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Gunderson v. University of Alaska Fairbanks and Alaska Railroad Corporation (9/8/95), 9902 P 2d 323
Notice: This opinion is subject to formal correction
before publication in the Pacific Reporter. Readers
are requested to bring errors to the attention of the
Clerk of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501, telephone (907) 264-0607, fax (907) 276-
THE SUPREME COURT OF THE STATE OF ALASKA
TIMOTHY C. GUNDERSON, d/b/a )
ALASKA CONTRACT MOTOR EXPRESS,) Supreme Court No. S-6570
Appellant, ) Superior Court No.
) 4FA-93-2161 Civil
) O P I N I O N
UNIVERSITY OF ALASKA, )
FAIRBANKS, and ) [No. 4255 - September 8, 1995]
ALASKA RAILROAD CORPORATION, )
Appeal from the Superior Court of the State
of Alaska, Fourth Judicial District,
Richard D. Savell, Judge.
Appearances: Lloyd I. Hoppner, Hoppner &
Paskvan, P.C., Fairbanks, and Wallace M.
Rudolph, Tacoma, Washington, for Appellant.
James Sarafin, Wohlforth, Argetsinger,
Johnson & Brecht, Anchorage, for Appellee
University of Alaska, Fairbanks. William R.
Hupprich, Alaska Railroad Corporation Office
of the General Counsel, Anchorage, and Gary
Foster, Law Office of Gary Foster, Fairbanks,
for Appellee Alaska Railroad Corporation.
Before: Moore, Chief Justice, Rabinowitz,
Matthews, Compton and Eastaugh, Justices.
MOORE, Chief Justice.
This case arises out of a sole source contract issued
by the University of Alaska, Fairbanks campus, (UAF) to Timothy
Gunderson, d/b/a/ Alaska Contract Motor Express (Gunderson). UAF
cancelled the contract after Alaska Railroad Corporation (ARRC)
filed a formal protest, asserting that the sole source contract
violated state law. See AS 36.30.300 (providing that a sole
source procurement may not be awarded if a reasonable alternative
source exists). Gunderson then sued both UAF and ARRC under a
variety of theories. On motion by ARRC, the superior court
dismissed Gunderson's claims against ARRC, ruling that ARRC was
immune from suit under the Noerr-Pennington doctrine. See
Professional Real Estate Investors, Inc. v. Columbia Pictures
Indus., 113 S. Ct. 1920, 1926 (1993) (under Noerr-Pennington
doctrine, those who petition the government for redress are
generally immune from antitrust and related liability).
In this appeal, Gunderson asserts that the Noerr-
Pennington doctrine does not bar his claims against ARRC. He
also asserts that the court improperly entered final judgment in
favor of ARRC under Alaska Civil Rule 54(b). However, because we
consider the issues raised in Gunderson's appeal appropriate for
discretionary review under Alaska Appellate Rule 402(b), we need
not consider whether the superior court erred in entering final
judgment. See Alaska R. App. P. 402(b)(2) (providing that
discretionary review is appropriate where an order or decision
involves an important question of law on which there is
substantial ground for difference of opinion and immediate review
may materially advance the ultimate termination of the
I. FACTS AND PROCEEDINGS
In 1992 Gunderson submitted an unsolicited proposal to
UAF, offering to truck coal to UAF from the Usibelli Coal Mine
and to deliver this coal directly into coal hoppers at the UAF
power plant in Fairbanks. Up to that time, the coal had been
transported by ARRC and delivered in railcars to a siding next to
the power plant. This method of delivery required UAF employees
to unload coal into the hoppers: a difficult, dangerous and time-
UAF officials determined that Gunderson's proposal
qualified as a "unique offer" under UAF procurement regulations
and awarded Gunderson a five-year sole source contract. The
contract set a price of $8.25 per ton and estimated a need for
60,500 tons per year, bringing the total contract price to just
under $500,000 per year.
Upon learning of this contract, ARRC filed a formal
written protest with UAF. See AS 36.30.560 (providing that an
interested party may protest a contract award). It asserted that
the sole source contract violated both state and university
procurement codes and requested that UAF cancel the contract and
publicly solicit competitive bids for the job.
