t ed , prio r  to  t h e  Se l e c t m e n ’s H ea r in g  on  

t h e  m a t t e r ?

The District Court erred in applying the Noerr-Pennington 
exception in Plaintiffs anti-trust action. It is the Plaintiffs 
contention that the public officials’ status of co-conspirators,



28

and Defendants’ sham law-suits as applied from the facts of 
this case, take the Defendants’ actions out from under Noerr’s 
protection. The District Court below acknowledges the public 
official co-conspirator exception issue:

“Alternatively, the plaintiff invokes the “conspiracy” ex­
ception of Noerr-Pennington which applies where 
government officials participate with private individuals 
in a scheme to restrain trade.” E. G. Duke v. Foerster, 
521 F.2d 1277 (3rd Cir., 1975).

In support of this contention, the Plaintiff relies upon the fact 
that two of the three members of the Board of Trade were 
present at the meeting when Mr. Manego’s proposal was dis­
cussed, and that other businesses were subsequently licensed in 
the same area. (R. 552).

But contrary to the evidence and the case law, the Court 
below refused to apply the exception and granted Summary 
Judgment to the Defendant Orleans Board of Trade due to the 
“lack” of a genuine issue for trial. (R. 552). The Court con­
ceded that Summary Judgment is inappropriate in cases in­
volving conspiracy claims because the existence or non­
existence of a conspiracy is essentially a factual issue to be 
decided by the jury. Adickes v. S.H. Kress, supra at 176. As 
the Plaintiff stated in the District Court, conspiracy is very dif­
ficult to prove. Those who could provide the best evidence are 
those who generally will not “talk” because of their own in­
volvement. Ferguson v. Omnimedia, Inc. 469 F.2d 194 (1st 
C ir., 1972). In a small town of interlocking business and social 
relationships, the above difficulty is aggravated.

The court also acknowledges Plaintiff s argument that Sum­
mary Judgment may be inappropriate in antitrust cases where 
“motive and intent” play leading roles. Poller v. Columbia 
Broadcasting System 368 U.S. 464, 82 S.Ct. 486 (1962).



29

The court in Poller went on to say:

1. “ . . . the proof is largely in the hands of the alleged 
conspirators, and hostile witnesses thicken the plot. It is 
only when the witnesses are present and subject to cross 
examination that their credibility lend the weight to be 
given their testimony. Trial by affidavit is no substitute 
for trial by jury which so long has been the hallmark of 
‘even-handed justice.’ ”

The court, however, cited exception to the general rule, 
stating that:

“Where a moving party in an anti-trust conspiracy case 
has shown that the facts relied upon in the opposing 
party’s allegations are not susceptible to the interpre­
tation which he sought to give them, Rule 3b (e) puts the 
burden on the opposing party to produce evidence in sup­
port of his allegation.”

The Court below went on to say that, without express 
evidence of a conspiracy involving the Orleans Selectmen, the 
Plaintiff would be precluded from advancing the inference of 
conspiracy based on their presence at the Board of Trade 
Meeting, as a result of the ruling in Federal Prescription 
Service v. American Pharmaceutical Ass’n 663 F.2d 255 (D.C. 
Cir., 1981) cert, denied, 455 U.S. 928 (1982) 102 S.Ct. 1293, 
that “mere membership” is not sufficient to prove conspiracy; 
nor would Plaintiff be allowed to buttress his conspiracy 
allegation by citing the fact of a subsequent grant of an enter­
tainment license to the Sports Center, which was explained 
away by the Selectmen as an exercise of “legitimate licensing 
authority.” The facts of the case and controlling law could not 
disagree more. More than “mere membership” was involved 
here.



30

The District Court erred in applying Federal Prescription to 
this case as controlling precedent. The District Court and the 
Defendant’s reliance on this case, which is distinguishable on 
the facts, created a miscarriage of justice by way of the fallacy 
of argument by false analog}'.

