POLK BROS., INC., Plaintiff-Appellant, v. FOREST CITY ENTERPRISES, INC., Defendant-Appellee, 776 F.2d 185

Summary

Appellant retailer challenged the denial of injunctive relief seeking specific performance of covenants with appellee retailer. Both parties constructed a building on land belonging to appellant, and appellee leased its store with restrictions on what could be sold in the adjoining stores. Appellee exercised an option to purchase the building, agreeing that the lease restrictions would become covenants running with the land. Appellee sought to invalidate the covenants, and appellant sued. The district court held that the covenants constituted a per se violation of the state's antitrust law and that appellant was not entitled to equitable relief based on the doctrine of unclean hands. The court reversed, holding appellant was entitled to injunctive relief because its transgressions were not legally substantial and it was entitled by law to specific performance of covenants running with the land.