Baltimore Scrap Corp. v. David J. Joseph Co. , 237 F.3d 394 ( 2001 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
BALTIMORE SCRAP CORPORATION, 
formerly known as Brooklyn
Salvage Corporation,
Plaintiff-Appellant,
v.
THE DAVID J. JOSEPH COMPANY, t/a
United Iron & Metal Company;
DAVID J. WORKUM, III; JOHN DOES
1-10; I. D. SHAPIRO; JAMES SHAPIRO;
CHARLES BAUM; UNITED HOLDINGS
COMPANY, INCORPORATED; UNITED
OPERATING COMPANY, INCORPORATED;
 No. 00-1141
UNITED INVESTMENT ENTERPRISES
PARTNERSHIP,
Defendants-Appellees.
FRANCIS X. DUGGAN; RICH &
HENDERSON, PC; DONALD LEVENSON;
MARLEN TRADING COMPANY; ISAAC
M. NEUBERGER; THOMAS M. WOOD,
IV; WARREN K. RICH; TIMOTHY R.
HENDERSON; DAVID B. IRWIN,
Movants.

Appeal from the United States District Court
for the District of Maryland, at Baltimore.
Benson E. Legg, District Judge.
(CA-96-827-L)
Argued: November 1, 2000
Decided: January 18, 2001
2 BALTIMORE SCRAP v. THE DAVID J. JOSEPH CO.
Before WILKINSON, Chief Judge, WILLIAMS, Circuit Judge,
and Frank J. MAGILL, Senior Circuit Judge of the
United States Court of Appeals for the Eighth Circuit,
sitting by designation.
Affirmed by published opinion. Chief Judge Wilkinson wrote the
opinion, in which Judge Williams and Senior Judge Magill joined.
COUNSEL
ARGUED: Lewis A. Noonberg, PIPER, MARBURY, RUDNICK &
WOLFE, L.L.P., Baltimore, Maryland, for Appellant. G. Jack Don-
son, TAFT, STETTINIUS & HOLLISTER, L.L.P., Cincinnati, Ohio;
Carter G. Phillips, SIDLEY & AUSTIN, Washington, D.C., for
Appellees. ON BRIEF: Kathleen A. Ellis, PIPER, MARBURY,
RUDNICK & WOLFE, L.L.P., Baltimore, Maryland; Charles S.
Hirsch, Robert A. Scott, BALLARD, SPAHR, ANDREWS &
INGERSOLL, L.L.P., Baltimore, Maryland, for Appellant. Daniel R.
Warncke, TAFT, STETTINIUS & HOLLISTER, L.L.P., Cincinnati,
Ohio; Robert J. Carson, Gary R. Jones, Baltimore, Maryland, for
Appellees; Thomas M. Wood, IV, Allan P. Hillman, NEUBERGER,
QUINN, GIELEN, RUBIN & GIBBER, P.A., Baltimore, Maryland,
for Appellees.
OPINION
WILKINSON, Chief Judge:
This antitrust case stems from a protracted dispute over Baltimore
Scrap Corp.’s attempt to install a scrap metal shredder in Baltimore,
Maryland in 1991. Baltimore Scrap alleges that the defendants vio-
lated the Sherman Act, 15 U.S.C. § 1 (1994), by surreptitiously
financing litigation in state court in order to prevent or delay Balti-
more Scrap’s entry into the market. The defendants argue that the
Noerr-Pennington doctrine immunizes those who petition the courts
BALTIMORE SCRAP v. THE DAVID J. JOSEPH CO. 3
from antitrust liability. The district court ruled that although the
defendants’ conduct was wrong, it was nonetheless protected by
Noerr-Pennington. See Baltimore Scrap Corp. v. The David J. Joseph
Co., 81 F. Supp.2d 602, 603 (D. Md. 2000). Because neither the sham
exception nor the fraud exception to Noerr-Pennington immunity
applies here, we affirm the judgment of the district court.
I.
