                    RECOMMENDED FOR FULL-TEXT PUBLICATION
                         Pursuant to Sixth Circuit Rule 206
                               File Name: 12a0050p.06

             UNITED STATES COURT OF APPEALS
                            FOR THE SIXTH CIRCUIT
                              _________________


                                               X
                         Plaintiff-Appellant, -
 VIBO CORPORATION, INC.,
                                                -
                                                -
                                                -
                                                    No. 10-5043
          v.
                                                ,
                                                 >
                                                -
                       Defendants-Appellees. -
 JACK CONWAY, et al.,
                                                -
                                               N
                  Appeal from the United States District Court
               for the Western District of Kentucky at Louisville.
           No. 08-00571—Jennifer B. Coffman, Chief District Judge.
                             Argued: October 6, 2011
                      Decided and Filed: February 22, 2012
             Before: CLAY, GIBBONS, and WHITE, Circuit Judges.

                               _________________

                                   COUNSEL
ARGUED: John K. Bush, GREENEBAUM DOLL & McDONALD PLLC, Louisville,
Kentucky, for Appellant. Gary D. Wilson, Washington, D.C., Douglas L. Wald,
ARNOLD & PORTER LLP, Washington, D.C., for Appellees. ON BRIEF: John K.
Bush, Daniel W. Redding, GREENEBAUM DOLL & McDONALD PLLC, Louisville,
Kentucky, for Appellant. Gary D. Wilson, Washington, D.C., Douglas L. Wald, Michael
B. Bernstein, ARNOLD & PORTER LLP, Washington, D.C., Eric Shapland, ARNOLD
& PORTER LLP, Los Angeles, California, Michael Plumley, OFFICE OF THE
KENTUCKY ATTORNEY GENERAL, Frankfort, Kentucky, Irving Scher, Scott
Martin, GREENBERG TRAURIG LLP, New York, New York, Charles S. Cassis,
Theresa A. Canaday, FROST BROWN TODD LLC, Louisville, Kentucky, Stephen R.
Patton, Douglas G. Smith, KIRKLAND & ELLIS LLP, Chicago, Illinois, Robert J.
Brookhiser, Elizabeth B. McCallum, BAKER & HOSTETLER, Washington, D.C.,
Merrill S. Schell, M. Stephen Pitt, WYATT, TARRANT & COMBS, LLP, Louisville,
Kentucky, Eric Estes, OFFICE OF THE ARKANSAS ATTORNEY GENERAL, Little
Rock, Arkansas, David Lapp, OFFICE OF THE MARYLAND ATTORNEY
GENERAL, Baltimore, Maryland, Brett DeLange, OFFICE OF THE IDAHO
ATTORNEY GENERAL, Boise, Idaho, Paul Berks, OFFICE OF THE ILLINOIS
ATTORNEY GENERAL, Chicago, Illinois, Brian D. Devlin, OFFICE OF THE
MICHIGAN ATTORNEY GENERAL, Lansing, Michigan, Douglas A. Bahr, OFFICE

                                         1
No. 10-5043           VIBO Corp., Inc. v. Conway, et al.                                       Page 2


OF THE NORTH DAKOTA ATTORNEY GENERAL, Bismarck, North Dakota, Susan
C. Walker, OFFICE OF THE OHIO ATTORNEY GENERAL, Columbus, Ohio,
Rebekah A. Baker, OFFICE OF THE TENNESSEE ATTORNEY GENERAL,
Nashville, Tennessee, Michael T. Weirich, OREGON DEPARTMENT OF JUSTICE,
Salem, Oregon, for Appellees.
     CLAY, J., delivered the opinion of the court, in which GIBBONS, J., joined.
WHITE, J. (p. 23), delivered a separate concurring opinion.
                                      _________________

                                            OPINION
                                      _________________

        CLAY, Circuit Judge. Plaintiff VIBO Corporation, Inc., appeals the district
court’s order dismissing its antitrust claims against Defendant tobacco companies, filed
pursuant to the Sherman Act, 15 U.S.C. §§ 1, 3(a); dismissing its constitutional claims
against Defendant Attorneys General, filed pursuant to the Equal Protection Clause of
the Fourteenth Amendment, the Due Process Clauses of the Fifth and Fourteenth
Amendments, and the Due Process, Commerce, and Compact Clauses of Article I;
dismissing its request for relief from the constitutional violations, filed pursuant to
42 U.S.C. § 1983; dismissing its state common law fraud claim; and denying its motion
for preliminary injunctive relief. For the reasons set forth below, we AFFIRM.

                                        BACKGROUND

        Plaintiff VIBO Corp., doing business as General Tobacco, filed a Complaint
against sixteen tobacco manufacturers (“Manufacturer Defendants”)1 and fifty-two
Attorneys General (“Attorneys General Defendants”) acting in their official capacities,2



        1
           Manufacturer Defendants are comprised of two groups of tobacco companies: three companies
who were parties to the original Master Settlement Agreement contested in this suit and thirteen
companies who joined the settlement within ninety days of its execution. These companies include
Lorillard Tobacco Co.; Philip Morris USA, Inc.; R.J. Reynolds Tobacco Co.; Commonwealth Brands, Inc.;
Imperial Tobacco Limited/ITL; Japan Tobacco International USA, Inc.; King Maker Marketing, Inc.; Lane
Limited; Liggett Group, LLC; Lignum-2, Inc.; P.T. Djarum; Premier Manufacturing, Inc.; Santa Fe Natural
Tobacco Co.; Sherman’s 1400 Broadway N.Y.C., Inc.; Top Tobacco, LP; and Vector Tobacco, Inc.
        2
           The Attorneys General represent forty-six states, four United States territories, the
Commonwealth of Puerto Rico, and the District of Columbia. Jack Conway, the lead named defendant,
is the Attorney General of the Commonwealth of Kentucky.
No. 10-5043           VIBO Corp., Inc. v. Conway, et al.                                       Page 3


alleging federal antitrust and constitutional violations and a pendent state fraud claim.
On January 6, 2010, the district court entered judgment dismissing Plaintiff’s claims
against Defendants for failure to state a claim or lack of subject matter jurisdiction,
denying as moot Defendants’ other motions to dismiss, and denying Plaintiff’s request
for preliminary injunctive relief. See VIBO Corp., Inc. v. Conway, 594 F. Supp. 2d 758,
788–89 (W.D. Ky. 2009).