The pertinent facts in Federal Prescription were as follows: 
The regulatory officials were members of state pharmacy 
boards, and also members of a national pharmacists associa­
tion which was engaged in a program of lobbying before the 
state boards to oppose licensing of mail-order pharmacies. The 
court held that evidence of overlapping membership is not 
probative of conspiracy. The court went on to hold that “mere 
membership” (names on a roster) in associations, are not 
enough to establish participation in a conspiracy with other 
members of those associations and yet another association. The 
fact that the case concerned mere membership and nothing 
more can be deduced by noting that the plaintiff mail-order 
pharmacies were forced to advance the tenuous argument of 
“membership notification,” claiming that the national associa­
tion was responsible for the actions to the state boards. The 
court noted, relying on the membership notification case, 
Phelps-Dodge Refining Corp. v. FTC, 139 F.2d 393 (2d Cir., 
1943) that liability is imposed upon members of an association 
who knowingly acquiesce in unlawful conduct. The court then 
declined to apply the membership notification theory, holding 
the National Association liable for the conduct of the 
individual state branch. The court stated that:

“absent evidence that the state branch was apparently 
authorized by the national association, there could be no 
finding of conspiracy. . ”

The court could find no evidence of this apparent authority to 
be gleaned from mere membership but stated that it would be 
a different matter if, among other possibilities, the national



31

association officers met in an unlawful fashion  with state 
board members. Id. at 264-265. The court did not expand on 
what would be the indicia of a “meeting in unlawful fashion.” 
It requires no quantum leap in logic, however, to assume that 
a meeting with the regulatory officials/members with the 
express purpose of restraining trade would be an unlawful 
meeting and a clear violation of Section 1 of the Sherman Anti- 
Trust Act.

In the present action we have neither a mere “membership 
problem,” nor a case of overlapping membership. We do not 
have a situation wherein “membership notification” is even 
remotely applicable, except as it may impact upon those 
members of the Board of Trade who were not present at the 
conspiratorial meeting with the Bank in the person of its 
agent, Defendant Branch Manager/Board of Trade, President 
Willard and Board of Trade members, including two Orleans 
Selectmen.

This is not a “mere membership” case. The “membership” 
was coupled with knowledge, notification, presence and par­
ticipation of the members of the Board of Selectmen who were 
at the meeting. Contrary to the Court’s statement that “they 
may have attended,” (R. 548), or Mr. Willard’s statement that 
he did not “recall” if they attended, the record is clear. 
According to the Board of Trade’s own minutes of its meeting, 
the Selectmen Norgeot and Nickerson were there. (R. 461). 
They were there even though they had yet to hold their own 
official public hearing on the matter. They were there when a 
vote was taken after Mr. Willard introduced the subject of Mr. 
Manego’s disco. They were there when the subject was dis­
cussed in a “wide ranging and thorough manner.” (R. 237). 
They were there when the decision to “unanimously” oppose 
the Plaintiff’s disco was taken.

There is also nothing in the record to justify granting the 
Selectmen the benefit of a doubt as to whether they actually 
participated in the vote. There were no abstentions of record



32

during the voting. One of the Selectmen returned one month 
later to report to his fellow members on the Board of Trade the 
status of the Manego case and informed them of the next 
public hearing to be held the following evening. (R-464,465) 

The District Court erred when it stated there was no 
remaining genuine issue of fact to infer conspiracy primarily as 
a result of its unwillingness to give probative weight to the 
Selectmen’s membership in the Board of Trade and their 
presence at the Board of Trade meeting. As argued above, 
Federal Prescription does not apply. If Federal Prescription 
does not apply then self-serving statements by Defendants 
merely represent their preferred alternative interpretation of a 
set of circumstances which Plaintiff alleges actually added up 
to a probative inference of conspiracy, unprotected by the 
Noerr-Pennington Doctrine.

CONCLUSION

For all of the reasons stated hereinabove, Plaintiff respect 
fully submits that the judgment of the court below granting 
summary judgment to the Defendants, should be reversed.

C h a r l e s  R a y  W eid m a n  
938 Main Street 
Chatham, MA 02633 
(617) 945-2782 
Attorney fo r  Plaintiff