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

United States Court of Appeals for the Eleventh Circuit · Property

Propertyrestrictive covenantsgrocery exclusivemandate rulelaw of the caseFlorida lawAlabama law99 Cent

Facts

Winn-Dixie leases often contained grocery-exclusive restrictive covenants limiting nearby tenants' sales of groceries to the lesser of 500 square feet of sales area or 10% of the store's square footage. Winn-Dixie sued Big Lots, Dollar General, and Dollar Tree, alleging that co-located stores exceeded those limits. In an earlier appeal, the Eleventh Circuit directed the district court to apply Florida's 99 Cent definitions of "groceries" and "sales area" to 41 Florida stores and to apply Alabama law to the Alabama stores. On remand, the district court refused to apply 99 Cent to Florida leases executed before February 20, 2002, but did apply it to later Florida leases, and it held the Alabama terms ambiguous and construed them narrowly against Winn-Dixie.

Issue

Whether the district court violated the Eleventh Circuit's mandate by refusing to apply 99 Cent's definitions of "groceries" and "sales area" to all 41 Florida stores. Also, whether the district court correctly interpreted 99 Cent's definition of "groceries" for Florida stores and correctly concluded under Alabama law that "groceries" and "sales area" are ambiguous and therefore must be construed narrowly against Winn-Dixie.

Rule

A district court on remand must follow a clear appellate mandate and may not vary from it, reconsider matters decided expressly or by necessary implication, or refuse to apply it because parties believe the prior appellate decision is wrong. Under Florida law as previously mandated in this case, the terms "groceries" and "sales area" for the Florida stores must be interpreted consistently with 99 Cent: "sales area" includes fixtures and their proportionate aisle space, and "groceries" includes food, beverages excluding alcoholic beverages, and many household supplies, limited to items associated with the preparation and service of food and the maintenance of a clean kitchen. Under Alabama law, when restrictive-covenant terms are reasonably subject to more than one interpretation, they are ambiguous and must be construed narrowly against the party seeking enforcement and in favor of free use of property.

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A federal court of appeals reversed a district court in a shopping-center covenant dispute involving 18 Florida stores in Tampa and Orlando. The appellate opinion expressly ordered the district court on remand to conduct further proceedings using a particular Florida appellate decision's definitions of the undefined lease terms "groceries" and "sales area" for all 18 stores. On remand, after the defendants argued fairness concerns, the district court applied those definitions only to stores whose leases were signed after the Florida decision was issued.

Was the district court's approach proper?

Explanation. The district court must execute a clear and precise appellate mandate and may not vary it, review it, or refuse to apply it on a matter already decided on appeal. Where the appellate court directed use of specified definitions for all covered Florida stores, the district court could not limit that instruction to post-decision leases based on fairness concerns. (Derived from Winn-Dixie Stores, Inc. v. Dolgencorp, LLC (n.d.).)