Macy's Denied Restraining Order Against J.C. Penney

macy's j.c. penney lawsuit martha stewart everyday
David Handschuh, The (New York) Daily News/AP Martha Stewart testifies in New York State Supreme Court on March 5. Stewart, 71, is at the center of a bitter legal battle between Macy's and J.C. Penney that resumed this month.
NEW YORK -- A New York Appellate judge has rejected Macy's request to slap rival J.C. Penney with a temporary restraining order barring it from selling non-branded goods designed by Martha Stewart while an appeal is pending.

On Monday, rival Macy's Inc. (M) filed an appeal to overturn a decision made by New York State Supreme Court Judge Jeffrey Oing on Friday. That decision had allowed J.C. Penney Co. (JCP) to sell home products under the label JCP Everyday until a lawsuit that Macy's is waging against Penney and Martha Stewart Living Omnimedia Inc. (MSO) is decided.

Macy's, based in Cincinnati, had argued that the JCP Everyday products violate its long-standing exclusive agreement with Martha Stewart in certain products like bedding and cookware.

Thursday's decision made by New York Appeals Judge Richard Andrias offers Penney a short-term reprieve until an appellate panel of five judges makes the decision on that issue. The ruling is expected late next week.

A temporary order made last summer by Oing still bars Penney of Plano, Texas, from selling Martha Stewart-branded goods in the exclusive categories.

The development is the latest in a heated court battle that started late February over the two department stores' partnership with Martha Stewart.

Macy's, which had a merchandising contract with the home maven since 2006, sued Martha Stewart and Penney after they signed a deal in December 2011 to develop mini Martha Stewart shops, planned for spring.

In afternoon trading, Macy's shares declined 55 cents to $43.06. J.C. Penney shares added 26 cents to $15.03.

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