Brandywine Village Associates v. Carlino East Brandywine, L.P. et al

MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM AND FOR LACK OF SUBJECT MATTER JURISDICTION

E.D. Pa.November 11, 2016

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA BRANDYWINE VILLAGE ASSOCIATES, : : Plaintiff, : Civil Action No. 16-cv-5209 v. : : CARLINO EAST BRANDYWINE, L.P., et al., : : Defendants. : ORDER AND NOW, this _________ day of _______________________, 2016, upon consideration of the motion of defendants Carlino East Brandywine, L.P., Christina Watters, Katherine Kettlety, Frank Watters, and Thomas Watters to dismiss the Complaint of plaintiff Brandywine Village Associates, and any response thereto, it is ORDERED that the Motion is GRANTED and the Complaint is hereby DISMISSED WITH PREJUDICE. BY THE COURT: __________________________________________ THE HONORABLE JEFFREY L. SCHMEHL UNITED STATES DISTRICT JUDGE Case 5:16-cv-05209-JLS Document 23 Filed 11/11/16 Page 1 of 35 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA BRANDYWINE VILLAGE ASSOCIATES, : : Plaintiff, : Civil Action No. 16-cv-5209 v. : : CARLINO EAST BRANDYWINE, L.P., et al., : : Defendants. : MOTION OF DEFENDANTS, CARLINO EAST BRANDYWINE, L.P., CHRISTINA WATTERS, KATHERINE KETTLETY, FRANK WATTERS, AND THOMAS WATTERS, TO DISMISS COMPLAINT PURSUANT TO FRCP 12(b)(6) AND 12(h)(3), AND TO STRIKE INJUNCTION REQUEST PURSUANT TO FRCP 12(f) Pursuant to Federal Rule of Civil Procedure 12(b)(6), defendants, Carlino East Brandywine, L.P. (“Carlino”), Christina Watters, Katherine Kettlety, Frank Watters, and Thomas Watters (collectively, the “Individual Defendants”), hereby move the Court for an Order dismissing the Complaint of plaintiff, Brandywine Village Associates, with prejudice on the grounds that the Complaint fails to state any plausible claim upon which relief can be granted. Carlino and the Individual Defendants further move to dismiss the claim for specific performance (Count VI) for lack of subject matter jurisdiction. Finally, Carlino and the Individual Defendants move to strike, in accordance with Federal Rule of Civil Procedure 12(f), any requested relief to enjoin pending state court litigation. Case 5:16-cv-05209-JLS Document 23 Filed 11/11/16 Page 2 of 35 In support of their motion, Carlino and the Individual Defendants rely upon and incorporate herein by reference the attached memorandum of law. Respectfully submitted, /s/ Michael Eidel Michael Eidel Joshua Horn FOX ROTHSCHILD LLP 2000 Market Street, 20th Floor Philadelphia, PA 19103 (215) 299-2000 meidel@foxrothschild.com jhorn@foxrothschild.com Attorneys for Defendants Carlino East Brandywine, L.P., Christina Watters, Katherine Kettlety, Frank Watters, and Thomas Watters Dated: November 11, 2016 Case 5:16-cv-05209-JLS Document 23 Filed 11/11/16 Page 3 of 35 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA BRANDYWINE VILLAGE ASSOCIATES, : : Plaintiff, : Civil Action No. 16-cv-5209 v. : : CARLINO EAST BRANDYWINE, L.P., et al., : : Defendants. : MEMORANDUM OF LAW IN SUPPORT OF MOTION OF DEFENDANTS, CARLINO EAST BRANDYWINE, L.P., CHRISTINA WATTERS, KATHERINE KETTLETY, FRANK WATTERS, AND THOMAS WATTERS, TO DISMISS COMPLAINT PURSUANT TO FRCP 12(b)(6) AND 12(h)(3), AND TO STRIKE INJUNCTION REQUEST PURSUANT TO FRCP 12(f) Case 5:16-cv-05209-JLS Document 23 Filed 11/11/16 Page 4 of 35 i TABLE OF CONTENTS Page I. INTRODUCTION .............................................................................................. 1 II. RELEVANT FACTS AS ALLEGED IN COMPLAINT................................... 3 III. LEGAL STANDARD......................................................................................... 5 I. PLAINTIFF FAILS TO STATE A CLAIM FOR CONSPIRACY TO RESTRAIN TRADE IN VIOLATION OF SECTION 1 OF THE SHERMAN ACT [COUNT I AGAINST ALL DEFENDANTS] .......................................... 6 A. BVA lacks antitrust standing. ............................................................................. 7 B. Plaintiff fails to allege that Carlino was engaged in a contract, combination, or conspiracy in restraint of trade...................................................................... 12 C. Plaintiff fails to plead that any agreement in restraint of trade proximately caused harm to Plaintiff. ............................................................................... 14 D. Plaintiff failed to adequately plead the relevant market. .................................. 14 E. Carlino’s alleged conduct cannot be the basis for any antitrust claim.............. 17 F. The Complaint is silent regarding the Individual Defendants. ......................... 18 II. THE COMPLAINT FAILS TO STATE A CLAIM FOR FALSE AND MISLEADING ADVERTISING IN VIOLATION OF SECTION 43(A) OF THE LANHAM ACT (COUNT II AGAINST CARLINO ONLY)................. 18 III. PLAINTIFF FAILS TO STATE A CLAIM FOR UNFAIR COMPETITION (COUNT III AGAINST ALL DEFENDANTS) .............................................. 19 IV. PLAINTIFF FAILS TO STATE A CLAIM FOR COMMERCIAL DISPARAGEMENT (COUNT IV AGAINST CARLINO ONLY)................. 20 V. PLAINTIFF FAILS TO STATE A CLAIM FOR ABUSE OF PROCESS (COUNT V AGAINST CARLINO ONLY)..................................................... 20 VI. PLAINTIFF’S CLAIM FOR SPECIFIC PERFORMANCE (COUNT VI AGAINST CARLINO AND INDIVIDUAL DEFENDANTS) SHOULD BE DISMISSED FOR LACK OF SUBJECT MATTER JURISDICTION ........... 22 VII. PLAINTIFF FAILS TO STATE A CLAIM FOR BREACH OF CONTRACT (COUNT VII AGAINST THE INDIVIDUAL DEFENDANTS) .................... 23 Case 5:16-cv-05209-JLS Document 23 Filed 11/11/16 Page 5 of 35 ii VIII. THE ANTI-INJUNCTION ACT BARS PLAINTIFF’S REQUEST TO ENJOIN STATE COURT LITIGATION......................................................... 24 IX. CONCLUSION................................................................................................. 25 Case 5:16-cv-05209-JLS Document 23 Filed 11/11/16 Page 6 of 35 iii TABLE OF AUTHORITIES Page(s) Cases Acme Markets, Inc. v. Wharton Hardware and Supply Corp., 890 F.Supp. 1230 (D.N.J. 1995) ..................................................................................14 Ashcroft v. Iqbal, 129 S.Ct. 1937 (2009)....................................................................................................6 Bayada Nurses, Inc. v. Comm., Dept. of Labor and Industry, 8 A.3d 866 (Pa. 2010) ..................................................................................................18 Behrend v. Comcast Corp., 532 F.Supp.2d 735 (E.D. Pa. 2007) .............................................................................12 Blue Shield of Virginia v. McCready, 457 U.S. 465 (1982).......................................................................................................9 Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477 (1977)...............................................................................................6, 8, 9 Clark v. Progressive Advanced Ins. Co., 2013 WL 1787566 (E.D. Pa. April 26, 2013)................................................................6 Coles v. Street, 38 Fed. Appx. 829 (3d Cir. 2002)................................................................................23 CoreStates Bank, N.A. v. Cutillo, 723 A.2d 1053 (Pa. Super. 