Court Opinion

ID: 35623
Source: CourtListenerOpinion
Date Created: 2010-04-25 19:30:48+00
Date Added: 2024-06-11T15:05:24.548579
License: Public Domain

United States Court of Appeals
                                                                Fifth Circuit
                                                             F I L E D
                        REVISED JULY 22, 2004
                                                              June 28, 2004
               IN THE UNITED STATES COURT OF APPEALS
                                                         Charles R. Fulbruge III
                        FOR THE FIFTH CIRCUIT                    Clerk

                        _____________________

                            No. 03-30470
                        _____________________

     BRENNAN’S INC; OWEN E BRENNAN, JR; JAMES C BRENNAN; THEODORE
     M BRENNAN

                      Plaintiffs - Appellants - Cross-Appellees

          v.

     DICKIE BRENNAN & COMPANY INC; RICHARD J BRENNAN, JR;

                      Defendants - Appellees - Cross-Appellants

     RICHARD J BRENNAN; COUSINS RESTAURANTS INC; SEVEN SIXTEEN
     IBERVILLE LLC

                      Defendants - Appellees

_________________________________________________________________

          Appeals from the United States District Court
              for the Eastern District of Louisiana
_________________________________________________________________

Before KING, Chief Judge, and BENAVIDES and CLEMENT, Circuit
Judges.

KING, Chief Judge:

     The plaintiffs, owners of a famous New Orleans restaurant

that bears their family name, brought trademark and contract

claims against certain relatives who operated other restaurants

that used the family name in ways that allegedly caused confusion

in the marketplace.   The district court ruled that the two
contracts that are the basis of the breach-of-contract claims

barred the plaintiffs from pursuing trademark-related claims.

The remaining claims proceeded to trial, and the jury returned a

verdict in the plaintiffs’ favor on one of their contract claims.

Both sides appeal, challenging various aspects of the proceedings

below.   We affirm in part, reverse in part, and remand.

                           I. BACKGROUND

     As habitués of New Orleans are well aware, members of the

Brennan family are uncommonly blessed with a talent for

restaurateuring.   This case involves a dispute between two

branches of the family over the names that may be used on certain

restaurants.

     The family’s first restaurant, known since the 1950s as

Brennan’s Restaurant, was opened by Owen E. Brennan, Sr.   In

time, this restaurant came to be owned 60% by Owen Sr.’s widow

Maude and their three sons--Owen Jr., James, and Theodore (“the

brothers”)--and 40% by the brothers’ aunts and uncles, including

Richard Brennan, Sr. (“Richard Sr.”).   The family registered

BRENNAN’S as a federal trademark, and the family opened other

restaurants as well.   A disagreement arose between the two sides

of the family in the early 1970s, resulting in a partition of the

family restaurant enterprise.   The original Brennan’s Restaurant

went to Owen Sr.’s widow and sons, while the family’s other

restaurants went to the brothers’ aunts and uncles.

                                 2
     The partition did not solve all of the difficulties, and the

Brennan’s Restaurant side of the family sued the other side of

the family in 1976 for trademark infringement.   The litigation

came to a close in 1979 with a settlement agreement (“the 1979

Agreement”) and a consent judgment that defined the two camps’

rights in the BRENNAN’S mark.    Owen Sr.’s widow and sons received

exclusive rights to the mark in Louisiana and all other states

except Texas and Georgia, where Richard Sr. and his siblings held

exclusive rights.   The agreement further provided that (with some

exceptions) no party would “open[] or operate[]” a new restaurant

in Louisiana using the Brennan name, though the agreement also

allowed the parties to “aid” their descendants’ efforts to own or

operate restaurants “under any name.”   Regarding future disputes

that might arise, the 1979 Agreement stated that neither side

would assert its trademark rights against the other for uses

permitted by the agreement, but it also said that it did not bar

future claims that might arise out of a breach of the agreement.

Owen Sr.’s widow later died, and the three brothers continued to

own and operate the original Brennan’s Restaurant through

Brennan’s, Inc. (“Brennan’s”).

     Business proceeded without incident for around twenty years.

During that time, Richard Sr.’s son Richard Jr., known as

“Dickie,” began to establish his own name in the restaurant

business.   Unlike Richard Sr., Dickie was not a signatory to the

1979 Agreement.   In the late 1990s, Richard Sr. gave Dickie and

                                  3
another child a majority interest in the Palace Café restaurant,

which began to be known as Dickie Brennan’s Palace Café.    At

around the same time, Richard Sr., Dickie, and others decided to

open a new restaurant, also in New Orleans, called Dickie

Brennan’s Steakhouse.

     In July 1998, Theodore happened to notice a sign announcing

the construction of Dickie Brennan’s Steakhouse several blocks

away from Brennan’s Restaurant, and he informed his brothers.

The brothers held a meeting with Dickie in September at which the

parties discussed how to manage the use of the family name in

connection with their respective restaurants.   According to the

brothers, Dickie concealed from them the fact that his father,

Richard Sr., held ownership interests in the two restaurants

bearing Dickie’s name.   The meeting produced an agreement between

Brennan’s and Dickie (“the 1998 Agreement”) in which Brennan’s

promised that it “shall not object” to Dickie’s operation of

restaurants under the names “Dickie Brennan’s Palace Café” and

“Dickie Brennan’s Steakhouse” “so long as”: Dickie did not use

the name “Brennan’s” separately from “Dickie,” the words “Dickie

Brennan’s” were not made more prominent than the rest of the

name, Dickie did not use certain typefaces, and Dickie did not

imply any connection with the original Brennan’s Restaurant.

Dickie also promised that he would not use the Brennan name in

ways other than those specified in the agreement.   The agreement

further required Dickie to notify the brothers and take remedial

                                 4
action if he became aware that his restaurants were being

confused with the original Brennan’s Restaurant.

