Uptown Grill, LLC v. Shwartz

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

UPTOWN GRILL, LLC CIVIL ACTION

VERSUS NO. 13-6560

MICHAEL LOUIS SHWARTZ, ET AL. SECTION: “H”

ORDER AND REASONS

Pending before the Court are four Motions: (1) Shwartz’s1 Motion to

Dismiss for Lack of Jurisdiction Under the Rooker-Feldman Doctrine (Doc.

442), (2) Khodr’s2 Motion for Rule 11 Sanctions (Doc. 456), (3) Khodr’s Motion

for Partial Summary Judgment on Trade Dress Injunction (Doc. 435), and (4)

Shwartz’s Motion for Summary Judgment (Doc. 414). The Court heard oral

argument on all four Motions on November 18, 2020 and took the matter under

advisement.

For the following reasons, Shwartz’s Motion to Dismiss for Lack of

Jurisdiction Under the Rooker-Feldman Doctrine is DENIED, Khodr’s Motion

for Rule 11 Sanctions is DENIED, Khodr’s Motion for Partial Summary

Judgment on the Issue of Standing is DENIED, and Shwartz’s Motion for

Summary Judgment is GRANTED IN PART and DENIED IN PART.

1 For ease of reference, Michael Shwartz and the Shwartz-owned entities (Camellia Grill

Holdings, Inc.; and Camellia Grill, Inc.) are collectively referred to as “Shwartz.”

2 Hicham Khodr and the Khodr-owned entities (Uptown Grill, L.L.C.; Uptown Grill of Destin,

L.L.C., The Grill Holdings, L.L.C., RANO, L.L.C., K&L Investments, L.L.C., Robert’s

Gumbo Shop, L.L.C., and Chartres Grill, L.L.C.) are collectively referred to as “Khodr.”

BACKGROUND

This case arises from two transactions that took place in 2006: 1) the sale

of the New Orleans-based Camellia Grill restaurant, and 2) the licensing of the

rights to Camellia Grill intellectual property. After approximately twelve years

of litigation—seven of which have been before this Court—the parties are still

fighting over what rights they were afforded under those two initial

documents—the Bill of Sale and the License Agreement. This Court has

already stated that, “[a]t every turn, the parties have seemingly operated with

the goal of extending, rather than ending, this litigation.”3 Unfortunately, the

Motions now before the Court exemplify this disturbing pattern.

Although this Court has outlined the parties’ long and litigious history

many times before, the varying scope and subject matter of the pending

Motions again require a detailed recitation of the factual and procedural

background.

I. Factual Background

Michael Shwartz’s family owned the Camellia Grill restaurant on

Carrollton Street for decades (“the Carrollton restaurant”). The Camellia Grill

was operated through Michael Shwartz’s wholly owned company, Camellia

Grill, Inc. Michael Shwartz later formed Camellia Grill Holdings, Inc. (“CGH”),

vesting in it the ownership of Camellia Grill’s federally registered trademarks.

In 2006, following Hurricane Katrina, Michael Shwartz and Hicham

Khodr negotiated the sale of the Carrollton restaurant. In August of 2006, the

parties, through various entities, executed three contracts: (1) the Cash Sale,

(2) the Bill of Sale, and (3) the License Agreement. The August 11, 2006 Cash

Sale transferred the immovable property located at 626 Carrollton Avenue (the

home of the Camellia Grill) to RANO, L.L.C. for $490,000. The August 11, 2006

3 Doc. 294 at 2.

Bill of Sale transferred all “right, title and interest in and to the . . . tangible

property located within or upon” the Carrollton restaurant, including

“appliances, recipes, trademarks, names, logos, likenesses, etc.”4 The Bill of

Sale was executed by Michael Shwartz, Camellia Grill, Inc., and CGH in favor

of Uptown Grill, L.L.C. (“Uptown Grill”), for the sum of $10,000.00.

On August 27, 2006, CGH and Hicham Khodr’s company, The Grill

Holdings, L.L.C. (“The Grill Holdings”), executed the License Agreement, in

which the parties acknowledged that CGH held the federally registered

trademarks and granted The Grill Holdings exclusive license to use the

trademarks for the sum of $1,000,000.00, plus royalties. The License

Agreement expressly retains ownership of the marks to the Licensor, CGH, but

permits The Grill Holdings the right to use certain defined “marks.” These

marks include all trade dress associated with the Camellia Grill restaurant.

The License Agreement also mandates that each of its provisions is

binding upon all sublicensees. Hicham Khodr, through The Grill Holdings,

made many of the Khodr-owned entities sublicensees to the License Agreement

and used those entities to operate the Carrollton restaurant and new Camellia

Grill-style restaurants. Particularly relevant to this litigation is a Camellia

Grill-style restaurant operated by the sublicensee Chartres Grill L.L.C.

(“Chartres Grill”), which operated from 2010 to 2017 on Chartres Street in the

French Quarter (“the Chartres restaurant”). To date, however, the Carrollton

restaurant is the only Camellia Grill-style restaurant in operation.

II. Procedural History

The parties’ litigious history begins in 2008 and includes litigation in

multiple courts. Only the details relevant to the pending Motions are outlined

below.

4 Doc. 442-6 at 1.

A. State Court Litigation

In 2008, The Grill Holdings filed suit in the Civil District Court for

Orleans Parish seeking a declaratory judgment as to whether CGH had the

right to audit The Grill Holdings’ books and records under the License

Agreement.5 The state district court ruled in CGH’s favor, and the Louisiana

Fourth Circuit Court of Appeal denied The Grill Holdings’ application for

supervisory writ. In denying the writ, the Fourth Circuit found the language

of the License Agreement clear and explicit and required The Grill Holdings to

submit to the audit.6

In 2011, CGH again filed suit in the Civil District Court for the Parish

of Orleans, arguing that The Grill Holdings had breached the terms of the

License Agreement and asking for the Agreement’s termination. On appeal,

the Louisiana Fourth Circuit affirmed the district court’s holding that The

Grill Holdings had breached the License Agreement.7 In so holding, the Fourth

Circuit also affirmed the applicability of the post-termination provisions of the

License Agreement.8 The post-termination provisions require The Grill

Holdings to “avoid any action or the continuance of any condition which might

suggest to the public that Licensee has any right to the Marks, or that Licensee

continues to be associated with Licensor” and provide that “all rights and

privileges granted to Licensee hereunder will immediately cease and will

5 Khodr contends that Shwartz initially filed suit against The Grill Holdings in the United

States District Court for the Northern District of Mississippi, but Shwartz voluntarily

dismissed that claim, acknowledging improper venue. Khodr then filed the 2008 state court

action in anticipation of Shwartz’s refiled suit. See Doc. 450 at 5.

6 See Doc. 442-1.

7 The Grill Holdings, L.L.C. v. Camellia Grill Holdings, Inc., 120 So. 3d 294 (La. App. 4 Cir.

2013).

8 Id. at 301–02.

revert to Licensor. Licensee will discontinue use of all Marks.”9 The Louisiana

Supreme Court denied The Grill Holdings’ application for writ.

Although Shwartz argues that the Louisiana courts’ findings preclude

this Court’s consideration of the matters before it, Shwartz does not dispute

the fact that only the License Agreement, not the Bill of Sale, was litigated in

the state courts.

B. Federal Court Litigation

In July of 2013, CGH filed its first federal action against Khodr in this

Court.10 In response to the Carrollton restaurant’s nomination as a historical

landmark, CGH filed suit against The Grill Holdings and the City of New

Orleans alleging trademark infringement and deprivation of property rights

without due process and seeking a preliminary and permanent injunction

prohibiting the historical landmark designation.11 CGH’s requested

preliminary injunction was denied, and CGH filed a Motion for Voluntary

Dismissal, which this Court granted.12

On December 3, 2013, while the Motion for Voluntary Dismissal was

pending, Uptown Grill filed a Complaint for Declaratory Relief, the lead action

in this case, asking this Court to determine the parties’ respective rights in the

Camellia Grill trademarks within or upon the Carrollton restaurant. Shortly

thereafter, Shwartz filed a “Supplemental and Amending Petition” in the

closed state court matter against Hicham Khodr and various Khodr-owned

entities, seeking damages for trademark infringement. Khodr removed the

matter to this Court, and the actions were consolidated. Shwartz amended his

9 See Doc 442-4 at 11.

10 See Camellia Grill Holdings, Inc. v. New Orleans City, No. CIV.A. 13-5148, 2013 WL

4431344 (E.D. La. Aug. 16, 2013).

11 CGH feared that the building’s landmark status would preclude CGH from “requir[ing] the

removal of the façade mark at the termination of the license agreement.” Id. at *1.

12 See Camellia Grill Holdings, Inc. v. New Orleans City, No. 13-5148, 2013 WL 6440505, at

*1 (E.D. La. Dec. 9, 2013).

complaint to assert claims for trade dress infringement, as well as breach of

contract for Khodr’s continued use of Camellia Grill intellectual property

following the termination of the License Agreement.

