718 A.2d 1025 | Conn. Super. Ct. | 1997
In this case, plaintiff Roncari Development Company (Roncari), has sued seven defendants,1 all persons or entities allegedly involved in the airport valet parking business in and around Bradley International Airport (Bradley Airport) from 1987 or earlier, until the date this case was commenced.2 The plaintiff *410 seeks money damages and injunctive relief in connection with and as a result of the defendants' joint and concerted efforts, pursuant to a conspiracy to monopolize, restrict and/or prevent competition, and/or control prices in the local airport valet parking market to prevent the plaintiff from entering and competing in that market since 1989. In its four count revised complaint, the plaintiff alleges, more particularly, that the defendants pursued their anti-competitive design by jointly filing, maintaining and supporting by false and misleading testimony a groundless administrative appeal from the July 10, 1989 approval by the town of Windsor Locks zoning board of appeals (ZBA), of the plaintiff's application for a permit to construct a 2500 car valet parking facility on its thirty-two acre property directly across the road from Bradley Airport. As a result of the defendants' prosecution of their appeal, which the plaintiff has characterized as a "sham," the plaintiff claims that it has been delayed, hindered and/or prevented from using its property as an airport valet parking facility in competition with the defendants, lost income that would have derived from such use, and it incurred substantial costs, including attorney's fees, in opposing the appeal and otherwise protecting its interests.
The first and second counts of the revised complaint allege that the defendants engaged in the above described conduct in violation of the Connecticut Antitrust Act, General Statutes §
The defendants have now moved to strike the plaintiff's revised complaint on the following grounds: first, that all of the plaintiff's claims are based upon conduct that is constitutionally protected by the
The plaintiff does not strenously argue against the applicability of the Noerr-Pennington doctrine to state statutory and common-law damages actions. Rather, it argues principally that each count of its revised complaint states a valid claim for relief that may constitutionally be pursued under the sham litigation exception to Noerr-Pennington. For the following reasons, this court agrees with the plaintiff that this portion of the defendants' challenge to the revised complaint must be rejected.
The Noerr-Pennington doctrine, evolving from a trilogy of United States Supreme Court decisions; Eastern Railroad Presidents Conference v. NoerrMotor Freight,
Even so, it is generally recognized that there may be situations where the combination of parties to assert legal claims "is a mere sham to cover what is actually nothing more than an attempt to interfere directly with the business relationships of a competitor and the application of the Sherman Act would be justified." Eastern *414 Railroad Presidents Conference v. Noerr Motor Freight, supra,
In this case, the plaintiff brought claims under the Connecticut Antitrust Act, CUTPA and Connecticut common law. Although no Connecticut Supreme or Appellate Court decision has applied the Noerr-Pennington
doctrine to Connecticut antitrust law, the doctrine has gained wide acceptance in the decisions of this court. See Connecticut National Bankv. Mase, judicial district of Fairfield at Bridgeport, Docket Number 269180 (January 31, 1991, Flynn, J.); Abrams v. Knowles, Superior Court, judicial district of Norwich, Docket No. 95287 (December 4, 1990) (
This court agrees. Since article
Until recently, there was considerable uncertainty as to what constitutes "sham litigation" for the purposes of the Noerr-Pennington
doctrine.3 Some feared, in particular, that the term "sham" might become "no more than a label courts could apply to activity they deem unworthy of antitrust immunity." Professional Real Estate Investors,Inc. v. Columbia Pictures Industries, Inc.,
The defendants claim, however, that even if the first prong of the test is satisfied, the second prong is not. "Under this second part of our definition of sham, the court should focus on whether the baseless lawsuit *417
conceals `an attempt to interfere directly with the business relationships of a competitor; ' [Eastern Railroad Presidents Conferencev. Noerr Motor Freight, supra,
In the present case, the plaintiff has alleged that "[t]he defendants combined, conspired, and colluded with each other . . . to monopolize, restrict and/or prevent competition in the market for valet parking, to prevent entry into the market and/or to control the price, service and availability of valet parking . . . in restraint of trade through . . . (a) meeting together, actively participating in, and jointly hiring counsel to commence, continue and maintain lawsuits . . . which lawsuits were designed and intended to delay or prevent new competitors from entering the valet parking market . . . (b) presenting false and misleading testimony and pleadings in the lawsuits . . . (c) filing the lawsuits a under assumed or fictitious names. . . ." Nothing else is needed. In fact, these allegations, if proven, describe the classic situation envisioned by the United States Supreme Court as typifying abuse of the legal process — "the filing of frivolous objections to the license application of a competitor, with no expectation of achieving denial of the license but simply in order to impose expense and delay." Id., 380. The plaintiff has therefore *418 alleged facts sufficient to satisfy the second prong of the ProfessionalReal Estate Investors test.