     Over the course of the next few years, the staff at

Brennan’s Restaurant noticed a number of instances in which the

consuming public apparently confused their restaurant with Dickie

Brennan’s Steakhouse and vice versa, such as people going to one

restaurant when they were looking for the other.   Attorneys for

Brennan’s wrote to Dickie in March 2000 to request a meeting to

discuss the apparent confusion, Dickie’s alleged breaches of the

1998 Agreement, and remedial measures that Dickie could take.

After meetings and letters failed to resolve the dispute,

Brennan’s sued Dickie and Dickie Brennan & Co. (the corporation

through which the plaintiffs believed that Dickie was operating

the restaurants) for breach of the 1998 Agreement, federal and

state trademark claims, and other claims.   The defendants filed a

motion to dismiss for failure to join parties.   Attached to the

motion were affidavits stating that the Palace Café and

Steakhouse restaurants were actually owned and operated by

Cousins Restaurants, Inc. (“Cousins”) and Seven Sixteen

Iberville, L.L.C. (“Seven Sixteen”), respectively.   The

affidavits further stated that Richard Sr. and Dickie both held

ownership interests in the two companies and that Dickie and the

two companies were acting as successors to Richard Sr.’s rights

under the 1979 Agreement.   In response, Brennan’s amended its

complaint to add a claim for breach of the 1979 Agreement, to

                                 5
join Richard Sr. and the two companies as defendants, and to join

the brothers (who, like Richard Sr., were signatories to the 1979

Agreement) as plaintiffs.   The defendants filed counterclaims

asserting breach of the 1979 Agreement and, later, breach of the

1998 Agreement.

     The district court made several rulings that narrowed the

issues for trial.   Relevantly for purposes of this appeal, the

district court held that: (1) Richard Sr. had breached the 1979

Agreement by owning a minority share of Cousins and Seven Sixteen

and otherwise contributing to those businesses; according to the

district court, Richard Sr.’s activity amounted to the

contractually forbidden “open[ing] or operat[ing]” of a

restaurant, not the “aid” to a descendant permitted under the

agreement; (2) the 1979 Agreement barred the plaintiffs from

bringing trademark-related claims against Richard Sr., and the

plaintiffs were accordingly limited to pursuing contract remedies

against Richard Sr.; (3) the 1998 Agreement barred the plaintiffs

from pursuing trademark-related claims against Dickie; the

plaintiffs would therefore be limited to remedies for breach of

contract unless they could show that the contract should be

rescinded because of fraud or a serious breach; and (4) Cousins

and Seven Sixteen could exercise the rights given to Dickie under

the 1998 Agreement, and so the plaintiffs could not pursue

trademark-related claims against those companies either.   After

the district court’s pretrial rulings, the only matters that

                                 6
remained for trial were the plaintiffs’ claim that Dickie had

breached the 1998 Agreement and their claim that Dickie had

fraudulently induced them to enter into the agreement.1

     The liability phase of the bifurcated trial began on October

28, 2002.   On November 7, the jury returned its liability

verdict.    It found that the plaintiffs had not proved that Dickie

fraudulently induced them to enter into the 1998 Agreement.    On

the breach-of-contract claim, the jury found that Dickie had

breached the 1998 Agreement with respect to his Steakhouse

restaurant--but not with respect to his Palace Café restaurant--

by using the Brennan name in a manner not permitted under the

contract and by failing to take proper remedial measures to

remedy the marketplace confusion of which he had become aware.

The jury also found, however, that Dickie had acted in good faith

and that the breach was not so serious as to justify dissolving

the 1998 Agreement.

     Since the 1998 Agreement remained in force, the district

court’s prior rulings limited the plaintiffs to contract remedies

in the damages phase of the trial.    During the liability phase,

the plaintiffs had already presented testimony tending to show

that some customers actually were confused as between Brennan’s

     1
          Although the court had granted summary judgment for the
plaintiffs on their claim that Richard Sr. breached the 1979
Agreement, they did not pursue contract damages against Richard
Sr. at trial. They instead elected to reserve their right to
argue on appeal that trademark remedies were available.

                                  7
Restaurant and Dickie Brennan’s Steakhouse.    In the damages

phase, the plaintiffs presented evidence from a single expert

witness, William Legier.2   The defendants countered with their

own expert, who severely criticized Legier’s testimony.    On

November 8, the jury returned an award of $250,000 to compensate

the plaintiffs for Dickie’s breach of contract, compared to the

$2.2 million that plaintiffs’ counsel had requested in closing

arguments.   The district court entered judgment on the verdict

and ordered Dickie to bring his conduct into compliance with the

1998 Agreement.

     The plaintiffs now appeal, raising several issues.    Most

importantly, they challenge the district court’s rulings that the

1979 and 1998 Agreements bar them from pursuing all trademark-

related claims against the defendants.   They additionally contend

that they are entitled to judgment as a matter of law on their

fraudulent inducement claim or, at least, that they are entitled

to a new trial on that claim because the district judge erred in

preventing them from asking Dickie a certain question on cross-

examination.   They also complain that the judge erred in barring

them from presenting evidence of the value of a reasonable

royalty in the damages phase of the trial.    Dickie and Dickie

Brennan & Co. have cross-appealed, contending that the district

     2
          The circumstances surrounding Legier’s testimony form
the basis of a cross-appeal and are discussed in greater detail
in Part III.A.

                                 8
court should have excluded the plaintiffs’ expert testimony on

damages and that, without said testimony, the damages award

cannot stand.

                 II. PLAINTIFFS’ ISSUES ON APPEAL

A.   Rule 50 motion on fraudulent inducement

     At trial, the plaintiffs asserted that Dickie had

fraudulently induced them into signing the 1998 Agreement.      The

jury found to the contrary.   The plaintiffs moved for judgment as

a matter of law under Rule 50, but the district court refused to

set aside the verdict.

     We review the district court’s ruling de novo, applying the

same Rule 50 standard as did the district court.    See Coffel v.

Stryker Corp., 284 F.3d 625, 630 (5th Cir. 2002).   Judgment as a

matter of law is appropriate with respect to an issue if “there

is no legally sufficient evidentiary basis for a reasonable jury

to find for [a] party on that issue.”   FED. R. CIV. P. 50(a)(1).