On July 10, 2015, this Court granted Uptown Grill’s Motion for

Summary Judgment. Shwartz appealed and, on March 23, 2016, the Fifth

Circuit affirmed this Court’s decision in part. The Fifth Circuit affirmed that

(1) this Court had subject matter jurisdiction, (2) laches did not apply to

Uptown Grill’s claims related to the Bill of Sale, (3) the License Agreement

could not be used as parol evidence to modify the terms of the Bill of Sale, and

that (4) the Bill of Sale “clearly and unambiguously transfers to Uptown Grill

the trademarks within or upon the Carrollton Avenue location.”13 The Fifth

Circuit did, however, reverse this Court’s finding that Uptown Grill owned the

Camellia Grill marks beyond the Carrollton location as the issue was not

briefed by the parties. The Fifth Circuit therefore remanded the case back to

this Court to determine the scope of relief considering Uptown Grill’s

representations and practice with respect to the License Agreement.14

On remand, this Court addressed multiple motions for summary

judgment and held a trial to determine damages. Shwartz again appealed. On

March 29, 2019, the Fifth Circuit affirmed this Court’s finding that the Bill of

Sale assigned all Camellia Grill trademark and trade dress rights to Khodr

and that Shwartz’s claims for infringement under the Lanham Act must fail.15

As for the License Agreement, the Fifth Circuit agreed that the License

13 See Uptown Grill, L.L.C. v. Shwartz, 817 F.3d 251, 258 (2016).

14 Id. at 260. Following the Fifth Circuit’s opinion, on June 8, 2016, Shwartz filed a complaint

in the Northern District of Mississippi whereby Shwartz “attempt[ed] to recover for his

claimed loss of the Camellia Grill trademarks, by alleging fraud and misrepresentation

during the transfer of the Camellia Grill trademarks.” Shwartz v. Khodr, 733 F. App’x 215,

216 (5th Cir. 2018). The Northern District of Mississippi transferred the case to this Court,

which subsequently dismissed Shwartz’s claims. The Fifth Circuit affirmed. Id.

15 Uptown Grill, LLC v. Camellia Grill Holdings, Inc., 920 F.3d 243 (5th Cir. 2019).

Agreement constituted a relative nullity under Louisiana law. A “relative

nullity ‘may be invoked only by the person in whose interest the ground for

nullity [such as mutual mistake] was established, and may not be declared by

the court on its own initiative.’”16 As Khodr was not asking that the License

Agreement be nullified, the Fifth Circuit found that it should be enforced “as

far as possible.”17 The Fifth Circuit thus affirmed that Khodr’s use of Camellia

Grill trademarks at the Chartres location constituted a breach of contract. As

for Shwartz’s entitlement to relief, the Fifth Circuit affirmed that there were

no compensable damages at issue and found that the scope of this Court’s

injunction—enjoining the various Khodr entities from using the marks “at any

location other than the Carrollton Location”18—was proper.

Although the Fifth Circuit agreed with this Court’s findings related to

the Bill of Sale, Shwartz’s Lanham Act claim, and Shwartz’s trademark breach

of contract claim, the circuit court reversed this Court’s holding on Shwartz’s

trade dress breach of contract claim. This Court previously “held that Shwartz

could not bring a breach of contract claim based on trade dress because the

elements of [Camellia Grill’s] putative trade dress were not defined in the

License Agreement.”19 On appeal, however, the Fifth Circuit found that “the

elements of a claimed trade dress need not necessarily be articulated in a

contract for a party to enforce his rights under the contract.”20 Accordingly, the

Fifth Circuit found that Khodr’s use of Camellia Grill trade dress could

constitute a breach of the License Agreement. Noting that this Court had

previously identified eight alleged elements of Camellia Grill trade dress, the

Fifth Circuit “remanded for proceedings to determine if Khodr breached the

16 Id. at 250 (quoting LA. CIV. CODE art. 2031).

17 Id.

18 Doc. 358 at 3.

19 Uptown Grill, 920 F.3d at 251.

20 Id.

License Agreement by using the above-detailed alleged trade dress at the

Chartres restaurant.”21

C. The Motions Currently Before the Court

The Fifth Circuit most recently remanded the action to determine

whether Khodr breached the License Agreement by using Camellia Grill trade

dress at the Chartres restaurant after the termination of the License

Agreement. The Fifth Circuit clarified that, “[e]ven though we find all putative

trade dress rights were assigned to Khodr in the Bill of Sale, we must still

determine whether the License Agreement afforded Shwartz any enforceable

contract rights.”22 Having held that the License Agreement was an enforceable

contract between the parties, the Fifth Circuit essentially asks this Court to

determine if Khodr violated the post-termination provisions of the License

Agreement requiring Khodr to “avoid any action or the continuance of any

condition which might suggest to the public that [Khodr] has any rights to the

Marks, or that [Khodr] continues to be associated with [Shwartz].”23 Shwartz’s

current Motion for Summary Judgment asks this Court to rule in his favor on

this issue.

Following the filing of Shwartz’s Motion for Summary Judgment, Khodr

filed a Motion for Partial Summary Judgment on Trade Dress Injunction. In

the Motion, Khodr argues that Shwartz lacks standing to request injunctive

relief as Khodr is not currently participating in any activity that would

constitute a breach of the post-termination provisions of the License

Agreement.

Most recently, on August 14, 2020, Shwartz filed a Motion to Dismiss for

Lack of Jurisdiction under the Rooker-Feldman Doctrine. In the Motion,

21 Id. at 251.

22 Id.

23 Doc 442-4 at 11.

Shwartz contends that the state court judgments deprive this Court of

jurisdiction, rendering void all decisions of both this Court and the Fifth

Circuit related to Uptown Grill’s request for declaratory relief.

In response to Shwartz’s unexpected and consequential Motion to

Dismiss, Khodr filed a Motion for Rule 11 Sanctions, arguing that the Motion

to Dismiss seeks to relitigate already-litigated issues and is an attempt to

“avoid the consequences of seven years of litigation.”24 Khodr therefore

requests that this Court levy sanctions against Shwartz for “abusive and

harassing” conduct.

Provided the significance of Shwartz’s Motion to Dismiss for Lack of

Jurisdiction Under the Rooker-Feldman Doctrine, this Court will address the

Rooker-Feldman Motion first alongside Khodr’s affiliated Motion for Rule 11

Sanctions. The Court will then address Khodr’s Motion for Partial Summary

Judgment on Trade Dress Injunction and conclude with Shwartz’s Motion for

Summary Judgment on Trade Dress.

LEGAL STANDARD

I. Motion to Dismiss

A Rule 12(b)(1) motion challenges the subject matter jurisdiction of a

federal district court. “A case is properly dismissed for lack of subject matter

jurisdiction when the court lacks the statutory or constitutional power to

adjudicate the case.”25 In ruling on a Rule 12(b)(1) motion to dismiss, the court

may rely on (1) the complaint alone, presuming the allegations to be true, (2)

the complaint supplemented by undisputed facts, or (3) the complaint

supplemented by undisputed facts and by the court’s resolution of disputed

24 Doc 456-1 at 2.

25 Home Builders Ass’n of Miss., Inc. v. City of Madison, 143 F.3d 1006, 1010 (5th Cir. 1998).

facts.26 The proponent of federal court jurisdiction bears the burden of

establishing subject matter jurisdiction.27

II. Motion for Sanctions

Federal Rule of Civil Procedure 11 establishes that “[b]y presenting to

the court a pleading, written motion, or other paper . . . an attorney . . . certifies

that[—]to the best of the person’s knowledge, information, and belief, formed

after an inquiry reasonable under the circumstances[—]the factual contentions

have evidentiary support or, if specifically so identified, will likely have

evidentiary support after a reasonable opportunity for further investigation or

discovery.”28 “An attorney’s conduct is judged . . . with an objective, not a

subjective, standard of reasonableness.”29 “Reasonableness is reviewed

according to the ‘snapshot’ rule, focusing upon the instant the attorney affixes

his signature to the document.”30 A court may impose appropriate sanctions on

an attorney or party that violates the Rule, but is not required to do so.31

III. Motion for Summary Judgment

“The court shall grant summary judgment if the movant shows that

there is no genuine dispute as to any material fact and the movant is entitled

to judgment as a matter of law.”32 “As to materiality . . . [o]nly disputes over

facts that might affect the outcome of the suit under the governing law will

properly preclude the entry of summary judgment.”33 Nevertheless, a dispute

about a material fact is “genuine” such that summary judgment is

26 Den Norske Stats Oljesels kap As v. Heere MacVof, 241 F.3d 420, 424 (5th Cir. 2001).

27 See Physicians Hosps. of Am. v. Sebelius, 691 F.3d 649, 652 (5th Cir. 2012).

28 FED. R. CIV. P. 11(b).

29 Snow Ingredients, Inc. v. SnoWizard, Inc., 833 F.3d 512, 528 (5th Cir. 2016).

30 Id. (quoting Smith v. Our Lady of the Lake Hosp., Inc., 960 F.2d 439, 444 (5th Cir. 1992)).

31 See FED. R. CIV. P. 11(b) (“[T]he court may impose an appropriate sanction . . .” (emphasis

added)).

