A ruling on the federal appeal filed by the owners of White Flint Mall in its case against Lord & Taylor is not expected to come until this fall, an attorney for the mall said Tuesday.
Scott Morrison, who represents the mall’s owners—Lerner Enterprises and The Tower Cos.—said the U.S. Court of Appeals for the Fourth Circuit will likely take up the case during its fall term, which begins in September.
The mall’s owners appealed the case in November after a U.S. District Court jury awarded Lord & Taylor $31 million in damages last year for breaching a 1975 contract, in which the mall’s owners agreed to maintain the retail center as a “first-class” shopping destination until at least 2042. The $31 million is what Lord & Taylor had estimated the store had lost in profits and sales because the mall’s owners had shuttered and started demolishing the mall.
The Lord & Taylor store is all that remains at the site after the rest of the mall was demolished over the past year.
White Flint mall has been demolished at the site. Credit: Andrew Metcalf
Morrison said the Fourth Circuit wasn’t able to hear the appeal during the spring term because Lord & Taylor’s attorneys kept asking for extensions before filing updated briefs with the court.
“They kept pushing it back and pushing it back,” Morrison, a partner with Katten Muchin Rosenman, said.
However, Michelle Gambino, an attorney with Greenberg Traurig LLP, the firm representing Lord & Taylor, said that White Flint is benefiting from the delays.
“White Flint is the only person that benefits if this matter is delayed because it simply prolongs the time when White Flint needs to pay Lord & Taylor $31 [million] in damages,” Gambino wrote in an email to Bethesda Beat. “These damages should have been paid nearly a year ago. The Fourth Circuit Court of Appeals sets its own calendar for the appellate argument and that has not been influenced by Lord & Taylor in this matter.”
The mall’s owners are contesting the jury’s award by claiming that the trial judge, Roger W. Titus, should have allowed the jury to hear evidence about future profits the Lord & Taylor store would reap at a redeveloped shopping center at the White Flint mall site, according to briefing documents filed with the appeals court.
Lord & Taylor’s attorneys, not content to simply defend the $31 million verdict, are seeking additional damages in the appeals process. In their appeals brief, the Greenberg Traurig attorneys wrote that the retail store wasn’t fairly compensated for the 1975 easement agreement that gave the store rights to the land on which the store was built until at least 2042. The attorneys wrote this agreement could be worth as much as $6.5 million to $15.1 million, and are asking for a new trial to debate the merits of this point.
“These damages are separate and distinct from the damages that Lord & Taylor’s business incurred when White Flint drove out retailers from the mall,” Gambino wrote in the email. “Failing to allow the jury to consider these damages will allow White Flint to build over land that Lord & Taylor holds an interest in without compensating it for this taking.”
Morrison reiterated Tuesday that the mall’s owners do not plan to move forward with the town center-style redevelopment unless their appeal is successful.
“There’s not going to be any development of the White Flint project unless and until this appeal reverses the $31 million judgment,” Morrison said. He added that the Lerners “have a variety of options” elsewhere to develop and that the verdict has adversely affected the financing of the White Flint redevelopment.
Gambino said she believes the verdict will hold.
“After years of litigation, mountains of evidence, and over 3 weeks of trial, the jury properly found that White Flint had no excuse for its actions and breached its obligations to Lord & Taylor,” Gambino wrote. “That breach caused Lord & Taylor to lose over $31 [million] in lost sales as it sits surrounded in a pile of mud despite the fact that White Flint claimed that its development would be ‘imminent.’ In reality, White Flint simply doesn’t know what it wants to build and hasn’t been able to figure that out since its initial sketch plan was approved by the county in 2012. No one is tying White Flint’s hands and preventing it from developing its property except itself.”
The 2012 sketch plan calls for about 5.22 million square feet of residential, retail, office and hotel development at the former mall site.
