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Law Firm Not Immune From Antitrust Claim

(CN) - A California woman can sue the law firm representing a school district in an eminent domain case for allegedly hiding soil test results that would have given her property a higher value, the 9th Circuit ruled.

The San Francisco appeals court found that Foley & Lardner LLP is not exempt under the First Amendment's Noerr-Pennington doctrine, which shields private entities from antitrust liability for trying to influence public officials.

U.S. District Judge David Alan Ezra, who participated in the panel decision, noted that the case fits the doctrine's exception for sham litigation.

The firm and its client used the "governmental process ... as an anticompetitive weapon," Ezra wrote.

Joan Kearney of Ramona, Calif., sued the lawyers representing the Ramona Unified School District when she found percolation testing on a school expense report after the school claimed that it never conducted testing.

The test results purportedly showed that the land could support up to 16 residential lots, instead of the six to eight lots assumed in the appraisal. The higher capacity would have made her land worth $1.4 million -- $550,000 more than the $850,000 appraised value, Kearney claimed.

She sued the firm under the Racketeer Influenced and Corrupt Organizations Act, or RICO.

The district court said Kearney didn't search hard enough for the test results, but the 9th Circuit rejected that finding, saying the issue was the law firm's immunity, not Kearney's actions.

The appellate panel upheld dismissal of the state law claims as barred by California's litigation privilege, but vacated and remanded the federal claims on the ground that the Noerr-Pennington doctrine doesn't apply.

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