CANBY, Circuit Judge:
Charley's Taxi Radio Dispatch Corporation ("Charley's") appeals the district court's dismissal of its antitrust action. The defendants in this action are the State Independent Drivers Association of Hawaii, Inc. ("SIDA"), the State of Hawaii, the State of Hawaii's Department of Transportation ("DOT"), and Wayne J. Yamasaki, Director of Transportation. After a six-day bench trial, the district court found that Charley's had failed to establish that either SIDA or the state defendants had violated either section 1 or 2 of the Sherman Act, 15 U.S.C. §§ 1, 2 (1982). We hold that (1) the Eleventh Amendment bars Charley's action against Hawaii and the DOT; (2) under the Parker state action doctrine Director Yamasaki may not be enjoined from enforcing the challenged contract; and (3) SIDA did not engage in a group boycott in violation of the section 1 of the Sherman Act, or engage in other conduct prohibited by the Sherman Act. Accordingly, we vacate in part, affirm in part, and remand.
SIDA, the State Independent Drivers Association, Inc., is the largest taxi company on Oahu, Hawaii. It was formed in 1963 by a group of individual taxi owner-operators for the purpose of gaining access to airport and hotel taxi stands that were contracted out on an exclusive basis to individual taxi companies. SIDA's membership is limited to independent taxi operators; it does not admit fleet operators.
In 1963, Hawaii's Department of Transportation awarded a contract granting SIDA the exclusive right, subject to minor exceptions, to provide taxi service from Honolulu International Airport. No restrictions were placed on taxi service to the Airport. The DOT's decision to award an exclusive contract was unilateral and not based upon negotiations with SIDA.
From 1963 to 1971, SIDA's contract with the DOT was renewed every two years. In 1973 SIDA's contract was renewed for five years. In 1978, SIDA's contract was renewed for 15 years.
Charley's Taxi Radio Dispatch Corporation is the largest fleet operator on Oahu, Hawaii. In 1979, Charley's brought this action in the United States District Court for the District of Hawaii against SIDA, the State of Hawaii, and various state agencies and officials
On June 22, 1982, Charley's moved for partial summary judgment, arguing that Parker state action immunity was not available to the state defendants. The state defendants filed a countermotion asserting
On November 5, 1984, following a bench trial, the district court ruled in favor of SIDA and Hawaii. It found that neither defendant had violated the Sherman Act. Judgment was entered on February 22, 1985. Charley's filed a timely appeal.
I. JURISDICTION AND THE ELEVENTH AMENDMENT
The first issue we must consider is whether the district court correctly asserted jurisdiction over the state defendants. We review de novo findings of subject matter jurisdiction. Bright v. Bechtel Petroleum, Inc., 780 F.2d 766, 768 (9th Cir.1986). We conclude that the Eleventh Amendment deprived the district court of jurisdiction over Charley's action against Hawaii and the DOT.
The Eleventh Amendment provides that:
Under this amendment, an unconsenting state is immune
Charley's contends that Hawaii and the DOT waived their immunity to suit in the district court. A state may waive its Eleventh Amendment immunity only by giving an "unequivocal indication" that it consents to suit in a federal court. Atascadero State Hospital v. Scanlon, 473 U.S. 234, 105 S.Ct. 3142, 3145 n. 1, 87 L.Ed.2d 171 (1985). We may find such an indication where (1) the state expressly consents to federal jurisdiction in the context of the litigation, see Actmedia, Inc., v. Stroh, 789 F.2d 766, 772 (9th Cir.1986); (2) a state statute or constitutional provision expressly provides for suit in a federal court, Atascadero, 105 S.Ct. 3142 at n. 1; or (3) Congress clearly intends to condition the state's participation in a program or activity on the state's waiver of its immunity. Id. at 3150; Doe v. Maher, 793 F.2d 1470, 1477 (9th Cir.1986).
None of these conditions are present here. Hawaii and the DOT have asserted their constitutional immunity throughout the course of this action. The statutes relied on by Charley's, Haw.Rev.