        A.       The Master Settlement Agreement

        The claims at issue revolve around a November 1998 settlement, the Master
Settlement Agreement (MSA), which was executed to end litigation between several
states and the four largest tobacco companies at the time.3 The litigation involved the
tobacco companies’ advertising strategies, which allegedly misled consumers as to the
harmful and addictive effects of tobacco and inappropriately targeted underage
consumers.

        Under the MSA, the Attorneys General of several states agreed to release their
past and future claims against the tobacco companies in exchange for large settlement
payments, future annual disbursements from the tobacco companies managed under an
approved payment scheme, and restrictions on the companies’ future advertising and
marketing schemes. The four original tobacco companies party to the MSA were known
as the original participating manufacturers (OPMs). In addition to releasing their claims
against the OPMs under the MSA, Attorneys General Defendants released claims against
the OPMs’ suppliers, retailers, and distributors. The release provided an incentive for
these businesses to partner with OPMs rather than tobacco companies that had not joined
the MSA, known as non-participating manufacturers (NPMs).

        Attorneys General Defendants also wanted NPMs to join the MSA and thus be
subject to its payment and marketing requirements. Thus, the MSA outlined procedures



        3
          The agreement was originally executed by eight state Attorneys General. Other states joined
the MSA by initiating similar litigation against the tobacco companies in their states’ courts and
subsequently moving the courts to approve their agreed-upon entry into the MSA and dismiss their claims
with prejudice.
No. 10-5043         VIBO Corp., Inc. v. Conway, et al.                             Page 4


for NPMs to join the MSA despite not being party to the original litigation. If an NPM
joined the MSA, it would become a subsequent participating manufacturer (SPM). In
order to encourage the expedited entry of SPMs into the MSA, any SPM that entered the
MSA within ninety days of its November 1998 execution date was “grandfathered” into
the MSA and had a reduced payment obligation for its future annual payments under the
payment scheme when compared with the payment obligations of non-grandfathered
SPMs. However, by MSA requirement, the OPMs retained the most favorable payment
terms.

         In order to induce NPMs to join the MSA and in order to prevent NPMs from
having a market advantage over the OPMs and SPMs that were subject to large MSA
payments and marketing restrictions, the agreement permitted the states to enact
“Escrow Statutes.” These statutes required an NPM to make annual deposits into state
escrow accounts for each state where the NPM sold its products. The escrow payment
amounts were based on each company’s sales in each state. The deposits were held for
twenty-five years, in the event that a state obtained a future judgment or settlement from
that NPM. If no judgment is obtained during that time, the deposit would be released
back to the NPM. For many tobacco companies, especially those selling products in
multiple states, the payment scheme under the MSA was less burdensome than the
payment schedules provided in the Escrow Statutes.

         If an NPM joined the MSA later than ninety days after its execution, it would be
required to negotiate an MSA “adherence agreement” with the Attorneys General. After
doing so, it became a non-grandfathered SPM and was subject to higher payment
obligations than the OPMs and grandfathered SPMs. A “back-payment” provision
required every tobacco company that joins the MSA after ninety days of its execution
to make the payments to the states that it would have been obligated to make had it
joined the MSA at the time of its execution. The payment amount was based on the
company’s nationwide sales since 1999. The company also had to make annual
payments going forward, which were based on the company’s national market shares.
These payments were not reduced as were the grandfathered SPMs’ payments. The
No. 10-5043        VIBO Corp., Inc. v. Conway, et al.                            Page 5


adherence agreement determined the back-payment amount and the annual payment
obligation amount going forward.

       The MSA also contained provisions to ensure that the OPMs retained favored
treatment among the other participating manufacturers (PMs). If any adherence
agreement of an SPM provides for more favorable terms for that company than the terms
governing the OPMs under the MSA, then a clause in Section XVIII(b) of the MSA,
entitled “Limited Most Favored Nations” (LMFN), granted the OPMs the right to
receive those same favorable terms. The LMFN clause did not grant any PM the
authority to vote on whether an NPM may become a party to the MSA or to determine
the terms of an adherence agreement. Other provisions in the MSA governed waiver of
constitutional claims, jurisdiction, venue, and arbitration agreements.

       B.      Plaintiff Becomes a Party to the MSA

       Plaintiff entered the tobacco market in 2000, two years after the MSA’s
execution. Plaintiff originally operated as an NPM in a few states, including Kentucky,
Florida, and North Carolina. It paid into state escrow accounts, but the states began to
amend their escrow statutes to make the escrow payments more burdensome.
Ultimately, Plaintiff determined that it would be more profitable to operate as an SPM.
Plaintiff joined the MSA in 2004 by negotiating its Adherence Agreement (AA) with
Attorneys General Defendants. The AA outlined Plaintiff’s mandatory back-payment
amount and the payment amounts it would make going forward. These payment
amounts were determined, in part, based on Plaintiff’s two-percent share in the national
tobacco market (the largest share among NPMs at the time).

       According to Plaintiff, during negotiations for the AA, Attorneys General
Defendants failed to explain the extent of the payment reductions granted to
grandfathered SPMs and denied Plaintiff access to this information on the grounds that
other PMs’ payment arrangements were confidential. Plaintiff also claims that it was
assured that Attorneys General Defendants enforced their Escrow Statutes (thereby
confirming to Plaintiff that it would be more beneficial to join the MSA) and that the
No. 10-5043        VIBO Corp., Inc. v. Conway, et al.                              Page 6


LMFN clause would not prevent Plaintiff’s ability to obtain more favorable terms under
the MSA if it sought to do so at a later date.