This occurs when the facts and inferences point so strongly and

overwhelmingly in the movant’s favor that reasonable jurors could

not reach a contrary verdict.   Coffel, 284 F.3d at 630.   In

considering a Rule 50 motion, the court must review all of the

evidence in the record, drawing all reasonable inferences in

favor of the nonmoving party; the court may not make credibility

determinations or weigh the evidence, as those are jury

functions.   Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S.
9
133, 150 (2000).   In reviewing the record as a whole, the court

“must disregard all evidence favorable to the moving party that

the jury is not required to believe.   That is, the court should

give credence to the evidence favoring the nonmovant as well as

that evidence supporting the moving party that is uncontradicted

and unimpeached, at least to the extent that that evidence comes

from disinterested witnesses.”   Id. at 151 (citation and internal

quotation marks omitted).

     The jury in this case was instructed that, under Louisiana

law, fraud is “a misrepresentation or a suppression of the truth

made with the intention either to obtain an unjust advantage for

one party, or to cause a loss or inconvenience to the other.”

They were further instructed that fraud can occur through silence

or inaction, as well as through affirmative misrepresentations.

     The plaintiffs’ argument relies heavily on the fact that

Dickie admittedly did not inform the brothers during the

September 1998 meeting that Richard Sr. was involved with

Dickie’s restaurants.   Moreover, the brothers testified at trial

that Dickie made several specific remarks during the meeting that

tended to suggest that Sr. would not be involved: that Richard

Sr. had “retired,” for example, and that Dickie was “going out on

his own” to establish his own name.    Dickie did not deny making

those statements but instead testified that he could not remember

whether he made them.   The brothers also testified that they

certainly would not have entered into the 1998 Agreement had they

                                 10
known that Richard Sr. was involved.     Dickie admitted that he was

aware of the animosity between Richard Sr. and the brothers’

branch of the family, and he likewise admitted that he was aware

that the 1979 Agreement limited his father’s use of the family

name.    On the basis of such evidence, the plaintiffs contend that

a reasonable jury would be required to conclude that Dickie

fraudulently induced the brothers into signing the 1998 Agreement

by concealing Richard Sr.’s involvement.

       We disagree.   A rational jury could have ruled as this jury

did.    The evidence before the jury showed that it was the

brothers who requested the meeting with Dickie, the brothers who

proposed entering into an agreement concerning use of the

BRENNAN’S mark, and the brothers who drafted the 1998 Agreement

for Dickie to sign.     The jury also heard evidence that Dickie

believed that he did not need the 1998 Agreement or any

permission from Brennan’s in order to open his restaurants under

his name, casting doubt on his motive to deceive them.     Moreover,

although the brothers testified that they were unaware of Richard

Sr.’s involvement in Dickie’s restaurants, there was evidence

that permitted a rational inference that Dickie would have

expected the brothers to have been exposed to this information

through media reports and local scuttlebutt.     In sum, the jury

rationally could have concluded that Dickie did not undertake

fraudulently to induce the brothers into executing the 1998

Agreement.

                                  11
B.   Request for a new trial on fraudulent inducement

     The plaintiffs next ask for a new trial on their fraudulent

inducement claim, contending that the district court improperly

prevented them from inquiring into Dickie’s state of mind.       In

particular, the plaintiffs assert that the district court

committed reversible error when it sustained defense counsel’s

objection to the question whether Dickie believed that the

brothers would have entered into the 1998 Agreement had they

known that Richard Sr. was involved in Dickie’s restaurants.       The

error is said to have occurred in the following exchange:

     Q:      Do you think they would have entered into the 1998
             Agreement if they knew that your father was involved
             with the restaurant?

     A:      Mr. Colbert, when I look back over all the information
             that we have seen, I don’t know how they weren’t aware
             that my dad was involved.

             [Plaintiffs’ counsel]:    Could I please have the
                                       question read back.

The court reporter read back the question, but, before Dickie

answered, his attorney asked to approach the bench.     Dickie’s

attorney then objected to the question on the ground that it

sought an answer to the ultimate question to be answered by the

jury.     The plaintiffs’ attorney responded that the question went

to whether Dickie had a motive to conceal Richard Sr.’s

involvement.     The court sustained the objection.

     The plaintiffs face an uphill battle in appealing this

ruling, for the district court’s decisions regarding whether to

                                  12
admit or to exclude testimony are generally reviewed only for

abuse of discretion.   Green v. Adm’rs of Tulane Educ. Fund, 284
F.3d 642, 660 (5th Cir. 2002).    Further, we will not reverse

unless the error prejudices a party’s substantial rights.       FED.

R. EVID. 103(a); FED R. CIV. P. 61.

     We conclude that there was no reversible error here.       Dickie

indirectly answered the question the first time it was posed by

stating that the brothers must have been aware of Richard Sr.’s

involvement.   His response amounted to a “yes” answer to defense

counsel’s question: Dickie said that the brothers must have known

about Richard Sr.’s involvement, yet they signed the 1998

Agreement; therefore, according to Dickie, they would still sign

even if they knew.   There is no reason to think that Dickie would

have provided a different answer if plaintiffs’ counsel had been

permitted to pursue the matter.       Further, the court’s ruling in

no way prevented the plaintiffs from making their case.       Even

without Dickie’s answer to this question (which answer would not

have helped them), there was ample evidence from which a rational

jury could have concluded that Dickie intended to deceive the

brothers.   The plaintiffs recount that evidence in detail and

indeed argue, as explained in the previous section of this

opinion, that no rational jury could reach a different conclusion

based on the evidence before it.       The plaintiffs’ failure to

convince the jury of fraud cannot reasonably be attributed to the

                                  13
judge’s decision to exclude this single question, even if the

judge erred in sustaining the objection.

C.    Effect of the 1998 and 1979 Agreements on the plaintiffs’
      ability to bring trademark-related claims

      We turn next to considering whether the district court erred

in concluding that the 1998 and 1979 Agreements barred the

plaintiffs from pursuing their trademark infringement and related

claims3 against Dickie, Cousins and Seven Sixteen, and Richard

Sr.   We conclude that the district court erred in certain

respects, but we also conclude that there are significant

limitations on the plaintiffs’ ability to obtain additional

relief on remand.

