TWTB, Inc. v. Rampick, CIVIL ACTION NO. 15-3399 SECTION: "G"(2)

CourtUnited States District Courts. 5th Circuit. United States District Court (Eastern District of Louisiana)
PartiesTWTB, INC., et al. v. BRUCE J. RAMPICK
Docket NumberCIVIL ACTION NO. 15-3399 SECTION: "G"(2)
Decision Date20 January 2016

TWTB, INC., et al.



January 20, 2016


In this litigation, Plaintiffs TWTB, Inc. ("TWTB") and Frank Eugene Raper ("Raper") (collectively "Plaintiffs") allege that Defendant Bruce Rampick ("Rampick") violated his fiduciary duties as a director, officer, and shareholder of TWTB.1 LRSBR, LLC ("LRSBR"), which was formed by Rampick, has filed a third party complaint against TWTB for trademark infringement.2 TWTB has filed a cross-claim against LRSBR alleging that LRSBR breached its trademark License Agreement.3 Pending before the Court is LRSBR's "Motion for Preliminary Injunction,"4 in which LRSBR requests that the Court enjoin TWTB from using its registered and unregistered trademarks and seeks attorneys' fees. Having reviewed the motion, the memoranda in support, the memorandum in opposition, the evidence, and the applicable law, the Court will grant the motion in part and deny it in part.

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I. Background

A. Factual Background

In their complaint, Plaintiffs allege that TWTB was lawfully created on or about September 17, 1992.5 TWTB is 50.5% owned by Rampick, 24.75% owned by Raper, and 24.75% owned by the Joseph E. and Janice V. Anthony Trust ("Anthony)."6 The primary business purpose of the creation of TWTB was to create an ongoing restaurant and bar establishment known as "Lucy's Retired Surfer's Bar & Restaurant," located at 701 Tchoupitoulas Street in New Orleans, Louisiana.7 In or about June 2012, TWTB adopted its current by-laws and the Shareholders' Agreement.8 At that time, Rampick was the president of TWTB, as well as a director and shareholder.9 TWTB also entered into a trademark License Agreement in June 2012 with LRSBR, pursuant to which LRSBR licensed TWTB to use trademarks owned by LRSBR, including "the federally registered trademarks 'Retired Surfers Bar and Restaurant' and 'Salt Water Wash Only' and all other tradenames, trademarks, service marks, marks or terms . . . owned by Licensor its successors and assigns."10

Plaintiffs allege that Raper was notified in or about October or November 2014 of alleged violations of Rampick's fiduciary duties to TWTB and that an investigation was undertaken.11 Plaintiffs allege that on January 11, 2015, based upon the findings of the investigation, it was

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determined by the Board of Directors that Rampick had violated his fiduciary duties to TWTB and that those determinations gave rise to "Just Cause," as defined in the by-laws, to remove Rampick from his office as President and remove him from the Board of Directors.12

On May 26, 2015, LRSBR allegedly notified TWTB, by letter, of at least four material breaches of the License Agreement, pursuant to which TWTB had 30 days to cure the alleged breaches.13 On June 11, 2015, counsel for TWTB replied to the letter.14 LRSBR alleges that on August 24, 2015, LRSBR terminated the License Agreement "due to TWTB's failure to cure the material breaches of the Agreement identified in the May 26 letter."15 LRSBR contends that despite the termination of the License Agreement, TWTB continues to use the trademarks owned by LRSBR.16

B. Procedural Background

On August 11, 2015, TWTB and Raper filed a complaint against Rampick, alleging, inter alia, that Rampick stole money and other assets from TWTB.17 On September 25, 2015, LRSBR moved for leave to intervene, which was granted on October 2, 2015.18 LRSBR filed its third party complaint alleging trademark infringement against TWTB on October 2, 2015.19 On November 6,

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2015, TWTB filed an answer and cross-claim against LRSBR for breach of contract, alleging that LRSBR had committed a breach of the trademark License Agreement.20

LRSBR filed the instant motion on October 16, 2015.21 TWTB filed an opposition on November 17, 2015.22 With leave of court, LRSBR filed a reply on November 23, 2015.23 The Court held an evidentiary hearing on December 8, 2015.24

II. Parties' Arguments

A. LRSBR's Arguments in Support of Preliminary Injunctive Relief and Attorneys' Fees

LRSBR moves for (1) a preliminary injunction enjoining TWTB "from further infringement of the Lucy's trademarks" and (2) reasonable attorneys' fees and costs incurred in the preparation and filing of their motion.25 LRSBR contends that it meets all four elements required for a preliminary injunction.26

First, LRSBR contends that there is a substantial likelihood that it will succeed on its trademark infringement claims against TWTB concerning: (1) infringement of its registered trademarks; and (2) infringement of the unregistered "Lucy's" mark and TWTB's unregistered surfer bar trade dress.27 LRSBR essentially argues that: (1) TWTB's use of the word "Lucy's" constitutes

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trademark infringement of LRSBR's registered trademarks; (2) TWTB's use of the word "Lucy's" constitutes trademark infringement because LRSBR has a valid unregistered trademark in the word "Lucy's"; and (3) TWTB's use of the surfer bar trade dress constitutes trade dress infringement.