       After joining the MSA, Plaintiff became dissatisfied with the disparate treatment
afforded the other tobacco companies, such as the lack of back-payments for the OPMs
and the reduced payment obligations available to eligible grandfathered SPMs.
Plaintiff’s per-carton payment obligation to Attorneys General Defendants was higher
than the obligations of the OPMs and some SPMs.

       Plaintiff eventually was unable to meet its back-payment obligations and its
payments going forward, as was required by its AA. In an attempt to renegotiate its
position under the MSA, Plaintiff sought to execute an Amended Adherence Agreement
(AAA) with Attorneys General Defendants. The AAA was more favorable to Plaintiff
than the AA because it lessened Plaintiff’s payment obligations. According to Plaintiff,
however, the AAA did not contain more favorable terms than the OPMs or
grandfathered SPMs had under the MSA.

       Initially, Attorneys General Defendants were willing to execute the AAA.
However, the PMs learned of the proposed AAA’s terms and sent written notice to
Attorneys General Defendants to remind them of the LMFN clause. Specifically, the
PMs noted that if the AAA contained more favorable terms than the PMs had under the
MSA, the LMFN clause would be triggered and the PMs would seek to receive the
beneficial AAA terms. Attorneys General Defendants requested that the PMs waive any
LMFN rights that they may have if the AAA was executed, but the PMs refused to waive
their rights. Based upon this knowledge, Attorneys General Defendants declined to
execute the AAA with Plaintiff. As a result, Plaintiff remains a party to the MSA
through its original AA.

       Plaintiff initiated the present civil action alleging that Manufacturer Defendants
violated two antitrust provisions of the Sherman Act by assisting with the creation of the
allegedly discriminatory MSA and by invoking their allegedly baseless LMFN rights.
Plaintiff also raised claims against Attorneys General Defendants, asserting that the
MSA violates the Equal Protection Clause, Due Process Clause, Commerce Clause, and
No. 10-5043         VIBO Corp., Inc. v. Conway, et al.                                Page 7


Compact Clause of the United States Constitution. Finally, Plaintiff raised a fraudulent
inducement claim against Attorneys General Defendants for allegedly failing to provide
Plaintiff with material information regarding the payment terms of the other PMs during
its AA negotiations.

                                      DISCUSSION

        We review de novo a district court’s grant of a Rule 12(b)(6) motion to dismiss
for failure to state a claim upon which relief can be granted and a district court’s grant
of a Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction. Frank v.
Dana Corp., 646 F.3d 954, 958 (6th Cir. 2011) (considering Rule 12(b)(6) ruling);
EEOC v. Hosanna-Tabor Evangelical Lutheran Church & Sch., 597 F.3d 769, 775 (6th
Cir. 2010) (considering Rule 12(b)(1) ruling). The facts alleged by the plaintiff must be
accepted as true, and those “[f]actual allegations must be enough to raise a right to relief
above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).

I.      SHERMAN ACT CLAIMS

        Plaintiff challenges Manufacturer Defendants’ actions under two sections of the
Sherman Act, 15 U.S.C. §§ 1, 3(a). The relevant provisions provide that “[e]very
contract, combination in the form of trust or otherwise, or conspiracy, in restraint of
trade or commerce . . . is declared [to be] illegal.” 15 U.S.C. §§ 1, 3(a). Plaintiff alleges
that Manufacturer Defendants’ refusal to waive their LMFN rights, which caused
Attorneys General Defendants to reject Plaintiff’s proposed AAA, constituted a per se
illegal boycott of Plaintiff, a concerted refusal to deal with Plaintiff, and the denial of
Plaintiff’s equal access to an essential facility, namely, the MSA. Manufacturer
Defendants assert that, regardless of the truth of Plaintiff’s allegations, they are
immunized from Plaintiff’s antitrust claims under the Noerr-Pennington doctrine or, in
the alternative, the state-action doctrine.
No. 10-5043            VIBO Corp., Inc. v. Conway, et al.                                         Page 8


         The district court found that Manufacturer Defendants were immunized under
both the Noerr-Pennington and state-action doctrines and thus dismissed these claims
under Federal Rule of Civil Procedure 12(b)(6).4 We agree.

         A.       Noerr-Pennington Immunity

         Under the Petition Clause of the First Amendment to the U.S. Constitution,
private actors have the right to petition the government for action. U.S. Const. amend
I (“Congress shall make no law . . . abridging . . . the right of the people . . . to petition
the Government for a redress of grievances.”). Where private actors petition the
government for action that would violate antitrust law, the Petition Clause immunizes
the actors from litigation in connection with their petitioning.                         Under these
circumstances, private immunization from alleged violations of the Sherman Act is
known as the Noerr-Pennington doctrine.                  See United Mine Workers of Am. v.
Pennington, 381 U.S. 657 (1965); E. R.R. Presidents Conference v. Noerr Motor
Freight, Inc., 365 U.S. 127 (1961). “The doctrine is an “expression[] of the principle
that the antitrust laws regulate business, not politics,” and is designed to protect
“citizens’ participation in government.” City of Columbia v. Omni Outdoor Adver., Inc.,
499 U.S. 365, 383 (1991). Thus, “‘[w]here a restraint upon trade or monopolization is
the result of valid governmental action, as opposed to private action,’ those urging the
governmental action enjoy absolute immunity from antitrust liability for the
anticompetitive restraint.” Allied Tube & Conduit Corp. v. Indian Head, Inc., 486 U.S.
492, 499 (1988) (quoting Noerr, 365 U.S. at 136). However, private actors remain liable
for anticompetitive activity not associated with government petitioning or antitrust
violations that they directly cause. Id. at 501. “The dividing line between restraints
resulting from governmental action and those resulting from private action may not
always be obvious.” Id. at 501–02.



