Macy’s Inc. won reinstatement of lawsuit claims that J.C. Penney Co. interfered with its contract with Martha Stewart’s company in a battle to sell the homemaking mogul’s branded products. Macy’s lost a bid to revive an effort to collect punitive damages.
A New York state appeals court in Manhattan said Thursday that a trial judge shouldn’t have thrown out claims of unfair competition and breach of the confidentiality of Macy’s contract with Martha Stewart Living Omnimedia Inc.
The appeals court upheld the judge’s finding that J.C. Penney interfered with the agreement by violating exclusivity clauses, while ruling against Macy’s on punitive damages.
In Thursday’s decision, Judge John W. Sweeny wrote that J.C. Penney sought information about the Macy’s contract with Martha Stewart Living almost immediately after it began discussions with the company. Such details were “tantamount to trade secrets,” he wrote.
The evidence “clearly showed that JCP intended to, and did in fact, use its financial leverage over MSLO to obtain this information,” Sweeny wrote. “It used this leverage by making its licensing proposal with MSLO contingent on MSLO’s providing the entire Macy’s agreement, including the material covered by the confidentiality provision.”
