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

Citation746 F.3d 1008
Decision Date05 March 2014
Docket Number12–14742,Nos. 12–14527,12–14825.,s. 12–14527
PartiesWINN–DIXIE STORES, INC., Winn–Dixie Stores Leasing, LLC, et al., Plaintiffs–Appellants, v. DOLGENCORP, LLC, f.k.a. Dolgencorp, Inc, a Kentucky corporation, Defendant–Appellee. Winn–Dixie Stores, Inc., Winn–Dixie Stores Leasing, LLC, et al., Plaintiffs–Appellants Cross Appellees, v. Dollar Tree Stores, Inc., a Virginia corporation, Defendant–Appellee Cross Appellant. Winn–Dixie Stores, Inc., Winn–Dixie Stores Leasing, LLC, et al., Plaintiffs–Appellants Cross Appellees, v. Big Lots, Inc., an Ohio corporation, Defendant–Appellee Cross Appellant.
CourtUnited States Courts of Appeals. United States Court of Appeals (11th Circuit)

OPINION TEXT STARTS HERE

Dean Angelo Morande, Thomas Edward Warner, Ryan Cobbs, Carlton Fields, PA, West Palm Beach, FL, for PlaintiffsAppellants/PlaintiffsAppellants Cross Appellees.

Shakara Barnes, Brian P. Watt, William N. Withrow, Jr., Troutman Sanders, LLP, Atlanta, GA, Michael Virgil Elsberry, I, Rebecca E. Rhoden, Wayne “Drew” Sorrell, II, Lowndes Drosdick Doster Kantor & Reed, PA, Orlando, FL, for DefendantAppellee/DefendantAppellee Cross Appellant.

Jeffrey Michael Berman, Steve Ian Silverman, Marilyn Golub Kohn, Jonathan Korin, Michael T. Landen, Kluger Kaplan Silverman Katzen & Levine, PL, Miami, FL, for DefendantAppellee Cross Appellant Dollar Tree Stores, Inc.

Appeals from the United States District Court for the Southern District of Florida. D.C. Docket Nos. 9:11–cv–80601–DMM, 9:11–cv–80638–DMM, 9:11–cv–80641–DMM.

Before MARCUS and FAY, Circuit Judges, and HODGES,* District Judge.

MARCUS, Circuit Judge:

When a Winn–Dixie supermarket signs on to anchor a shopping center, its lease often contains a restrictive covenant sharply limiting grocery sales by other tenants. In this complex lawsuit, Winn–Dixie claimed that, since 2005, it suffered more than $90 million in lost profits because Defendants Dollar General, Dollar Tree, and Big Lots violated, and continue to violate, these restrictive covenants. Trial involved ninety-seven of Defendants' stores across five southeastern states. The district court handled this complicated case with thought and skill.

For fifty-four stores, the district court reached the question of whether the Defendants violated the terms of the restrictive covenants, whose standard language for most stores limited the sale of “staple or fancy groceries” to a discrete “sales area.” Applying general principles of Florida law, the district court construed these terms narrowly, reading groceries as only food items and measuring sales area only by shelving space. As a result, the court refused to order injunctions for thirty-seven stores where it found no violation of the terms of the covenants. As for the seventeen other stores, the court issued injunctive relief that limited only the sale of food items measured by shelving space. Being Erie-bound to apply state rules of decision in this diversity jurisdiction case, we must reverse and remand as to the fifty-four stores. We do so for forty-one of these stores found in Florida, compelled by an intermediate appellate decision from that state interpreting a restrictive covenant materially identical to many of those at issue here. See Winn–Dixie Stores, Inc. v. 99 Cent Stuff–Trail Plaza, LLC, 811 So.2d 719 (Fla. 3d DCA 2002). As we read controlling Florida law, “groceries” broadly includes food and “many household supplies (as soap, matches, paper napkins),” and sales area “includes fixtures and their proportionate aisle space.” Id. at 722 (emphasis added). Also, for eleven stores in Alabama and two found in Georgia, we are required to reverse and remand for interpretation of the covenant terms in accordance with the appropriate law of each of those states.

