J.C. Penney Appeals Decision in Macy’s Suit

JCPenneyNEW YORK-J.C. Penney said it is appealing the New York State Supreme Court’s ruling in favor of Macy’s, in the lawsuit regarding J.C. Penney’s agreement for a Martha Stewart-branded line of home goods with Martha Stewart Living Omnimedia (MSLO).

On June 16, State Supreme Court Justice Jeffrey Oing said that agreement “tortiously interfered” with the existing Macy’s-MSLO collaboration for home goods branded under the Martha Stewart label.

In a statement to HFN, J.C. Penney said, “While we appreciate the court’s efforts in this multiyear litigation, we respectfully disagree with and are disappointed by this outcome. The company does not believe that money damages are warranted and is defending against any damages by exercising options for appeal.”

In response, Macy’s issued the following comment to HFN: “We are confident that the appellate courts will affirm Justice Oing’s finding that J.C. Penney tortiously interfered with Macy’s contract with MSLO.” Macy’s also said it is planning to appeal the part of Oing’s ruling which denied a punitive damage award to Macy’s. “Macy’s believes that the trial record and the court’s factual findings clearly justify punitive damages, and that the court erred in not awarding them.”

Although Oing in his ruling had referred the matter of damages to a judicial hearing officer or special referee, he added that he did not believe damages were warranted. Noting that Macy’s Chairman and CEO Terry Lundgren had been “vindicated” by his ruling and the J.C. Penney-MSLO deal had put J.C. Penney “on the verge of financial collapse,” Oing said, “I find that these significant facts are a sufficient deterrent to JCP and other companies from acting in a similar way in the future.”