The opinion of the court was delivered by: Simandle, District Judge
I. INTRODUCTION........................ 3
II. BACKGROUND......................... 4
A. Factual and Procedural History. . . . . . . . . . . . 4
B. Expert Testimony................... 9
1. Plaintiffs' Expert - Dr. Cotterill.. . . . . . 10
2. Defendants' Expert - Dr. Ordover.. . . . . . . 16
III. DISCUSSION........................ 22
A. Antitrust Standing. . . . . . . . . . . . . . . . . 22
1. Delco's Standing.. . . . . . . . . . . . . . . 24
2. Decker's Standing.. . . . . . . . . . . . . . . 30
B. Preliminary Injunction Requirements.. . . . . . . . 34
1. Likelihood of Success. . . . . . . . . . . . . 34
a. Per Se Antitrust Claims. . . . . . . . . . 35
b. Remaining Antitrust Claims.. . . . . . . . 40
2. Irreparable Harm.. . . . . . . . . . . . . . . 48
3. Harm to the Nonmoving Party.. . . . . . . . . . 51
4. Public Interest.. . . . . . . . . . . . . . . . 52
IV. CONCLUSION........................ 52
In this action, Plaintiffs Delco, LLC ("Delco") and Edward Decker ("Decker") filed suit for various federal and state antitrust claims against Defendants Stop & Shop Supermarket Company, LLC ("Stop & Shop"), Giant of Maryland, LLC ("Giant"), and Wakefern Food Corporation ("Wakefern") alleging that a proposed transaction under which Wakefern would acquire and close a Stop & Shop supermarket located Delco's shopping center was an illegal antitrust violation. Stop & Shop sold all nine of its southern New Jersey supermarkets to Wakefern, which took over the leases and will operate the stores as ShopRite supermarkets, except for the store in Delco's shopping center, which it has closed because it already has a ShopRite operating about half a mile away. Along with their Complaint [Docket Item 1], Plaintiffs filed a motion for a preliminary injunction and a temporary restraining order [Docket Item 2] seeking to enjoin Defendants from subleasing the supermarket premises in question, closing the Stop & Shop supermarket, removing equipment from the supermarket, and enforcing a provision of the Delco-Giant lease that prevented other supermarkets from opening in the shopping center. In its August 1, 2007 Order [Docket Item 5], the Court denied Plaintiffs' motion for a temporary restraining order.
Subsequent to the Court's issuance of its August 1 Order, the plaintiffs altered their request for relief and filed an Amended Complaint. The Amended Complaint alleges violations of section 7 of the Clayton Act, 15 U.S.C. § 18, and section 1 of the Sherman Act, 15 U.S.C. § 1; breach of contract; tortious interference with economic advantage; and violations of New Jersey antitrust laws, N.J. Stat. Ann. §§ 56:9-3, 9-4. Plaintiffs' motion for a preliminary injunction now asks the Court to nullify the allegedly illegal sublease between the defendants, and to enjoin the defendants from enforcing provisions in the Delco-Giant lease that restrict the operation of other supermarkets in the shopping center. Presently before the Court is Plaintiffs' motion for a preliminary injunction [Docket Item 2]. For the reasons discussed herein, which constitute the findings of fact and conclusions of law pursuant to Rule 52(a), Fed. R. Civ. P., the Court will deny Plaintiffs' request for preliminary injunctive relief.
A. Factual and Procedural History
The instant dispute centers around a supermarket in the Grande Center, a shopping center located in Rio Grande, Cape May County, New Jersey. (Am. Compl. ¶¶ 22-23.) Plaintiff Delco developed and owns the Grande Center. (Id. at ¶ 22.) Plaintiff Decker works for Delco as its superintendent of construction, but he sues in his capacity as a consumer who shopped at the Stop & Shop before it was bought and closed by Wakefern. (Id. at ¶ 17.) In September 2002, Delco and Giant signed a 20-year lease agreement (the "Delco-Giant lease") under which Delco leased space in the Grande Center to Giant for Giant to open a Stop & Shop*fn1 supermarket (Id. at ¶ 25; Am. Compl. Ex. A § 1.3); the lease was subsequently amended in March 2004 and March 2005.*fn2
(Am. Compl. ¶ 26.) Giant opened a Stop & Shop supermarket (the "Grande Center Stop & Shop") in the leased premises on October 6, 2005. (Id. at ¶ 30.)
