United States District Court, D. New Mexico
MEMORANDUM OPINION AND ORDER DENYING DEFENDANTS'
RULE 41(d) MOTION FOR COSTS AND FEES AND FOR STAY OF
MATTER comes before the Court upon Defendants' Rule 41(d)
Motion for Costs and Fees and for Stay of Proceedings, filed
on February 22, 2019 by Defendants Richter, Nixon, JDAP, Inc.
(“JDAP”) and Dancingbones LLC
(“Dancingbones”) (Doc. 12).
Having reviewed the parties' pleadings and the applicable
law, the Court finds that Defendants' Motion is not
well-taken and, therefore, is denied.
a trademark infringement case. According to the complaint and
Joint Status Report (Doc. 21), Defendants Richter and Nixon
(“Defendants”) became interested in opening an
OsteoStrong franchise in Santa Fe. Plaintiff, in preparing
Nixon and Richter to open an OsteoStrong location, disclosed
confidential information and trade secrets about OsteoStrong.
Plaintiff decided not to open a Santa Fe OsteoStrong location
in order to allow Defendants to open their own OsteoStrong
location there instead. Defendants eventually changed their
mind about purchasing an OsteoStrong franchise and instead
opened a competing business in Santa Fe under the name
DancingBones, offering virtually the same services as
OsteoStrong and using the same equipment, layout and
confidential trade secret information detailing how to
successfully operate an OsteoStrong franchise. Defendants
also advertised and held themselves out as OsteoStrong on the
Internet. Defendants Nixon and Richter also own and operate
the corporation JDAP, which operates as Joe's Diner and
sent out Joe's Diner newsletters which published
OsteoStrong's trademark without permission or
authorization. The newsletters were circulated on the
Internet over the course of several months in an effort to
generate business and advertise services that ultimately
inured for the benefit of DancingBones.
maintain that they engaged in good-faith preparations to open
the Santa Fe OsteoStrong location, and signed a
non-disclosure agreement as part of their discussion.
However, repeated communications failures by Plaintiff and
its developers left Defendants with serious concerns about
proceeding with the project. Defendants deny that they were
ever provided any confidential or trade secret information.
They also claim that OsteoStrong made substantive changes to
the terms the parties had negotiated and under which the
Defendants thought they would become franchisees. Defendants
deny using any of the information they obtained from
OsteoStrong or their developer and also deny using
OsteoStrong's mark without permission.
Complaint and Application for Injunctive Relief asserts five
claims for relief:
Count 1 - Misappropriation (Defend Trade Secrets Act of 2016,
Count 2 - Misappropriation (New Mexico Uniform Trade Secrets
Count 3 - Breach of Contract;
Count 4 - Unfair Competition, 15 U.S.C. §1125
Count 5 - Trademark Infringement, 15 U.S.C. §1114(1)
addition, Plaintiff seeks to enjoin Defendants from using or
disclosing OsteoStrong's trade secrets and confidential
seek costs of a previously dismissed action under
Fed.R.Civ.P. 41(d). In December 2017, Plaintiff filed an
almost identical lawsuit in the Southern District of Texas,
Houston Division (“Texas case”) alleging
identical claims against the same Defendants. Doc. 12-1. In
response to the complaint in the Texas case, Defendants filed
a Motion to Dismiss based on lack of personal jurisdiction.
Plaintiff did not respond to the motion but instead
voluntarily dismissed the Texas case under Rule