         4
           Although the court did not address the merits of the Sherman Act claims, it did note that, with
respect to the LMFN waiver claim, “it is not actually clear that the wrong alleged even falls within the
scope of the Sherman Act.” VIBO Corp., 594 F. Supp. 2d at 775 n.13. Because we agree that
Manufacturer Defendants are immune from Plaintiff’s antitrust claims, we similarly decline to address the
merits of these claims.
No. 10-5043        VIBO Corp., Inc. v. Conway, et al.                            Page 9


       “The Supreme Court has interpreted ‘petitioning’ to encompass activities other
than legislative lobbying. For example, Noerr-Pennington immunity protects private
actors when they file court documents and enter contracts with the government.”
Sanders v. Brown, 504 F.3d 903, 912 (9th Cir. 2007) (citing Calif. Motor Transp. Co.
v. Trucking Unlimited, 404 U.S. 508, 510 (1972), and Greenwood Utils. Comm’n v.
Miss. Power Co., 751 F.2d 1484, 1505 (5th Cir. 1985)). Petitioning also includes the
acts of “negotiating and entering into settlements or other agreements with the
government.” Sanders, 504 F.3d at 912 (citing Campbell v. City of Chicago, 823 F.2d
1182, 1186–87 (7th Cir. 1987)). Some courts have held that a competitor’s conduct of
boycotting constitutes protected petitioning intended to induce government action, so
long as the boycotting is not for the purposes of contracting for higher prices and does
not amount to direct marketplace injury. See Armstrong Surgical Ctr., Inc. v. Armstrong
Cnty. Mem’l Hosp., 185 F.3d 154, 157–60 (3rd Cir. 1999); Sandy River Nursing Care
v. Aetna Cas., 985 F.2d 1138, 1141–44 (1st Cir. 1993); Mark Aero, Inc. v. Trans World
Airlines, Inc., 580 F.2d 288, 296–97 (8th Cir. 1978).

       Moreover, the bad intent or anticompetitive motivation of private actors seeking
government action is irrelevant to the application of Noerr-Pennington. Campbell v.
PMI Food Equip. Grp., Inc., 509 F.3d 776, 790 (6th Cir. 2007). This is so because it is
“impracticable or beyond the purpose of the antitrust laws to identify and invalidate
lawmaking that has been infected by selfishly motivated agreement with private
interests[, and it is likewise] impracticable or beyond that scope to identify and
invalidate lobbying that has produced selfishly motivated agreement with public
officials.” Omni Outdoor Adver., 499 U.S. at 383.

       Here, Manufacturer Defendants assert Noerr-Pennington immunity from
Plaintiff’s Sherman Act claims because their involvement with the MSA and notice of
their LMFN rights amounted to petitioning. Plaintiff argues that Noerr-Pennington does
not apply because this is not a situation where Manufacturer Defendants petitioned
Attorneys General Defendants for antitrust action, but rather where Manufacturer
Defendants directly violated antitrust law. See Allied Tube, 486 U.S. at 501–02. We
No. 10-5043           VIBO Corp., Inc. v. Conway, et al.                                    Page 10


disagree. Even taking Plaintiff’s factual allegations as true, it is clear that the state
governments’ actions were the actual cause of the alleged antitrust violations. Although
Manufacturer Defendants sent notice to Attorneys General Defendants that they would
not waive their LMFN rights—to the extent that the AAA would trigger the LMFN
clause at all—the LMFN clause itself creates no vote or veto power for the PMs; all
decision-making authority rests with Attorneys General Defendants.5                      Moreover,
Manufacturer Defendants’ allegedly selfish motivation in refusing to waive their LMFN
rights is immaterial.

         Attorneys General Defendants were free to accept or reject both the MSA and
the AAA, regardless of the explicit or implicit encouragement of Manufacturer
Defendants. They could have executed the AAA and risked the possibility of triggering
the LMFN clause, but they decided that the AAA was not worth that risk. Thus, the
decision not to execute the AAA rested with Attorneys General Defendants. As the
district court noted:

        Accepting all of the plaintiff’s allegations as true, the plaintiff has merely
        alleged a classic example of a claim for which the Noerr-Pennington
        doctrine grants immunity. . . . [P]rivate actors . . . have exerted influence
        on the government actors; and, as a result of that influence, the
        government actors have declined to sign and execute the [AAA]. . . .
        [S]imply put, the [Manufacturer Defendants] have petitioned for, and
        received, certain government action that creates anti-competitive effects
        upon the plaintiff. Under the Noerr-Pennington doctrine, the defendant
        manufacturers are entitled to immunity for the anti-competitive effects
        of their successful petition for government action.

VIBO Corp., 594 F. Supp. 2d at 774 (internal footnote omitted). We find this reasoning
to be sound.




        5
          Plaintiff also argues that the LMFN clause essentially granted veto power to the PMs in
determining whether Plaintiff and Attorneys General Defendants could effectuate the AAA and that the
PMs persuaded or coerced the Attorneys General to reject the AAA. We find no such power founded in
the LMFN clause or the MSA, in general. Moreover, Plaintiff admitted that Manufacturer Defendants have
“invoked” their LMFN rights on prior occasions, but that Attorneys General Defendants ignored the
Manufacturer Defendants’ petitioning in those instances. Plaintiff thus partially recognizes that only
Attorneys General Defendants hold the decision-making power.
No. 10-5043        VIBO Corp., Inc. v. Conway, et al.                            Page 11