Nor has Congress manifested a clear intent to condition either Hawaii's operation of the Airport or the DOT's entering into exclusive contracts on a waiver of Eleventh Amendment immunity. To the contrary, "in enacting the Sherman Act, [Congress] did not intend to compromise the States' ability to regulate their domestic commerce." Southern Motor Carriers Rate Conference, Inc. v. United States, 471 U.S. 48, 105 S.Ct. 1721, 1726, 85 L.Ed.2d 36 (1985); see also Parker v. Brown, 317 U.S. 341, 351, 63 S.Ct. 307, 313, 87 L.Ed. 315 (1943) ("The Sherman Act makes no mention of the state as such, and gives no hint that it was intended to restrain state action or official action directed by a state"). The Eleventh Amendment thus barred Charley's action against Hawaii and the DOT.
In contrast with states and their agencies, state officials acting in their official capacity enjoy only limited immunity under the Eleventh Amendment. Although suits against state officials allegedly violating federal law may be brought in federal court, see Edelman v. Jordan, 415 U.S. 651, 94 S.Ct. 1347, 39 L.Ed.2d 662 (1974); Ex parte Young, 209 U.S. 123, 160, 28 S.Ct. 441, 454, 52 L.Ed. 714 (1908), only prospective injunctive relief may be awarded, Pennhurst, 465 U.S. at 102-03, 104 S.Ct. at 909; Edelman, 415 U.S. at 666-67, 94 S.Ct. at 1357. Charley's alleged that the Airport's exclusive taxi service contract violated the Sherman Act. The district court thus properly entertained Charley's action to enjoin Director of Transportation Yamasaki from enforcing the contract.
The district court's jurisdiction over Charley's action against SIDA was, of course, unaffected by the Eleventh Amendment.
II. DIRECTOR YAMASAKI AND THE PARKER STATE-ACTION DOCTRINE
Charley's contends that the district court erred in dismissing its injunctive action against Director of Transportation Yakasaki. We may affirm the district court on any ground supported by the record, even if the ground is not relied on by the district court. Big Spring v. Bureau of Indian Affairs, 767 F.2d 614, 616 (9th Cir.1985), cert. denied, ___ U.S. ___, 106 S.Ct. 2914, 91 L.Ed.2d 543 (1986). In this case we affirm on a ground in fact rejected by the district court: the Parker state-action doctrine.
In Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943), the Supreme Court held that an anticompetitive marketing program instituted under the California Agricultural Act was exempt from the Sherman Act. The Court stated, "There is no suggestion of a purpose to restrain state action in the [Sherman] Act's legislative history." Id. at 351, 63 S.Ct. at 313. Over the years, the scope of the exemption for "state action" under Parker has been tested and delineated. See, e.g., Southern Motor Carriers Rate Conference, 471 U.S. 48, 105 S.Ct. 1721, 85 L.Ed.2d 36 (1985) (state authorized rate bureaus composed of private common carriers found immune); Community Communications Co. v. City of Boulder, 455 U.S. 40, 52-54, 102 S.Ct. 835, 841-42, 70 L.Ed.2d 810 (1982) (cities exempt when acting pursuant to clearly articulated and affirmatively expressed state policy); Goldfarb v. Virginia State Bar, 421 U.S. 773, 778-92, 95 S.Ct. 2004, 2008-15, 44 L.Ed.2d 572 (1975) (state bar acting alone could not immunize anticompetitive conduct).
In Deak-Perera Hawaii, Inc. v. Department of Transporation, 745 F.2d 1281 (9th
Id. at 1282-1283 (quoting Hoover v. Ronwin, 466 U.S. 558, 104 S.Ct. 1989, 1995, 80 L.Ed.2d 590 (1984) (emphasis added)).
Deak-Perera controls the Parker question before us. When it entered into an exclusive franchise contract with SIDA, the DOT was "operating within its constitutional and statutory authority." The Hawaii legislature, as authorized by Hawaii Const. Art. V, § 6, created the DOT to "establish, maintain, and operate transportation facilities of the state, including ... airports." Hawaii Rev.Stat. §§ 26-19. Under the Aeronautics Act of 1947, Hawaii Stat. Ch. 261, the DOT is broadly authorized to "enter into contracts, leases, licences, and other arrangements ... [c]onferring the privilege of supplying goods, commodities, things, services or facilities at the airport." Id. at § 267-7(a) (Supp.1984). The DOT "may establish the terms and conditions of the contract, lease, license, or other arrangement, and may fix the charges, rentals, or fees." Id. Finally, Section 261-10, "Exclusive rights prohibited," cautions that "[t]his section shall not prevent the making of contracts, leases or other arrangements pursuant to § 261-7." The constitutional and statutory authority to enter into the challenged contract with SIDA is thus well established.