32 FED. R. CIV. P. 56.

33 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

inappropriate “if the evidence is such that a reasonable jury could return a

verdict for the nonmoving party.”34

In determining whether the movant is entitled to summary judgment,

the Court views facts in the light most favorable to the non-movant and draws

all reasonable inferences in his favor.35 “If the moving party meets the initial

burden of showing that there is no genuine issue of material fact, the burden

shifts to the non-moving party to produce evidence or designate specific facts

showing the existence of a genuine issue for trial.”36 Summary judgment is

appropriate if the non-movant “fails to make a showing sufficient to establish

the existence of an element essential to that party’s case.”37

“In response to a properly supported motion for summary judgment, the

nonmovant must identify specific evidence in the record and articulate the

manner in which that evidence supports that party’s claim, and such evidence

must be sufficient to sustain a finding in favor of the nonmovant on all issues

as to which the nonmovant would bear the burden of proof at trial.”38 The Court

does “not . . . in the absence of any proof, assume that the nonmoving party

could or would prove the necessary facts.”39 Additionally, “[t]he mere argued

existence of a factual dispute will not defeat an otherwise properly supported

motion.”40

34 Id. at 248.

35 Coleman v. Hous. Indep. Sch. Dist., 113 F.3d 528, 533 (5th Cir. 1997).

36 Engstrom v. First Nat’l Bank, 47 F.3d 1459, 1462 (5th Cir. 1995).

37 Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).

38 Johnson v. Deep E. Tex. Reg. Narcotics Trafficking Task Force, 379 F.3d 293, 301 (5th Cir.

2004) (internal citations omitted)).

39 Badon v. R J R Nabisco, Inc., 224 F.3d 382, 393–94 (5th Cir. 2000) (quoting Little v. Liquid

Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994)).

40 Boudreaux v. Banctec, Inc., 366 F. Supp. 2d 425, 430 (E.D. La. 2005).

LAW AND ANALYSIS

I. Shwartz’s Motion to Dismiss for Lack of Jurisdiction Under

the Rooker-Feldman Doctrine

In Shwartz’s Motion to Dismiss (Doc. 442), Shwartz argues that this

Court lacks subject matter jurisdiction to hear Uptown Grill’s claims under the

Rooker-Feldman doctrine. Khodr not only disputes the doctrine’s application

but also argues that the Court should disregard Shwartz’s Motion to Dismiss

as untimely under Federal Rule of Civil Procedure 60. Accordingly, this Court

will address the applicability of Rule 60 before addressing the merits of

Shwartz’s Motion.

A. Federal Rule of Civil Procedure 60

Federal Rule of Civil Procedure 60 provides a mechanism by which a

party may seek relief from a final judgment, order, or proceeding.41 Khodr

argues that Shwartz’s Motion to Dismiss should be analyzed under Rule 60 as

the Motion primarily seeks to void this Court’s final orders and/or judgment

granting Uptown Grill’s request for declaratory relief. Khodr further argues

that because the Motion should be analyzed under Rule 60, not Federal Rule

of Civil Procedure 12(h)(3),42 Shwartz’s Motion to Dismiss is untimely.

Although this Court disagrees with Khodr’s analysis, this Court does find that

Rule 60 applies and bars Shwartz’s collateral attack on this Court’s final

rulings in favor of Uptown Grill.

As explained above, this case consists of two consolidated actions:

Uptown Grill’s action for declaratory relief and Shwartz’s claims against

Hicham Khodr and other Khodr-owned entities for trademark infringement,

41 FED. R. CIV. P. 60.

42 Shwartz argues that the Motion to Dismiss is timely in accordance with Federal Rule of

Civil Procedure 12(h)(3). Under Federal Rule of Civil Procedure 12(h)(3), “[i]f the court

determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the

action.”

trade dress infringement, and breach of contract. In 2015, this Court entered

a judgment in favor of Uptown Grill, declaring Uptown Grill to be the owner of

all Camellia Grill trademarks and dismissing Shwartz’s claims.43 On appeal,

the Fifth Circuit affirmed that Uptown Grill owned the Camellia Grill marks

at the Carrollton location but found that the issue of ownership beyond the

Carrollton location had not been sufficiently litigated in this Court.44 The Fifth

Circuit accordingly remanded the case for “further proceedings . . . to

determine the appropriateness of any further relief.”45

In this Court’s first Order and Reasons following remand from the Fifth

Circuit, dated May 26, 2017, this Court found that Uptown Grill’s request for

declaratory relief, the “lead action,” was resolved and that the Fifth Circuit’s

ruling served only to “revive” Shwartz’s claims relative to the use of marks at

locations other than Carrollton Avenue.46 Shwartz’s claims alone have been

the subject of litigation since the Fifth Circuit’s remand. Even if Uptown Grill’s

claims somehow persisted during that time, which this Court does not

countenance, they were certainly finalized with the Fifth Circuit’s 2019 opinion

affirming this Court’s rulings relating to the Bill of Sale. For all relevant

purposes, therefore, Uptown Grill’s claims have been fully and finally

adjudicated.

In Hall v. Hall, the Supreme Court held that a single case in a

consolidated action is independently appealable even if other cases within the

action remain pending.47 In reaching its holding, the Hall Court explained that

“one or many or all of the phases of the several actions may be merged. But

merger is never so complete in consolidation as to deprive any party of any

43 See Doc. 206.

44 Uptown Grill, 817 F.3d at 258–59.

45 Id. at 260.

46 See Doc. 294 at 5.

47 138 S. Ct. 1118 (2018).

substantial rights which he may have possessed had the actions proceeded

separately.”48 Applying Hall’s reasoning to the current matter, it is clear that

analysis under Rule 60 is warranted. Despite consolidation, Uptown Grill has

a substantial right to finality after its rights have been definitively

adjudicated. Shwartz’s current Motion to Dismiss, however, seeks to disturb

that right by voiding all orders and judgments of this Court granting Uptown

Grill’s claims for declaratory relief.49 Accordingly, this Court holds that Rule

60 governs Shwartz’s Motion to Dismiss.50

Federal Rule of Procedure Rule 60(b) provides the grounds upon which a

party may seek relief from a final judgment. These grounds include:

(1) mistake, inadvertence, surprise, or excusable neglect;

(2) newly discovered evidence that, with reasonable diligence,

could not have been discovered in time to move for a new trial

under Rule 59(b);

(3) fraud (whether previously called intrinsic or extrinsic),

misrepresentation, or misconduct by an opposing party;

(4) the judgment is void;

(5) the judgment has been satisfied, released, or discharged; it is

based on an earlier judgment that has been reversed or vacated; or

applying it prospectively is no longer equitable; or

(6) any other reason that justifies relief.

48 Id. at 1130 (quoting 3 J. MOORE & J. FRIEDMAN, MOORE’S FEDERAL PRACTICE § 42.01, at

3050–51 (1938)).

49 See Doc. 442 at 1 (moving this Court to dismiss Uptown Grill’s claims for lack of subject

matter jurisdiction).

50 Although this Court acknowledges the limited case law wherein courts have applied Rule

60 to pending, consolidated actions, this Court agrees with the logic of those cases where

they are available. See e.g., Kurzweil v. Philip Morris Cos., Inc., No. 94 CIV. 2373 (MBM),

1997 WL 167043, at *3 (S.D.N.Y. Apr. 9, 1997) (“My September 1995 order dismissing

plaintiffs’ complaint for failure to state a claim was a final order terminating the litigation

and finally determining the merits of the case, and judgment could have been entered

immediately. The entry of the judgment was delayed only because [of ongoing proceedings

in the consolidated case]. Plaintiffs’ motion is addressed correctly to the September 1995

order and is timely filed under Rule 60(b).”).

Usually, “[a] motion under Rule 60(b) must be made within a reasonable

time—and for reasons (1), (2), and (3) no more than a year after the entry of

the judgment or order or the date of the proceeding.”51 Motions under Rule

60(b)(4), however, do not follow the usual rules.

A judgment is void under Rule 60(b)(4) “‘only if the court that rendered

it lacked jurisdiction of the subject matter, or of the parties, or it acted in a

manner inconsistent with due process of law.’”52 As Shwartz’s Motion to

Dismiss is challenging this Court’s subject matter jurisdiction, it is

appropriately analyzed as a motion under Rule 60(b)(4). Unlike the rest of Rule

60(b), “‘Rule 60(b)(4) motions leave no margin for consideration of the district

court’s discretion as the judgments themselves are by definition either legal

nullities or not.’”53 Further, as “the mere passage of time cannot convert an

absolutely void judgment into a valid one,” Rule 60(b)(4) motions are not

subject to a time limit, and the court must void the judgment if it finds that

subject matter jurisdiction was lacking.54

The caveat to this rule, however, is that “[a] district court’s exercise of

subject-matter jurisdiction, even if erroneous, is res judicata and is not subject

to collateral attack through Rule 60(b)(4) if the party seeking to void the

judgment had the opportunity previously to challenge jurisdiction and failed

to do so.”55 In Picco v. Global Marine Drilling Co., the plaintiff filed a Rule

60(b)(4) motion arguing that the district court’s judgment was void because it

was entered after the bankruptcy court entered an automatic stay and divested

51 FED. R. CIV. P. 60(c)(1).

52 Brumfield v. La. State Bd. of Educ., 806 F.3d 289, 298 (5th Cir. 2015) (quoting Williams v.

New Orleans Pub. Serv., Inc., 728 F.2d 730, 735 (5th Circ. 1984)).