On July 15, 1991, Baltimore Scrap leased land in the city of Balti-
more in order to install a metal shredder there. Baltimore Scrap’s pro-
posed shredder caused great concern among two groups. The first was
comprised of citizen associations of Baltimore who opposed the
shredder on environmental grounds. These organizations voiced their
opposition to the Maryland Department of Environment and to the
Mayor of Baltimore in August of 1991.
The defendants, including The David J. Joseph Co. (DJJ), I.D. Sha-
piro, and the Shapiro family, composed the second group. The defen-
dants controlled the only other metal shredder in the Baltimore area.
DJJ and Shapiro wanted to ensure that their shredder maintained its
monopoly in that area. Unlike the citizen groups, however, DJJ and
Shapiro did not publicly voice their concerns about Baltimore Scrap’s
proposed shredder. Indeed, until their role was inadvertently revealed
in late March of 1993, the defendants’ plan to prevent Baltimore
Scrap from building a shredder was a closely-guarded secret.
In September of 1991, Baltimore Scrap applied for a zoning permit
from the Baltimore City Board of Municipal and Zoning Appeals. In
November, the leaders of the citizen groups testified against the per-
mit. One week later, the Board denied Baltimore Scrap’s application.
Baltimore Scrap appealed this decision to the Baltimore City Circuit
Court, which upheld the Board.
In May of 1992, Baltimore Scrap filed a new zoning application
with the Board. Because the Baltimore zoning code does not allow the
Board to consider "substantially the same proposal" until twelve
months after the previous application was denied, Baltimore Scrap
changed its application to add new protections against soil contamina-
tion at the site. The Board ruled that the application was different
4 BALTIMORE SCRAP v. THE DAVID J. JOSEPH CO.
enough to warrant a new hearing even though twelve months had not
elapsed since the previous denial of a permit. The Board then
approved a permit for Baltimore Scrap on August 6, 1992.
At this point, Shapiro decided to secretly fight the approval of the
permit. Shapiro’s attorney contacted another lawyer, David Irwin, to
handle the appeal. An employee from a different company co-owned
by Shapiro contacted Gloria Sipes. Sipes was the president of one of
the citizen groups, the Community of Curtis Bay Association. The
employee told Sipes that local businesses would pay for an attorney
if the citizen groups wanted to appeal the Board’s decision. The
employee told Sipes to contact David Irwin for the appeal. The caller
did not reveal her identity, or who she represented. Sipes consulted
with the other citizen groups, and they decided to accept the support
of their unknown benefactor. The citizen organizations did not ask
who was funding the appeal and "did not care" who paid the lawyer.
Irwin filed his appeal on behalf of the citizen groups on August 27,
1992. Irwin understood that DJJ and Shapiro controlled the appeal.
Baltimore Scrap moved to dismiss the appeal based upon the citizen
groups’ lack of standing. After the statutory appeal period expired,
Sipes moved to intervene in the lawsuit as an individual party. Judge
Ward of the Baltimore City Circuit Court ruled that the citizen groups
and Sipes all had standing, and granted Sipes’ motion to intervene. He
thus denied Baltimore Scrap’s motion to dismiss.
Chief Judge Hammerman, also of the Baltimore City Circuit Court,
heard the citizen groups’ appeal on the merits on January 7, 1993. He
agreed with Judge Ward that Sipes’ motion to intervene was timely.
After originally ruling for the citizen groups on the merits, Chief
Judge Hammerman eventually affirmed the Board’s decision to grant
Baltimore Scrap a permit once the Board clarified a technical point.
The citizen groups filed a motion with Chief Judge Hammerman to
stay his decision pending appeal.
Throughout this time, DJJ and Shapiro left no public trace of their
involvement in the lawsuit. In late March, however, a so-called "er-
rant fax" exposed the role of the defendants. This fax was supposed
to go to a lawyer working for DJJ and Shapiro, but instead was sent
to a friend of Baltimore Scrap’s president. On April 3, Irwin met with
BALTIMORE SCRAP v. THE DAVID J. JOSEPH CO. 5
representatives from the citizen groups involved in the lawsuit. He
told them that DJJ and Shapiro were funding the litigation. He asked
them whether they wanted to continue with the appeal. The citizen
groups decided to keep pursuing the appeal, despite the knowledge of
DJJ and Shapiro’s involvement.
