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Supermarket Antitrust Lawsuit Revived by 3rd Circ.

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By Jonathan R. Tung, Esq. on November 18, 2015 5:58 AM

The Third Circuit has just ruled that a real estate developer has standing to sue the owners of Shop-Rite over anti-competitive behavior that would stymie the opening of a Wegmans in Hanover, New Jersey.

The lengthy opinion outlines and clarifies the limits and intended application of the justiciability doctrine and antitrust immunity under Noerr-Pennington.

Background Facts

Hanover Realty signed a lease with Wegmans in 2012, a year before Village Supermarkets opened a Shop-Rite in neighboring Morristown. In a complaint to a lower Federal District court, Hanover alleged that the defendant filed a series of permits to slow and eventually block the building of a Wegmans in the city.

Eventually, even an ecological consulting firm had to get involved, causing Hanover to survey the area for a species of endangered bat. The contract terms contained a provision that allowed Wegmans to walk if Hanover failed to obtain the necessary permits within two years of execution.

Lack of Standing; No Immunity

Hanover eventually sued Village and the local Shop-Rite on charges of antitrust and for anti-competitive behavior. However, the lower U.S. District Court dismissed the case for lack of standing: it was found that Hanover, at the time of the suit was not yet a competitor to Village Supermarkets and therefore did not sustain the type of injury that the antitrust laws were designed to prevent. But Judge Fuentes, who wrote for Court, was not convinced. "Hanover Realty's injury was necessary to Defendant's plan," he said; and the injury was "inextricably intertwined" with Village's conduct.

Besides the standing issue, the circuit court also found that Village Realty was not entitled to immunity under Noerr-Pennington because at least some of Village's conduct was made in bad faith.

Disagreements

Dissenting from Judge Fuentes in part, Judge Greenberg said that the legal challenges that Village Realty brought against Hanover's development fall squarely within the antitrust immunity envisioned by Noerr-Pennington. Judge Ambro notably dissented on the issue of standing and said that Village's conduct did not injure Hanover at all, and disagreed that the Court should have reversed the lower court ruling.

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