The retail industry has been experiencing a Retail Apocalypse; over the past decade, thousands of brick-and-mortar retail stores are losing sales and closing due to reasons ranging from the rise of e-commerce to inefficient operations. In the past year, many large brands such as Macy’s have announced that they will be closing many of their stores. As individual stores close, they leave behind large spaces in America’s malls that have become increasingly difficult to lease. An individual store’s closure can also have a domino effect where other stores begin leaving as well, ultimately leading to the mall’s demise. In fact, one 2017 study predicted that between 20% and 25% of American malls will close by 2022. Vacancies in shopping malls have hit all-time highs, even surpassing the number of vacancies during the Great Recession. Mall closures can lead to a whole host of problems: crime, financial blows to the landlord, and losses of tens of thousands of retail jobs. The current solutions implemented to address the Retail Apocalypse may not be adequate and instead will result in more in-court disputes.CURRENT LANDLORD SOLUTIONS
Landlords have addressed the Retail Apocalypse with various solutions that have not required them to resort to the courts. For example, some mall landlords have filled up the huge spaces with untraditional anchor tenants such as SoulCycle or grocery stores. Other malls are reinventing themselves in order to survive the Retail Apocalypse. For example, the new American Dream mall in New Jersey is not only a mall, but also an entertainment complex with a theme park and ice rink.
Landlords and tenants have often negotiated their disputes out of court. Some out of court contract-based solutions have included shortening lease lengths or being more flexible with other lease terms. Other more creative contract-based solutions include landlords considering to convert troubled tenants’ “rent and other liabilities into secured debt that could give distressed companies some breathing room to stay out of court.” However, with more tenants vacating, landlords have been losing their negotiating power, forcing them to be more accommodating even to defaulting tenants, perhaps to the landlords’ detriment. Landlords are therefore the ones bearing the burden of keeping malls afloat for not only their own financial health, but also for the health of the community. Accordingly, landlords may benefit from employing the courts more often as a tool in resolving disputes with their tenants.THE COURTS
As the number of defaults increase and make out of court agreements more difficult to meet, it may become more likely that landlords and tenants will go to court to handle such issues. For instance, The Mall at Wellington Green in Wellington, Florida sued to evict retailer Love Culture from its mall because of overdue rent and other charges. Interestingly, the mall had sued this specific tenant previously in 2017 and 2018. According to one article, the mall has been “shifting its focus from traditional retailers to tenants that sell food and entertainment,” which suggests that the Retail Apocalypse is partly to blame for the mall’s need to get rid of the retailer rather than negotiating with the tenant more. In addition, landlords’ attempts to try to keep large retailers in their malls during the Retail Apocalypse may give rise to complaints from their other, smaller tenants. For instance, tenants in the Miami Mall of the Americas filed a class action lawsuit alleging that the landlord is neglecting the portion of the mall that contains smaller businesses “so that the landlord can focus all its resources on keeping the big tenants . . . happy.”
Even if landlords (and tenants) use the courts more often to settle disputes, there is another interesting question of whether courts will consider the broader economic implications of the Retail Apocalypse in their rulings. Courts have yet to release a decision explicitly referencing a “Retail Apocalypse.” Nevertheless, there have been some recent decisions that suggest that the courts are contemplating the Retail Apocalypse’s consequences. One example is the 2017 decision in Simon Property Group, L.P. v. Starbucks Corporation. There, an Indiana state court granted mall operator Simon Property Group’s preliminary injunction to prevent Teavana (a Starbucks subsidiary) from breaking its leases early and leaving over seventy of Simon Property Group’s malls across the country. One expert noted that this case “reverberat[ed] throughout the retail industry” because Simon Property Group was able to obtain a preliminary injunction “forcing [the 77 Teavana stores] to remain open and operational” despite the fact that these stores are not considered anchor tenants by any of the malls they are in. In addition to various other reasons, the Starbucks opinion notes that in making the decision to grant the preliminary injunction, the court partly took into account the aggregate negative harm Teavana would cause to Simon Property Group by allowing so many stores to leave. Furthermore, the court recognized that a denial of the motion for a preliminary injunction may send a message to other mall tenants that they can also break their leases early. Simon Property Group and Starbucks eventually settled out of court. It appears that this case is an example of a landlord successfully leveraging a lawsuit to win back some negotiating power in forcing a settlement with the tenant and preventing a huge blow to its malls.
Thus, the Starbucks case suggests that by framing the dispute as one beyond just the one mall and one tenant, landlords may be able to (1) persuade courts to consider the broader implications of the Retail Apocalypse in making their decisions and (2) force larger tenants’ hands into more favorable settlements.
The Retail Apocalypse may last for at least another couple years, and thus it is likely that there will be more mall landlord-tenant disputes in court in the near future. It will be interesting to see if landlords will use a strategy similar to the one Simon Property Group took in Starbucks and whether such strategies will lead to increased court consideration of the Retail Apocalypse’s broader economic consequences.
 See, e.g., Mary Hanbury, 50 Haunting Photos of Abandoned Shopping Malls Across America, Bus. Insider (Nov. 8, 2019), https://www.businessinsider.com/american-retail-apocalypse-in-photos-2018-1; Frank J. Cavaliere, The Web-Wise Lawyer – Retail Recession: What Does it Portend for Retail Law?, 63 Prac. Law. 7 (2017); Derek Thompson, What in the World Is Causing the Retail Meltdown of 2017?, Atlantic (Apr. 10, 2017), https://www.theatlantic.com/business/archive/2017/04/retail-meltdown-of-2017/522384/; Here’s a List of 68 Bankruptcies in the Retail Apocalypse and Why They Failed, CB Insights (Mar. 12, 2019), https://www.cbinsights.com/research/retail-apocalypse-timeline-infographic/?utm_source=CB+Insights+Newsletter&utm_campaign=5e8d763314-Top_Research_Briefs_01_06_2018&utm_medium=email&utm_term=0_9dc0513989-5e8d763314-87533957.