      1.   Trademark claims against Dickie

      The district court held that the 1998 Agreement barred

Brennan’s from pursuing trademark-related causes of action

against Dickie.   The court adopted the defendants’ position that

Brennan’s was limited solely to contract remedies as long as the

agreement remained in force; trademark remedies would be

available only if Brennan’s could avoid the agreement by proving

fraud in the inducement or could prove a breach sufficiently

serious to warrant dissolving the contract.   The jury found that

there was no fraudulent inducement and, although the jury found a

breach of the agreement, it found that the breach was not so

      3
          The plaintiffs’ theories of recovery included not only
standard trademark infringement but also other related theories
of dilution and unfair competition.

                                14
serious as to vitiate the contract.       The 1998 Agreement thus

remaining in force, the district court limited Brennan’s to

pursuing contract damages during the second phase of the trial.

       A good portion of the argument in this court has involved

the question whether the 1998 Agreement is a license agreement on

the one hand or a consent-to-use agreement on the other.                  A

license gives one party the right to use another party’s mark

(i.e., to engage in otherwise infringing activity), generally in

exchange for a royalty or other payment.           2 MCCARTHY   ON   TRADEMARKS

AND   UNFAIR COMPETITION § 18:79 (4th ed. 2004).      A consent-to-use

agreement, again in the paradigm case, is a contract in which

       party A, the owner of a mark, consents to party Z’s
       defined usage of a mark. In effect, A promises not to
       sue Z so long as Z keeps within the limits of the defined
       zone of use. . . . That is, A admits that such defined
       usage is not an infringement and that A will therefore
       not sue Z for such usage.

Id.    In other words, a consent-to-use agreement “‘[i]s not an

attempt to transfer or license the use of a trademark . . . but

fixes and defines the existing trademark of each . . . [so] that

confusion and infringement may be prevented.’”           Exxon Corp. v.

Oxxford Clothes, Inc., 109 F.3d 1070, 1076 (5th Cir. 1997)

(alterations in original) (quoting Waukesha Hygeia Mineral

Springs Co. v. Hygeia Sparkling Distilled Water Co., 63 F. 438,

441 (7th Cir. 1894)).      Courts ordinarily will not find a

licensing relationship when “an authorization of trademark use is

structured in such a way as to avoid misleading or confusing

                                    15
consumers as to the origin and/or nature of the respective

parties’ goods.”    Id.   According to those principles, the 1998

Agreement is best described as a consent-to-use agreement rather

than a license.    Indeed, it expressly provides that the parties’

aim in executing the agreement is “avoiding any confusion of the

trade or public.”    It expressly requires Dickie to take remedial

action to combat any consumer confusion that develops even in the

absence of any breach.

     With regard to licenses, the prevailing view is that one who

exceeds the scope of the license is potentially liable not just

for breach of the license agreement but also for trademark

infringement.     E.g., Franchised Stores of N.Y., Inc. v. Winter,

394 F.2d 664, 668-69 (2d Cir. 1968); Digital Equip. Corp. v.

AltaVista Tech., Inc., 960 F. Supp. 456, 473-78 (D. Mass. 1997);

see also 2 MCCARTHY § 18:42; 4 id. § 25:30.

     According to the defendants, the situation is very different

with regard to consent-to-use agreements.     A party aggrieved by

the breach of such an agreement, they claim, has recourse only to

contract damages and may not sue for trademark infringement

unless the contract is rescinded.      That is, the defendants argue

that the mark-holder who consents to a defined use is, so long as

the contract persists, unable to pursue trademark remedies even

when the consentee uses the mark in unauthorized ways.     They cite

the McCarthy treatise in support of that proposition, but while

the treatise does discuss several aspects of consent-to-use

                                  16
agreements, it does not set forth the proposition the defendants

advance (though neither does it expressly reject it).     In a case

that McCarthy cites as one of the earliest reported decisions to

consider a consent-to-use agreement, the court seems to permit an

action predicated on trademark infringement, not merely breach of

contract, for a use that fell outside of the contract’s

permissions (though the hundred-year-old opinion is admittedly

rather obscure).   See Waukesha Hygeia, 63 F. at 441.

     In support of their position that the existence of the

contract bars trademark actions, the defendants rely heavily on

Affiliated Hospital Products, Inc. v. Merdel Game Manufacturing

Co., 513 F.2d 1183 (2d Cir. 1975).   There, game manufacturer

Affiliated sued competing game manufacturer Merdel for trademark

infringement, and the parties settled their dispute by executing

a settlement agreement that regulated Merdel’s use of certain

names on its games.   Id. at 1185-86.   The agreement provided that

Affiliated would not object to Merdel’s use of the names as long

as Merdel did not use them in a fashion more prominent than it

was using them as of the date of the agreement, and it

specifically provided that Merdel would not use the names to

describe their game board.   Id. at 1186.   Finally, the agreement

stated that there would be no restriction on Merdel’s use of the

names after a period of three years had elapsed.    Id.   A few

years after executing the agreement, Affiliated sued Merdel

again, claiming that Merdel had breached the agreement and

                                17
infringed its marks.    Id. at 1184-85.   The court of appeals ruled

that the settlement agreement governed the parties’ rights and

that Affiliated would be limited to contract remedies--and have

no recourse to trademark remedies--unless it could show that the

contract should be rescinded because of fraud or grave breaches.

Id. at 1186.

     We do not think that Affiliated is controlling here.

Although Affiliated complained that Merdel had acted outside the

permissions in the contract during the three-year term, it also

wished to bring an infringement action based on uses that the

contract expressly permitted.    Recall that the key feature of the

parties’ contract in Affiliated was that it allowed Merdel

unrestricted use of Affiliated’s marks after a period of three

years.    That contractual surrender of any right to object to

Merdel’s use of the marks is the main reason that the contract

had to be avoided or rescinded before Affiliated could pursue an

infringement case.    That consideration is not present in today’s

case.    We do not read Affiliated so broadly as to mean that any

party that enters into a consent-to-use agreement is (absent

rescission) limited to contract remedies even for infringing uses

that are not authorized under the contract.    Such a rule would

make the availability of trademark remedies dependent on whether

a certain contract is labeled a licensing agreement or a consent-

to-use agreement--an undesirable circumstance given that some

agreements might not fit squarely into either box.    It would,

                                 18
moreover, act as a trap for the unwary mark-holder, who could

find himself stripped of trademark remedies (and potentially of a

federal forum) when a consentee infringes his mark through

unauthorized uses.