       Plaintiff next argues that even if Noerr-Pennington initially applies,
Manufacturer Defendants lose their immunity under the doctrine’s “sham exception.”
The sham exception to Noerr-Pennington prevents the application of immunity where
a defendant’s act of “petitioning” was “a mere sham to cover what is actually nothing
more than an attempt to interfere directly with the business relationships of a
competitor.” Omni Outdoor Advert., 499 U.S. at 380 (citing Noerr, 365 U.S. at 144).
This exception “encompasses situations in which persons use the governmental
process—as opposed to the outcome of that process—as an anticompetitive weapon.”
Id.; N. Ky. Right to Life Comm., Inc. v. Ky. Registry of Election Fin., No. 95-6334, 1998
U.S. App. LEXIS 495, at *17–18 (6th Cir. Jan. 7, 1998); Eaton v. Newport Bd. of Educ.,
975 F.2d 292, 298 (6th Cir. 1992). “A ‘sham’ situation involves a defendant whose
activities are ‘not genuinely aimed at procuring favorable government action’ at all, not
one ‘who genuinely seeks to achieve his governmental result, but does so through
improper means.’” Omni Outdoor Advert., 499 U.S. at 380 (quoting Allied Tube, 486
U.S. at 500 n.4, 507 n.10) (internal citations and emphasis omitted); Knology, Inc. v.
Insight Commc’n Co., LP, 393 F.3d 656, 658–59 (6th Cir. 2004). One “classic” example
of sham petitioning is where a defendant files “frivolous objections to the license
application of a competitor, with no expectation of achieving denial of the license but
simply in order to impose expense and delay.” Omni Outdoor Advert., 499 U.S. at 380.

       On appeal, Plaintiff asserts that the “sham” exception applies because
Manufacturer Defendants knew that the AAA did not contain more favorable terms than
the PMs had under the MSA, and therefore did not trigger the LMFN clause, but the
PMs nonetheless “invoked” their LMFN rights. Plaintiff undermines its argument that
Manufacturer Defendants’ petitioning was a sham by admitting that Manufacturer
Defendants actually wanted to prevent the execution of the AAA. Thus, by Plaintiff’s
own admission, Manufacturer Defendants petitioned for a specific outcome from the
government and succeeded; this is the precise situation that falls outside of the sham
exception. See id.; Noerr, 365 U.S. at 144.
No. 10-5043            VIBO Corp., Inc. v. Conway, et al.                                          Page 12


         B.       State-Action Immunity

         Although we find that Manufacturer Defendants are protected from Plaintiff’s
antitrust claims by Noerr-Pennington immunity, we also find that they are protected by
the extension of state-action immunity, in the alternative.

         As the Supreme Court decided in Parker v. Brown, principles of federalism and
state sovereignty prevent state governments’ liability under the Sherman Act for their
allegedly anticompetitive action. 317 U.S. 341, 352 (1943); see Omni Outdoor Adver.,
499 U.S. at 370; First Am. Title Co. v. Devaugh, 480 F.3d 438, 444 (6th Cir. 2007). This
doctrine is known as state-action, or Parker, immunity. First Am. Title Co., 480 F.3d
at 444. Where a state enters into an agreement with private entities and is protected by
state-action immunity, that immunity extends to the private entities with whom the state
deals. S. Motor Carriers Rate Conference, Inc. v. United States, 471 U.S. 48, 56–57
(1985); Jackson Tenn. Hosp. Co., LLC v. W. Tenn. Healthcare, Inc., 414 F.3d 608, 612
n.4 (6th Cir. 2005). Although Plaintiff does not raise its antitrust claims against
Attorneys General Defendants, we must first determine whether Attorneys General
Defendants would have immunity against such claims in order to decide whether that
immunity extends to Manufacturer Defendants.6

                  1.        State-Action Doctrine as Applied to Attorneys General
                            Defendants
         The Sherman Act does not apply to states or state officials when acting in their
sovereign capacities. Parker, 317 U.S. at 352. Even where the states act in conjunction
with private parties, they remain entitled to immunity so long as they acted within their
official capacity. Omni Outdoor Advert., 499 U.S. at 374 (noting that there is also no
conspiracy exception to the state-action doctrine).                   However, if a state acts as a
“commercial participant in a given market,” action taken in a market capacity is not

         6
           When the district court ruled on the parties’ motions, it was uncertain whether Plaintiff had also
raised a Sherman Act violation claim against Attorneys General Defendants. The court found that, to the
extent a claim was brought against the states, the states were immunized. During appellate argument,
however, Plaintiff’s counsel clarified that it had not brought antitrust claims against Attorneys General
Defendants. Our analysis of the state-action doctrine as applied to Manufacturer Defendants requires that
we consider whether the states are entitled to state-action immunity, but we do so only to adjudicate the
antitrust claims against Manufacturer Defendants.
No. 10-5043        VIBO Corp., Inc. v. Conway, et al.                             Page 13


protected. Thus, “with the possible market participant exception, any action that
qualifies as state action is ‘ipso facto exempt from the operation of the antitrust laws.’”
Id. at 379 (quoting Hoover v. Ronwin, 466 U.S. 558, 568 (1984)) (internal alterations
omitted).

         Plaintiff alleges that Attorneys General Defendants were acting in a market
participant capacity—not a sovereign capacity—in executing and enforcing the MSA
and in refusing to execute the AAA. A state is a market participant when it acts “in a
proprietary capacity as a purchaser or seller with regard to the challenged action” or its
actions “constitute[] direct state participation in the market.” Huish Detergents, Inc. v.
Warren Cnty., 214 F.3d 707, 714–15 (6th Cir. 2000) (quoting White v. Mass. Council
of Constr. Emp’rs, Inc., 460 U.S. 204, 208 (1983)) (internal citation marks omitted). A
state does not become a market participant “simply because . . . [it] labels its actions as
an ‘agreement.’” Huish Detergents, 214 F.3d at 715 (examining a state’s market
participant status in the dormant commerce clause context); see A.D. Bedell Wholesale
Co., Inc. v. Philip Morris Inc., 263 F.3d 239, 265 n.55 (3rd Cir. 2001) (explaining the
relationship of the market participant exception in dormant commerce clause
jurisprudence to an assertion of state-action immunity against a claim related to the
MSA).