1999).................................................................................23 Eastern R.R. Presidents Conference v. Noerr Motor Freight, 365 U.S. 127 (1961).....................................................................................................17 In re: Flonase Antitrust Litig., 795 F. Supp. 2d 300 (E.D. Pa. 2011) ...........................................................................17 Fowler v. UPMC Shadyside, 578 F.3d 203 (3d Cir. 2009)...........................................................................................6 In re Gen. Motors Corp. Pick-Up Truck Fuel Tank Prod. Liability Litig., 134 F.3d 133 (3d Cir. 1998).........................................................................................24 Gen. Refractories Co. v. Fireman's Fund Ins. Co., 337 F.3d 297 (3d Cir. 2003).........................................................................................21 Case 5:16-cv-05209-JLS Document 23 Filed 11/11/16 Page 7 of 35 iv Giordano v. Claudio, 714 F.Supp.2d 508 (E.D. Pa. 2010) .......................................................................19, 23 Goode v. Giorla, 2014 WL 2452214 (E.D. Pa. May 30, 2014) .................................................................6 Hanover 3201 Realty, LLC v. Village Supermarkets, Inc., 806 F.3d 162 (3d Cir. 2015).................................................................1, 2, 9, 10, 12, 16 I&S Assocs. Trust v. County of Lancaster, 2008 WL 2805616 (E.D. Pa. July 17, 2008)................................................................23 Appeal of Kramer, 266 A.2d 96 (Pa. 1970) ................................................................................................22 Larry Pitt & Ass. v. Lundy Law, LLP, 2013 WL 6536739 (Dec. 13, 2013 E.D. Pa.)...................................................13, 20, 22 Levin v. Upper Makefield Twp., Bucks Cty., Pa., 90 Fed. App’x 653 (3d Cir. 2004)....................................................................20, 21, 22 In re Lower Lake Erie Iron Ore Antitrust Litig., 998 F.2d at 1165 ......................................................................................................8, 11 Mallory v. S & S Publishers, 168 F.Supp.3d 760, 774 (E.D. Pa. 2016) .....................................................................20 Martin B. Glasser Dodge Co. v. Chrysler Corp., 570 F.2d 71 (3d Cir. 1977).............................................................................................7 Matthews v. Lancaster Gen. Hosp., 87 F.3d 624 (3d Cir 1996)..............................................................................................8 Naythons v. Stradley, Ronon, Stevens & Young, LLP, 2008 WL 1914750 (E.D. Pa. Apr. 30, 2008) ...............................................................21 Northeast Women’s Center, Inc. v. McMonagle, 670 F.Supp. 1300 (E.D. Pa. 1987) .............................................................................6, 7 Appeal of Patterson, 572 A.2d 246 (Pa, Cmwlth. 1990) ...............................................................................22 Philadelphia Tax Ass’n, Inc. v. Uber Technologies, Inc., 2016 WL 6525389 (E.D. Pa. Nov. 3, 2016) ................................................................10 Queen City Pizza v. Domino’s Pizza, Inc., 124 F.3d 430 (3d Cir. 1997).........................................................................................15 Case 5:16-cv-05209-JLS Document 23 Filed 11/11/16 Page 8 of 35 v Santiago v. Warminster Township, 629 F.3d 121 (3d Cir. 2010)...........................................................................................6 Satnam Distributors LLC v. Commonwealth-Altadis, Inc., et al., 140 F.Supp.2d 405 (E.D. Pa. 2015) .............................................................................15 Schafer v. Decision One Mortg. Corp., No. 08-5653, 2009 WL 1532048 (E.D. Pa. May 29, 2009)...........................................5 Shiner v. Moriarty, 706 A.2d 1228 (Pa. Super. 1998).................................................................................21 Tomalonis v. Levant, 2005 WL 1677555 (Pa. Super. May 10, 2005) ............................................................22 Trustees of University of Pennsylvania v. St. Jude Children’s Research Hosp., 940 F.Supp.2d 233 (E.D. Pa. 2013) .............................................................................17 Tunis Bros. Co. v. Ford Motor Co., 952 F.2d 715 (3d Cir. 1991).........................................................................................15 Ware v. Rodale Press, Inc., 322 F.3d 218 (3d Cir. 2003).........................................................................................23 Statutes 26 Pa.C.S.A. § 102.............................................................................................................25 15 U.S.C. § 1125(a) ...........................................................................................................18 28 U.S.C. § 2283................................................................................................................24 Other Authorities F.R.C.P. 12(f).....................................................................................................................24 Case 5:16-cv-05209-JLS Document 23 Filed 11/11/16 Page 9 of 35 I. INTRODUCTION Plaintiff Brandywine Village Associates (“Plaintiff” or “BVA”) sues Defendant Carlino East Brandywine, L.P. (“Carlino”) for nothing more than developing commercial real estate (a new shopping center) where one space is intended for a Giant supermarket. BVA owns an existing adjacent shopping center that formerly housed, and may or may not in the future house, a supermarket tenant. In a continuing obstructive effort to protect its supermarket exclusivity in the Township, BVA concocts grandiose – and more importantly, implausible – antitrust, Lanham Act, and state law claims. This current effort follows years of BVA’s repeated and unsuccessful land use challenges, appeals to state courts, and other sham legal challenges, all designed to prevent the inevitable approval of Carlino’s shopping center project. The ultimate victim of BVA’s obduration is the Township by depriving its residents of a full-service supermarket in a location that is already zoned for such use, and would bring jobs to the community. For its obstructive efforts, Carlino sued BVA in state court for tortious interference, abuse of process, and other claims; BVA’s efforts to dismiss that action were rejected by the state court and the matter is pending. Although it filed new matter seeking affirmative relief there, BVA now attempts to morph that request into retaliatory antitrust and related claims here. Neither BVA nor Carlino are competitors in the “Supermarket Market,” which is the sole relevant market alleged in the Complaint. BVA rests its antitrust standing entirely on the proposition that it is like the plaintiff in Hanover v. Village Supermarkets, where the court held that the plaintiff shopping center owner had antitrust standing to sue the defendant supermarket company. BVA’s proposition is wrong. As further discussed below, the parties here are adjacent shopping center developers, akin to the Hanover competing landlords over whom the court found no standing. Unlike Hanover, where the Case 5:16-cv-05209-JLS Document 23 Filed 11/11/16 Page 10 of 35 2 defendant was a supermarket company (Shop-Rite), none of the Defendants here is a supermarket, nor is any Defendant alleged to have conspired with a supermarket.1 And, unlike the plaintiff in Hanover, BVA does not even have a supermarket tenant. Accordingly, none of the non-supermarket defendants here can be said to have acted anti- competitively to affect prices, quality, or quantity in the supermarket market. Indeed, since BVA does not have a supermarket tenant, it is pure speculation that BVA’s alleged harm would ever be “inextricably intertwined” with any injury that a “Supermarket Market” participant might ever suffer. Unlike Hanover, there simply is no participant in the “Supermarket Market” that Defendants allegedly “targeted” and with whose harm BVA can allege its harm is “inextricably intertwined.” BVA merely alleges injury to itself as a shopping center owner caused by a competing shopping center owner. But injury to a competitor is not injury to competition in the relevant market, which is especially true when neither of the parties