The New York Times reported here yesterday that the judge in the Martha Stewart-JC Penny-Macy’s contract dispute ordered the parties into mediation. This is after three weeks of testimony in a bench trial that consolidated two law suits. According to the NY Times this will be the first mediation in this case. Apparently, previously, JC Penny and Martha Stewart were willing to go to mediation “but ‘other parties were not amenable.’”
It will be interesting to see the outcome of the mediation as this case seems to be a classic example of a breakdown in communications. Reportedly, Martha Stewart and Macy’s CEO, Terry J. Lundgren, were good friends until the day that Ms. Stewart called him to tell him about the deal with JC Penny. Ms. Stewart testified that, “I don’t know if I got through even half the points before he hung up.” For more of Ms. Stewart’s testimony, see here. Reportedly, Ms. Stewart and Mr. Lundgren did not speak after that phone call until they were both in court to testify. And, then they “had a productive conversation regarding the ongoing contract dispute.” It seems the Judge’s order to go to mediation was after this “productive conversation.” If the reports are true, that it is the first time Ms. Stewart and Mr. Lundgren spoke to each other, it makes me wonder why the various parties weren’t brought together earlier in the case. This seems another example of the value of having the parties present at earlier stages in the case and the potential wasted time and money when the lawyers do all of the appearances without their clients.