     A more apposite case is Sterling Drug Inc. v. Bayer AG, 792
F. Supp. 1357 (S.D.N.Y. 1992), aff’d in part and vacated in part,

14 F.3d 733 (2d Cir. 1994).4   As in today’s case, the parties in

Sterling entered into a contract according to which one party,

Sterling, promised that it would not object to the other party,

Bayer, using a certain mark so long as Bayer restricted its use

of the mark in specified ways.    Id. at 1363.   Sterling later sued

Bayer for breach of contract and trademark infringement.    Bayer

argued that the parties’ agreement rendered trademark law

inapplicable to the case and that contract law alone governed the

parties’ conduct.    Id. at 1365, 1371 n.12.   The court rejected

that argument, holding that both bodies of law were applicable

and basing its injunction on both.    Id. at 1371 n.12, 1375.   The

Sterling court distinguished the Affiliated case on the ground

that the plaintiff in Affiliated was pursuing an infringement

action for uses that were permitted by the parties’ agreement,

which is why it was necessary for the plaintiff in Affiliated to

     4
          The court of appeals affirmed the district court’s
rulings on breach of contract and trademark infringement, which
are the subject of the discussion in this paragraph of the text.
The vacatur was limited to aspects of the district court’s
remedial injunction that were deemed overly broad. See 14 F.3d
at 746, 749-50.

                                 19
eliminate the contract before suing for trademark infringement.

Id. at 1371 n.12.

     Viewing these principles as useful guides to interpreting

agreements like the one at issue here, we turn to the 1998

Agreement itself.     It is a contract and it must of course be

taken on its own terms, looking to the parties’ intent as

expressed in the contractual language.     The contract is governed

and interpreted in accordance with state law, here the law of

Louisiana.   We must decide whether the contract should be read to

bar Brennan’s from pursuing a trademark infringement action

against Dickie.     Before the advent of the 1998 Agreement,

Brennan’s certainly had the right to pursue such an action (which

is not to say that any such action would succeed).     The agreement

does limit that right at least to some extent, for it provides

that Brennan’s “shall not object” to Dickie’s use of the marks

DICKIE BRENNAN’S PALACE CAFÉ and DICKIE BRENNAN’S STEAKHOUSE “so

long as” Dickie arranged the words in certain ways, did not use

certain typefaces, and refrained from using words (such as

“original” or “famous”) that would suggest a connection to

Brennan’s.   Thus, as long as Dickie’s use of the marks came

within the uses described in the agreement, the contract would

protect him from a charge of trademark liability.     See, e.g., T&T

Mfg. Co. v. A.T. Cross Co., 587 F.2d 533 (1st Cir. 1978); Rush

Beverage Co. v. S. Beach Beverage Co., No. 01 C 5684, 2002 WL
31749188, at *9-11 (N.D. Ill. Dec. 6, 2002).     The agreement

                                  20
reduces the uncertainty and risk that inheres in certain uses

near the outer edges of the BRENNAN’S mark by creating a safe

harbor for uses that would otherwise invite colorable (though not

necessarily meritorious) trademark claims.   That much is agreed.

     In this case, the jury found that Dickie had used the

BRENNAN’S mark in ways that were not authorized under the

agreement.   The evidence showed that the name “Dickie Brennan”

was displayed more prominently than the word “Steakhouse,” for

example.   Thus, the question is whether the agreement bars

Brennan’s from pursuing a trademark case for uses outside of

those contemplated and permitted in the agreement.   By its terms,

the language of the agreement does not preclude such a suit, for

it provides only that Brennan’s “shall not object . . . so long

as” Dickie follows the contract’s guidelines.   The contract does

not say that Brennan’s has relinquished the right to pursue

trademark remedies for uses that are not permitted by the

agreement.   Louisiana law provides that waivers of the right to

bring future claims must be clear and are narrowly construed.

See Young v. Equifax Credit Info. Servs., 294 F.3d 631, 637 (5th

Cir. 2002); Brown v. Drillers, Inc., 630 So. 2d 741, 752-54 (La.

1994).   The agreement accordingly cannot be taken to mean that

Brennan’s has implicitly given up its preexisting right to pursue

trademark claims as to unauthorized uses.    Put differently, the

fact that Brennan’s permitted Dickie to engage in certain

specified uses without fear of liability does not mean that

                                21
Dickie is thereby immunized from trademark liability for all

unauthorized uses.    With regard to unauthorized uses, the

contract by its terms cannot be set up as a defense, and thus a

trademark action is allowed.    (Of course that does not mean, as

Brennan’s at points suggests, that a breach of a consent-to-use

agreement is per se an instance of trademark infringement.     A use

might breach the contract yet not independently qualify as

trademark infringement.    Cf. 2 MCCARTHY § 18:80 (“[I]n a consent

agreement, the parties can bargain for a greater separation

between their respective uses than would be required by general

trademark and unfair competition law.”).)

     While the district court erred in denying Brennan’s an

opportunity to pursue its trademark-related claims, we note that

the scope of the action that Brennan’s may pursue on remand is

limited in at least the following important ways.     First, since

the still-in-force 1998 Agreement permits Dickie to make certain

uses of his name in connection with his restaurants, Brennan’s

can prevail on its trademark claim only to the extent it shows

that incremental confusion would likely result from Dickie’s

unpermitted uses.    It might be that some possibility of confusion

is inherent in the operation of two nearby restaurants with

similar names, but Brennan’s cannot be heard to charge Dickie

with being an infringer with regard to any confusion that results

from uses to which it acceded in the yet-extant contract, which

the district court did not terminate but instead ordered Dickie

                                 22
to perform.5   See Sterling, 14 F.3d at 750; Sterling, 792 F.