UAF's Chief Procurement Officer, Charles Hill, denied
ARRC's protest on the ground that ARRC lacked standing to protest
UAF's award of the sole source contract because ARRC was not an
"interested party" as defined in AS 36.30.699.1
ARRC appealed this decision and requested a hearing
before an independent hearing officer as authorized by AS
36.30.590. Gerald Neubert, University Architect and Acting Chief
Procurement Officer for Protest, subsequently notified ARRC that
a hearing would be held for the limited purpose of determining
whether ARRC was an "interested party" capable of delivering and
unloading coal into the UAF hoppers. The Pre-Hearing Order
framed the scope of the hearing as follows:
In order to show that it has standing to
maintain an appeal, ARRC has the burden of
proving, by a preponderance of the evidence,
that at the time the University of Alaska
awarded Contract 93-0012 to [Gunderson], ARRC
was able to economically provide all services
required under the . . . contract and was
willing to do so.
The parties who will participate in this
limited hearing are ARRC and the University
of Alaska. [Gunderson] is not a party.
Hearing Officer Neubert issued written findings of fact
and conclusions of law shortly after the hearing. He found, in
11. In 1992, ARRC had equipment and manpower
available at its Fairbanks rail yard to move
coal cars from the UAF rail siding to the UAF
power plant hoppers and to unload those coal
cars. It also had the ability to subcontract
12. In 1992, ARRC would have been willing to
bid on a UAF proposal to provide coal
transportation and unloading services to the
UAF power plant using its own personnel and
equipment. ARRC would have been capable of
performing such services.
13. In 1992, ARRC routinely submitted bids
or proposals to customers who solicited bids
or proposals for transportation and related
services. ARRC routinely entered into volume
or "requirements" transportation contracts
with customers at rates below those contained
in ARRC's published tariffs.
14. If UAF had advertised for bids or
proposals for coal transportation/unloading
services, ARRC would have submitted a bid or
proposal to provide such services.
15. UAF's award of a sole source contract to
[Gunderson] has substantially affected ARRC's
economic interests by depriving ARRC of an
opportunity to earn in excess of $2.5 million
over the term of the contract. ARRC has an
economic interest in the UAF coal delivery
Based on these findings, the hearing officer concluded that ARRC
was an "interested party" under AS 36.30.699 because it had the
capability to transport and unload coal into the hoppers of the
UAF power plant without the assistance of UAF personnel or
equipment. He then ruled:
AS 36.30.300 allows a sole source procurement
if there is only one source for the required
procurement. If there is a reasonable
alternative source, a sole source procurement
may not be awarded. Because ARRC was a
reasonable alternative source for the
delivery and unloading of coal, it was
improper, as a matter of law, for UAF to
award a sole source contract to [Gunderson].
The ARRC protest was legally sufficient and
should have been upheld.
UAF subsequently issued a request for proposals for
coal transportation and unloading services. Nine companies,
including ARRC and Gunderson, submitted bids. UAF awarded the
contract to Royal Contractors, the lowest bidder.2 Gunderson
filed a formal protest with UAF, requesting that UAF cancel the
contract with Royal Contractors and reinstate his contract. UAF
denied this protest.
In August 1993 Gunderson sued both UAF and ARRC under a
variety of theories.3 In the fourth count of his complaint,
Gunderson asserted the following claims against ARRC:
[ARRC] has a monopoly of coal shipments into
Fairbanks and generally into interior Alaska.
[ARRC], in an attempt to maintain its
monopoly, filed a frivolous protest against
the issuance of the UAF contract to
Gunderson. In the hearing that was
subsequently held pursuant to the protest (a
hearing in which UAF barred Gunderson from
participating), [ARRC] misrepresented the
facts and misrepresented its intention to bid
a competitive price with Gunderson. The
misrepresentation by [ARRC] was for the
purpose of injuring Gunderson, and excluding
the trucking industry from competing with
[ARRC] for the hauling of coal in [the]
interior of Alaska. These acts by [ARRC]
constitute a common law tort of interference
with Gunderson's contractual relationship
with UAF; constitute a common law tort of
interference with Gunderson's prospective
advantage with UAF and other coal consumers
in interior Alaska; and constitute a
violation of Article A.S. '' 45.50.471, 501,
531 and A.S. '' 45.50.562, 45.50.576; or, in
the alternative, a violation of 42 U.S.C.
