Tops Markets, Inc. v. Quality Markets, Inc

142 F.3d 90 (2d Cir. 1998)

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Nature of the Case

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Facts

P operates 53 supermarkets and 87 convenience stores. Penn Traffic Company (D) operates 267 supermarkets and 15 discount department stores. Quality Markets (D) is a division of Penn (D) and competes with P. P owned a supermarket in the Jamestown market until 1984 when it voluntarily terminated operations there. Seven years later, in 1991, it resolved to re-enter the Jamestown market and commissioned studies to evaluate the feasibility and profitability of numerous potential sites for a new store location. Paige (D) agreed to sell his four parcels to P. Under the terms of a March 13, 1992 contract, Paige (D) undertook to transfer title to P for $475,000. The parties set December 15, 1992, as the date for closing, subject to change only by their mutual agreement. The contract also called for Paige (D) to obtain options to purchase the remaining parcels he did not own at the Washington Street site, giving him until March 15, 1992 to comply with this requirement. If Paige (D) failed to acquire these additional parcels, P could elect unilaterally to terminate the agreement. D discovered P's intentions and suddenly expressed an interest in acquiring two of Paige's (D) Washington site parcels. Paige (D) and D entered into a 'Back-Up' agreement on June 30, 1992, under which D would acquire for $225,000 two non-contiguous parcels lacking any frontage on Washington Street. The contract of sale was made expressly contingent upon the termination of Paige's (D) prior contract with P. The Paige (D) and D deal was amended twice to increase the price to $765,000. Paige (D) also got a right of repurchase by within one year after the deed to the property was conveyed to D. Any repurchase would be subject to a deed restriction limiting the property to uses other than a supermarket. On the same day that the second amendment was prepared, Paige (D) notified D that his contract with P had terminated. D thereafter exercised its option and did acquire title to the two Washington Street parcels in April 1993. This lawsuit followed. P eventually acquired the entire Washington Street site when the Jamestown Urban Renewal Agency, exercising its power of eminent domain, condemned the property and later sold it to P. P opened a superstore at the site on April 19, 1997. P alleged violations of §§ 1 and 2 of the Sherman Antitrust Act as well as state law claims. Ds moved for summary judgment, and the trial court ruled that P failed to establish facts from which a reasonable jury could find that defendants violated either § 1 or § 2 of the Sherman Act. It held that P failed to show either an actual adverse effect on competition in the Jamestown market or D's possession of market power. With respect to the § 2 cause of action, it further ruled that P failed to demonstrate D had either the requisite market power or potential market power to sustain a monopolization or attempted monopolization claim respectively. P appealed.