is in the alleged relevant market. Even if Plaintiff could show antitrust standing, its antitrust claim focused on pending state court litigation is barred by the Noerr-Pennington doctrine. And perhaps most damningly, Plaintiff has completely failed to allege that any of the purported conduct has prevented it from renting space in its shopping center to a supermarket – or that the space must be rented (or expanded to be rented) to a supermarket in the first place. Plaintiff’s Lanham Act false advertising claim fails because that claim does not relate to the sale of any goods or services and makes no mention of BVA or its property. BVA’s claims for commercial disparagement and abuse of process are defective because 1 Plaintiff’s Complaint nowhere alleges that non-party Giant – who is Carlino’s future tenant – made any “agreement” with any Defendant in violation of the Sherman Act, or otherwise did anything unlawful. Case 5:16-cv-05209-JLS Document 23 Filed 11/11/16 Page 11 of 35 3 they are not adequately pleaded and thus fail as a matter of law. Plaintiff’s state law claim for specific performance of the Cross Easement Agreement is directly at issue in two pending state court proceedings such that this Court lacks subject matter jurisdiction. Plaintiff’s claims against Christina Watters, Katherine Kettlety, Frank Watters, and Thomas Watters (collectively, the “Individual Defendants”) independently fail because zero facts are alleged to establish any wrongdoing by them. Instead, the Complaint offers rank speculation and conclusory allegations that, because they are the record owners of the land where Carlino intends to develop the Giant supermarket, it is “highly implausible” that Carlino could have done anything without their “active participation and support.” See Complaint, ¶¶ 9, 10 (the “Compl.”). Finally, this Court should strike all allegations that seek to enjoin pending state court litigation because such requested relief is barred by the Anti-Injunction Act. Plaintiff’s request for injunctive relief attempts to federalize Pennsylvania land-use planning jurisprudence. II. RELEVANT FACTS AS ALLEGED IN COMPLAINT2 BVA is the owner of a shopping center in East Brandywine Township, Pennsylvania, called Brandywine Village Shopping Center. See Compl., ¶ 18. Carlino is the equitable owner of a property adjoining the Brandywine Village Shopping Center (defined in the Complaint as the “Watters Property”) and has been trying to develop the property for a Giant supermarket. See Compl., ¶ 4. The Individual Defendants each have a fee ownership interest in the Watters Property. See Compl., ¶ 26. Plaintiff completed construction of Brandywine Village Shopping Center in 1995, and alleges that – over the years – it had a supermarket “anchor tenant” called 2 Carlino and the Individual Defendants do not admit the truth of any factual allegations in the Complaint, but recite them generally herein solely for the purposes of the Motion to Dismiss. Case 5:16-cv-05209-JLS Document 23 Filed 11/11/16 Page 12 of 35 4 “Cropper’s Market,” and subsequently, “Stauffer’s Market.” See Compl., ¶¶ 60, 70-73. The company that owned Cropper’s/Stauffer’s Market, Associated Wholesales, Inc., went bankrupt in 2014, and 1257 Horseshoe Pike Downingtown LLC, a company owned by C&S Wholesale Grocers (“C&S”), acquired its lease. See Compl., ¶ 76. After Stauffer’s Market operated for a few months under a sublease from C&S, C&S terminated its lease with Plaintiff by simply electing not to renew it. See Compl., ¶¶ 79-80. Plaintiff claims, “upon information and belief,” that C&S is a supplier of Giant. See Compl., ¶ 77. Because of this relationship, Plaintiff speculates that Giant – not a party here – “may also have played a role in causing the closure of Giant’s prospective competitor, Stauffer’s Market.” See Compl., ¶ 8 (emphasis added). As Plaintiff’s use of “may” confirms, it cannot plead any actual facts to support this speculation. Plaintiff further alleges that, since losing Stauffer’s in September, 2015, it has made unspecified “diligent efforts” to market its supermarket space, but has been unable to obtain a new “full-service supermarket tenant at a reasonable long-term rental rate and on reasonable terms.” See Compl., ¶¶ 83-84. The remainder of the Complaint alleges certain purportedly improper conduct by Defendants: • Carlino opposed Plaintiff’s sketch plan before the Township Planning Commission to expand the size of BVA’s supermarket space, and the Commission has not acted on Plaintiff’s plan to date (see Compl., ¶¶ 86-87); • Carlino’s representatives made statements regarding Carlino’s intention to develop and open the Giant supermarket (see Compl., ¶¶ 89-92); • Carlino filed development plans for the Watters Property, which Plaintiff opposed through use of the legal process pending in state court (see Compl., ¶¶ 97-117); Case 5:16-cv-05209-JLS Document 23 Filed 11/11/16 Page 13 of 35 5 • The Township allegedly held secret meetings with Carlino, where Carlino purportedly expressed the need for a new road to provide a point of access (i.e. connector road) from U.S. Route 322 to another road, which Plaintiff alleges led to the condemnation of easements previously granted to Plaintiff (see Compl., ¶¶ 119-139); • Carlino filed a pending state court lawsuit against Plaintiff (and others) for tortious interference with business relations and other causes of action, as to which Plaintiff’s preliminary objections have been rejected so the case is pending (see Compl., ¶¶ 144-148);3 • Carlino’s commercial real estate broker created an advertisement for Carlino’s proposed shopping center, called the “East Brandywine Shopping Center” (see Compl., ¶¶ 151-158, Exh. C); and • It is “highly implausible” that Carlino could have done anything without the “active participation and support” of the Individual Defendants (legal owners of the Watters Property) (see Compl., ¶¶9-10), although no facts are actually pleaded to support this opinion. III. LEGAL STANDARD To survive a motion to dismiss, a plaintiff must allege facts sufficient to “raise a right to relief above the speculative level,” presenting more than “labels and conclusions, and a formulaic recitation of the elements of a cause of action.” Twombly, 550 U.S. at 555. A “complaint must contain sufficient factual matter, accepted as true, to ‘state a 3 The Court may take judicial notice of the state court docket and order showing that BVA’s preliminary objections attacking Carlino’s complaint were rejected so that Carlino’s complaint can properly proceed against BVA. See Chester County Court of Common Pleas No. 2015-02938 (the “Carlino Tort Action”); Schafer v. Decision One Mortg. Corp., No. 08-5653, 2009 WL 1532048, at *3 (E.D. Pa. May 29, 2009) (judicial notice of state court proceeding for motion to dismiss). Case 5:16-cv-05209-JLS Document 23 Filed 11/11/16 Page 14 of 35 6 claim that is plausible on its face.’” Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S. at 570). “The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. (citing Twombly, 550 U.S. at 556); Goode v. Giorla, 2014 WL 2452214, at *1 n. 2 (E.D. Pa. May 30, 2014)(same); Clark v. Progressive Advanced Ins. Co., 2013 WL 1787566, at *1 n. 1 (E.D. Pa. April 26, 2013)(complaint must show entitlement with its facts). “[C]onclusory or ‘bare-bones’ allegations will no longer survive a motion to dismiss: threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009). To avoid dismissal, “all civil complaints must now set out sufficient factual matter to show that the claim is facially plausible.” Id. Allegations that are “no more than conclusions” are not entitled to the assumption of truth. Santiago v. Warminster Township, 629 F.3d 121, 130 (3d Cir. 2010). ARGUMENT I. PLAINTIFF FAILS TO STATE A CLAIM FOR CONSPIRACY TO RESTRAIN TRADE IN VIOLATION OF SECTION 1 OF THE SHERMAN ACT [COUNT I AGAINST ALL DEFENDANTS] The Court should dismiss Count I with prejudice for failure to state a claim for restraint of trade under Section 1 of the Sherman Act. Although an individual business may, under very limited circumstances, have standing to sue under the Sherman Act for injuries it sustained to its own business, “the antitrust laws were not enacted simply to protect such discreet, individual business interests.” Northeast Women’s Center, Inc. v. McMonagle, 670 F.Supp. 1300, 1304 (E.D. Pa. 1987). “The antitrust laws were enacted for the protection of competition, not competitors.” Brunswick Corp. v. Pueblo Bowl-O- Case 5:16-cv-05209-JLS Document 23 Filed 11/11/16 Page 15 of 35 7 Mat, Inc., 429 U.S. 477, 488 (1977). Accordingly, an antitrust plaintiff must plead and prove “that the defendants conspired among each other[;] that the conspiracy produced adverse, anticompetitive effects within the relevant product and geographic market[;] that the object and conduct pursuant to the conspiracy were illegal[;] and that plaintiff was injured as a proximate result … .” McMonagle, 670 F.Supp. at 1304 (citing Martin B. Glasser Dodge Co. v. Chrysler Corp., 570 F.2d 71, 81 (3d Cir. 1977))(no adverse impact where plaintiff failed to characterize or quantify alleged anti-competitive damage). “Adverse impact is not simply shown by a loss of profits, or even by the total elimination of one competitor.” Id. at 1305 (internal citation omitted) (emphasis added). With these principles in mind, there are six (6) reasons why Count I fails to state a claim: 1. BVA lacks antitrust standing because neither it, nor any Defendant, competes in the relevant market described in the Complaint. 2. Plaintiff fails to allege that Carlino was engaged in a contract, combination or conspiracy in restraint of trade. 3. Plaintiff fails to plead any agreement in restraint of trade that proximately caused harm to Plaintiff. 4. Plaintiff failed to plead the relevant market. 5. Carlino’s alleged conduct cannot be the basis of an antitrust claim. 6. The Complaint makes no factual allegations that the Individual Defendants agreed to restrain trade. These 6 grounds are discussed in detail below. A. BVA lacks antitrust standing. A plaintiff must plead a basis for antitrust standing. The Third Circuit has articulated the following antitrust standing factors to consider: (1) the causal connection between the antitrust violation and the harm to the plaintiff and the intent by the defendant to cause that harm, with neither factor alone conferring standing; (2) whether the plaintiff’s Case 5:16-cv-05209-JLS Document 23 Filed 11/11/16 Page 16 of 35 8 alleged injury is of the type for which the antitrust laws were intended to provide redress; (3) the directness of the injury, which addresses the concerns that liberal application of standing principles might produce speculative claims; (4) the existence of more direct victims of the alleged antitrust violations; and (5) the potential for duplicative recovery or complex apportionment of damages. In re Lower Lake Erie Iron Ore Antitrust Litig., 998 F.2d 1144, 1165 (3d Cir. 1993) (citing Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 545 (1983)). While the factors suggest a balancing test, the second factor, antitrust injury, is “a necessary but insufficient condition of antitrust standing.” Barton & Pittinos, Inc. v. SmithKline Beecham Corp., 118 F.3d 178, 182 (3d Cir. 1997) (emphasis added); see also Ethypharm S.A. France v. Abott Labs., 707 F.3d 223, 233 (3d Cir. 2013) (“If [antitrust injury] is lacking, we need not address the remaining [antitrust standing] factors.”). While all of the factors weigh against antitrust standing for BVA, it is clear at the outset that antitrust injury is missing. To properly plead antitrust injury, a plaintiff must show “more than injury causally linked to an illegal presence in the market”; instead, a plaintiff must plead “injury of the type the antitrust laws were intended to prevent and that flows from that which makes defendant[’s] acts unlawful.” Brunswick, 429 U.S. at 489. In other words, “antitrust plaintiff[s] must prove that the challenged conduct affected the prices, quantity or quality of goods and services, not just [the plaintiffs’] welfare.” Matthews v. Lancaster Gen. Hosp., 87 F.3d 624, 641 (3d Cir 1996). BVA alleges that the relevant market is “the supermarket market in East Brandywine Township (the ‘Supermarket Market’).” Compl., ¶ 32. BVA is neither a supermarket nor a competitor with Carlino in the defined market, but instead alleges it is an indirect participant who suffered harm that is “inextricably intertwined” with Case 5:16-cv-05209-JLS Document 23 Filed 11/11/16 Page 17 of 35 9 competitive injury directed to “its tenant” in the Supermarket Market.4 Compl., ¶46 (citing Hanover 3201 Realty, LLC v. Village Supermarkets, Inc., 806 F.3d 162 (3d Cir. 2015)). But BVA does not have a supermarket tenant, and its reliance on Hanover is entirely misplaced. The Hanover plaintiff was a shopping center owner which claimed that the supermarket defendant (Shop-Rite) acted in violation of the antitrust laws to prevent a competing supermarket (Wegmans) from renting space from Hanover in the geographic market. 806 F.3d at 167-70. Hanover, who admittedly did not compete in the relevant market (“full service supermarkets”), claimed that it was “inextricably intertwined” with that market for purposes of antitrust standing. Such standing existed because Shop-Rite’s actions to prevent Wegmans from renting from Hanover caused Hanover harm that was “the essential component of Defendants’ anticompetitive scheme . . . .” (Id. at 174) and Hanover was the “immediate target and bore the costs of the Defendants’ scheme.” Id. at 176. The court, however, found Hanover lacked standing to pursue Shop-Rite’s landlord because the two landlords did not compete in the relevant market. Id. at 177-78. Here, BVA and Carlino are more closely aligned to the two landlords in Hanover with one important distinction. The plaintiff in Hanover was the prospective developer who was thwarted from development by the existing adjacent land owner. Here, the plaintiff is BVA -- the existing adjacent land owner -- who is thwarting the prospective 4 The “inextricably intertwined” theory of antitrust standing originated with the U.S. Supreme Court’s decision in Blue Shield of Virginia v. McCready, 457 U.S. 465 (1982). In McCready, the plaintiff was a group health plan subscriber who was not reimbursed under her plan for costs of treatment by a psychologist (as opposed to a psychiatrist), and therefore brought antitrust claims against both her health insurer and an organization of Virginia psychiatrists. “Although McCready was not a competitor of the conspirators, the injury she suffered was inextricably intertwined with the injury the conspirators sought to inflict on psychologists and the psychotherapy market. In light of the conspiracy here alleged we think that McCready’s injury ‘flows from that which makes defendants’ acts unlawful’ within the meaning of Brunswick, and falls squarely within the area of congressional concern.” Id. at 483-84. Case 5:16-cv-05209-JLS Document 23 Filed 11/11/16 Page 18 of 35 10 developer (Carlino; see Compl., ¶ 4) from developing a supermarket that, according to Plaintiff itself, the Township desperately needs. Compl., ¶ 14. The party alignment here further demonstrates that the non-supermarket Defendants could not have any “anticompetitive scheme” in the alleged relevant market – the “Supermarket Market” because they do not compete in that market.5 This is even more the case for the alleged “co-conspirators” (the Township and the Individual Defendants), because neither could seek to monopolize the Supermarket Market, just like Hanover held as