Bridgeport Harbour Place I, LLC v. Ganim

• Decision Date: 13 December 2011
• Docket Number: No. 18290.,18290.
• Citation: 303 Conn. 205,32 A.3d 296,2011 Trade Cases P 77717
• Parties: BRIDGEPORT HARBOUR PLACE I, LLC v. Joseph P. GANIM et al.
• Court: Connecticut Supreme Court

2011-2 Trade Cases P 77,717

303 Conn. 205

32 A.3d 296

BRIDGEPORT HARBOUR PLACE I, LLC

v.Joseph P. GANIM et al.

No. 18290.

Supreme Court of Connecticut.

Argued March 15, 2011.Decided Dec. 13, 2011.

William F. Gallagher, New Haven, with whom were William J. Sweeney and, on the brief, Hugh D. Hughes and R. Bartley Halloran, Farmington, for the appellant (plaintiff).

Jeffrey J. Mirman, Farmington, with whom were John F. Droney, Jr., and, on the brief, Kurt F. Zimmerman and Leonard K. Atkinson, New Haven, for the appellee (named defendant).

Jeffrey J. White, with whom were Craig A. Raabe and, on the brief, Edward J. Heath and Jamie M. Landry, Hartford, for the appellee (defendant city of Bridgeport).Ira B. Grudberg, New Haven, with whom were Christian Young, Bridgeport, and, on the brief, Trisha M. Morris, for the appellees (defendant Crescent Avenue Development Company, LLC, et al.).Hubert J. Santos, with whom were Jeffrey R. Hellman, Bridgeport, and, on the brief, Sandra Snaden Kuwaye, Hartford, for the appellees (defendant Charles J. Willinger, Jr., et al.).

PALMER, ZARELLA, DiPENTIMA, LAVINE and BEACH, Js.

PALMER, J.

The plaintiff, Bridgeport Harbour Place I, LLC, brought this action against the defendants, Joseph P. Ganim, the city of Bridgeport (city), Alfred Lenoci, Sr., Alfred Lenoci, Jr., United Properties, Ltd., Eight Hundred Fifteen Lafayette Centre, LLC, United Investments, LLC, United Environmental Redevelopment, LLC, Crescent Avenue Development Company, LLC, Charles J. Willinger, Jr., Willinger, Willinger and Bucci, P.C., Joseph T. Kasper, Jr., Kasper Group, Inc., and Michael Schinella,¹ alleging that the defendants had violated General Statutes § 35–26 ² of the Connecticut Antitrust Act (antitrust act) by engaging in an illegal conspiracy in restraint of trade. The trial court granted the defendants' motions to strike the plaintiff's amended complaint on the ground that the complaint failed to allege an antitrust injury. The plaintiff appealed to the Appellate Court, which affirmed the trial court's judgment. Bridgeport Harbour Place I, LLC v. Ganim, 111 Conn.App. 197, 210, 958 A.2d 210 (2008). We granted the plaintiff's petition for certification to appeal limited to the following issue: “Did the Appellate Court properly affirm the trial court's granting of the defendants' motion[s] to strike?” Bridgeport Harbour Place I, LLC v. Ganim, 290 Conn. 906, 962 A.2d 793 (2009). We answer that question in the affirmative and, accordingly, affirm the judgment of the Appellate Court.

The following relevant procedural and factual background is set forth in the opinion of the Appellate Court. “In May, 1997, the city ... requested proposals for the site development of a section of waterfront property known as Steel Point. A development proposal submitted by Bridgeport Renaissance Center, later renamed Harbour Place Limited Partnership and subsequently acquired by the plaintiff, was chosen by the city for the project. On November 18, 1998, the city and the plaintiff signed a development agreement. The plaintiff could not fulfill its obligations under the contract, however, due to the successive withdrawals of several financing partners, and the city terminated the contract in March, 2001.

“According to the plaintiff, it was prevented from completing the development activities specified in the contract by the unlawful conduct of the defendants. Specifically, the plaintiff alleged that the city's mayor, Ganim, engaged in a contract steering scheme in which his coconspirators, Leonard Grimaldi and Paul Pinto, demanded bribes and kickbacks from businesses seeking city contracts and then divided the proceeds of those illegal payments with Ganim. After the contract had been awarded to the plaintiff, the plaintiff refused to participate in the scheme. Thereafter, Ganim and the other defendants allegedly conspired to deprive the plaintiff of its development rights, through corrupt and illegal means, for their own benefit. Because of the unreasonable delays, conditions and demands imposed on the plaintiff, its three financial partners withdrew from the project, and the plaintiff was unable to fulfill its contractual obligations. From the date it was chosen until it was discharged in March, 2001, the plaintiff had expended millions of dollars in its attempt to complete the project.