Second, LRSBR asserts that TWTB is causing injuries that cannot be fully redressed by money damages because TWTB is damaging the goodwill in the Lucy's marks and preventing LRSBR from making use of the marks.28 Third, LRSBR contends that the balance of harms is overwhelmingly in its favor because "an injunction will only force TWTB to do what both trademark law and the License Agreement require."29 Fourth, LRSBR avers that TWTB is confusing consumers and an injunction that stops such confusion is in the public interest.30

LRSBR also moves for attorneys' fees and costs, asserting that under the Federal Trademark Act, a court may award reasonable attorneys' fees in exceptional cases.31 LRSBR contends that TWTB is willfully infringing the Lucy's marks and has effectively stolen the Lucy's brand, and therefore LRSBR is entitled to an award of attorney's fees and costs.32

B. TWTB's Arguments in Opposition to Preliminary Injunctive Relief and Attorneys' Fees

TWTB agrees that in order to succeed on its motion for a preliminary injunction, LRSBR must prove the four elements addressed by LRSBR.33 Citing the Fifth Circuit in Lake Charles

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Diesel, Inc. v. General Motors Corp.,34 TWTB contends that a "preliminary injunction is an extraordinary remedy which should not be granted unless the party seeking it has 'clearly carried the burden of persuasion' on all four requirements."35

First, TWTB contends that LRSBR cannot show that it has a substantial likelihood of success on the merits.36 TWTB asserts that although LRSBR owns its registered trademarks, it does not own any trade dress, nor does it own the word "Lucy's."37 Furthermore, TWTB asserts that LRSBR cannot show that there is a likelihood of confusion between LRSBR's marks and the phrases and images utilized by TWTB, in part, because "[t]here is no evidence that LRSBR and TWTB are actually in competition."38

Second, in opposition to LRSBR's claim that there is a substantial threat of irreparable injury, TWTB asserts that "[a]n injunction is a harsh, dramatic, and extraordinary remedy, and should only issue where the party seeking it is threatened with irreparable lo[s]s of injury without adequate remedy at law."39 TWTB contends that LRSBR has offered no evidence to support its sweeping statements that LRSBR is damaging the goodwill associated with LRSBR's trademarks.40

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Third, turning to the weighing of the harms, TWTB asserts that the damage that it would suffer if the Court were to grant LRSBR's request would be "truly catastrophic."41 TWTB avers that its lease requires it to operate a restaurant and bar using the name "Lucy's" and if it could no longer use that name, the landlord could allege that it is in default of its obligations under the lease.42 Fourth, TWTB asserts that an injunction will disserve the public interest as it will "restrict free trade in Louisiana and will essentially eliminate TWTB's ability to do business, despite the fact that TWTB has undertaken in good faith a tremendous effort and cost to ensure that it in no way violates any of LRSBR's trademarks."43

TWTB also contends that in the event that the Court finds that LRSBR is entitled to injunctive relief, LRSBR's motion for attorneys' fees and costs should be denied because the evidence shows that TWTB has made "every effort not to infringe on LRSBR's trademarks" and therefore the case cannot be said to be exceptional.44

C. Evidentiary Hearing Testimony

In support of its motion for a preliminary injunction, LRSBR called as witnesses: (1) Gary Wollerman ("Wollerman"), an individual with over 40 years of experience in the New Orleans restaurant business; (2) Defendant Bruce Rampick; (3) Sarah Campbell ("Campbell"), former events manager and general manager of the Lucy's Retired Surfer's Bar & Restaurant in New Orleans; (4) Dave Dillen ("Dillen"), another former general manager of the Lucy's Retired Surfer's Bar &

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Restaurant in New Orleans; and (5) Virginia Saussy ("Saussy"), a marketing consultant who was previously retained by Rampick to work with the Lucy's Retired Surfer's Bar & Restaurant business.45

In opposition, TWTB called as witnesses: (1) Plaintiff Frank Eugene Raper; and (2) Deborah Schumacher ("Schumacher"), the general manager at Lucy's who was responsible for removing any LRSBR-owned federally registered trademarks from the business.46

III. Preliminary Injunction

A. Standard for Preliminary Injunction

A preliminary injunction is an "extraordinary remedy which should not be granted unless the party seeking it has 'clearly carried the burden of persuasion'" on all required elements.47 Four elements must be proven before a court will issue a preliminary injunction: (1) a substantial likelihood of success on the merits; (2) a substantial threat of irreparable harm if the injunction is denied; (3) the threatened injury to the movant outweighs the injury to the nonmovant; and (4) granting the...

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