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Lockdowns, Landlords, & Litigation: Abercrombie & Fitch Flips The Script on Simon Property Group Inc.

Novel litigation between commercial property owners and tenants arises from COVID-19 lockdowns. Typically, owners sue for nonpayment of rent. But in Franklin County, Ohio, a large retail tenant turned the tables and sued the owner to recoup payments.

Abercrombie & Fitch (A&F), Columbus-based apparel retailer, recently filed suit against one of the nation’s largest landlords, Simon Property Group Inc. A&F, which leases properties from Simon, alleges that Simon “wrongfully extracted” rent payments on those properties during the lockdowns that covered the nation. The amount of rent and number of stores impacted by the lawsuit is not disclosed, but according to public filings, A&F demands return of all rent payments to Simon during a specified period.

A&F essentially argues that it was not obligated to pay rent because it was locked out of its premises. More specifically, A&F argues that “the government-mandated closures amounted to ‘prohibitions’ under the terms of the lease agreements such that A&F was, and is, entitled to an abatement of any and all rent and other charges” during the lockdown. A&F maintains that Simon’s mere demand for payment during the lockdown constitutes a breach of contract, and any/all payments remitted were “under protest” and should be returned.  

Seeking to gain leverage by adopting an aggressive posture is a classic litigation technique that is now being applied in these unprecedented times. Whether the tactic will be fruitful depends on innumerable variables that begin with the contract language between the parties. Given the size and sophistication of the litigants, copycat actions and/or landmark precedents are likely to result.

For more information, please contact our Real Estate or Litigation teams.

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El Contrato Escrito: La Herramienta Predilecta

No existe mejor herramienta a una disputa contractual que un documento firmado por las partes en el cual se expongan las obligaciones y acuerdos entre éstas.

New State Budget Institutes Licensure Requirement for Ohio’s Hospitals

On July 1, 2021, Governor Mike DeWine signed Ohio’s final budget codified at Ohio Revised Code 3722.01 et seq., which includes a new licensing requirement for Ohio’s hospitals. For years, Ohio was the only state in the country that did not license its hospitals. This approach will now be replaced with new, detailed requirements that will require careful review and compliance. Here are some of the highlights concerning these new changes:

Healthcare Provisions in the Ohio FY 22-23 Budget

Governor Mike DeWine signed Ohio’s Fiscal Year 2022-2023 budget bill (HB 110) into law on July 1, 2021. At almost 1,000 pages and 74.1 billion dollars, the budget lays out the State’s spending for the next two years. Below are a few highlighted provisions from the budget that will be important for the healthcare industry in Ohio

Interim Final Rule for Surprise Billing

In an effort to implement the new bipartisan No Surprises Act, on July 1, 2021, the Department of Health and Human Services (HHS), along with the Departments of Labor and Treasury, issued an interim final rule to safeguard patients against unforeseen medical bills arising from out-of-network care.

President Biden Seeks to Limit Non-Compete Agreements

Today, President Biden announced he would issue an Executive Order that calls on the Federal Trade Commission (FTC) to adopt rules to curtail worker non-compete agreements. Interestingly, a week ago, the FTC approved changes to its Rules of Practice to modernize and expedite the way it issues Trade Regulation Rules. If you have followed our alerts, we predicted the elimination of non-competes would probably happen. In 2016, then-Vice President Biden was a vocal opponent against non-compete agreements. He led the Obama administration’s initiative seeking to limit or eliminate non-compete agreements. In his presidential campaign, Biden promised to “work with Congress to eliminate all non-compete agreements, except the very few that are absolutely necessary to protect a narrowly defined category of trade secrets . . ..”