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KAEHLY v. CITY OF PITTSBURGH

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA


March 3, 1997

CHARLES KAEHLY, STEVEN KAEHLY, MICHAEL VETTER, ROBERT RICE, MICHAEL ROSSMAN, PAUL SWEENY, WILLIAM MARSH, and KAREN PAULETT, Plaintiffs,
v.
CITY OF PITTSBURGH and STADIUM AUTHORITY OF PITTSBURGH, Defendants.

The opinion of the court was delivered by: BLOCH

MEMORANDUM OPINION

 BLOCH, District J.

 Presently before the Court is defendants' joint motion to dismiss or, in the alternative, to stay. For the reasons set forth in this opinion, the Court will grant defendants' motion in part and deny it in part.

 I. Background

 Each of the plaintiffs were issued a vending license which expired on or about January 31, 1996, by defendant City of Pittsburgh (City) pursuant to City of Pittsburgh Ordinance No. 719. In December, 1995, defendant City amended Ordinance No. 719 effective December 15, 1995, to, inter alia, prohibit vending on or within thirty feet of Three Rivers Stadium property. Prior to its amendment, Ordinance No. 719 permitted vending on or around Three Rivers Stadium property subject to a 250-foot restriction from the outside wall of the Stadium.

 Three Rivers Stadium property is owned and controlled by the defendant Stadium Authority of the City of Pittsburgh (Stadium Authority). Daniel Onorato is both a Pittsburgh City Council member and a member of the defendant Stadium Authority. Onorato was the sponsor of Bill No. 2601 which amended Ordinance No. 719.

 The Stadium Authority is party to an exclusive Concession Services Agreement (CSA) with Pittsburgh Stadium Concessions, Inc. The CSA, which currently extends until December 31, 1998, grants Pittsburgh Stadium Concessions, Inc., the exclusive right and privilege to sell food, beverages and related services to the public at locations on Stadium Authority property.

 Plaintiffs contend that the effect of amending Ordinance No. 719 was a revocation of their vending licenses because the vast majority of plaintiffs' vending revenue was generated while vending on Three Rivers Stadium property. Accordingly, plaintiffs filed the within action alleging: (1) deprivation of plaintiffs' substantive due process rights (Count I); (2) deprivation of plaintiffs' procedural due process rights (Count II); (3) deprivation of plaintiffs' right to equal protection (Count III); (4) violation of federal antitrust laws (Count IV); (5) violation of 42 U.S.C. § 1983 (Count V); (6) violation of Article 1, Section 1 of the Pennsylvania Constitution (Count VI); (7) violation of Article 2, Section 1 of the Pennsylvania Constitution (Count VII); and (8) violation of Article 1, Section 26 of the Pennsylvania Constitution (Count VIII).

 II. Motion to dismiss standard

 A motion to dismiss for failure to state a claim, filed pursuant to Fed. R. Civ. P. 12(b)(6), serves to test the sufficiency of a complaint. See Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993). Because dismissal under Rule 12(b)(6) results in a determination on the merits at any stage in the plaintiffs' case, the plaintiffs are afforded the safeguard of having all of their allegations taken as true and all reasonable factual inferences drawn in their favor. Markowitz v. Northeast Land Co., 906 F.2d 100, 103 (3d Cir. 1990); Wisniewski v. Johns-Manville Corp., 759 F.2d 271, 273 (3d Cir. 1985). When considering defendants' motion to dismiss, the question before this Court is not whether the plaintiffs will ultimately prevail; rather, it is whether the plaintiffs can prove any set of facts in support of their claim that would entitle them to relief. Hishon v. King and Spalding, 467 U.S. 69, 73, 81 L. Ed. 2d 59, 104 S. Ct. 2229 (1984). It is axiomatic that a complaint should not be dismissed for failure to state a claim, unless it appears beyond doubt that the plaintiffs can prove no set of facts in support of their claim which would entitle them to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957). See also Cruz v. Beto, 405 U.S. 319, 320, 31 L. Ed. 2d 263, 92 S. Ct. 1079 (1972) (citing same).

 III. Discussion

 Defendants argue that this Court must dismiss Counts I through VIII of plaintiffs' complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure because plaintiffs have failed to state a claim upon which relief may be granted. *fn1" Defendants also ask this Court to certify plaintiffs' state constitutional claims to the Commonwealth Court of Pennsylvania which has jurisdiction of a substantially similar parallel state action. Finally, defendants argue that this Court should "abstain from accepting jurisdiction of this Civil Action either by dismissing the plaintiffs' complaint, without prejudice, or, in the alternative, stay this Civil Action pending final disposition of the parallel state action." (Defendants' motion at P5). The Court will now consider the defendants' contentions.

