New York -- J.C. Penney Co. has asked a New York Federal court to dismiss a lawsuit filed by the visual merchandising firm Hudson + Broad over the Plexiglass LED square frame used in the chain’s new “Fair and Square” branding campaign, Women’s Wear Daily reported.
Hudson + Broad, based in New York City, is seeking $40 million in damages. It filed suit on April 25, suing the retailer for "breach of contract and misappropriation of trade secrets.” Hudson + Broad claims it had an agreement with J.C. Penney to create original proprietary in-store icons to represent the chain’s "fair and square" image, only to have the retailer renege on the agreement and have the light-changing fixtures knocked-off.
Hudson + Broad issued a statement on Tuesday that J.C. Penney had not responded to its lawsuit by the statutory deadline set by federal court rules and so the clerk of the U.S. District Court filed a certificate of default against the retailer. In addition to asking the court to dismiss the suit, Penney also asked the court to vacate the default certificate.
“It is shocking that J.C. Penney failed to honor its agreement with Hudson + Broad to be the exclusive company manufacturing the 'fair and square' icons that we created under a proprietary arrangement and that they love - and now it is mind-boggling that they failed to respond to our lawsuit in court within the deadline," said James Maharg, president of Hudson + Broad, in the statement on Tuesday.
Maharg said his firm was asked by J.C. Penney in December 2011 to develop a fixture that would serve as a symbolic icon to be rolled out to the chain’s stores nationwide. The Hudson + Broad square fixtures were well received by J.C. Penney executives, according to Marharg, and were installed in the chain’s Manhattan Mall in New York City store for CEO Ron Johnson's Jan. 25, 2012 presentation on the new Fair and Square initiative.
After the presentation, Maharg said J.C. Penney asked Hudson + Broad to deliver an initial order of over 1,800 units to be installed in some 700 stores. According to the suit, on April 3rd, J.C. Penney’s procurement department told Hudson + Broad that the retailer had sourced the custom-designed proprietary LED fixture elsewhere.
Hudson + Broad said it will respond vigorously to both motions to the court by July 13. The company said it hasn’t had any communication with J.C. Penney since April 4. Meanwhile, Hudson + Broad is taking its message viral — on YouTube. The firm posted a 3-minute video message to Johnson in which Maharg asks the company to stand by its mission statement of treating people "fair and square."