CLAUDE DE BOTTON, NEWTOWN SQUARE EAST, L.P., NATIONAL DEVELOPERS, INC. AND NEWTOWN G.P., LLC,
KAPLIN STEWART REITER & STEIN, P.C., MARC B. KAPLIN, ESQUIRE, BARBARA ANISKO, ESQUIRE AND PAMELA M. TOBIN, ESQUIRE (COLLECTIVELY "KSMRS"), Appellants CLAUDE DE BOTTON, NEWTOWN SQUARE EAST, L.P., NATIONAL DEVELOPERS, INC. AND NEWTOWN G.P., LLC,
BPG REAL ESTATE INVESTORS, CAMPUS INVESTORS OFFICE B, L.P., CAMPUS INVESTORS 25, L.P., CAMPUS INVESTORS I BUILDING, L.P., CAMPUS INVESTORS H BUILDING, L.P., CAMPUS INVESTORS D BUILDING, L.P., CAMPUS INVESTORS COTTAGES, L.P., CAMPUS INVESTORS OFFICE 2B, L.P., ELLIS PRESERVE OWNERS ASSOCIATION, KELLY PRESERVE OWNERS ASSOCIATION, COTTAGES AT ELLIS OWNERS ASSOCIATION, GENBER/ MANAGEMENT CAMPUS, LLC, BERWIND PROPERTY GROUP, LTD., EXECUTIVE BENEFIT PARTNERSHIP CAMPUS, MANAGEMENT PARTNERSHIP BENEFIT, L.P. AND ELLIS ACQUISTION, L.P., KAPLIN STEWART MELOFF REITER & STEIN, P.C., MARC B. KAPLIN, ESQUIRE, BARBARA ANISKO, ESQUIRE, AND PAMELA M. TOBIN APPEAL OF: BPG DEFENDANTS
Appeal from the Order Dated May 22, 2012 In the Court of Common Pleas of Philadelphia County Civil Division No(s).: 001997, October Term, 2010
BEFORE: FORD ELLIOTT, P.J.E., MUNDY, and FITZGERALD, [*] JJ.
Appellants, Kaplin Stewart Reiter & Stein, P.C., Marc B. Kaplin, Esq., Barbara Anisko, Esq., Pamela M. Tobin, Esq. (collectively, "Kaplin"), BPG Real Estate Investors, Campus Investors Office B, L.P., Campus Investors 25, L.P., Campus Investors I Building, L.P., Campus Investors H Building, L.P., Campus Investors D Building, L.P., Campus Investors Cottages, L.P., Campus Investors Office 2B, L.P., Ellis Preserve Owners Association, Kelly Preserve Owners Association, Cottages at Ellis Owners Association, Genber/Management Campus, LLC, Berwind Property Group, Ltd., Executive Benefit Partnership Campus, Management Partnership Benefit, L.P., and Ellis Acquisition, L.P. (collectively, but excluding Kaplin, "BPG"),  appeal from the order entered in the Philadelphia County Court of Common Pleas ordering the production of privileged documents to Appellees, Claude de Botton, Newtown Square East, L.P., National Developers, Inc., and Newtown G.P., LLC (collectively, "de Botton"). Kaplin and BPG contend that the trial court erred by ordering the production of privileged information. As set forth in further detail below, this case—which has been litigated in the United States District Court for the Eastern District of Pennsylvania, the Court of Common Pleas of Delaware County, and the Court of Common Pleas of Philadelphia County—has consumed significant judicial resources. We vacate the order below and remand for further proceedings consistent with this decision.
We quote the findings of facts and conclusions of law as set forth in a prior decision by the United States District Court for the Eastern District of Pennsylvania:
[BPG] sue the defendants for, inter alia, federal antitrust violations[.] According to the Amended Complaint, BPG and the de Botton Defendants own parcels of land in Newtown Township, on which each of them would like to develop a "mixed use town center" ("MUTC")[.] The plaintiffs describe an MUTC as a "planned integration of mutually supportive commercial, retail, residential, entertainment and community uses in a pedestrian friendly environment on one parcel of land, " Am. Compl. at ¶ 2[.] Simply stated, BPG alleges that the defendants have done a variety of illegal things to slow down or prevent BPG's development of an MUTC on its parcel of land[.] The defendants have purportedly taken these actions to eliminate competition with their own MUTC in Newtown Township[.]
BPG Real Estate Investors—Straw Party 1, L.P. v. de Botton, 09-1714 (E.D. Pa. Apr. 29, 2010) (order), at 2-3 (footnotes omitted) ("Fed. Order"). For example, in support of their antitrust allegations, BPG alleged that de Botton, inter alia, disparaged BPG, deterred potential MUTC tenants from signing leases with BPG, and abused the judicial process. Fed. First Am. Compl., 6/15/09, at 20, 29. BPG also claimed that de Botton bought a specific piece of property in order to have legal standing to object to BPG's development. Id. at 16.
