Lebewohl et al v. Heart Attack Grill LLC et al

Filing 50

ORDER: The Court hereby sets the following schedule aimed at moving this case forward expeditiously. The discovery deadline is hereby extended to February 15, 2012. By that date, the parties should complete all depositions which are not subject to dispute among the parties. Any remaining dispute with respect to such discovery will be discussed and resolved at the conference scheduled to be held, in person, on February 15, 2012 at 3:45 PM, as further set forth within. (Deposition due by 2/15/2012. Discovery due by 2/15/2012. Status Conference set for 2/15/2012 at 03:45 PM before Judge Paul A. Engelmayer.) (Signed by Judge Paul A. Engelmayer on 2/2/2012) (ab)

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

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ELECTKO:\ICALLY FILED

DOC #:
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DATE fiLED:
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JEREMY LEBEWOHL et aI.,
Plaintiff,

11 Civ. 3153 (PAE)

-vORDER
HEART ATTACK GRILL, LLC et aI.,
Defendants.

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)(

PAUL A. ENGELMAYER, District Judge:
The Court is in receipt of plaintiffs' two letters dated January 26, 2012; the first requests
an extension of the discovery deadline, and the second sets forth the basis of an anticipated
summary judgment motion. The Court is also in receipt of the defendants' January 30, 2012
letter in response. The letters, but not their attachments, are attached.
The Court notes that in its January 4,2012 conference with the parties, the Court set a
briefing schedule for any summary judgment motions, with deadline for opening papers set for
Friday, January 27, 2012. That date passed with no submission, leading the Court to conclude
that neither side intended to move for summary judgment. The Court now understands that
plaintiffs intend to make such a motion.
The Court hereby sets the following schedule aimed at moving this case forward
expeditiously. The discovery deadline is hereby extended to February 15,2012. By that date,
the parties should complete all depositions which are not subject to dispute among the parties.
Any remaining dispute with respect to such discovery will be discussed and resolved at the
conference scheduled to be held, in person, on February 15,2012 at 3:45 p.m. In the event that
there are outstanding discovery disputes at that time, the Court will resolve them at that

-2­

conference, and set a prompt timetable for their resolution. In the event the Court determines
that a party has not complied with a prior discovery order of this Court, the Court will take
appropriate remedial action.
The parties shall come to the February 15 conference prepared to discuss all outstanding
issues in this case. These issues include (1) plaintiffs' anticipated summary judgment motion,
(2) defendants' anticipated cross-motion, (3) the ongoing discovery dispute, including the
question of whether Mr. Basso's deposition binds the corporate defendants, and (4) plaintiffs'
January 25 request for sanctions. Defendants may submit a letter in response to plaintiffs' premotion letter by February 7, 2012. At the conference, the Court will set a briefing schedule for
summary judgment motion.

SO ORDERED.

Paul A. Engelmayer
United States District Judge
Dated: February 2, 2012
New York, New York

JAKUBOWITZ & CHUANG LLP

ArrORNEYS AT LAW
401 BROADWAY, SUlTE 408
NEW YORK, NY 10013

WILLIAM W. CHUANG

TOVIA JAKUBOWITZ

[phone]
[phone]

WILLlAM@jCLA WLLP.COM
TOVIA@jCLA WLLP.COM

January 26, 2012
BYFEDEX
Hon. Judge Paul A. Engelmayer
U.S. District Judge
United States Courthouse
500 Pearl St.
New York, NY 10007-1312
RE:

Lebewohl etal. v. Heart Attack Grill LLC, etal., Case No. ll-cv-3153.

Dear Judge Engelmayer:
My firm represents the Plaintiffs in this case. As we intend to move for summary judgment,
we write to request a pre-motion conference. Even when viewed in the light most favorable
to HAG, there are no genuine issues of material fact disputing that: (1) Plaintiffs have used
the "Instant Heart Attack Sandwich" mark in interstate commerce as a trademark and (2)
that such use predated HAG's first use of the "Heart Attack Grill" trademark. Therefore, we
seek summary judgment in our favor as to these points.
The summary judgment motion will amplify the arguments set forth in the Plaintiffs'
December 9, 2011 letter to the Court responding to HAG's proposed summary judgment
motion, and the Plaintiffs' opposition to HAG's motion to dismiss the counterclaims.
Documents referred to in this letter have previously been submitted to the Court as part of
these filings.
Plaintiffs have been using the "Instant Heart Attack Sandwich" as a trademark, which is any
word used by a person to identify and distinguish his goods from those sold by others, and
to indicate the source ofthe goods. 15 U.S.c. § 1127; DC Comics. Inc. v. Powers, 465 F.Supp.
843,846 (S.D.N.Y. 1978). Plaintiffs have continuously used the "Instant Heart Attack
Sandwich" mark to identify its product, a beef sandwich made with Iatkes, since at least
2004, and to distinguish this product from similar sandwiches sold by others. The Instant
Heart Attack Sandwich mark has become associated with the 2ND AVE DELI, as
demonstrated by the January 6,2006 New York Times article. 1
1 These documents are part of Trademark Office file on the Instant Heart Attack Sandwich trademark
application, which can be viewed at http://tdr.uspto.gov/search.action?sn=85140751#