to competing landlords there. For BVA’s alleged harm to qualify as “antitrust injury,” that harm must have been “inextricably intertwined” with something; namely, a defendant’s antitrust violation that caused harm in the relevant market. See Hanover, 803 F.3d at 176 (defendant’s actions “were the very means by which Defendants sought to keep a competitor out of the market” (emphasis added)). BVA instead alleges injuries to itself by a competing shopping center owner (Carlino); that is not “damage to competition” in the relevant market. Judge Sanchez of this Court very recently dismissed a similar claim for damage between competitors where there was no allegation of damage to competition. See Philadelphia Tax Ass’n, Inc. v. Uber Technologies, Inc., 2016 WL 6525389, *3 (E.D. Pa. Nov. 3, 2016)(“Plaintiffs have failed to establish antitrust injury because they do not allege any injury to competition. Instead, their Amended Complaint is limited to injuries Plaintiffs have suffered as competitors . . . .”). BVA also does not have a supermarket tenant who could possibly be the “target” of anticompetitive conduct in the Supermarket Market. See Hanover, at 167-70 (“The 5 The Township is obviously not a supermarket and the Individual Defendants are only alleged to be merely the legal landowners. Compl., ¶9. Case 5:16-cv-05209-JLS Document 23 Filed 11/11/16 Page 19 of 35 11 end goal of Defendants’ alleged anticompetitive conduct was to injure Wegmans, a prospective competitor.”). Instead, BVA has empty, leasable space that some supermarket company may lease in the future. The Complaint does not plead that this available commercial space could only be used for a supermarket. Moreover, the Complaint nowhere alleges that the former “family supermarket” tenant was lost because of anything that any Defendant did. Instead, the Complaint explicitly alleges that the former tenant (“AWI”) went bankrupt (indeed, in the absence of a not-yet-built Giant), and the entity that acquired the lease in bankruptcy proceedings – an entity unaffiliated with any Defendant – elected not to renew the lease. Compl., ¶¶75, 79-80. The Third Circuit has never extended the concept of “inextricably intertwined antitrust injury” to a situation where neither the plaintiff nor defendant was a competitor in the relevant market, and where the plaintiff did not even have a tenant or prospective tenant in the relevant market. The absence of antitrust injury – the “second factor” in the standing analysis – also precludes a finding of standing. Even if some remote flicker of antitrust injury were pleaded, all of the other factors weigh against a finding of standing. As to the first factor, BVA alleges no monopolistic behavior in the Supermarket Market by any Defendant to cause harm to BVA as a shopping center landlord. As to the third factor, the directness of the injury, the Complaint is completely devoid of allegations that the purported “increased” costs imposed by Defendants somehow caused BVA’s inability to locate a supermarket tenant. This factor weighs heavily against BVA to avoid producing “speculative claims.” See In re Lower Lake Erie Iron Ore Antitrust Litig., 998 F.2d at 1165. The fourth factor, the existence of more direct victims of the alleged antitrust Case 5:16-cv-05209-JLS Document 23 Filed 11/11/16 Page 20 of 35 12 violations, weighs against standing for BVA. No “more direct victim” in the Supermarket Market even exists, as Wegman’s existed in Hanover. The fifth factor, the potential for duplicative recovery or complex apportionment of damages, also weighs heavily against antitrust standing because BVA claims damages on behalf of both its current and future tenants and “residents of East Brandywine Township.” Compl., ¶¶163, 164.6 B. Plaintiff fails to allege that Carlino was engaged in a contract, combination, or conspiracy in restraint of trade. “To prevail on a [S]ection 1 claim, a plaintiff must establish the existence of an agreement.” Burtch, 662 F.3d at 221(internal quotations omitted). “Unilateral action, regardless of motivation, is not a violation of Section 1.” Id. Instead, BVA must plead and show concerted action, unity of purpose, or a common design and understanding. Id. Although Plaintiff makes sweeping allegations of Carlino’s conspiracy to restrain trade, Plaintiff fails to plead the actual existence of any “contract” between Carlino, the Township, and the Individual Defendants to restrain trade. See Compl., ¶¶ 1, 2, 5 ,11, 89- 96, 120-126, 133, 159-168; compare Behrend v. Comcast Corp., 532 F.Supp.2d 735, 741 (E.D. Pa. 2007) (agreement to restrain trade allegations adequate because they detailed agreement formation). The Complaint does not even allege the Individual Defendants’ participated in any agreement in restraint of trade. Naked claims that it is “highly implausible” that Carlino could do nothing without the Individual Defendants’ “active participation and support” (see Compl., ¶¶ 9-10) are the type of speculative allegations 6 BVA’s antitrust count also alleges other damages that are speculative as a matter of law because they consist of (a) the “expense and burden” of a condemnation proceeding that is alleged to be a “sham” but has not even been decided yet; and (b) the loss of rent from not being able to sign up an “anchor tenant” (which might or might not be a supermarket) without any allegation that the inability to lease space to an “anchor tenant” was caused by anything any Defendant did. See Compl., ¶¶163, 164. Case 5:16-cv-05209-JLS Document 23 Filed 11/11/16 Page 21 of 35 13 that are routinely rejected. See Twombly, 550 U.S. at 556-557 (“an allegation of parallel conduct and a bare assertion of conspiracy” are “naked assertion[s]”). Plaintiff’s allegations regarding meetings between Carlino and Township officials also do not establish any unity of purpose or a common design to restrain trade in the Supermarket Market. See Larry Pitt & Ass. v. Lundy Law, LLP, 2013 WL 6536739, *5 (Dec. 13, 2013 E.D. Pa.) (without allegations of acts with “unity of purpose” to “engage in unlawful” anticompetitive behavior, Section 1 claim dismissed); Twombly, 550 U.S. at 557 (“[A] conclusory allegation of agreement at some undefined point does not supply facts adequate to show illegality.”). The Complaint also omits allegations regarding when Carlino and the Township allegedly agreed to restrain trade in the Supermarket Market, including the parameters of that alleged agreement. Most notably the Complaint fails to allege: (1) Any agreement in restraint of trade regarding non-party C&S’s termination of the lease as Plaintiff’s supermarket tenant; (2) Any agreement in restraint of trade regarding Carlino opposing Plaintiff’s plan before the Township Planning Commission; (3) Any agreement in restraint of trade regarding Carlino’s own development plans; (4) Any agreement in restraint of trade regarding Carlino’s lawsuit against Plaintiff; and (5) Any agreement in restraint of trade regarding Carlino’s purportedly inaccurate advertisement. The only agreement BVA actually pleads is between Carlino and the Township regarding the Connector Road (see Complaint as Exhibit B), which is the entire subject of a pending state condemnation proceeding.7 This “agreement” speaks for itself. Nothing about it has anything to do with or evidences any intent to conduct anticompetitive 7 Why a township would ever agree to restrain trade in the Supermarket Market remains unanswered in the Complaint and simply makes no logical sense. Case 5:16-cv-05209-JLS Document 23 Filed 11/11/16 Page 22 of 35 14 conduct in violation of the antitrust laws, either in the Supermarket Market or otherwise. Simply put, the purported “agreement” has nothing to do with BVA’s claimed effort to find, or inability to find, a supermarket tenant.8 Thus, Plaintiff fails to plead the