Baltimore Scrap argued in its opposition to the motion to stay that
the lawsuit was a fraud because DJJ and Shapiro were the real parties
in interest. Irwin responded in his pleadings that the notion that the
defendants directed the conduct of this case or drafted the previous
motion was "preposterous, inflammatory, and not based in reality."
Irwin emphasized in open court during an April 23 hearing on the
motion to stay that the citizen groups were the only parties he repre-
sented. When Chief Judge Hammerman questioned Irwin about the
errant fax, Irwin told the judge that nothing in the errant fax "says my
law firm is involved with" DJJ and Shapiro. Irwin stated to the court,
"I continue to deny, as my papers do, that I am representing anyone
but the people represented here." Chief Judge Hammerman denied
Irwin’s motion to stay because he thought that the citizen groups did
not have a likelihood of success on appeal. In reaching this decision,
Chief Judge Hammerman observed that he saw the hand of the defen-
dants in the lawsuit, and that "they have gone from the role of an
interested observer to the role of an active participant."
Despite the denial of the motion to stay, the citizen groups
appealed to the Maryland Court of Special Appeals. In a twelve-page
opinion, the Court of Special Appeals denied the appeal. See Sipes v.
Board of Municipal and Zoning Appeals, 635 A.2d 86 (Md. Ct. Spec.
App. 1994). It called the case "dead on arrival in the circuit court"
because the citizen groups did not have standing since they were nei-
ther an aggrieved party nor a taxpayer. Id. at 97; accord id. at 89.
Although Sipes as an individual did have standing, her motion to
intervene was time-barred as a logical extension of the citizen groups’
lack of standing. Id. at 94. The citizen groups did not pursue an appeal
from this decision. Baltimore Scrap’s shredder became fully opera-
tional in July, 1993.
Baltimore Scrap sued DJJ, the Shapiro family, and the Shapiro
family’s companies. The complaint alleged violations of the Sherman
Act, 15 U.S.C. § 1, violations of Maryland antitrust law, Md. Code
6 BALTIMORE SCRAP v. THE DAVID J. JOSEPH CO.
Ann. Com. Law. II §§ 11-204 et seq., and various state common law
tort claims including malicious use of process, abuse of process, and
fraud. The district court found that the defendants’ actions were "de-
ceitful," "underhanded," and "morally wrong." Baltimore Scrap
Corp., 81 F. Supp.2d at 603. Nevertheless, the district court dismissed
Baltimore Scrap’s claims because of the defendants’ Noerr-
Pennington immunity. See id. Baltimore Scrap now appeals.
II.
The Noerr-Pennington doctrine guarantees citizens their First
Amendment right to petition the government for redress without fear
of antitrust liability. See Eastern R.R. Presidents Conference v. Noerr
Motor Freight, Inc., 365 U.S. 127, 136-39 (1961); United Mine Work-
ers of Am. v. Pennington, 381 U.S. 657, 669 (1965). In Noerr, the
Supreme Court held that "the Sherman Act does not prohibit two or
more persons from associating together in an attempt to persuade the
legislature or the executive to take particular action with respect to a
law that would produce a restraint or a monopoly." Noerr, 365 U.S.
at 136. Indeed, the Court emphasized that "[t]he right of petition is
one of the freedoms protected by the Bill of Rights, and we cannot,
of course, lightly impute to Congress an intent to invade these free-
doms." Id. at 138.
Antitrust law was thus not intended to impose a barrier between the
people and their government. Because it is "neither unusual or illegal
for people to seek action on laws in the hope that they may bring
about an advantage to themselves and a disadvantage to their compet-
itors," the Supreme Court has made clear that the Sherman Act gener-
ally does not prohibit the petitioning of public bodies for relief. Id. at
139. Indeed, an "anticompetitive purpose [does] not illegalize" con-
certed attempts to influence public officials "even though the resulting
official action damaged other competitors at whom the conduct was
aimed." Pennington, 381 U.S. at 669.