53 Id. at 296 (quoting Carter v. Fenner, 136 F.3d 1000, 1005 (5th Cir. 1998)).

54 Jackson v. FIE Corp., 302 F.3d 515, 523–24 (5th Cir. 2002).

55 United States v. Hansard, No. 07-30090, 2007 WL 2141950, at *1 (5th Cir. July 26, 2007)

(citing Ins. Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702

n.9 (1982); Picco v. Global Marine Drilling Co., 900 F.2d 846, 850 (5th Cir. 1990)).

the district court of jurisdiction.56 The district court granted the Rule 60(b)(4)

motion, and the Fifth Circuit reversed. The Fifth Circuit reasoned that “the

district court was fully aware of the automatic stay, and therefore implicitly

concluded that its dismissal was consistent with its terms. Picco did not object

or appeal to challenge the district court’s jurisdiction.”57 The Fifth Circuit

found that application of res judicata was proper in a case such as this where

“the challenging party was before the court when the order in question was

entered and had notice of it and had a full and fair, unimpeded opportunity to

challenge it, and the court’s jurisdiction, by appeal.”58

This Court finds that the logic of Picco applies to this case. This Court

litigated Uptown Grill’s claims from 2013 to 2017. During that time, both this

Court and the Fifth Circuit addressed the impact that the state courts’

holdings had on this Court’s interpretation of the Bill of Sale and the parties’

intellectual property rights. At all times, this Court found that its jurisdiction

was proper. Additionally, “Rule 60(b)(4) does not provide a license for litigants

to sleep on their rights.”59 Shwartz had a multitude of opportunities to raise

Rooker-Feldman but failed to do so. In fact, Shwartz argued that federal

question jurisdiction was improper in both this Court and the Fifth Circuit but

did not raise Rooker-Feldman.60 Now that Uptown Grill’s claims have long

been settled, this Court does not find reason to disturb its final ruling simply

because Shwartz only recently discovered, seven years after these proceedings

began, the potential applicability of Rooker-Feldman.61 Accordingly, because

56 Picco, 900 F.2d at 849–50.

57 Id. at 850.

58 Id. See also Brown v. Illinois Cent. R. Co., 480 F. App’x 753, 754 (5th Cir. 2010).

59 United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260, 275 (2010).

60 See Uptown Grill, 817 F.3d at 256.

61 See also In re Bell Family Tr., 575 F. App’x 229, 233 (5th Cir. 2014) (rejecting plaintiff’s

arguments that “she only ‘recently’ realized that ‘the court lacked jurisdiction in matters

res judicata applies to this Court’s determination of its finding of jurisdiction62

and because this case does not demonstrate “a clear usurpation of power” or

“total want of jurisdiction” as to warrant the disturbing of a final order,63 this

Court finds that its prior rulings in favor of Uptown Grill should not be

disturbed.

B. The Rooker-Feldman Doctrine

Assuming arguendo that Shwartz’s Motion is properly before the Court,

Shwartz’s Motion to Dismiss for Lack of Jurisdiction Under the Rooker-

Feldman doctrine still fails on the merits. In Rooker v. Fidelity Trust Co.,64 the

Supreme Court stated that federal district courts lacked appellate authority to

reverse or modify state court decisions, even if erroneous.65 Six years later, in

District of Columbia Court of Appeals v. Feldman,66 the Supreme Court stated

that federal courts cannot review state court judicial decisions and cannot

address claims “inextricably intertwined” with the state court decisions.67

Today, “‘the Rooker–Feldman doctrine holds that inferior federal courts do not

of ‘spendthrift’ trust and that there are no deadlines to file a Motion to redress lack of

jurisdiction’” when plaintiff had multiple opportunities to challenge jurisdiction).

62 See Winograd v. Fowler, 184 F.3d 816 at *3 (5th Cir. 1999). In Winograd, the Fifth Circuit

denied consideration of plaintiff’s Rule 60(b)(4) motion to vacate the court’s judgment for

lack of jurisdiction under Rooker-Feldman. Id. at *1. Although the district court did not

address Rooker-Feldman’s application during the proceedings, the Fifth Circuit affirmed

the district court’s finding that res judicata barred consideration of the motion where the

factual basis for Rooker-Feldman was evidenced on the face of the pleadings and the

plaintiff had a “full and fair unimpeded opportunity to challenge it based upon subject

matter jurisdiction.” Id. at *2.

63 “[T]otal want of jurisdiction must be distinguished from an error in the exercise of

jurisdiction, and . . . only rare instances of a clear usurpation of power will render a

judgment void.” Espinosa, 559 U.S. at 271 (quoting United States v. Boch Oldsmobile, Inc.,

909 F.2d 657, 661 (1st Cir. 1990)).

64 263 U.S. 413 (1923).

65 See Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284–85 (2005).

66 D.C. Court of Appeals v. Feldman, 460 U.S. 462 (1983).

67 See Exxon, 544 U.S. at 285–86.

have the power to modify or reverse state court judgments’ except when

authorized by Congress.”68

In Exxon Mobil Corp. v. Saudi Basic. Indus. Corp., the Supreme Court

addressed the Rooker-Feldman doctrine and emphasized that it occupies

“narrow ground.”69 The Supreme Court held that the doctrine only applies to:

(1) cases brought by state court losers, (2) complaining of injuries caused by

state court judgments, (3) rendered before the district court proceedings

commenced, and (4) inviting district court review and rejection of those

judgments.70 The two hallmarks of the Rooker-Feldman inquiry are thus: (1)

“what the federal court is being asked to review and reject,” and (2) “the source

of the federal plaintiff’s alleged injury.”71 If the federal court is being asked to

review a decision from a state court judicial proceeding, and the state court

judgment is the source of the injury, then the Rooker-Feldman doctrine denies

the federal court of subject matter jurisdiction.72 Shwartz argues that all four

elements of the Rooker-Feldman doctrine are satisfied here as the previous

state court rulings are “inextricably intertwined” with Uptown Grill’s

requested declaratory relief. This Court disagrees.

This Court finds that Shwartz cannot demonstrate even the first

requirement of Rooker-Feldman—that the case be brought by a state court

loser. Rooker-Feldman “has no application to a federal suit brought by a

nonparty to the state suit.”73 Here, the parties to the state court proceedings,

68 Truong v. Bank of Am., N.A., 717 F.3d 377, 382 (5th Cir. 2013) (quoting Union Planters

Bank Nat’l Ass’n v. Salih, 369 F.3d 457, 462 (5th Cir. 2004)).

69 Exxon, 544 U.S. at 284.

70 Id.

71 Truong, 717 F.3d at 382.

72 See id. at 382–83.

73 Exxon, 544 U.S. at 287 (paraphrasing Johnson v. De Grandy, 512 U.S. 997, 1005–06

(1994)).

the Grill Holdings and CGH, were the parties to the License Agreement.74

Uptown Grill, a different Khodr-owned entity, brought the initial federal action

for declaratory relief as the sole buyer in the Bill of Sale. As Uptown Grill was

not a party to the state court proceedings, it cannot be the “state court loser”

as required by Rooker-Feldman.

Shwartz contends, however, that because Uptown Grill was a

sublicensee to the License Agreement, Uptown Grill is a “successor in interest”

to The Grill Holdings and thus stands in the shoes of The Grill Holdings for

purposes of Rooker-Feldman. In Lance v. Dennis, the Supreme Court held that

Rooker-Feldman does not bar suits by nonparties to the state action even if,

under preclusion principles, they were in privity with the state court loser.75

The Supreme Court in Lance did, however, acknowledge the possibility of a

limited exception whereby “Rooker-Feldman may be applied against a party

not named in an earlier state proceeding—e.g., where an estate takes a de facto

appeal in a district court of an earlier state decision involving the decedent.”76

Although Shwartz is correct that courts have utilized the Lance exception to

enforce Rooker-Feldman against successors in interest,77 the facts of this case

fit squarely within the holding of Lance, not the exception.

Uptown Grill is not a successor in interest to The Grill Holdings but

rather a distinct juridical entity.78 In fact, the relationship between these two

74 See Docs. 442-1, 442-3, 442-4, 442-5.

75 Lance v. Dennis, 546 U.S. 459, 466 (2006).

76 Id. at 466 n.2.

77 See e.g., Morris v. Am. Home Mortg. Servicing, Inc., 443 F. App’x 22, 24 (5th Cir. 2011)

(finding that the absence of the federal defendant in the state court action did not preclude

applicability of the Rooker-Feldman doctrine where the federal defendant was the

successor-in-interest to the plaintiff in the state foreclosure proceeding).

78 As evidence that Uptown Grill stands in the shoes of The Grill Holdings, Shwartz looks to

a 2012 affidavit by Hicham Khodr stating “[t]hat the sublicensees, Uptown Grill, L.L.C.,

Chartres Grill, L.L.C., and Destin Grill L.L.C. were companies [Hicham Khodr] formed

only for accounting purposes and are not third parties.” See Doc. 115-5 at 3. Shwartz has,

however, already cited to this same language in his briefings to this Court and the Fifth

entities and the extent to which Uptown Grill is bound by the state court

judgments is an issue that has already been examined by both this Court and

the Fifth Circuit. In its first opinion in this matter, the Fifth Circuit affirmed

this Court’s denial of Shwartz’s laches claim, finding that Uptown Grill had

not unreasonably delayed asserting its ownership rights because “Uptown

Grill was not a party to any litigation where ownership of the trademarks was

at issue until it filed its action for declaratory judgment.”79 The Fifth Circuit

further noted that:

even if earlier litigation between Camellia Grill, Inc., CGH, and/or

any of Khodr’s entities could somehow be imputed to Uptown Grill,

the License Agreement, not the Bill of Sale, was at issue in those

cases. Accordingly, Uptown Grill may not be punished for failing

to assert the Bill of Sale in prior litigation, and laches is

inapplicable.80

The Fifth Circuit also went on to find that, because Uptown Grill was not a

party to the License Agreement, the provisions of the License Agreement were

irrelevant to construing the Bill of Sale.81 Thus, although the Fifth Circuit

found Uptown Grill to be an “affiliate” of The Grill Holdings under the License

Agreement, the court did not find the parties so connected as to constructively

render Uptown Grill a party to the state proceedings.82

The Fifth Circuit’s prior statements in this matter are remarkably

relevant to resolving the applicability of Rooker-Feldman. The Fifth Circuit

Circuit to argue that Uptown Grill consented to the License Agreement. See Brief for

Appellant, Uptown Grill, L.L.C. v. Shwartz, 817 F.3d 251, 258 (2016) (No. 15-30617), 2015

WL 5665651, at *18–21. The Fifth Circuit nevertheless held that Uptown Grill was not a

party to the License Agreement or the state court litigation. Uptown Grill, 817 F.3d at 256–

57. Accordingly, the affidavit does not change the fact that Uptown Grill is not a party

against whom Rooker-Feldman applies.

