Inserra Supermarkets, Inc. v. Stop & Shop Supermarket Co.

Decision Date28 February 2017
Docket NumberDocket No: 16–01697
Citation240 F.Supp.3d 299
Parties INSERRA SUPERMARKETS, INC., Plaintiff, v. The STOP & SHOP SUPERMARKET CO., LLC, ABC Corporations 1–10, and John Does 1–10, Defendants.
CourtU.S. District Court — District of New Jersey

Arthur N. Chagaris, Daniel Lee Steinhagen, John J. Lamb, Martin Richard Kafafian, Beattie Padovano, LLC, Montvale, NJ, for Plaintiff.

Guy V. Amoresano, John D. Haggerty, Kaitlyn E. Stone, Kate Elizabeth Janukowicz, Kevin Reed Reich, Gibbons, PC, Newark, NJ, for Defendants.



Plaintiff Inserra Supermarkets, Inc. ("Inserra") brings eight federal and state antitrust and tort claims against The Stop & Shop Supermarket, Co. ("the Defendant"). The First Amended Complaint ("FAC") alleges that Defendant acted for anticompetitive reasons to prevent Inserra from opening a Shop–Rite adjacent to Defendant's existing supermarket in Wyckoff, New Jersey. Defendant now moves under Federal Rule of Civil Procedure 12(b)(6) to dismiss the action for failure to state a claim. Defendant's motion to dismiss is DENIED.

A. Inserra's Land–Use Applications—Administrative Proceedings

In 2009, Inserra leased 7.4 acres of land in Wyckoff, New Jersey, intending to open a full-service Shop–Rite supermarket. FAC ¶¶ 40, 45. The Property is located adjacent to Defendant's Stop & Shop, which Inserra alleges is the only full-service supermarket in Wyckoff. Id. at ¶ 243. Inserra applied for land-use approval with the Wyckoff Planning Board (the "Wyckoff Board") in September 2009, and later with the Bergen County Planning Board (the "County Board") in June 2011. Id at ¶ 65. Defendant was entitled as a member of the public to formally object to Inserra's applications in public hearings.

According to the Complaint, Defendant abused the approval process by filing dozens of "obstructionist, anti-competitive [objections]," resulting in "39 hearings over nearly three years." Id. at ¶¶ 79, 214.1 Defendant objected, for example, that the zoning category "retail food stores" did not include supermarkets, id. at ¶¶ 76, 233; that Inserra's plan did not accommodate certain large tractor trailers id. at ¶ 83(d); that the store would increase traffic and require installation of a new traffic light, id. at ¶ 83(e); and that Wyckoff's Zoning Ordinance required a 100–foot setback from what Defendant characterizes as "residential property." Id. at ¶ 8(f). Inserra argues that, in addition to the sheer volume of objections, the manner in which many objections were filed indicated that Defendant intended to prolong and complicate the approval process. Defendant, for example, repeatedly requested adjournments, id. at 116, and often waited until "the last minute" to raise objections, "so as to inflict maximum delay on the application process." Id. at ¶ 238. According to Inserra, Defendant presented expert testimony that the Wyckoff Board recognized to be inaccurate, inciting additional questioning and cross-examination. Id. at ¶ 83(a).

Inserra alleges that Defendant acted in concert with Munico, LLC,2 landlord of Defendant's Wyckoff property and Defendant's collaborator on other existing and prospective projects. Id. at ¶ 71. Defendant allegedly "utilized existing lease relationships at the Wyckoff Location and at other properties controlled by Munico's principals, and the potential future relationships on other projects, to pressure and/or coerce and/or induce Munico to object to the Application." FAC. ¶ 72. Defendant and Munico entered an initial appearance at the Wyckoff proceeding using joint counsel, but Munico obtained its own counsel thereafter. Id. at ¶¶ 78; 82(b).

The Wyckoff Board finally approved Inserra's application on February 13, 2013, and the County Board's approval followed on April 8, 2014. Id. at ¶ 113. Defendant appealed the County's decision to Board of Chosen Freeholders ("Freeholders"), which affirmed the approval after de novo review in August 2014.

B. State Litigation Challenging the Approval of Inserra's Land–Use Applications

On April 1, 2013, Defendant and Munico filed separate complaints in New Jersey Superior Court challenging the Wyckoff Board's approval of Inserra's application. FAC ¶ 131. Both actions were filed as "complaints in lieu of prerogative writs," accelerated proceedings used to challenge a governmental or quasi-governmental decision. See N.J.S.A. Const. Art. 6, § 5, ¶ 4 ; Willoughby v. Planning Bd. Of Tp. Of Deptford , 306 N.J.Super. 266, 703 A.2d 668, 671 (App. Div. 1997). Defendant filed a similar action challenging the County Board's approval in October 2014. In August 2014, Defendant sued Bergan County under New Jersey's Open Public Records Act ("OPRA"), alleging that documents regarding Inserra's application had been withheld improperly. Id. at ¶ 158. Ultimately, all four complaints were dismissed or decided in Inserra's favor, and all were appealed. On August 18, 2016, the Appellate Division affirmed the decision upholding the Wyckoff Board's grant of approval. Defendant's two actions against the County remain pending before the Appellate Division. Munico withdrew its appeal.

