Protected Petitioning or Unlawful Retaliation? The Limits of First Amendment Immunity for Lawsuits Under the Fair Housing Act

Copyright (c) 2000 Pepperdine University School of Law
Pepperdine Law Review
27 Pepp. L. Rev. 477
David K. Godschalk*
(reprinted by permission)


Free speech and equal protection are at the core of American notions about rights and justice. In the context of fair housing, however, the two ideals have come into conflict as courts and federal agencies have addressed attempts to use lawsuits, ordinarily protected by the First Amendment right to petition the government for redress of grievances, to deny equal housing opportunities to protected groups. 1

The Fair Housing Act (the "Act") prohibits discrimination in the sale or rental of housing on the basis of race, color, religion, sex, familial status, national origin, or handicap. 2 Under the Act, discrimination can take various forms, such as the failure to sell or rent property, steering persons to particular neighborhoods, the use of different terms of sale or rental, or harassment and intimidation of individuals in the exercise of their fair housing rights. 3

The classic means of intimidation are familiar: arson, firebombing, assault, crossburnings, and vandalism. 4 The Act's prohibitions on intimidation and interference are not limited to violent acts, however it also bans nonviolent retaliation, including some commercial and legal actions. 5 Cases upholding the ban on discriminatory legal actions have frequently involved attempts to use zoning or restrictive covenants to prevent the operation of group homes. 6 Victims of such tactics have used the Act to challenge those who have attempted to use lawsuits against them.

On the other hand, the Supreme Court has held that lawsuits can fall within the protection of the First Amendment's "right to petition" clause, 7 but the limits of the immunity which attends such petitioning are unclear and vary dramatically in different circumstances. In some fields, such as antitrust law, the limits are clearer having developed over decades of litigation. In others, like fair housing, they are still evolving.

Consider a recent case. The owner of a house in a small subdivision wishes to sell and locates a buyer. The two parties arrange the sale of the house. Before the sale closes, word reaches the neighbors that the buyer intends to convert the house into a group home for autistic children. They hastily circulate a petition opposing the group home and file suit against the seller claiming that the proposed use violates the restrictive covenants that preserve the single family character of their subdivision. The seller responds by filing a complaint under sections 804 and 817 of the Act charging that the neighbors' lawsuit is an attempt to deny housing to people with disabilities. The neighbors defend their suit as an exercise of their First Amendment right to petition the courts for a redress of grievances. How is the court to rule? 8

This pattern has arisen in jurisdictions across the country, making efforts to enforce local zoning rules or private covenants against group homes an important forum for emerging case law regarding the role of lawsuits under the Act. In deciding such cases, courts have been charting new territory searching for guidance on the right to petition in antitrust and labor law, and attempting to balance the relevant state and federal interests.

This interplay between the right to petition and the Act was a matter of interest mostly to practitioners, until a much publicized 1994 investigation by the U.S. Department of Housing and Urban Development ("HUD") in Berkeley, California brought it to the attention of the larger public. That incident is important because it set the stage for current attempts by Congress and the executive branch to resolve this seeming conflict between the Act and the First Amendment.

In the summer of 1994, HUD began an investigation of a complaint under the Act alleging discriminatory community opposition to a shelter for people with disabilities. One issue in the investigation involved a neighborhood group that had filed suit in state court against the proposed shelter seeking to overturn the shelter's zoning variance. 9 In response, the agency planning to operate the shelter filed a complaint with HUD alleging that the plaintiffs had violated the Act by pursuing the state court action and impeding construction of the shelter, thereby impairing the agency's ability to provide housing for people with disabilities. 10 The complaint alleged that the plaintiffs opposed the shelter because the shelter's residents would include people with mental and physical disabilities, including recovering alcoholics and drug addicts. 11

In response to HUD's investigation, the plaintiffs filed suit against HUD claiming that the agency had violated their First Amendment rights by, among other things, demanding membership lists and offering to drop federal charges if the group would drop its lawsuit against the shelter. HUD was denounced for trampling on the First Amendment. 12

The outcry resulting from the Berkeley incident spawned a number of governmental attempts to reconcile federal fair housing law and the right to petition. HUD moved rapidly to issue new guidance regarding its policy on cases involving the First Amendment. 13 Public concern over the Berkeley case also generated congressional attempts to provide standards limiting the government's authority to initiate enforcement action or investigations in cases involving political speech or judicial petitioning. 14

The solution ultimately adopted by the courts or Congress will have a powerful impact on the future of both fair housing, land use, and zoning law. Overprotection of lawsuits could create new barriers to housing opportunity; underprotection of those lawsuits could chill lawful petitioning activity and feed a perception that the government is out of touch with the legitimate concerns of its citizens. The solution adopted is also likely to have implications the interpretation of the First Amendment in other circumstances under the Act, such as in cases involving attempts to persuade political decisionmakers to take discriminatory action.