1983. As a result of these common law torts
and statutory violations, Gunderson has been
damaged in a sum or sums to be proved at
trial and is entitled to have these damages
tripled pursuant to the appropriate statutory
ARRC moved to dismiss these claims under Civil Rule
12(b)(6), arguing, inter alia, that the Noerr-Pennington doctrine
barred Gunderson's claims against ARRC. The superior court
granted ARRC's motion, ruling that ARRC was immune from suit
under the Noerr-Pennington doctrine. Because the court
considered materials outside the pleadings in dismissing
Gunderson's claims, it treated ARRC's motion as a motion for
summary judgment. On motion by ARRC, the court then entered
final judgment in favor of ARRC under Alaska Civil Rule 54(b).
This appeal followed.
II. STANDARD OF REVIEW
We review de novo the superior court's grant of summary
judgment. Kollodge v. State, 757 P.2d 1024, 1026 n.4 (Alaska
1988). "[S]ummary judgment is affirmed if the evidence in the
record fails to disclose a genuine issue of material fact and the
moving party is entitled to judgment as a matter of law."
Dayhoff v. Temsco Helicopters, Inc., 772 P.2d 1085, 1086 (Alaska
1989). In reviewing the record, we draw all reasonable
inferences in favor of the non-moving party. Id.
The Noerr-Pennington doctrine evolved out of two United
States Supreme Court cases: Eastern Railroad Presidents
Conference v. Noerr Motor Freight, Inc., 365 U.S. 127 (1961), and
United Mine Workers v. Pennington, 381 U.S. 657 (1965). In these
decisions, the Court held that attempts to influence legislative
and executive officials were beyond the scope of the Sherman Act,
reasoning that Congress did not intend federal antitrust law to
regulate political activities or to infringe on the First
Amendment rights of petition and association. Noerr, 365 U.S. at
136-38; Pennington, 381 U.S. at 669-70; see generally John P.
Ludington, Annotation, Application of Doctrine Exempting From
Federal Antitrust Laws Joint Efforts to Influence Legislative or
Executive Action, 17 A.L.R. Fed. 645 (1973).
In California Motor Transport Co. v. Trucking
Unlimited, 404 U.S. 508 (1972), the Court extended the Noerr-
Pennington doctrine to include attempts to influence adjudicatory
proceedings before administrative agencies and the courts. Id.
[I]t would be destructive of rights of
association and of petition to hold that
groups with common interests may not, without
violating the antitrust laws, use the
channels and procedures of state and federal
agencies and courts to advocate their causes
and points of view respecting resolution of
their business and economic interests vis-a-
vis their competitors.
Id. at 510-11.
In his brief, Gunderson concedes that the Noerr-
Pennington doctrine protects the right of a party to invoke the
legal process "without fear that such action would be considered
a tortious interference with prospective advantage or a violation
of the State's antitrust laws."4 However, Gunderson goes on to
argue that ARRC subverted the legal process by presenting false
and misleading evidence at the April 1992 hearing. For this
reason, Gunderson argues that ARRC engaged in a "sham" protest
designed to destroy Gunderson's contractual relationship with
The United States Supreme Court has observed that a
party will be subject to federal antitrust liability if its
efforts to influence governmental action are "a mere sham to
cover what is actually nothing more than an attempt to interfere
directly with the business relationships of a competitor."
Noerr, 365 U.S. at 144; see also California Motor Transp. Co. v.
Trucking Unlimited, 404 U.S. 508, 511-13 (1972).
