BENTON - Pete’s Market in Troy and the Pete’s Fresh Market group in Chicago settled a trademark suit on June 26 and Senior U. S. District Judge Phil Gilbert canceled a trial that would have started on July 8.
Troy store owners Pete Patel of Edwardsville and Chirag Patel of Troy negotiated the settlement without counsel.
They fired their lawyers last year and negotiated a settlement but Gilbert rejected it.
Owners of the Chicago stores sued Patel and Patel in 2021, alleging trademark infringement and unfair competition.
The Chicago group sought to recover the profit their name produced in Troy.
Patel and Patel retained Jason Schmidt and Jonathan Soifer from the St. Louis County office of Sandberg Phoenix and John Gilbert from the firm’s Edwardsville office.
John Gilbert filed a counterclaim alleging that Pete’s Fresh Markets abused the legal process to intimidate Patel and Patel into changing the name of their store.
He claimed Pete’s Market and similar names have been used by approximately 280 entities.
In 2022 Judge Gilbert set trial to start June 12, 2023.
As the date approached he delayed trial to June 20, 2023.
The Sandberg Phoenix lawyers moved to withdraw on June 5, 2023, stating their clients instructed them to do so.
On their way out they claimed victory.
“The client renamed its enterprise Pete’s Hometown Grocery, which obviates the need for an injunction of its use of Pete’s Market which it no longer uses,” Schmidt wrote.
“Plaintiff has been unable to make a case for damages, which is to be expected considering the nature of the alleged infringement.
“Plaintiff has been unable to support a claim of willfulness or otherwise demonstrate this matter is exceptional such that it is entitled to fees or costs.”
Julianne Hartzell of Chicago, counsel for Pete’s Fresh Markets, didn’t oppose the withdrawal motion but challenged its statement of the case.
She claimed Schmidt seemed to argue that the court could grant the motion because her client failed to prove its case.
“Of course, there is no legal precedent cited to support this position," she wrote.
She claimed the alleged name change did not obviate the need for trial.
She claimed Patel and Patel had not ceased all use of the Pete’s Market name.
“Plaintiff is entitled to disgorgement of defendants’ profits and need only support the disgorgement with evidence of defendants’ sales," she wrote.
“Defendants were put on notice of plaintiff’s trademarks prior to ever opening their grocery store and chose to ignore Plaintiff’s trademark rights.”
Judge Gilbert postponed trial to Aug. 7, 2023, then to Sept. 25, and then to Oct. 24.
A day before trial Hartzell filed a stipulation that the parties agreed to settle all claims.
She asked him to dismiss the suit without prejudice, “to allow for performance of the terms of that agreement.”
She requested an order stating that dismissal without prejudice would convert to dismissal with prejudice on July 1, 2024, unless an intervening motion was filed.
She didn’t attach the agreement or submit it to chambers.
The next morning, instead of holding trial, Gilbert held a hearing on the motion.
Hartzell told him the parties wished for him to retain jurisdiction to avoid refiling of the case should a dispute arise during settlement negotiations.
He denied approval in November, finding the stipulation invalid and ineffective.
He found a plaintiff can file a stipulation of dismissal, which escapes the court’s discretion to impose conditions, or file a dismissal motion which allows the court to impose conditions.
“A plaintiff cannot voluntarily dismiss their case and in the same breath ask the court to impose conditions on the dismissal,” he wrote.
“Given the defendants in this litigation have been unable to acquire counsel, such irregular methods that serve only to restrain the parties and the court are suspect.”
He saw no reason why conversion after dismissal would be preferable to simply continuing the trial to allow for negotiation.
“When a court has not reviewed the settlement, either because it has not been provided yet or not fully negotiated, the court cannot retain jurisdiction over the settlement,” he wrote.
His reaction to the current stipulation amounted to two words: “Case settled.”