We noted in Deak-Perera that the legislature "contemplated an exclusive lease [to the currency exchange concession]." 745 F.2d at 1282. We do not view this statement, however, as establishing an additional requirement of legislative contemplation for a state executive agency or state official seeking Parker immunity.
We conclude that state executives and executive agencies, like the state supreme court, are entitled to Parker immunity for actions taken pursuant to their constitutional or statutory authority, regardless of whether these particular actions or their anticompetitive effects were contemplated by the legislature. The requirement of specific authorization that we impose on cities to qualify for Parker immunity is not appropriate for the executive branch of the state government. When the state executive or executive agencies act within their lawful authority, their acts are those of the sovereign.
Because the DOT was acting pursuant to its constitutional and statutory authority, the DOT did not violate the Sherman Act by entering into the exclusive franchise contract with SIDA. Director of Transportation Yamasaki therefore could not be enjoined from enforcing that contract.
III. CHARLEY'S CLAIMS AGAINST SIDA
The district court found that Charley's antitrust claims against SIDA were without merit. On appeal, Charley's challenges this finding on three grounds: (1) SIDA's refusal to admit Charley's to membership is a per se violation of section 1 of the Sherman Act; (2) SIDA's exclusive right to provide taxi service at the Airport is prohibited by section 2 of the Sherman Act; and (3) SIDA's exclusive contract is a restraint of trade in violation of section 1 of the Sherman Act. We reject Charley's challenge.
A. Refusal to Grant Membership
Charley's contends that by refusing to admit Charley's to membership, SIDA engaged in a group boycott in violation of section 1 of the Sherman Act.
Section 1 of the Sherman Act prohibits "Every contract, combination ... or conspiracy, in restraint of trade." 15 U.S.C. § 1. Because every contract falls within the literal terms of this prohibition, section 1 has been prudently construed to prohibit only restraints of trade that are unreasonable. See Chicago Board of Trade v. United States, 246 U.S. 231, 238, 38 S.Ct. 242, 243, 62 L.Ed. 683 (1918); Standard Oil Co. v. United States, 221 U.S. 1, 31 S.Ct. 502, 55 L.Ed. 619 (1911). On the basis of their proven anticompetitive effect, group boycotts are considered unreasonable per se. See Klor's Inc. v. Broadway-Hale Stores, Inc., 359 U.S. 207, 79 S.Ct. 705, 3 L.Ed.2d 741 (1959). Consequently, once properly identified, group boycotts may be judged unlawful without further inquiry. Yet as we have observed, "The term `group boycott' can be applied to divergent types of concerted activity, not all of which necessarily have a pernicious effect on competition or lack any redeeming virtue." Ron Tonkin Gran Turismo Inc. v. Fiat Distributors, Inc., 637 F.2d 1376, 1383 (9th Cir.), cert. denied, 454 U.S. 831, 102 S.Ct. 128, 70 L.Ed.2d 109 (1981).
Charley's argues that by excluding it from SIDA, the members of SIDA have engaged in a group boycott that prevented it from competing in the ground-transportation market outbound from the Airport ("Airport-outbound market").
In order to bring its allegations within the ambit of the per se rule, Charley's relies on Associated Press v. United States, 326 U.S. 1, 65 S.Ct. 1416, 89 L.Ed. 2013 (1945) and Northwest Wholesale Stationers, Inc. v. Pacific Stationery and Printing Co., 472 U.S. 284, 105 S.Ct. 2613, 86 L.Ed.2d 202 (1985) ("Northwest Wholesale"). In both of these cases, defendant firms had acted in concert to acquire a product sought by the plaintiff competitor firm and refused to make that product available to the competitor. In the former case, the defendant firms had joined to produce "AP news" and agreed to by-laws restricting access to this news. In the latter case, defendant firms had formed a buying cooperative that sold stationery supplies to its members at discount rates and then expelled the plaintiff from the cooperative for failure to abide by its disclosure rules. These cases, however, fail to support Charley's claim of per se violation.
