A New Jersey appeals court on Tuesday revived a lawsuit alleging that a supermarket and its lawyer had filed anti-competitive sham litigation in an effort to delay development of a shopping complex in Woolwich.
The three-judge panel of the Appellate Division reversed orders by Superior Court Judge Jean B. McMaster that dismissed the malicious abuse of process suit, instructing the judge to look at an alleged pattern by Benjamin Ammons and his attorney, R.S. Gasiorowski, of using court filings to stymie competition.
In 2015, McMaster ruled that Ammon’s unsuccessful court challenge to an agreement between Woolwich Township and plaintiffs Main Street at Woolwich LLC, Woolwich LLC and Woolwich Crossings LLC did not qualify for the sham-litigation exception to the Noerr-Pennington doctrine, which generally grants immunity to citizens who petition the government, unless the litigation is “objectively baseless.”
However, the Appellate Division found no support for McMaster’s conclusion, and for the first time, the judges adopted a nonbinding ruling from the U.S. Court of Appeals for the Third Circuit that broadened the basis for finding that a defendant’s supposed anti-competitive conduct meets the doctrine’s carve-out.
“As a matter of first impression, we adopt the holding in Hanover 3201 Realty v. Village Supermarkets,” Judge Michael A. Guadagno wrote, “and conclude that the motion judge was required to consider the allegations in plaintiffs’ complaint that the Ammons action was part of a pattern of sham litigation brought by defendants for the purpose of injuring market rivals rather than to redress actual grievances.”
The Woolwich plaintiffs sued in 2014, after a Chancery judge struck down Ammons’ claim that the Woolwich Township Joint Land Use Board lacked the authority to consider a general development plan to build a shopping center on 1.3 million square feet of land in western Gloucester County.
Ammons, who owns and operates ShopRite supermarkets in New Jersey and Pennsylvania, had filed the litigation after learning that a Wal-Mart Superstore was planned for the cite, the plaintiffs said.
In his 23-page opinion, Guadagno pointed to a slew of allegations in the complaint that Ammons and Gasiorowski had engaged in an “extensive course of conduct” that mirrored their actions in the Woolwich case, including attempts to thwart retail developments in Hamilton and Egg Harbor townships that threatened the ShopRite stores’ business.
But Guadagno said McMaster had failed to even consider that the plaintiffs’ claims were part of a pattern of filings that Ammons used as an “anticompetitive weapon” to shut down its rivals.
“We are satisfied that sufficient facts were alleged to suggest defendants engaged in sham litigation for the sole purpose of impeding the development of plaintiffs’ shopping center and to stifle competition,” he said.
Marc Kaplin, who represented the plaintiffs, welcomed the ruling on Wednesday, saying that he hoped it would prevent further interference in the project, which is still in the land-development stage.
“I think the decision is totally consistent with the federal law that been developing,” said Kaplin, an attorney with Kaplin Stewart Meloff Reiter & Stein.
“This is what the law should be. You shouldn’t be able to use the court system to stifle competition.”
Attorneys for Ammons and Gasiorowski did not return calls Wednesday seeking comment.
Ammons is represented by Theodora McCormick and Anthony Argiropoulos of Epstein Becker & Green. Gasiorowski is represented by Christopher J. Carey of Graham Curtin.
The case is captioned Main Street at Woolwich v. Ammons Supermarket.