Competition or Destructive Competition: What Is the Difference?

Janis B. Schiff serves as the firm's Real Estate Section leader, in our Washington D.C. office.

Given the current challenging economic times and the impact on owners and users of retail space, the recent Court of Appeals case in Maryland addressing the concept of a landlord's "implied covenant to refrain from destructive competition" requires attention and consideration.

In the case of RRC Northeast LLC v BAA Maryland, Inc., RRC, a concessionaire at BWI-Marshall Airport claimed that the holder of the master lease for the airport (defendant BAA) violated an implied covenant to refrain from destructive competition when BAA sublet spaces at the airport terminal to other merchants selling the same tourist-themed products that RCC was selling at its store. While the case was ultimately dismissed on procedural grounds, the Maryland Court of Appeals took the opportunity to reject the argument posed by BAA – given the complexity of lease documents, as well as the