By Lauren Berg

Law360 (August 3, 2020, 10:12 PM EDT ) A New Jersey mall slapped Microsoft Corp. with a federal lawsuit Friday, saying the tech giant is breaching its lease by not continuing to operate its retail store after announcing it would be closing dozens of stores around the world.

Microsoft's lease with the Westfield Garden State Plaza, which is owned by Westland Garden State Plaza Ltd. Partnership, requires it to operate its retail store in the mall for one year after it exercises its contractual right to terminate the lease early, according to the complaint in New Jersey federal court, but the tech giant is refusing to reopen and operate its store after closing due to the coronavirus pandemic.

In June, Microsoft announced that it would be closing most of its 83 stores, except for stores in China, its New York City flagship store and stores in England and Australia and on its corporate campus near Seattle, according to the complaint. Microsoft hasn't attributed its store closures to COVID-19 or asserted any breach of the lease to explain why it is closing the store in the Garden State Plaza, the mall said.

"Microsoft's refusal to remain open and operating a key attraction at Garden State Plaza for one year ... will cause a domino effect of adverse consequences for Westfield Garden State," the mall said. "The vacancy of Microsoft, a prestigious tenant in a prominent location, amidst an unprecedented number of smaller independent store closures due to COVID-19 and bankruptcy filings by larger, more familiar stores, would be a perfect storm."

Westland said if Microsoft's retail spot becomes vacant, the mall's reputation would be damaged and might encourage other tenants not to renew their leases.

The suit includes a claim of breach of contract and seeks an injunction barring Microsoft from breaching its lease agreement or from closing its store, as well as damages and attorney fees.

Representatives for the parties did not immediately respond to requests for comment Monday.

A number of businesses have sued their landlords or been sued over lease agreements and rent payments recently, mostly due to the crippling effect of the deadly coronavirus pandemic.

Earlier this month, WeWork's landlord at a Los Angeles office building said the coworking company owes at least $54 million in damages after it backed out of a 10-year lease agreement.

In June, Italian fashion brand Valentino sued its Fifth Avenue landlord, arguing it has been blocked from moving out of the Manhattan space even though the lease has been rendered void by the COVID-19-spurred shutdown. Similarly, Jenner & Block LLP said its Chicago landlord actually owes the firm $840,000 thanks to a rent abatement provision triggered by the pandemic.

Victoria's Secret sued the landlord of its midtown Manhattan store, claiming the building's owners attempted to collect more than $1 million per month in rent after the shutdown despite the terms of the lease being unenforceable.

In May, the NBA was accused of failing to pay rent for its store on Fifth Avenue for two months and purportedly owes its landlord more than $1.2 million.

The Gap Inc. and Ross Stores Inc. have also been sued over unpaid rent, according to complaints in New York and Florida federal courts, respectively. Both of those cases have since been voluntarily dismissed, according to court records.

Westland Garden State Plaza Limited Partnership is represented by Stephen M. Orlofsky, Adrienne C. Rogove and Mara B. Levin of Blank Rome LLP.

Counsel information for Microsoft was not immediately available.

The suit is Westland Garden State Plaza Ltd. Partnership v. Microsoft Corp., case number 2:20-cv-09822, in U.S. District Court for the District of New Jersey.

--Additional reporting by Hailey Konnath, Dave Simpson and Craig Clough. Editing by Jay Jackson Jr.

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