Martha Stewart Loses Bid To Dismiss Macy’s Contract Claim

Design mogul Martha Stewart lost her court filing on Thursday as she tried to dismiss a Macy’s Inc claim that her company violated its contract when she designed a line of products for J.C. Penny. Macy’s claims that, even if the products didn’t carry the Marth Stewart brand name, they were still in violation.

The ruling by New York State Supreme Court Justice Jeffrey Oing could force J.C. Penney to pull various products from its shelves including home goods in bedding and cookware. The company contracted Martha Stewart to design the goods and then wrapped them into the JCP Everyday label.

Judge Oing will rule on Friday whether or not the Martha Stewart designed products should be temporarily blocked at JCP.

Several product brands have already been blocked from sale by J.C. Penney, and that preliminary injunction could soon expand into new categories.

An analyst at Citi estimates that J.C. Penney is already carrying $100 million in JCP Everday inventory.

Judge Oing is hoping that Macy’s and J.C. Penney will settle the dispute without a drawn out trial. According to Oing:

“This is a business deal that you should not have courts getting involved in. It’s getting to a point where the clock can’t be turned back. The ship is ready to sail.”

The lawsuit was filed against J.C. Penney and Martha Stewart Living Omnimedia after the two company’s announced plans in December 2011 to open a new store-within-a-store franchise for the Martha Stewart brand.

According to Macy’s, Martha Stewart Living granted the company exclusive rights to manufacturer and sell Stewart’s home goods in certain categories. Stewart and Macy’s started their partnership in 2006 and renewed the agreement last year through 2018.

Do you think that ultimately Martha Stewart loses this case, or it is much adieu about nothing?

You can learn more at Macy’s Inc v Martha Stewart Living Omnimedia Inc, 650197/2012, and Macy’s Inc v J.C. Penney Corp, 652861/2012, New York State Supreme Court, New York County.

[Image via David Shankbone]