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J.C. Penney Files Appeal in Macy’s Case

The retailer has filed an appeal to a ruling ordering Penney’s to pay damages and attorney fees for interfering with a contract between Macy's and MSLO.

NEW YORK — J.C. Penney Co. Inc. has filed an appeal to a New York state court ruling last month ordering Penney’s to pay damages and attorney fees to Macy’s Inc. for interfering with a contract between Macy’s and Martha Stewart Living Omnimedia Inc.

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

In response to the filing, Macy’s said, “We are confident that appellate courts will affirm Justice [Jeffrey K.] Oing’s finding that J.C. Penney tortiously interfered with Macy’s contract with MSLO. In addition, in light of J.C. Penney’s decision to appeal Justice Oing’s ruling, Macy’s plans to appeal that part of the court’s decision denying 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.”

While Justice Oing determined in June that Penney’s “tortiously” interfered with the contract, he also ruled then that Macy’s could not establish “clear, unequivocal and convincing evidence” that it deserved punitive damages.

The legal battle began in 2012 when Macy’s sued Penney’s for breaching a deal that guaranteed exclusive rights to sell cookware, bedding and bath products from Martha Stewart Living.

Macy’s has already settled a separate breach-of-contract lawsuit against MSLO.