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Florida court would not impose its definition of terms to similar Alabama stores
by Michael Blahy
Winn Dixie considers itself a grocer and leases space in shopping centers in several states. In many centers, the Winn Dixie store is an anchor tenant. As such, it has the ability to include “grocery exclusive” clauses within the lease documents, which limit the space competitors may use to sell grocery products.
Here is the typical language used by Winn Dixie:
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 lesser 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.
Winn Dixie discovered 97 Alabama (13), Florida (75), Georgia (2), Louisiana (6) and Mississippi (1) stores in violation of its exclusivity provisions, and in 2011 began three suits seeking an injunction, compensatory and punitive damages against Dollar General, Dollar Tree and Big Lots.
The District court decided to treat the three cases as one. It also determined that 43 of the stores should be excluded for various reasons. The case continued considering 54 stores in Alabama, Florida and Georgia.
At trial, much hinged on the interpretation of the terms “groceries” and “sales area”. The Court found the terms ambiguous, even after considering a similar 2002 Florida case involving Winn Dixie and 99 Cent Stuff – Trail Plaza LLC (99 Cent). The District Court came up with its own definitions:
“groceries” to be “food only, which excludes prepared foods and includes beverages, including but not limited to, bottled water, soda, and energy and coffee drinks, but excluding alcoholic beverages.”
“sales area” to “include only the footprint of the display unit, excluding aisle space.”
Using its own definitions, the court only granted injunctive relief for 10 Florida stores and another seven stores were told to measure their “groceries” “sales area” to make sure that they were not in violation.
Winn Dixie appealed. The appeals court affirmed the lower court’s decision to exclude the 43 of the original 97 stores, but it found the lower court erred twice; Once in applying Florida law to stores in Alabama and Georgia (their respective state laws should have been applied) and second, not using the framework established in “99 Cent” for definitions of “groceries” and “sales area”.
On remand, the court found no precedent for definitions of “groceries” or “sales area” for Alabama or Georgia, so it considered them ambiguous and applied it’s narrow definitions for those 13 stores. Dollar Tree settled with Winn Dixie on the two Georgia stores, leaving 11 Alabama stores for appeal.
As for the Florida stores, the district court decided that only the definitions from the “99 Cent” case only applied to stores whose leases started after February 20, 2002, the day of the “99 Cent” ruling. It applied its narrow definitions on the stores whose leases commenced prior to the “99 Cent” ruling.
Winn Dixie appealed the district court’s decision to not apply the “99 Cent” ruling to all stores.
In the appeals court second ruling, they said
“Needless to say (or maybe not), a district court cannot amend, alter, or refuse to apply an appellate court’s mandate simply because an attorney persuades the court that the decision giving rise to the mandate is wrong, misguided, or unjust. A district court can, of course, wax eloquent about how wrong the appellate court is, but after the waxing wanes the mandate must be followed. The mandate in our earlier decision in this case involving the Florida stores did not leave room for confusion or genuine doubt. It was not vague or ambiguous. Our instructions regarding those stores were clear:”
“There is no imprecision in those instructions, no room for evasive interpretation, in short, there is no legitimate basis for applying what we said only to a subset of the 41 Florida stores. We don’t know what else we could have said other than, perhaps, “and we really mean it.” Well, we really did mean it. And we still do.”
“[T]he defendants’ contention that the 99 Cent definitions cannot be applied to leases executed before that decision was issued cannot be reconciled with that decision itself. Under the defendants’ logic, the 99 Cent court could not have applied the definitions of “groceries” and “sales area” to the leases at issue in that case because the defendant would not have known what those terms meant until the appellate decision in his own case was issued in 2002. But the 99 Cent court did apply the definitions of “groceries” and “sales area” it announced to leases in that case which, of course, predated the issuance of the decision.”
The court reversed the judgment on the Florida stores and remanded the case to the district court to apply the “99 Cent” ruling. As for the Alabama stores, since no Alabama definitions exist for “groceries” and “sales area” the appellate court affirmed the district court decision to use the narrow definitions of the terms.
(Winn-Dixie Stores, Inc. v. Dolgencorp, LLC - 13-10891, 15-12990)
Decision: January 2018
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