The United States Court of Appeals for the Fourth Circuit recently reversed a district court's dismissal of Labor Management Relations Act claims raised by two commercial real estate developers against the United Food and Commercial Workers Union and the Mid-Atlantic Retail Food Industry Joint Labor Management Fund.

The plaintiffs had alleged that the defendants had committed an unfair labor practice by engaging in a secondary boycott by exerting pressure on the real estate developers in the hope that they would cease dealing with a non-unionized grocery chain. These claims arose after the plaintiffs each planned to lease a storefront unit in each of their shopping centers to the grocery chain. The defendants opposed these plans, and instituted numerous legal challenges during the course of each project's development as a result. These challenges included petitioning to revoke a city council decision to have a project site rezoned, appealing a decision to have a city council decision to extend time to post fees and bonds for the project, filing suit to enjoin the city council's approval of financing bonds, and more. The plaintiffs filed suit claiming that the unions' creation of a secondary boycott constituted an unfair labor practice. The claims were dismissed by a district court judge, who applied the Noerr-Pennington doctrine and concluded that the defendants were protected from liability associated with their First Amendment Right to petition the government for redress of grievances.

In concluding that the district court's dismissal under the Noerr-Pennington doctrine was improper, the Fourth Circuit converted the plaintiffs' motion to one for summary judgment as to this issue, and held that there was a genuine issue of material fact regarding whether the "sham litigation" exception to the Noerr-Pennington doctrine applies to the plaintiffs' claim. In so doing, the court reasoned that the First Amendment offers no protection where an individual's petitioning activity is a sham to cover an attempt to violate federal law. The court analyzed the proper test for determining whether "sham litigation" encompassing a series of legal proceedings has occurred, and concluded that a holistic evaluation of whether administrative and judicial processes have been abused should apply to focus on the entire pattern of legal proceedings at issue. Focusing those considerations to this case, the court noted that a genuine issue of material fact was created by evidence showing that the majority of legal challenges failed, there was no standing to proceed on at least one of the unions' claims, and ten of the fourteen suits were withdrawn under questionable circumstances. As such, the court concluded, a genuine issue of material fact remains regarding whether the pattern of litigation constituted an impermissible secondary boycott. The district court's dismissal of this component of the plaintiffs' complaint was vacated, and the matter was remanded to the district court for further proceedings. Read more.