Debevoise Wins Significant Trademark Ruling for Casa Azul Spirits in Trademark Infringement Filing Brought by Casa Tradición

15 Noveber 2023

Debevoise & Plimpton LLP has won a significant summary judgment ruling on November 3 on behalf of client Casa Azul Spirits, dismissing all claims for monetary relief and striking the jury demand brought by plaintiff Casa Tradición.

The matter began in September 2022, when Casa Azul Spirits – which had launched a canned tequila soda under the name CASA AZUL that summer – faced a trademark infringement action in federal court in Houston, Texas brought by plaintiff, which is the maker of premium tequila CLASE AZUL. In December 2022, Debevoise defeated plaintiff’s motion for a preliminary injunction, which had threatened to put Casa Azul out of business. The denial of plaintiff’s motion cleared the way for Casa Azul to continue nationwide expansion of its CASA AZUL tequila soda and to launch its organic CASA AZUL tequila in early 2023.

Following an unsuccessful effort at mediation, during which plaintiff indicated that it was willing to roll the dice with a jury, the case moved forward with full discovery, including extensive expert discovery. Each side then filed several pre-trial motions, including Casa Azul’s motions for partial summary judgment against plaintiff’s damages claims, and to strike plaintiff’s jury demand.

Debevoise persuasively argued that plaintiff’s claims for disgorgement of defendant’s profits and for actual damages should be dismissed. The team obtained key admissions from each of plaintiff’s founder and CEO during depositions that they were not aware of any harm that plaintiff suffered as a result of Casa Azul’s alleged infringement. The firm accordingly argued that plaintiff was not entitled to any monetary relief and moved to exclude plaintiff’s damages expert (who opined that a reasonable royalty was an appropriate measure of damages) because he blindly relied on the data of a third-party without conducting any of his own independent expert analysis. Finally, Debevoise argued, given that plaintiff had no surviving claim for damages, that plaintiff’s jury demand should be stricken because only claims for equitable relief remained.

On November 3, Judge Lee Rosenthal of the U.S. District Court for the Southern District of Texas granted Casa Azul Spirits’ motion to exclude plaintiff’s damages expert in the entirety, dismissed all of plaintiff’s claims for monetary relief, and struck the plaintiff’s jury demand. These rulings dramatically narrowed the issues remaining for trial and set up a bench trial before Judge Rosenthal, who has been skeptical of the plaintiff’s claims since the preliminary injunction hearing nearly a year ago. The Debevoise team is now preparing for the bench trial, which is expected to be scheduled for January or February 2024.

The Debevoise team is led by litigation partner David H. Bernstein and counsel Jared Kagan, and includes associates Marissa MacAneney, Nicole Flores, Kendra Berry, Jacob Hochberger, Jose Jesus Martinez III, Naomi Perla and Victoria Reis.