“The plaintiff filed a one count complaint on October 19, 2004, claiming that the defendants [had] violated the [antitrust act] by engaging in an illegal conspiracy in restraint of trade. [The plaintiff] sought treble damages pursuant to General Statutes § 35–35.³ Several of the defendants filed motions to strike the complaint on the ground that it failed to state a legally sufficient antitrust claim. The [trial] court, Alander, J., granted the motions, concluding that the plaintiff's original complaint failed to allege facts that would establish an actual adverse effect on competition as a whole in the relevant market and failed to allege facts that would constitute price discrimination in violation of General Statutes § 35–45.

“The plaintiff timely filed an amended complaint. See Practice Book § 10–44. The amended complaint added one paragraph, alleging, in part, that ‘[t]he defendants' conduct had an actual adverse effect on competition as a whole in the relevant market of undertaking and completing commercial development in the [c]ity ... in a timely, cost efficient manner.’ ⁴ The other allegations in the amended complaint were the same as in the original complaint, and the plaintiff did not amend its allegations with respect to [its claim of] price discrimination.

“Six of the defendants filed motions to strike the plaintiff's amended complaint, claiming that the plaintiff [had] failed to allege any additional facts that could constitute a cognizable antitrust claim. The court, Stevens, J., heard argument and issued its decision on March 5, 2007, granting the motions of those defendants. In its decision, the court concluded that the allegations in the added paragraph contained only legal or conclusory claims and did not provide a factual basis for an antitrust violation. Further, the court stated that, even if it is assumed that the relevant market was as alleged in the added paragraph, the plaintiff nevertheless failed to allege any facts of a specific nature that demonstrated that the defendants' conduct had an adverse effect on competition in that market. The court noted: ‘When taken as true, the facts set forth in the ... amended complaint establish that the plaintiff lost its ability to develop a single property, Steel Point, due to the improper conduct of the various defendants. The plaintiff has not alleged any particular facts, however, that would indicate that this action prevented other competitors from developing Steel Point or other properties in [the city] under government contracts with the city ... or otherwise hindered competitors in such pursuits.’

“Subsequently, the [remaining] defendants filed motions to strike the amended complaint on identical grounds. The court granted the motions and ... rendered judgment in favor of all of the defendants.” Bridgeport Harbour Place I, LLC v. Ganim, supra, 111 Conn.App. at 200–203, 958 A.2d 210.

The plaintiff appealed to the Appellate Court from the judgment of the trial court, claiming, inter alia, that the trial court improperly had determined that the amended complaint failed to allege an antitrust injury. Specifically, the plaintiff contended that the allegations in the amended complaint “that the defendants conspired to exclude competition in connection with eight different city projects through commercial bribery and other unlawful acts were sufficient to support the legal conclusion that the defendants engaged in anticompetitive behavior in commercial development in [the city].” Id., at 207, 958 A.2d 210. The Appellate Court disagreed, concluding that the amended complaint was “devoid of factual allegations that would support the legal conclusion that the defendants' conduct had an adverse effect on competition as a whole in the relevant market. The plaintiff [did] not allege how the challenged actions decreased competition among developers or how the alleged payback scheme actually affected the marketplace, which allegations are necessary to support a ... violation [of § 35–26] under a rule of reason analysis. The plaintiff appears to claim that the very fact that the defendants allegedly required anyone who wanted a city contract in [the city] to pay bribes, i.e., they had to ‘pay to play,’ automatically results in an anticompetitive effect on the market. The plaintiff can cite no case law in support of such a position.” Id., at 208, 958 A.2d 210. The Appellate Court also noted that “the case law suggest[ed] otherwise.” Id. In reaching its conclusion, the court relied on three cases, namely, Expert Masonry, Inc. v. Boone County, 440 F.3d 336, 348 (6th Cir.2006), Comet Mechanical Contractors, Inc. v. E. A. Cowen Construction, Inc., 609 F.2d 404, 406 (10th Cir.1980), and Federal Paper Board Co. v. Amata, 693 F.Supp. 1376, 1383 (D.Conn.1988), that had held that commercial bribery, standing alone, does not constitute anticompetitive behavior under federal antitrust law.

On appeal to this court, the plaintiff contends that the Appellate Court improperly concluded that the amended complaint fails to allege a cognizable antitrust injury. The plaintiff claims that the complaint, when construed in the light most favorable to sustaining its legal sufficiency, alleges such an injury because it asserts that the defendants “controlled the relevant market to such an extent that they excluded competitors at will through their bribery and kickback scheme.” In particular, the plaintiff contends that “[t]he restraint alleged [in the complaint] is that of a general contractor, the Lenocis and their cronies, conspiring with the mayor [Ganim] who controlled the city....”...