Lord & Taylor, LLC v. White Flint, L.P.

Procedural entryThis page is a short order in Lord & Taylor, LLC v. White Flint, L.P.. Read the opinion of the Court — 849 F.3d 567
Court of Appeals for the Fourth Circuit·Decided March 7, 2017·No. 15-1995·Published

Opinion

PUBLISHED

UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT

No. 15-1995

LORD & TAYLOR, LLC; LT PROPCO, LLC,

Plaintiffs – Appellees,

v.

WHITE FLINT, L.P., f/k/a White Flint Mall, LLP, now known as White Flint Mall, LLLP,

Defendant – Appellant,

and

ALAN H. GOTTLIEB,

Defendant.

No. 15-2064

Plaintiffs – Appellants,

WHITE FLINT, L.P., f/k/a White Flint Mall, LLP, now known as White Flint Mall, LLLP,

Defendant – Appellee,

and ALAN H. GOTTLIEB,

Appeals from the United States District Court for the District of Maryland, at Greenbelt. Roger W. Titus, Senior District Judge. (8:13-cv-01912-RWT)

Argued: December 6, 2016 Decided: February 28, 2017

Amended: March 7, 2017

Before WILKINSON, AGEE, and HARRIS, Circuit Judges.

Affirmed by published opinion. Judge Harris wrote the opinion, in which Judge Wilkinson and Judge Agee joined.

ARGUED: Stuart Scott Morrison, KATTEN MUCHIN ROSENMAN LLP, Washington, D.C., for Appellant/Cross-Appellee. Michelle DeFinis Gambino, GREENBERG TRAURIG LLP, McLean, Virginia, for Appellees/Cross-Appellants. ON BRIEF: Laura Metcoff Klaus, Washington, D.C., David G. Barger, GREENBERG TRAURIG LLP, McLean, Virginia, for Appellees/Cross-Appellants.

2 PAMELA HARRIS, Circuit Judge:

Lord & Taylor, LLC, operates a retail department store along Rockville Pike in

Montgomery County, Maryland. From 1977 to 2015, the store was part of the White

Flint Shopping Center, an enclosed shopping mall (the “Mall”). But in 2015, the Mall’s

operator, White Flint, L.P., closed the Mall and began demolition in order to make way

for a mixed-use redevelopment. Lord & Taylor sued White Flint, claiming that White

Flint had breached the parties’ contract by closing the Mall without Lord & Taylor’s

consent.

A jury found White Flint in breach of contract and awarded Lord & Taylor $31

million in damages. Both parties appeal, arguing primarily that the damages award is too

high (White Flint) or too low (Lord & Taylor). Because we find no error in the district

court’s capable management of a lengthy trial, we affirm.

I.

A.

This is the latest chapter in a long-running dispute between the parties over the

planned redevelopment of the Mall site. The Montgomery County Council approved the

redevelopment in 2012, as part of a broader plan to revitalize the surrounding area, and

litigation commenced soon thereafter. We have decided one appeal already in this case,

see Lord & Taylor, LLC v. White Flint, L.P., 780 F.3d 211 (4th Cir. 2015) (“White Flint

3 I”), and the details of the parties’ original agreement and the County’s zoning process are

set out in that opinion.

We recap only briefly here. In 1975, White Flint, then planning the development

of what would become the Mall, reached an agreement with Lord & Taylor: Lord &

Taylor would lease land on the Mall site and serve as an “anchor” tenant for the Mall,

along with co-anchor Bloomingdale’s. And in exchange, White Flint would construct an

enclosed “first class” mall and then maintain it until at least 2042. The parties’

agreement required White Flint to secure Lord & Taylor’s consent before building any

additional structures or making alterations to the Mall’s design or appearance.

The Mall opened in 1977 and operated successfully for many years, before more

recently experiencing a drop in business. The parties, not surprisingly, disagree about the

cause of this decline. According to White Flint, the Mall’s struggles reflect the

weakening of the mall business generally, as consumer preferences change and e-

commerce grows; for Lord & Taylor, the blame goes to White Flint, for allowing the

Mall to fail and even hastening its demise by offering tenant buy-outs, all to facilitate the

redevelopment plan. Whatever the cause, in 2012, Bloomingdale’s chose not to renew its

lease, and by 2013, the vast majority of tenants had left the Mall.

The Mall officially closed in January 2015, leaving Lord & Taylor the sole

business operating on the premises. By then, White Flint already had demolished the

Bloomingdale’s building, with further construction to come. Ultimately, the

redevelopment plan calls for transforming what once was an enclosed mall into a mixed-

use development, complete with residential, retail, recreational and office space.

4 B.

Lord & Taylor objected to the redevelopment, arguing that the clear terms of the

parties’ agreement required White Flint to maintain the Mall, and that the proposed

mixed-use alternative would negatively affect its business by making customer access

less convenient and denying the store the benefit of foot traffic from Mall customers.

Negotiations between the parties proved fruitless, and Lord & Taylor filed its first

complaint against White Flint in July 2013.

In that original complaint, what Lord & Taylor sought was not damages but an

injunction, prohibiting White Flint from carrying out the proposed redevelopment and

requiring it instead to continue operation of the Mall. The district court denied the

requested relief. Assuming that White Flint had breached its contractual obligations, the

district court reasoned, Lord & Taylor would be entitled to monetary damages for any

harm that resulted. But injunctive relief, the district court concluded, would be infeasible

under the circumstances, requiring the kind of ongoing judicial supervision of a major

and complex commercial undertaking that is outside court competence. In our previous

encounter with this case, we affirmed the denial of injunctive relief as well within the

discretion of the district court. See White Flint I, 780 F.3d at 217–29.

So Lord & Taylor amended its complaint to bring the alternative claim

hypothesized by the district court: one for damages resulting from White Flint’s alleged

breach of contract. And for good measure, Lord & Taylor added a claim for fraud, as

5 well. According to Lord & Taylor, White Flint’s breach and fraud had cost it somewhere

between $70 and $100 million. Specifically, Lord & Taylor sought damages for lost

profits during the construction phase of the redevelopment; for the costs of redesigning

and reconstructing its store to conform to the new development; and for the loss of

bargained-for property rights, in the form of use restrictions and easements violated by

the planned redevelopment.

Not all of Lord & Taylor’s claims survived to trial. Lord & Taylor’s fraud claim,

for instance, alleged that the store had been misled about White Flint’s plans by a letter in

which White Flint assured Lord & Taylor that it did not “inten[d] to take any action or

undertake any changes at the [M]all in violation of [the contract].” J.A. 598. The district

court granted summary judgment to White Flint, deeming the fraud claim “utterly

meritless,” J.A. 603, in part because White Flint’s statement of intent was not false, and

in part because there was no evidence that Lord & Taylor, a “large multi-national . . .

operation” with the “most sophisticated . . . people running it,” had relied on or been

deceived by the statement, J.A. 601–02.

The district court also rejected one of Lord & Taylor’s three damages theories,

under which Lord & Taylor sought to recover for lost property rights as well as lost

profits.

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