The goal of this article is to explore the sources and interpretations of petitioning immunity for lawsuits, and to suggest how the right to petition may be construed in the fair housing context to provide the proper deference to the First Amendment and to preserve the goals of the Act. This article addresses the two main competing standards that have been proposed for determining when a lawsuit violates the Act. The first, adopted by HUD, the Department of Justice, and a number of federal district courts, is the Supreme Court's ruling in Bill Johnson's Restaurants, Inc. v. NLRB ("Bill Johnson's"). 15 The second, proposed in Congress in a series of bills, is drawn from Rule 11 of the Federal Rules of Civil Procedure. This article attempts to provide some comparison of the merits of these two standards within the context of existing First Amendment jurisprudence. 16

Part I begins with a brief discussion of the relevant prohibitions on discrimination in the Act, its implementing regulations, and their interpretation by the courts. Special attention is given to the accumulating body of law dealing with the legality of local zoning rules and decisions which interfere with the siting and operation of group homes for individuals with disabilities, because those cases have provided a growing source of law regarding the status of lawsuits under the First Amendment. Part II traces the history of the right to petition and examines the interplay between the right to petition, the common law, and statutory limits on lawsuits. Part III examines the Supreme Court's decision in Bill Johnson's and the two-part test it sets forth, as well as the meaning and importance of the "illegal objective" exception. Part IV addresses the current attempts to chart a First Amendment policy for the Act by HUD, the courts, and Congress. Part V argues, in conclusion, that the Bill Johnson's standard is more suitable for application to the Act than a Rule 11 based approach. It further argues that the illegal objective rule is viable for fair housing cases, and it discusses the possible application of Bill Johnson's standard to cases involving suits enforcing discriminatory zoning rules or restrictive covenants.


Congress originally enacted the Act in the wake of the Martin Luther King assassination as Title VIII of the landmark 1968 Civil Rights Act. 17 The Fair Housing Amendments Act of 1988 extended the original prohibitions on discrimination to include gender and disability and to strengthen the enforcement authority allocated to HUD and the Department of Justice. 18

In adopting the Act, Congress intended to preempt state and local laws that conflict with its prohibitions. Section 815 of the Act states that "any law of a State, a political subdivision, or other such jurisdiction that purports to require or permit any action that would be a discriminatory housing practice under this subchapter shall to that extent be invalid." 19

Currently, the Act prohibits discrimination in the sale or rental of housing on the basis of race, color, religion, sex, familial status, national origin, or disability. 20 The main substantive provisions of the Act's prohibitions on discrimination in the sale or rental of housing, the provision of loans or financing, or the provision of appraisal or brokerage services-are found in sections 3604 through 3606. 21

Section 818 provides further protection for persons exercising the rights guaranteed by sections 803 through 806 of the Act. 22 Specifically, section 818 makes it unlawful to "coerce, intimidate, threaten, or interfere with any person . . . on account of his having aided or encouraged any other person in the exercise or enjoyment of, any right granted or protected by section . . . 3604 of this title." 23

In the Preamble to its regulations implementing the Act, HUD observed that "a broad range of activities" can constitute illegal intimidation or interference under section 3617. 24 It is not necessary to find a corresponding violation of one of the other substantive provisions of the Act in order for a violation of section 3617 to exist. 25 Although physical violence or duress are frequent elements of claims invoking section 3617, they are not necessary to establish a violation. 26 Courts have applied section 3617 broadly to cover "all practices which have the effect of interfering with the exercise of rights under the federal fair housing laws." 27 Such practices range from racially motivated firebombings, crossburnings, vandalism, and sexual harassment to exclusionary zoning and insurance redlining. 28 Most importantly, for the purpose of this paper, a number of courts have held that filing a lawsuit can constitute prohibited interference under section 3617. 29

In United States v. Scott, 30 a group of neighbors filed suit in state court to enforce a restrictive covenant to prevent the conversion of a residence into a group home for persons with disabilities. 31 The state court found that the group home did not violate the restrictive covenant, although it declined to award attorney's fees to the group home defendants because it found the plaintiffs' action was not frivolous. 32 The sellers then filed a complaint with HUD which charged the neighbors with violating sections 804 and 818 of the Act. 33 In the resulting federal district court case, the court held that the language of sections 804 and 807 encompassed enforcing restrictive covenants through the judicial process in order to deny housing opportunities to persons with disabilities. 34 The court granted the government's motion for summary judgment, holding that the neighbors' attempt to enforce a facially neutral restrictive covenant to prevent the group home from residing in their neighborhood violated the Act. 35

In other cases, courts have held that filing a lawsuit could constitute unlawful interference under the Act. In Northside Realty Associates v. Chapman, 36 a real estate agent brought a state class action suit on behalf of all state real estate agents and brokers against a fair housing testers group alleging interference with economic relations, nuisance, trespass, unjust enrichment, and libel. 37 Counterclaiming that the broker's suit violated section 3617 of the Fair Housing Act, the fair housing group petitioned for removal to federal district court. 38 In deciding against the broker's petition for remand, the district court held that under the language of section 3617 the defendant fair housing group should be allowed the opportunity to show that the state court lawsuit had the effect of interfering with their rights under the Act. 39 Similarly, in Casa Marie Inc. v. Superior Court of Puerto Rico, 40 and Sofarelli v. Pinellas County, 41 the courts held the lawsuits constituted prohibited interference. 42


Treating a lawsuit as the basis for substantive civil liability can be problematic, however, because lawsuits have traditionally been treated as a form of protected speech under the First Amendment's right to petition. As discussed above, this protected status has recently become a lively issue in fair housing enforcement, but one that is often not well understood. 43 A closer examination of the history of the right to petition reveals both its inherent limits and the way in which its scope can be affected by the substantive statute at issue.

