A Gambrills shopping center developer has settled its $25 million lawsuit against a labor union it accused of using “sham litigation” to wage an unsuccessful war to keep out Wegmans, a non-union supermarket.
The settlement between Waugh Chapel South LLC and the United Food and Commercial Workers Union locals 27 and 400 came nearly three months after an appeals court revived the developer’s lawsuit. Waugh Chapel claimed the union violated a federal prohibition on unfair labor practices by filing 14 separate lawsuits and petitions for review between August 2008 and July 2011.
A federal judge dismissed Waugh Chapel South’s suit against the union last year, saying the unions’ many legal filings were constitutionally protected and did not constitute an unfair practice under the Labor Management Relations Act.
But the 4th U.S. Circuit Court of Appeals reinstated the action in late August, saying the First Amendment does not protect what might be unlawful activity.
“Although the courts are a medium by which citizens may exercise their First Amendment right to petition their government, the act of petitioning those courts may not serve as the means to achieve illegal ends,” Judge Albert Diaz wrote for the unanimous three-judge panel on Aug. 26.
Terms of the settlement were not disclosed. U.S. District Judge William D. Quarles Jr. approved the parties’ stipulation of dismissal Friday.
The union’s attorney, Michael T. Anderson, said Tuesday that “the parties have resolved their differences in a professional and amicable manner.” Anderson is with Murphy Anderson PLLC in Washington.
Ira L. Oring, the developer’s attorney, declined to comment. Oring is with Fedder and Garten P.A. in Baltimore.
The 4th Circuit, in sending the case back for trial, instructed the district court to take note that only one of the union’s 14 challenges proved to be successful.
“While there is no particular win-loss percentage that a litigant must achieve to secure the protection of the First Amendment, a one-out-of-fourteen batting average at least suggests a policy of starting legal proceedings without regard to the merits and for the purpose of violating the law,” Diaz wrote.
The union’s legal actions began shortly after the developer reached an agreement in 2006 to lease space in The Village at Waugh Chapel to Wegmans, according to the lawsuit the LLC filed in U.S. District Court in Baltimore on March 31, 2011.
The unsuccessful challenges included a petition to revoke the mixed-use zoning on the project, a short-lived suit against the Maryland Department of the Environment and nine appeals of building and grading permits issued by the county.
The union’s only win came when it challenged the County Council’s approval of tax increment financing bonds to fund the shopping center. The union successfully argued that the TIFs were invalid because no hearing had been held. But that victory was also short-lived, as the council held a hearing and the TIFs were again approved, the 4th Circuit said.
Even so, Quarles dismissed the developer’s suit against the union in February 2012, finding it was barred under the Noerr-Pennington doctrine.
The doctrine — named for two Supreme Court decisions from the 1960s — generally prohibits entities from being sued in retaliation for exercising their right to petition the government for a redress of grievances.
But the 4th Circuit said the doctrine does not apply to petitions and lawsuits filed in a bad-faith effort to cause delay or compel the termination of a lease and that “the pleadings and concomitant record evidence in this case, if credited by a factfinder, are sufficient to show that the unions have abused their right to petition the courts beyond the point of constitutional protection,” Diaz wrote.
The 4th Circuit also rejected the union’s argument that the ruling should be upheld because Waugh Chapel suffered no injury, since Wegmans did lease the space at The Village at Waugh Chapel.
Diaz called this a “heads I win, tails you lose” theory that “would nullify the sham litigation exception [to the Noerr Pennington doctrine] altogether.”
The 4th Circuit instructed the trial court to “conduct a holistic evaluation of whether the administrative and judicial processes have been abused” by the union’s filings.
WAUGH CHAPEL SOUTH LLC V. UNITED FOOD AND COMMERCIAL WORKERS UNION
U.S. District Court, Baltimore
William D. Quarles Jr.
Events: August 2008-July 2011
Suit filed: March 31, 2011
Stipulation of dismissal approved: Nov. 8, 2013
Ira L. Oring of Fedder and Garten P.A. in Baltimore.
Michael T. Anderson of Murphy Anderson PLLC in Washington:
Unfair labor practices