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Court Revives Macy's Lawsuit vs. Penney Over Martha Stewart

/ Source: Reuters

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A New York state appeals court on Thursday revived most of Macy's Inc's lawsuit accusing JC Penney Co of interfering improperly with its exclusive merchandising contract with Martha Stewart Living Omnimedia Inc.

The decision by the Appellate Division in Manhattan restored two claims by Macy's that a lower court judge had dismissed. It also agreed that Macy's third claim against JC Penney was valid, but that Macy's did not deserve punitive damages. Thursday's decision is the latest step in an unusual battle over the right to sell home goods from a company named for one of the most famous U.S. names in homemaking. Macy's had settled with Martha Stewart in January 2014.

At issue was a 2011 agreement in which Martha Stewart was to design bed, bath and kitchen products for sale at JC Penney stores being revamped by the retailer's since-ousted chief executive, Ron Johnson. Macy's complained that this agreement interfered with its own 2006 contract giving it exclusive rights to sell the same kinds of products under the Martha Stewart brand.

JC Penney declined to comment, except to say it was pleased that punitive damages were not warranted. Macy's spokesman Jim Sluzewski called Thursday's decision a "resounding victory" for the Cincinnati-based company.

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