For the remaining forty-three stores, the district court denied all relief for a variety of reasons, without deciding whether the Defendants had violated covenant terms. Finding no error, we affirm the judgment of the district court as to these forty-three stores. To begin with, the district court acted well within its considerable discretion in excluding the testimony of Dr. Pacey, Winn–Dixie's expert on damages, based on twin findings that the expert opinion would not assist the trier of fact and was not grounded in reliable methodology. As a result, the court made no error in refusing to award compensatory damages as to any of the stores. Nor did the court err in finding that the restrictive covenants were unenforceable underthe laws of Louisiana and Mississippi, or in refusing to allow Winn–Dixie to enforce a covenant in a grocery store lease created after a Defendant's lease had been signed. Moreover, the trial court made no error in refusing to recognize collateral estoppel because this case involves different stores with different leases signed at different times from the lease for the one store at issue in the prior Florida decision. And the district court did not abuse its discretion in denying punitive damages because a legitimate dispute about the meaning of the grocery exclusives indicated that the Defendants did not intentionally engage in misconduct or act in a grossly negligent manner.

The cross-appeals lodged by Big Lots and Dollar Tree lack merit. As the district court concluded, Big Lots need not have signed the restrictive covenants to be bound by them because section 542.335 of the Florida Statutes does not apply to covenants running with the land. The district court also properly concluded that Big Lots' landlords were not indispensable parties under Federal Rule of Civil Procedure 19(a)(1), and that Winn–Dixie was not required to make a pre-suit demand for compliance upon Big Lots under Florida law. Finally, the district court did not err in granting summary judgment against Dollar Tree's statute of limitations affirmative defense; in Florida, a continuing violation principle applies because the Defendants' stores engaged in ongoing grocery sales.

Thus, we affirm in part, reverse in part, and remand for further proceedings consistent with this opinion.

I.

Plaintiffs (Winn–Dixie) own or operate roughly 500 supermarkets or grocery stores on leased property throughout Alabama, Florida, Georgia, Louisiana, and Mississippi. Most of their stores are found in Florida. Defendants, in turn, run discount general merchandise stores, some of which are colocated in shopping centers featuring a Winn–Dixie supermarket as an anchor tenant. Dolgencorp, LLC (Dollar General) is a Kentucky limited liability company with over 9,600 stores in 36 states. Dollar Tree Stores, Inc. (Dollar Tree) is a Virginia corporation that operates more than 4,400 stores in 48 states. Big Lots Stores, Inc. (Big Lots) is an Ohio corporation that runs over 1,400 stores in 48 states.

Winn–Dixie's commercial leases often include a “grocery exclusive” provision that precludes landlords from renting to other tenants who operate grocery stores in the same shopping center. Many of the leases specify that these tenants may devote a limited “sales area” to certain restricted products, including “staple or fancy groceries.” Winn–Dixie argued that these grocery exclusives bind subsequent tenants as covenants running with the land. Based on reports of estimated sales activity compiled by its investigators, Winn–Dixie concluded that a number of colocated Dollar General, Dollar Tree, and Big Lots stores operate in violation of the restrictive covenants created by the grocery exclusives. Not surprisingly, the parties vigorously dispute which products are restricted and how the permissible sales space is measured.

On May 20, 2011, Winn–Dixie sued Dollar General in the United States District Court for the Southern District of Florida. Two weeks later, Winn–Dixie filed separate suits against Big Lots and Dollar Tree in the same court. Winn–Dixie initially identified 136 stores in all as being in violation of the restrictive covenants. Of these original claims, Winn–Dixie at trial pursued its rights as to only ninety-seven stores: fifty-one Dollar General,1 thirty-two Dollar Tree,2 and fourteen Big Lots.3 The ninety-seven stores were located predominantly in Florida (seventy-five stores), but also in Alabama (thirteen), Louisiana (six), Georgia (two), and Mississippi (one). Winn–Dixie sought damages or, in the alternative, injunctive relief. The Defendants in turn filed third-party complaints against a number of shopping center landlords seeking indemnification, but those third-party actions are not at issue in this appeal.

