Bonnie L. Hemenway (BH 2246)

Barbra S. Levy (BL-3306)

JONES, DAY, REAVIS & POGUE

599 Lexington Avenue

New York, New York 10022

(212)326-3939

 

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

STARBUCKS CORPORATION, a

Washington corporation; and STARBUCKS

U.S. BRANDS, INC., a California corporation

Plaintiffs,

v.

WOLFE'S BOROUGH COFFEE, INC., a New

Hampshire corporation, dba BLACK BEAR

MICRO ROASTERY,

Defendant.

No. 01-CV- 5981 (LTS)(THK)

 

 

DECLARATION OF JOHN C. RAWLS IN SUPPORT OF

PLAINTIFFS' MOTIONS FOR LEAVE TO FILE AMENDED COMPLAINT AND

LEAVE TO MODIFY PRE-TRIAL SCHEDULING ORDER

 

1.        I am a member of the firm of Jones, Day, Reavis & Pogue, attorneys for Plaintiffs Starbucks Corporation and Starbucks U.S. Brands Corporation ("Plaintiffs"). I submit this declaration in support of Plaintiffs' motions for leave to file an amended complaint and leave to modify the pre-trial scheduling order.  

2.       Plaintiffs seek to amend their complaint to reflect the fact that Starbucks has waived and withdrawn any claim for the recovery of actual damages from defendant.  Attached hereto as Exhibit A is a true and correct copy of Plaintiffs' proposed First Amended Complaint.7. Defendant's counsel did not respond substantively to the request for a stipulation for one full month. Finally, on March 6, 2002, Black Bear's counsel sent a letter in response to Starbucks counsel's request. Attached hereto as Exhibit D is a true and correct copy of Black Bear counsel's response.

3.       Plaintiffs filed their complaint in this trademark infringement and dilution action on July 2,2001. Attached hereto as Exhibit B is a true and correct copy of Plaintiffs' original Complaint. Additionally, attached as Exhibit C is a true and correct copy of a red-lined version of the proposed First Amended Complaint and the original Complaint. 

4.       After filing and serving the Complaint, Starbucks made extensive efforts to resolve this litigation through-settlement. Among other things, the parties participated in a Settlement Conference held before Magistrate Judge K-atz in November 2001. Counsel for the parties had a number of follow up communications regarding a negotiated resolution. These discussions continued through approximately December 20, 2001, but ultimately ended in failure.

5.       As a result of the information exchanged during the settlement discussions, Starbucks sought to determine whether its damage claim was worth pursuing.  Among other things Starbucks was concerned that any damage award might be so small as to be outweighed by the costs of litigating damage issues; for example, Black Bear might both argue that its sales of the infringing Charbucks product were minimal, thus resulting in little if any, recovery of lost profits, and at the same time seek expensive and time consuming discovery of Starbucks financial records under the theory that such data were relevant to the defense of a damage claim. Further, Starbucks had (and has) serious doubts as to whether Black Bear has the resources to satisfy any substantial damage award. Thus, after a brief but thorough analysis of these issues, Starbucks determined that pursing a damage claim was not worthwhile.

6.       On February 7, 2002, Starbucks counsel wrote to counsel for Black Bear, giving explicit notice that Starbucks was waiving all claims for actual damages. As a housekeeping matter, Starbucks counsel also enclosed a [Proposed] Amended Complaint that was consistent with this waiver, and asked that Black Bear stipulate to its filing.

8.       Black Bear has posted on its Web site a letter from Zurich Insurance Company stating that all coverage will be withdrawn as soon as the [Proposed] Amended Complaint is filed. Attached hereto as Exhibit E is a true and correct copy of the insurance company letter posted on the defendant's Web site. Starbucks has not acted in bad faith. Indeed, if any party here has acted in bad faith it is Black Bear.

I declare under penalty of perjury that the foregoing is true and correct. 

 

Dated: Los Angeles, California

March 28, 2002

 

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John Rawls