1

Plaintiffs have also been using the Instant Heart Attack Sandwich mark in connection with
its sandwich. According to 15 U.S.c. § 1127, a mark is used in commerce on goods when:

(A) it is placed in any manner on the goods or their containers or the displays
associated therewith or on the tags or labels affixed thereto, or ifthe nature ofthe
goods makes such placement impracticable, then on documents associated with
the goods or their sale, and
(B) the goods are sold or transported in commerce.

The Instant Heart Attack Sandwich is not served in a wrapper, and it is impracticable to
affix tags or labels on the sandwich. Therefore, the mark is used on menus, which describe
it as a "sandwich consisting of two large Potato Pancakes with your choice of Corn beef,
Pastrami, Turkey, Salami." The menu description ofthe Instant Heart Attack Sandwich has
remained essentially unchanged since October 2005 to the present day.
Furthermore, the Plaintiffs have been using the "Instant Heart Attack Sandwich" in
interstate commerce. The Lanham Act can regulate wholly intrastate conduct Dawn Donut
Co. v. Hart's Food Stores. Inc .. 67 F.2d 358, 365 (2d Cir. 1959); see Larry Harmon pictures
Corp. v. Wiliams Rest. Corp., 929 F.2d 662, 666 (Fed. Cir. 1991) (use of a mark by a single­
location restaurant held to be use in commerce). This is because the Lanham Act arises
under the Commerce Clause powers of the Congress. United We Stand Am. y. United We
Stand. America. NY. 128 F.3d 86, 92 (2d Cir. 1997). Wholly intrastate conduct falls within
the scope of the Lanham Act when the alleged infringement, though occurring in intrastate
commerce, has a substantial effect on interstate commerce. Franchised Stores of New York.
Inc. v. Winter, 394 F.2d 664, 669 (2d Cir. 1968). A substantial effect on interstate commerce
within the meaning of the Commerce Clause can be found when restaurants offer to serve
interstate travelers or when they serve food, a substantial portion of which has moved in
interstate commerce. Katzenbach v. McClung, 379 U.S. 294, 304 (1964).
In this case, the Plaintiffs' business has had a substantial effect on interstate commerce. The
2ND AVE DELI has two locations in Manhattan, New York. Both locations are within five
miles of New Jersey, and thirty miles of Connecticut, and close to interstate highways to
those states. Plaintiffs will show that a substantial portion of its food comes from out-of­
state suppliers, and that they serve interstate travelers and commuters due to their
proximity to New Jersey and Connecticut The 2ND AVE DELI has also advertised the
Instant Heart Attack Sandwich on its website. Reviews for the Instant Heart Attack
Sandwich were posted on Chowhound. The New York Times mentioned the Instant Heart
Attack Sandwich when discussing the 2ND AVE DELI. Therefore, Plaintiffs have been using
the "Instant Heart Attack Sandwich" mark in interstate commerce. Patsy's Italian Rest.. Inc.
v. Banas, 658 F.3d 254, 268 (2d Cir. 2011) (finding that single-location restaurant rendered
services in commerce because it was accessible from several nearby interstate highways,
articles about the restaurant were found in the New York Times, which extends to an
interstate audience, reviews for the restaurant were found in various publications, and
there was testimony that people came "from all over" to go there).

2

Lastly, Plaintiffs have been using the Instant Heart Attack Sandwich trademark before HAG
started using the Heart Attack Grill mark in commerce. In its trademark application for the
Heart Attack Grill mark, HAG alleged a date of first use in commerce of October 1, 2005.
Plaintiffs have submitted a review of the 2ND AVE DELI dated May 19, 2004 that mentions
the Instant Heart Attack Sandwich. Plaintiffs also provided an invoice dated October 10,
2005 for a July 28, 2005 order of menus listing the Instant Heart Attack Sandwich. There is
also a New York Times article dated January 6,2006 mentioning the Instant Heart Attack
Sandwich, which shows that the Plaintiffs' mark was already famous just three months
after HAG began to use its marks. Lastly, Plaintiffs will provide testimony that the Instant
Heart Attack Sandwich was created and first used as a trademark in the early 2000s.
In conclusion, Plaintiffs seek summary judgment that it has used the Instant Heart Attack
mark as a trademark in interstate commerce prior to HAG's first use in interstate
commerce of the Heart Attack Grill mark. This request is well-founded on documentary
evidence and case law. Granting this motion will dramatically simplify the issues involved
in this case, and HAG will have to give a straight answer as to whether or not it believes
there is a likelihood of confusion between the Plaintiffs' marks and the HAG Marks-which
is something they have yet to do. This will aid the resolution of this case.
Very TryJy~Yours,

fiJ~~
William W. Chuang, Esq.
CC:

Robert C. Kain, Jr. (bye-mail)

Darren Spielman (bye-mail)

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JAKUBOWITZ & CHUANG LLP

ATTORNEYS AT LAW
401

BROADWAY, Sum 408
NEW YORK, NY 10013

WILLIAM W. CHUANG
TOVIA JAKUBOWITZ

[phone]
[phone]

WILLlAM@ICLA WLLP.COM
[e-mail]

January 26, 2012
BYFEDEX

Hon. Judge Paul A. Engelmayer
U.S. District Judge
United States Courthouse
500 Pearl St.
New York, NY 10007-1312
RE:

Lebewohl et aI. v. Heart Attack Grill LLC, et al., Case No. ll-cv-3153.

Dear Judge Engelmayer:
My firm represents the Plaintiffs in this case. We seek a Court ruling that the deposition of
Jon Basso taken on January 13, 2012 would serve as the depositions of the corporate
defendants. We also seek an extension of discovery to serve and depose the members of the
Diet Center LLC first identified by HAG on January 13,2012.
The depositions of Jon Basso and the corporate defendants were noticed for and taken on
January 13, 2012. Mr. Basso was the only witness offered by HAG, which makes sense
because they claim in their Initial Disclosures and interrogatory responses that he is the
only person with relevant knowledge in this case. The subpoenas for Mr. Basso and the Diet
Center LLC (DE) along with the topics noticed for deposition were entered as exhibits and
shown to Mr. Basso. Nevertheless, HAG soon claimed that the testimony ofJon Basso would
not necessarily bind the corporate defendants.
This is yet another discovery dispute manufactured by HAG in an effort to avoid
adjudication of the merits of this case, and to burden Plaintiffs with legal fees. HAG has
provided vague and conflicting explanations as to why the defendants would not be bound
by Mr. Basso's testimony. Apparently, HAG believes that the Plaintiffs should have deposed
Mr. Basso in his personal capacity and then taken new depositions covering the same topics
for each corporate defendant. This would only make sense if HAG thought that Mr. Basso's
recollection of events and preparation to testify would vary depending on which hat he
wore. In any event, HAG believes that deposing all the corporate defendants should have
taken until Saturday, January 14, and faults Plaintiffs for only taking a single day of
depositions.

1

It is difficult to see how defendants could avoid being bound by Mr. Basso's testimony.
According to HAG, Mr. Basso was the only member of the Heart Attack Grill LLC, HAG LLC,
and the Diet Center LLC (TX). In fact, the assets of these businesses were passed forward to
successor entities as Heart Attack Grill restaurants went out of business seriatim in Tempe,
Arizona, then Chandler, Arizona, then Dallas, Texas, at which point the assets were seized
by the landlord for nonpayment. Furthermore, HAG claims that Mr. Basso dominated the
management and control of the Heart Attack Grill (DE). It is beyond dispute that the
corporate defendants are bound by Mr. Basso's testimony.
During the meet and confer, HAG refused to say exactly what was wrong with Plaintiffs'
actions, and what Plaintiffs should have been done differently. HAG refused to provide a
good faith explanation (or any explanation) as to why Mr. Basso would not bind all the
corporate defendants. This is because Plaintiffs acted properly, and took Mr. Basso's
testimony on behalf of all the corporate defendants.
Plaintiffs also seek an extension of the discovery deadline to a week before the pretrial
order date, which might be adjourned in light of Plaintiffs' proposed motion for summary
judgment. HAG has only consented to an extension until February 6, and only to take the
depOSition of Fred MossIer. Plaintiffs seek to depose the members of the Diet Center LLC
who were first identified by HAG on January 13, 2012 after much motion practice. We
believe that they are knowledgeable about the trademark issues, business plans to expand,
and the management and control ofthe company. Mr. Basso's testimony has conflicted with
the Operating Agreement, and deposing the members would clarify whether or not Mr.
Basso is even authorized to involve the Diet Center in this lawsuit.
In conclusion, we seek to bind HAG to the testimony of Mr. Basso. We also seek an
extension of discovery to pursue discovery against the belatedly identified members of the
Diet Center LLC (DE).
Very Truly Yours,

