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Village Supermarket Inc. v. Mayfair Supermarkets Inc.

Decided: August 24, 1993.


Wecker, J.s.c.


Plaintiff Village Supermarkets ("Village") brings a two-count complaint against defendant Mayfair Supermarkets ("Mayfair") for intentional interference with (1) contractual advantage and (2) prospective economic advantage. Mayfair operates a Foodtown supermarket in Westfield. Village is seeking variances to allow construction of a ShopRite supermarket on the Westfield/Garwood line, on property it has contracted to purchase. Mayfair seeks to dismiss Village's complaint.

The test on a motion to dismiss under R. 4:6-2(e), challenging "the legal sufficiency of the facts alleged on the face of the complaint," is "whether a cause of action is 'suggested' by the facts." Printing Mart v. Sharp Electronics, 116 N.J. 739, 746, 563 A.2d 31 (1989). It is not a question of how likely plaintiff is to prove the facts alleged, but rather whether a liberal, "generous and hospitable approach" to the complaint reveals the elements of a legal claim. Id. The plaintiff should be given the opportunity to amend to supply a missing element if necessary. Id. For reasons that will be apparent, no amendment can cure the defects in this complaint.

Village seeks damages allegedly resulting from Mayfair's opposition to Village's variance applications before the planning boards of Westfield and Garwood. Village claims that Mayfair has no standing to object directly, and is acting improperly by funding the opposition of others who do have standing. Mayfair's motion to dismiss Village's complaint is granted without prejudice, on grounds that it is premature, and to permit it to continue violates Mayfair's constitutional right to be heard at the municipal level.

I. Prematurity

Village's suit is analogous to a counterclaim for malicious prosecution in a pending case. See The Penwag Property Co. Inc. v. Landau, 76 N.J. 595, 388 A.2d 1265 (1978). An action for malicious prosecution is disfavored. The burden upon one bringing such an action is heavy because of the chilling effect upon

legitimate, as well as less than legitimate, lawsuits. Id. Penwag holds that favorable Disposition of the underlying claim must precede an action for malicious prosecution. Neither damages nor restraints are available on such a counterclaim, even if the plaintiff loses and may subsequently be held liable for damages.

As Justice Pashman writes in his Concurring opinion in Penwag, supra, 76 N.J. at 599, 388 A.2d 1265, regarding the requirements of "special grievance," i.e., damages, as a precondition to the cause of action:

This seemingly harsh rule is necessary to avoid having prospective plaintiffs discouraged from seeking vindication of their rights by the threat of such a retaliatory suit.

For similar reasons I join in the Court's ruling that an action for malicious use of process may not be maintained as a counterclaim in the action alleged to have been maliciously brought. The societal cost resulting from the deterrence of just claims by reason of the powerful leverage such a practice would afford defendants far outweighs the utility of any judicial economies it might produce.

The simultaneous attempt to punish (and implicitly to stop) the activity is what is disapproved.

The same rule should apply here. If defendant Mayfair is acting improperly in connection with the current hearings before the municipal planning boards, it will eventually have to answer in damages. The propriety or impropriety of its role in the quasijudicial proceeding before the municipal boards cannot be evaluated until those proceedings have come to a Conclusion.

Additionally, there can be no proof of damages at this stage. While exactitude is not required to prove damages, the most significant element is unknown: whether plaintiff will build its supermarket.

II. First Amendment Rights

There is a further reason for dismissing the action at this time. To impose damages for objecting in a planning board proceeding would chill First Amendment rights (and parallel state constitutional rights) which are protected under the Noerr-Pennington*fn1

doctrine. Under that doctrine participation in judicial and administrative proceedings (as well as advocacy in the legislative arena, i.e., lobbying) is protected unless it is "objectively baseless," thereby falling within the "sham" exception to the doctrine. See Professional Real Estate Investors, Inc. v. Columbia Pictures Industries, Inc., 508 U.S. , 113 S. Ct. 1920, 123 L. Ed. 2d 611 (1993). This recent United States Supreme Court case holds that if a party's participation in litigation is objectively reasonable, its subjective intent is legally irrelevant. Thus plaintiff's argument that defendant is motivated by an improper, anticompetitive goal is legally irrelevant.

While Noerr and Pennington arise in the anti-trust context, the United State Supreme Court recognizes the doctrine "in other contexts . . . ." Professional Real Estate Investors, Inc. v. Columbia Pictures Industries, Inc., supra, 508 U.S. at , 113 S. Ct. at 1927, 123 L. Ed. 2d at 623:

The cause of action for intentional interference with either contractual or prospective economic advantage is analogous at common law to the statutory anti-trust action. Applying the Noerr doctrine is clearly appropriate. Whether applying Noerr as an anti-trust doctrine or invoking it in other contexts, we have repeatedly reaffirmed that evidence of anti-competitive intent or purpose alone cannot transform otherwise legitimate activity into a sham.

In the years between Noerr and Columbia Pictures, the doctrine was expanded to administrative hearings and to litigation, and not limited to legislative lobbying.

The essential First Amendment rights protected by Noerr require its application to state tort claims such as Village's and not only to antitrust suits as in ...

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