Macy's, JC Penney, Martha Stewart wrap up lawsuit arguments

Thu Aug 1, 2013 6:30pm EDT
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By Madeline Will

NEW YORK (Reuters) - Macy's Inc (M.N: Quote) told a judge on Thursday that J.C. Penney Co (JCP.N: Quote) should be barred from selling certain home goods designed by celebrity trendsetter Martha Stewart, and Penney and Martha Stewart Living Omnimedia MSO.N also delivered closing arguments in a long-running lawsuit.

New York State Supreme Court Justice Jeffrey Oing listened to the arguments in a packed courtroom, often interjecting with questions. Oing said he would make a decision soon, "but it won't be coming out tomorrow."

Macy's claims exclusive rights to Martha Stewart cookware, bedding and bath products under a partnership first signed in 2006. Last year, it sued Martha Stewart Living and rival department store chain Penney over a deal announced in 2011 to open shops within Penney stores carrying Stewart-designed goods.

Ted Grossman, an attorney for Macy's, said Martha Stewart Living breached its contract by agreeing to design for Penney, which courted Stewart even though it knew she had an exclusive contract with Macy's.

"They were the pursuer, and Martha Stewart was the prey," he said.

When Oing said this case dealt with "highly sophisticated" competition, Grossman shot back: "No, Your Honor, we're dealing with cut-throat competitors."

Mark Epstein, Penney's lawyer, said Macy's contract did not clearly prohibit Martha Stewart Living from designing for others.

"The fact is, it's not in there," he said. "Macy's wishes it was there, they really wish it was there, and they're trying now to rewrite the contract ... to get a right that they did not bargain."   Continued...

Customers stand outside Macy's store in New York, April 11, 2013. REUTERS/Brendan McDermid