Because the plaintiff has alleged facts which, if proved, would show that the defendant's appeal was objectively baseless and concealed an attempt to interfere directly with the plaintiffs business relationships, this portion of the defendant's motion to strike is denied.
The right to bring a treble damages action for alleged violation of the Connecticut Antitrust Act arises under General Statutes §
In this case, the plaintiff has clearly alleged that the defendants, by their conduct, violated several substantive provisions of the Connecticut Antitrust Act. In particular, the plaintiffs allegations of conspiracy, combination, and joint and concerted efforts to monopolize, restrain trade, prevent competition, and/or control prices in the local valet parking market would, if proved at trial, establish violations of the following substantive provisions of the Connecticut Antitrust Act: General Statutes §
Accordingly, the defendants have focused their challenge on the second essential requirement of §
If the statutory phrase, "any person injured in its business or property by any violation of the provisions of this chapter," were given a literal interpretation, the statute would plainly be broad enough to confer standing to bring a treble damages action upon every person who ever sustained any kind of pecuniary loss or injury that could be traced, however remotely or indirectly, to a proven violation of the Connecticut Antitrust Act. In that event, the first and second counts of the plaintiff's revised complaint would surely state valid claims under §
It has long been understood, however, that since the Connecticut Antitrust Act is based upon the federal antitrust laws, its provisions must ordinarily be construed in light of binding federal precedents interpreting and applying parallel provisions of federal law. WestportTaxi Service, Inc. v. Westport Transit District,
There was considerable disagreement among the federal circuits, however, as to how cases falling within the statute should be distinguished from cases falling outside it. Id. "Some courts have focused on the directness of the injury[.] . . . Others have applied the requirement that the plaintiff must be in the `target area' of the antitrust conspiracy, that is, the area of the economy which is endangered by a breakdown of competitive conditions in a particular industry. . . . Another Court of Appeals . . . asked whether the injury is `arguably within the zone of interests protected by the antitrust laws.'" (Citations omitted.) Associated General Contractors v.Carpenters,
In Associated General Contractors, where it first formally addressed this issue, the United States Supreme Court agreed with the lower courts that a literal reading of the statute was inappropriate because such a reading would be inconsistent with the intent of Congress, as evidenced by the statute's legislative history. Thus, though it acknowledged that the statute's language, like that of §
As it did so, however, the court declined to adopt any particular test for deciding which cases are covered by the statute and which are excluded from it. Instead, it declared that lower federal courts must analyze each case individually, evaluating "the plaintiff's harm, the alleged wrongdoing by the defendants, and the relationship between them;" id., 535; and deciding whether the *423 law affords a remedy in the circumstances presented, in light of factors bearing appropriately on that issue, as identified in previously decided cases. Id., 537. The court then went on, instructively, to identify and apply several "factors [affecting] judicial recognition of the [plaintiff's] antitrust claims" to the allegations in the case before it. Id.
The first factor so identified and applied, though not dispositive of the plaintiff's right of action, was the alleged "causal connection between an antitrust violation and harm to the [plaintiff.]" Id. The second, which was also not dispositive, was the plaintiff's claim that "the defendants intended to cause [the particular] harm." Id.
A third factor, one which the court said "may be controlling;" id., 538; was "the nature of the plaintiff's alleged injury." Id. On that score, the court made the following significant observations: "As the legislative history shows, the Sherman [Antitrust] Act[,
"If either these firms, or the immediate victims of coercion by defendants, have been injured by an antitrust violation, their injuries would be direct and, as we held in McCready, they would have a right to maintain their own treble-damages actions against the defendants. An action on their behalf would encounter none of the conceptual difficulties that encumber the Union's claim. The existence of an identifiable class of persons *425 whose self-interest would normally motivate them to vindicate the public interest in antitrust enforcement diminishes the justification for allowing a more remote party such as the Union to perform the office of a private attorney general. Denying the Union a remedy on the basis of its allegations in this case is not likely to leave a significant antitrust violation undetected or unremedied." Id., 540-42. The court concluded its remarks on the directness or indirectness of the plaintiff's alleged injury by noting that if the right to bring treble damages actions were appropriately limited to those directly injured by the defendants' anticompetitive activity, speculative damages claims would be avoided, the risk of duplicate recoveries would be lessened, and the scope of already complex antitrust cases would be maintained within manageable judicial limits by eliminating complex apportionment of damages issues. Id., 542-44.