William W. Chuang, Esq.
CC:

Robert C. Kain, Jr. (bye-mail)
Darren Spielman (bye-mail)

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900 Southeast Third Avenue, Suite 205
Fort Lauderdale, Florida 33316
Telephone: [phone]
Facsimile: [phone]

Kain & Associates
Attorneys at Law

Complex I P. com®

www.ComplexIP.com

Patent - Trademark - Copyright - Computer Law
Trade Secret - Domain Disputes

Robert C. Kain. Jr.
[e-mail]
Darren Spielman [e-mail]

January 30,2012
(Federal Express)
Paul A. Engelmayer
United States District Judge
United States District Court
Southern District ofNew York
500 Pearl Street, Room 670
New York, NY 10007
[phone]
Re:

Lebewohl. 2nd Ave Deli v. Heart Attack Grill. LLC.. HAG. LLC. and Jon Basso
U.S. District Court, S.D. New York, Case No. ll-CIV-3153-PAE-JCF

Our Ref.: 5087-23

Dear Judge Engelmayer:
We represent Defendants HAG in this action. This letter responds to Plaintiffs, 2nd AVE
DELI's, letter ofJanuary 25 seeking sanctions and two letters dated January 26 seeking an extension
ofdiscovery and the right to file a summary judgment motion.
As for the extension ofdiscovery, weeks ago HAG told 2nd AVE DELI that HAG agreed to
extend discovery to February 6 for Fred MossIer's deposition (as suggested by the Court). HAG
does not want to extend discovery further since the pretrial stipulation is due February 12. 2nd AVE
DELI has not set MossIer for deposition at this time (discovery ended January 13). DELI has
provided no excuse why the Mossier deposition has not been reset. Discovery should not be
extended because 2nd AVE DELI set four (4) depositions for January 13 in Las Vegas and then
voluntarily ended the deposition of BASSO at 2:30 PM (it began at 9:00 AM) without moving
forward on the other depos. HAG was prepared for a long day ofdepositions on Friday, January 13
and was prepared to continue the depositions into Saturday, January 14 ifneeded. Instead, 2nd AVE
DELI ended the depositions suddenly and left early in the afternoon. The requested extension and
sanctions is behavior which should not be tolerated by the Court when counsel for DELI and counsel

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January 30, 2012
Page 2
for HAG flew thousands of miles to attend critical depositions but then DELI terminates the
proceeding without cause. I
As for deposina the other Diet Center (Delaware) investors, it is HAG's position that they
know nothing about New York, have no input as to the rights ofthe parties in New York, and do not
control HAG's extraterritorial rights (outside ofNevada) to use the federally registered marks. The
information they have is not relevant to any issue in the case. 2nd AVE DELI's letters highlight this
point in that their main concern is to attack the credibility ofco-defendant JON BASSO (Defendant,
trademark owner and manager-owner of the corporate Defendants).
As for summ.ary judament, HAG would seek a right to cross move for a declaration of "no
infringement" on 2nd AVE DELI's sole count for declaratory relief.
As for sanctions, BASSO did not remember that the Heart Attack Grill restaurant liquor
license listed all investors until he began preparing for his deposition on January 12. To launch the
Heart Attack Grill restaurant, BASSO was required to pull many, many permits and licenses, buy
equipment, signage and hire employees. It is not surprising that BASSO forgot that the investors
names were listed on the liquor license. Therefore, whatever earlier failures were made in disclosing
this information, such failures were not deliberate and were not made to thwart legitimate discovery
of facts about what happens in New York regarding the Heart Attack Grill.
Issues In This Case:
In the current pleadings, Plaintiffs, 2nd AVE DELI's, complaint only seeks a declaration of

no infringement (no damages requested) in New York. See Second Amended Complaint D.E. 12.
Defendants, HAG's, counterclaims seek (a) declaratory relief relating to Plaintiffs' pending federal
trademark applications (Count TI);2 (b) declaratory relief relative to Plaintiffs' expansion ofits use
ofthe accused marks and terms (Count II); and, (c) declaratory relief for concurrent use relative to
the term "heart attack" (Count N). See Second Amended Answer, D.E. 27. In conjunction with
HAG's motion to voluntarily dismiss Count I, co-defendant JON BASSO (Defendant, trademark
owner and manager-owner ofthe corporate Defendants), filed a declaration that, based upon the then
current evidence provided by 2nd AVE DELI, there is no likelihood ofconfusion.