A. The History and Scope of the Right to Petition

The right to petition, as modern courts understand it, protects the free expression of opinions regarding the government and requests for governmental action. 44 The First Amendment states that Congress shall make no law abridging the right of the people "to petition the Government for a redress of grievances." 45 The right to petition extends to all parts of the government, and the right of access to the courts is one aspect of it. 46

The historical roots of the right to petition predate the Constitution. Its development in English law can be traced to the Magna Carta and the Bill of Rights imposed by William and Mary in 1689, and it may date back as early as the tenth century. 47 In its original usage, the right to petition protected the right of individuals to petition the government for a redress of public or private wrongs, and it included an affirmative duty for the government to consider the grievance presented. 48 In the colonial period, the process for considering such petitions blended legislative and quasi-judicial action and was an important means of addressing public matters of concern and private disputes. 49 Britain's failure to respect colonial petitioning was protested in the Declaration of Independence. 50

The right to petition was included in the Bill of Rights, although Madison initially proposed it as part of a clause guaranteeing the rights to assembly, consultation, and petition, with a separate clause guaranteeing the freedoms of speech and the press. 51 Congressional attention to the petitioning process floundered under a growing burden of petitions, and ultimately sank during a crisis over abolitionist petitioning in the 1830's and 1840's. 52 The right to petition was ultimately subsumed into an aspect of the right to free expression. 53

Modern interpretations of the right to petition focus on its importance in furthering the democratic process. 54 The right to petition protects the right to criticize government officials, to lobby the government to achieve one's goals, and to go to court to protect one's interests or seek political objectives. 55 Like the other rights protected by the First Amendment, the right to petition does not confer absolute immunity. 56 It provides no greater constitutional protection than other elements of the First Amendment and has been treated similarly to the other guarantees of free expression. 57

It is a fundamental tenet of First Amendment jurisprudence that it protects speech without regard to the truth or popularity of the ideas that are offered, and this protection necessarily extends to the right to petition. 58 This protection is not limited to political matters, but also covers business and other economic activity. 59 Courts have suggested, however, that litigation involving equal opportunity, as a form of political speech, may deserve more protection than commercial litigation. The Supreme Court in NAACP v. Button noted that litigation could not only be a means of resolving private differences, but also a means for achieving lawful political objectives like equality of treatment, and as such was a form of political expression. 60 In Creek v. Village of Westhaven, 61 Judge Posner observed that "a racial motivation, to the extent that it lent an ideological hue to the lawsuit, could actually strengthen the case for regarding it as a form of petition for redress of grievances or as an exercise of freedom of speech." 62 However, in other contexts, the Court has stated that litigation need not be "bound up with political matters of acute social moment" to be protected. 63

Although the right to petition extends to all branches of government, its limits vary with the form of the petitioning activity at issue. 64 It has been argued that various explicitly political forms of protected speech, such as speaking in town meetings and contacting government officials and the media, should enjoy greater immunity under the First Amendment than petitioning before the courts. In practice, that appears to be the case. 65 Scholars have noted that the Supreme Court has long distinguished between the legislative and adjudicatory limits on petitioning. 66 "From the outset, the Supreme Court suggested a sharp distinction between the political arena of the legislature and the adjudicatory setting of judicial and administrative proceedings, with the latter category benefitting from a more expansive sham exception and a correspondingly lesser degree of petitioning immunity." 67 Courts have "almost plenary power" to control the conduct of courtroom proceedings, and may impose prior restraints on speech in ways that would be inconceivable elsewhere. 68

B. The Protection for Lawsuits Guaranteed by the Right to Petition is Limited

The existence of substantive and procedural limitations on petitioning protection for litigation is apparent in examples drawn from the common law (the torts of abuse of process and malicious prosecution are frequently cited as examples of common law limits on juidicial petitioning, as is the Noerr-Pennington doctrine in antitrust law) and the Federal Rules of Civil Procedure. 69 These examples, along with a line of labor cases addressing retaliatory lawsuits, have provided guidance for judicial, executive, and congressional attempts to reconcile fair housing enforcement with petitioning immunity.

1. Abuse of Process and Malicious Prosecution

Abuse of process is the misuse of a legal process, either criminal or civil, to accomplish a purpose for which the "process" is not intended. 70 Process is defined as a direction or demand emanating from court authority. 71 The mere institution of an action or filing of a complaint is not sufficient to give rise to liability under this tort. 72 A legal or legitimate use of process cannot constitute abuse, regardless of any improper motive of the user. 73

Malicious prosecution is the malicious institution or continuation of a criminal prosecution or civil suit, without probable cause, for purposes of harassment where the suit ultimately fails, and results in damage to a person or their property. 74 There is no federal tort of malicious prosecution. 75

Abuse of process is similar to malicious prosecution in that both torts involve the improper use of the courts. 76 The difference between the two is that malicious prosecution involves maliciously causing process to issue, whereas abuse of process involves the improper use of process after it has issued. 77 There is no liability for abuse of process if the defendant has merely carried the process to its authorized conclusion, even if with bad intentions; instead, some perversion of the process, such as using a judgment as a club for coercion or extortion, is necessary. 78 In construing the Noerr-Pennington doctrine of immunity for petitioning under antitrust law, courts have analogized the doctrine to both torts, and have drawn from them the conclusion that baseless or improperly motivated lawsuits may lose their immunity. 79