         Plaintiff does not allege any facts necessary to show that Attorneys General
Defendants were acting as market participants. Plaintiff’s allegation that Attorneys
General Defendants were using their contractual powers when executing and enforcing
the MSA is unhelpful to its claim. See Huish Detergents, 214 F.3d at 715. The Third
Circuit considered this limited issue in a related circumstance, and noted in dicta that
“[i]n joining the Multistate Settlement Agreement, the States did not enter the tobacco
market as a buyer or seller, nor did they assume control or ownership of any entity
within the market. . . . [T]he States’ actions would not fall under the market participant
exception to Parker immunity.” A.D. Bedell Wholesale Co., 263 F.3d at 265 n.55. We
agree.
No. 10-5043         VIBO Corp., Inc. v. Conway, et al.                            Page 14


       We hold that Attorneys General Defendants acted in their sovereign capacities,
and not their market participant capacities, in enacting and enforcing the MSA and in
deciding to forgo the AAA. Therefore, they are protected by state-action immunity.

               2.      State-Action Doctrine as Applied to Manufacturer Defendants

       Where a state is protected by state-action immunity, that immunity extends to
private entities involved in the same course of dealing. S. Motor Carriers Rate
Conference, 471 U.S. at 56–57; Jackson Tenn. Hosp. Co., 414 F.3d at 612 n.4 (noting
that state-action immunity would be worthless if the private parties dealing with the
immunized states were also not protected). Because we have determined that Attorneys
General Defendants are clearly protected by state-action immunity in relation to the
MSA, such immunity extends to Manufacturer Defendants.

       Plaintiff, however, points to a refinement of the state-action doctrine articulated
by the Supreme Court in California Retail Liquor Dealers Ass’n v. Midcal Aluminum,
Inc., 445 U.S. 97 (1980). The Court held in Midcal that even where the challenged
restraint is “clearly articulated and affirmatively expressed as state policy[,] . . . the
policy must be actively supervised by the [s]tate itself” for state-action immunity to
apply. Id. at 105 (internal quotation marks and citation omitted); see also Hoover, 466
U.S. at 568–69. In other words, even if the state authorized private parties to engage in
anticompetitive behavior, immunity does not extend to the private actors unless the state
retains active supervision over the private actors. Midcal, 445 U.S. at 105.

       The district court found that it need not apply the Midcal test, because
(1) Plaintiff did not allege that the MSA was a law or regulatory scheme arising from a
clear state policy; and (2) even if the MSA was characterized as a state regulatory
scheme, Plaintiff did not allege that the MSA authorizes Manufacturer Defendants to
violate antitrust law. We agree. Even in its subsequent briefing, Plaintiff fails to argue
the threshold issue that the MSA is a regulatory scheme that permits Manufacturer
Defendants to violate antitrust law. It instead argues that Manufacturer Defendants
violated antitrust law when they misinterpreted the MSA and their rights under the
LMFN clause and acted contrary to or in conflict with state supervision. Regardless of
No. 10-5043        VIBO Corp., Inc. v. Conway, et al.                            Page 15


whether that assertion has merit, Plaintiff has confused the threshold inquiry of whether
the state took action—such as passing a law, regulation, program, or other form of
authorization—permitting the private actors to violate antitrust law, with the subsequent
inquiry as to whether Defendants were acting within the proper scope of state
supervision. Furthermore, we have already found that Attorneys General Defendants,
and not Manufacturer Defendants, were the direct cause of the failed execution of the
AAA. Thus, Plaintiff has not demonstrated the applicability of the Midcal test.

       Because Manufacturer Defendants are protected by Noerr-Pennington immunity
and state-action immunity, we find that the district court did not err in dismissing
Plaintiff’s Sherman Act claims for failure to state a claim upon which relief can be
granted.

II.    CONSTITUTIONAL CLAIMS

       Plaintiff next raises claims against Attorneys General Defendants for violations
of the Equal Protection Clause, the Due Process Clause, the Commerce Clause, and the
Compact Clause. The district court dismissed Plaintiff’s Equal Protection, Due Process,
and Commerce Clause claims as waived under the MSA and dismissed Plaintiff’s
Compact Clause claim for failing to state a claim upon which relief may be granted.

       A.      MSA Section XV Waiver

       Under Kentucky law, which the parties agree governs this issue, contract
interpretation is a question of law, which we review de novo. Noe v. PolyOne Corp., 520
F.3d 548, 551 (6th Cir. 2008); Morganfield Nat’l Bank v. Damien Elder & Sons, 836
S.W.2d 893, 895 (Ky. 1992). Courts interpreting contracts must look to the language of
the agreement to determine the parties’ intent. “When no ambiguity exists in the
contract, [the court] look[s] only as far as the four corners of the document to determine
that intent.” Abney v. Nationwide Mut. Ins. Co., 215 S.W.3d 699, 703 (Ky. 2006).
Whether a contract is ambiguous—in that a reasonable person would find it susceptible
to different interpretations—is also a question of law reviewed de novo. Id.; Cantrell
Supply, Inc. v. Liberty Mut. Ins. Co., 94 S.W.3d 381, 385 (Ky. Ct. App. 2002).
No. 10-5043            VIBO Corp., Inc. v. Conway, et al.                                          Page 16


         Plaintiff agreed to be bound by the MSA when it signed the AA. Section XV of
the MSA addresses the possibility of constitutional claims between the parties and
contains a waiver clause. The provision states, in relevant part:

         Each Participating Manufacturer further acknowledges that it
         understands that certain provisions of this Agreement may require it to
         act or refrain from acting in a manner that could otherwise give rise to
         state or federal constitutional challenges and that, by voluntarily
         consenting to this Agreement it . . . waives for the purposes of
         performance of this Agreement any and all claims that the provisions of
         this Agreement violate the state or federal constitutions.

MSA Section XV.

