Appeals Court Denies Macy's Injunction Against J.C. Penney

Photo: David Handschuh/Bloomberg

Macy's request for a preliminary injunction against J.C. Penney has been denied by the  Appellate Court, giving JCP the right to continuing selling items designed by Martha Stewart Living Omnimedia ("MSLO").  These items will be sold under the "JCP Everyday" label and cannot bear or be marketed under Martha Stewart's name.  Macy's requested the preliminary injunction in order to stop JCP from selling these products while the two companies litigate the claim in New York State Supreme Court before Judge Oing.  The New York State Supreme Court's Appellate Division decision upholds Judge Oing's April 12th ruling in favor of JCP which will allow the company to avoid a estimated $100 million loss.  

J.C. Penney Permitted to Sell Martha Stewart Products, Macy's Appeals (Update!)

Last Friday, Judge Oing gave J.C. Penney the green light to temporary sell Martha Stewart designed products in order to avoid a estimated $100 million loss.  The products will be sold under the JCP Everyday label until the a final decision is rendered.  Had Judge Oing not allowed JCP to sell the products, JCP would be forced to find another way to dispose of the products and be faced with aisles of empty shelves in the home department.  However, JCP is still not allowed to sell Martha Stewart branded house ware products which it has not yet produced anyways.  

Martha Stewart Wins Round One Against Macy's

Martha Stewart's company, Martha Stewart Living Omnimedia won one claim against Macy's when Judge Oing ruled that MSLO did not violate the confidentiality provision of its licensing agreement.  Macy's claimed the agreement was breached when MSLO shared certain details of the contract with J.C. Penney.  The Judge stated that MSLO "had a legal obligation to provide the documents to JCPenney," because JCP was making a substantial investment in the company and both are public companies.  Further, MSLO did take measures to limit the disclosure of information to only those that were necessary.  

Macy's & J.C. Penney Trial Resumes as JCP CEO is Forced Out

The month-long court ordered mediation for Macy's, J.C. Penney ("JCP") and Martha Stewart Living Omnimedia ("MSLO") did not come to any resolution so yesterday, the parties headed back to court to resume the trial over rights to sell Martha Stewart branded items.  (Recap? read here).  

Macy's wasted no time letting Judge Oing know that it it believed JCP had violated the injunction as it caught them selling Martha Stewart branded products that Macy's claimed it had exclusive rights to including plastic champagne flutes and acrylic pitchers.  Macy's lawyers requested that the judge block these sales.  MSLO attorney stressed that since these were disposable items, they did not fall into the exclusive categories as Macy's claims.  Judge Oing granted JCP and MSLO some time to look into Macy's accusations and get back to him. 

Macy's, J.C. Penney & Martha Stewart Living Ordered into Mediation

Photo via The Associated Press

On March 7th, after almost three weeks at trial, Justice Oing ordered Macy's, J.C. Penney & Martha Stewart Living Omnimedia into mediation.  For a recap of what's going on, click here and here. All three parties agreed to the mediation process and if no resolution is reached by April 8th, Oing will continue to hear the case.

Before the start of the trial, JCP and MSLO were open to mediation, Daphne Avila, a JCP spokeswoman said, but “other parties were not amenable.”  Macy’s declined to comment on prior mediation efforts.

Macy's v. J.C. Penney (Update!)

As we enter the third day of the battle of the department stores, things are getting heated. Yesterday, Macy's executive, Leonard Marcus, president of Macy's Merchandising Group who helped negotiate the terms if the 2006 deal with Martha Stewart testified that he was hesitant to enter a deal in which he would not own the brand but only to build them up and risk losing them, which is exactly what happened here.

Marcus is one of many executives expected to testify at the hearing. Macy's chairman, CEO and president Terry J. Lundgren, JCP's CEO Ron Johnson, and Martha Stewart are all expected to testify.

Macy's v. J.C. Penney to go to Trial over Martha Stewart Deal

Photo: Eric Thayer/Reuters

Macy's, Inc.'s lawsuit against J.C. Penney is set to go to trial in New York State Supreme Court on February 19th over J.C. Penney's deal with Martha Stewart Living Omnimedia, Inc ("MSLO").  Back in December 2011, JCP announced that is was buying a 16.6 percent stake in MSLO and that the companies entered into a partnership featuring Martha Stewart products and know-how.  Sounds familiar? That's because Macy's also has a deal with MSLO since 2006 until 2018 if renewal options are exercised.  

As expected, Macy's quickly sought to enjoin MSLO from going forward with the partnership.  In July 2012, the court granted Macy's preliminary injunction against MSLO with respect to certain product lines such as soft furnishings, dinnerware and cookware that it has an exclusive right to sell.  MSLO appealed and that decision is still pending.