existence of any agreement in restraint of trade, and there is no causal connection between the Connector Road condemnation agreement and the alleged harm Plaintiff claims, i.e, its inability to find a supermarket tenant. C. Plaintiff fails to plead that any agreement in restraint of trade proximately caused harm to Plaintiff. Even if an anticompetitive agreement were pleaded, Plaintiff still fails to allege proximate cause. Plaintiff has not pleaded that any such anticompetitive agreement caused its inability to obtain a supermarket tenant. There are no facts pleaded as to how or why BVA was unable to obtain a supermarket tenant because of any act or omission of Defendants, even though BVA’s space was apparently sufficient for its prior supermarket tenant for nearly 20 years. See Acme Markets, Inc. v. Wharton Hardware and Supply Corp., 890 F.Supp. 1230, 1237 (D.N.J. 1995) (proximate cause of defendant’s alleged harm was the vacancy created by its former tenant and not the complained of conduct). The Complaint also certainly does not allege that any alleged antitrust activity caused a prospective tenant to not rent from BVA. In short, the Complaint fails to plead facts that plausibly establish causation. The Sherman Act claim fails as a result. D. Plaintiff failed to adequately plead the relevant market. Plaintiff’s Sherman Act claim also fails because Plaintiff inadequately defines the “relevant market.” “[W]here a plaintiff attempts to allege a product market ‘that makes 8 Moreover, the development of a supermarket is not a restraint of trade in and of itself, and, more importantly, the Cross Easement Agreement contemplates the development of the Watters Property in accordance with its commercial zoning and contains no restriction against developing a shopping center. See Compl. Ex. A. Case 5:16-cv-05209-JLS Document 23 Filed 11/11/16 Page 23 of 35 15 no economic sense under any set of facts,’ courts will dismiss Sherman Act claims even at early stages.” Satnam Distributors LLC v. Commonwealth-Altadis, Inc., et al., 140 F.Supp.2d 405, 418 (E.D. Pa. 2015) (citation omitted). Specifically: [W]here the plaintiff fails to define its proposed relevant market with reference to the rule of reasonable interchangeability and cross-elasticity of demand, or alleges a proposed relevant market that clearly does not encompass all interchangeable substitute products even when all factual inferences are granted in plaintiff’s favor, the relevant market is legally insufficient and a motion to dismiss may be granted. Id. at 418-19 (quoting Queen City Pizza v. Domino’s Pizza, Inc., 124 F.3d 430, 436 (3d Cir. 1997)).9 Plaintiff alleges a relevant market of the “Supermarket Market.” See Compl., ¶ 32. It alleges that market participants were “Croppers’ Market and its successor Stauffer’s Market,” and that “[t]he Giant supermarket that Carlino plans to build on the Watters Property would also participate directly in the relevant market,” even though Giant may never do so. See Compl., ¶¶ 42-43. As discussed above, Plaintiff has not alleged that it or any of the Defendants actually participate in the defined “relevant market.” In short, Plaintiff alleges the wrong market. The “Supermarket Market” comprises the market for stores who sell products typically found in supermarkets in the Township. See Compl., ¶¶ 34-36. Nevertheless, Plaintiff’s real claim is that Carlino interfered with the supermarket buildings market in the Township because both it and Carlino are in the building market there. See Compl., ¶1. This is fundamentally different from BVA’s alleged relevant market, which is thus defective enough to warrant dismissal. See Satnam, 140 F.Supp.2d at 418. 9 Interchangeability “means that one product is ‘roughly equivalent’ to another product for its intended use, and assessment of interchangeability involves an examination of prices, use and quality of the goods.” Id. at 418 (citations omitted). Cross-elasticity of demand “requires an analysis of whether ‘the rise in the price of a good within the relevant product market would tend to create a greater demand for other like goods in that market.’” Id. (quoting Tunis Bros. Co. v. Ford Motor Co., 952 F.2d 715, 722 (3d Cir. 1991)). Case 5:16-cv-05209-JLS Document 23 Filed 11/11/16 Page 24 of 35 16 Plaintiff’s market definition is also artificially narrow and does not encompass all interchangeable substitute products, i.e. alternative anchor tenants. Further, Plaintiff does not establish cross-elasticity of demand, nor could it. Carlino cannot raise the price to its “customer” (Giant) because it already has an agreement with Giant; thus, Carlino cannot drive a supermarket tenant to Plaintiff. See Hanover, 806 F.3d at 177 (“Such cross- elasticity exists where customers of the defendant would switch to plaintiff if the defendants raised its prices.”). There are also no allegations to support even the inference that the Carlino and BVA properties must only be used for supermarkets. There is any number of other uses for Plaintiff’s property, and the Complaint does not plead otherwise. Plaintiff’s purported “antitrust damage” allegations further illustrate the defectively defined market. Among other things, Plaintiff seeks “$60,000 per month in rent and common area maintenance charges.” See Compl., ¶ 164. Such a claim is reflective of Carlino and BVA being in the building market, with tenant customers. BVA does not seek lost revenue from any supermarket business – nor could it. BVA’s claimed damages are tied to its lost tenant and Carlino’s purported effort to prevent BVA from getting a new one. Any such prospective tenant, however, cannot plausibly be limited to only supermarkets. Thus, the relevant market is not the “Supermarket Market,” or even the “supermarket building market.” The relevant market here is “buildings” in East Brandywine Township and the Complaint does not actually address that market. Because the Complaint proposes a very narrow, economically nonsensical relevant market, the Sherman Act claim should be dismissed. Case 5:16-cv-05209-JLS Document 23 Filed 11/11/16 Page 25 of 35 17 E. Carlino’s alleged conduct cannot be the basis for any antitrust claim. The Noerr-Pennington doctrine protects parties who petition the government for redress from claims arising in response to that petitioning. See Trustees of University of Pennsylvania v. St. Jude Children’s Research Hosp., 940 F.Supp.2d 233, 239 (E.D. Pa. 2013). To pierce Noerr-Pennington immunity, a party must demonstrate that the petitioning party engaged in “sham” petitioning to interfere directly with business relationships of a competitor. See Eastern R.R. Presidents Conference v. Noerr Motor Freight, 365 U.S. 127, 144 (1961). The conduct Plaintiff complains about is protected by this doctrine. No liability can be imposed on Carlino for: (a) opposing Plaintiff’s plan before the Township Planning Commission, (b) filing development plans for its own property, or (c) pursuing the Carlino Tort Action. The Noerr-Pennington doctrine protects all of this conduct. See In re: Flonase Antitrust Litig., 795 F. Supp. 2d 300, 311 (E.D. Pa. 2011) (under the objective prong, plaintiffs must plead facts that, if proven, would demonstrate that a reasonable petitioner could not realistically expect merits success to strip a defendant of Noerr-Pennington immunity). None of the conduct falls under the “sham” exception to the doctrine. The status of the current state court litigation, as explicitly pleaded, precludes a finding of sham litigation. BVA’s three appeals to the Chester County Court of Common Pleas of the Township’s approval of the Carlino development plans are pending. See Compl., ¶¶ 106- 07, 113-16. In other words, BVA lost at the plan approval level, and cannot presently allege that it “won” any of them. The Carlino Tort Action is also being