Antitrust Law Daily Wrap Up, ANTITRUST—D.N.J.: Supermarket attempted monopolization claim proceeds without bifurcated discovery, (Sep 1, 2016)

By Greg Hammond, J.D.

The owner of a Hanover, New Jersey-area ShopRite Supermarket was not entitled to bifurcated discovery in an action in which a supermarket developer claimed that the ShopRite owner attempted to monopolize the market for full-service supermarkets in the greater Morristown area. The federal district court in Newark rejected the ShopRite owner’s suggestion that market share or lack thereof was the sole consideration for determining monopoly power and consequently denied the motion to bifurcate. The owner’s alleged practice of filing sham petitions would go directly to proving the defendants engaged in anticompetitive conduct and could achieve monopoly power in the future—two of the three factors needed to prove attempted monopolization under the Sherman Act (Hanover 3201 Realty, LLC v. Village Supermarkets, Inc., August 31, 2016, Waldor, C.).

Hanover 3201 Realty, LLC signed a contract to develop a supermarket on its property in Hanover, New Jersey. After Village Supermarkets, Inc.—the owner of a local ShopRite—caught wind of the development, it allegedly filed various administrative and court challenges to Hanover’s permit applications. Hanover’s remaining antitrust claim—after the district court granted dismissal and the U.S. Court of Appeals in Philadelphia partially vacated that decision—was that Village Supermarkets attempted to monopolize the greater Morristown full-service supermarket market.

After the district court reinstated the remaining Sherman Act claim, Village Supermarkets moved for bifurcated discovery, arguing that it did not have monopoly power and that the lone attempted monopolization claim is factually and legally baseless. In particular, Village Supermarkets claimed that it did not have monopoly power because there was another full-service supermarket that competed in the same alleged market. Village Supermarkets consequently asked the court to limit the first stage of discovery to Village Supermarkets’ lack of monopoly power in the alleged market.

Contrary to Village Supermarkets’ suggestion, the court noted that market share or lack thereof is not the sole consideration for determining monopoly power. Rather, Village Supermarket could continue to use the same alleged "sham" objection tactics for future competitors in the relevant geographic region. Discovery concerning these tactics was therefore critical to determine if there was a valid federal claim, the court stated. Village Supermarket’s practice of filing sham petitions would go directly to proving the defendants engaged in anticompetitive conduct and could achieve monopoly power in the future—two of the three factors needed to prove attempted monopolization under the Sherman Act. Village Supermarkets therefore failed to meet its burden of showing a significant need for bifurcation.

The case is No. 2:14-cv-1327 (SRC)(CLW).

Attorneys: James E. Cecchi (Carella Byrne Cecchi Olstein Brody & Agnello, PC) for Hanover 3201 Realty, LLC. Anthony Argiropoulos (Epstein Becker & Green, PC) and James M. Hirschhorn (Sills, Cummis, Epstein & Gross) for Village Supermarkets, Inc. and Hanover & Horsehill Development LLC.

Companies: Hanover 3201 Realty, LLC; Village Supermarkets, Inc.; Hanover & Horsehill Development LLC

Cases: Antitrust NewJerseyNews