 Kelly Tyko, Macy’s is Closing Nearly 30 Stores in 19 States. Is Your Location on the List?, USA Today (Jan. 7, 2020), https://www.usatoday.com/story/money/2020/01/07/macys-store-closings-2020-list-more-than-dozen-stores-shutter/2829013001/.
 Alistair Gray, Landlords Grapple with Sears Bankruptcy, Fin. Times (Oct. 21, 2018), https://www.ft.com/content/329315b8-d412-11e8-a9f2-7574db66bcd5.
 Phil Wahba, Major Wall Street Firm Expects 25% of U.S. Malls to Close by 2022, Fortune (May 31, 2017), https://fortune.com/2017/05/31/malls-retail-stores-closing/.
 Alistair Gray, US Shopping Mall Vacancies Hit Two-Decade High, Fin. Times (Jan. 7, 2020), https://www.ft.com/content/700164de-30e8-11ea-a329-0bcf87a328f2?desktop=true&segmentId=d8d3e364-5197-20eb-17cf-2437841d178a#myft:notification:instant-email:content (“More shopping centre units lay empty across the country at the end of 2019 than any time during the past two recessions….”).
 Hayley Peterson, Dying Shopping Malls are Wreaking Havoc on Suburban America, Bus. Insider (Mar. 5, 2017), https://www.businessinsider.com/dying-shopping-malls-are-wreaking-havoc-on-suburban-america-2017-2.
 John W. Schoen, The Slow Death of the Retail Industry Hammered the Jobs Report, CNBC (Apr. 7, 2017), https://www.cnbc.com/2017/04/07/job-gains-stumble-as-retailers-retrench.html.
 VC Daily: Training Ground for Seed-Stage Longevity Startups | Fitness Startups as Anchor Tenants, Wall St. J. (Jun. 4, 2019), https://www.wsj.com/articles/vc-daily-training-ground-for-seed-stage-longevity-startups-fitness-startups-as-anchor-tenants-11559653835; Stephanie Noda, Stew Leonard’s Offers First Look at New Supermarket at Paramus Park Mall, North Jersey (Sep. 17, 2019), https://www.northjersey.com/story/news/bergen/paramus/2019/09/17/stew-leonard-open-paramus-park-mall-nj/2347816001/.
 Allison Pries, American Dream Has Been Open for 3 Months. Are People Going to the Mega-Mall?, NJ.Com (Jan. 26, 2020), https://www.nj.com/bergen/2020/01/american-dream-has-been-open-for-3-months-are-people-going-to-the-mega-mall.html.
 Mike Cherney, Gap Sues Westfield Over Mall Expenses as Tensions Rise in Retail World, Wall St. J. (July 17, 2018), https://www.wsj.com/articles/gap-sues-westfield-over-mall-expenses-as-tensions-rise-in-retail-world-1531835153.
 Rhiannon Curry, Landlords Adapt to Counter Rise of Online Retailers, Fin. Times (Mar. 12, 2019), https://www.ft.com/content/070a7666-4028-11e9-9bee-efab61506f44.
 New Role for Mall Landlords: Lender?, Crain’s Chi. Bus. (Aug. 7, 2019), https://www.chicagobusiness.com/commercial-real-estate/new-role-mall-landlords-lender.
 Esther Fung, Mall Tenants Play Hardball In Lease Negotiations, Wall St. J. (June 13, 2017), https://www.wsj.com/articles/mall-tenants-play-hardball-in-lease-negotiations-1497351603.
 Jeff Ostrowski, Mall at Wellington Green Sues Tenant Over Unpaid Rent—Again, Palm Beach Post (Mar. 14, 2019), https://www.palmbeachpost.com/news/20190314/mall-at-wellington-green-sues-tenant-over-unpaid-rent---again.
 Michael Pike & Daniel Lustig, Miami Area Mall Faces Class Action Lawsuit from Commercial Tenants, Pike & Lustig, LLP (Oct. 12, 2018), https://www.turnpikelaw.com/miami-area-mall-faces-class-action-lawsuit-from-commercial-tenants/.
 Simon Property Group, L.P. v. Starbucks Corporation, No.49D01-1708-PL-032170, 2017 Ind. Super. LEXIS 2, *81 (Ind. Super. Nov. 27, 2017).
 David J. Marmins, How A Shopping Mall Property Group Finally Stopped Retail Stores from Closing, 16 Real Est. Condemnation & Tr. Litig. 15, 15 (2018).
 A key factor in the court’s decision to grant the motion was Starbucks’ relative financial health. Usually in other cases involving a landlord’s attempt to obtain a preliminary injunctions, the tenant is bankrupt or experiencing other financial issues. Id. at 17. In addition, Teavana’s leases had explicit continuous operations clauses, which state that a tenant must continuously stay open until the end of the lease. Id.
 Simon Property Group, L.P., No.49D01-1708-PL-032170, 2017 Ind. Super LEXIS 2, at *61.
 Id, at *70.
 Esther Fung, Simon Settles Suit with Starbucks Over Teavana Closures, Wall St. J. (Jan. 16, 2018) https://www.wsj.com/articles/simon-settles-suit-with-starbucks-over-teavana-closures-1516129597.
 Rich Duprey, The ‘Retail Apocalypse’ May Last Two More Years, Motley Fool (Oct. 5, 2019), https://www.usatoday.com/story/money/2019/10/05/the-retail-apocalypse-may-last-2-more-years/40237695/.