The defendants in the instant case would have this court rule that since the plaintiff had not yet entered the airport valet parking business by the time of their alleged conspiracy, combination and joint and concerted actions to prevent him from doing so, the plaintiff has not suffered the sort of competitive injury which the antitrust laws, state and federal, were designed to prevent. Employing the analysis used by the United States Supreme Court in Associated General Contractors, however, the defendants' claim must be rejected
To begin with, as previously noted, the plaintiff has clearly alleged a causal link between the defendants' alleged antitrust violations and the losses for which it seeks treble damages in this case. It has claimed, moreover, that it was the direct and intended victim of the defendants' anticompetitive activities, for the alleged purpose and effect of the defendants' challenged administrative appeal was to overturn the board's approval of its building permit application, and thus to *426
delay, hinder or prevent its immediate entry into the local airport valet parking market.5 These factors, all identified, described, and relied upon to determine antitrust standing under the Clayton Act by the United States Supreme Court, strongly favor the viability of the plaintiff's treble damages action under §
It is true, of course, that the plaintiff had not yet become a competitor in the relevant market when the defendants' alleged conspiracy, combination and joint and concerted actions to prevent it from entering that market took place. Even so, both the nature of the defendants' challenged conduct and the nature of the plaintiff's alleged injury strongly support the plaintiff's claim that it has standing to pursue this action. When an antitrust plaintiff is already a competitor of the antitrust defendants in the market they seek to monopolize and control, any alleged injury to its ability to compete in that market is the classic sort of injury for which a treble damages claim under the antitrust laws may be pursued. Such a competitor is the direct and foreseeable target of the defendants' conduct, its injuries are immediate and far from speculative, and the presentation of its claim presents no risk of duplicate recoveries or complex apportionment of damages issues.
When, by contrast, an antitrust plaintiff has not yet entered the relevant market, more difficult questions naturally arise as to whether he has truly suffered any injury, much less an injury to his ability to compete in that market, which the antitrust laws were enacted to *427 protect. If a plaintiff only contemplated entering the relevant market before the antitrust violation occurred, his claim of competitive injury, like his business plans themselves, is merely speculative, and thus is not the proper subject of a treble damages action. If, on the other hand, a plaintiff with well-developed plans, available means and a definite intention to make immediate entry into that market is prevented from so doing by the anticompetitive conduct of the defendants, then it, no less than those already competing with the defendants in the market, is the very sort of person who is classically entitled to bring a statutory treble damages action. See generally 54 Am.Jur.2d 430, Monopolies and Restraints of Trade § 414 (1996) ("Prospective competitors, as well as current competitors, may have standing to bring an action alleging a conspiracy to restrain trade or other antitrust violation, if such would-be cometitors are able to demonstrate both an intention and a preparedness to enter the relevant market.")
When a potential competitor brings an antitrust action, the court's task is to distinguish between a serious potential competitor who has illegally been kept out of the market and the inchoate business enterprise with a mere hope of entry. Practice Perfect, Inc. v. HamptonCounty Pharmaceutical Ass'n,
In this case, the plaintiff alleges that over a period of four years it made efforts to secure the approval of Windsor Locks zoning authorities for the construction of a valet parking facility on its property across from Bradley Airport. Having finally secured the necessary *428
permit, it alleges that it was prepared to construct the planned facility at once so that it could open its airport valet parking business by December, 1989. According to the plaintiff, the defendants' filing and prosecution of their sham administrative appeal injured it directly and substantially by delaying, hindering and preventing it from proceeding at once with the long planned construction of its new facility and the opening of its new valet parking business. Because these allegations, if proved at trial, would clearly establish both that the defendant was a serious potential competitor of the defendants in the market they sought to monopolize and control, and that the plaintiff had taken substantial and demonstrable steps to enter that market before it was thwarted in that purpose by the defendants' anticompetitive conduct, the court concludes that the plaintiff has standing to pursue that claim under §
The defendants first claim that the doing of a single act, of whatever kind or for whatever reason, can never constitute a violation of CUTPA because the substantive proscription of unfair trade practices set forth therein is worded in the plural, as follows: "No person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or business." General Statutes §
First, the General Assembly has long made it clear that singular and plural usages in state statutes may be used interchangeably where the broader statutory context supports such a reading. On this precise point, General Statutes §
Though the language of §
In fact, the broader context of CUTPA makes it clear that each and every unfair method of competition, as well as each and every unfair or deceptive act or practice, is separately actionable as a violation of CUTPA by any person who suffers an ascertainable loss by reason thereof. General Statutes §
The defendants next claim that even if a single act can constitute a violation of CUTPA, the act of filing and maintaining a lawsuit — even one that meets the sham litigation exception to theNoerr-Pennington doctrine, and thus qualifies as a violation of the antitrust laws — does not violate CUTPA where, as here, none of the defendants filed the lawsuit "in the conduct of any *431
trade or commerce." General Statutes §
Section
"(a) No person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.