2. The Noerr-Pennington Doctrine

The most widely referenced example for balancing First Amendment protections with substantive prohibitions on improper litigation is the Noerr-Pennington doctrine, named for Eastern Rail Road Presidents Conference v. Noerr Motor Freight, Inc. and United Mine Workers of America v. Pennington, and extended by California Motor Transport Co. v. Trucking Unlimited. 80 Analyses of the Noerr-Pennington doctrine have been provided by a number of scholars and practitioners; therefore, this paper will provide only a brief summary of that doctrine and the points most related to the matter at issue here. 81

The Noerr-Pennington doctrine states that conduct seeking to influence legislative, executive, or judicial action to eliminate competition is immune from federal antitrust liability unless the conduct falls within the "sham exception." 82 The sham exception states that petitioning conduct which is ostensibly directed toward influencing governmental action, but is in actuality merely a sham to cover an attempt to interfere directly with the business relationships of a competitor, is not exempt from antitrust liability. 83

Originally, Noerr-Pennington immunity was recognized only for attempts to persuade the legislature or the executive to take action. 84 In Noerr, a coalition of trucking companies and their trade association invoked the Sherman Act against several railroads. The trucking companies claimed that the railroads, attempting to monopolize the long-distance freight business, had conducted a publicity campaign intended to foster the adoption of anti-trucking laws and to create distaste among the general public for the trucking industry, and had successfully lobbied the governor of Pennsylvania to veto pro-trucking legislation. 85 In ruling that the Sherman Act does not prohibit attempts to persuade a legislature or an executive to restrain trade or create a monopoly, the Court based its decision on two complementary justifications: the power of government to lawfully restrain trade, and the right of private citizens to petition the government to do so. 86 These two justifications--the state action doctrine and the right to petition--underlie all subsequent interpretations of the Noerr-Pennington doctrine. 87

The judiciary expanded legislative petitioning immunity to encompass petitioning before administrative agencies in United Mine Workers v. Pennington 88 and courts in California Motor Transport. 89 The California Motor Transport decision left open the question of whether a litigant must have a subjective expectation of success in order for the lawsuit not to be considered a sham. 90 The Court answered that question in Professional Real Estate Investors, Inc. v. Columbia Pictures Industries, Inc. 91

The Court held that in the antitrust context, an "objectively reasonable effort to litigate" could not constitute a sham, despite any improper intent by the litigant. 92 The Court stated that Noerr-Pennington immunity covers lawsuits in which an objective litigant could conclude that the suit is "reasonably calculated to elicit a favorable outcome." 93 The Court outlined a two-part definition of sham litigation. First, the lawsuit must be objectively baseless, so that no reasonable litigant could expect success on the merits. 94 If the lawsuit is objectively meritless, the court should examine whether the lawsuit conceals "an attempt to interfere directly with the business relationships of a competitor" through the use of governmental process, as opposed to the outcome of that process, as an anticompetitive weapon. 95 In a concurring opinion, Justice Stevens dissented from this formulation, arguing that it "might not be objectively reasonable to bring a lawsuit just because some form of success on the merits--no matter how insignificant--could be expected." 96

In setting forth the rule that subjective motivation does not determine whether a lawsuit has a reasonable basis, the Court noted that it had applied the same rule in another context--the National Labor Relations Act--by its opinion in Bill Johnson's Restaurants, Inc. v. NLRB, the decision that provides the best analogy for Fair Housing Act cases. 97


One of the main sources of law regarding the interplay between petitioning immunity for litigation with statutory limits on lawsuits is a line of cases drawn from labor law, chiefly Bill Johnson's Restaurants, Inc. v. NLRB, in which the Supreme Court established a two-part test for determining whether a lawsuit violates a statutory prohibition on retaliation.

A. The Right to Petition Restricts the Power of the NLRB to Enjoin State Court Lawsuits as Illegal Retaliation

In Bill Johnson's, the Supreme Court addressed the limits of the right to petition in the context of an attempt by the National Labor Relations Board ("NLRB") to enjoin "retaliatory" lawsuits. 98 The case grew out of an attempt by waitresses at a Phoenix, Arizona restaurant chain to organize a union. When one of the waitresses, Myrland Helton, was fired, allegedly as the result of her organizing activities, she filed charges against the restaurant with the NLRB. 99 After an investigation, the NLRB issued a complaint on September 20, 1978, and on the same day Helton and her colleagues picketed the restaurant. 100 The restaurant manager confronted the picketers and threatened to "get even" with them, and the president of the company made similar threats. 101 Several days later, the restaurant filed a complaint in Arizona state court against the picketers, alleging that they had libeled the restaurant, harassed customers, and created a threat to public safety. 102 In response, Helton filed a second charge with the NLRB, including, among other claims, an allegation that the petitioners had filed their state court suit in retaliation for Helton's protected activities under the NLRA. 103 The NLRB issued another complaint, and after a hearing, an administrative law judge concluded that the petitioners' state lawsuit had been filed for a retaliatory purpose, lacked a reasonable basis, and therefore violated the NLRA's prohibitions on retaliation. 104 The Ninth Circuit enforced the Board's order. 105

The Supreme Court vacated and remanded the decision. In a unanimous opinion by Justice White, the Court recognized that lawsuits may be used as instruments of retaliation or coercion, but "the right of access to the courts is an aspect of the First Amendment right to petition the Government for redress of grievances." 106 Adopting the reasoning of California Motor Transport, the Court held that the First Amendment does not protect lawsuits that lack a reasonable basis. 107

