Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Developer challenges grocer’s efforts to block construction of new supermarket, (Mar 5, 2014)

By Linda O’Brien, J.D., LL.M.

A real estate developer alleges that a major retail supermarket has engaged in anticompetitive conduct by obstructing, delaying and attempting to prevent the required government approvals for its proposed development of a property, which would include the construction of a competing supermarket. The complaint in Hanover 3201 Realty, LLC v. Village Supermarkets, Inc. was filed in federal district court in Newark, New Jersey on February 28, 2014.

Village Supermarkets, Inc., owns and operates 29 ShopRite retail supermarkets including a store located in Hanover Township, New Jersey. In 2012, Hanover 3210 Realty, owner of certain property in Hanover Township, entered into a lease and site development agreement with retail grocer, Wegman’s , to build a full-service supermarket on the site. The proposed Wegman’s supermarket would be approximately two miles from the ShopRite supermarket in Hanover Township.

According to the complaint, Village engaged in a course of conduct to impede, delay, and/or prevent Hanover from promptly obtaining the necessary government approvals for the construction of the proposed Wegman’s supermarket. In conjunction with the Wegman project, Hanover sought a Flood Hazard Area (FHA) Individual Permit from the New Jersey Department of Environmental Protection (DEP). Village appealed the DEP’s grant of the FHA permit, making a request for an adjudicatory hearing, which would postpone the finality of the permit and delay construction. Upon information and belief, there is no objective good faith basis for Village’s FHA permit challenge, the complaint states.

Hanover also sought a number of Freshwater Wetlands General Permits from the DEP. Village engaged consultants to file objections to Hanover’s Wetlands Permit application, claiming that the property was a potential habitat for certain endangered species. Additionally, Hanover submitted a Major Street Intersection with Planning Review (MSI) Application with the New Jersey Department of Transportation (DOT). Village challenged Hanover’s MSI Application and included a traffic engineering analysis to support its request to deny the application. Village lacked interest in Hanover’s Wetlands Permit application and MSI application other than being a competitor attempting to stifle competition, the complaint alleged.

The complaint states that, after Hanover’s site plan was given final approval by the Township Planning Board, Village filed suit to nullify the site plan zoning approvals by the Board. The action is objectively baseless since Village sustained no injury as a result of the Board action and its claims are unfounded.

Hanover asserts claims for monopolization, attempted monopolization, and conspiracy to monopolize in violation of federal and New Jersey antitrust law, among other claims. The action seeks declaratory and injunctive relief, treble damages, costs of suit, attorney fees, and other just and proper relief.

The case is No. 2:14-cv-01327.

Attorneys: James E. Cecchi and Lindsey H. Taylor (Carella, Byrne, Cecchi, Olstein, Brody, & Agnello) for Hanover 3201 Realty, LLC

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

News: Antitrust NewJerseyNews