79 Uptown Grill, 817 F.3d at 256 (emphasis added).

80 Id. at 256–57.

81 Id.

82 Id. at 256–57, 59.

found that Uptown Grill was not a state court loser and also distinguished the

injuries addressed by the state and federal proceedings. Rooker-Feldman bars

claims by state court losers that complain of injuries caused by state court

judgments and invite district court review and rejection of those judgments.83

Both this Court and the Fifth Circuit have confirmed that Uptown Grill’s

federal action relates only to ownership under the Bill of Sale—an issue that

was not addressed by the state courts. Accordingly, this Court’s granting of

Uptown Grill’s request for declaratory relief does not address any injuries

created by the state court judgments nor does it reject any findings by the state

courts.

In spite of the Fifth Circuit’s prior statements, Shwartz still argues that

Uptown Grill’s sought declaratory relief under the Bill of Sale is inextricably

intertwined “with [the] two prior final judgments of the Louisiana Fourth

Circuit Court of Appeal affirming the contractual validity of a License

Agreement between the parties.”84 The Fourth Circuit affirmed the validity of

the License Agreement and found the Agreement terminated, “restoring all

rights to the licenses [and] marks to [Shwartz].”85 Shwartz thus contends that

this Court’s ruling in favor of Uptown Grill essentially “vitiates” the License

Agreement as it allows Uptown Grill to operate the Camellia Grill where the

termination provisions of the License Agreement do not.

It is undisputed that, under both this Court and the Fifth Circuit’s

holdings, Shwartz lost rights to the Bill of Sale that the state courts otherwise

attributed to him under the License Agreement. This fact alone, however, does

83 See Exxon, 544 U.S. at 284.

84 Doc. 442-7 at 1.

85 Doc. 442-3 at 1 (Judgment by the Civil District Court for the Parish of Orleans); Doc. 442-

4 (Fourth Circuit Court of Appeal opinion affirming the Judgment).

not equate to a “direct attack” on the state court judgments.86 To the contrary,

this Court has enforced the state courts’ findings that the License Agreement

is a valid and enforceable document and has spent the past three years

litigating Shwartz’s related breach of contract claims. Rooker-Feldman “does

not prohibit a plaintiff from ‘present[ing] some independent claim, albeit one

that denies a legal conclusion that a state court has reached in a case to which

he was a party.’”87 This Court was asked to evaluate Uptown Grill’s ownership

rights under the Bill of Sale. Neither ownership nor the Bill of Sale was

litigated in the state courts. Uptown Grill has thus presented an independent

claim, and this Court’s legal conclusions related to the Bill of Sale do not vitiate

the state courts’ conclusions related to the License Agreement.

Shwartz asks this Court to follow the logic of Johnson v. Way Cool

Manufacturing, L.L.C.88 There, the federal plaintiffs, the Johnsons, executed

a purchase agreement and licensing agreement in favor of Way Cool

Manufacturing, L.L.C.89 After a dispute over the terms of the licensing

agreement, an arbitrator determined that the Johnsons had breached the

licensing agreement and the asset purchase agreement, and the state court

entered a judgment affirming the arbitration award.90 When the Johnsons

later filed in federal court, their claims were dismissed under Rooker-

86 See Weaver v. Texas Capital Bank N.A., 660 F.3d 900, 904 (5th Cir. 2011) (“[T]he Rooker–

Feldman doctrine generally applies only where a plaintiff seeks relief that directly attacks

the validity of an existing state court judgment.”).

87 See Truong, 717 F.3d at 382 (quoting Exxon, 544 U.S. at 293). Shwartz further argues,

however, that “a plaintiff cannot ‘circumvent this jurisdictional limitation by asserting

claims not raised in the state court proceeding or claims framed as original claims for relief,’

if these claims are ‘inextricably intertwined with the state judgment.’” Doc. 442-7 at 20

(quoting United States v. Shepherd, 23 F.3d 923, 924 (5th Cir. 1994)). The Fifth Circuit,

however, has already determined that Uptown Grill was not delayed in asserting its claim

for relief in this Court. See Uptown Grill, 817 F.3d at 256–57.

88 20 F. App’x 895 (Fed. Cir. 2001).

89 Id. at 896–97.

90 Id. at 897.

Feldman.91 The Federal Circuit affirmed the lower court decision, finding the

Johnsons’ contract-based claims in direct conflict with the state court

judgment.92 Notably, the Federal Circuit also found that Rooker-Feldman

barred the Johnsons’ patent infringement claims even though infringement

was not addressed in state court.93 The Federal Circuit reasoned that, because

permission from the patentee destroys liability for patent infringement, the

state court’s finding that Way Cool Manufacturing, L.L.C. had authority to act

under the license agreement precluded the federal court’s finding of

infringement.94 As the federal court could not find for the Johnsons without

finding that the state court’s decision was wrongfully decided, the court found

the claims “inextricably intertwined” with the state court decision.

This Court does not find Johnson instructive. First, Johnson was decided

before the Supreme Court emphasized the narrowness of Rooker-Feldman in

Exxon. Indeed, the Johnson court found the Rooker-Feldman doctrine

applicable even though the Johnsons did not participate in the state

litigation.95 Further, for the federal court in Johnson to have found in favor of

the plaintiffs on infringement, the federal court would have had to find the

state court erroneous in its interpretation of the licensing agreement. To the

contrary, this Court’s ruling in favor of Uptown Grill did not require this Court

to overrule or question any finding made by the state courts. In fact, both this

Court and the Fifth Circuit refused to use the License Agreement to interpret

91 Id.

92 Id. at 898.

93 Id.

94 Id. at 898–99.

95 As support for this proposition, the Johnson court cited to Lemonds v. St. Louis County,

222 F.3d 488 (8th Cir. 2000). The Eighth Circuit has acknowledged Lemonds as superseded

by Exxon’s clarification of the Rooker-Feldman doctrine. See Shelby Cty. Health Care Corp.

v. S. Farm Bureau Cas. Ins. Co., 855 F.3d 836, 841 (8th Cir. 2017). Following Exxon, the

Rooker-Feldman doctrine does not apply unless the federal plaintiff was a party to the state

action. See Exxon, 544 U.S. at 287.

the Bill of Sale, contrary to Shwartz’s requests.96 Finally, Johnson is

distinguishable as the Johnson state court fully litigated the parties’ rights

under both the licensing agreement and the asset purchase agreement,

whereas the issues of licensure and ownership in the present matter were

bifurcated between the state and federal suits.97 Therefore, unlike in Johnson,

the state and federal claims in this matter are not “inextricably intertwined,”

and this Court does not risk an implicit overruling of the state courts’ decisions.

Finally, Shwartz argues in his Reply that this Court erred in finding that

the License Agreement did not modify the Bill of Sale.98 This Court has

litigated the relationship between the Bill of Sale and the License Agreement

ad nauseum. To the extent that Shwartz’s remaining arguments ask this Court

to revisit its interpretation of these two agreements, this Court declines to do

so.99 This Court agrees with Khodr that a great deal of Shwartz’s briefing

consists of recycled arguments and represents an attempt to “take another bite

at the proverbial apple.”100 Many, if not all, of Shwartz’s arguments are

contradicted by prior rulings of this Court and the Fifth Circuit. Accordingly,

this Court finds that Shwartz’s Motion to Dismiss for Lack of Jurisdiction

Under Rooker-Feldman is without merit and that Khodr’s Motion for Rule 11

Sanctions warrants consideration.

96 See Uptown Grill, 817 F.3d at 258 (“We thus decline the Shwartz parties’ invitation to

consider parol evidence such as the License Agreement in interpreting the Bill of Sale.”).

97 Johnson, 20 F. App’x at 898.

98 See Doc. 454 at 6–8.

99 Shwartz asks this Court to consider Fonseca v. Pelican Pub. Co., Inc., 921 So.2d 112 (La.

App. 5 Cir. 2006), where the Louisiana Fifth Circuit Court of Appeal interpreted a series

of contracts between an author and her publisher. This Court does not find Fonseca

relevant to the issue of Rooker-Feldman, and therefore declines to address Shwartz’s

related arguments.

