United States District Court, M.D. Louisiana
K&F RESTAURANT HOLDINGS, LTD., d/b/a IZZO'S ILLEGAL BURRITO, ET AL.
DONALD J. ROUSE, JR., ET AL.
RULING AND ORDER
JOHN W. DEGRAVELLES UNITED STATES DISTRICT COURT.
October 26, 2017, Plaintiffs K&F Restaurant Holdings,
Ltd. d/b/a Izzo's Illegal Burrito
(“Izzo's”); K&F Restaurant Operations,
LLC; G&O Pizza Holdings, Ltd. d/b/a LIT Pizza; G&O
Restaurant Operations, LLC; Osvaldo Fernandez; and A. Gary
Kovacs (collectively “Plaintiffs”) filed the
operative Second Amended Complaint in this case. (Doc. 138).
Plaintiffs allege, inter alia, that Defendant Donald
J. Rouse, Jr. manages the Rouses chain of grocery stores and
bribed an Izzo's employee to “defect” to
Rouses and bring with him Izzo's secret recipes.
(Id. at 3). Plaintiffs claim that Rouses now uses
Izzo's recipes in its build-your-own burrito bars.
(Id. at 4). Plaintiffs also contend that Donald J.
Rouse, Jr.'s conduct in bribing an Izzo's employee,
as well as his alleged subsequent interference with
Izzo's ability to obtain space in commercial
developments, violated several state and federal criminal
statutes. (Id. at 4-6).
Donald J. Rouse, Jr., Donald J. Rouse, Sr., Thomas B. Rouse,
Allison Rouse Royster, and Rouse's Enterprises, L.L.C.
(collectively “the Rouse Defendants”) move to
strike the aforementioned allegations as false, scandalous,
and prejudicial. (“Motion, ” Doc. 141). The Rouse
Defendants contend that these allegations were first made in
the Second Amended Complaint, and this timing “calls
into question Plaintiffs' motivation and basis for the
amendment.” (Doc. 141-1 at 2-3). The Rouse Defendants
also note that, in November 2017, this lawsuit was the
subject of news stories in the Baton Rouge Business
Report and The Hayride, and, “[a]bsent
the scandalous allegations[, ] . . . it is doubtful that this
action would have been considered interesting enough to gain
the attention of any journalists.” (Id. at 3).
articles are attached as exhibits to the Motion. The
Baton Rouge Business Report article states in
Izzo's Illegal Burrito and its parent company have upped
the ante in their long-running lawsuit against the owners of
In court documents filed Oct. 27, the Baton Rouge-based
restaurant chain alleges the south Louisiana supermarket
chain committed conspiracy under the civil Racketeer
Influenced and Corrupt Organizations, or RICO, Act.
RICO cases are serious business, and have brought down mafia
dons, corrupt government officials and Major League Baseball
teams, and the RICO statute isn't typically used in
disputes between two businesses. But in its recent court
filing, Izzo's alleges Rouses engaged in the kind of
corruption and racketeering that constitute a RICO action.
RICO argument, according to its lawsuit, is threefold:
Rouses, in 2011, allegedly tried to bribe an Izzo's
restaurant manager into going to work for Rouses so the
supermarket could steal his Izzo's recipe book and
establish burrito bars, similar to Izzo's, in their
Rouses conspired to keep Izzo's out of shopping center
developments-specifically Juban Crossing-where Rouses was an
anchor tenant. The suit claims Rouses' executives told
leasing agents for Juban Crossing in phone calls that
Izzo's “sold ‘substandard' products and
was ‘litigious'” -allegedly, an act of wire
fraud-in an effort to keep Izzo's out of the Denham
Springs retail development.
Rouses allegedly continues to use Izzo's trademark
recipes at its own burrito bars.
“As detailed above, Rouses conspired to commit three
RICO violations against Izzo's, ” court documents
claim. “These violations began in 2011 and are ongoing
… Rouses Enterprises, LLC is a RICO enterprise
affecting interstate commerce.”
(Doc. 141-3 at 1 (alterations and quotations in original)).
The article on The Hayride, entitled “The
Great Izzo's-Rouse's RICO Kerfuffle, ”
characterizes this lawsuit and the events giving rise to it
as “a rather crazy story of predatory marketing,
cutthroat competition and two companies which downright do
not like each other.” (Doc. 141-4 at 1-2). The article
quotes the first three paragraphs from the Baton Rouge
Business Report article and then continues as follows
(again, in relevant part):
Izzo's is alleging essentially three things. First, that
in 2011 Rouse's attempted to bribe an Izzo's store
manager into taking a job with the supermarket chain and
bringing along his recipe book so that Rouse's might
replicate Izzo's product with burrito bars in its own
stores. If you've been in a Whole Foods ...