Texas Roadhouse, Inc. et al v. Texas Corral Restaurants, Inc. et al
OPINION AND ORDER: The Court hereby GRANTS in part, DENIES in part, and DENIES without prejudice in part the Defendants' 156 Motion to Compel Discovery Compliance. The Court ORDERS Defendants to provide Plaintiffs with their selected stores for trade dress evidence discovery on or before 5/24/2017. The Court ORDERS Plaintiffs to respond to discovery requests and produce documents as ordered herein on or before 6/26/2017. Any motion for extension of Plaintiffs' deadline must show good cause for the extension and provide a summary of actions taken to comply with this Opinion and Order. Signed by Magistrate Judge Paul R Cherry on 5/10/17. (jss)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
TEXAS ROADHOUSE, INC., et al.,
) CAUSE NO.: 2:16-CV-28-JVB-PRC
TEXAS CORRAL RESTAURANTS, INC., et al., )
OPINION AND ORDER
This matter is before the Court on a Defendants’ Motion to Compel Discovery Compliance
[DE 156] filed on February 7, 2017, by Defendants Texas Corral Restaurants, Inc., Texcor, Inc.,
Texas Corral Restaurant II, Inc., T.C. of Michigan City, Inc., T.C. of Kalamazoo, Inc., Chicago
Roadhouse Concepts, LLC, T.C. of Oak Lawn, Inc., T.C. of Harwood Heights, Inc., Texas Corral
Incorporated, Martinsville, Corral, Inc., and Paul Switzer. Plaintiffs Texas Roadhouse, Inc. and
Texas Roadhouse Delaware LLC filed a response on February 21, 2017. Defendants filed a reply
on February 28, 2017.
This litigation is currently pending on Plaintiffs’ Second Amended Complaint. In that
pleading, Plaintiffs bring claims of trade dress infringement in violation of 15 U.S.C. § 1125(a) and
common law; trademark infringement in violation of 15 U.S.C. §§ 1114 and 1125(a)(1), enacted
state laws of Illinois, Indiana, and Michigan, and common law; deceptive trade practices in violation
of Illinois state law; copyright infringement in violation of 17 U.S.C. § 101 et seq.; and unfair
competition in violation of common law.
Defendants ask the Court to compel Plaintiffs to produce trade dress evidence, franchise
agreements, site selection plans and consumer and market research, the identity of Texas
Roadhouse’s suppliers of its trade dress fixtures, and detailed profit and loss financial information
for each Texas Roadhouse store. Defendants also request that they be awarded their reasonable
attorneys’ fees incurred in bringing the instant motion.
Federal Rule of Civil Procedure 26(b)(1) sets forth the scope of discovery for this cause of
action. A party may
obtain discovery regarding any nonprivileged matter that is relevant to any party’s
claim or defense and proportional to the needs of the case, considering the
importance of the issues at stake in the action, the amount in controversy, the parties’
relative access to the relevant information, the parties’ resources, the importance of
the discovery in resolving the issues, and whether the burden or expense of the
proposed discovery outweighs its likely benefit.
Fed. R. Civ. P. 26(b)(1). A party may seek an order compelling discovery when an opposing party
fails to respond to discovery requests or has provided evasive or incomplete responses. Fed. R. Civ.
P. 37(a). The burden is on the objecting party to show why a particular discovery request is
improper. Medical Assurance Co. v. Weinberger, 295 F.R.D. 176, 181 (N.D. Ind. 2013) (quoting
Kodish v. Oakbrook Terrace Fire Prot. Dist., 235 F.R.D. 447, 450 (N.D. Ill. 2006)).
Defendants ask the Court to compel Plaintiffs to answer interrogatories and produce
documents in five categories: trade dress evidence, franchise agreements, site selection plans and
consumer and market research, identification of Plaintiffs’ suppliers of trade dress fixtures, and
detailed profit and loss financial information for each Texas Roadhouse store. Plaintiffs, in response,
argue that Defendants failed to comply with Northern District of Indiana Local Rule 37-1 and that
Defendants’ discovery requests are unduly broad and too burdensome. The parties devote most of
their briefs to argument regarding Rule 37-1 and discovery of Plaintiffs’ trade dress evidence. The
Court will address each category below, beginning with Rule 37-1 and trade dress evidence.
A. Local Rule 37-1
Plaintiffs argue that Defendants’ Motion to Compel is premature because Defendants did not
comply with Northern District of Indiana Local Rule 37-1’s requirement to certify that the filing
party conferred in good faith or attempted to confer with the other affected parties in an effort to
resolve the matter raised in a motion to compel without court action.
Defendants’ counsel filed a certification in which she certified that counsel first began
communicating regarding the instant discovery disputes on October 24, 2016. Defendants’ counsel
sent discovery deficiency letters on October 24, 2016, December 22, 2016, and January 16, 2017.
