Stockade Companies, LLC et al v. Kelly Restaurant Group, LLC

Filing 87

ORDER DENYING Plaintiffs' Opposed 66 Motion to Compel and for Discovery Sanctions. Signed by Judge Robert Pitman. (klw)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
AUSTIN DIVISION
STOCKADE COMPANIES, LLC and
STOCKADE FRANCHISING, LP,
Plaintiffs,
v.
KELLY RESTAURANT GROUP, LLC,
Defendant.

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1:17-CV-143-RP

ORDER
Before the Court in the above-entitled matter are Plaintiffs’ Opposed Motion to
Compel and for Discovery Sanctions, (Dkt. 66), and the responsive filings thereto. Having
considered the parties’ arguments, the case file, and relevant law, the Court concludes that
Plaintiffs’ motion is DENIED.
I. BACKGROUND AND OVERVIEW
Plaintiffs Stockade Companies, LLC and Stockade Franchising, LP (collectively,
“Plaintiffs” or “Stockade”) own and license the trademarks for the Sirloin Stockade, Coyote
Canyon, and Montana Mike’s restaurants. (Compl., Dkt. 1, ¶ 1). Stockade filed suit against
Defendant Kelly Restaurant Group (“KRG” or “Defendant”) on February 24, 2017. (Dkt.
1). Stockade subsequently filed a Motion for Preliminary Injunction, which the Court
granted in part on May 31, 2017. (Dkt. 26). In that order, the Court directed KRG to debrand its Sirloin Stockade, Coyote Canyon, and Montana Mike’s franchise restaurants within
21 days. (Id. at 7). Defendant then rebranded the restaurants in question as “Kansas
Buffets.”

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Plaintiffs filed a second Motion for Preliminary Injunction on July 28, 2017, seeking
an order enjoining Defendant from operating “family-style buffets” at former Stockade
restaurants. (Dkt. 44). Stockade then moved for expedited discovery. (Dkt. 46). The Court
granted that motion, ordering KRG to respond to Stockade’s discovery requests within
seven days. 1 (Dkt. 50).
While its second Motion for Preliminary Injunction was pending, Stockade filed the
instant Motion to Compel and for Discovery Sanctions. (Dkt. 66). The motion alleges that
KRG failed to comply with (1) the initial preliminary injunction’s order that KRG return or
delete manuals and related materials; and (2) an expedited discovery order entered by the
Court following the filing of Stockade’s second Motion for Preliminary Injunction. (Id. at 1).
The Court denied Stockade’s second Motion for Preliminary Injunction on October
16, 2017. (Dkt. 86).
II. DISCUSSION
As the Court has ruled on Stockade’s second Motion for Preliminary Injunction, any
argument regarding KRG’s compliance with the expedited discovery directives are moot.
The Court therefore focuses exclusively on Stockade’s contention that KRG failed to
comply with the initial preliminary injunction order.

Stockade requested that KRG produce (1) from February 1, 2017 to the present, all documents relating to
KRG’s plans or efforts to re-brand its restaurants from Coyote Canyon to Sirloin Stockade; (2) all operating
manuals, training manuals, quality control assessment tools, POS manuals, and recipes that KRG is using at the
Kansas Buffets; (3) all plans related to any changes that KRG plans to make to the Kansas Buffets relating in
any way to food, operations, or system of the restaurant, or to the interior or exterior of the buildings; (4) all
documents related to customer communications to KRG regarding Kansas Buffets since June 15, 2017; (5) all
copies of any manuals or other materials related to Stockade’s operations of Coyote Canyon or Sirloin Stockade
that KRG retained either in hard copy or in any data storage device; (6) all documents related to instructions
regarding returning Stockade’s manuals or other Stockade information; (7) from February 1, 2017 to the
present, all documents related to Gale Premer or any Mexican franchisee of Stockade, including but not limited
to communications between or among KRG and any of the Mexican franchisees. (Mot. Disc., Dkt. 46, at 7).

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According to Stockade, KRG violated the initial preliminary injunction order by
“return[ing] hardcopy manuals but ma[king] only a half-hearted effort [at] a system to delete
electronically stored manuals and related materials.” (Mot. Compel, Dkt. 66, at 1). In
response, KRG asserts that it fully complied with the Court’s order. (Resp, Dkt. 80, at 3).
KRG notes that Stockade did not object to KRG’s Compliance Report, (Dkt. 35), which
detailed its compliance with the initial preliminary injunction order, and has offered no
evidence supporting its claim that KRG is withholding relevant documents.
The Court agrees that any allegations by Stockade regarding KRG’s noncompliance
are speculative. Stockade’s motion focuses primarily on KRG’s process for collecting
information—not on providing evidence regarding what information, if any, was allegedly
withheld. (Mot. Compel, Dkt. 66, at 9–10; Reply, Dkt. 81, at 2). Moreover, testimony at
hearings regarding Stockade’s second Motion for Preliminary Injunction demonstrated that
KRG did indeed return Stockade materials. (Tr., Dkt. 84, at 131, 170–72).
Stockade cites no law in support of its contention that the Court should require
KRG to retain a forensic consultant or otherwise impose sanctions. 2 Given the evidence
now before it, the Court sees no reason to grant such relief.

Stockade relies on Federal Rule of Civil Procedure 37 to argue that KRG should be sanctioned for its alleged
failure to comply with the expedited discovery order. (Mot. Compel, Dkt. 66, at 11). Rule 37 pertains to
discovery matters. As noted above, any arguments related to the Court’s order granting expedited discovery are
now moot.

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III. CONCLUSION
Plaintiffs’ Opposed Motion to Compel and for Discovery Sanctions, (Dkt. 66), is
DENIED.

SIGNED on October 17, 2017.

_____________________________________
ROBERT PITMAN
UNITED STATES DISTRICT JUDGE

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