Izzo’s Illegal Burrito and its parent company have upped the ante in their long-running lawsuit against the owners of Rouses Supermarkets.
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.
Izzo’s 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 stores.
- 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.”
Rouses’ attorneys with Fishman Haygood in New Orleans decline to comment on the RICO charges but are soon expected to file answers on behalf of their client.
Izzo’s attorney, Robby Evans of Metairie, did not return a call seeking comment.
The RICO charges are the latest escalation of a legal battle that began in early 2016, when Izzo’s filed a suit against Rouses in 19th Judicial District Court alleging unfair trade practices, tortious interference, defamation, trademark infringement and conspiracy under state law—essentially the same allegations it now says fall under the civil RICO statute.
In April 2016, the case was transferred to federal court. In February, Rouses scored a major victory in the case, when U.S. District Judge Shelly Dick threw out all but one of Izzo’s claims. Izzo’s is appealing that ruling. In the meantime, it has since filed two revised complaints against Rouses, the most recent, Oct. 27, alleging the RICO violations.
Izzo’s is seeking $10 million in damages. According to recent court documents, the restaurant chain is willing to enter into settlement talks, but no negotiations have taken place and Rouses is not interested in settling.
—Stephanie Riegel
