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ROSENBERG v. CLEARY

November 21, 1984

Louis L. Rosenberg and the Cherry Pike Corp.
v.
Cleary, Gottlieb, Steen and Hamilton, et al.



The opinion of the court was delivered by: SWEET

Opinion

SWEET, D.J.: Cleary, Gottlieb, Steen and Hamilton ("Cleary Gottlieb"), a prominent and well-known law firm and a defendant to this action, has moved under Rule 12(b)6 of the Fed.R.Civ.P. to dismiss the complaint as to it and for attorney's fees and costs. Plaintiffs Louis Rosenberg and Cherry Pike Corporation (collectively "Cherry Pike") have cross-moved for leave to amend their complaint. The complaint, alleging antitrust violations as a basis for federal jurisdiction, arises out of the development and construction of a Pathmark Supermarket with an adjacent parking facility in lower Manhattan. For the reasons stated below, both Cherry Pike's motion to amend its complaint and Cleary Gottlieb's motion to dismiss will be granted and Cleary Gottlieb's motion for attorney's fees will be denied.

 The Facts

 The pleadings and motion papers present the following facts and allegations. Cherry Pike, the owner of a parcel of land located at the north-east corner of Pike Slip and Cherry Street in Manhattan, constructed a 42,233 square foot supermarket with an adjacent 199-car parking facility on its land. Shortly after the construction of the foundation of the supermarket, a series of lawsuits were instituted by various of the defendants to this action (collectively with Cleary Gottlieb, "the defendants") seeking to enjoin construction of the supermarket project (the "state court actions"). *fn1" In each state court action some of the plaintiffs, described by Cherry Pike as "competing supermarket interests" (Amended Complaint, P31, were represented by the law firm of Cleary Gottlieb. Certain actions involved special permits relating to the parking facility, and none was successful in enjoining construction.

 Cherry Pike and its president, Louis Rosenberg, now allege that the state court actions and other acts of the defendants including attendance at local Community Board, Planning Commission and Board of Estimate meetings to render objections to the granting of a special permit, constituted a conspiracy by the defendants to restrain trade in violation of the Sherman Antitrust Act of 1890, 15 U.S.C. § 15. Although the amended complaint contains no specific allegations that the supermarket, which is leased from Cherry Pike by Supermarkets General Corporation, the parent company of Pathmark, opened late because of these actions, Cherry Pike does allege that the defendants' actions caused them injury in the form of lost rent and higher material and building charges and seeks $100,000,000 in damages.

 Motion to Amend Complaint

 Preliminarily, Cherry Pike's motion to amend its complaint will be granted. As the Supreme Court has noted, "[i]n the absence of any apparent or declared reason -- such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the oppressing party by virtue of the allowance of the amendment, etc. -- the leave sought should, as the rules require, be "fairly given." Foman v. Davis, 371 U.S. 178, 182, 9 L. Ed. 2d 222, 83 S. Ct. 227 (1962). Cherry Pike's proposed amendment clarifies allegations made in the original complaint, and granting the motion does not prejudice the defendants. The motion is therefore granted.

 Antitrust Standing

 For the purposes of Cleary Gottlieb's motion, the facts alleged in Cherry Pike's proposed amended complaint are taken as true. However, although the amended complaint clarifies several allegations made in the original complaint, it fails to withstand a motion to dismiss because Cherry Pike lacks standing under section 4 of the Clayton Act to bring this action.

 Section 4 of the Clayton Act provides:

 Any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefore in any district court of the United States in the district in which the defendant resides or is found or has an agent, without respect to the amount in controversy, and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney's fee.

 15 U.S.C. § 15.

 Antitrust standing requires a different evaluation than that undertaken for constitutional standing. Associated General Contractors of California, Inc. v. California State Board of Carpenters 459 U.S. 519, 74 L. Ed. 2d 723, 103 S. Ct. 897 (1983); Crimpers Promotions, Inc. v. Home Box Office, Inc. 724 F.2d 290 (2d Cir. 1983), cert. denied sub nom. H.B.O., Inc. v. Crimpers Promotions, Inc., 467 U.S. 1252, 52 U.S.L.W. 3906, 82 L. Ed. 2d 841, 104 S. Ct. 3536 (U.S. June 7, 1984).In a recent opinion, the Supreme Court established limitations on the availability of the section 4 remedy to individuals claiming injury under the Clayton Act. Associated General Carpenters, supra, 459 U.S. 519. The Court set out some of the factors that a court should evaluate in determining antitrust standing: (1) whether there is a causal connection between the antitrust violation and the plaintiff's injury; (2) whether the defendant intended to cause the harm; (3) whether the injury was of the type sought to be prevented by the antitrust laws; (4) the directness or indirectness of the asserted injury; (5) the possibility that denial would "leave a significant antitrust violation undetected or unremedied"; and (6) the speculative nature of the plaintiff's claim of damages. Associated General Contractors, supra, 459 U.S. at 535-543.

 Cherry Pike's amended complaint does meet several of the Court's requirements. While the damages claimed may be considered speculative in nature, the complaint alleges both a causal connection between the defendant's actions and its claimed injury and an improper motive. It fails, however, to allege either an ...


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