We continue quoting from the federal district court's decision:
BPG sues the de Botton Defendants in Count I for attempted monopolization in violation of § 2 of the Sherman [Antitrust] Act, and BPG brings claims in Count II against all defendants for antitrust conspiracy pursuant to § 1 of the Sherman Act[.] The de Botton Defendants move to dismiss Count I, and all defendants move to dismiss Count II[.] The defendants raise many arguments in favor of dismissal, but we will address only their contention that BPG fails to allege a relevant geographic market, as BPG must do to maintain its antitrust claims[.]
BPG has the burden of proving the relevant geographic market, and at this stage BPG must therefore allege facts in the Amended Complaint that could plausibly support its proposed relevant geographic market[.] The relevant geographic market is "the area in which a potential buyer may rationally look for the goods or services he or she seeks, " Tunis Brothers Co. v. Ford Motor Co., 952 F.2d 715, 726 (3d Cir. 1991) (internal quotations omitted), quoted in U.S. Horticultural Supply v. Scotts Co., 2010 WL 729498 *4 (3d Cir. Mar. 4, 2010)[.] "[T]he geographic market is not comprised of the region in which the seller attempts to sell its product, but, rather, is comprised of the area where customers would look to buy such a product, " U.S. Horticultural Supply, 2010 WL 729498 at *4[.]
The plaintiffs allege that "[t]he relevant market in this action is the business of developing and operating mixed use town centers located at the intersection of Route 3, an east/west axis, and Route 252, a north/south axis in [Newtown] Township, " Am. Compl. at ¶ 28[.] BPG also claims that the relevant geographic market is "[t]he approximately five mile area surrounding the cross roads of the two major access and travel roads (Routes 3 and 252), " Id. at ¶ 38[.] In BPG's response to the de Botton Defendants' motion to dismiss, they then puzzlingly argue that the relevant geographic market is Newtown Township, BPG Resp. to de Botton Mot. Dismiss at 22-23[.]
We could dismiss the antitrust claims due to the plaintiffs' failure to clearly and consistently allege a relevant geographic market[.] But BPG does not allege facts that could support a conclusion that any of its proposed geographic boundaries—the intersection, a five-mile radius around the intersection, or the Township as a whole—meets the requirements for a relevant geographic market[.] BPG does not, for example, allege any facts that could support a conclusion that the intersection or a five-mile radius of it—as opposed to a four-mile or ten-mile radius—is the boundary of the area in which a customer would rationally seek look to buy or use any of the goods or services that BPG hopes to offer at its MUTC[.] The same is true with respect to the entirety of Newtown Township[.] "The mere delineation of a geographical area, without reference to a market as perceived by consumers and suppliers, fails to meet the legal standard necessary for the relevant geographic market, " Tunis Brothers, 952 F.2d at 727[.]
BPG argues that the defendants target similar geographic areas for marketing their MUTC, but this is unavailing because (1) the defendants' marketing plans do not determine the relevant geographic market for antitrust purposes and (2) the relevant geographic market is defined from the buyer's perspective, not the seller's[.] BPG states that "there are relatively few areas within the Philadelphia area where a mixed use town center can realistically be developed, " but this does not address the relevant inquiry[.] BPG also contends that "consumer convenience" is a factor in defining the relevant geographic market and that it is possible to have a relatively small geographic market, Pl. Resp. Madison Marquette Mot. Dismiss at 21[.] This may be true, but BPG fails to allege any facts regarding "consumer convenience" that could support—much less plausibly support—a conclusion that its customers would not take advantage of MUTC offerings outside the small areas that BPG proposes as relevant geographic markets[.]
We may take judicial notice of geography, and we therefore note that Newtown Township is a suburb of Philadelphia that is surrounded by other suburban towns and cities[.] Any of the potential customers of BPG's MUTC—e.g., residential renters and buyers, upscale retailers, shoppers, and those seeking office space—could easily get those services from an MUTC at a different intersection, outside the five-mile radius, or outside of Newtown Township[.] BPG does not allege any facts to suggest that a potential customer of its MUTC would not seek goods or services from an MUTC that is, for example, five-and-a-half miles away from the intersection or in a neighboring suburb[.] We thus conclude that BPG has failed to allege a relevant geographic market, and we will dismiss its antitrust claims in Counts I and II, which are the only federal law claims in the Amended Complaint[.]
Fed. Order, at 3-9 (footnotes omitted). Accordingly, the district court dismissed the two federal antitrust claims. It also declined to exercise supplemental jurisdiction over BPG's remaining state claims of business disparagement, tortious interference, abuse of process, and civil conspiracy, and transferred the case to the Delaware County Court of Common Pleas. Id. at 12; see also Fed. First Am. Compl., 6/15/09, at 33-37.
The Delaware County Court of Common Pleas received the federal case on June 15, 2010. On November 22, 2010, BPG filed a second amended complaint in that court raising four claims: abuse of process, business disparagement, tortious interference with contractual rights and prospective economic advantage, and civil conspiracy. BPG's Second Am. Compl., 10-7352, 11/10/10, at 25-30 (Delaware Co.).