 A. Plaintiffs' substantive and procedural due process claims

 In Count I of their complaint, plaintiffs contend that the City deprived them of a property interest in violation of both the federal and state Constitutions by effectively revoking their business licenses. In addition, Count II contends that the plaintiffs' procedural due process rights were violated as a result of the process whereby Ordinance No. 719 was amended. Defendants contend that the complaint fails to set forth a protected property interest and that, therefore, Counts I and II must be dismissed.

 To state a valid claim for deprivation of substantive due process or deprivation of procedural due process, a plaintiff must set forth a protected property interest. See, e.g., Independent Enterprises, Inc. v. Pittsburgh Water and Sewer Authority, 103 F.3d 1165, 1997 WL 6335 at *10-13 (1997). While conceding that a vending license is a protected property interest, defendants, relying upon Lindsay v. City of Philadelphia, 863 F. Supp. 220, 223 (E.D. Pa. 1994), contend that there is no constitutionally protected property interest to vend in a particular location. (Defendants' brief at p. 3). The Court agrees. However, in Lindsay, the plaintiffs did not argue that their licenses had been revoked, only that they were removed from their customary vending locations. See Lindsay, 863 F. Supp. at 223. Plaintiffs in the instant case are not seeking access to an exclusive or customary location on Stadium Authority property. Rather, plaintiffs contend that by amending Ordinance No. 719, defendants effectively revoked plaintiffs' licenses by prohibiting them from vending anywhere on Stadium Authority property, where plaintiffs allegedly earn the majority of their income.

 Accordingly, utilizing the lenient standard set forth above, the Court finds that dismissal of Counts I and II of the complaint at this early stage of the proceedings would be inappropriate. Specifically, the Court cannot find that the plaintiffs would be unable to prove any set of facts in support of their claims that would entitle them to relief. For this reason, defendants' motion to dismiss Counts I and II will be denied.

 B. Plaintiffs' equal protection claim

 Defendants also move to dismiss Count III of the complaint, which sets forth alleged violations of plaintiffs' right to equal protection under federal law. Again, however, utilizing the lenient motion to dismiss standard, the Court cannot find at this stage of the litigation that plaintiffs will be unable to prove any set of facts in support of their equal protection claim that would entitle them to relief. Accordingly, defendants' motion to dismiss Count III of the complaint will be denied.

 C. Defendants' immunity from antitrust liability

 In a single sentence, defendants argue that plaintiffs' antitrust claims must be dismissed because defendants are immune from liability. (See defendants' brief at p. 7 ("Moreover, state governments, or local agencies implementing state policy, are exempt from antitrust liability.")). The Court, however, disagrees.

 It is well established that municipalities are shielded from antitrust liability for allegedly anti-competitive acts "authorized by the State 'pursuant to State policy to displace competition with regulation or monopoly public service.'" Town of Hallie v. City of Eau Claire, 471 U.S. 34, 38-39, 85 L. Ed. 2d 24, 105 S. Ct. 1713 (1985) (quoting City of Lafayette v. Louisiana Power & Light Co., 435 U.S. 389, 413, 55 L. Ed. 2d 364, 98 S. Ct. 1123 (1978)). See also Communications Co. v. City of Boulder, 455 U.S. 40, 51-52, 70 L. Ed. 2d 810, 102 S. Ct. 835 (1982). However, because questions remain as to what state policy, if any, the amendment of Ordinance No. 719 is alleged to have implemented, the Court finds that dismissal of plaintiffs' antitrust claims on the grounds of defendants' immunity is not appropriate at this time.

 D. Plaintiffs' claims of antitrust violations

 Although plaintiffs' complaint asserts violations of "Sections 1 through 7 of the Sherman-Antitrust Act," (see complaint at P41), with the exception of Sections 1 and 2 of the Sherman Act, plaintiffs' complaint cannot sustain defendants' motion to dismiss. First, Sections 4 through 7 of the Sherman Act cannot provide the basis for a cause of action. Section 4, 15 U.S.C. § 4, is a jurisdictional statute. *fn2" Section 5, 15 U.S.C. § 5, permits the Court to bring additional parties before the Court. *fn3" Section 6, 15 U.S.C. § 6, mandates forfeiture of certain property to the United States. *fn4" Finally, under Section 7 of the Sherman Act, 15 U.S.C. § 6a, subject to certain exceptions, the Sherman Act does not apply to conduct involving trade or commerce with foreign nations. *fn5"

