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Ltd. v. Panjwani

United States District Court, S.D. Texas, Houston Division

November 21, 2017

BUC-EE'S, LTD., Plaintiff,
AMJAD PANJWANI, et al., Defendants.



         This is an intellectual property case between companies that provide convenience store and gas station merchandise and services in Texas. Pending before the Court is Defendants' Motion for Dismissal for Attempting to Influence the Testimony of a Witness (Doc. No. 157). After considering the motion, response, reply, and applicable law, the Court denies Defendants' motion.

         I. BACKGROUND

         Plaintiff Buc-ee's, Ltd. (“Buc-ee's”) brings claims against Defendants Shepherd Retail, Inc., Blanco Restaurant, Inc., Live Oak Retail, Inc., Harlow Food, Inc., Mariam, Inc., S.W. Retail Inc., Falfurrias Highway Foods, Inc., and Highway 46 Retail, Inc. (collectively, “Defendants”) for trademark dilution, trademark infringement, false designation of origin, unjust enrichment, and unfair competition. (Doc. No. 78 ¶ 1.)

         Buc-ee's' claims arise out of Defendants' use of an alligator logo, which Buc-ee's alleges is confusingly similar to Buc-ee's' trademarks. (Doc. No. 78 ¶ 2.) Buc-ee's uses a logo consisting of a cartoon beaver in front of a yellow circle for its Buc-ee's convenience stores and gas stations. Defendants use a logo consisting of a cartoon alligator in front of a yellow circle for their Choke Canyon convenience stores, gas stations, and restaurants.

         Defendants move the Court to dismiss all of Buc-ee's' claims with prejudice for allegedly attempting to influence a witness's testimony by filing a separate lawsuit against that witness. (Doc. No. 157 at 19-20.) The witness whom Buc-ee's allegedly attempted to influence is Buck's, a company based in Omaha, Nebraska, which owns a convenience store chain named Bucky's and which testified through a designated corporate representative. Buck's and Buc-ee's previously litigated disputes related to their word trademarks, which resulted in settlement in 2009.

         Defendants in this case deposed a representative of Buck's regarding the authenticity of a copy of the 2009 settlement agreement between Buck's and Buc-ee's (hereinafter the “Buck's Settlement Agreement”). (Doc. No. 157-15 at 3:12-4:12; Doc. No. 157-3.) The Buck's Settlement Agreement resolved a trademark opposition and litigation about their respective uses of the trademarks “Bucky's” and “Buc-ee's” in the connection with retail store services featuring convenience store items and gasoline. The parties agreed that each may use and register their respective trademark. (Doc. No. 157-3 at 2.) Defendants argue that the Buck's Settlement Agreement and the underlying trademark dispute are relevant to this case because they undermine Buc-ee's' claim that its mark is famous and they are relevant to Defendants' laches defense. (Doc. No. 170 at 3-4.) The deposition of the Buck's representative in this case occurred in October of 2016. The deposition was taken by written questions and is two pages long. (Doc. No. 157-15.)

         Buc-ee's filed a trademark infringement lawsuit against Buck's and three other defendants on March 17, 2017 (hereinafter the “Buck's Lawsuit”). (Buc-ee's, Ltd. v. Bucks, Inc., Case No. 4:17-cv-00818 (S.D. Tex.).)[1] In the Buck's Lawsuit, Buc-ee's alleges that Buck's and the other defendants seek to operate convenience stores and gas stations in Texas using the Bucky's mark, and that such activity infringes on the Buc-ee's mark. Buck's' counsel has informed Defendants' counsel that Buck's will not testify in this proceeding so long as the Buck's Lawsuit is pending. (Doc. No. 192-7.)

         Defendants argue that the Buck's Lawsuit is frivolous and allege that Buc-ee's filed the Buck's Lawsuit to prevent Buck's from testifying as a fact witness in this case. Plaintiff argues that Defendants' motion for sanctions is itself frivolous and requests that the Court sanction Defendants for filing their motion.


         A. Sanctions Under the Inherent Authority of the Court

         Courts have certain implied, inherent powers to “manage their own affairs so as to achieve the orderly and expeditious disposition of cases.” Link v. Wabash R. Co., 370 U.S. 626, 630-31 (1962). One of the inherent powers of courts is “the power to punish for contempts.” Chambers v. NASCO, Inc., 501 U.S. 32, 44-45 (1991). Conduct that may warrant sanction under the Court's inherent powers includes acting in bad faith, vexatiously, wantonly, or for oppressive reasons. Id. at 45-46. The Court may “fashion an appropriate sanction for conduct which abuses the judicial process.” Id. at 44-45.

         The Court's inherent powers are not without limit. “Inherent powers must be exercised with restraint and discretion.” Chambers, 501 U.S. at 44. The threshold for the use of sanctions under the Court's inherent powers is high. The powers may only be exercised “if essential to preserve the authority of the court” and if the chosen sanction uses the least possible power adequate to achieve the purpose of the sanctions. Nat. Gas Pipeline Co. of Am. v. Energy Gathering, Inc., 86 F.3d 464, 467 (5th Cir. 1996). Dismissal of a lawsuit is a sanction within the court's discretion, but it is a “particularly severe sanction.” Chambers, 501 U.S. at 45. Courts may use dismissal as a sanction only when it is necessary to deter “bad faith or willful abuse of the judicial process.” Woodson v. Surgitek, Inc., 57 F.3d 1406, 1417 (5th Cir. 1995).

         B. ...

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