100 Doc. 45 at 34.

II. Khodr’s Motion for Rule 11 Sanctions

In Khodr’s Motion for Rule 11 Sanctions (Doc. 456), Khodr asks this

Court to sanction Shwartz for filing the Motion to Dismiss for Lack of

Jurisdiction Under Rooker-Feldman. Khodr argues that Shwartz’s Motion to

Dismiss was filed to harass, cause unnecessary delay, and to increase the cost

of litigation—all in violation of Rule 11. In response, Shwartz argues that the

Motion to Dismiss is meritorious and that Khodr’s Motion for Sanctions suffers

from procedural defects that preclude consideration of Khodr’s Motion on the

merits. Finding Khodr’s Motion procedurally deficient, this Court will not

address its merits.

Federal Rule of Civil Procedure 11(c)(2) requires that “the motion [for

sanctions] must be served under Rule 5, but it must not be filed or be presented

to the court if the challenged paper, claim, defense, contention, or denial is

withdrawn or appropriately corrected within 21 days after service or within

another time the court sets.” Here, Khodr served the draft motion for sanctions

upon Shwartz at least twenty-one days before filing it. The version of the

motion that Khodr filed in this Court, however, contains substantial variances

from the version initially served upon Shwartz. The question before this Court

then is whether these alterations violate Rule 11’s safe harbor provision.

Although the Fifth Circuit has yet to directly address this issue, the Fifth

Circuit’s discussion of Rule 11 in In re Pratt101 is instructive. The Fifth Circuit

there held that informal notice, such as a warning letter, is insufficient to meet

the requirements of Rule 11 or Bankruptcy Rule 9011.102 In reaching this

101 In re Pratt, 524 F.3d 580 (5th Cir. 2008).

102 Id. at 588. The issue presented in In re Pratt implicated Bankruptcy Rule 9011, but the

Fifth Circuit looked to Rule 11 jurisprudence as “Rule 9011 is substantially identical to

Federal Rule of Civil Procedure 11.” Id. at 586.

conclusion, the Fifth Circuit quoted the following excerpt from the Tenth

Circuit:

The reason for requiring a copy of the motion itself, rather than

simply a warning letter, to be served on the allegedly offending

party is clear. The safe harbor provisions were intended to

“protect[ ] litigants from sanctions whenever possible in order to

mitigate Rule 11’s chilling effects, formaliz[e] procedural due

process considerations such as notice for the protection of the party

accused of sanctionable behavior, and encourag[e] the withdrawal

of papers that violate the rule without involving the district court.”

Thus, “a failure to comply with them [should] result in the rejection

of the motion for sanctions.”103

Considering the policy underlying Rule 11’s safe harbor provision, the fact that

the plain language of the rule “mandates that the movant serve the respondent

with a copy of the motion before filing it with the court,” and the fact that the

Fifth Circuit has “continually held that strict compliance with Rule 11 is

mandatory,” the In re Pratt court found that “‘substantial compliance’ through

informal service” was insufficient.104

In light of the Fifth Circuit’s practice of “strict compliance,” several

courts within this circuit have held that the served motion must be identical to

the filed motion for sanctions to comply with Rule 11.105 Moreover, while many

103 In re Pratt, 524 F.3d at 586–87 (quoting Roth v. Green, 466 F.3d 1179, 1192–93 (10th Cir.

2006)).

104 Id. at 588.

105 See Wells Fargo Home Mortg., Inc. v. Taylor, No. 04-825, 2004 WL 1771607, at *1 (E.D.

La. Aug. 5, 2004) (Livaudais, Senior J.) (finding that the served draft, which alleged

different grounds for sanctions, was not sufficient under Rule 11); Orchestrate HR, Inc. v.

Trombetta, 178 F. Supp. 3d 476, 500 (N.D. Tex. 2016) (Horan, J.), objections overruled sub

nom. Orchestratehr, Inc. v. Trombetta, No. 3:13-CV-2110-KS-BH, 2016 WL 5942223 (N.D.

Tex. Oct. 13, 2016) (“Rule 11’s plain language provides that the movant must file with

Court, after the expiration of the safe-harbor period, the motion that was served upon the

adversary.” (citations omitted)); Thabico Co. v. Kiewit Offshore Servs., Ltd., No. 2:16-CV-

427, 2017 WL 3387185, at *5 (S.D. Tex. Aug. 7, 2017) (Ramos, J.) (“Rule 11(c)’s safe harbor

provisions are strictly construed and require Kiewit to have served its motion for sanctions

in identical form at least 21 days prior to presenting it to the Court for a ruling.”);

SortiumUSA, LLC v. Hunger, No. 3:11-CV-1656-M, 2014 WL 1080765, at *3 (N.D. Tex.

of the courts outside of the Fifth Circuit have rejected this “hyper-technical”

reading of Rule 11, most have still required, at the very least, that the

sanctionable grounds alleged, the legal arguments asserted, and the form of

relief requested be the same in both the served and filed documents.106

Here, the final Motion for Sanctions that Khodr filed with this Court

contained substantial deviations from the draft version Khodr served upon

Shwartz. These alterations include the addition of argument and case law

under 28 U.S.C. § 1927, the addition of argument and case law relating to

“legally indefensible” filings, and a change in the relief requested.107

Accordingly, even if the pleadings need not be identical, this Court finds

substantial differences between Khodr’s served and filed motions, thereby

rendering Khodr’s Motion procedurally deficient. Accordingly, Khodr’s Motion

for Rule 11 Sanctions is denied.

III. Khodr’s Motion for Partial Summary Judgment on Trade

Dress Injunction

Khodr files this Motion for Partial Summary Judgment (Doc. 435) on the

issue of standing. Specifically, Khodr argues that the one claim remaining

before this Court—Shwartz’s108 claim that Khodr breached the License

Agreement by using Camellia Grill trade dress at the Chartres restaurant—is

Mar. 18, 2014) (Lynn, J.) (“‘The requirement that the actual motion be served was

deliberately imposed . . . to ensure that the moving party understands the seriousness of

[the] motion and [that it] will define precisely the conduct claimed to violate the rule.”

(quoting O’Connell v. Smith, No. CV 07-0198-PHX-SMM, 2008 WL 477875, at *2 (D. Ariz.

Feb. 19, 2008)).

106 See Merritt v. Lake Jovita Homeowner’s Ass’n, Inc., No. 8:08-CV-98-T-27EAJ, 2010 WL

11507746, at *1 (M.D. Fla. May 11, 2010) (and cases cited therein); Rygg v. Hulbert, No.

C11-1827JLR, 2012 WL 12847008, at *3 (W.D. Wash. Sept. 21, 2012), aff’d, 611 F. App’x

900 (9th Cir. 2015) (and cases cited therein).

107 Compare Doc. 456 (Khodr’s filed Motion for Sanctions), with Doc. 466-2 (Khodr’s served

Motion for Sanctions).

108 The Court notes that Shwartz’s entity, CGH, is the only member of the Shwartz entities

that has pending claims against the Khodr entities. For continuity, however, this Court

will continue to refer to CGH as Shwartz.

now moot.109 In Shwartz’s pending Motion for Summary Judgment, Shwartz

requests relief in the form of a “narrowly-tailored permanent injunction

precluding Khodr from further use of any of the trade dress attributes at future

restaurants and an award of attorney’s fees incurred in connection with this

matter.”110 Khodr, however, no longer operates the Chartres restaurant or any

other Camellia Grill derivative restaurant. Khodr therefore argues in his

Motion for Partial Summary Judgment that Shwartz lacks standing to seek

injunctive relief.

Article III of the U.S. Constitution limits a federal court’s jurisdiction to

“cases or controversies,” and requires plaintiffs to have a personal stake in the

suit.111 Standing to sue under Article III thus requires the plaintiff to have

“suffered an injury (a) to a legally protected interest, and that is actual or

imminent, concrete and particularized; (b) that is fairly traceable to the

challenged action of the defendant; and (c) that is redressable by the court.”112

When the plaintiff seeks injunctive relief, he must show “a real and immediate

threat of future or continuing injury apart from any past injury.”113

The personal interest that Article III demands “at the commencement of

the litigation (standing) must continue throughout its existence (mootness).”114

Mootness is thus often referred to as “standing in a time frame.”115 “Mootness

applies when intervening circumstances render the court no longer capable of

providing meaningful relief to the plaintiff.”116 When a claim is moot, “it

109 See Uptown Grill, L.L.C., 920 F.3d at 251.

110 Doc. 414 at 1.

111 Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992).

112 Id.

113 Aransas Project v. Shaw, 775 F.3d 641, 648 (5th Cir. 2014) (citing In re Stewart, 647 F.3d

553, 557 (5th Cir. 2011)).

114 Laidlaw, 528 U.S. at 170.

115 United States Parole Comm’n v. Geraghty, 445 U.S. 388, 397 (1980).

116 Ctr. for Biological Diversity, Inc. v. BP Am. Prod. Co., 704 F.3d 413, 425 (5th Cir. 2013).

presents no Article III case or controversy, and a court has no constitutional

jurisdiction to resolve the issues it presents.”117

The doctrines of mootness and standing, however, are not coextensive.