         Plaintiff and the district court adopted differing interpretations of this waiver
provision. Plaintiff argues that the waiver only prevents it from challenging the
constitutionality of MSA requirements that Plaintiff “act or refrain from acting” in a
manner that may be deemed unconstitutional.7 Plaintiff reads the second clause (the
waiver of constitutional claims) as limited by the first clause (recognition that the
Plaintiff may be required to act unconstitutionally). Plaintiff argues that the waiver does
not bar its claims, because none of its constitutional claims are based on requirements
that cause Plaintiff to act or refrain from acting.

         On appeal, Plaintiff asserts that the district court erroneously read the waiver
broadly so as to encompass all constitutional claims rather than only those claims related
to requirements that Plaintiff act or refrain from acting. However, the district court
actually adopted Plaintiff’s limited interpretation of the waiver clause as only applying
to restrictions on Plaintiff’s own actions. See VIBO Corp., 594 F. Supp. 2d at 782. The
difference of interpretation lies in the district court’s broad construction of the phrase
“requirements that Plaintiff act or refrain from acting” to mean “provisions that affect



         7
            Plaintiff also claims that MSA Section XV only waives First Amendment claims because the
original litigation preceding the MSA involved advertising restrictions. This claim is utterly without merit,
as the waiver language clearly provides for “any and all claims that the provisions of this Agreement
violate the state or federal constitutions” and does not signal that it applies only to First Amendment
claims. MSA Section XV (emphasis added). We look only to the plain language of the agreement to
determine the parties’ intent. Abney, 215 S.W.3d at 703.
No. 10-5043            VIBO Corp., Inc. v. Conway, et al.                                         Page 17


the Plaintiff’s performance under the contract” and its liberal interpretation of what
requirements “affect” Plaintiff’s performance. See id.

         Under the district court’s interpretation, it concluded that three of Plaintiff’s four
constitutional claims related to provisions that affected its performance and were thus
encompassed by the waiver. Specifically, the court found that Plaintiff’s Equal
Protection and Due Process claims involved “[t]he MSA’s unequal application of its
purported back-payment requirements, grandfather exemptions and escrow
requirements.” Id. Because the alleged unequal payment scheme affected Plaintiff by
imposing on it obligations higher than those of the other manufacturers, the court found
that these two claims affected Plaintiff’s performance and were therefore waived. In
regard to Plaintiff’s Commerce Clause claim, the district court found that it “involves
a requirement made on the plaintiff” and thus was waived. Id. at 783.

         We reject both of these interpretations of the waiver clause. We read Section XV
more broadly than the district court and find that all constitutional claims related to the
MSA are waived, even those not grounded on restrictions to Plaintiff’s own actions.8
Our interpretation is based on a close reading of the language of the two clauses in the
waiver. The waiver, which is outlined in a single sentence, states that each participating
manufacturer “acknowledges that it understands” two things: (1) “that” it may be
required to act unconstitutionally; (2) “and that” it “waives . . . any and all” of its
constitutional claims. The use of “that . . . and that” demonstrates that this sentence has
two separate and equal components. Thus, the second clause is not limited by the first
clause, but rather they are distinct acknowledgments. For Plaintiff to succeed on its
argument that the second clause was to be limited by the first, the language of the waiver
would, at the very least, need more indication that the clauses are co-dependent by using
language such as “that” and “therefore” or “so.” The fact that both clauses are in the
same sentence does not signify that they are co-dependent. Moreover, the second clause


         8
           Our reading of the waiver provision does not require that we interpret the phrase “act or refrain
from acting” within Section XV. However, we note that the district court’s interpretation of “requirements
that Plaintiff act or refrain from acting” to mean “any provision that affects Plaintiff’s performance”
appears too broad based on a reading of the provision’s plain language.
No. 10-5043             VIBO Corp., Inc. v. Conway, et al.                                         Page 18


contains a clear, broad waiver that Plaintiff has waived “any and all claims that the
provisions of this Agreement violate the state or federal constitutions.”

        B.          Knowing, Voluntary, and Intelligent Waiver

        Plaintiff argues that even if the MSA waiver applies, the waiver was not valid
because Attorneys General Defendants misrepresented certain facts regarding their
enforcement of the MSA and the inability to enter into the AAA without the OPMs’
approval. Specifically, Plaintiff alleges: “(1) that the plaintiff requested specific
information about the extent of the exemptions granted to the grandfathered SPMs but
was denied access to the information on the grounds that it was confidential . . . (2) that
the plaintiff sought assurance that the Settling States were enforcing their Escrow
Statutes and was so assured . . . and (3) that the Settling States represented to the plaintiff
that the LMFN provision of the MSA would not affect the states’ ability to grant the
plaintiff entry into the MSA . . . .”9 VIBO Corp., 594 F. Supp. 2d at 784.

        For a waiver to be valid, it must be made knowingly, voluntarily, and
intelligently. Fuentes v. Shevin, 407 U.S. 67, 94–95 (1972). There is a presumption
against waivers of constitutional rights, which can be overcome by clear evidence “that
there was ‘an intentional relinquishment or abandonment of a known right or privilege.’”
Brookhart v. Janis, 384 U.S. 1, 4 (1996) (quoting Johnson v. Zerbst, 304 U.S. 458, 464
(1938)).

        Accepting Plaintiff’s allegations of fraud as true, the district court found that the
waiver was nevertheless knowing, intelligent, and voluntary because “[a]ny
misrepresentations by the states as to how diligently [the] states were enforcing their
Escrow Statutes or the impact of the LMFN clause have no relevance to the plaintiff’s
understanding of what rights it was giving up by signing on to the MSA.” VIBO Corp.,
594 F. Supp. 2d at 785. Plaintiff has not alleged that it did not understand that it was
waiving its constitutional claims. The Section XV waiver is clear, and Plaintiff is a



        9
            These allegations also form the basis of Plaintiff’s fraudulent inducement claim, analyzed infra.
No. 10-5043         VIBO Corp., Inc. v. Conway, et al.                              Page 19


sophisticated corporation that was represented by counsel in the course of its arms-length
negotiations. The waiver is valid.