The Court held that the NLRB could enjoin prosecution of "a baseless lawsuit with the intent of retaliating against an employee for the exercise of rights protected by [the NLRA]." 108 It stated that the prosecution of a lawsuit may not be enjoined, "regardless of the plaintiff's motive, unless the suit lacks a reasonable basis in fact or law." 109 Although the Court recognized that the NLRB could find that filing an "unmeritorious" lawsuit for a retaliatory purpose constituted an unfair labor practice, the NLRB could not enjoin that lawsuit unless it lacked a reasonable basis. 110

In an important footnote, the Court also recognized that its holding in this case did not deal with suits that are beyond the jurisdiction of state courts because of  federal-law preemption or suits that have objectives that are illegal under federal law. 111 The Court stated that the NLRB could enjoin such lawsuits. 112

B. The Bill Johnson's Test

The Court's opinion, therefore, established a two-part test, with certain important exceptions. In order for the NLRB to enjoin a lawsuit filed in state court as an unfair labor practice, the lawsuit must: (1) lack a reasonable basis in law or fact, and (2) have been filed with improper intent. If the state court lawsuit has already been resolved and found "unmeritorious," however, the lawsuit may be the basis for liability under the NLRA. In addition, lawsuits with illegal objectives and lawsuits beyond the jurisdiction of state courts because of federal preemption can be enjoined without a "no reasonable basis" finding, and presumably can be the basis for substantive liability.

1. No Reasonable Basis And An Improper Motive

In attaching a meaning to the term "reasonable basis," the Court adopted the standards employed in antitrust jurisprudence. 113 The Court cited with approval an article restating the Noerr-Pennington doctrine arguing that the First Amendment interests involved in private litigation are not advanced by litigation "based on intentional falsehoods or on knowingly frivolous claims." 114

In evaluating whether a lawsuit lacks a reasonable basis, the Court stated that while the NLRB need not limit its inquiry to the pleadings alone, suits that present a genuine issue of material fact should not be enjoined. 115 The plaintiff's First Amendment interest in petitioning for redress of grievances, his interest in having his claim heard by a jury, and the state's own interest in protecting its citizens militate against allowing the NLRB to take over this factfinding authority. 116 The Court recommended that the NLRB look to the summary judgment and directed verdict jurisprudence for guidance. 117 Similarly, in cases involving questions of law or mixed questions of law and fact, the NLRB is required to leave such matters to the state court, unless the plaintiff's position is "plainly foreclosed as a matter of law or is otherwise frivolous." 118

Where a plaintiff wins a case in state court, the lawsuit is deemed to be meritorious and cannot provide the basis for a retaliation claim. 119 Where the plaintiff loses in state court, or where the case is withdrawn or otherwise shown to lack merit, the NLRB may adjudicate its case, and may take into account the ruling of the state court in determining whether the state lawsuit was retaliatory. 120 If a lawsuit results in a judgment adverse to the plaintiff, it may be the basis for a finding of liability. 121 However, the decision does not appear to require the conclusion that losing cases are necessarily unreasonable, and the concurring opinion states that this is a policy decision for the appropriate government agency. 122

The circuits that have addressed this question have varied in their interpretations of the Supreme Court's decision. In NLRB v. Vanguard Tours, Inc., 123 the Second Circuit rejected an administrative law judge's interpretation of Bill Johnson's that any termination favorable to the defendants required a finding of no reasonable basis. 124 The court also rejected the NLRB's interpretation that a termination favorable to the defendants gives rise to a rebuttable presumption of no reasonable basis. 125 In NLRB v. International Union of Operating Engineers Local 520, 126 the Seventh Circuit upheld the NLRB's decision, based on Bill Johnson's and the NLRB's "consistent interpretation" of the NLRA that a lawsuit was meritless because it had been finally adjudicated and the plaintiff did not prevail. 127 The court denied enforcement of the NLRB's order, however, because the NLRB's  finding of retaliatory motive was not adequately supported by the evidence. 128 Similarly, in Diamond Walnut Growers, Inc. v. NLRB, 129 the Ninth Circuit upheld an NLRB decision that a state libel suit, which had been dismissed by demurrer, was retaliatory and an unfair labor practice. 130 The court rejected the appellant's argument that the NLRB erred when it failed to make a finding that the appellant's lawsuit lacked a reasonable basis. 131 It stated that whether a lawsuit lacks a reasonable basis is relevant only to whether the NLRB can enjoin the lawsuit, and that "bringing an action that proves unmeritorious can constitute an unfair labor practice even though the suit did not lack a reasonable basis . . . at the time it was filed." 132 It also stated that the cases relied on by appellant--including Professional Real Estate Investors--were not on point. 133

The second prong of the test is whether the lawsuit was brought with an "improper motive." The Court in Bill Johnson's looked to the substantive law at issue for guidance on the issue of its improper motive analysis and determined that, for the purposes of that case, "retaliatory motive" is the second prerequisite to the issuance of an injunction, as well as the basis for a finding that a lawsuit constituted an unfair labor practice. 134 The determination of motive is a question of fact. 135

Similarly, in the antitrust context, the second tier of the analysis is one that addresses the substantive violation at issue. The Noerr-Pennington sham analysis requires consideration of whether the lawsuit "conceals 'an attempt to interfere directly with the business relationships of a competitor,' . . . through the 'use [of] the governmental process--as opposed to the outcome of that process--as an anticompetitive weapon." 136