Supp. at 1372 n.14.   Second, assuming that Brennan’s can prove

infringement, the jury’s previous finding that Dickie acted in

good faith might preclude an award of any trademark remedies that

require a showing of willfulness, see 5 MCCARTHY §§ 30:62, 30:89,

30:99, a question that we leave for the district court to address

in the first instance.   (Again, any damages would have to be

attributable to incremental confusion that stems from unpermitted

uses.)   Third, although trademark law provides more numerous and

     5
          For this reason, we reject Brennan’s contention that
the proceedings on remand can assume trademark liability and move
directly to remedies. The jury’s findings that there was a
breach of contract and that there was a likelihood of confusion
“inconsistent with the intention” of the 1998 Agreement might not
be preclusive regarding the question whether the likelihood of
confusion arose only from unpermitted uses, a matter that we
leave to the district court to resolve on remand.
     We note that our conclusions concerning the limitations on
Dickie’s liability for trademark infringement reflect both the
peculiar nature of the 1998 Agreement and the fact that the
agreement remains in force. In the usual case, a consent-to-use
agreement contemplates that there will be no marketplace
confusion as long as the consentee’s uses are confined in
accordance with the contract. See 2 MCCARTHY § 18:79. The 1998
Agreement, however, contemplates that some confusion (though not
necessarily actionable confusion) might result even if Dickie
kept to the permitted uses, and it directed Dickie to take action
to eliminate it. Further, in many cases the consentee’s non-
compliance with the terms of an agreement would terminate the
contract and relieve the mark-holder of his contractual
obligation to allow the specified uses. But here the jury was
instructed that they had the discretion to decide whether to
declare the contract at an end or instead to require Dickie to
specifically perform the contract. The jury was instructed that
its decision on this question could consider the severity of
Dickie’s breach, his good faith or bad faith, and the relative
fairness of the two methods of dealing with the breach.
Brennan’s has not challenged this aspect of the instructions on
appeal.

                                23
generous remedies than contract law typically does, in this case

Brennan’s has already recovered $250,000 in lost profits under

its contract claim.   While it can pursue trademark measures of

damages on remand, in no event should it be permitted to retain

two payments for the same lost profits.   See id. § 30:73.

Because of these limitations, Brennan’s might not be able to

achieve any more relief against Dickie than it has already

attained, despite the fact that the district court should have

let it pursue an infringement case.

      2.   Trademark claims against Dickie’s companies

      The district court ruled that Dickie was permitted to use a

corporate or partnership entity to exercise his rights under the

1998 Agreement.   Since the district court believed that the

agreement precluded a trademark action against Dickie, it

likewise barred Brennan’s from pursuing a trademark action

against Dickie’s companies, Cousins and Seven Sixteen.   The

plaintiffs did not assert breach-of-contract claims against the

companies.   As a result, the jury was not presented with any

questions regarding the liability of Cousins or Seven Sixteen.

The court did not issue any order requiring the companies to

comply with the 1998 Agreement, though it did order Dickie to do

so.

      We concluded above that the 1998 Agreement does not shield

Dickie from potential trademark liability for confusion that

results from activities that fall outside of the contract’s

                                24
aegis.   It follows that the agreement does not shield the

companies regarding such uses either, since their rights vis-à-

vis Brennan’s are surely no greater than are Dickie’s.   To the

extent that the district court barred such claims, it erred.

     There remains the question whether the companies could be

sued for trademark infringement even for uses that the 1998

Agreement permits Dickie to make.6   Brennan’s argues at points

that the companies cannot avail themselves of the 1998 Agreement

at all, even for uses that the agreement authorizes.   In so

arguing, the plaintiffs point out that the 1998 Agreement

provides that its rights are “personal” to Dickie and “may not be

assigned, licensed or otherwise encumbered.”   The district court

rejected Brennan’s position, reasoning that although the contract

forbade Dickie from assigning his rights thereunder, nothing in

the contract prevented him from exercising his own rights through

a business entity.7

     6
          In considering this question, we do not imply that
conduct consistent with the 1998 Agreement would in fact
constitute trademark infringement. The question here is not
whether such a suit would succeed; rather, the question is
whether a trademark suit could even be pursued in the face of the
contract.
     7
          On appeal, the defendants support the district court’s
decision substantially on the same grounds advanced by the
district court, namely that the 1998 Agreement contemplated that
Dickie would be able to carry on his restaurant enterprises
through business entities. We point out that the defendants do
not raise the theory, adopted by some courts but not by others,
that a stranger to a consent-to-use agreement can use the
agreement against the mark-holder as an admission that certain
uses do not create confusion, though other courts reject such a

                                25
     We agree with the district court’s outcome on this score.

The 1998 Agreement contemplates that Dickie has been and will be

operating at least two large restaurants.   While this is an

activity that could be conducted as a sole proprietorship, Dickie

was not then operating the restaurants as sole proprietorships,

and any requirement that he do so would seriously erode the

utility of the contract from his point of view.   We are bound to

assume, of course, that the parties intended a reasonable,

practical arrangement.   See, e.g., Texaco Inc. v. Vermilion

Parish Sch. Bd., 152 So. 2d 541, 547-48 (La. 1963); Lamson

Petrol. Co. v. Hallwood Petrol., Inc., 763 So. 2d 40, 43 (La.

App. 3d Cir. 2000).   That rule argues in favor of a construction

according to which Dickie could continue to operate the

restaurants, which were major financial undertakings, through the

vehicle of his preexisting business entities.   Moreover, to the

extent that extrinsic evidence of the parties’ intent is

relevant, one of the Brennan brothers testified at trial that

theory. See 2 MCCARTHY § 18:81. In terms of the facts of this
case, the argument would be that the plaintiffs’ consent to let
Dickie use certain names could be turned against the plaintiffs
if they brought an infringement case against other parties for
similar conduct, on the theory that even strangers to the
consent-to-use agreement could use the plaintiffs’ contract with
Dickie as an admission that such uses do not produce confusion.
Since the defendants have not raised this particular theory in
their brief in defense of either the companies or Richard Sr., we
accordingly express no opinion on whether such a theory is a
viable defense in an infringement suit.

                                26
their concern was not whether the restaurants were run by a

corporation.8

     In sum, we conclude that the position of Dickie’s companies

matches that of Dickie himself: Brennan’s may not pursue

trademark actions against the companies for uses permitted by the

1998 Agreement, but Brennan’s may pursue such actions for uses

that exceed the permissions of the 1998 Agreement.

