Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Purepecha Enterprises, Inc., An Illinois Corporation, D/B/A El v. El Matador Spices & Dry Chiles

August 24, 2012

PUREPECHA ENTERPRISES, INC., AN ILLINOIS CORPORATION, D/B/A EL MATADOR, PLAINTIFF,
v.
EL MATADOR SPICES & DRY CHILES, A CALIFORNIA CORPORATION, EL MATADOR ADOBOS, LLC, A TEXAS LIMITED LIABILITY COMPANY, CARLOS RICO, JAIME PABLO RICO, DARIO RICO, ROGELIO RICO, ARTURO OROZCO, RUBEN OROZCO, AND ISRAEL GONZALES FERNANDEZ, DEFENDANTS.
EL MATADOR ADOBOS, LLC AND CARLOS RICO, COUNTER-PLAINTIFFS,
v.
PUREPECHA ENTERPRISES, INC., EVERARDO MEJIA, AND PETRA ANGELICA RICO, COUNTER-DEFENDANTS.



The opinion of the court was delivered by: Amy J. St. Eve, District Court Judge:

MEMORANDUM OPINION AND ORDER

On April 15, 2011, Plaintiff Purepecha Enterprises, Inc., d/b/a El Matador ("Plaintiff"), filed an eight-count Complaint alleging trademark claims under the Lanham Act, 15 U.S.C. § 1051, et seq., as well as state law claims against Defendants El Matador Spices & Dry Chiles, El Matador Adobos, LLC, and certain individuals ("Defendants"). See 28 U.S.C. §§ 1331, 1367(a). On June 30, 2011, Defendants El Matador Adobos, LLC ("El Matador Adobos") and Carlos Rico ("Counter-Plaintiffs") filed a thirty-count Counterclaim against Purepecha Enterprises, Inc., Everardo Mejia, and Petra Angelica Rico ("Counter-Defendants") alleging Lanham Act trademark violations, see 15 U.S.C. § 1051, et seq., as well as state law claims.

As discussed in detail below, the parties have filed cross-motions for summary judgment pursuant to Federal Rule of Civil Procedure 56(a). For the following reasons, the Court grants in part and denies in part Defendants'/Counter-Plaintiffs' motion for summary judgment and grants in part and denies in part Plaintiff's/Counter-Defendants' motion for partial summary judgment. In addition, the Court grants in part and denies in part Defendants'/Counter-Plaintiffs' motion to strike.

INTRODUCTION

I. Claims and Counterclaims

In its eight-count Complaint, Plaintiff alleges the following claims: (1) a Lanham Act direct infringement claim pursuant to 15 U.S.C. § 1114 (Count I); (2) a Lanham Act unfair competition claim based on 15 U.S.C. § 1125, as well as common law unfair competition claims under Illinois, Texas, Michigan, Indiana, Missouri, and Ohio law (Count II); (3) a Lanham Act trademark dilution claim under 15 U.S.C. § 1125(c) (Count III); (4) an Illinois Uniform Deceptive Trade Practices Act ("IUDTPA") claim under 815 ILCS 510/2 (Count IV); (5) three Illinois common law tortious interference with contract claims (Counts V-VII); and (6) an Illinois Consumer Fraud and Deceptive Business Practices Act claim ("ICFA") pursuant to 815 ILCS 505/2 (Count VIII).

Counter-Plaintiffs El Matador Adobos and Carlos Rico bring the following thirty counts in their Counterclaim: (1) a Lanham Act trademark infringement claim pursuant to 15 U.S.C. § 1125(a) (Counterclaim I); (2) a Lanham Act false advertising claim under 15 U.S.C. § 1125(a) (Counterclaim II); (3) an IUDTPA claim (Counterclaim III); (4) an ICFA claim (Counterclaim IV); (5) a claim to cancel U.S. Trademark Registration No. 3,942,992 based on fraud (Counterclaim V); (6) a claim to cancel U.S. Trademark Registration No. 3,942,992 pursuant to 15 U.S.C. § 1052(d) (Counterclaim VI); (7) a claim to cancel U.S. Trademark Registration No. 3,436,830 based on abandonment (Counterclaim VII); (8) a claim for declaratory relief concerning ownership of the trademarks at issue (Counterclaim VIII); (9) an Illinois common law defamation per se claim (Counterclaim IX); (10) an Illinois common law defamation per quod claim (Counterclaim X); (11) a Texas common law breach of fiduciary duty claim (Counterclaim XI); and (12) nineteen Illinois common law tortious interference with contract claims (Counterclaims XII-XXX).

