Court Opinion

ID: 622971
Source: CourtListenerOpinion
Date Created: 2012-02-16 17:49:44+00
Date Added: 2024-06-11T17:51:03.000438
License: Public Domain

NOT PRECEDENTIAL

        UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
                              ________

                                      No. 10-4666
                                      _________

                      JOSEPH COMPRELLI, M&J COMPRELLI
                        REALTY, LLC, JOSEPH SUPOR III, J.
                      SUPOR & SON TRUCKING & RIGGINGS
                         CO., INC. and S&B REALTY CO.,
                                              Appellants
                                        v.

                         TOWN OF HARRISON, HARRISON
                         REDEVELOPMENT AGENCY, THE
                        TOWN COUNCIL OF THE TOWN OF
                       HARRISON, and PAUL J. ZARBETSKI,
                       CLERK OF THE TOWN OF HARRISON,
                                   ________

                    On Appeal from the United States District Court
                              for the District of New Jersey
                                (D.C. No. 2:10-cv-03013)
                   District Judge: Honorable Dickinson R. Debevoise
                                         _______

                      Submitted Under Third Circuit LAR 34.1(a)
                                 December 13, 2011

                   Before: SLOVITER, VANASKIE, Circuit Judges
                            and STENGEL,* District Judge

                               (Filed: February 16, 2012)
                                         ______

                                       OPINION
                                        ______

   *
    Hon. Lawrence F. Stengel, United States District Court for the Eastern District of
Pennsylvania, sitting by designation.
STENGEL, District Judge.

      This case involves a zoning dispute and concerns a lengthy history involving

Appellants, Mr. Comprelli, M&J Comprelli Realty, Joseph Supor III, J. Supor & Son

Trucking & Rigging Co., Inc. and S&B Realty (collectively “Comprelli”), and Appellees,

the Town of Harrison (the “Town”), Harrison Redevelopment Agency (the “Agency”),

the Town Council of the Town of Harrison (the “Council”), and Paul J. Zarbetski, Clerk

of the Town of Harrison (the “Clerk”).1

                                            I.

      Because we write primarily for the parties, our recitation of the facts and

procedural history is brief. Since 1988, Comprelli has owned commercial surface

parking lots (the “Parking Lot”) located at 1000 Frank E. Rodgers Boulevard South in the

Town of Harrison. In 1998, the Town Council adopted a redevelopment plan (the

“Redevelopment Plan”), which encompassed Appellants‟ parking lots, changing the

zoning such that surface parking lots were no longer a permitted use. In 2003, the Town

adopted an amended Redevelopment Plan allowing for certain interim uses, including

surface parking lots, subject to Planning Board approval.

      In 2008 and 2009, Comprelli obtained licenses to operate up to 1,050 parking

spaces on his lot. However, when Comprelli filed for yet another renewal of his licenses

in 2010, the Clerk noticed that Comprelli had not filed the required plat showing the

1
  The District Court had jurisdiction under 28 U.S.C. §§ 1331 and 1367. We have
jurisdiction under 28 U.S.C. § 1291. We exercise plenary review of the District Court‟s
grant of the motion to dismiss. See Omnipoint Communications Enters., L.P. v. Newton
Township, 219 F.3d 240, 242 (3d Cir. 2000).
                                            2
requested 1,050 spaces. The last plat on file was for 198 spaces, so the Clerk issued a

license for that amount and advised Comprelli that any increase in spaces would require

Planning Board approval.