On November 7, 2016, November 22, 2016, and January 26, 2017, counsel for the parties held
telephone conferences on the matter.
A fourth telephone conference was scheduled for February 2, 2017. That conference was
never held. On February 1, 2017, Plaintiffs’ counsel sent Defendants’ counsel an email clarifying
Plaintiffs’ position regarding the discovery at issue, specifically which restaurants it was choosing
to provide discovery on and why. In light of this email, Defendants cancelled the February 2, 2017
Plaintiffs argue that the instant motion should be denied because Defendants failed to confer
in good faith. The Court does not so find. The certification and exhibits presented to the Court on
this matter show adequate discussion between the parties beginning on October 24, 2016, and the
parties’ ultimate arrival at an impasse on February 1, 2017. Defendants conferred with Plaintiffs in
good faith regarding the discovery at issue and have complied with Local Rule 37-1.
B. Trade Dress
Defendants asked for trade dress evidence, including development information, evidence of
first use, and duration of use for each of Plaintiffs’ claimed trade dress elements. Defendants argue
that their discovery requests for this information are proper because the information is necessary to
defend against Plaintiffs’ claim of trade dress infringement. Specifically, Defendants contend that
[t[he degree to which each individual element of Plaintiffs’ claimed trade dress
element is incorporated into each specific store is directly relevant to the strength and
protectability of Plaintiffs’ trade dress. Similarly, the date by which each element
was first displayed at each location goes directly to whether Defendants could have
infringed upon any claimed [trade dress] and the extent to which such elements postdated Defendants’ stores.
(Mem. at 11, ECF No. 157).
A plaintiff seeking to prevail on a trade dress infringement claim “must establish that: (1)
its trade dress is ‘inherently distinctive’ or has acquired ‘secondary meaning’; (2) the similarity of
the defendant’s trade dress to that of the plaintiff creates a ‘likelihood of confusion’ on the part of
consumers; and (3) the plaintiff's trade dress is ‘non-functional.’” Computer Care v. Serv. Sys.
Enterprises, Inc., 982 F.2d 1063, 1067-68 (7th Cir. 1992) (citing Roulo v. Russ Berrie & Co., 886
F.2d 931, 935 (7th Cir. 1989)).
Plaintiffs state that, in order to prevail in this lawsuit, they will need to establish whether
there is a likelihood of confusion between Plaintiffs’ trademark and trade dress and the accused mark
and trade dress of Defendants.
In assessing the likelihood of consumer confusion, [courts] generally consider seven
factors: (1) the similarity between the marks in appearance and suggestion, (2) the
similarity of the products, (3) the area and manner of concurrent use of the products,
(4) the degree of care likely to be exercised by consumers, (5) the strength of the
complainant’s mark, (6) any evidence of actual confusion, and (7) the defendant’s
intent (or lack thereof) to palm off its product as that of another.
Eli Lilly & Co. v. Nat. Answers, Inc., 233 F.3d 456, 461-62 (7th Cir. 2000) (citing Smith Fiberglass
Prods., Inc. v. Ameron, Inc., 7 F.3d 1327, 1329 (7th Cir. 1993)). The “factors are not a mechanical
checklist, and ‘[t]he proper weight given to each . . . will vary from case to case.’” Id. at 462
(alterations in original) (quoting Dorr-Oliver, Inc. v. Fluid-Quip, Inc., 94 F.3d 376, 381 (7th Cir.
Plaintiffs argue that likelihood of confusion will only be present in locations near both a
Texas Roadhouse restaurant and a Texas Corral restaurant, and, consequently, only trade dress
evidence for Texas Roadhouse restaurants that are geographically near a Texas Corral restaurant
should be produced in discovery. Defendants do not argue that there is evidence pertaining to
confusion at any other location. Instead, they argue that the requested trade dress evidence is needed
to defend against Plaintiffs’ contention that Plaintiffs’ trade dress is protectable.
In order to receive protection, trade dress must have a stable visual appearance. Keystone
Camera Prods. Corp. v. Ansco Photo-Optical Prods. Corp., 667 F. Supp. 1221, 1229 (N.D. Ill.
1987); cf. AM Gen. Corp. v. DaimlerChrysler Corp. 311 F.3d 796, 815 n.6 (7th Cir. 2002) (requiring
specific definition and a stable visual appearance for protection of family or theme trade dress).
Plaintiffs assert that their use of the trade dress at issue began with the opening of Store #8 in
Louisville, Kentucky. Defendants requested the trade dress evidence in discovery in order to verify
or discount the protectability of the trade dress on the basis of inconsistency of the trade dress in
appearance or use or on the basis of the timing of Plaintiffs’ development of trade dress elements
in comparison to Defendants’ development of their trade dress. There are nearly 500 Texas
Roadhouse locations, and Plaintiffs suggest that evidence of trade dress usage in seven stores—all
selected by Plaintiffs—is sufficient inquiry into the protectability of Plaintiffs’ trade dress. Further
discovery, Plaintiffs argue, would pose an undue burden on Plaintiffs.