     3.   Trademark claims against Richard Sr.

     The district court ruled on summary judgment that Richard

Sr. had breached the 1979 Agreement.   The 1979 Agreement

generally forbade its signatories (of whom Richard Sr. was one)

from opening or operating new restaurants in Louisiana using the

Brennan name.   At the same time, however, the agreement also

expressly permitted signatories to “aid” their descendants’

efforts to own or to operate a restaurant “under any name.”     The

district court held that Richard Sr.’s minority ownership

     8
          In further support of its position that the companies
could not claim the protections of the 1998 Agreement, Brennan’s
points to affidavits in which Richard Sr. and Dickie are said to
have made statements inconsistent with the view that the
companies could claim protection under the 1998 Agreement. The
affidavits, however, express only the view that the companies
could be considered the assigns of Richard Sr.’s interests under
the 1979 Agreement. This does not affect the interpretation of
the 1998 Agreement; the companies could have both statuses.
     Since our conclusion rests on the parties’ intent as
expressed in the 1998 Agreement itself, we need not consider
whether, absent such an intent, Dickie’s rights could otherwise
be imputed to his companies as a matter of corporations law or
agency law. Cf. Casson v. Hartford Fire Ins. Co., 548 So. 2d 66
(La. App. 3d Cir. 1989). Nor do we consider what would happen
were the relationship between Dickie and the companies to change.

                                27
interest in Cousins and Seven Sixteen went beyond the permitted

“aid” to descendants and instead violated the 1979 Agreement.

Richard Sr. has not appealed that ruling.

     The district court also ruled that the 1979 Agreement barred

Brennan’s from suing Richard Sr. for trademark infringement,

leaving Brennan’s to pursue contract remedies only, which it

declined to do.   Brennan’s appeals the district court’s ruling,

asking not only that we let it pursue trademark-related claims

against Richard Sr. but, indeed, that we render judgment in its

favor and remand for determination of an appropriate remedy.

     The key section of the 1979 Agreement provides as follows:

     Each of the parties agrees that it will not assert any of
     its “marks” . . . against the other party with respect to
     said other party’s use of the surname Brennan or
     Brennan’s or the “marks,” if such use is permitted by and
     is in accordance with this Agreement. This Agreement
     shall not affect the right of either party to assert at
     a future date, a claim, demand or cause of action, either
     directly or by way of counter-claim, against the other
     party, or its successors and assigns, that may arise
     . . . out of a breach of this Settlement Agreement
     . . . .

Under the first sentence quoted above, the plaintiffs cannot

bring a trademark suit for uses that are permitted under the

contract.   By its terms, that sentence does not shield Richard

Sr., since the district court found that he violated the

contract’s restrictions.   In the second quoted sentence, each

party expressly reserves the right to assert a claim that

“arise[s] . . . out of a breach of” the agreement.   It could be

argued that a trademark suit predicated on acts that violate the

                                28
contract “arise[s] . . . out of” a breach of the agreement, even

though such a suit sounds in tort.9   If so, then the second

sentence of the 1979 Agreement expressly authorizes a trademark

suit in a situation like the one we confront today.    But if such

a trademark suit is not held to “arise . . . out of” a breach of

the 1979 Agreement, then the 1979 Agreement is silent on the

question of whether it bars trademark suits for future conduct

that is not permitted under the agreement: The first sentence

does not expressly bar such a suit, and the second sentence does

not expressly reserve the right to pursue it.    As explained

previously, Louisiana law requires that waivers of the right to

bring future claims be clear, and such waivers are narrowly

construed.   See, e.g., Young, 294 F.3d at 637; Brown, 630 So. 2d

at 752-54.   Therefore, we conclude that the district court erred

in ruling that the 1979 Agreement barred the plaintiffs from

bringing trademark-related claims against Richard Sr.

     While we agree with the plaintiffs that the 1979 Agreement

does not bar their trademark-related claims against Richard Sr.,

we cannot accede to their request that we simply render judgment

against Richard Sr. on trademark infringement.    That he breached

     9
          In a recent decision involving an insurance policy that
excluded coverage for injuries “arising out of . . . [b]reach of
contract,” this court held under Texas law that a trademark
infringement action related to a violation of a licensing
arrangement “aris[es] out of” a breach of contract. See Sport
Supply Group, Inc. v. Columbia Cas. Co., 335 F.3d 453, 458-59
(5th Cir. 2003).

                                29
the 1979 Agreement--a ruling he did not appeal--does not by

itself mean that he infringed the plaintiffs’ trademarks through

his conduct with regard to Dickie’s restaurants.    Among other

things, it is unclear whether Richard Sr.’s level of

participation in the restaurants is sufficient to expose him to

personal liability.   See generally Chanel, Inc. v. Italian

Activewear of Fla., Inc., 931 F.2d 1472, 1477-78 (11th Cir.

1991); 4 MCCARTHY § 25:24.   The district court must consider any

such defenses on remand.

D.   Reasonable royalty as a measure of damages

     The district court barred the plaintiffs from presenting

evidence of a reasonable royalty in the damages phase of the

case.   The amount that a party hypothetically would have agreed

to pay as a reasonable royalty for use of the mark is sometimes

used as a measure of damages in trademark actions, especially

those involving licensing relationships.    See 5 MCCARTHY § 30:85.

But it is much less familiar as a measure of contract damages,

which is the type of claim that went to the jury.    During the

charge conference for the damages phase of the trial, Brennan’s

took the position that lost profits and a reasonable royalty were

alternative methods of quantifying the loss attributable to

Dickie’s breach of the 1998 Agreement.    On appeal, it takes the

position that, in order to receive a full recovery for the

defendants’ breach of contract, it is entitled to both types of

damages.   In support, it relies principally on the codal

                                 30
provision stating that “[d]amages are measured by the loss

sustained by the obligee and the profit of which he has been

deprived.”   LA. CIV. CODE ANN. art. 1995 (West 1987) (emphasis

added).

     The basic rule of contract remedies is that the plaintiff is

to be put in the same position he would have occupied had the

defendant performed his obligation.      Morris v. Homco Int’l, Inc.,

853 F.2d 337, 346 (5th Cir. 1988) (applying Louisiana law); Amoco

Prod. Co. v. Texaco, Inc., 838 So. 2d 821, 837 (La. App. 3d Cir.