For ninety-one of the ninety-seven locations at issue, a standard grocery exclusive in Winn–Dixie's lease included the following critical terms:

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.

Winn–Dixie Stores, Inc. v. Big Lots Stores, Inc., 886 F.Supp.2d 1326, 1336 (S.D.Fla.2012). Of these ninety-one standard grocery exclusives, seventy-eight contain the following exception:

[E]xcept the sale of such items is 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.

Id. (alterations in original). Of the remaining thirteen standard grocery exclusives, five include similar language that allows up to 1,000 square feet of restricted products; three allow up to 400 square feet; and five do not allow the sale of any such items.

Winn–Dixie sought summary judgment against each of the Defendants, which the district court granted in part and denied in part. The court found that the grocery exclusives formed valid and enforceable covenants running with the...

To continue reading

Request your trial
130 cases
  • St. Augustine-St. Johns Cnty. Airport Auth. v. Boomerang, LLC
    • United States
    • U.S. District Court — Middle District of Florida
    • June 9, 2020
    ...to comply with one court's order without breaching another court's order concerning the same incident." Winn-Dixie Stores, Inc. v. Dolgencorp, LLC, 746 F.3d 1008, 1040 (11th Cir. 2014). "Inconsistent adjudications or results, by contrast, occur when a defendant successfully defends a claim ......
  • Royal Palm Vill. Residents, Inc. v. Slider
    • United States
    • U.S. Court of Appeals — Eleventh Circuit
    • January 12, 2023
    ...would decide the issue otherwise." King v. King , 46 F.4th 1259, 1263 (11th Cir. 2022) ; see also Winn-Dixie Stores, Inc. v. Dolgencorp, LLC , 746 F.3d 1008, 1020–26 (11th Cir. 2014) (following this three-step progression).I won't bury the lede: My research reveals (1) that the Florida Supr......
  • Fair Fight Action, Inc. v. Raffensperger, CIVIL ACTION FILE NO. 1:18-cv-5391-SCJ
    • United States
    • U.S. District Court — Northern District of Georgia
    • May 30, 2019
    ...oversight ability to enforce uniform and state-wide election standards and processes. See e.g., Winn-Dixie Stores, Inc. v. Dolgencorp, LLC, 746 F.3d 1008, 1039 (11th Cir. 2014) (affirming the denial of joinder where district court could provide complete relief among the existing parties).La......
  • Fla. Panthers, (Puma Concolor Coryi) an Endangered Species, Red-Cockaded Woodpeckers, (Picoides Boralis) an Endangered Species, Fla. Wildlife Fed'n, Corp. v. Collier Cnty.
    • United States
    • U.S. District Court — Middle District of Florida
    • April 8, 2016
    ...or otherwise inconsistent obligations because of the interest.Fed. R. Civ. P. 19(a)(1). See Winn-Dixie Stores, Inc. v. Dolgencorp, LLC, 746 F.3d 1008, 1039 (11th Cir. 2014).Page 41 Here, neither proposed party is a party who should be joined under Rule 19(a)(1). "A party is considered 'nece......
  • Request a trial to view additional results
1 books & journal articles
  • EXPLORING THE INDISPENSABLE PARTY: A SURVEY OF COMMON CONTEXTS FOR RULE 19 CLAIMS.
    • United States
    • Environmental Law Vol. 50 No. 3, June 2020
    • June 22, 2020
    ...976 (9th Cir. 2008) ("We adopt the approach endorsed by the First Circuit [in Delgado]."); Winn-Dixie Stores, Inc. v. Dolgencorp, LLC, 746 F.3d 1008, 1040 (11th Cir. (19) Winn-Dixie Stores, 746 F.3d at 1040. (20) Id. at 1039 (citing FED. R. Civ. P. 19(a)). (21) Id. (citing FED. R. CIv. P. 1......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT