17
Apr2013

Penney’s, Macy’s, and Martha: Breach of Contract?

Our blog post yesterday discussed breaches of contract and the remedies associated. One thing we mentioned was the fact that there are many different types of contracts and many different types of breach of contract.

The longstanding litigious triangle amongst Macy’s, Martha Stewart and J.C. Penney is a breach of contract case that has gotten a lot of media attention. It wages on with today’s news of Macy’s appeal to the judge’s most recent decision (see below) to allow J.C. Penney to sell non-branded Martha Stewart products. Here is a recap of what has happened thus far:

December 2011: J.C. Penney announces (after purchasing 17% stock in Martha Stewart Living Omnimedia) plans to start selling Martha Stewart products in 2013

January 2012: Macy’s files a lawsuit against MSLO for breach of contract

February 2012: Macy’s asks New York Supreme Court Justice to file a preliminary injunction barring J.C. Penney from the sale of goods branded in the MSLO image

July 2012: Judge issues preliminary injunction blocking MSLO from selling certain products at J.C. Penney

August 2012: Macy’s files additional lawsuit attempting to prevent J.C. Penney from violating their contract with MSLO

April 2013: New York Judge rules that J.C. Penney can sell a line of home goods designed by Martha Stewart so long as they do not bear her name

This lawsuit comes at a time that is very difficult for retail companies, particularly J.C. Penney. However, luckily for J.C. Penney, the dismissal of Macy’s claims of unfair competition was granted just a few days ago; and the judge ruled that while J.C. Penney is not allowed to sell MSLO branded products, they are permitted to sale JCP Everyday products (the Martha Stewart designs).

The judge described his decision as a “bye” for J.C. Penney, highlighting the fact that their CEO clearly made the wrong decision entering into this agreement with the knowledge that there was a good chance Macy’s would file a lawsuit. If the judge hadn’t ruled to allow J.C. Penney to sell the Stewart designs that were already being warehoused, it would have surely been a large financial hit to the already struggling retail chain.

Like we’ve mentioned, breach of contract cases are often too varied to be summarized. However, these cases are some of the most common disputes among businesses, colleagues within a business, or investors and a business. The Patterson Law Firm has dealt with a range of breach of contract issues. To learn more about our breach of contract work, click here or call (312) 223-1699 to speak with one of our experienced attorneys.

Sources: InsideCounsel