In 2007, Stop & Shop and Wakefern completed a transaction regarding the sale from Stop & Shop to Wakefern of all nine Stop & Shop supermarkets in southern New Jersey. (Am. Compl. ¶ 33; (Certification of Frank Rostan ("Rostan Cert.") ¶ 2.) The implications of the Stop & Shop-Wakefern transaction for the Grande Center Stop & Shop precipitated the instant dispute, and the parties disagree about the circumstances that resulted in the sale. According to Plaintiffs' allegations, when Stop & Shop approached Wakefern about the possibility of selling supermarkets, Stop & Shop was not interested in selling the Grande Center Stop & Shop to Wakefern. (Am. Compl. ¶ 34; Juliano Supp. Aff. ¶ 4.) Instead, Plaintiffs allege that Wakefern insisted that the Grande Center Stop & Shop be included in the package of supermarkets being sold "because it wished to eliminate Giant and Stop & Shop . . . as a competitor and potential competitor in the lower Cape May County geographic market." (Am. Compl. ¶ 36.) Wakefern was interested in the Grande Center Stop & Shop, according to Plaintiffs, because Wakefern owned a ShopRite supermarket approximately one-half mile from the Grande Center Stop & Shop. (Id. at ¶ 38.) As Plaintiffs allege, "Wakefern wanted Giant and Stop & Shop to get out of South Jersey." (Julian Supp. Aff. ¶ 6) (quotations omitted).
Defendants offer a completely different account of the Stop & Shop-Wakefern transaction. According to Stop & Shop's former Senior Vice President of Real Estate, Anthony Colavolpe, Stop & Shop sought to "exit the southern New Jersey market" entirely because its stores in the region were losing money, and "[i]n exiting the southern New Jersey area, Stop & Shop did not want to have any store(s) remaining in the area in which they were leaving." (Certification of Anthony Colavolpe ("Colavolpe Cert.") ¶¶ 4-6.) Mr. Colavolpe explains the decision of Stop & Shop to include the Grande Center Stop & Shop in the sale to Wakefern by noting that "[t]o operate only one store at Grande Center in this market area would be extremely unprofitable." (Id. at ¶ 7.) Moreover, according to Wakefern's Senior Vice President, Frank Rostan, Wakefern made clear during its negotiations with Stop & Shop that Wakefern "had no interest in purchasing the [Grande Center Stop & Shop] because the understanding was that the store consistently lost money." (Rostan Cert. ¶ 4.) Despite Wakefern's disinterest in the Grande Center Stop & Shop, according to Mr. Rostan, "Stop & Shop insisted that Wakefern purchase all nine New Jersey locations or none at all - i.e., it was a take-it-or-leave-it offer requiring the purchase of all southern New Jersey Stop & Shop stores." (Id. at ¶ 5.)
Plaintiffs allege that after the Stop & Shop-Wakefern transaction was completed, Wakefern informed Delco that it intended to close the Grande Center Stop & Shop and remove certain pieces of equipment from the premises. (Am. Compl. ¶ 39.) In addition, Wakefern informed Delco that it would not "seek to escape or otherwise renegotiate its obligations as sublessee," which meant that Delco would remain subject to the lease provision prohibiting Delco from leasing retail space in the Grande Center to a supermarket or drugstore. (Id. at ¶¶ 9, 39.) Wakefern informed Delco that it intended to continue to meet its obligation under the lease to pay rent to Delco. (Id. at ¶ 42.) Delco continues to receive full rental from Wakefern for the empty space where the Stop & Shop formerly operated.
In the wake of these events, Plaintiffs filed a Complaint with this Court, arguing that Wakefern's decision to acquire and subsequently shutter the Grande Center Stop & Shop would amount to an anticompetitive maneuver that was prohibited under federal and state antitrust law. (Compl. ¶ 5.) With their Complaint, Plaintiffs filed a motion for preliminary injunction and a temporary restraining order seeking to enjoin Defendants from closing and removing equipment from the Grande Center Stop & Shop, and from enforcing the provision of the lease that granted the lessee the exclusive right to operate a supermarket in the Grande Center.
On July 31, 2007, the Court heard oral arguments on Plaintiffs' motion for a temporary restraining order. In its Order of that same date, the Court denied Plaintiffs' motion for a temporary restraining order on the grounds that Plaintiffs failed to demonstrate a probability of success or the likelihood of immediate and irreparable harm [Docket Item 5]. The Court observed that Plaintiff could not prevail in the absence of expert opinion testimony regarding anticompetitive effects in the relevant market, and directed the parties to submit expert's reports on the issues of what constituted the relevant product and geographic markets in the ...