Sheraton's appeal challenged certain aspects of the judgment, primarily (i) the validity of a finding that Sheraton's conduct violated the Robinson-Patman Act, a federal antitrust statute; (ii) a $10.26 million award for breach of the management contract's "agency" provision; and (iii) the finding and amount of liability for punitive damages.

The court agreed with Sheraton and ruled that Sheraton was entitled to judgment on the Robinson-Patman Act claim. The court also threw out the $10.26 million award for breach of the agency provision. Finally, although the court agreed with Sheraton that the jury had been misinstructed on a crucial point regarding liability for punitive damages, it concluded that Sheraton's trial counsel had invited the error and therefore that the court could not overturn the punitive damages on that basis. The court did, nonetheless, slash the award of punitive damages from over $17 million to about $2 million. The trial counsel's error was the subject of a successful malpractice action in 2003.

"We are extremely pleased with this result," reported Ken Siegel, Starwood's General Counsel. "Although the Woodley Road case involved actions by Sheraton that predated Starwood's ownership, it has been a cloud on our management business. For the past 5 years, Starwood has worked very hard to overcome the negative image this case created by introducing innovative programs and offerings for our hotel owners. Coupled with an aggressive litigation strategy, we believe this approach has enabled Starwood to put Woodley Road behind us."

Questions about the decision may be directed to Starwood's appellate counsel, Andrew Frey (212-506-2635) or Kenneth Siegel (914-640-8500).

Starwood Hotels & Resorts Worldwide, Inc. is one of the leading hotel and leisure companies in the world with more than 750 properties in more than 80 countries and 110,000 employees at its owned and managed properties.