actively litigated, and BVA is nowhere near “winning” that action given that its preliminary objections to Case 5:16-cv-05209-JLS Document 23 Filed 11/11/16 Page 26 of 35 18 Carlino’s complaint were rejected.10 Id. ¶144. Plaintiff asserts boilerplate sham litigation allegations knowing that its antitrust claim is barred by Noerr-Pennington. F. The Complaint is silent regarding the Individual Defendants. The entire Complaint only alleges that the Individual Defendants own the Watters Property. See Compl., ¶ 9. There are no allegations that any of the Individual Defendants engaged in any conduct in violation of the Sherman Act. Count I should be dismissed as to the Individual Defendants for this independent reason. II. THE COMPLAINT FAILS TO STATE A CLAIM FOR FALSE AND MISLEADING ADVERTISING IN VIOLATION OF SECTION 43(A) OF THE LANHAM ACT (COUNT II AGAINST CARLINO ONLY) Plaintiff’s false advertising claim under section 43(a) of the Lanham Act is entirely based on a real estate broker’s advertisement for the Carlino shopping center. Compl., Exh. “C.” Plaintiff alleges that the square footages in the advertisement convey a misleading message that Carlino somehow “owns or controls” Plaintiff’s shopping center. Compl., ¶ 154. Plaintiff’s claim fails for three reasons: • First, Plaintiff fails to plead how any statements made are “in connection with any goods or services, or any container for goods,” as the Lanham Act requires. 15 U.S.C. § 1125(a). Exhibit “C” on its face does not even mention Plaintiff’s shopping center. • Second, Plaintiff fails to allege that any statements about Plaintiff were false and misleading. 15 U.S.C. § 1125(a). Rather, Plaintiff contends that Carlino made misleading statements, but the alleged statements pertain to the square footage of 10 If Carlino could not realistically expect merits success, the state court would have sustained BVA’s preliminary objections. See Bayada Nurses, Inc. v. Comm., Dept. of Labor and Industry, 8 A.3d 866, 844 (Pa. 2010) (demurrer proper where law precludes recovery). Case 5:16-cv-05209-JLS Document 23 Filed 11/11/16 Page 27 of 35 19 Carlino’s property and say nothing about Plaintiff or its adjacent property. See Compl., Exh C. • Third, Plaintiff fails to adequately plead how any of the alleged “misrepresentations” damaged Plaintiff. There are simply no concrete details alleged to make a plausible claim that anyone was discouraged from pursuing Plaintiff’s property, or that Plaintiff suffered any other purported damage, as a result of the square footage listing on the “advertisement” pertaining to Carlino’s property, not BVA.11 Plaintiff’s claim under the Lanham Act fails and should be dismissed. III. PLAINTIFF FAILS TO STATE A CLAIM FOR UNFAIR COMPETITION (COUNT III AGAINST ALL DEFENDANTS) The Court should dismiss Count III with prejudice because Plaintiff fails to “allege that it is in competition with the defendant—that is, that the plaintiff and the defendant supply similar goods or service.” Giordano v. Claudio, 714 F.Supp.2d 508, 523, (E.D. Pa. 2010)(internal quotations and citation omitted). Specifically, Plaintiff fails to state a claim for unfair competition (like its failed Section 1 claim above) because, among other things, Plaintiff fails to plead that Carlino (or any of the Individual Defendants) and Plaintiff competes in the Supermarket Market. See Compl. ¶ 32. Carlino is “a property developer,” not a supermarket.12 See Compl. ¶ 4. Because Plaintiff and Carlino do not compete in the relevant market, Plaintiff fails to state a claim 11 Although the advertisement was supposedly published from 2012 to the present (Compl., ¶ 151), the Complaint does not allege that: (a) there has been even a single instance of actual confusion; or (b) Plaintiff itself ever complained to anyone about the advertisement. Moreover, the advertisement cannot possibly be “literally false” as Plaintiff hopefully alleges (Compl., ¶ 157) because it does not state that Carlino “owns or controls” Brandywine Village. Id. Instead, that is a message Plaintiff alleges was “implied” by the advertisement, and thus actual confusion must be pleaded and proven. 12 Plaintiff makes no allegation regarding a relevant market that applies to the Individual Defendants. Case 5:16-cv-05209-JLS Document 23 Filed 11/11/16 Page 28 of 35 20 for unfair competition. See Lundy Law, 2013 WL 6536739 at *7 (unfair competition claim dismissed because antitrust claim insufficiently pleaded). IV. PLAINTIFF FAILS TO STATE A CLAIM FOR COMMERCIAL DISPARAGEMENT (COUNT IV AGAINST CARLINO ONLY) To state a claim for commercial disparagement, Plaintiff must plead and show the following: (1) the statement is false; (2) the publisher either intends the publication to cause pecuniary loss or reasonably should recognize that publication will result in pecuniary loss; (3) pecuniary loss does result; and (4) the publisher either knows that the statement is false or acts in reckless disregard of its truth or falsity (actual malice). Mallory v. S & S Publishers, 168 F.Supp.3d 760, 774 (E.D. Pa. 2016) (conclusory financial loss and lost opportunity allegations, constitute a repetition of claim element, and insufficient to state a claim for commercial disparagement). Here, Plaintiff fails to allege how it was damaged by any statement of Carlino. Plaintiff also fails to allege how Carlino’s alleged misrepresentation of the square footage of the tentative shopping center proximately damaged Plaintiff. Moreover, Plaintiff makes no allegation that it has actually suffered any pecuniary loss as a result of this statement. Plaintiff’s commercial disparagement claim must be dismissed. V. PLAINTIFF FAILS TO STATE A CLAIM FOR ABUSE OF PROCESS (COUNT V AGAINST CARLINO ONLY) Count V alleges that Carlino committed abuse of process when Carlino filed a motion to intervene in the Township’s pending condemnation action against BVA, which was later denied. Compl., ¶ 192. The Court should dismiss Count V of the Complaint with prejudice because Plaintiff has failed to plead “that the defendant (1) used a legal process against the plaintiff; (2) primarily to accomplish a purpose for which the process was not designed; and (3) harm has been caused to the plaintiff.” Levin v. Upper Case 5:16-cv-05209-JLS Document 23 Filed 11/11/16 Page 29 of 35 21 Makefield Twp., Bucks Cty., Pa., 90 Fed. App’x 653, 665-665 (3d Cir. 2004) (quoting Shiner v. Moriarty, 706 A.2d 1228, 1236 (Pa. Super. 1998)). “In support of this claim, a plaintiff must show some definite act or threat not authorized by the process, or aimed at an objective not legitimate in the use of the process, and there is no liability where the defendant has done nothing more than carry out the process to its authorized conclusion, even though with bad intentions.” Id. “[T]he point of liability is reached when the utilization of the procedure for the purpose for which it was designed becomes so lacking in justification as to lose its legitimate function as a reasonably justifiable litigation procedure.” See Naythons v. Stradley, Ronon, Stevens & Young, LLP, 2008 WL 1914750 at *6 (E.D. Pa. Apr. 30, 2008) (petition for review of arbitration award legitimate legal process) (citing Gen. Refractories Co. v. Fireman's Fund Ins. Co., 337 F.3d 297, 308 (3d Cir. 2003)). Plaintiff fails to plead facts that if proven would establish an improper purpose, i.e., that Carlino’s utilization of the intervention procedure was “so lacking in justification as to lose its legitimate function as a reasonably justifiable litigation procedure.” See Compl., ¶¶ 192-200. Moving to intervene in a lawsuit is, obviously, an authorized legal procedure. It is undisputed and explicitly alleged in the Complaint that Carlino had and has a beneficial ownership interest in property that would be affected by the condemnation. See Compl. ¶ 