Noerr-Pennington immunity from antitrust laws extends to peti-
tioning the courts as well. See California Motor Transport Co. v.
Trucking Unlimited, 404 U.S. 508, 510-11 (1972). Federal antitrust
law is thus generally not an appropriate means of collaterally attack-
ing state judicial judgments because of Noerr-Pennington’s holding
BALTIMORE SCRAP v. THE DAVID J. JOSEPH CO. 7
that the rights of petition and association trump any anticompetitive
effects that might occur from asking the government for redress. Any
other rule would allow the specter of satellite litigation to restrict the
primary right of citizens to seek justice from the judicial system.
III.
Noerr-Pennington immunity from lawsuits has two main excep-
tions, however — "sham litigation" and, arguably, fraudulent litiga-
tion. See Professional Real Estate Investors, Inc. v. Columbia
Pictures Indus., 508 U.S. 49, 60, 61-62 n.6 (1993) (PRE); accord
Noerr, 365 U.S. at 144. Baltimore Scrap argues that both exceptions
operate to strip the defendants of any Noerr-Pennington immunity.
A.
We address the sham exception to Noerr-Pennington immunity
first. Sham litigation must meet a two-part test. See PRE, 508 U.S. at
60-61. First, the lawsuit must be objectively baseless. A lawsuit is
objectively baseless only if "no reasonable litigant could realistically
expect success on the merits." PRE, 508 U.S. at 60. If an objective
party can "conclude that the suit is reasonably calculated to elicit a
favorable outcome, the suit is immunized under Noerr, and an anti-
trust claim premised on the sham exception must fail." Id. By defini-
tion, a winning lawsuit is a "reasonable effort at petitioning for
redress and therefore not a sham." Id. at 60 n.5. Second, in the event
the challenged litigation is found to be objectively baseless, the law-
suit must further conceal an attempt to interfere directly with the busi-
ness relationships of a competitor. Id. at 60-61. Because the litigation
at issue in this case was not objectively baseless, our analysis stops
after the first prong of the test.
Lawsuits are not objectively baseless simply because a litigant lost.
In PRE, the Supreme Court held that Columbia Pictures had a reason-
able basis for believing it might win a copyright infringement case
despite the fact that the Ninth Circuit dismissed the lawsuit as a mat-
ter of law. See PRE, 508 U.S. at 63-65. The Court pointed to the fact
that two other circuits expressly declined to follow the Ninth Circuit’s
holding as well as the criticism that the Ninth Circuit’s opinion
engendered among commentators. See id. Even in the absence of this
8 BALTIMORE SCRAP v. THE DAVID J. JOSEPH CO.
contrary authority, the Court held that Columbia Pictures would have
been entitled to press a novel claim if a similarly situated litigant
could have perceived some likelihood of success. See id. at 65.
Baltimore Scrap argues that the litigation was a sham because the
defendants knew that the citizen groups did not have standing and
Sipes did not timely move to intervene. Baltimore Scrap cites In re
Burlington Northern, Inc., 822 F.2d 518 (5th Cir. 1987), and Land-
marks Holding Co. v. Bermant, 664 F.2d 891 (2d Cir. 1981), to sup-
port its claim. In Burlington Northern, railroad companies allegedly
tried to prevent or delay the construction of a coal pipeline by engag-
ing in sham petitioning of the courts. See 822 F.2d at 521. Some of
the railroad companies knew that they had no standing or had no rea-
sonable basis for asserting standing. Still, they joined in the lawsuit.
See id. at 530. The court held that the defendants’ actions were not
protected by Noerr-Pennington because the litigation was baseless.
Id. In Landmarks Holding, owners of a shopping mall sued a compet-
ing shopping mall knowing that they lacked the standing to do so. See
664 F.2d at 893. These owners also subsidized litigation by various
citizens to stop the competing mall without the citizens’ knowledge
that the shopping mall owners were funding the lawsuit. See id. at
893-94. The court held that because all the lawsuits were meritless,
Noerr-Pennington did not protect the defendants’ actions. See id. at
896.