In Associated Press, the Supreme Court summarized its holding as follows: "We merely hold that arrangements or combinations designed to stifle competition cannot be immunized by adopting a membership device accomplishing that purpose." 326 U.S. at 19, 65 S.Ct. at 1424. (emphasis added). The Court thus identified anti-competitive purpose or effect as a central characteristic of a group boycott. Accord White Motor Co. v. United States, 372 U.S. 253, 263, 83 S.Ct. 696, 702, 9 L.Ed.2d 738 (1963) (group boycotts unlawful per se because they are "naked restraints of trade with no purpose except stifling competition"); Joseph E. Seagram & Sons, Inc. v. Hawaiian Oke & Liquors, Ltd., 416 F.2d 71, 76-78 (9th Cir.1969) (anticompetitive intent required), cert. denied, 396 U.S. 1062, 90 S.Ct. 752, 24 L.Ed.2d 755 (1970); see also Northwest Wholesale, 105 S.Ct. at 2620 (no per se violation because, "[t]he act of expulsion does not necessarily imply anticompetitive animus ... [where] purchasing cooperatives must establish and enforce reasonable rules").
Id. at 2621. Finding no evidence of such "structural characteristics," the Court concluded that challenged conduct was not per se unreasonable. Id.
We find the characteristics of a per se unlawful boycott identified in the above cases to be lacking in the activities of the members of SIDA. The district court found that "SIDA was organized to gain access to a major market for independents, and not to deny it to Charley's or any other taxi fleet." Charley's does not challenge the district court's finding. Although SIDA does not permit fleet owners to become members, its membership remains open to additional independent owner-operators. SIDA does not prevent its members from competing with each other.
SIDA does not possess "market power or exclusive access to an element essential to effective competition." Id. Although SIDA currently has an exclusive franchise to provide service to the Airport-outbound market, this fact is no more probative of market power than the fact that the cooperative in Northwest Wholesalers had exclusive access to discount goods. In each case there are other markets that a would-be competitor may take advantage of. The Airport-outbound market, though important, is not essential to effective competition. The district court found, and Charley's does not contest, that competition among taxis on Oahu is alive and well. Even within the Airport-outbound market, SIDA members compete with each other.
In light of the purpose and effect of SIDA's membership policies, and the limits of its market power, we conclude that SIDA's exclusion of Charley's from membership does not constitute a per se unlawful group boycott.
Charley's contends that SIDA monopolized in violation of section 2 of the Sherman Act. Charley's argues that SIDA's monopoly over the Airport market arose from SIDA's exclusive franchise contract with Hawaii.
Charley's section 2 claim is simply another attempt by Charley's to attack the validity of the SIDA contract. We earlier determined that the DOT had Parker immunity to grant SIDA an exclusive franchise to provide outbound taxi service from the Airport. Parker immunity exempts state action, not merely state actors. Because the monopoly granted to SIDA was shielded by the Parker doctrine, SIDA cannot be held liable for possessing that monopoly. To hold otherwise, would allow the Parker doctrine to be circumvented by artful pleading: "A plaintiff could frustrate any [Parker protected state plan] merely by filing suit against the regulated private parties, rather than the state officials who implement the plan." Southern Motor Carriers Rate Conference, 105 S.Ct. at 1727. Charley's section 2 claim is meritless.
C. The Exclusive Contract as a Restraint of Trade
Finally, Charley's contends that the contract granting SIDA the exclusive right to pick up passengers at the Airport is a restraint of trade prohibited by section 1 of the Sherman Act. Our analysis of Charley's monopolization claim applies with equal force here. Our earlier conclusion that the DOT had Parker immunity to grant SIDA the exclusive contract establishes
We AFFIRM the district court's dismissal of Charley's Sherman Act claims against SIDA and Director Yamasaki. The district court erred in asserting jurisdiction over Hawaii and the DOT. We VACATE the district court's dismissal of Charley's claims against Hawaii and the DOT and REMAND the case so the district court may dismiss these claims for lack of jurisdiction. Costs are to be awarded to appellees.
AFFIRMED in part; VACATED in part; and REMANDED.
These cases stand for the proposition that intentional anticompetitive behavior — supressing rivals or coercing suppliers — cannot be justified on the basis of a benign ultimate objective — eliminating industry pirating or furthering economic growth. See Hilton Hotels ("Defendants `intended' to impose these restraints upon competition in the only relevant sense here. The ultimate objective defendants sought to achieve is immaterial,") (citations omitted). Thus, while ultimate objective is immaterial, anticompetitive intent is the touchstone of the inquiry.