“The bar to overcome mootness is lower than the bar to establish standing:

‘there are circumstances in which the prospect that a defendant will engage in

(or resume) harmful conduct may be too speculative to support standing, but

not too speculative to overcome mootness.’”118 Unlike standing, the mootness

doctrine admits an exception for situations where the unlawful activity is

“capable of repetition, yet evading review.”119 It is thus “well settled that a

defendant’s voluntary cessation of allegedly illegal conduct does not moot the

controversy arising from the challenged activity.”120 Provided the risk that a

defendant might cease unlawful conduct when sued and later resume the

conduct after the case is dismissed, “‘a defendant claiming that its voluntary

compliance moots a case bears a formidable burden of showing that it is

absolutely clear the allegedly wrongful behavior could not reasonably be

expected to recur.’”121 These cases therefore “‘require closer examination than

allegations that ‘happenstance’ or official acts of third parties have mooted the

case.’ The overarching goal is to determine whether the defendant’s actions are

mere ‘litigation posturing’ or whether the controversy is extinguished.”122

117 Nat’l Rifle Ass’n of Am., Inc. v. McCraw, 719 F.3d 338, 344 (5th Cir. 2013).

118 Cain v. City of New Orleans, 281 F. Supp. 3d 624, 641 (E.D. La. 2017), aff’d sub nom. Cain

v. White, 937 F.3d 446 (5th Cir. 2019) (quoting Laidlaw, 528 U.S. at 190)).

119 Laidlaw, 528 U.S. at 191, 120.

120 Donovan v. Cunningham, 716 F.2d 1455, 1461 (5th Cir. 1983). See also Already, 568 U.S.

at 91 (“A defendant cannot, however, automatically moot a case simply by ending its

unlawful conduct once sued.”).

121 Already, 568 U.S. at 727 (quoting Laidlaw, 528 U.S. at 190). See also Texas v. Equal

Employment Opportunity Comm’n, 933 F.3d 433, 449 (5th Cir. 2019).

122 Fontenot v. McCraw, 777 F.3d 741, 748 (5th Cir. 2015) (quoting Envt’l Conservation Org.

v. City of Dallas, 529 F.3d 519, 528 n. 4 (5th Cir. 2008)).

Khodr argues that this case is moot as Shwartz cannot demonstrate “a

real or immediate threat that [Shwartz] will be harmed again.”123 Khodr

contends that the Chartres restaurant operated from 2010–2017 and that

there is no evidence that it will re-open. Khodr, however, does not attribute the

closure of the Chartres restaurant to external forces124 but rather admits that

“the Khodr Parties have voluntarily ceased using the alleged trade dress.”125

Accordingly, this Court finds that the “voluntary cessation” standard applies,

and that Khodr bears a “heavy burden that ‘there is no reasonable expectation

that the wrong will be repeated.’”126

This Court finds Khodr’s arguments unconvincing. Khodr argues that

there is no “evidence of real or immediate threat that the wrong will be

repeated.”127 The only support Khodr offers for this contention, however, is that

“[t]he Chartres Location has not operated since [2017], and there is no evidence

that the Chartres Location has any intention of re-opening its doors

(particularly at a time when restaurants are under economic strain and heavy

regulation).”128 Strikingly, Khodr offers this Court no argument or evidence to

suggest that Khodr intends to refrain from using Camellia Grill trade dress at

a location other than Chartres.

Khodr contends that his use of trade dress at locations other than

Chartres is irrelevant to the matter at hand given the Fifth Circuit’s most

123 Plumley v. Landmark Chevrolet, Inc. 122 F.3d 308, 312 (5th Cir. 1997).

124 See generally, Envt’l. Conservation Org., 529 F.3d at 527–28 (finding that third party

action caused the alleged wrongful conduct to cease, declining to apply the voluntary

cessation test, and affirming that the burden continued to lay with the plaintiff).

125 Doc. 435-2 at 6.

126 Donovan, 716 F.2d at 1462 (quoting United States v. W.T. Grant Co., 345 U.S. 629, 633

(1953)).

127 Doc. 435-2.

128 Id. at 5.

recent directive to this Court.129 The Fifth Circuit remanded this matter for

this Court to “determine if Khodr breached the License Agreement by using

the above-detailed alleged trade dress at the Chartres restaurant.”130 Although

this Court agrees with Khodr’s characterization of the issue on remand, this

Court cannot say that evidence of breaches at other locations is irrelevant to

the issue of injunctive relief. When this Court ruled in favor of Shwartz on his

trademark breach of contract claim, the Chartres restaurant was also the only

location at issue.131 Nevertheless, this Court found that Shwartz was “entitled

to an injunction to preclude any further operation in violation of the License

Agreement”132 and enjoined various Khodr entities from using the marks “at

any location other than the Carrollton Location.”133 Shwartz now requests a

similarly-styled injunction prohibiting Khodr’s use of Camellia Grill trade

dress. Accordingly, it is the likelihood that Khodr will use the Camellia Grill

trade dress at any location outside of the Carrollton location that will

determine the appropriateness of injunctive relief. This Court therefore finds

Khodr’s sole argument that he has no intention of re-opening the Chartres

location insufficient to render Shwartz’s claim moot.

Khodr relies on the following cases for support. In Reservoir, Inc. v.

Truesdell, the Southern District of Texas denied injunctive relief after finding

“no evidence that Defendants again will infringe Plaintiffs’ rights” where the

“Defendants now are on notice, which they apparently previously were not,

that they have no rights to use the . . . marks.”134 In Neutron Depot, LLC v.

129 This Court agrees with Khodr that Shwartz has not provided competent summary

judgment evidence to support its arguments related to The Grille in Metairie. This Court

therefore did not rely on that evidence to form its opinion.

130 Uptown Grill, 920 F.3d at 251.

131 See Doc. 358.

132 See id. at 3.

133 Id.

134 Reservoir, Inc. v. Truesdell, 1 F. Supp. 3d 598, 617 (S.D. Tex. 2014).

Bankrate, Inc., the Western District of Texas found the threat of future injury

“exceedingly unlikely” because it had been four years since the defendant

infringed on the mark and because the defendant sold the infringing entity and

“consequently lack[ed] further motivation to infringe on the Mark.”135 Finally,

in Fram Corp. v. Boyd, the Fifth Circuit affirmed that there was no evidence

in the record to cast doubt on the defendant’s good faith abandonment of

infringing practices.136 This Court finds these cases distinguishable.

Unlike the above-cited cases, this Court cannot say that there is no

evidence in the record suggesting that Khodr will breach the License

Agreement in the future. As the Chartres restaurant was one of several

Camellia Grill spin-offs, the closure of one restaurant location does not

necessarily demonstrate a lack of “further motivation” to use Camellia Grill

trade dress.137 Further, there is at least some evidence that Khodr operated a

Camellia Grill-style restaurant as recently as 2019,138 distinguishing this case

from Reservoir and Neutron Depot where several years had passed since the

defendants last used the infringing mark. Finally, and most significantly, none

of Khodr’s cited cases address matters with the kind of prolonged, vexatious,

and disturbing litigation pattern like the one currently before the Court. This

Court does not find the record in this matter indicative of the kind of “good

faith” necessary to moot the availability of injunctive relief. Accordingly,

135 Neutron Depot, LLC v. Bankrate, Inc., No. AU-16-CA-01170-SS, 2018 WL 3014435, at *5

(W.D. Tex. May 1, 2018), aff’d sub nom. Neutron Depot, L.L.C. v. Bankrate, Inc., 798 F.

App’x 803 (5th Cir. 2020).

136 Fram Corp. v. Boyd, 230 F.2d 931, 933 (5th Cir. 1956).

137 Cf. Neutron Depot, LLC, 2018 WL 3014435, at *5.

138 See Doc. 435-2 at 5 n.2. (“CGH previously admitted that ‘The Grille closed in or around

June of 2019.’ [Doc. 414-3, p.6]. Thus, The Grille ceased all use of any alleged trade dress

within ninety (90) days of the Fifth Circuit’s finding that CGH had articulated a trade

dress.”).

Khodr’s Motion for Partial Summary Judgment on Trade Dress Injunction is

denied.

IV. Shwartz’s Motion for Summary Judgment

In his Motion for Summary Judgment (Doc. 414), Shwartz asks this

Court to find that Khodr breached the License Agreement by using Camellia

Grill trade dress at the Chartres restaurant, to enjoin Khodr from further use

of the trade dress or any derivative thereof at any future restaurant, and to

award Schwartz attorney’s fees. This Court will address each issue in turn.

A. Breach of Contract

The Louisiana Fourth Circuit Court of Appeal held that the License

Agreement terminated on June 1, 2011.139 Accordingly, Khodr’s use of

Camellia Grill trademarks and trade dress thereafter violates the post-

termination provisions of the License Agreement, Sections 12.1 and 12.2,

which revert all rights back to the Licensor and require the Licensee to “avoid

any action or the continuance of any condition which might suggest to the

public that Licensee has any right to the Marks, or that Licensee continues to

be associated with Licensor.”140 In the Fifth Circuit’s 2019 opinion, the circuit

court noted that this Court found eight “alleged elements” of trade dress and

remanded “for proceedings to determine if Khodr breached the License

Agreement by using the above-detailed alleged trade dress at the Chartres

restaurant.”141 This is the issue currently before this Court.

In Shwartz’s Statement of Uncontested Facts, he states that “Khodr used

the Camellia Grill trade dress at the Chartres Location from the time the

restaurant opened in December 2010 until its close in or around December of

2017” and that “Khodr did not cease use of the Camellia Grill trade dress

139 See The Grill Holdings, L.L.C., 120 So. 3d at 303.

140 Doc. 414-4 at 13.

141 Uptown Grill, 920 F.3d at 251.

following the termination of the License.”142 Khodr concedes that these facts

are “undisputed.”143 This Court therefore finds that The Grill Holdings and

Chartres Grill are liable to the Licensor of the License Agreement, CGH, for

breach of the License Agreement’s post-termination provisions. Shwartz’s

Motion for Summary Judgment is granted to the extent it requests this Court

to find a breach of contract.

