A federal court jury this week cleared Quality Markets of charges that it tried to create a supermarket monopoly in Jamestown in the early 1990s.
Following a month-long trial that involved testimony from about 20 witnesses, jurors late Wednesday rejected claims by Tops Markets Inc. that Quality and its corporate parent, The Penn Traffic Co., violated federal antitrust laws.
The jury dealt another legal setback to Tops, finding the company liable on a counterclaim filed by Jamestown area developer James V. Paige, who accused Tops of interfering with his development plans.
Paige sold property to Quality Markets in 1993, a transaction that Tops battled in court. Kenneth W. Africano, Paige's attorney, said his client will seek approximately $1 million in damages as the case proceeds.
Tops had sought $50 million in damages in a lawsuit that accused Quality of trying to create a monopoly. Quality bought two Bells stores and closed them in 1993, then did the same thing two years later with two Super Duper stores. Prior to the acquisitions, Quality already dominated the Jamestown market, owning five of the nine major supermarkets.
The case inched its way through the courts for six years, and there were all indications Thursday that the legal duel between the two supermarket chains will continue for some time.
Attorney Edward C. Cosgrove said Tops will appeal on the grounds that U.S. District Court Judge John T. Elfvin erred in several areas.
"The judge's rulings were very unusual and unanticipated by all the lawyers," he said.
Cosgrove said Elfvin refused to let Tops call an expert on supermarket business practices to the witness stand. The attorney claimed that the Connecticut authority would have testified that food prices in Jamestown were higher because of Quality's dominance in the market.
"Unfortunately, the jury never heard any of this testimony," Cosgrove said.
But officials from Penn Traffic insisted that none of their actions were improper or in violation of any laws.
"From the beginning, the Tops federal antitrust claims have been unwarranted and without merit," said Francis D. Price Jr., vice president and general counsel of Penn Traffic. "For almost seven years, Tops has wasted our time on these claims -- and their time as well."
Joseph V. Fisher, Penn Traffic's president and CEO, said Jamestown is a "highly competitive" market for supermarket chains.
"Quality Markets has always preferred to compete in the marketplace, not in the court," Fisher said.
Shortly before the trial ended, Elfvin dismissed Tops' antitrust claim against Paige. The jury later found Tops liable on Paige's counterclaim.
"Not only is my client pleased with the potential damage recovery on the counterclaim, but he is thrilled to have been vindicated on these claims," said Africano.
After Paige sold property on Washington Street to Quality Markets in 1993, Tops filed affidavits claiming that it had a valid contract with the developer to acquire the land. Jurors rejected the notion that there was a valid enforceable agreement between Tops and Paige, Africano said.
In addition to the appeal that will be launched in federal court, the supermarket chains are battling some of the same issues in a suit that is pending in State Supreme Court.
Three years ago, Elfvin dismissed the federal case, but a U.S. Court of Appeals panel later reinstated Tops' complaint and remanded it to the lower court for trial.
Penn Traffic operates 213 supermarkets in upstate New York, Pennsylvania, Ohio and West Virginia. It also operates wholesale food-distribution businesses serving 91 licensed franchises and 74 independent operators.
Buffalo-based Tops is owned by the Dutch chain of Royal Ahold NV and is the dominant supermarket chain in the region.
A survey conducted last year by Scarborough Research found that 85 percent of the respondents had visited a Tops Market in the prior seven days, versus 19 percent who shopped at a Quality Market. Wegmans was the second most popular shopping destination, according to the survey, and Tops' Wilson Farms convenience store chain was third.