ELR Citation: ELR 20015
No(s). A112028 (Cal. App. 1st Dist. Jan 10, 2008)

A California appellate court upheld the dismissal of the state's Unfair Competition Law (UCL) claim against a lumber company for misrepresenting and concealing crucial facts during administrative environmental review proceedings held in connection with a 1996 agreement to sell the Headwaters Forest, an ancient redwood forest, and other land to the state and federal governments for over $300 million. The company is immune from UCL liability under California Civil Code §47(b), which renders absolutely privileged communications made as part of a “judicial or quasi-judicial proceeding.” The company is also immune under federal law pursuant to the Noerr-Pennington doctrine, which precludes virtually all civil liability for a defendant’s petitioning activities before not just courts, but also before administrative and other governmental agencies. It is only when efforts to influence government action are a "sham" that they fall outside the protection of the Noerr-Pennington doctrine and within the scope of the Sherman Act. Here, the company's petitioning activities do not fall within the sham exception. In addition, the fraudulent conduct alleged here is not actionable because the state failed to adequately allege that it deprived the California Environmental Quality Act proceedings of legitimacy.