9. Thus, the issue for the state court on the motion to intervene was whether this beneficial interest was enough of an “interest” for intervention purposes. The court decided it was not. On these facts, no plausible abuse of process claim could be based on Plaintiff’s mere allegation that Carlino’s true motive to intervene Case 5:16-cv-05209-JLS Document 23 Filed 11/11/16 Page 30 of 35 22 was to pressure Plaintiff financially. See Compl. ¶¶192-200.13 As stated above, as a matter of law, “there is no liability where the defendant has done nothing more than carry out the process to its authorized conclusion, even though with bad intentions.” Levin, 90 Fed. App’x at 665-665. Plaintiff fails to plead that Carlino made “a definite act or threat not authorized by the process” or that Carlino did anything “more than carry out the process to its authorized conclusion.” Id. Plaintiff also fails to plead cognizable harm. The Complaint only alleges that Carlino harmed Plaintiff “by requiring it to expend funds needlessly in opposition to the petition [to intervene].” See Compl. ¶ 199. Incurring attorney’s fees to oppose Carlino’s petition is not the type of harm sufficient to maintain an abuse of process claim. See Tomalonis v. Levant, 2005 WL 1677555 at *2-*3 (Pa. Super. May 10, 2005) (responsibility for attorneys’ fees does not constitute harm necessary for abuse of process); Lundy Law, 2013 WL 6536739 at *8 (abuse of process claim dismissed; neither allegations defendant took steps to increase necessary defense costs nor any perversion of the litigation process). As a result, this claim fails and must be dismissed. VI. PLAINTIFF’S CLAIM FOR SPECIFIC PERFORMANCE (COUNT VI AGAINST CARLINO AND INDIVIDUAL DEFENDANTS) SHOULD BE DISMISSED FOR LACK OF SUBJECT MATTER JURISDICTION In Count VI, BVA seeks specific performance of the Cross Easement Agreement. According to the Complaint, the Cross Easement Agreement is already the subject of a prior pending condemnation case, as well as the pending declaratory judgment action and Carlino Tort Action. See Compl., ¶¶7c, d and g, 15c and d, 132-34, 137-41, 143, 145-50, 13 In fact, Pennsylvania law supports intervention in a condemnation proceeding. See, e.g., Appeal of Kramer, 266 A.2d 96, 97 (Pa. 1970) (noting intervention of developer); Appeal of Patterson, 572 A.2d 246, 246 (Pa, Cmwlth. 1990) (noting intervention of utility company). Case 5:16-cv-05209-JLS Document 23 Filed 11/11/16 Page 31 of 35 23 164, 168, 192-95, 198 and 210.14 Thus, this Court lacks subject matter jurisdiction over the Cross Easement Agreement; Count VI should be dismissed. See I&S Assocs. Trust v. County of Lancaster, 2008 WL 2805616 (E.D. Pa. July 17, 2008)(no subject matter jurisdiction because property subject to pending state condemnation proceeding); see also Coles v. Street, 38 Fed. Appx. 829, 831 (3d Cir. 2002)(abstention proper because “claims clearly arise out of eminent domain issues” despite no pending state condemnation case). Separately, “specific performance is an equitable remedy for breach of contract permitting the court ‘to compel performance of a contract when there exists in the contract an agreement between the parties as to the nature of the performance.’” Giordano v. Claudio, 714 F.Supp.2d 508, 532 (E.D. Pa. 2010) (specific performance claim failed because no contract between the parties) (citation omitted) (emphasis added). Plaintiff fails to allege any wrongful conduct by the Individual Defendants regarding the Cross Easement Agreement. See Compl. ¶¶ 201-207. Therefore, BVA’s specific performance claim fails on the merits too. VII. PLAINTIFF FAILS TO STATE A CLAIM FOR BREACH OF CONTRACT (COUNT VII AGAINST THE INDIVIDUAL DEFENDANTS) The Court should dismiss Count VII of the Complaint with prejudice because Plaintiff fails to plead and cannot prove: “(1) the existence of a contract, including its essential terms; (2) a breach of duty imposed by the contract; and (3) damages.” Ware v. Rodale Press, Inc., 322 F.3d 218, 225-226 (3d Cir. 2003) (citing CoreStates Bank, N.A. v. Cutillo, 723 A.2d 1053, 1058 (Pa. Super. 1999)). BVA fails to state a breach of contract claim because Plaintiff fails to allege any acts of the Individual Defendants that allegedly 14 The condemnation proceeding (commenced on November 17, 2014) is docketed at 2014-11237 in the Chester County Court of Common Pleas. The competing and consolidated declaratory relief actions are docketed at 2011-05037 and 2011-05189. Case 5:16-cv-05209-JLS Document 23 Filed 11/11/16 Page 32 of 35 24 breached a contract. See Compl., ¶¶ 208-212. Plaintiff only alleges that the Individual Defendants were the owners in fee simple of the Watters Property. See Compl., ¶ 209. Although Plaintiff alleges in conclusory fashion that Carlino engaged in purportedly wrongful conduct (see Compl., ¶ 210), Plaintiff fails to allege any action by the Individual Defendants, other than their mere property ownership. See Compl., ¶¶ 208- 212. Without breach allegations involving the Cross Easement Agreement, Plaintiff fails to state a breach of contract claim. VIII. THE ANTI-INJUNCTION ACT BARS PLAINTIFF’S REQUEST TO ENJOIN STATE COURT LITIGATION. Plaintiff’s request to enjoin the “Carlino Tort Action” violates the Anti-Injunction Act, 28 U.S.C. § 2283, (the “Act”), and should be stricken pursuant to F.R.C.P. 12(f). The Act states that “[a] court of the United States may not grant an injunction to stay proceedings in a State court except as expressly authorized by Act of Congress, or where necessary in aid of its jurisdiction, or to protect or effectuate its judgments.” This is “an absolute prohibition against enjoining State Court proceedings, unless the injunction falls within one of three specifically defined exceptions.” In re Gen. Motors Corp. Pick-Up Truck Fuel Tank Prod. Liability Litig., 134 F.3d 133, 144 (3d Cir. 1998). Here, Plaintiff seeks to enjoin: Carlino and the Individual Defendants for seeking approval of any land use planning that may impact BVA’s Cross Easement Agreement; Carlino and the Individual Defendants from doing anything to the Watters Property that may impact BVA’s Cross Easement Agreement; and Carlino from pursuing its state tort action. See Compl., ad damnum Exhs. e, f, and h. In other words, Plaintiff is trying to federalize state actions involving privately owned real estate, the rights over which are Case 5:16-cv-05209-JLS Document 23 Filed 11/11/16 Page 33 of 35 25 already subject to multiple state court actions.15 BVA’s requested injunction is not: authorized by Act of Congress, necessary to aid this Court’s jurisdiction, or necessary to protect any judgment of this Court. Consequently, this requested relief must be stricken. IX. CONCLUSION For the reasons set forth above, defendants, Carlino East Brandywine, L.P., Christina Watters, Katherine Kettlety, Frank Watters, and Thomas Watters, respectfully request that the Court dismiss all claims against them in Plaintiff’s Complaint with prejudice. Respectfully submitted, /s/ Michael Eidel Michael Eidel Joshua Horn FOX ROTHSCHILD LLP Attorneys for Defendants Carlino East Brandywine, L.P., Christina Watters, Katherine Kettlety, Frank Watters, and Thomas Watters Dated: November 11, 2016 15 The Eminent Domain Code provides a complete and exclusive procedure and law to govern all condemnations of property (including the Cross Easement Agreement) for public purposes and the assessment of damages. See 26 Pa.C.S.A. § 102. Case 5:16-cv-05209-JLS Document 23 Filed 11/11/16 Page 34 of 35 CERTIFICATE OF SERVICE I, Joshua Horn, Esquire, hereby certify that a true and correct copy of the foregoing Motion to Dismiss was served upon all counsel of record via the Court’s electronic transmission facilities. /s/ Joshua Horn Joshua Horn, Esquire Case 5:16-cv-05209-JLS Document 23 Filed 11/11/16 Page 35 of 35