 Accordingly, the Court concludes that plaintiffs have attempted to set forth claims under Sections 1 through 3 of the Sherman Act only. With regard to plaintiffs' claim under Section 3, the Court concludes that plaintiffs have not sufficiently set forth allegations to entitle them to relief. Title 15 U.S.C. § 3 prohibits:

 

every contract, combination in form of trust or otherwise, or conspiracy, in restraint of trade or commerce in any Territory of the United States or of the District of Columbia, or in restraint of trade or commerce between any such Territory and another, or between any such Territory or Territories and any State or States or the District of Columbia, or with foreign nations, or between the District of Columbia and any State or States or foreign nations....

 15 U.S.C. § 3. Plaintiffs make no allegations that they or defendants do business in any territory of the United States or the District of Columbia. In fact, from the pleadings and facts stipulated in this case, it appears that no trade or commerce of any territory of the United States or the District of Columbia is affected. Accordingly, dismissal of Count V of plaintiff's complaint will be granted to the extent that it attempts to assert a cause of action under Section 3 of the Sherman Act. See Campbell Distributing Co. v. Jos. Schlitz Brewing Co., 208 F. Supp. 523, 526-27 (D.C. Md. 1962) (plaintiff's reliance upon 15 U.S.C. § 3 was not supported absent allegation that plaintiff does business in any territory of the United States or the District of Columbia).

 With regard to plaintiffs' alleged causes of action under Sections 1 and 2 of the Sherman Act, the Court will now consider defendants' contention that such claims must be dismissed because plaintiffs have not defined the relevant product and market.

 It is plaintiffs' burden to define relevant market, See, e.g., Tunis Bros. Co., Inc. v. Ford Motor Co., 952 F.2d 715, 724, 726 (3d Cir. 1991), cert. denied, 505 U.S. 1221, 120 L. Ed. 2d 903, 112 S. Ct. 3034 (1992), and "the complaint should allege viable relevant markets." Brader v. Allegheny General Hospital, 64 F.3d 869, 877 (3d Cir. 1995). However, the Court disagrees with defendants' contention that plaintiffs' complaint is defective for failing to define the relevant market pertaining to the allegedly anti-competitive Ordinance. Specifically, the Court finds that plaintiffs' complaint makes a colorable claim that the relevant market involves vending goods at major league sport stadiums in the Pittsburgh, Pennsylvania area.

 Moreover, defendants' argument regarding application of the "rule of reason" test is premature. See Swarthmore Radiation Oncology, Inc. v. Lapes, 812 F. Supp. 517, 520 (E.D. Pa. 1992) (district court need not decide at motion to dismiss stage whether a per se rule or a rule of reason analysis applies) (relying on Fuentes v. South Hills Cardiology, 946 F.2d 196 (3d Cir. 1991)). Accordingly, the Court will deny defendants' motion to dismiss plaintiffs' Sherman Act claims for failure to define the relevant market.

 E. Plaintiffs' claims under § 1983

 In Count V of the complaint, plaintiffs set forth a cause of action under 42 U.S.C. § 1983. Section 1983 provides for the imposition of liability on any person who, acting under color of state law, deprives another of rights, privileges, or immunities secured by the Constitution or the laws of the United States. See 42 U.S.C. § 1983. Specifically, plaintiffs state:

 

Ordinance No. 719 and its Amendment are unconstitutional on their face and in their application to the plaintiffs. As such, it deprives the plaintiffs of rights and privileges secured by the United States Constitution and laws.

 (Complaint at P48).

 It is well established that § 1983 "is not a source of substantive rights, but merely provides a method for vindicating federal rights elsewhere conferred." Graham v. Connor, 490 U.S. 386, 393-94, 104 L. Ed. 2d 443, 109 S. Ct. 1865 (1989) (citing Baker v. McCollan, 443 U.S. 137, 144 n. 3, 61 L. Ed. 2d 433, 99 S. Ct. 2689 (1979) (internal citation marks omitted)). Accordingly, the Court reads Count V in conjunction with Counts I, II, and III of the complaint, which allege violations of plaintiffs' procedural and due process rights as well as their right to equal protection.