In California Motor, a group of California truckers
instituted a series of state and federal proceedings in an effort
to defeat an application for in-state operating rights filed by a
group of out-of-state truckers. The out-of-state truckers
subsequently filed a civil action, alleging that the California
truckers had violated federal antitrust laws. In holding that
the district court had erred in dismissing their complaint under
the Noerr-Pennington doctrine, the Supreme Court observed:
Misrepresentations, condoned in the political
arena, are not immunized when used in the
adjudicatory process. Opponents before
agencies or courts often think poorly of the
other's tactics, motions, or defenses and may
readily call them baseless. One claim, which
a court or agency may think baseless, may go
unnoticed; but a pattern of baseless,
repetitive claims may emerge which leads the
factfinder to conclude that the
administrative and judicial processes have
been abused. That may be a difficult line to
discern and draw. But once it is drawn, the
case is established that abuse of those
processes produced an illegal result, viz.,
effectively barring respondents from access
to the agencies and courts. Insofar as the
administrative or judicial processes are
involved, actions of that kind cannot acquire
immunity by seeking refuge under the umbrella
of "political expression."
Id. at 513.
In the wake of California Motor, many courts have held
that the filing of a single lawsuit may, in certain
circumstances, constitute an abuse of the judicial process for
the purposes of the Noerr-Pennington doctrine. See, e.g., Aydin
Corp. v. Loral Corp. 718 F.2d 897, 903 (9th Cir. 1983) (holding
that a single action is sufficient to invoke the sham exception);
Energy Conservation, Inc. v. Heliodyne, Inc., 698 F.2d 386, 389
(9th Cir. 1983) (holding that a single baseless suit may be held
to constitute a sham so long as some abuse of process is
alleged); First Nat'l Bank v. Marquette Nat'l Bank, 482 F. Supp.
514, 520-21 (D. Minn. 1979), aff'd, 636 F.2d 195 (8th Cir. 1980),
cert. denied, 450 U.S. 1042 (1981) (holding that the filing of a
single action may constitute a "sham" under the Noerr-Pennington
doctrine if the action involved unethical conduct). See
generally Glenn A. Guarino, Annotation, "Sham" Exception to
Application of Noerr-Pennington Doctrine, Exempting from Federal
Antitrust Laws Joint Efforts to Influence Governmental Action, 71
A.L.R. Fed. 723 (1985).
In Professional Real Estate Investors, Inc. v. Columbia
Pictures Industries, 113 S. Ct. 1920 (1993), the Supreme Court
established a two-part test for determining whether a particular
lawsuit constitutes a "sham."
First, the lawsuit must be objectively
baseless in the sense that no reasonable
litigant could realistically expect success
on the merits. If an objective litigant
could conclude that the suit is reasonably
calculated to elicit a favorable outcome, the
suit is immunized under Noerr, and an
antitrust claim premised on the sham
exception must fail. Only if challenged
litigation is objectively meritless may a
court examine the litigant's subjective
motivation. Under this second part of our
definition of sham, the court should focus on
whether the baseless lawsuit conceals "an
attempt to interfere directly with the
business relationships of a competitor,"
Noerr, supra, 365 U.S., at 144, 81 S. Ct., at
533 (emphasis added), through the "use [of]
the governmental process--as opposed to the
outcome of that process--as an
anticompetitive weapon," Omni, 499 U.S., at
___, 111 S. Ct., at 1354 (emphasis in
original). This two-tiered process requires
the plaintiff to disprove the challenged
lawsuit's legal viability before the court
will entertain evidence of the suit's
economic viability. Of course, even a
plaintiff who defeats the defendant's claim
to Noerr immunity by demonstrating both the
objective and the subjective components of a
sham must still prove a substantive antitrust
violation. Proof of a sham merely deprives
the defendant of immunity; it does not
relieve the plaintiff of the obligation to
establish all other elements of his claim.
Id. at 1928 (footnote omitted). However, the Court in Columbia
Pictures expressly declined to decide whether the Noerr-
Pennington doctrine immunizes parties who commit fraud and
misrepresentation in bringing an action.
In surveying the "forms of illegal and
reprehensible practice which may corrupt the
administrative or judicial processes and
which may result in antitrust violations," we
have noted that "unethical conduct in the
setting of the adjudicatory process often
results in sanctions" and that
"[m]ispresentations, condoned in the
political arena, are not immunized when used
in the adjudicatory process." California
Motor Transport, 404 U.S., at 512-513, 92 S.
Ct., at 613. We need not decide here whether
and, if so, to what extent Noerr permits the
imposition of antitrust liability for a
litigant's fraud or other misrepresentations.