       Comprelli filed suit in federal court2 and, in addition to this action, commenced

suit in the Superior Court of New Jersey in lieu of prerogative writs.3 The state action

was dismissed by Judge Velazquez with prejudice for failure to exhaust administrative

remedies and failure to state a cause of action. On November 16, 2010, the District Court

entered an order dismissing Comprelli‟s Sherman Act claim pursuant to the Parker

doctrine4 and dismissing the remaining claims as barred by res judicata based on the

State‟s order. After a motion for reconsideration, Judge Velazquez, modified the state

2
  Appellants claimed constitutional violations of equal protection (Count One), due
process (Count Two), and improper restraint on and partial taking of property (Count
Three). The complaint also alleged violations of the Sherman Act, 15 U.S.C. § 1, et seq.
(Count Four) and § 1983 (Count Eight). Finally, Appellants asserted state law claims
under the New Jersey Antitrust Act, N.J.S.A. 56:9-1, et seq. (Count Five), tortious
interference with contractual relationships (Count Six), and tortious interference with
prospective economic advantages (Count Seven).
3
  The state action alleges all of the same counts as the federal complaint, but does not
include Federal Complaint Counts Four through Seven. See Joseph Comprelli, et al. v.
Town of Harrison, et al. No. HUD-L-3169-10 (Oct. 19, 2010).
4
  The Parker doctrine or “state-action” doctrine shields state governments from antitrust
liability for anti-competitive actions taken in their capacity as sovereigns to further policy
goals. Bedell Wholesale Co. v. Philip Morris Inc., 263 F.3d 239, 255 (3d Cir. 2001). The
Parker doctrine applies indirectly to local municipalities where the suppression of
competition is an authorized implementation of state policy. City of Columbia v. Omni
Outdoor Advertising, Inc., 499 U.S. 365, 370, 373 (1991).

                                              3
court‟s dismissal order on January 13, 2011, dismissing Counts One through Three

without prejudice.5

       Despite the modified state court order for Counts 1-3, the District Court declined

to exercise supplemental jurisdiction over the state law claims, as all federal causes of

action were barred by either res judicata or the Parker doctrine. Comprelli timely

appealed.

                                                 II.

       Comprelli claims that the District Court erred by finding that the federal claims

were barred by the doctrine of res judicata because the claims were dismissed in error

and the state court modified its dismissal of the state law claims to dismiss without

prejudice. Comprelli also contends that the District Court erred by failing to exercise

supplemental jurisdiction over the state law claims. We disagree.

       Res judicata bars a subsequent suit on the same cause of action when there is a

judgment in a prior suit involving the same parties. CoreStates Bank, NA v. Huls

America, Inc., 176 F.3d 187, 194 (3d Cir. 1999). In applying the doctrine, the District

Court must accord preclusive effect to the prior decisions of state courts. Rycoline

Prods., Inc. v. C & W Unltd., 109 F.3d 883, 887 (3d Cir. 1997). See also Marrese v. Am.

Acad. Of Orthopaedic Surgeons, 470 U.S. 373, 381 (1985) (federal courts “look first at

the state preclusion law in determining the preclusive effects of a state court judgment”).

5
 The three counts were Count One (Inverse Condemnation), Count Two (Failure to Issue
Required Parking License for 1,050 Spaces), and Count Three (Improper Revocation of
Parking License).

                                             4
Under New Jersey law, for the application of res judicata to a given action requires (1)

the judgment in the first action is valid, final and on the merits6; (2) the parties in both

actions are the same or are in privity; and (3) the claims in the second action arise from

the same transaction or occurrence as the claims in the first. Watkins v. Resorts Int’l

Hotel & Casino, Inc., 124 N.J. 398, 412 (1991).

       Appellants argue that the claims dismissed with prejudice were in error and thus

cannot be banned by the doctrine of res judicata. The District Court properly stated, and

we agree, that the preclusive effect of a final judgment cannot be challenged on the basis

of “errors” in its legal conclusion. Federated Dept. Stores, Inc. v. Moitie, 452 U.S. 394,

398 (1981) (“A judgment merely voidable because based upon an erroneous view of the

law is not open to collateral attack, but can be corrected only by a direct review and not

by bringing another action upon the same cause of action.”).

