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SOUTH BEACH BEVERAGE CO. v. RUSH BEVERAGE COMPANY

February 19, 2004.

SOUTH BEACH BEVERAGE COMPANY, Counterclaim Plaintiff,
v.
RUSH BEVERAGE COMPANY, INC., and R.J. CORK NATURALS, INC., Counterclaim Defendants



The opinion of the court was delivered by: JOHN W. DARRAH, District Judge

MEMORANDUM OPINION AND ORDER

The Counterclaim Plaintiff, South Beach Beverage Company, Inc. ("South Beach"), filed counterclaims against the Counterclaim Defendants, Rush Beverage Company, Inc. and R.J. Con-Naturals, Inc., for, among reasons, breach of contract. Presently before the Court is the South Beach's Motion for Summary Judgment against Rush Beverage Company, Inc. and RJ. Con-Naturals. For the following reasons, South Beach's Motion for Summary Judgment is granted.

LEGAL STANDARD

  Summary judgment is appropriate when no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Cincinnati Ins. Co. v. Flanders Elec. Motor Serv., Inc., 40 F.3d 146, 150 (7th Cir. 1994). "One of the principal purposes of the summary judgment rule is to isolate and dispose of factually unsupported claims or defenses. . . ." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (Celotex). Thus, although the moving party on a motion for summary judgment is responsible for demonstrating to the court why there is no genuine issue of material fact, the non-moving party must go beyond the Page 2 face of the pleadings, affidavits, depositions, answers to interrogatories, and admissions on file to demonstrate, through specific evidence, that a genuine issue of material fact exists and to show that a rational jury could return a verdict in the non-moving party's favor. Celotex, 477 U.S. at 322-27; Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 254-56 (1986) (Anderson); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986) (Matsushita); Waldridge v. Am. Hoechst Corp., 24 F.3d 918, 923 (7th Cir. 1994).

  Disputed facts are material when they might affect the outcome of the suit. First Ind. Bank v. Baker, 957 F.2d 506, 507-08 (7th Cir. 1992). When reviewing a motion for summary judgment, a court must view all inferences to be drawn from the facts in the light most favorable to the opposing party. Anderson, 477 U.S. at 247-48; Popovits v. Circuit City Stores, Inc., 185 F.3d 726, 731 (7th Cir. 1999). However, a metaphysical doubt will not suffice. Matsushita, 475 U.S. at 586. If the evidence is merely colorable or is not significantly probative or is no more than a scintilla, summary judgment may be granted. Anderson, 477 U.S. at 249-250.

  BACKGROUND

  Counterclaim Defendants failed to respond to South Beach's motion for summary judgment of Rule 56.1(a) Statement of Facts. Counterclaim Defendants' failure to comply with Rule 56.1(b) results in accepting as true all facts set out in a Rule 56.1(a) statement. See Smith v. Lamz, 321 F.3d 680, 682-83 (7th Cir. 2003). Even though Counterclaim Defendants failed to respond to South Beach's statement of material facts and such facts are deemed admitted, South Beach's Motion for Summary Judgment will only be granted if it can demonstrate that there is no genuine issue of material fact and that they are entitled to judgment as a matter of law. See Johnson v. Gudmundson, 35 F.3d 1104, 1112 (7th Cir. 1994). Accordingly, the undisputed facts, Page 3 for the purposes of this motion, taken from South Beach's Local Rule 56.1(a) & (b) statements of material facts (referred to herein as "Pl.'s 56.1") and exhibits, are as follows.

  Rush Beverage is a corporation organized and existing under the laws of Illinois with its principal place of business In Blue Island, Illinois. Pl.'s 56.1 ¶ 1. Robert J. Corr is the president of Rush Beverage and R.J. Corr Naturals. Pl.'s 56.1 ¶ 2. South Beach is a Delaware corporation with its principal place of business in Norwalk, Connecticut. South Beach is the successor in interest to South Beach Beverage Company, LLC, a Connecticut limited liability company. Pl.'s 56.1 ¶ 4.

  In or about June 2000, South Beach Beverage Company, LLC began developing a new energy drink known as "Adrenaline Rush." Pl.'s 56.1 ¶ 5. On September 6, 2000, South Beach Beverage Company, LLC received a letter from Corr, alleging that South Beach Beverage Company, LLC's use of "Adrenaline Rush" in connection with beverage products would lead to consumer confusion with R.J. Corr Naturals' "Rush" trademarks and demanding that South Beach Beverage Company, LLC cease all further use of "Adrenaline Rush." Pl.'s 56.1 ¶ 6.

  Following negotiation, South Beach Beverage Company, LLC and R. J. Corr Naturals entered into an agreement (the "Consent Agreement") effective September 29, 2000. Pl.'s 56.1 ¶ 7. Pursuant to the Consent Agreement, R.J. Corr Naturals agreed "never to use or license others to use the mark `Rush' in combination with the words Adrenaline or SOBE in connection with beverage products." Pl.'s 56.1 ¶ 8. The Consent Agreement further provided that "Corr will refrain from taking any legal action or initiat[ing] any other legal proceedings that would hinder South Beach in its free and unfettered use and registration" of the "SOBE Adrenaline Rush" mark. Pl.'s 56.1 ¶ 9. South Beach Beverage Company, LLC paid R.J. Corr Page 4 Naturals $30,000 and agreed to certain restrictions on the use of the mark "SOBE Adrenaline Rush." Pl.'s 56.l ¶ 10.

  South Beach Beverage Company, LLC assigned its rights under the consent agreement to South Beach. Pl.'s 56.1 ¶ 11. R J. Corr Naturals assigned its rights under the Consent Agreement to Rush Beverage. Pl.'s 56.l ¶ 12.

  In November 2000, South Beach launched the "SOBE Adrenaline Rush" energy drink in the United States. Pl.'s 56.1 ¶ 13. South Beach complied in all respects with the terms of the Consent Agreement. Pl.'s 56.1 ¶ 14. Rush Beverage filed the instant suit on July 23, 2001, alleging breach of the Consent Agreement. Pl.'s 56.1 ¶ 15.

  ANALYSIS

  South Beach seeks summary judgment on liability as to its Fourth Cause of Action contained in its Answer with counterclaims, a breach of contract claim. South Beach also seeks to voluntarily withdraw its remaining counterclaims. Finally, South Beach seeks to ...


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