C. The Instant Action

Inserra filed this action on March 28, 2016, alleging that Defendant executed a "corporate policy of filing anticompetitive sham petitions ... [which were] more interested in delay[ing] than in redressing any particular grievances." FAC ¶ 16. Count I alleges that Defendant conspired with Munico to restrain trade in violation of Section 1 of the Sherman Act. Count II alleges that Defendant violated Section 2 of the Sherman Act, 15 U.S.C. § 2, by monopolizing or attempting to monopolize the market for full-service supermarkets in the Greater Wyckoff Area. FAC ¶ 259. Counts III and IV state claims under corresponding provisions of the New Jersey Antitrust Act. N.J.S.A. 56:9–3 ; 56:9–4. Counts V–VIII allege tortious interference by contract, interference with prospective economic advantage, civil conspiracy, and malicious use of process. Defendant moves under § 12(b)(6) to dismiss the Complaint in its entirety.


Defendant makes six arguments for dismissing the Complaint. First, the Sherman Act's statute of limitations bars the two federal antitrust claims. Second, Inserra does not plausibly allege "concerted action" by Defendant and Munico, as required by the Act. Third, Inserra fails to state a claim for monopolization or attempted monopolization under the Act because it does not plausibly allege a "dangerous probability" that Defendant had or will have monopoly power. Fourth, Defendant is immune from liability under the Noerr–Pennington doctrine. Fifth, New Jersey's "entire controversy" doctrine prohibits this Court from reviewing state claims that could have been asserted in a prior state court litigation. Lastly, Inserra does not plausibly allege "special grievances" required to state a claim for malicious use of process. For the reasons explained below, all of these arguments fail.

1. Statute of Limitations

Claims under the Sherman Act must be brought within four years of the alleged antitrust violation. 15 U.S.C. § 15b. See W. Penn Allegheny Health Sys., Inc. v. UPMC , 627 F.3d 85, 105 (3d Cir. 2010). Inserra filed this action on March 28, 2016, rendering untimely any action that accrued before March 28, 2012. Defendant argues that Inserra's claims accrued in 2010, when Defendant and Munico allegedly conspired to impede the Wyckoff Board proceedings. Inserra concedes that the initial agreement between Defendant and Munico took place in July 2010, and that most Wyckoff Board hearings occurred before the limitations period.

Defendant, however, misconstrues the Sherman Act's limitations provision. "In the context of a continuing conspiracy to violate the antitrust laws ... each time a plaintiff is injured by an act of the defendants a cause of action accrues [ ] to recover the damages caused by that act and ... as to those damages, the statute of limitations runs from the commission of the act." W. Penn Allegheny Health Sys., Inc. v. UPMC , 627 F.3d 85, 106 (3d Cir. 2010). Further, a claim alleging conspiracy is not untimely merely because "the acts that occurred within the limitations period were reaffirmations of decisions originally made outside the limitations period." Id. at 106.

Viewing the facts in the light most favorable to Inserra, the Complaint plausibly alleges that Defendant's practice of sham petitioning "inflicted continuing and accumulating harm" during the limitations period. In re Lower Lake Erie Iron Ore Antitrust Litig. , 998 F.2d 1144, 1172 (3d Cir. 1993) (citing Hanover Shoe, Inc. v. United Shoe Machinery Corp. , 392 U.S. 481, 502 n. 15, 88 S.Ct. 2224, 20 L.Ed.2d 1231 (1968) ). Defendant filed all four of its state court actions during the limitations period. Many Wyckoff Board hearings occurred within the limitations period. According to Inserra, some or all of these hearings were caused by Defendant's sham objections. Each hearing visited further harm upon Inserra, which pays $100,000 in monthly rent and which has refrained from developing the Property given the pending litigation.

In sum, although the initial agreement between Defendant and Munico occurred outside the limitations period, the post-limitations injuries were not merely "inertial consequences" of that original agreement. George, Inc. v. Envirotech Corp. , 939 F.2d 1271, 1274 (5th Cir. 1991). Rather, Defendant filed additional sham petitions during the limitations period, manifesting "an active, injurious conspiracy" that continued to inflict anticompetitive harm. See In re Lower Lake Erie Iron Ore Antitrust Litig. , 998 F.2d 1144, 1173 (3d Cir. 1993). West Penn Allegheny Health Sys., Inc. , 627 F.3d at 106,. Inserra's action is timely.

2. Concerted Action

Count 1 alleges that Defendant violated Section § 1 of the Sherman Act, 15 U.S.C. § 1, by conspiring with Munico to restrain competition in the market for full-service supermarkets in Wyckoff. FAC ¶ 243. To...

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