B. Scope of Injunctive Relief

Having found that Khodr breached the License Agreement by use of

Camellia Grill trade dress at the Chartres restaurant, Shwartz asks this Court

to enjoin Khodr from further use of the Camellia Grill trade dress beyond the

Carrollton location. Three aspects of Shwartz’s request are in dispute: (1)

whether Camellia Grill’s trade dress consists of 8 or 10 elements, (2) whether

this Court’s injunction should prohibit Khodr from any derivative use of the

trade dress, and (3) whether Hicham Khodr and Uptown Grill should be

included in the injunction.

1. The Elements of Camellia Grill Trade Dress

The parties first dispute how this Court should define Camellia Grill’s

trade dress in its injunction. As the License Agreement does not list the

elements of Camellia Grill’s trade dress, this Court finds that Camellia Grill’s

trade dress should be limited to that which is protectable under the Lanham

Act. This Court’s injunction must enforce Shwartz’s rights under the License

Agreement while preserving Khodr’s right to future competition in the

restaurant industry. This Court finds that the Lanham Act’s definition of

protectable trade dress adequately serves this goal.144

142 Doc. 414-2 at 2–3.

143 Doc. 421-1 at 2.

144 “The functionality doctrine prevents trademark law, which seeks to promote competition

by protecting a firm’s reputation, from instead inhibiting legitimate competition by

Contrary to the parties’ assertions, this Court has not previously made a

finding as to the protectable elements of Camellia Grill’s trade dress. In this

Court’s Order and Reasons, dated May 26, 2017,145 this Court granted Khodr’s

Motion for Partial Summary Judgment146 and dismissed Shwartz’s claims for

trade dress infringement under the Lanham Act. In that motion, Khodr

argued, in part, that the alleged trade dress was not protectable because “(1)

[Shwartz has] insufficiently alleged the elements of a putative trade dress[,]

(2) even if the elements are sufficiently alleged, they are not inherently

distinctive and have not acquired secondary meaning, and (3) . . . the elements

are all functional and do not qualify for trade dress protection.”147

In addressing Khodr’s arguments, this Court first found that Shwartz’s

discovery responses were “sufficient to put the Khodr parties on notice of the

elements of the putative trade dress.”148 This Court found that these putative

elements included:

(1) the straw “popping” routine, (2) U-shaped counters, (3) audible

order calling routine, (4) pink and green wall scheme, (5) separate

pie cases on the rear wall at both ends of the cooking line, (6)

stainless steel stemmed stools with green stool cushions, (7)

individual counter checks handed to each customer, (8) fluted

metal design under the counters and above the cooking line.149

Second, this Court found that “[t]he admissible evidence submitted by the

Shwartz parties, though scant, [was] sufficient to create a genuine issue of

material fact as to whether the putative trade dress has acquired a secondary

allowing a producer to control a useful product feature.” Qualitex Co. v. Jacobson Prod. Co.,

514 U.S. 159, 164 (1995).

145 See Doc. 294.

146 See Doc. 262.

147 Doc. 294 at 19.

148 Id. (emphasis added).

149 Id.

meaning.”150 Third, this Court found that the functional nature of the putative

trade dress elements “does not necessarily preclude protection under the

Lanham Act.”151 These findings encompass the extent to which this Court has

addressed the elements of Camellia Grill’s trade dress. Accordingly, the scope

of Camellia Grill’s protectable trade dress is still undetermined by this Court.

Shwartz’s Motion for Summary Judgment does not provide sufficient

admissible evidence to allow this Court to determine Camellia Grill’s

protectable trade dress at this stage. Further, this Court finds that a

determination as to trade dress is necessary before this Court can entertain

Shwartz’s additional arguments regarding derivative use. Accordingly,

Shwartz’s request for summary judgment on the scope of the injunction is

denied. A trial will be held to determine the protectable elements of Camellia

Grill trade dress and whether an injunction prohibiting Khodr’s use of less

than all of the protectable trade dress is appropriate.

2. The Parties to the Injunction

Shwartz asks this Court to include Hicham Khodr, individually, in any

injunctive relief that this Court issues. As a preliminary matter, this Court has

addressed this issue previously, and Shwartz has argued this issue on appeal.

This Court therefore does not see why this Court’s injunction relating to trade

dress should differ in scope than the injunction previously issued with respect

to trademarks. Accordingly, this Court denies Shwartz’s Motion for Summary

Judgment to include Hicham Khodr, individually, in its injunction.

Secondly, this Court finds Shwartz’s cited case law on the matter

unavailing. Much of the case law to which Shwartz cites involves matters

where the court held a corporate officer in contempt for violating an injunction

150 Id. at 21.

151 Doc. 294 at 22.

issued to the corporate entity.152 In each of these cases, the court found the

corporate officers bound by the initial injunction to the corporate entity even

though they were not personally named in the injunction. These courts’

findings are consistent with Federal Rule of Civil Procedure 65(d)(2), which

states that every injunction or restraining order “binds only the following who

receive actual notice of it by personal service or otherwise: (A) the parties;

(B) the parties’ officers, agents, servants, employees, and attorneys; and (C)

other persons who are in active concert or participation with anyone described

in Rule 65(d)(2)(A) or (B).” Shwartz’s cited case law is therefore contrary to

Shwartz’s position that Hicham Khodr needs to be personally named, as under

Rule 65, corporate officers are de facto bound by injunctions naming the

officers’ affiliated entities.

Shwartz seems to have reached this same conclusion as he concedes that

“[a]rguably, the plain language of Rule 65 makes such an injunction

automatically binding without the explicit naming of Uptown Grill and

Hicham Khodr, individually.”153 Shwartz therefore asks this Court to include

the language of Federal Rule of Civil Procedure 65(d)(2) in its injunction. As

this Court finds that this language is already implicit in the injunctions issued

by this Court, this Court has no difficulty granting Shwartz’s request. The

injunction that this Court issues will therefore enjoin the parties, the parties’

152 See e.g., Additive Controls & Measurement Sys., Inc. v. Flowdata, Inc., 154 F.3d 1345,

1351 (Fed. Cir. 1998) (“[I]t is clear that Cotton was bound by the injunction when it was

entered against AdCon in August 1993, even though Cotton was not a named party to the

underlying infringement suit. Rule 65(d) specifically names “officers” of a defendant as

among those who are bound by an injunction, and there is a substantial body of case law

in support of that proposition.” (citations omitted)); Elec. Workers Pension Tr. Fund of

Local Union |58, IBEW v. Gary’s Elec. Serv. Co., 340 F.3d 373, 382 (6th Cir. 2003)

(“Whether or not Pipia was a named defendant in the order, or even mentioned at all, is

not controlling. Pipia, as an officer of the corporation and the one responsible for the

corporation’s affairs, was subject to the court’s order just as the corporation itself was.”

(citations omitted)).

153 Doc. 428 at 7.

officers, agents, servants, employees, attorneys, and other persons in active

concert or participation therewith.154

Additionally, Khodr argues that Uptown Grill should be excluded from

this Court’s injunction. Uptown Grill was included in this Court’s previous

injunction as a sublicensee to the License Agreement. Khodr argues that this

Court’s previous injunction is distinguishable as it “addressed trademark use

by both the Uptown and Chartres location.”155 This Court does not find the

previous injunction distinguishable. This Court previously enjoined use of the

Camellia Grill Marks beyond the Carrollton restaurant after finding a breach

of the License Agreement at the Chartres location. Even Khodr concedes that

the “factual scenario and legal issues presented are nearly identical.”156 This

Court therefore holds that, like in the previously issued injunction, the parties

to the injunction should be the parties to the License Agreement: The Grill

Holdings, Uptown Grill, and Chartres Grill.

C. Attorney’s Fees

Shwartz also asks that this Court award Shwartz attorney’s fees as it

did in relation to Shwartz’s trademark breach of contract claim. Section 17.2

of the License Agreement provides that the prevailing party in any action or

proceeding to enforce the License Agreement be awarded all reasonable

attorneys’ fees and costs.157 This Court therefore finds that attorney’s fees are

warranted.

This Court does agree with Khodr, however, that Shwartz should only be

awarded attorney’s fees that are associated with Shwartz’s breach of contract

claim. Shwartz therefore is not entitled to fees related to Shwartz’s Motion to

154 See FED. R. CIV. P. 65(d)(2).

155 Doc. 421 at 11.

156 Id. at 9.

157 Doc. 414-4 at 16.

Dismiss Under the Rooker-Feldman Doctrine or Khodr’s Motion for Rule 11

Sanctions. Further, Shwartz may only collect attorney’s fees that originated

after the most recent remand from the Fifth Circuit.

CONCLUSION

For the foregoing reasons, Shwartz’s Motion to Dismiss for Lack of

Jurisdiction Under the Rooker-Feldman Doctrine (Doc. 442), Khodr’s Motion

for Rule 11 Sanctions (Doc. 456), and Khodr’s Motion for Partial Summary

Judgment on Trade Dress Injunction (Doc. 485) are DENIED. Shwartz’s

Motion for Summary Judgment (Doc. 414) is GRANTED IN PART and

DENIED IN PART.

New Orleans, Louisiana this 27th day of January, 2021.

G TRICHE MILAZZO

UNITED STATES DISTRICT JUDGE

39