II. Motions for Summary Judgment

Before the Court are Defendants'/Counter-Plaintiffs' (collectively "El Matador") motion for summary judgment and Plaintiff's/Counter-Defendants' (collectively "Purepecha") motion for partial summary judgment. Purepecha moves for summary judgment as to Counterclaims I, III, IV, V, VII, and IX-XXX. El Matador moves for summary judgment as to all eight counts of Purepecha's Complaint, as well as Counterclaims V, VI, and VII in which El Matador seeks cancellation of Purepecha's U.S. Trademark Registrations. For the following reasons, the Court grants in part and denies in part El Matador's summary judgment motion and grants in part and denies in part Purepecha's partial summary judgment motion. The Court dismisses -- with prejudice -- Counts V-VII of the Complaint and Counterclaims XI-XIX and XXII-XXX from this lawsuit.

More specifically, the Court denies El Matador's summary judgment motion as to Purepecha's infringement claim in Count I of the Complaint. Furthermore, the Court denies El Matador's motion on Count II in which Purepecha alleges an unfair competition claim under both 15 U.S.C. § 1125(a) and common law because El Matador fails to make any arguments in support of its motion as to this claim. Likewise, although El Matador moved for summary judgment as to Purpecha's trademark dilution claim under 15 U.S.C. § 1125(c) in Count III, neither party addresses this claim, including whether the marks at issue are "truly prominent and renowned" as required by the statute. See Ty Inc. v. Perryman, 306 F.3d 509, 511 (7th Cir. 2002). As such, the Court denies El Matador's summary judgment motion as to Count III. The Court also denies El Matador's motion as to Purepecha's IUDTPA and ICFA claims alleged in Counts IV and VIII. The Court grants El Matador's summary judgment motion as to Purepecha's tortious interference of contract claims in Counts V, VI, and VII and dismisses these claims from this lawsuit.

Further, the Court denies El Matador's and Purepecha's summary judgment motions as to El Matador's Counterclaim V for cancellation of U.S. Trademark Registration No. 3,942,992 based on fraud and El Matador's motion as to Counterclaim VI for cancellation of U.S. Trademark Registration No. 3,942,992 based on 15 U.S.C. § 1052(d). Similarly, the Court denies both El Matador's and Purepecha's motions concerning Counterclaim VII for cancellation of U.S. Trademark Registration No. 3,436,830 based on abandonment.

Because El Matador does not oppose Purpecha's motion as to El Matador's tortious interference with contract claims as alleged in Counterclaims XVII-IX and XXII-XXX, the Court dismisses these claims from this lawsuit. The Court grants Purepecha's motion as to El Matador's tortious interference with contract claims alleged in Counterclaims XII through XVI, but denies Purepecha's motion as to Counterclaims XX and XXI. The Court also denies Purepecha's motion as to El Matador's defamation Counterclaims IX and X, but grants Purpecha's motion as to El Matador's Texas common law breach of fiduciary duty claim against Counter-Defendant Everardo Mejia as alleged in Counterclaim XI. Last, the Court denies Purepecha's motion for partial summary judgment as to El Matador's ICFA and IUDTPA claims in Counterclaims III and IV.

BACKGROUND

I. Northern District of Illinois Local Rule 56.1

Local Rule 56.1 "is designed, in part, to aid the district court, 'which does not have the advantage of the parties' familiarity with the record and often cannot afford to spend the time combing the record to locate the relevant information,' in determining whether a trial is necessary." Delapaz v. Richardson, 634 F.3d 895, 899 (7th Cir. 2011) (citation omitted). Local Rule 56.1(a)(3) requires the moving party to provide "a statement of material facts as to which the moving party contends there is no genuine issue." Cracco v. Vitran Exp., Inc., 559 F.3d 625, 632 (7th Cir. 2009). "The opposing party is required to file 'a response to each numbered paragraph in the moving party's statement, including, in the case of any disagreement, specific references to the affidavits, parts of the record, and other supporting materials relied upon." Id. (citing N.D. Ill. R. 56.1(b)(3)(B)). Also, Local Rule 56.1(b)(3)(C) requires the nonmoving party to present a separate statement of additional facts that requires the denial of summary judgment because the Court will not consider any additional facts proposed in the nonmoving party's Local Rule 56.1(b)(3)(B) Response. See Ciomber v. Cooperative Plus, Inc., 527 F.3d 635, 643-44 (7th Cir. 2008); Cichon v. Exelon Generation Co., L.L.C., 401 F.3d 803, 809 (7th Cir. 2005).