Rule 26 directs the Court to consider “the importance of the issues at stake in the action, the
amount in controversy, the parties’ relative access to the relevant information, the parties’ resources,
the importance of the discovery in resolving the issues, and whether the burden or expense of the
proposed discovery outweighs its likely benefit” in determining whether the discovery sought is
Whether Plaintiffs’ trade dress is protected is a foundational matter to the trade dress
infringement claim. The Court is not aware of any valuation of this case in the public record, but
Plaintiffs ask for several categories of damages, including the maximum amount allowed for willful
infringement and for treble damages. The amount in controversy appears to be significant.
Regarding access, Plaintiffs suggested that Defendants could visit each Texas Roadhouse location
to observe the use of Plaintiffs’ trade dress. While it would be possible for Defendants to observe
current use by following that suggestion, Defendants would not be able to discern when each trade
dress element was first used. Plaintiffs appear to have sole access to that information. The parties
on both sides of this case are restaurant owners, though Plaintiffs have nearly 500 locations and
Defendants have 11. This does not necessarily correspond directly to a comparison of the parties’
resources, but the Court finds no reason to assume that Plaintiffs’ resources are less than
Defendants’ resources. This discovery is vital to the issue of verifying or discounting Plaintiffs’
allegation of protected trade dress. Though the Court is sympathetic to Plaintiffs’ statement of the
burden that producing the discovery requested would create, the Court cannot find that any
additional discovery on this issue would outweigh its likely benefit. On the other hand, the Court
finds that the full amount of discovery requested by Defendants—which Plaintiffs contend would
amount to over one million pages—would be disproportional to the needs of the case and would
impose an undue burden on Plaintiffs.
Accordingly, the Court grants in part Defendants’ request for this information. Defendants
shall select any 10 of Plaintiffs’ Illinois stores, any 15 of Plaintiffs’ Indiana stores, and any 10 of
Plaintiffs’ Michigan stores. Plaintiffs must provide trade dress evidence, including development
information, evidence of first use, and duration of use for each of Plaintiffs’ claimed trade dress
elements for (1) the stores selected by Defendants as outlined above, (2) all of Plaintiffs’ Louisville,
Kentucky stores (including stores located within 10 miles of the Louisville city limits), (3) the seven
stores that Plaintiffs identify as “implicated stores,” and (4) the five stores most recently opened for
business by Plaintiffs before the date of the original filing of this lawsuit.
C. Franchise Agreements
Defendants asked for franchise agreements for each Texas Roadhouse franchisee. Plaintiffs
state that they are seeking to produce all franchise agreements in the United States. Defendants
provide no argument in their reply brief that this scope (which excludes international franchise
agreements, if any exist) is inappropriate. The Court finds that compelling the production of
international franchise agreements, if any, would be disproportional to the needs of this case.
Therefore, the Court grants the Motion to Compel as to franchise agreements in the United States
D. Site Selection Plans and Consumer and Market Research
Defendants asked for Texas Roadhouse’s site selection plans and consumer and market
research, especially, without limitation, Plaintiffs’ plans for expansion in Illinois, Indiana, and
Michigan. Plaintiffs state that they are producing site selection plans for locations or potential
locations in Illinois, Indiana, and Michigan.
In their memorandum in support of the Motion to Compel, Defendants state that they seek
production of this information because it will “reveal the dates upon which Plaintiffs considered
moving into territories already occupied by Defendants, Plaintiffs’ knowledge of Defendants’
presence in proposed expansion territories, and Plaintiffs’ knowledge of market conditions and
probable competitors in proposed expansion territories.” (Mem. at 11, ECF No. 157).
In light of Defendants’ statement of need for this information, the geographical restriction
as proposed by Plaintiffs is appropriate, as information for stores in other states is not relevant, and
its production would be unduly burdensome. To the extent that consumer and market research are
separate from Plaintiffs’ site selection plans, Plaintiffs have not argued that the research should not
be produced. Accordingly, the Court orders Plaintiffs to produce site selection plans and consumer
and market research for Plaintiffs’ expansion in Illinois, Indiana, and Michigan.
E. Trade Dress Suppliers
Defendants asked Plaintiffs to identify Texas Roadhouse’s suppliers of its trade dress
fixtures. This discovery request was made in Interrogatory Number 29. Plaintiffs assert that they
have turned over a list of the most common suppliers and that they have produced other documents
that identify vendors of trade dress items to Texas Roadhouse restaurants. Plaintiffs have not,
however, provided Defendants with a complete substantive response to the Interrogatory, signed
under oath. Plaintiffs make no argument to the Court that the Interrogatory is improper. Therefore,
the Court orders Plaintiffs to respond to Interrogatory 29.
