July 25, 2017 (Date Decided)
FOR APPELLANTS: Marc B. Kaplin (Kaplin Stewart Meloff Reiter & Stein, P.C., attorneys; Daniel R. Utain and Mr. Kaplin, on the briefs).
FOR RESPONDENTS: Theodora McCormick (Epstein Becker & Green, P.C., attorneys; Anthony Argiropoulis and Ms. McCormick, on the brief); Christopher J. Carey (Graham Curtin, P.A., attorneys; Mr. Carey, of counsel and on the brief; Jared J. Limbach, on the brief).
Plaintiffs appealed from the dismissal of their complaint against defendants alleging malicious abuse of process, tortious interference with prospective contracts, and civil conspiracy. Plaintiffs’ complaint stemmed from underlying litigation filed by defendants against plaintiffs, challenging the approval of a land development plan submitted by plaintiffs to build a shopping complex. Plaintiffs asserted that defendants’ underlying litigation was “sham litigation” intended solely to prevent plaintiffs’ competition with defendants’ supermarket.
The trial court dismissed plaintiffs’ complaint for failure to state a claim, after finding that defendants’ litigation was protected by the Noerr-Pennington doctrine and was not objectively baseless. On appeal, plaintiffs argued that their complaint was not barred by Noerr-Pennington as it fell within the sham exception, that defendants’ litigation was objectively baseless, and that the Noerr-Pennington doctrine was not applicable to a claim for abuse of process.
The court noted that the Noerr-Pennington doctrine held that petitioners for government redress were generally immune from antitrust liability defending against such claims based on their petitioning activity. But the court noted that the doctrine did not provide protection for sham litigation, with the presumption of immunity waived where an underlying lawsuit was objectively baseless, such that no reasonable litigation would expect success on the merits. The court further noted that a series of lawsuits, as opposed to just one action, could be further evidence of sham litigation.
The court agreed that the Noerr-Pennington doctrine applied to plaintiffs’ claims against defendant. However, the court reversed the dismissal of plaintiffs’ complaint, holding that the trial court failed to support its conclusion that defendants’ underlying litigation against plaintiffs was not objectively baseless. The court noted that the trial court failed to consider the findings of the judge who dismissed defendants’ litigation.
The court found that plaintiffs alleged sufficient facts to suggest defendants engaged in litigation for the sole purpose of impeding the development of plaintiffs’ shopping center and stifling the competition plaintiffs would pose to defendants. The court ruled that, on remand, the trial could would be required to consider plaintiffs’ allegations that defendants’ underlying litigation was part of a pattern of sham litigation filed by defendants to injure their market rivals, rather than to redress legitimate grievances.