United States District Court, E.D. Texas, Sherman Division
TRUE BELIEVERS INK 2, CORP. Plaintiff/Counterclaim-Defendant,
RUSSELL BRANDS, LLC. Defendants/Counterclaim-Plaintiff
MEMORANDUM OPINION AND ORDER
L. MAZZANT UNITED STATES DISTRICT JUDGE
before the Court is Defendants' Motion to Voluntarily
Dismiss Counterclaims Without Prejudice (Dkt. #43) and
Plaintiff and Defendants' Joint Notice and Joint Motion
for Leave to Submit Supplemental Briefing Regarding
Russell's Motion to Voluntarily Dismiss Counterclaims
Without Prejudice (Dkt. #95). Having considered the motions
and the relevant pleadings, the Court holds that Plaintiff
and Defendants' Joint Notice and Joint Motion for Leave
to Submit Supplemental Briefing Regarding Russell's
Motion to Voluntarily Dismiss Counterclaims Without Prejudice
(Dkt. #95) is DENIED and Defendants'
Motion to Voluntarily Dismiss Counterclaims Without Prejudice
(Dkt. #43) is GRANTED.
Believers Ink 2, Corp. (“True Believers”) filed
this trademark infringement action against Russell Brands,
LLC (“Russell”) for allegedly improper use of the
phrase “TRUE BELIEVERS” on June 18, 2018 (Dkt.
#1). True Believers alleges: (1) trademark infringement under
15 U.S.C. § 1114; (2) unfair competition under 15 U.S.C.
§ 1125(a); (3) trademark infringement under Texas common
law; (4) unfair competition under Texas common law; and (5)
dilution under the Texas Anti-Dilution Act, Tex. Bus. &
Comm. Code. § 16.103 (Dkt. #1). On July 16, 2018,
Russell filed its Answer, Affirmative Defenses, and
Counterclaims (Dkt. #6). Russell asserted three counterclaims
against True Believers: (1) Federal Trademark Infringement
and Unfair Competition in Violation of 15 U.S.C. §
1125(a); (2) Declaratory Judgment (seeking a declaration that
Russell has not infringed, diluted, or engaged in unfair
competition with respect to the marks asserted in True
Believers' Complaint); and (3) Cancellation of the
‘115 Registration (alleging that True Believers has
abandoned this trademark) (Dkt. #6).
now moves to voluntarily dismiss its three counterclaims
under Federal Rule of Civil Procedure 41(a)(2) (Dkt. #43).
Citing the termination of its “#TrueBelievers”
advertising campaign, Russell asserts that its counterclaims
now have “little value” (Dkt. #43). True
Believers opposes dismissal of Russell's counterclaims
asserting that Russell made judicial admissions in its
Answer, Affirmative Defenses, and Counterclaims (Dkt. #46).
Accordingly, True Believers claims that the dismissal of
these alleged judicial admissions would be legally
prejudicial to their action (Dkt. #46). In its Reply, Russell
counters that True Believers' characterization of its
pleadings is inaccurate as Russell has made no judicial
admissions (Dkt. #47). Thus, Russell contends that True
Believers will suffer no legal prejudice should the Court
dismiss Russell's counterclaims (Dkt. #47).
Court heard both parties regarding Russell's
counterclaims on August 1, 2019 at the Final Pretrial
Conference. After the parties were unable to resolve the
matter amongst themselves at the Conference, the Court
granted the parties an additional week to attempt to reach an
agreement (Dkt. #100). On August 8, 2019, True Believers and
Russell petitioned the Court again stating that they were
still at an impasse. Consequently, the parties filed a Joint
Notice and Joint Motion for Leave to Submit Supplemental
Briefing Regarding Russell's Motion to Voluntarily
Dismiss Counterclaims Without Prejudice (Dkt. #95). The Court
concludes that no additional briefing is necessary and now
considers Russell's Motion to Voluntarily Dismiss
Counterclaims Without Prejudice.