       Additionally, Appellants contend that because the state court‟s decision was

amended, dismissing Counts One through Three without prejudice, the District Court

erred in barring Appellants‟ claims under res judicata. Appellants‟ Br. at 23-25. As the

District Court appropriately reasoned, “[w]ith the exception of the Sherman Act claims,”

the remaining counts dismissed without prejudice “arise under New Jersey law.”

Therefore, the district court may decline to exercise supplemental jurisdiction over a

claim if it “has dismissed all claims over which it has original jurisdiction.” Hedges v.

Musco, 204 F.3d 109, 123 (3d Cir. 2000); 28 U.S.C. § 1367(c)(3). Accordingly, the

6
  It is well established that a “judgment entered „with prejudice‟ is the equivalent of a
judgment entered on the merits and is considered a final judgment.” Citizens Voices
Ass’n v. Collings Lakes Civic Ass’n, 396 N.J. Super. Ct. 432, 444 (App. Div. 2007).
                                               5
District Court properly dismissed Counts Five, Six, and Seven as there were no

remaining federal claims, and Appellants had an entirely adequate state court venue in

which to pursue their claims.

       Comprelli also argues that the District Court erred by dismissing his Sherman Act

claim pursuant to the Parker doctrine because Appellees were motivated not by

redevelopment but by monetary gain. We disagree.

       Although under Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir.

1997), the District Court must accept the factual allegations in the complaint as true and

draw all reasonable inferences in favor of the plaintiff when considering a Rule 12(b)(6)

motion, Bell Atlantic Corporation v. Twombly, 550 U.S. 544, 545 (2007), held that

“[f]actual allegations must be enough to raise a right to relief above the speculative

level.” The District Court must distinguish between factual allegations and “[t]hreadbare

recitals of the elements of a cause of action, supported by mere conclusory statements.”

Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009).

       Therefore, in analyzing the Appellants‟ Sherman Act claim, the Court must

determine if the assertions in the complaint are enough to “state a claim to relief that is

plausible on its face.” Twombly, 550 U.S. at 570. As explained in A.D. Bedell Wholesale

Co. v. Philip Morris Inc., 263 F.3d 239, 254-55 (3d Cir. 2001), the Parker doctrine

shields state governments from antitrust liability for anti-competitive actions taken in

their capacity as sovereigns. The Parker doctrine does not apply directly to local

municipalities; however, a municipality‟s restriction of competition may be an

implementation of protected state policy. City of Columbia v. Omni Outdoor Advertising,

                                              6
Inc., 499 U.S. 365, 370 (1991). For instance, a local government‟s actions are protected

under Parker where the “suppression of competition is the „foreseeable result‟ of what

the statute authorizes.” Id. at 373. The statute at issue is New Jersey‟s Local

Redevelopment and Housing Law N.J.S.A. 40A:12A-1, et seq., which is a zoning

regulation that delegates broad authority to municipalities and redevelopment entities to

rehabilitate blighted areas. See N.J.S.A. 40A:12A-8. The Supreme Court has held that

“[t]he very purpose of zoning regulation is to displace unfettered business freedom in a

manner that regularly has the effect of preventing normal acts of competition, particularly

on the part of new entrants.” Omni, 499 U.S. at 373.

       Appellants argue that the Parker doctrine does not apply because “the purpose of

Appellee‟s actions was not to further the Town‟s redevelopment plan,” but rather

monetary gain. Appellants‟ Br. at 7, 37. Therefore, its actions were not taken in

connection with a valid redevelopment plan, and cannot be protected as such. The

District Court did not err in finding that “nothing in Plaintiffs‟ complaint suggests that the

Town‟s actions were not taken in connection with a valid redevelopment plan.”

Appellants‟ legal conclusions were unsupported, and the District Court is not “bound to

accept as true a legal conclusion couched as a factual allegation.” Iqbal, 129 S. Ct. at

1950. Therefore, we find that the District Court properly dismissed Appellants‟ Sherman

Act claim.

                                             III.

                                              7
       For the foregoing reasons, we will affirm the District Court‟s dismissal in all

respects.

                                             8