Cf. Fed.Rule Civ.Proc. 60(b)(3) (allowing a
federal court to "relieve a party . . . from
a final judgment" for "fraud . . . ,
misrepresentation, or other misconduct of an
adverse party"); Walker Process Equipment,
Inc. v. Food Machinery & Chemical Corp., 382
U.S. 172, 176-177, 86 S. Ct. 347, 349-350, 15
L.Ed.2d 247 (1965); id. at 179-180, 86 S.
Ct., at 351-52 (Harlan, J., concurring).
Id. at 1929 n.6.
On appeal, Gunderson does not argue that ARRC's protest
was "objectively baseless." Rather, he asserts, as he did below,
that ARRC misrepresented its ability and intention to bid a
competitive price at the April 1992 hearing. Citing footnote six
of Columbia Pictures, Gunderson argues that ARRC's alleged
misrepresentations at the hearing suffice to make its protest a
"sham" without regard to the objective merit of its protest or
ARRC's motivation. In other words, Gunderson contends that where
a party engages in misrepresentation or fraud during the judicial
process, the two-part Columbia Pictures test does not apply.
As the superior court observed, the Ninth Circuit
recently considered and rejected this very argument. See Liberty
Lake Invs., Inc. v. Magnuson, 12 F.3d 155 (9th Cir. 1993), cert.
denied, 115 S. Ct. 77 (1994). In Liberty Lake, a property
developer sued a number of business competitors, alleging that
they had conspired to mount a frivolous environmental challenge
to the developer's plans to market a tract of land as a regional
shopping center. Id. at 156. The district court granted summary
judgment in favor of the defendants, ruling, inter alia, that the
defendants were immune from suit under the Noerr-Pennington
On appeal, the Ninth Circuit affirmed, holding that the
environmental challenge was not "objectively baseless" under
Columbia Pictures and that the defendants were entitled to Noerr-
Pennington immunity. Id. at 157-58. The court rejected the
developer's contention that the defendants' alleged fraud and
misrepresentations in the course of the litigation sufficed "to
make the litigation sham without regard to the objective merit of
the lawsuit or its proponents' motivation." Id. at 158.
As we read the Court's footnote 6,
however, it does no more than reserve the
issue of whether antitrust liability may be
premised on a litigant's deceptive conduct
which goes to the core of a lawsuit's
legitimacy, such that it is not "genuine,"
either in the sense of "'having the reputed
or apparent qualities or character'" (i.e.,
objectively "genuine") or being "'sincerely
and honestly felt or experienced'" (i.e.,
subjectively "genuine"). Id. at ___, 113 S.
Ct. at 1929 (quoting Webster's Third New
International Dictionary 948 (1986)).
Following its reservation of the
question whether "fraud or other
misrepresentations" may amount to "sham," the
Court cited as analogous authority Walker
Process Equipment, Inc. v. Food Machinery &
Chemical Corp., 382 U.S. 172, 86 S. Ct. 347,
15 L.Ed.2d 247 (1965), which held that a
patent procured by intentional fraud on the
Patent Office could form the basis for a
federal antitrust claim, id. at 176-77, 86 S.
Ct. at 349-50; Justice Harlan's Walker
Process concurrence which emphasized that the
Court's holding reached only "deliberate
fraud," id. at 179-80, 86 S. Ct. at 351-52
(Harlan, J., concurring); and Rule 60(b)(3),
which allows a party to obtain relief from
judgment because of its opponent's "fraud . .
. misrepresentation, or other misconduct."
In a case involving a fraudulently-
obtained patent, that which immunizes the
predatory behavior from antitrust liability
(the patent) is, in effect, a nullity because
of the underlying fraud. Similarly, Rule
60(b)(3) enables a party to set aside an
otherwise valid judgment on the ground that
it resulted from an opposing party's
fraudulent behavior or misrepresentation to
the court. See Charles Alan Wright & Arthur
R. Miller, Federal Practice and Procedure:
Civil ' 2860, at 188-89 (1973). Read in
context with the entire [Columbia Pictures]
opinion, footnote 6 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, the
court deprive the litigation of its
Id. at 158-59 (footnote omitted).
