Winn-Dixie Stores, Inc. v. Dolgencorp, LLC

881 F.3d 835
CourtCourt of Appeals for the Eleventh Circuit
DecidedJanuary 31, 2018
Docket15-12990
StatusPublished
Cited by28 cases

This text of 881 F.3d 835 (Winn-Dixie Stores, Inc. v. Dolgencorp, LLC) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eleventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Winn-Dixie Stores, Inc. v. Dolgencorp, LLC, 881 F.3d 835 (11th Cir. 2018).

Opinion

ED CARNES, Chief Judge:

After we have remanded a case with specific instructions,, attorneys rarely attempt to have the district court defy our mandate. And even if they try it, a district court is seldom misled into that kind of error by them.'This is one'of those rare cases where the attorneys representing one side successfully urged the district court to act contrary to our mandate. Of course, we reverse that part of its judgment.

I. FACTS AND PROCEDURAL HISTORY

Winn-Dixie filed a lawsuit against Big Lots, Dollar General, and Dollar Tree. The facts underlying that lawsuit, which eventually led to this appeal, follow.

A. Winn-Dixie Discovers Alleged Violations Of Its Grocery Exclusives

Winn-Dixie owns or operates Winn-Dixie grocery stores on leased property in several states. Its stores are often the anchor tenant in a shopping center, which gives it the power to' negotiate leases that limit what its neighboring competitors can sell in their stores. The leases that Winn-Dixie negotiates often include a “supermarket and pharmacy exclusive” provision, which we will refer to as a “grocery exclusive” provision. The key language in these provisions limits, the amount of space those neighboring stores can devote to selling grocery products that compete with what Winn-Dixie is selling. Here from a typical lease is the grocery exclusive language that Winn-Dixie insists on':

Landlord covenants and:' agrees that the Tenant .shall.have the exclusive right to operate a supermarket in the Shopping Center and any enlargement thereof. Landlord further covenants and agrees that it will not directly or indirectly lease or rent any property located within the Shopping Center, or within 1000 feet of any exterior boundary thereof, for occupancy as a supermarket, grocery store, meat, fish or vegetable market, nor will the Landlord permit any tenant or occupant of any- such property to sublet in any manner, directly or indirectly, any part thereof to any person, firm or corporation engaged in any such business without written permission of the'Tenant; and Landlord further covenants and agrees not to permit or suffer any property located ■ within the Shopping Center to be used for or occupied by any business dealing in or which shall keep in stock or sell' for off premises consumption any staple or fancy groceries, meats, fish, vegetables, fruits, bakery goods, dairy products or frozen foods without written permission of the Tenant; except the sale of such items in not to exceed the lésser of 500 square feet of sales area or 10% of the square foot area of any storeroom within the Shopping Center, as an incidental only to the conduct of another business ... shall not be deemed a violation hereof.

(Emphasis added.)

B. Winn-Dixie Sues Big Lots, Dollar General, And Dollar Tree

Winn-Dixie discovered that many co-located stores (that is, stores located in the same shopping center as its own stores) were selling “groceries” in a “sales area” greater than the grocery exclusive provisions permitted. As a result, in 2011 it filed three separate lawsuits against Big Lots, Dolgencorp (Dollar General’s parent company, which we are referring to as “Dollar General”), and Dollar Tree, claiming that they were operating stores in Alabama, Florida, Georgia, Louisiana, and Mississippi in violation of Winn-Dixie’s rights under the leases. Winn-Dixie contended that it had negotiated grocery exclusive provisions with the landlords of each of the shopping centers at issue, and that those provisions were restrictive covenants running with the land that bound tenants that moved into the shopping center thereafter.

Winn-Dixie wanted to enforce the grocery exclusive provisions against a total of 97 stores: 51 Dollar General stores, 32 Dollar Tree stores, and 14 Big Lots stores. Of those 97 stores, 75 were located in Florida, 13 were in Alabama, 6 were in Louisiana, 2 were in Georgia, and 1 was in Mississippi. Winn-Dixie sought compensatory damages and punitive damages, as well as an injunction ordering the stores in violation of the provisions to remove groceries from their stores to the extent necessary to end the violation and ordering them not to violate the provisions in the future.

1. The District Court’s Ruling

The district court consolidated the three cases into one. After a bench trial, the court determined that Winn-Dixie could pursue claims against a total of 54 Big Lots, Dollar General, and Dollar Tree stores that were located in Alabama, Florida, and Georgia. It reasoned that under the law of those three states, the grocery exclusive provisions were real property covenants that ran with the land, and as a result could be enforced even though the stores were not themselves parties to Winn-Dixie’s leases. The district court denied Winn-Dixie any relief for the 43 other stores for a number of reasons. 1

The district court then turned to answering the question of whether the 54 Big Lots, Dollar General, and Dollar Tree stores in Alabama, Florida, and Georgia that were still in the lawsuit violated the grocery exclusive provisions, a task that required interpreting the terms “groceries” and “sales area” in the provisions. Without explanation, the court applied Florida law to interpret those two key terms not only for the stores in that state but also for the stores in Alabama and Georgia. It found that the terms “groceries” and “sales area” were ambiguous and that Winn-Dixie did not present any extrinsic evidence that revealed the contracting parties’ original intent as to the terms. The court acknowledged the existence of 99 Cent, a Florida appellate court decision that had addressed what the terms “groceries” and “sales area” meant in a materially identical grocery exclusive provision. See Winn-Dixie Stores, Inc. v. 99 Cent Stuff-Trail Plaza, LLC, 811 So.2d 719 (Fla. 3d DCA 2002) (“99 Cent”). But the district court thought that decision was distinguishable. Instead of following 99 Cent, the district court itself decided the meaning to be given the terms, defining “groceries” to be “food items” and “beverages, including, but not limited to, bottled water, soda, and energy and coffee drinks, but excluding alcoholic beverages.” It defined “sales area” “to include only the footprint of the display unit, excluding aisle space.”

Based on those definitions, the district court refused to grant Winn-Dixie injunc-tive relief for 37 of the 54 stores in the three states, but did grant it that relief for 17 Florida stores. 2 The court denied Winn-Dixie’s claims for compensatory damages and punitive damages. Winn-Dixie appealed.

2. This Court’s Previous Decision

We affirmed in part and reversed in part the district court’s judgment. See Winn-Dixie Stores, Inc. v. Dolgencorp, LLC, 746 F.3d 1008, 1045 (11th Cir. 2014). Finding no error in the district court’s rulings as to 43 of the 97 stores, see supra note 1, we affirmed the part of the judgment that denied Winn-Dixie all relief regarding those 43 stores. Id.

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881 F.3d 835, Counsel Stack Legal Research, https://law.counselstack.com/opinion/winn-dixie-stores-inc-v-dolgencorp-llc-ca11-2018.