41(a)(2) of the Federal Rules of Civil Procedure provides
that “an action may be dismissed at the plaintiff's
request only by court order, on terms that the court
considers proper.” Fed.R.Civ.P. 41(a)(2); accord
Elbaor v. Tripath Imaging, Inc., 279 F.3d 314, 317 n.2
(5th Cir. 2002); Davis v. Huskipower Outdoor Equip.
Corp., 936 F.2d 193, 198-99 (5th Cir. 1991). The same
rule extends to the dismissal of counterclaims. See
Fed. R. Civ. P. 41(c)(2). The primary purpose of Rule
41(a)(2) is to “prevent voluntary dismissals which
unfairly affect the other side, and to permit the imposition
of curative conditions.” Manshack v. Sw. Elec.
Power Co., 915 F.2d 172, 174 (5th Cir. 1990) (citing 9
C. Wright & A. Miller, Federal Practice and
Procedure § 2364, at 165 (1971)). When determining
whether to dismiss a counterclaim, the Fifth Circuit has held
that “[t]he decision to dismiss an action rests within
the sound discretion of the trial court and may only be
reversed for an abuse of that discretion.” Schwarz
v. Folloder, 767 F.2d 125, 129 (5th Cir. 1985) (citing
La-Tex Supply Co. v. Fruehauf Trailer Division, 444
F.2d 1366, 1368 (5th Cir. 1971); see United States ex
rel. Doe v. Dow Chem. Co., 343 F.3d 325, 329 (5th Cir.
2003) (citation omitted); Templeton v. Nedlloyd
Lines, 901 F.2d 1273, 1274-75 (5th Cir. 1990) (citing
LeCompte v. Mr. Chip, Inc., 528 F.2d 601, 604 (5th
Cir. 1976)). Generally, a motion for voluntary dismissal
should be freely granted unless the non-moving party will
suffer some plain legal prejudice other than the possibility
of a second lawsuit. See Doe, 343 F.3d at 330
(citing Elbaor, 279 F.3d at 317); Davis,
936 F.2d at 199; Ikospentakis v. Thalassic S.S.
Agency, 915 F.2d 176, 177 (5th Cir. 1990). Moreover,
“[i]t is not a bar to dismissal that [the moving party]
may obtain some tactical advantage thereby.”
Manshack v. Sw. Elec. Power Co., 915 F.2d 172, 174
(5th Cir. 1990) (quoting 9 C. Wright & A. Miller,
Federal Practice and Procedure § 2364, at 165
(1971)). If the Court finds that legal prejudice does not
exist, then the motion should be granted. See
Elbaor, 279 F.3d at 317. If, however, the Court finds
that the motion will cause legal prejudice, then the Court
may deny the motion or impose conditions that will cure the
prejudice. Id. at 317- 18.
Believers asserts that Russell's Answer, Affirmative
Defenses, and First Amended Counterclaims (Dkt. #16) contain
judicial admissions (Dkt. #46). Citing its intent to
“utilize the judicial admissions at trial to simplify
and streamline the presentation of evidence to the jury,
” True Believers claims that it would be “highly
[prejudicial], both legally and practically, if Russell were
permitted to dismiss its counterclaims at this late date . .
.” (Dkt. #46). Russell, however, denies that any
judicial admissions were made (Dkt. #43). Consequently,
Russell asserts that there would be no legal prejudice to
True Believers if the Court were to grant Russell's
Motion to Voluntarily Dismiss Without Prejudice (Dkt. #43).
To determine whether Russell's counterclaims should be
dismissed, the Court must first determine whether
Russell's Answer, Affirmative Defenses, and First Amended
Counterclaims contain judicial admissions. The Court will
then turn to whether True Believers would be legally
prejudiced by a dismissal of the counterclaims.
judicial admission is “a formal concession in the
pleadings or stipulations by a party or counsel that is
binding on the party making them. Although a judicial
admission is not itself evidence, it has the effect of
withdrawing a fact from contention.” Martinez v.
Bally's Louisiana, Inc., 244 F.3d 474, 476 (5th Cir.