We find the Ninth Circuit's reading of Columbia
Pictures persuasive. Allegations of fraud and misrepresentation
in the judicial process will only block Noerr-Pennington immunity
when such allegations go "to the core of a lawsuit's legitimacy."
Id. at 158. In this case, Gunderson's complaint charged ARRC
with misrepresenting "the facts and . . . its intention to bid a
competitive price with Gunderson" in its protest. Even assuming
the truth of this charge, these misrepresentations do not go to
the heart of ARRC's protest. ARRC challenged the sole source
contract award to Gunderson on the ground that it was capable of
providing the delivery and unloading services offered by
Gunderson. See AS 36.30.300 (providing that a sole source
procurement is permitted only when there is one source for the
required good or service). Gunderson has never argued that ARRC
is not capable of providing these services. As noted by ARRC,
the fact that ARRC prevailed in its protest and that nine
companies ultimately submitted bids demonstrates the protest's
legitimacy.6 See Columbia Pictures, 113 S. Ct. at 1928 (noting
that a successful lawsuit is "by definition a reasonable effort
at petitioning for redress and therefore not a sham").
We therefore conclude that the superior court properly
granted summary judgment in favor of ARRC.7
1 AS 36.30.699 provides:
In AS 36.30.560 -- 36.30.695, "interested
party" means an actual or prospective bidder
or offeror whose economic interest may be
affected substantially and directly by the
issuance of a contract solicitation, the
award of a contract, or the failure to award
a contract; whether an actual or prospective
bidder or offeror has an economic interest
depends on the circumstances.
2 Royal Contractors bid $7.57 per ton. Gunderson
submitted the third lowest bid, at $8.18 per ton. ARRC bid
$10.20 per ton, the fifth lowest bid.
3 Gunderson raised the following causes of action against
UAF: (1) breach of contract; (2) breach of duty of
confidentiality and expropriation of intellectual property; and
(3) due process violations.
4 Thus Gunderson concedes that the Noerr-Pennington
doctrine applies to his state antitrust law claims under AS
45.50.562-.596 (Alaska Restraint of Trade Act). He also concedes
that the Noerr-Pennington doctrine may bar a party from bringing
related business tort and ' 1983 claims. See Video Int'l Prod.
v. Warner-Amex Cable Communications, Inc., 858 F.2d 1075, 1084
(5th Cir. 1988), cert. denied, 491 U.S. 906 (1989) (holding that
conduct protected from antitrust liability under the Noerr-
Pennington doctrine is also shielded from business tort and '
5 On appeal, Gunderson also contends that ARRC's protest
falls within the "sham" exception because he was improperly
excluded from the April 1992 hearing in violation of his due
process rights. However, Gunderson did not present this argument
to the trial court or include this issue in his points on appeal.
Therefore it is waived. See Moran v. Holman, 501 P.2d 769, 769-
70 (Alaska 1972) (this court will not consider on appeal
arguments which were not raised before the trial court or which
were not included in statement of points on appeal).
In any case, Gunderson makes no attempt to argue that
ARRC affirmatively sought to exclude Gunderson from the hearing
or that ARRC was involved in any way in the hearing officer's
decision. As ARRC points out, in the absence of any such
connection, Gunderson's exclusion from the hearing process has no
bearing on its right to Noerr-Pennington immunity.
6 In a related argument, Gunderson contends that the
superior court improperly "assumed" that the sole source contract
was illegal under AS 36.30.300. Essentially, Gunderson is
arguing that UAF should be able to award a sole source contract
to a business which comes up with an innovative service, even if
other businesses are equally capable of providing the proposed
service. However, this argument has no bearing on whether ARRC
is entitled to Noerr-Pennington immunity. Even if the superior
court were to ultimately conclude that UAF could properly award
Gunderson a sole source contract in these circumstances, ARRC
would still be entitled to immunity as long as there was a
legitimate basis for its protest. See Columbia Pictures, 113 S.
Ct. at 1928 n.5 (noting that a losing lawsuit does not prove that
the litigation was a sham).
7 Because we conclude that the Noerr-Pennington doctrine
bars Gunderson's claims, we need not address the other grounds
raised by ARRC for affirming the superior court's dismissal.