F. Detailed Profit and Loss Financial Information
Defendants asked for detailed profit and loss financial information for each individual Texas
Roadhouse store. Plaintiffs represent that they turned over some financial documents on November
11, 2016. Plaintiffs state that they produced detailed financial information on a national level for all
stores and on a store-by-store basis for the stores for which Plaintiffs can show evidence of a
probability of confusion or actual confusion with Defendants’ stores.
Plaintiffs take issue with Defendants’ own refusal to produce any of Defendants’ financial
documents in discovery. Discovery of Defendants’ financial documents was addressed in a previous
motion to compel, and the Court did not order production of those documents due to a pending
Motion to Bifurcate liability from damages. The parties briefed the issues in the instant motion
before the Court issued its Opinion and Order that declined to order production of Defendants’
financial information. As with the earlier motion to compel, the instant motion only asks for
financial information on the basis of calculation of damages. Because the Motion to Bifurcate
remains pending and the only reason provided for production of financial information is for the
calculation of damages, the Motion to Compel as to Plaintiff’s financial information is denied
without prejudice as premature. Defendants may refile their motion as to production of financial
information either after the Court rules on the motion to bifurcate or with argument as to why the
requested production falls within the scope of discovery as to liability.
G. Allocation of Costs of Production of Discovery
Plaintiffs ask the Court to order Defendants to pay for part of all of the reasonable costs of
obtaining the information from sources that are not reasonably accessible. Though the Court has the
authority to shift the allocation of expenses incurred in responding to discovery, see Fed. R. Civ. P.
26(c)(1)(B), the Court declines to do so here. The only significantly challenged request brought by
Defendants in this motion is the request to compel trade dress evidence. Plaintiffs chose to initiate
this litigation, and their Second Amended Complaint references their efforts to maintain a
substantially identical look and feel across its nearly 500 locations. Plaintiffs contend that
Defendants are using “discovery tactics which seem to be designed to drive up the cost of litigation
and stall the progression of this case.” (Resp. at 21, ECF No. 166). The Court finds, however, that
Defendants are seeking this information to prepare a defense against the allegations of the Second
Amended Complaint and that shifting the costs of responding to these discovery requests is not
warranted, especially in light of the scope of these requests as narrowed by the Court.
H. Reasonable Expenses
Plaintiffs and Defendants both ask for an award of reasonable expenses under Federal Rule
of Civil Procedure 37(a)(5). Because the Court is granting in part and denying in part the Motion
to Compel, the proper analysis is found in Rule 37(a)(5)(C). Rule 37(a)(5)(C) provides that “[i]f the
motion is granted in part and denied in part, the court may . . . after giving an opportunity to be
heard, apportion the reasonable expenses for the motion.” “In determining a reasonable
apportionment of fees, the court will look to the relative degree of success of the party seeking fees.”
McGrath v. Everest National Ins. Co., 2:07 cv 34, 2008 WL 4261075, at *1 (N.D. Ind. Sept. 11,
2008). “However, the degree of success in the motion to compel is not the sole determinant when
proportioning fees. The court also will look to the degree to which the objecting party was justified
in refusing greater cooperation.” Id. “District courts possess wide latitude in fashioning appropriate
sanctions and evaluating the reasonableness of attorney’s fees requested.” Johnson v. Kakvand, 192
F.3d 656, 661 (7th Cir. 1999).
Defendants sought an order compelling five categories of information. The request to compel
financial information is denied as moot as premature. Three categories—franchise agreements for
each Texas Roadhouse franchisee, site selection plans and consumer and market research, and the
identity of Texas Roadhouse’s suppliers of its trade dress fixtures—are given little attention by the
parties in the briefs. Defendants partially prevailed on the remaining category, trade dress, though
with a limitation in scope. Taking into account Defendants’ degree of success on the several issues
presented in the Motion to Compel and also taking into account Plaintiffs’ justification in refusing
to cooperate more completely, the Court declines to award reasonable expenses to either party.
Based on the foregoing, the Court hereby GRANTS in part, DENIES in part, and DENIES
without prejudice in part the Defendants’ Motion to Compel Discovery Compliance [DE 156].
The Court ORDERS Defendants to provide Plaintiffs with their selected stores for trade
dress evidence discovery on or before May 24, 2017. The Court ORDERS Plaintiffs to respond to
discovery requests and produce documents as ordered herein on or before June 26, 2017. Any
motion for an extension of Plaintiffs’ deadline must show good cause for the extension and provide
a summary of actions taken to comply with this Opinion and Order.
SO ORDERED this 10th day of May, 2017.
s/ Paul R. Cherry
MAGISTRATE JUDGE PAUL R. CHERRY
UNITED STATES DISTRICT COURT
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