As the Seventh Circuit recently explained, "[f]or litigants appearing in the Northern District of Illinois, the Rule 56.1 statement is a critical, and required, component of a litigant's response to a motion for summary judgment. The purpose of the local rule is to make the summary judgment process less burdensome on district courts, by requiring the parties to nail down the relevant facts and the way they propose to support them." Sojka v. Bovis Lend Lease, Inc., 686 F.3d 394, 398 (7th Cir. 2012). As such, Local Rule 56.1 statements should identify the relevant admissible evidence supporting the material facts, but should not make factual or legal arguments. See Cady v. Sheahan, 467 F.3d 1057, 1060 (7th Cir. 2006) ("statement of material facts did [] not comply with Rule 56.1 as it failed to adequately cite the record and was filled with irrelevant information, legal arguments, and conjecture"). Moreover, the requirements for responses under Local Rule 56.1 are "not satisfied by evasive denials that do not fairly meet the substance of the material facts asserted." Bordelon v. Chicago Sch. Reform Bd. of Trs., 233 F.3d 524, 528 (7th Cir. 2000). The Court may also disregard statements and responses that do not properly cite to the record. See Cady, 467 F.3d at 1060; Cichon, 401 F.3d at 809-10. Finally, the Court has broad discretion to enforce Local Rule 56.1. See Benuzzi v. Board of Educ. of City of Chicago, 647 F.3d 652, 655 (7th Cir. 2011).

II. Relevant Facts

A. The Rico Family Business

This lawsuit involves a dispute between siblings in the Rico family regarding pre-mixed seasonings called adobo that are used to marinade and season meat, including an adobo for a type of Mexican sausage called chorizo. The father of the Rico siblings owned a butcher shop in Mexico and everyone in the Rico family worked at the family's butcher shop. (R. 78-2, El Matador's Rule 56.1 Stmt. Facts ¶ 2.) Carlos and Jesus Rico were the first siblings to make chorizo at the Rico family butcher shop in Mexico and, based on Carlos' suggestion, the Rico's father began using the El Matador name and bullfighter logo after Carlos had worked at a California butcher shop named El Matador. (Id. ¶¶ 3, 5; R. 81, Purepecha's Rule 56.1 Stmt. Facts ¶ 6.)

Specifically, Carlos first worked at a butcher shop named El Matador in Santa Ana, California -- which is in the greater Los Angeles area -- for a short period of time in 1989. (El M. Stmt. Facts ¶ 8.) When Carlos permanently moved to the United States in 1995, he worked at the El Matador butcher shop from 1996 until approximately 1998 when the butcher shop closed. (Id. ¶¶ 7, 8.) While working at El Matador in Santa Ana, Carlos made chorizo and used a spice mix recipe that he had adapted from his father's adobo recipe. (Id. ¶¶ 9, 10.) This adobo could be stored and added in a measured quantity to meat to prepare chorizo. (Id. ¶ 10.)

In 1996, Carlos decided to make his own chorizo adobo to sell to Hispanic and Latino grocery stores and butcher shops in the Los Angeles area. (Id. ¶ 11.) To start the business, Carlos sent money to his brother Jesus for raw spices and coloring from Mexico after which Jesus would ship these items to Carlos in the Los Angeles area. (Id.) Carlos then solicited various butchers and owners of Hispanic and Latino grocery stores to buy the pre-made chorizo adobo from him by giving them free samples of the chorizo adobo. (Id. ¶¶ 12, 25.) Carlos sold the chorizo adobo wholesale to butchers and store owners in buckets that weighed approximately 40 pounds each. (Id. ¶¶ 14, 26.) To clarify, the stores bought the adobo mix to make chorizo -- customers did not purchase the adobo directly. (Id. ¶ 66.) Meanwhile, the Santa Ana El Matador butcher shop's owner allowed Carlos to make the chorizo adobo at his butcher shop and to use the El Matador name and bullfighter logo. (Id. ¶ 13.)

B. Early Use of the Marks

Carlos is the owner and president of El Matador Adobos, which is a limited liability company organized and existing under the laws of the State of Texas with its principal place of business in Rialto, California. (Id. ¶ 15; Purepecha's Stmt. Facts ¶ 1.) In 1996 -- prior to the incorporation of El Matador Adobos -- Carlos purchased business cards with the El Matador name and bullfighter logo (hereinafter "marks") and handed out these business cards to market the chorizo adobo to customers and potential customers. (El M. Stmt. Facts ¶¶ 16, 19, 21.) The business cards contained Carlos' contact information, the marks, and the words "Especies para Chorizo" meaning spices for chorizo. (Id. ¶¶ 19-21.)

In 1995 or 1996, Rafael Rico -- Carlos' brother -- immigrated to the United States from Mexico. (Id. ¶ 30.) Carlos, who was already living in the United States at that time, got Rafael a job at the El Matador butcher shop in Santa Ana. (Id.) Rafael also made and marketed the chorizo adobo with his brother Carlos -- both of whom used the business cards with the El Matador and bullfighter marks on them in connection with the chorizo adobo. (Id. ¶ 32; R. 87, Purpecha Add'l Facts ¶ 50.) The parties dispute whether Carlos first used the business cards or whether both Carlos and Rafael first used the business cards in relation to the adobo business. Also, the parties dispute whether the El Matador name and bullfighter marks were on the buckets of chorizo adobo or other business materials associated with the chorizo adobo when Carlos and Rafael worked together in the Los Angeles area starting in 1996, as discussed in detail below. (El M. Stmt. Facts ¶¶ 16, 21, 23.)

