Tag Archives: business litigation

The Buck Stops Here: Buc-ees vs. Bucky’s

Drive down any Texas interstate long enough and you’ll run into Buc-ees. It is a Texas staple and many Texans’ favorite chain of convenience store. What most Texans don’t know is that there is a war brewing due to the arrival of Bucky’s, a Nebraska based chain of convenience stores.

Further complicating matters is the fact that the two companies have bumped heads in the past. Both companies sought trademark protection for their brands only a few months apart. In 2009, they entered into a consent agreement allowing them to both continue using their names due to the fact there was such a great distance between them.

However, Bucky’s has recently decided to play hardball and has already taken steps to bring six of its stores to Texas. Naturally, Buc-ees has filed suit to prevent their competitor from being able to operate in Texas. Buc-ees suit alleges that Bucky’s looking to confuse the market and asserts claims of trademark infringement and unfair competition.

Unfair Competition

What exactly is “unfair competition”?  In all competitive situations there is some degree of unfairness. However, what makes unfair competition a cause of action is that it is categorized as arising out of business conduct which is contrary to honest practices in industrial or commercial matters. U.S. Sporting Prods., Inc. v. Johnny Stewart Game Calls, Inc., 865 S.W.2d 214, 217 (Tex. App.–Waco 1993, writ denied) (quoting Am. Heritage Life Ins. Co. v. Heritage Life Ins. Co., 494 F.2d 3, 14 (5th Cir. 1974)). This includes

1) passing off or palming off;

2) trade secret misappropriation, and

3) common law misappropriation. Id.;

Conceal City, L.L.C. v. Looper Law Enforcement, LLC, 917 F.Supp.2d 611, 618 (N.D. Tex. 2013); see also Taylor Pub. Co. v. Jostens, Inc., 216 F.3d 465, 486 (5th Cir. 2000).

Obviously, Buc-ees will argue that if allowed to operate in Texas, Bucky’s will receive the benefit of 35 years of undeserved brand recognition. They’ll also probably assert that certain Bucky’s goods are going to be “passed off” as Buc-ees goods.

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An Ounce Of Prevention Is Worth A Pound Of Cure: Why Your Business Needs a Lawyer

Time and time again I hear small business owners say that they cannot afford a lawyer. They usually follow that statement with something like “Hopefully, I’ll never need one”. This is simply a HUGE mistake and a bad business practice.

Would you invest 50% of your companies earnings in the stock market but wait until you’ve lost most of the money before you hire an investment banker? Would you wire your business for electricity but wait until after the building catches on fire before you decide to consult an electrician? No? Then why spend thousands of dollars into building a business only to lose it, or a large amount of its revenue in a lawsuit because you did not consult a lawyer, and tried to do all the legal work?

An attorney should be an essential part of your business. In the start-up phase of your company, you should anticipate ongoing legal expenses. You should desire to have an ongoing business relationship with an attorney so that he or she can provide regular consultations to help your company avoid criminal and civil liability. Waiting until after you are sued or sanctioned to consult a lawyer is like waiting until you are very sick before going to the hospital. Little good can come from it and the money that was saved by avoiding legal consultation is often lost in a judgment or defending suit. This is is especially true if your business does transactions with other businesses.

BUT LAWYERS ARE SOOOOO EXPENSIVE!

It is true that business attorneys are not cheap and they shouldn’t be. The practice of business law is very complex and meticulous. If a business attorney is billing anything less than $150.00 per hour you may want to question the quality of service. However, It is possible to save money and find a good business attorney.

Attorneys at large firms are VERY expensive. Big law firms have big overhead and pay big salaries. Those costs get passed to you. You also pay for the firm’s reputation. Even the young lawyers at big firms are billed to companies at $400-$600 per hour right out of law school. However, smaller firms have less overhead and less attorneys salaries to pay out. They can often offer billing at lower rates such as $150-$400 depending on the attorneys experience. In addition, some smaller firms are sometimes willing to offer lower rates for a commitment to ongoing business.

OK SO WHAT SHOULD I DO NOW?

Contact a lawyer immediately! Inform them that you are looking to build a business relationship and that you are seeking regular legal counsel for your company. The meeting can be very informal. In fact, I often take meetings of this variety during lunch. I save the office meetings for the more serious issue specific cases where a company is already being sued.

During the meeting, you should get a feel for the attorney and see if you feel that you all can have a workable relationship. Also, check and see if the attorney has experience in your industry. If all goes well, offer to allow the attorney to come and see how the business is operated so the he or she can become more familiar with the company. I often make site visits and see the way my clients business is ran. Your goal should be to help the attorney help you avoid liability. Do not look at the lawyer as an expense. Consider the lawyer to be long term investment and asset to your business.

Should you have any questions regarding your business, please feel free to reach out to our office at 832-930-0529 or info@kestephenslaw.com.

None of the information given here is intended to be legal advice and it should not be construed as such.

Forum Selection Clauses: Don’t Blindly Give Up Home Field Advantage

WHAT HAPPENED

A Subcontractor brought action against a contractor, alleging that the contractor failed to pay subcontractor for work performed on construction of child-development center at Army base in Texas.  Atl. Marine Const. Co., Inc. v. U.S. Dist. Court for W. Dist. of Texas, 134 S. Ct. 568, 187 L. Ed. 2d 487 (2013). The United States District Court for the Western District of Texas, Lee Yeakel, J., denied the contractor’s motion to dismiss or to transfer case, pursuant to forum-selection clause in contract, to Eastern District of Virginia. Id.  A key argument in the decision was that the subcontractor identified seven non-party witnesses that may have provided relevant testimony who resided in Texas and any trial subpoenas for witnesses to travel more than 100 miles would be subject to motions to quash and be held unenforceable under Rule 45(c)(3)(ii). See Id.

THE LAW

The Texas Supreme Court reviewed this case and stated that when a forum selection clause is in the contract but a plaintiff files suit in a different forum, and a 28 U.S.C.A. § 1404 motion is filed by the defendant, district courts are to require the party acting in violation of the forum-selection clause, to show that public-interest factors overwhelmingly disfavored a transfer. See Id. at 574.

With regard to the sub-contractors key argument that it’s witnesses would be burned by the venue transfer, the Court state when the subcontractor entered into a contract to litigate all disputes in Virginia, it knew that a distant forum might hinder its ability to call certain witnesses and might impose other burdens on its litigation efforts. See Id. at 584.  It nevertheless promised to resolve its disputes in the forum selected in the contract and the District Court should not have given any weight to sub-contractors claims of inconvenience. See Id.

WHAT IT MEANS FOR YOU

As always, you should have an attorney review contracts with an eye on litigation. Personally, when reviewing client contracts I analyze the contract with litigation in mind and a “worst that can happen” mind state. I then point out all the potential exposure to my clients and let them decide what risks they are comfortable taking and those that they are not. Lastly, upon the instruction of my client, I will try to limit some of those exposures by negotiating what I call “subtle non-material modifications” to the contract. Obviously, there are many things that some companies will not bend on. However, as the old adage goes, you won’t know unless you ask.

Nothing here is intended to be legal advice nor should it be construed as such. If you have questions or would like to discuss an issue with your company, please call 832-930-0529 or visit http://www.kestephenslaw.com.