The case at bar differs substantially from both Burlington Northern
and Landmarks Holding. First, both these cases were decided before
the Supreme Court enunciated its test for sham litigation in PRE. Sec-
ond, and more importantly, in both cases the defendants knew or rea-
sonably should have known that they lacked standing and therefore
that their claims were baseless.
In this case, an objective litigant could reasonably expect to
achieve success on the merits. Although the zoning lawsuit was even-
tually dismissed due to lack of standing, Judge Ward ruled for the cit-
izen groups on the standing issue and allowed Sipes to intervene.
Chief Judge Hammerman indicated that after his independent
research, he probably would agree with Judge Ward if he needed to
rule on standing. The Court of Special Appeals disagreed, but only
after making a "logical extension" of its intervention rule and after a
BALTIMORE SCRAP v. THE DAVID J. JOSEPH CO. 9
reasoned opinion. Sipes, 635 A.2d at 94. As the district court noted,
the "success before two judges of the Circuit Court for Baltimore City
demonstrates a reasonable basis" for the litigation position. 81 F.
Supp.2d at 614. The fact that the Court of Special Appeals ultimately
dismissed the lawsuit on the standing issue makes no difference in
deciding whether an objective litigant could reasonably expect to
have success on the merits. Judged by this latter standard, the zoning
litigation was not a sham.
B.
Baltimore Scrap maintains, however, that Noerr-Pennington analy-
sis is inapplicable to this case because DJJ and the Shapiro family did
not petition the government since they were not parties to the zoning
litigation. Baltimore Scrap argues that Noerr-Pennington protects liti-
gants only, not third parties who covertly funded the lawsuit. See
PRE, 508 U.S. at 60 ("If an objective litigant could conclude that the
suit is reasonably calculated to elicit a favorable outcome . . . .")
(emphasis added).
PRE is not so restrictive as to protect only the litigant from later
antitrust liability. See Liberty Lake Investments, Inc. v. Magnuson, 12
F.3d 155, 157-59 (9th Cir. 1993). The fact that a third party funded
the litigation cannot govern the analysis of the objective merit of a
lawsuit. See id. As the Sixth Circuit put it, "[I]t would avail an anti-
trust plaintiff nothing to show that the defendant had surreptitiously
caused a front man to institute a lawsuit against the plaintiff, even if
the suit proved to be without merit, absent a showing of clear abuse
of process." Opdyke Investment Co. v. City of Detroit, 883 F.2d 1265,
1273 (6th Cir. 1989).
Baltimore Scrap again relies on Burlington Northern for the propo-
sition that a third party who does not have standing to pursue a law-
suit in its own right does not receive Noerr-Pennington immunity. See
Burlington Northern, 822 F.2d at 531. In Burlington Northern, Union
Pacific Railroad did not join the litigation against the coal pipeline
company as a party. However, it provided legal assistance to the state
of Nebraska. Most parties, as well as the district court, did not know
of Union Pacific’s involvement in the lawsuit. See id. at 530-31. The
court held that if Union Pacific did not have standing against the pipe-
10 BALTIMORE SCRAP v. THE DAVID J. JOSEPH CO.
line company in its own right, it would not receive the protection of
Noerr-Pennington. See id. at 531 and n.11.
Baltimore Scrap argues that since the defendants in this case like-
wise did not have standing to pursue the appeal, they do not receive
Noerr-Pennington immunity. We are wary of relying on Burlington
Northern, however, given the fact that the Supreme Court in PRE spe-
cifically disapproved of Burlington Northern in fashioning its two-
part sham litigation test. See PRE, 508 U.S. at 55 n.3. Indeed, post-
PRE cases with similar facts have recognized that the defendant’s
standing to bring a lawsuit is not germane in deciding whether the
lawsuit itself was objectively meritless. See, e.g., Liberty Lake, 12
F.3d at 155. In Liberty Lake, a developer named Harry Magnuson
solicited and financed straw parties to prosecute an environmental
challenge against a competing business. See Liberty Lake, 12 F.3d at
158. The Liberty Lake court undertook the normal, two part analysis
for sham litigation despite the fact that Magnuson was behind the liti-
gation. See id. at 157-58. In a case decided before PRE, this circuit
declined as well to deny Noerr-Pennington immunity to non-litigants.
See Hospital Building Co. v. Rex Hospital, 691 F.2d 678 (4th Cir.
1982) (non-litigants who caused a government entity to file litigation
entitled to jury charge of Noerr-Pennington immunity).
In this case, we need not decide whether the defendants themselves
had independent standing to pursue the zoning litigation in state court
because the standing of third parties does not control the sham litiga-
tion analysis. Funding of litigation by a non-party can be petitioning
to the same extent that filing a lawsuit itself is petitioning. See Liberty
Lake, 12 F.3d at 157-59; Opdyke, 883 F.2d at 1273. Indeed, non-
parties often provide aid to litigants, whether through financial back-
ing, legal assistance, amicus briefs, or moral support. The fact that an
amicus brief, for example, might be filed by a non-party with some
anti-competitive aim does not strip from the amicus its Noerr-
Pennington right to petition the courts. The realities often are that liti-
gation cannot be entirely financed out of the pocket of the party bring-
ing suit. And the costs of supporting a party’s right of access to public
bodies need not entail the defense of a collateral antitrust suit. To hold
that only parties who have standing in their own right receive the pro-
tection of Noerr-Pennington immunity is to artificially restrict that
BALTIMORE SCRAP v. THE DAVID J. JOSEPH CO. 11
doctrine by penalizing even the lawful support of objectively merito-
rious actions.
Such a limited rule would also severely curtail the rights of all citi-
zens to petition the government and to associate with others who do
so. The First Amendment freedoms of petitioning and of association
protect groups who for whatever reason want to contribute to a law-
suit openly or to stand apart from public view while another party
files a lawsuit, assuming no rule or statute independently requires dis-
closure of the aid. Accordingly, because the litigation was not objec-
tively baseless, and because the source of funding this lawsuit in no
way affected the legitimacy of the claims advanced, the district court
correctly held that the lawsuit was not sham litigation. As that court
noted, Baltimore Scrap has "fail[ed] to show how the legal questions
raised by the citizens groups in the zoning appeal would have lacked
objective merit had the role of the defendants been known." 81 F.
Supp.2d at 615-16.
IV.
Baltimore Scrap argues in the alternative that even if the lawsuit
was not sham litigation, the defendants’ actions do not deserve Noerr-
Pennington immunity because of the fraud exception to Noerr-
Pennington.
In PRE, the Supreme Court specifically left open the question of
whether a fraud exception to Noerr-Pennington exists. "We need not
decide here," the Court stated, "whether and, if so, to what extent
Noerr permits the imposition of antitrust liability for a litigant’s fraud
or other misrepresentations." PRE, 508 U.S. at 62 n.6. If a fraud
exception to Noerr-Pennington does exist, it extends only to the type
of fraud that deprives litigation of its legitimacy. See Cheminor Drugs
v. Ethyl Corp., 168 F.3d 119, 123-24 (3d Cir. 1999) ("While we do
not condone misrepresentations in a judicial setting, neither will we
deprive litigants of immunity derived from the First Amendment’s
right to petition the government if the alleged misrepresentations do
not affect the core" of the litigant’s case.); Liberty Lake, 12 F.3d at
158-59 (PRE "does not obviate application of the Court’s two-part
test for determining sham litigation in the absence of proof that a
party’s knowing fraud upon, or its intentional misrepresentations to,
12 BALTIMORE SCRAP v. THE DAVID J. JOSEPH CO.
the court deprive the litigation of its legitimacy."). Alleged frauds that
"do not infect the core" of a case will receive Noerr Pennington
immunity because regardless of the alleged fraud, the outcome would
have been the same. Cheminor, 168 F.3d at 123. If a judgment is not
procured by fraud or deceit, it cannot fall within any fraud exception
to Noerr-Pennington. See PRE, 508 U.S. at 61-62 n.6; Liberty Lake,
12 F.3d at 158-59. Because Baltimore Scrap cannot show that the
state court judgment was procured by fraud or deceit, we need not
reach the question of whether a fraud exception to Noerr-Pennington
still exists after PRE.
Baltimore Scrap alleges three instances of fraud that deprive the lit-
igation of legitimacy: 1) the defendants’ clandestine funding of the
citizen groups; 2) the misstatements that Irwin made to Chief Judge
Hammerman at the April 23, 1993 hearing about the defendants’ role
in financing the lawsuits; and 3) the fabricated environmental issues
that the citizen groups supposedly raised in their pleadings. Like the
district court, we in no way condone the actions of the defendants.
Whether to condemn their activities, however, is a different question
than whether to abrogate Noerr-Pennington immunity for conduct
that does not deprive the lawsuit of legitimacy. In achieving an over-
all public benefit like the right to petition, any immunity will shield
individual instances of conduct that might otherwise be actionable.
None of the defendants’ alleged frauds infected the core of the law-
suit’s legitimacy.
Baltimore Scrap first argues that the defendants’ failure to inform
the citizen groups who was funding the lawsuit deprives the litigation
of legitimacy. Specifically, Baltimore Scrap contends that if DJJ or
the Shapiro family had revealed its involvement in the litigation, the
citizen groups would not have accepted the funding and the lawsuit
would have been dropped. Baltimore Scrap specifically points to the
testimony of Gloria Sipes, who testified that had she known the
defendants were behind the lawsuit, she would not have taken their
money. Even if these allegations are true, they do not rise to the level
of fraud on the courts. This alleged fraud was solely between the par-
ties. The defendants’ failure to tell the citizen groups that they were
behind the litigation did not deceive the courts because the courts
were not the target of this alleged deception. As the district court
noted, Baltimore Scrap’s "central problem, which it is unable to over-
BALTIMORE SCRAP v. THE DAVID J. JOSEPH CO. 13
come, is that the arguments presented by the citizens groups were
legitimate, both objectively and subjectively." 81 F. Supp.2d at 617.
The citizen groups can of course sue the defendants for fraud.
Whether such an action by the citizen groups against the defendants
for fraud would be successful is another matter. First, and most
importantly, the citizen groups were not duped into pursuing a claim
they did not want to litigate. In fact, the citizens’ objections to Balti-
more Scrap’s metal shredder existed well before the defendants
offered to pay for further litigation. Soon after the citizens learned of
the proposed shredder, they voiced their opposition. They attended a
meeting with the Maryland Department of Environment on August
12, 1991 to protest the shredder. They wrote a letter to the mayor of
Baltimore on August 26 urging him to block its installation. The citi-
zens were extremely worried about the environmental damage that the
shredder could cause, especially the increase in air pollution, the
release of potentially toxic chemicals, and the potential of higher can-
cer rates.
Indeed, the citizen groups knew that "local businesses" were pay-
ing for the litigation. Despite knowing this fact, they decided to take
the money because, as Sipes testified, they "[did] not care" who
funded the lawsuit. Moreover, the defendants revealed their involve-
ment to the citizen groups on April 3, 1993. After learning that the
defendants were funding the litigation, the citizen groups nevertheless
decided to continue their appeal. In sum, the evidence concerning the
defendants’ secret funding of the lawsuit, construed in the light most
favorable to Baltimore Scrap, fails to rise to the level of fraud among
the parties. It falls far short of showing the type of fraud upon the
court that would deprive the litigation of its legitimacy.
Second, Baltimore Scrap contends that Irwin’s alleged misrepre-
sentations to the court about the role of the defendants in the lawsuit
constitutes fraud that deprives the litigation of legitimacy. For pur-
poses of summary judgment, we of course assume all facts in the light
most favorable to Baltimore Scrap. The problem with Baltimore
Scrap’s argument remains, however, that Irwin’s alleged misstate-
ments were simply not material. Chief Judge Hammerman, before he
ruled, stated that he saw the hand of the defendants in the lawsuit.
