PHILADELPHIA – A federal judge has stayed a New Jersey developer’s anti-trust litigation against a Pennsylvania competitor, which claimed the latter is conspiring to prevent it from developing a major retail project featuring the Royal Farms Convenience Store in the vicinity of a Merck headquarters.
Upper Gwynedd Equities, LLC, and Retail Sites, LLC of Maple Shade, N.J. first filed suit in the U.S. District Court for the Eastern District of Pennsylvania on June 12 versus Provco Pinegood Sumneytown, LLC, Gerald Holtz, Provco Group, LLC, The Provco Group, Ltd., Provco Ventures I, L.P., Provco Real Estate, all of Villanova, Wawa, Inc. of Media, Bruce Goodman of Jenkintown, ABC Entities 1-5 and John Does 1-10.
“It is a claim for attempted monopolization of neighborhood retail projects (NRPs) with multiple commercial uses and tenants, in this instance, one use of which is a hyper-convenience store market and the hyper-convenience store real estate site market in Upper Gwynedd Township, Montgomery County, Pennsylvania, at and near the intersection of Sumneytown Pike and Church/Road West Point Pike,” the suit stated.
NRPs usually consist of one or more buildings with multiple tenants and uses, which are anchored by a key retail tenant such as a hyper-convenience store, supermarket, pharmacy and/or restaurant, and which benefit from the frequent shopping trips generated by each use in the project and predominantly, the continual high volume of customers attracted to the anchor tenant.
The location selected by the plaintiffs is just minutes away from Merck’s pair of West Point Campuses, which collectively employ about 12,500 people. According to the litigation, that statistic makes them both the largest employer in Upper Gwynedd Township, as well as Montgomery County.
However, the plaintiffs claimed the defendants have conspired to “hinder, delay or stop Upper Gwynedd Equities’s NRP, to prevent UGE from leasing space in its NRP to tenants and to interfere with UGE’s lease agreement with its tenant, Royal Farms, a direct competitor in these markets with defendants Provco Group, Provco and its client and its tenant, Wawa.”
The plaintiffs alleged the defendants’ actions are also meant to harm UGE and prevent it from leasing to its other prospective tenants and to exclude UGE and its tenant, Royal Farms, from the NRP and hyper-convenience store real estate site markets.
The plaintiffs claimed the defendants have done this through the use of a series of sham litigations, conspiracy in restraint of trade, other anti-competitive acts and tortious conduct, meant to both prevent the construction and development of a Royal Farms Store and protect a competing NRP featuring Wawa and CVS stores owned and operated by the defendants, just over 1 mile from the target site.
“If successful in their sham litigations and other tortious and anti-competitive acts, the defendants would effectively eliminate a new NRP and new convenience or hyper-convenience store competitor in the geographic area providing the goods and services associated with hyper-convenience stores and likewise eliminate a competitor in the hyper-convenience store real estate site market, all within the Sumneytown Pike Corridor Market,” the suit said.
The plaintiffs add their instant action is designed to “end the defendants’ unlawful scheme, to award UGE damages under the Sherman Act and compensatory and punitive damages in an amount commensurate with defendant’s illegal anti-competitive conduct, and malicious and tortious conduct as alleged.”
UPDATE
On July 24, counsel for Wawa filed a motion to stay discovery in the case, pending a resolution of their forthcoming motion to dismiss the plaintiffs’ complaint, an action they say would not be contested by the plaintiffs.
“In this complex antitrust action, plaintiffs claim that defendants brought allegedly baseless legal challenges to certain land use decisions by Upper Gwynedd Township regarding plaintiffs’ proposed development in the township to delay or prevent plaintiffs from competing in the market for hyper-convenience stores. But petitioning of the courts for redress is generally immune from antitrust liability,” counsel for Wawa stated.
“By the end of next month pursuant to the Court’s order of July 13, 2020, defendants will file a dispositive motion to dismiss contending that, as a matter of law, the land use challenges were not objectively baseless and therefore qualify for immunity under the U.S. Supreme Court’s Noerr-Pennington doctrine. Because a favorable decision on that motion will obviate the need for discovery, defendants now move for a brief stay pending a decision on that motion. Plaintiffs have advised defendants that they do not oppose such a stay.”
Wawa’s counsel labeled the benefits of staying discovery “readily apparent.”
“If Plaintiffs’ complaint survives dismissal, discovery will be extensive and complex. Plaintiffs’ voluminous complaint explicitly attacks the propriety of two separate land use actions and appeals,” the stay motion stated.
“Much of this discovery will include sensitive aspects of the parties’ respective business operations, the production of which will require careful review and designations after the negotiation of appropriate protective orders. In addition, discovery will involve substantial time and expense, including attorneys’ fees, the time of the parties’ employees, and third-party vendor costs.”
On July 27, U.S. District Court for the Eastern District of Pennsylvania Judge John M. Younge granted the motion to stay discovery.
“Here, considering the defendants’ assertion that the motion to dismiss they intend to file on Aug. 28, 2020 will raises issues relating to the Noerr-Pennington doctrine, the Court finds that the forthcoming motion may have the potential to dispose of the entire case, thereby eliminating the need for some, if not all, discovery,” Younge said.
For multiple counts of violation of the Sherman Act, tortious interference with existing contracts, tortious interference with prospective contracts, abuse of process and civil conspiracy, the plaintiffs are seeking compensatory damages in an amount in excess of jurisdictional and compulsory arbitration thresholds, together with interest, costs of suit, punitive damages and counsel fees, together with such other relief as the Court deems just.
The plaintiffs are represented by Eric B. Smith of Timoney Knox, in Fort Washington.
The defendants are represented by Barbara T. Sicalides, Frank H. Griffin IV and Martha Guarnieri of Troutman Pepper Hamilton Sanders, plus Edward D. Rogers, Leslie E. John, Emilia L. McKee Vassallo and Thomas J. Gallagher IV of Ballard Spahr, all in Philadelphia.
U.S. District Court for the Eastern District of Pennsylvania case 2:20-cv-02819
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com