 To state a claim under § 1983, a plaintiff must show both that: (1) offending conduct was committed by a person acting under color of state law; and (2) that such conduct deprived plaintiff of rights, privileges, or immunities secured by the Constitution or laws of the United States. See Parratt v. Taylor, 451 U.S. 527, 535, 68 L. Ed. 2d 420, 101 S. Ct. 1908 (1981), overruled in part on other grounds, Daniels v. Williams, 474 U.S. 327, 88 L. Ed. 2d 662, 106 S. Ct. 662 (1986). Taking all of plaintiffs' allegations in the complaint as true, and drawing all reasonable factual inferences in their favor, the Court cannot find that the plaintiffs would be unable to prove any set of facts in support of their § 1983 claims that would entitle them to relief. Accordingly, defendants' motion to dismiss plaintiffs' claims under 42 U.S.C. § 1983 will be denied.

 F. Plaintiffs' causes of action arising under the Pennsylvania Constitution

 Defendants argue that Counts VI through VIII of the complaint must fail because "Plaintiffs have [not] been deprived of an identifiable and constitutionally protected property interest" and because "the amended Ordinance is not unduly oppressive or arbitrary and is legitimately related to promoting the health, safety, morals and general welfare of the public." (Defendants' brief at p. 8). In essence, defendants argue that plaintiffs' claims based upon alleged violations of the Pennsylvania Constitution must fail for the same reasons defendants contend that plaintiffs' federal constitutional claims are deficient. However, the Court rejects defendants' arguments with regard to Counts VI through VIII for the same reasons set forth in Sections IIIA and B, supra. Defendants request that this Court certify plaintiffs' state claims to the Commonwealth Court of Pennsylvania will likewise be denied.

 G. Abstention

 Defendants also ask this Court to defer exercising jurisdiction over this case under the doctrine set forth in Colorado River Water Conservation District v. United States, 424 U.S. 800, 47 L. Ed. 2d 483, 96 S. Ct. 1236 (1976). In Colorado River, the Supreme Court explained its rationale for allowing abstention in certain "exceptional circumstances":

 

there are principles unrelated to considerations of proper constitutional adjudication and regard for federal-state relations which govern in situations involving the contemporaneous exercise of concurrent jurisdictions, either by federal courts or by state and federal courts. These principles rest on consideration of "wise judicial administration, giving regard to conservation of judicial resources and comprehensive disposition of litigation."

 Colorado River, 424 U.S. at 817 (citations omitted).

 Under the Colorado River doctrine, the Court must first ascertain whether the state and federal cases are "parallel" so as to allow for the potential application of this abstention doctrine. Trent v. Dial Medical of Florida, Inc., 33 F.3d 217, 223 (3d Cir. 1994). If the cases are parallel, then the Court must consider various factors in deciding whether to exercise its jurisdiction and abstain from further proceedings. See id. at 225.

 "Generally, cases are parallel so as to justify abstention under Colorado River when they involve the same parties and claims." Id. at 223. "Cases that are not truly duplicative do not invite Colorado River deference." Id. In the instant case, the Court concludes that the federal and state law suits are not parallel proceedings. First, there is an additional plaintiff in the current action. While Trent held that additional defendants in the state law action did not destroy the parallel nature of a federal and state law suit, see Trent, 33 F.3d at 224 n. 6, abstention by this Court in the instant case would deprive the additional plaintiff of an opportunity to have his claims litigated against the defendants. Moreover, while both cases involve some identical issues, the federal case raises both antitrust claims and a cause of action under 42 U.S.C. § 1983 which were not raised in the state action. Indeed, plaintiffs' antitrust claim could not have been raised in state court because federal district courts have exclusive jurisdiction over such claims. See 15 U.S.C. §§ 15, 26. Accordingly, while overlapping to some extent, the pertinent state and federal lawsuits are not truly duplicative, and, accordingly, this is not an appropriate instance for this Court to abstain. *fn6"

 An appropriate Order will be issued.

 Date: 3/3/97

 Alan N Bloch

 United States District Judge

 ORDER

 AND NOW, this 3rd day of March, 1997, upon consideration of Defendants' Joint Motion to Dismiss or, in the Alternative, to Stay (document No. 5) filed in the above captioned matter on June 4, 1996, and upon further consideration of Plaintiffs' Response thereto, and for the reasons set forth in this Court's Memorandum Opinion filed herewith,

 IT IS HEREBY ORDERED that said Motion is GRANTED in part and DENIED in part, to wit:

 

1. Said Motion is GRANTED to the extent it seeks dismissal of plaintiffs' claims under Section 3 of the Sherman Act set forth in Count V of the complaint; and

 

2. Said Motion is DENIED in all other respects.

 Alan N. Bloch

 United States District Judge


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