Sales of Martha Stewart Products at J.C. Penney Blocked

A judge of the New York state appeals court has issued a temporary order that prevents J.C. Penney Co. Inc. (NYSE: JCP) from selling certain home products designed by Martha Stewart Omnimedia Inc. (NYSE: MSO) but sold under J.C. Penney's "Everyday" brand. J.C. Penney has held the items in its warehouses voluntarily, but based on a ruling from the state Supreme Court last week had planned to get the Everyday-branded items on its shelves by Mother's Day.

The judge in the case expects to issue a decision tomorrow on the request from Macy's Inc. (NYSE: M) for a temporary restraining order that would prevent J.C. Penney from selling the disputed items until the court case is decided.

Based on his previous rulings, it seems likely that the judge will deny the temporary restraining order and lift the ban he imposed last night on the sale of the Everyday-branded items. The judge has also chided both parties, telling them that this is a business dispute that should not have been brought to court. From his statements and previous rulings, he is reluctant to restrain J.C. Penney from selling the goods, seeming to prefer to let the Macy's suit wend its way through the courts and then making J.C. Penney pay up if it turns out that Macy's suffered injury from the sale of the Martha Stewart items.

J.C. Penney shares are down about 1.8% in the first half-hour of trading this morning, at $14.92 in a 52-week range of $13.55 to $36.89.

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