2. The Illegal Objective Exception.

In adopting this two-part test, the Court noted that its ruling dealt only with a particular kind of case: one involving a "lawsuit that federal law would not bar except for its allegedly retaliatory motivation." 137 It distinguished this fact pattern from situations involving suits in which federal law preempts state court jurisdiction or suits with objectives that are illegal under federal law. 138 The Court recognized its own history of upholding NLRB injunctions against unions suing to enforce fines that could not lawfully be imposed. 139

Several circuits picked up the illegal objective exception in cases under the NLRA. 140 In International Longshoremen's & Warehousemen's Union v. NLRB, 141 the D.C. Circuit held that a union's challenge of an NLRB award in state court was an attempt to enforce a contractual claim that was preempted by the NLRB ruling and, therefore, met the illegal objective standard. 142 It read the Bill Johnson's decision as distinguishing suits that have an illegal objective from those that federal law would not bar but for their improper motivation. The court reasoned that, in suits with illegal objectives, "the plaintiff's motivation and the reasonable basis of the action presumably is irrelevant." 143 The court held that the union's "squarely contrary" contract claim constituted an illegal attempt to coerce an employer in contradiction of the Board's award. 144

In Chauffeurs, Teamsters & Helpers Local 776 v. NLRB, 145 the Third Circuit relied on the illegal objective standard in upholding a similar injunction against a federal suit. 146 In this case, the union continued to seek enforcement of an award granted by the contract arbitrator, despite a prior decision on the case by the NLRB holding that the arbitrator's decision had been superseded by a subsequent decision and order by the NLRB. 147 The NLRB argued that the union's continual attempts to press its contractual claim unlawfully restrained and coerced the warehouse employees and attempted to cause their employer to discriminate against them, and that it constituted an illegal attempt to change the scope of the bargaining unit. 148 The Third Circuit interpreted the distinction between the two-part test and the illegal objective exception in Bill Johnson's to lie in "the plaintiff's objective goals in bringing the action." 149 It summarized the lawsuit in Bill Johnson's as seeking, "on the surface," objectives that were not illegal under federal law. 150 The lawsuit before the Third Circuit did have an illegal objective (circumventing the NLRB's decision), and the union could not obtain the relief it sought no matter what evidence it produced. 151 The court analogized the union's position to that of a litigant subject to Rule 11 sanctions because of its objectively unreasonable position, and stated that the litigant's "subjective good faith" would not defeat liability. 152

It is not clear from the cases interpreting the illegal objective exception whether an improper motive is also required to find a violation under the illegal objective exception, but it appears not to be. The Third and D.C. Circuit opinions interpreting the illegal objective exception required only that the NLRB show that a state court plaintiff had effectively violated the NLRA by filing a lawsuit that was "contrary" to the Board's prior decision. 153 In Chauffeurs, Teamsters, & Helpers Local 776, the Third Circuit appeared to hold that, under the illegal objective exception, no showing of retaliatory motive was necessary to prove a violation where the union attempted to enforce an arbitration award contrary to the NLRB's previous decision. 154 It agreed with the NLRB's holding that an illegal objective is something other than a retaliatory motive and that the Board may restrain a lawsuit with an illegal objective even if it is "otherwise meritorious." 155 In International Longshoremen's & Warehousemen's Union, the D.C. Circuit stated that the issue of motivation was not relevant under the illegal objective exception. 156 The NLRB decided that the union's "collateral attack" on the NLRB's order was "coercion" under Section 8(b) of the NLRA. 157

It should be noted that the Noerr-Pennington doctrine did not recognize an equivalent exception for "illegal" state court litigation; however, that does not mean that the circuit court decisions applying the illegal objective exception are suspect. The difference seems to lie in the fact that, as recognized in City of Columbia v. Omni Outdoor Advertising, 158 the Court limited the Sherman Act and exempted anticompetitive restraints imposed by the states based on state sovereignty principles and federalism. 159 Therefore, the conflict between federal and state authority under the NLRA that the illegal objective and federal preemption exceptions address has no analogy under the antitrust laws. 160 On the contrary, in the antitrust context, the state has clear authority in some situations to ignore the federal law. The illegal objective exception might be considered somewhat analogous to the point made by the Court in Professional Real Estate Investors that litigation that is "objectively baseless" loses its Noerr immunity. 161 Where federal law trumps state law, the state law action could be considered objectively baseless; however, under the Bill Johnson's formulation, the suggestion would be that an improper motive is also a necessary prerequisite for liability, and that does not appear to be the case.

3. The State Action Doctrine

The illegal objective exception highlights the importance of the state action doctrine in understanding Noerr-Pennington and Bill Johnson's and, consequently, in determining how to apply these precedents in other contexts.

The existence of the state action doctrine in antitrust law derives in part from the fact that Congress did not intend the Sherman Act to preempt state laws, and the courts have not inferred it has such an effect. 162 During debate on that Act, Senator Sherman himself stated that his bill was intended "to supplement the enforcement of the established rules of the common and statute law by the courts of the several states . . . ." 163 According to Professor Areeda, "Congress has never expressed the least willingness to limit state antitrust by making federal antitrust 'occupy the field.'" 164 However, a state or local government act may be preempted on its face when its requirements compel a result that the federal antitrust laws clearly prohibit. 165

Under the NLRA, however, there is no equivalent grant of authority to the states. In his concurring opinion in Bill Johnson's, Justice Brennan addressed the issue of federal preemption of state authority. He noted that, "with regard to labor disputes, federal pre-emption of state law is the rule, not the exception." 166 However, in enacting those laws, Congress did not completely preempt state law. The Court had previously held, in Linn v. Plant Guard Workers, 167 that Congress had not preempted the right to sue in state court for defamation occurring in connection with a labor dispute. 168 Therefore, while it appears that the right to petition in cases under the NLRA is not supported by the broad state action doctrine available under the Sherman Act, the right to petition in Bill Johnson's was buttressed by a legitimate state interest that had not been preempted by federal law.