"(b) It is the intent of the legislature that in construing subsection (a) of this section, the . . . courts of this state shall be guided by interpretations given by the Federal Trade Commission and the federal courts to Section 5(a) (1) of the Federal Trade Commission Act (
Following the mandate of §
Applying these criteria to the act of prosecuting a sham lawsuit to prevent, hinder or delay a prospective competitor from entering a market pursuant to a conspiracy to monopolize, restrain trade, prevent competition and/or to control prices in that market, the *432 following observations must be made. First, because such conduct directly violates the antitrust laws, state and federal, it clearly "offends public policy as . . . established by [those laws]." (Internal quotation marks omitted.) Id., 568. Secondly, such conduct is "oppressive [and] unscrupulous," for it subjects the plaintiff, a would-be competitor, both to the loss of a valuable business opportunity and to the potentially crippling expense of hiring counsel to overcome the defendants' dishonest, anticompetitive effort to extinguish it entirely. (Internal quotation marks omitted.) Id. Thirdly, the delay or prevention of the plaintiff's entry into the valet parking market with a large new facility that could potentially serve a large percentage of that market very probably caused substantial injury not only to the plaintiff, but to the consuming public. Just as the plaintiff was disenabled from competing in the relevant market, customers in that market were deprived of the plaintiff's services and of the price and service benefits that would doubtless have been realized with increased competition. In short, the challenged conduct appears on its face to satisfy each prong of the cigarette rule.
Not suprisingly, the federal courts have long agreed with this position, holding that "the [federal trade] [c]ommission has broad powers to declare trade prices unfair[, and that this] broad power . . . is particularly well established with regard to trade practices which conflict with the basic policies of the Sherman and Clayton Acts even though such practices may not actually violate these laws." FTC v. BrownShoe Co.,
So stating, the court has clearly established that "[a] combination or conspiracy in restraint of trade is an unfair method of competition. . . ." 87 C.J.S. 649 Trade-Marks, Trade-Names, and Unfair Competition, § 228c (1954). It has also established that "[t]he standards established by the anti-trust acts, and by the courts in construing and applying such acts," are the standards to be applied in "determining whether particular acts amount to unfair methods of competition within the Federal Trade Commission Act, and in determining whether practices which are against public policy because of their dangerous tendency to hinder competition or create a monopoly constitute unfair methods of competition." Id., 649-50; accord 1 R. Langer, J. Morgan D. Belt, Connecticut Unfair Trade Practices Act (1994) § 2.4, p. 23 ("When first enacted, the Federal Trade Commission Act prohibited only unfair methods of competition. The provision now is understood to cover anticompetitive conduct of essentially the same character as the Sherman Act and the Clayton Act. The Connecticut Antitrust Act covers the same subject matter. . . .")
Here, then, since this court has already ruled that the allegations of the plaintiff's antitrust counts, all of which are incorporated by reference in its CUTPA count, are sufficient to plead an actionable violation of the Connecticut Antitrust Act within the sham litigation exception to the Noerr-Pennington doctrine, the court concludes that it has also adequately pleaded a violation of CUTPA.
The defendants' final challenge to the third count of the plaintiff's revised complaint is that the plaintiff is *434
not entitled to make a CUTPA claim since it was not a consumer or a competitor of the defendants when they filed the challenged administrative appeal. This argument is easily disposed of on two independent bases. First, in McLaughlin Ford, our Supreme Court explicitly held that to prove a violation of CUTPA, a plaintiff need not show that he suffered consumer injury. Instead, said the court, "[w]e agree with the plaintiff that a competitor or other business person can maintain a CUTPA cause of action. . . ." (Emphasis added.) McLaughlinFord, Inc. v. Ford Motor Co., supra,
Second, as previously noted, since the plaintiff has already been determined by this court to have standing, as a potential competitor of the defendants, to file and maintain an antitrust claim against them, then it likewise has a right to present a CUTPA claim against them. To reiterate a point just made: the standards applicable to antitrust claims govern those applicable to similar conduct under the Federal Trade Commission Act, and thus, by extension, under CUTPA.