Indeed, he presumed the defendants were involved before he issued
14 BALTIMORE SCRAP v. THE DAVID J. JOSEPH CO.
his opinion against the citizen groups and the defendants. The result
would have been the same even if Irwin had admitted the defendants’
role because no judicial ruling was based on the erroneous assumption
that the citizens alone were pursuing the appeal and fully funding the
litigation.
If Irwin did indeed misrepresent facts to the court, the proper rem-
edy here is through Maryland law, whether it be through the sanction-
ing process of the state bar, see, e.g., Md. R. Prof. Conduct 3.3 ("A
lawyer shall not knowingly make a false statement of material fact or
law to a tribunal."), Md. R. Prof. Conduct 8.4 ("It is professional mis-
conduct for a lawyer to . . . engage in conduct involving dishonesty,
fraud, deceit, or misrepresentation [or] engage in conduct that it preju-
dicial to the administration of justice."), Md. R. 16-812 (adopting the
Maryland Rules of Professional Conduct), Attorney Grievance
Comm’n of Maryland v. Middleton, 756 A.2d 565, 573-74 (Md. App.
2000) (upholding state bar’s indefinite suspension of a lawyer
because of intentional misrepresentations to a court since "candor and
truthfulness are two of the most important moral character traits of a
lawyer") (internal quotations omitted); the state Rules of Civil Proce-
dure, see Md. R. 1-311 (stating that the effect of a lawyer’s signature
on the pleadings is to represent "that to the best of the attorney’s
knowledge, information, and belief there is good ground to support"
what was written, and imposing potential disciplinary action for "a
wilful violation of this Rule"), Md. R. 1-341 (awarding attorney’s fees
if "the conduct of any party in maintaining or defending any proceed-
ing was in bad faith . . ."), Md. R. 2-535 (allowing court to revise the
judgment "in case of fraud, mistake, or irregularity"), Md. Code Ann.
Cts. & Jud. Proc. § 6-408 (1998) (same); or another similar process.
The states are perfectly capable of handling malfeasance in their own
courts. Federal antitrust law is simply not the proper vehicle to punish
an attorney’s misconduct in state court.
Baltimore Scrap finally charges that the defendants fabricated envi-
ronmental issues that caused the litigation to be deprived of legiti-
macy. Even if true, however, the lawsuit was not decided on
environmental grounds. Rather, the lawsuit revolved around the issues
of standing and intervention. In no way did the so-called environmen-
tal fabrications infect the core of the litigation’s legitimacy.
BALTIMORE SCRAP v. THE DAVID J. JOSEPH CO. 15
We reiterate that the Supreme Court has not approved a fraud
exception to Noerr-Pennington immunity at all. See PRE, 508 U.S. at61-62 n.6; Cheminor, 168 F.3d at 123-24. Yet the fraud exception as
Baltimore Scrap conceives it would have wide ranging implications
for our federal system as well as the Noerr-Pennington doctrine. A
broad fraud exception would allow federal collateral litigation over
conduct in state courts that never affected the core of a state judg-
ment. It is simply not the role of federal courts hearing antitrust law-
suits to reconsider the underlying validity of a state zoning contest.
We would have to immerse ourselves in the minutiae of state civil
proceedings and in effect relitigate the claims that the state courts
have already decided. For the federal courts to entertain this type of
antitrust action would impermissibly impact the right to petition a
coordinate system of justice. Such concerns weigh heavily against
creating any broad exception to the immunity created by Noerr and
its numerous progeny.
V.
The replay of state law zoning disputes is not normally the proper
function of antitrust litigation, especially when the alleged fraud did
not deprive the litigation of its underlying legitimacy and when the
lawsuit is not objectively meritless. We hold as a matter of law that
the defendants’ actions do not warrant the dissolution of Noerr-
Pennington immunity. For the foregoing reasons, the judgment of the
district court is
AFFIRMED.