Given a similar concern with preempting state law, the NLRA appears to be more analogous to the Fair Housing Act than the Sherman Act is, and it might be expected that Bill Johnson's and its progeny would furnish the appropriate precedent for courts examining the limits of petitioning immunity for lawsuits in the fair housing context. This has been the case. However, several members of Congress have attempted to chart a different course, one based on Rule 11 of the Federal Rules of Civil Procedure.

A. In Fair Housing Cases, Courts Have Accepted Bill Johnson's As the Relevant Precedent

To date, two federal district courts (Texas and Connecticut) have considered the question of when a lawsuit loses its petitioning immunity and violates the Fair Housing Act. Both cases involved attempts to locate homes for children with disabilities in residential neighborhoods. Although those courts have differed in approaches, both held that Bill Johnson's provided the proper framework for determining when a lawsuit violates the Act. In the first case, United States v. Robinson, 169 the court refused to apply the illegal objective exception to a lawsuit challenging the right of a family with a number of foster children to reside in a neighborhood zoned for single-family use. 170 In the second case, United States v. Wagner, 171 the court held that a lawsuit to enforce a restrictive covenant to prevent a group home for children with disabilities from purchasing a house in a single-family neighborhood fell within the illegal objective exception and, additionally, lacked a reasonable basis in law. 172

In United States v. Robinson, the question of whether the Bill Johnson's standard should be applied under the Fair Housing Act was considered in federal court for the first time. 173 In considering whether the zoning suit at issue constituted unlawful retaliation under the Fair Housing Act, the Robinson court held that Bill Johnson's provided the appropriate precedent, being "particularly on point because it involved a construction of a statute which Congress drafted to reach . . . discrimination or coercion." 174 The court found that "the act of filing the state lawsuit alone forms the basis for the [Fair Housing Act] violations alleged in this action, placing the defendants within the heartland of the Petition Clause." 175 Relying on Noerr, which stated that "the 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 freedoms," 176 the court considered the legislative history of the Fair Housing Act and determined that it did not demonstrate any Congressional intent to prohibit a well-founded lawsuit without some showing that the lawsuit was intended to effectuate "illegal extra-judicial conduct." 177 The court, invoking the Bill Johnson's test, held that the defendants' motion to dismiss must be granted if their state court lawsuit had a reasonable basis in fact or law. 178

The issue of whether a lawsuit can violate section 3617 of the Fair Housing Act also came up in United States v. Wagner. 179 The Pines claimed that a lawsuit brought to enforce allegedly discriminatory deed restrictions violated the Fair Housing Act. The court found that the defendant homeowners had filed their lawsuit with the intent to interfere with the Pines' rights under the Act because of the disabilities of the prospective residents of their house. The court also found that filing the lawsuit constituted a violation of section 3617 of the Act. 180

 Rejecting the defendants' argument that Noerr-Pennington provided the relevant framework, the court applied the Bill Johnson's standard and found that the First Amendment did not protect the lawsuit. 181 The court noted that Noerr-Pennington was an antitrust doctrine and was not constitutionally mandated by the First Amendment. 182 Although it did not specifically recognize Bill Johnson's as the relevant precedent, the court expressly adopted the Bill Johnson's test urged by the Government, and further held that it could consider the defendants' other protected speech activities as evidence of improper motive. 183

The court found that the defendants' lawsuit had both an illegal objective and was improperly motivated and lacking in a reasonable basis. 184 In analyzing the illegal objective exception, the court looked at both federal and state law and found that because both prohibited the use of restrictive covenants to prevent the property from being used as a group home, the defendants had sought an objective that was illegal under both federal and state law. 185 It rejected the defendants' contention that the objective of the lawsuit was to "enforce a facially valid deed restriction," stating that the evidence of the defendants' conduct showed that the illegal purpose of the lawsuit was to prevent the use of the property as a group home. 186

Furthermore, the court found that "ample authority" existed that showed the lawsuit violated both the Fair Housing Act and state law. In addition, evidence at trial showed that the defendants' attorneys did not have support for arguments to the contrary. 187 Evidence that the defendants knew of the proposed use of the house as a group home for persons with disabilities was sufficient to demonstrate that their suit was improperly motivated. 188

The different outcomes in Robinson and Wagner may be attributable to the different state interests involved. In Robinson, the court clearly granted some deference to the local interest in zoning. The court's decision--that a lawsuit to enforce a facially neutral ordinance that effectively discriminated against individuals with disabilities presented a genuine issue of law--may result from an unwillingness to invade the state's authority, despite a clear expression of Congressional intent to override exactly that kind of discriminatory zoning. In Wagner, on the other hand, the court showed little patience with the homeowners' assertion that their suit was not brought out of any discriminatory animus. The fact that the lawsuit was clearly contradicted by both federal and state law convinced the court that the lawsuit fell within the illegal objective exception.