Similar to the federal action, BPG alleged in the Delaware County action that de Botton engaged in "a variety of illegal things to slow down or prevent BPG's development of an MUTC." See Fed. Order at 3. For example, for its abuse of process claim, BPG alleged that de Botton purchased a particular parcel of land in order to establish legal standing to oppose BPG's development. BPG's Second Am. Compl. at 17, 25 (Delaware Co.). De Botton, BPG claimed, subsequently abused legal process to interfere with BPG's development. Id. Another example is BPG's allegation that de Botton's illegal acts interfered with BPG's prospective contractual relations with potential MUTC tenants. Id. at 29.
Meanwhile, on October 15, 2010, de Botton filed the instant suit in Philadelphia County against Kaplin and BPG. De Botton's Compl., 101001997, 10/15/10 (Phila. Co.). De Botton alleged claims of wrongful use of civil proceedings and abuse of process. Id. at 25, 28. The complaint referenced de Botton's ownership of the parcel of land set forth above, id. at 10, and that the parties were competing for prospective MUTC tenants. Id. at 9.
In response, BPG, in Delaware County, filed a motion to stay the Philadelphia County lawsuit and transfer it to Delaware County for coordination. BPG's Mot. for Immediate Stay, Transfer and Coordinate de Botton's Later Filed Phila. Action., 11/22/10 (Delaware Co.). De Botton opposed, and the Delaware County trial court denied BPG's motion without prejudice. Order, 2/2/11 (Delaware Co.). In denying the motion, the court relied on the representations of de Botton's counsel that discovery for the Philadelphia County action would "be conducted with 'laser-like precision' and limited solely to the issues" of whether Kaplin and BPG "acted without probable cause and for an improper purpose in filing [federal antitrust] claims against" de Botton. Id. at 1. The court permitted BPG to renew its request if discovery exceeded the "laser-like precision." Id. at 2.
Discovery thus continued in the Philadelphia County lawsuit. On April 13, 2011, de Botton served interrogatories and requests for documents on Kaplin and BPG. BPG and Kaplin objected on grounds of, inter alia, attorney-client privilege and work product doctrine. The parties then executed, and the Philadelphia court approved, a clawback agreement.
1. In response to [de Botton's] requests for production and interrogatories served on April 13, 2011, [Kaplin] and BPG shall produce documents that constitute work product which was [sic] collected or created in connection with defining the relevant market for purposes of bringing the Federal Antitrust Claims in the Federal Court Action (herein referred to as the "Defendants' Designated Work Product Documents"). The production of the Defendants' Designated Work Product Documents shall not constitute a waiver of the Work Product Protection in the Philadelphia Action for all other documents which constitute work product in the Federal Action. Nor shall production of the Defendants' Designated Work Product Documents constitute a waiver by Defendants of Work Product Protection or any other privilege for the Philadelphia Action, Delaware County Action, or any other action previously brought or hereafter brought. Defendants' Designated Work Product Documents shall be protected from disclosure in the Delaware County Action, the Philadelphia Action, and any other action to the same degree as if BPG and [Kaplin] did not produce Defendants' Designated Work Product Documents in the Philadelphia Action pursuant to this agreement. [De Botton] may use, in the Philadelphia Action only, the Defendants' designated Work Product Documents.
2. This Agreement does not constitute a waiver, or an agreement to waive, attorney-client privilege by any party.
3. [De Botton] agree[s] that they will not utilize in the Delaware County Action or any other pending or subsequent litigation any documents designated as Defendants' Designated Work Product Documents and produced in the Philadelphia Action. Nothing contained in this Agreement shall prohibit the use of any documents in the Delaware County Action properly obtained during the course of discovery in the Delaware County Action.
4. [De Botton] agree[s] that they will not use or rely on the production of the Defendants' Designated Work Product Documents to advance or support any argument in the Philadelphia Action or in any other pending or subsequent litigation between the parties that BPG or [Kaplin] have waived the Attorney-Client Privilege, Work Product Protection (except, in the Philadelphia Action, to the extent set forth above in paragraph 1 and subject to paragraph 5 below), or any other applicable privilege recognized at law.
Stipulated Non-Waiver and Clawback Agreement and Order, 10/26/11, at 4-5 (Phila Co.). Kaplin subsequently produced 290 pages of work product and a privilege log identifying withheld documents.
The parties, however, disputed the adequacy of the production. On February 7, 2012, de Botton filed a motion to compel Kaplin to produce selected documents for the court's in camera review. Kaplin opposed and the court granted de Botton's motion, reasoning as follows:
At the heart of this wrongful use of civil process action are the very communications which [Kaplin] seek[s] protection for under the attorney-client privilege or the attorney work product doctrine. Therefore, they are relevant and discoverable and ostensibly not covered by the cited privileges. As an added layer of protection, this Court will conduct an in camera inspection of the ...