2001). By withdrawing a fact from contention, a judicial
admission “acts as a substitute for evidence in that it
does away with the need for evidence in regard to the subject
matter of the judicial admission.” Blue Spike, LLC
v. Audible Magic Corp., No. 6:15-CV-584, 2016 WL
7636118, at *5 (E.D. Tex. June 21, 2016) (quoting State
Farm Mut. Auto. Ins. Co. v. Worthington, 405 F.2d 683,
686 (8th Cir. 1968)).
qualify as a judicial admission, the Fifth Circuit has held
that a statement must be: “(1) made in a judicial
proceeding; (2) contrary to a fact essential to the theory of
recovery; (3) deliberate, clear, and unequivocal; (4) such
that giving it conclusive effect meets with public policy;
and (5) about a fact on which a judgment for the opposing
party can be based.” Heritage Bank v. Redcom Labs.,
Inc., 250 F.3d 319, 329 (5th Cir. 2001) (citing
Griffin v. Superior Ins. Co., 161 Tex. 195, 338
S.W.2d 415, 419 (1960)). While it is true that “factual
assertions in pleadings . . . are considered to be judicial
admissions conclusively binding on the party who made them,
” that is not always the case. White v.
ARCO/Polymers, Inc., 720 F.2d 1391, 1396 (5th Cir.
1983). Indeed, courts have generally recognized that
pleadings made in the alternative do not constitute a
judicial admission. See, e.g., Cont'l Ins.
Co. of New York v. Sherman, 439 F.2d 1294 (5th Cir.
1971) (holding that “there is ample authority that one
of two inconsistent pleas cannot be used as evidence in the
trial of the other.”) (citing Giannone v. United
States Steel Corporation, 238 F.2d 544, n. 4 (3rd Cir.
1956); McCormick on Evidence, § 242 at 509-510
(1954)); Wells Fargo Bank, N.A. v. Guevara, 2010 WL
5824040, at *3 (N.D. Tex. 2010) (“[Plaintiff] may not
use allegations related to one claim as evidence to
invalidate an alternative claim.”) (citation omitted);
Boulle, Ltd. v. De Boulle Diamond & Jewelry,
Inc., 2014 WL 4261994, at *7 (N.D. Tex. Aug. 29, 2014)
(“Defendant should not be able to use
Plaintiff's trademark infringement claims as an
admission to Defendant's trademark infringement
claim. Therefore, Plaintiffs' statements in the Amended
Complaint and in the Joint Pretrial Order are not binding
judicial admissions, given the inconsistent statements
Plaintiffs provide in their answers.”). To be sure,
where a party's pleadings are inconsistent-e.g., pled in
the alternative-any “admission” cannot be
unequivocal. See Gabarick v. Laurin Mar. (Am.),
Inc., 406 Fed.Appx. 883, 889 (5th Cir. 2010) (quoting
Sherman, 439 F.2d at 1298).
True Believers alleges that Russell's First Amended
Counterclaim contains statements that constitute judicial
admissions. Citing paragraphs 9-13, 15-18, 20-22, 52-56, and
60-63 of Russell's First Amended Counterclaim, True
Believers contends that Russell has admitted: (1) that it
used “TRUE BELIEVERS” as a mark; (2) that the
parties' “respective use” of the mark is
likely to cause confusion; (3) that it is using the mark
“in connection with services that are identical to the
services” True Believers offers; and (4) that
“the parties use ‘TRUE BELIEVERS' in the same
channels of trade” (Dkt. #46). Contrary to True
Believers' assertions, however, Russell's statements
cannot be characterized as judicial admissions. First, it is
clear to the Court that several of the disputed statements
merely contain general information about Russell, such as the
brand names that Russel sells merchandise under, the history
of Russell, and Russell's ownership of the
“SPALDING” and “TRUE TO THE GAME”
trademarks. It is readily apparent that these statements are
not “contrary to a fact essential to the theory of
recovery;” therefore, the Court finds that paragraphs
9-13, 15, and 16 do not qualify as judicial statements.
Heritage Bank, 250 F.3d at 329 (citation omitted).
Paragraphs 16, 17, 18, 20, and 22 appear to detail
Russell's advertisement campaign revolving around the
phrase “True Believers.” These statements fail to