B. Congressional Proposals to Amend the Fair Housing Act Have Adopted the Rule 11 Standard

There have been a handful of bills proposed in Congress over the last several years which have attempted to expand the petitioning immunity for lawsuits under the Fair Housing Act. These bills have rejected the two-part test that the courts have drawn from Bill Johnson's and have instead put forth a standard closely based on Rule 11. 189 One such bill was H.R. 3206, entitled "The Fair Housing Amendments Act of 1998," which proposed to amend the Fair Housing Act by adding a new section, "Protection of First Amendment Rights":

Sec. 821

(a) Nothing in this Act shall be construed to make the expression of an opinion or the seeking of redress from public authority a violation of this Act.

(b) A party shall not be held liable or otherwise sanctioned under this Act for engaging in litigation or administrative proceedings unless --

(1) the party does so for an improper purpose, such as to harass or cause unnecessary delay or needlessly to increase the cost of the litigation or proceedings; and

(2)(A) the claims, defenses, and other legal contentions of the party in the litigation or proceedings are not warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law; or

(B) the allegations and other factual contentions, for which the party in the litigation or proceedings has the burden of going forward with the evidence, have no evidentiary support." 190
While H.R. 3206 employed the structure of the Bill Johnson's two-part test, it derived its language from Rule 11 of the Federal Rules of Civil Procedure. Where Rule 11 provides that a litigant may be sanctioned based on an improper purpose or a lack of reasonable basis in law or fact, 191 H.R. 3206 tightened the standard for Fair Housing Act sanctions significantly, by importing the Rule 11 language to define "improper purpose" and to establish the boundaries of the "reasonable basis in law or fact" standard. 192

Rule 11 of the Federal Rules of Civil Procedure provides a modern response to the ancient problem of what to do with baseless or improperly motivated lawsuits. 193 It allows courts to impose sanctions on attorneys or parties bringing claims that have improper purposes, that are not warranted by existing law or by a good faith argument for a change in law, or that lack evidentiary support for any claims of fact.

Rule 11 states, in part:

(b) Representations to Court. By presenting to the court (whether by signing, filing, submitting, or later advocating) a pleading, written motion, or other paper, an attorney or unrepresented party is certifying that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances, --

(1) it is not being presented for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation;

(2) the claims, defenses, and other legal contentions therein are warranted by existing law or by a nonfrivolous argument for the extension,_modification, or reversal of existing law or the establishment of new law;

(3) the allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery; and

(4) the denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonable based on a lack of information or belief. 194

Under the explicit language of the rule, all sub-elements must be present for a pleading or motion to meet the standards of Rule 11. Therefore, according to the rule, either an improper purpose (Rule 11(b)(1)) or a lack of reasonable basis in law or fact (Rule 11(b)(2)-(4)) should be sufficient to allow a court to impose sanctions. Circuit courts have differed, however, over whether an improper purpose alone can warrant the imposition of sanctions for an otherwise nonfrivolous filing. 195 The Second, Fifth, Sixth, Ninth, and Tenth Circuits state that sanctions may be applied for complaints with improper purposes only if the complaint itself is frivolous. 196 The First, Third, and Seventh Circuits have taken the opposite approach, holding that an improper purpose alone is a basis for imposition of Rule 11 sanctions. 197 Several also distinguish between complaints and other court papers, indicating that special care must be taken to avoid penalizing the filing of complaints merely on the grounds of improper purpose. 198

Case law establishes that the standard for determining which claims are frivolous under Rule 11 is, like the standard applied in Sherman Act cases, "an objective standard, focusing on what a reasonably competent attorney would believe." 199 A court should not "'use the benefit of hindsight' but 'should test the conduct by inquiring what was reasonable to believe at the time the pleading, motion, or other paper was submitted.'" 200


The Supreme Court's decision in New York Times v. Sullivan 201 opted to overprotect speech not traditionally protected by the First Amendment. 202 In New York Times, the Court established the "actual malice" standard to protect certain false statements of fact, ordinarily not covered by the First Amendment, in order to ensure that protected speech involving the criticism of government officials was not punished by mistake. 203

Should courts establish similar overprotection for the right to petition? Should lawsuits that are used to discriminate receive immunity in order to avoid a chilling effect on legitimate petitioning? Or should such lawsuits instead be punished, in order to effectuate the goals of the Fair Housing Act, even at the risk of discouraging lawful litigation? 204 To understand the limits of the right to petition in this context, it is necessary first to consider the interplay of the federal and state interests at stake.

The Bill Johnson's and the Noerr-Pennington cases are the chief source of guidance on the right to petition. As discussed earlier, the Noerr-Pennington doctrine is a product of the interplay between the Sherman Act, the state action doctrine, and the right to petition. 205 Similarly, Bill Johnson's represents a careful balancing of the individual, state, and federal interests involved--an attempt to reconcile the individual right to petition, recognized by California Motor Transport, and the state's legitimate interests in providing remedies for conduct affecting interests "deeply rooted in local feeling and responsibility," 206 with the authority of the federal government to set national labor policy. In doing so, the Court found that the state's interest in protecting the health and welfare of its citizens justified some degree of deference from the federal government. When interpreting these cases, it is important to remember that not only the right to petition is at issue, but the relevant state interest involved as well. 207

It is clear, then, that the limits of the Constitutional protection for individual petitioning when state interests are involved can be affected by the nature of those state