Shakespeare Spat Won’t Go Down in Federal Court

(CN) - The Shakespeare Theatre Co. can fight its Washington landlord over a 700-percent rent increase in Superior Court, a federal judge ruled.

For its 25-year anniversary in 2012, the Shakespeare Theatre received a Tony Award honoring its regional theater productions of the classics of antiquity, the Renaissance and the modern era.

But the Lansburgh Theatre, its landlord, allegedly marked the quarter centennial with a seven-fold rent hike.

The Bard-loving tenant hoped a Superior Court judge would issue an injunction, but the theater removed the case to federal court last month, claiming that the "entire suit is premised on violations of Section 509(a)(3) of the federal tax code." Unfortunately for the landlord, U.S. District Judge Richard J. Leon ruled Tuesday that federal courts lacked jurisdiction to hear arguments between two D.C.-based nonprofits.

"These federal tax law issues are simply not substantial enough to outweigh the presumption of limited federal jurisdiction," he wrote. "To be sure, the Superior Court may interpret and apply Section 509(a)(3) in evaluating whether Lansburgh has overstepped its articles and its bounds as a supporting organization for Shakespeare, but the court may also provide relief for common law claims."

Though Leon sent the case back to Superior Court, he refused to make the theater pay attorneys' fees and costs for their failed maneuver..

"To put it simply: It was a benign, but justifiable, attempt at forum shopping," the four-page order concludes.

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