2nd AVE DELI's request that the Court rule on the evidentiary matter of BASSO's
statements as an agent ofthe corporate defendants is not properly a discovery matter. See
Fed.R.Evid.P. 801 (d)(2)(C) and (D).
I

2

HAG's Count I was dismissed at D.E. 41.
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January 30, 2012
Page 3
Therefore, the sole issue in this case is: "what is happening in New York" relative to HAG's

federally registered marks and relative to the accused marks used by 2nd AVE DELI. Nevada has
nothing to do with the issues in this case.
Evidence Produced:
Since September of last year, 2nd AVE DELI knew Diet Center (Delaware)'s rights were
strictly limited to Nevada. On September 12,2011, HAG disclosed to 2nd AVE DELI the enclosed
AEO Trademark License Agreement (AEO Bates Page HAG 2291) which clearly provides: (a) co­
defendant BASSO is the trademark owner (see introductory paragraph); (b) Diet Center (Delaware)
has an exclusive right to use the HAG marks in Nevada ONLY (see pg. 2291,,1); (c) BASSO, as
licensor, pays all fees for the HAG marks (pg. 2291, , 3); and (d) Diet Center (Delaware), licensee,
only provides NOTICE of infringement to BASSO but BASSO pays all costs for enforcement (pp.
2291 - 93,,6, 8(H)(2)(indemnity provision).
On October 5, 2011, HAG produced to 2nd AVE DELI three (3) Corporate Resolutions for

Diet Center (Texas), HAG, LLC and Heart Attack Grill, LLC (AEO HAG 2295-2303), all proving
that BASSO did own and currently owns all right, title and interest in the HAG marks. All the
federal registrations for the HAG marks are owned by BASSO, individually. See HAG's Amended
Answer and Counterclaim Exhibits, D.E. 27-1.
On September 30, HAG answered 2nd AVE DELI's interrogatories and stated: "Further, Jon
Basso is the sole owner ofall trademark rights subject to this litigation. Diet Center LLC (Texas) and
Diet Center LLC, (Delaware) have an interest in the rights to the HAG marks. Diet Center LLC
(Delaware) has an exclusive limited territorial license to use HAG's marks in Nevada." On January
13, 2012 at his deposition, BASSO testified consistent with this position that Diet Center (Delaware)
only has rights in Nevada and has no rights elsewhere. BASSO also testified he is the only owner
of the HAG marks.

Although the Operating Agreement (AEO HAG 2345 - 2362) states "The management and
control of the Company shall be vested in the Members. The Members shall take action only by a
positive vote ofthe Required Members" (HAG 2348, , 2. 1(a», the Operating Agreement only deals
with the Nevada HAG trademark rights and not any extraterritorial rights outside of Nevada.
At his deposition, BASSO testified that the Diet Center (Delaware) investors do not have any
management control in the Heart Attack Grill restaurant in Las Vegas. Further, he testified that he
may not even recognize the investors if they passed him on the street and BASSO never interacts
with these investors on business matters other than to produce the monthly accounting reports to the
investors. Further, BASSO testified that the investors never (a) told him how to run the Heart Attack
Grill restaurant; (b) how to organize it or run it; and (c) how to use to use the federally registered
marks.
Therefore, (a) Diet Center (Delaware) has no interest in any HAG trademark rights outside
ofNevada; and (b) the investors of Diet Center (Delaware) have no knowledge of who did what,
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January 30, 2012
Page 4
when or where in New York. Even if the investors had knowledge about New York, that testimony
would be excluded at trial since Diet Center (Delaware) has no rights to any ofthe HAG marks in
New York. Even ifthe investors wrestled control ofDiet Center (Delaware) from BASSO, they still
have no rights to the HAG marks in New York.
Meet and Confer:
During the meet and confer telephone conference prior to DELI's letter motions, counsel for
HAG challenged DELI counsel to establish the relevance of deposing investors. No statement of
relevance was provided other than "to challenge the credibility of BASSO."
Sanctions:
The failure ofBASSO's memory regarding whether the investor data was public knowledge
does not rise to the level ofa sanctionable event. There was no willful withholding ofdata. Further,
the Diet Center (Delaware) investors do not exercise control over the Nevada operation ofthe Heart
Attack Grill restaurant. Lastly, if2nd AVE DELI wanted to attack the credibility ofBASSO, it had
and still has an opportunity to do so with Fred Mossier's deposition. However, Mossier's deposition
has not been reset even within the agreed-to time frame which expires February 6.
WHEREFORE, Defendants request that the motions be denied.

RCKlcjp
cc: William Chuang, Esq. via email

Sincerely.
IslRobertKain /1/7
Robert C. Kain:J;, for the Firm

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