Meanwhile, in 1996, Dario Rico, another Rico brother, came to the United States and when Dario arrived both Carlos and Rafael were already using the business cards to sell the chorizo adobo. (Id. ¶¶ 33, 34.) In the summer of 1999, another brother, Rogelio, arrived in the United States and lived in the same house as Carlos at which time he assisted in preparing and delivering the chorizo adobo for Carlos. (Id. ¶ 36.)

C. Purepecha's Use of the Marks

Counter-Defendant Petra Angelica Rico -- Carlos' sister -- moved from Mexico to the United States in 1999, and her husband, Counter-Defendant Everado Mejia, moved to the United States, specifically Cicero, Illinois, in 1998. (Purepecha Stmt. Facts ¶ 6; El M. Stmt. Facts ¶ 52.) Mejia, the President of Purepecha, incorporated Purepecha on June 2, 2004 under the laws of the State of Illinois, and since then, Purepecha has been the corporate entity through which Mejia and Petra make and distribute their spices. (Purepecha Stmt. Facts ¶ 8; El M. Stmt. Facts ¶ 50.) In 1999, Petra and Mejia started selling chorizo adobo in the Chicago area using the El Matador and bullfighter marks that were identical to the marks Carlos and Rafael used. (El M. Stmt. Facts ¶¶ 53, 56.) It is undisputed that Petra and Mejia did not sell the chorizo adobo under the El Matador and bullfighter marks prior to May 1999. (Id. ¶¶ 53, 56.)

Since 2006, Rafael Rico has distributed Purepecha's products. (Purepecha's Stmt. Facts ¶¶ 14, 15.) At his deposition, Rafael testified that his business relationship with Mejia began in 2000 or 2001. (R. 78-5, Ex. C, Rafael Rico Dep., at 22, 26, 39.) Rafael further explained that he and Carlos worked together at El Matador in Santa Ana and made and sold adobo together. (Rafael Rico Dep., at 39-41; Purepecha Stmt. Facts ¶ 16.) In 1999, Rafael moved from California to Texas and started selling spice mixes there. (Purepecha Stmt. Facts ¶ 17.)

D. 2005 Rico Family Business Plan

In 2005, Carlos, Mejia, Petra, and several other Rico relatives agreed to enter into a business arrangement, the primary goal of which was to have only one entity that would produce spice mixes for distribution throughout the United States. (Id. ¶ 33.) One aspect of the business plan was that Mejia and Carlos would purchase a warehouse and machinery to mix the spices on an industrial scale. (Id. ¶ 34.) To accomplish the goals of the 2005 business plan, Mejia and Carlos formed a limited liability company, El Matador Adobos, LLC, on March 7, 2005. (Id. ¶ 35.) By early 2006, the family business arrangement had fallen through. (Id. ¶¶ 36, 37.)

E. Trademark Registrations

Purepecha owns U.S. Trademark Registration No. 3,942,992 for the mark El Matador and bullfighter design with respect to "spices and seasonings." (Id. ¶ 9.) In particular, Purepecha applied for the registration on March 16, 2009, and the United States Patent and Trademark Office ("PTO") granted the application on April 12, 2011. (Id.) The March 16, 2009 trademark application contained the following representations: (1) Purepecha was the owner of the El Matador name and design mark; (2) Purepecha first used the trademark in 1999; (3) Purepecha first used the trademark in interstate commerce in 2000; and (4) "no other person, firm, corporation, or association has the right to use the mark in commerce, either in the identical form thereof or in such near resemblance thereto as to be likely, when used on or in connection with the goods/services of such other person, to cause confusion, or to cause mistake, or to deceive."

(R. 86, El M. Rule 56.1 Add'l Facts ¶ 52.)

Further, Purepecha owns U.S. Trademark Registration No. 3,436,830 for the mark Matador Brothers with respect to "marinades and spices." (Purepecha Stmt. Facts ΒΆ 11.) Purepecha applied for the Matador Brothers registration on November 8, 2006, and the PTO granted the application on May 27, 2008. (Id.) The Matador Brothers trademark application contained the following representations: (1) Purepecha was entitled to use the Matador Brothers mark in commerce; and (2) "no other person, firm, corporation, or association has the right to use the mark in commerce, either in the identical form thereof or in such near resemblance thereto as to be likely, ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.