Antitrust Law Daily Wrap Up, ANTITRUST—NDIll: Developer's Antitrust Claims over Stalled Shopping Center Dismissed, (Feb 6, 2013)

By Jeffrey May, J.D.

A real estate developer failed to state antitrust claims against a grocery chain and consulting firm that purportedly thwarted its attempts to develop a shopping center in Mundelein, Illinois, the federal district court in Chicago has ruled. Motions to dismiss the developer's third amended complaint were granted, except to the extent the developer asserted a claim of tortious interference with prospective economic advantage (Rubloff Development Group, Inc. v. Supervalu, Inc., February 5, 2013, Leinenweber, H.).

The developer contended that the grocery store chain and its consulting firm stirred up opposition to the development, which was located near an upscale gated community. The chain allegedly bankrolled three lawsuits by local citizens against Mundelein and/or the developer to block the development. The chain was opposed to the development because it would have included a Walmart, whose grocery store portion would have competed with chain's local store. The developer ultimately settled all three lawsuits in exchange for $200,000 and several concessions in the design and development of the shopping center, which remains unbuilt.

In an earlier ruling in March 2012 (2012-1 Trade Cases ¶77,842, 863 F.Supp.2d 732), the court found that the Noerr-Pennington doctrine protected the defendants for their admittedly misleading petitioning of various villages and administrative agencies in regards to the development. It also found the accompanying public relations campaign in regards to those activities similarly protected.

In its third amended complaint, the developer asked the court to reconsider its ruling on the Noerr-Pennington issue. The developer argued that the conduct was actionable because it fell within an exception to the doctrine for a pattern of baseless, repetitive litigation made without respect to merit. However, because the developer settled the three lawsuits for a substantial sum, the lawsuits could not be deemed objectively meritless and within the exception, according to the court. Moreover, three lawsuits filed against the developer’s interests—two of which were consolidated— would not amount to a whole series of legal proceedings for the purposes of the “pattern” exception. The court also refused to consider the defendants' conduct nationwide against Walmart for purposes of establishing a pattern or to expand the exception beyond the protection of the target of the anticompetitive behavior (competitors) to collaterally affected victims like the developer.

While Noerr-Pennington immunity would not have protected the defendants' challenged non-petitioning activity, the court concluded that the defendants' "mere speech" was not actionable under the antitrust laws. The defendants allegedly approached the owner of another Mundelein shopping center with a Menards home improvement store. Menards was slated to be part of the developer's new project. The defendants allegedly tried to get the landlord to lock Menards into a long-term lease, in an attempt to make that tenant unable to come to the new development and thereby “kill the project or lead to serious delay.”

There could not be antitrust liability for mere speech without some enforcement, coercion, or compulsion on the part of the defendants, the court ruled. The defendants never successfully caused Menards and its landlord to execute another long-term lease. Even if the conversation caused Menards to enter more short-term leases, there was still nothing alleged but mere speech, which was not actionable under the antitrust laws. The court did rule, however, that the defendants' discussions with the Menards landlord could have caused Menards to pull out of the new development and that this allegation stated a claim of tortious interference with prospective economic advantage.

The case is No. 10 C 3917.

Attorneys: Thomas James Frederick (Winston & Strawn LLP) for plaintiff Rubloff Development Group, Inc. Joshua Buchanon Strom (Robins Kaplan, Miller & Ciresi, LLP) for defendant SuperValu, Inc.

Companies: Rubloff Development Group, Inc.; SuperValu, Inc.; Walmart, Inc.

Cases: Antitrust IllinoisNews