Judge Orders Starbucks to Keep 77 Teavana Stores Open Despite Closure Plans

When I first read Atlas Shrugged, I shook my head at the idea that anyone in the government would require a business to stay open if it was losing money. I could see them making people keep businesses afloat if they were profitable, but ones losing money? Surely you couldn’t expect businesses to operate at a loss indefinitely.

However, that bit from the book apparently sounds like a fine idea to one judge.

Judge Heather Welch recently issued an injunction against Starbucks. The coffee giant wanted to close their Teavana stores since the division was operating at a loss. People just weren’t interested in going to the mall to buy (probably) overpriced tea. Go figure.

However, Simon Property Group was none too thrilled to hear about this.

They operate malls where 77 Teavana stores are located and went to court to block Starbucks from shutting down their own businesses, terrified that the stores would trigger some kind of a mass exodus from their malls.

Judge Welch argued that Starbucks could better handle the financial burden when compared to Simon Property Group — a burden estimated by Starbucks to be $15 million over just five months — and thus the company cannot close the stores. However, there’s no estimate of how much Simon would lose if Teavana left… especially since they’re citing fears of others leaving rather than actual evidence that they would.

Please, someone, explain to me just how in the hell this is remotely legal?

I’m not saying Welch’s comments are inaccurate. Starbucks probably would be able to handle the financial hit better than Simon, but so what? It’s not about that. It’s about whether a company is free to close stores or not. It’s just that simple.

What Welch has essentially done is tell other stores that they may not be permitted to close down. If I was the CEO of a retail company looking to expand, the last place I’d look is a mall owned by Simon Property Group. After all, if I needed to close locations, it’s clear that they might not let me. I might be required to lose money for an undetermined amount of time simply because they’re afraid my company leaving might make others rethink their locations as well.

Our economic system is one that is generally pretty free. Part of that means when you open a business, you’re not required to leave it open despite losing money, and I can’t help but believe that any judge who rules otherwise should be disbarred.