        Because Plaintiff knowingly, voluntarily, and intelligently agreed to Section XV,
we find all of its constitutional claims, including its Compact Clause claim, properly
dismissed as waived.

III.   FRAUDULENT INDUCEMENT CLAIM

        Finally, Plaintiff argues that the district court improperly dismissed its fraudulent
inducement claim against Attorneys General Defendants. The district court found that
Attorneys General Defendants were protected by sovereign immunity, so the court
lacked subject matter jurisdiction to review the claim.

        The Eleventh Amendment to the U.S. Constitution grants immunity to states
from litigation on state law claims in federal court. U.S. Const. amend. XI; Sossamon
v. Texas, 131 S. Ct. 1651, 1657–58 (2011). A claim against a state officer acting in his
official capacity is deemed to be a claim against the state for sovereign immunity
purposes. Will v. Mich. Dep’t of State Police, 491 U.S. 58, 71 (1989). Fraud is a state
common law claim, and this action was filed in federal court. Plaintiff concedes that
Attorneys General Defendants were acting in their official capacities. Attorneys General
Defendants are thus immune from Plaintiff’s allegations of fraud.

        A state may, however, lose sovereign immunity where the state consents to
litigation, where the state is alleged to have acted unconstitutionally, or where Congress
abrogates sovereign immunity. Kovacevich v. Kent State Univ., 224 F.3d 806, 817 (6th
Cir. 2000). In cases of consent, waiver “cannot be implied but must be unequivocally
expressed.” United States v. King, 395 U.S. 1, 4 (1969); United States v. White Mt.
Apache Tribe, 537 U.S. 465, 472 (2003). Waiver occurs “if the [s]tate voluntarily
invokes [federal] jurisdiction, or else if the [s]tate makes a ‘clear declaration’ that it
intends to submit itself to [federal] jurisdiction.” College Sav. Bank v. Fla. Prepaid
Postsecondary Ed. Expense Bd., 527 U.S. 666, 675–76 (1999) (internal citations
omitted). This is a high standard to meet, as courts “will give effect to a [s]tate’s waiver
No. 10-5043           VIBO Corp., Inc. v. Conway, et al.                                     Page 20


of Eleventh Amendment immunity only where stated by the most express language or
by such overwhelming implication from the text as will leave no room for any other
reasonable construction.” Port Auth. Trans-Hudson Corp. v. Feeney, 495 U.S. 299,
306–07 (1990) (internal citations, quotation marks, and alteration omitted).

        Plaintiff claims that Attorneys General Defendants consented to litigation on
matters involving the MSA and thereby waived their Eleventh Amendment immunity.
On appeal, Plaintiff asserts four ways in which this occurred, none of which have
merit.10

        First, Plaintiff believes there is consent to be sued because the MSA is a contract
between states, and the Supreme Court is the only forum available for disputes between
states. This argument clearly fails, because the present action is not litigation between
states, but between Plaintiff, which is a private party, against several states. Plaintiff
next argues that consent was given since “each State consented to federal court
jurisdiction to hear MSA disputes with the District of Columbia and any of the U.S.
territories that is a party to the agreement because the courts in these jurisdictions are all
federal courts.” This argument also fails because this is a lawsuit by a private party
against states, not between states and the District of Columbia or a territory. We will
not extend consent to federal jurisdiction for disputes with or between other government
entities to consent to federal jurisdiction for cases involving private parties.

        Third, Plaintiff argues the existence of consent because the states “acknowledge
the jurisdiction of the federal courts . . . through references to the United States District
Courts for the Districts of Utah and Puerto Rico where the MSA was to be submitted for
approval through a consent decree” per MSA Sections II(p), II(ss), VII, and XIII. We
have reviewed the relevant MSA provisions and find no such consent. Furthermore,
even though Utah and Puerto Rico joined the MSA by filing their consent decrees in


        10
           We note that the MSA would have permitted the jurisdiction of the Franklin Circuit Court of
the Commonwealth of Kentucky on Plaintiff’s fraud claim. MSA Section VII permits jurisdiction of the
“Court” over disputes, and Section II(p) defines “Court” as the court in each settling state where the
consent decree was presented for approval. In this case, Kentucky’s consent decree was entered by the
Franklin Circuit Court on December 21, 1998. Kentucky’s consent to jurisdiction in the Franklin Circuit
Court obviously does not extend to the federal district court in Kentucky.
No. 10-5043         VIBO Corp., Inc. v. Conway, et al.                             Page 21


federal courts, the jurisdiction granted under Section VII only applies to the federal
courts of Utah and Puerto Rico, not a federal court in Kentucky. Moreover, such alleged
consent could only be deemed as consent by Utah and Puerto Rico.

        Finally, Plaintiff argues that consent to be sued was expressed in MSA Section
XI(c), wherein the states agreed to arbitration that “would be subject to motions to affirm
or vacate in federal court under the Federal Arbitration Act.” This provision is
inapplicable to the present lawsuit, which is not an arbitration. We will not construe
consent to federal arbitration as consent to be sued in federal court for state law claims.

        Because Plaintiff has not plausibly stated that Attorneys General Defendants
gave clear and explicit consent to be sued on state law claims in federal courts, it has not
shown that Attorneys General Defendants waived their Eleventh Amendment immunity.
The fraudulent inducement claim was therefore properly dismissed.

                                     CONCLUSION

        For the reasons stated above, the judgment of the district court dismissing all
claims against Defendants and denying Plaintiff’s request for preliminary relief is
AFFIRMED.
No. 10-5043       VIBO Corp., Inc. v. Conway, et al.                             Page 22


                             _____________________

                                CONCURRENCE
                             _____________________

HELENE N. WHITE, Circuit Judge, concurring.

      I concur in the majority opinion for the reasons stated in Sections IA, II, and III.