2003).    A plaintiff is not entitled to be put in a better

position by recovering twice for the same harm.      Morris, 853 F.2d

at 346; Town of Winnsboro v. Barnard & Burk, Inc., 294 So. 2d
867, 882 (La. App. 2d Cir. 1974).

     Even if a reasonable royalty could be a proper measure of

contract damages under Louisiana law--a proposition on which we

express no opinion--we must reject the plaintiffs’ argument.      In

the circumstances of this case, it is evident that the two

proposed measures of damages do not aim to compensate Brennan’s

for discrete, independent harms.      The plaintiffs’ expert’s report

calculated several different measures of damages, and it is

important to understand the relationships between them.     The

expert calculated the plaintiffs’ lost profits by estimating the

number of customers that Brennan’s lost during the period of

time, which stretched back several years before trial, in which

                                 31
Dickie’s restaurants were allegedly causing confusion.10     The

hypothetical royalty set forth in another part of the report was

simply calculated as a percentage of the defendants’ sales during

that same time period.    Thus, the lost-profits calculation aims

to put Brennan’s in the position it would have occupied but for

the breach by estimating what Brennan’s would have earned had

Dickie’s restaurants not caused confusion in the marketplace.

The royalty calculation, in contrast, aims to make Brennan’s

whole through the more indirect method of capturing what

Brennan’s hypothetically would have received from Dickie in

exchange for licensing Dickie to use the BRENNAN’S mark in an

otherwise infringing (i.e. confusing) manner.    But Brennan’s

would be made doubly whole were it to receive the profits it

would have made in the absence of confusion plus the royalties it

would have demanded to permit that same confusion.    That

Brennan’s may not do.

          Taking a different tack, Brennan’s has also argued that a

reasonable royalty is a permissible proxy for lost goodwill and

that it is entitled to recover lost goodwill as an element of

contract damages under Louisiana law.    But the reasonable royalty

calculated by its expert does not capture a loss of goodwill in

the sense of damage to a business’s reputation going forward, nor

in the accounting sense of the value of a business apart from its

     10
          The plaintiffs’ expert’s methodology is described in
more detail in Part III.A infra.

                                  32
value as a mere collection of assets.   See Simpson v. Restructure

Petrol. Mktg. Servs., 830 So. 2d 480, 486 (La. App. 2d Cir.

2002); Kenneth M. Kolaski & Mark Kuga, Measuring Commercial

Damages via Lost Profits or Loss of Business Value: Are These

Measures Redundant or Distinguishable?, 18 J.L. & COM. 1, 15-16

(1998) (both explaining the concept of goodwill).   In fact, the

expert’s royalty calculation--which was computed as a percentage

of Dickie’s restaurants’ sales during the period of confusion--

simply provided another metric for recompensing the damage that

the plaintiffs suffered during the same time period used in the

expert’s lost-profits calculation.   But cf. Simpson, 830 So. 2d

at 486 (explaining that a breach of contract could be remedied by

an award of past lost profits plus an award for a loss of

business reputation, which would address future sales).     We

therefore reject Brennan’s request to supplement its lost-profits

recovery on its breach-of-contract claim with a royalty award.

                      III. CROSS-APPEAL ISSUE

     On cross-appeal, Dickie and Dickie Brennan & Co. challenge

the testimony of the plaintiffs’ damages expert.    They argue that

the testimony should have been excluded for several reasons and

that, without it, the jury’s $250,000 verdict cannot stand.

A.   Relevant facts

     In the damages phase of the trial, Brennan’s relied on

expert testimony from William Legier.   Legier attempted to

                                33
quantify the plaintiffs’ lost profits through a “but for” method;

that is, he attempted to determine how many customers Brennan’s

would have served (and how much profit would have been generated

thereby) but for the confusion caused by Dickie’s restaurants.

To determine how many customers Brennan’s lost, Legier calculated

Brennan’s customer counts as a percentage of the attendance at

the New Orleans convention center.   (Brennan’s relies heavily on

out-of-town visitors.)   The method yielded three different lost-

profits figures--a low figure, a high figure, and a weighted

average figure--each representing a different set of assumptions

regarding Brennan’s historical market share.    If Brennan’s

Restaurant’s business decreased in relation to convention traffic

in the years following the opening of Dickie’s restaurants, the

decline could be attributed to consumer confusion.

     In his initial report, provided to the defense on July 8,

2002, Legier relied on convention attendance raw data provided by

the convention center’s marketing department.    The defendants’

expert, Douglas Tymkiw, issued his report on August 5.    At that

time, Tymkiw did not have access to the work papers and

calculations that supported Legier’s estimates, but Tymkiw did

note that Legier’s conclusions appeared inconsistent with the

convention attendance data that Tymkiw had obtained.    On

September 12, after reviewing Legier’s work papers and

deposition, Tymkiw issued a supplemental report in which he

concluded that Legier had used faulty convention attendance data.

                                34
Brennan’s filed a motion to exclude Tymkiw’s supplemental report

and related testimony, but the district court decided on October

21 that the report was for the most part admissible.   On October

23, a bit less than a week before trial, Legier then provided his

own supplemental report in which he used the adjusted attendance

data that Tymkiw said were correct.11

     The defendants quickly filed a motion in limine seeking to

exclude Legier’s supplemental report.   They charged, among other

things, that the supplemental report was simply an over-late

effort to correct Legier’s initial errors and that the defendants

would be prejudiced in their trial preparation, particularly

since they had not yet been provided with the work papers that

supported the supplemental report.   The district court denied the

     11
          The defendants’ brief contends that Legier contradicted
himself regarding when he came into possession of the adjusted
data. Like the district court, we have examined Legier’s
testimony, his reports, and a post-trial affidavit submitted in
response to the defendants’ Rule 59(e) motion. The district
court reasonably concluded that there did not appear to have been
any duplicity. Legier had in his possession at the time of his
initial report a faxed one-page summary of adjusted attendance
totals, but he instead used the marketing department’s detailed
raw data, which could be analyzed and checked for accuracy more
readily than the end totals on the summary. After filing his
initial report, he learned that the convention center’s chief
financial officer maintained an adjusted set of the detailed raw
attendance figures that Legier had used in his initial report.
This adjusted set of detailed data is not the same thing as the
one-page summary that Legier had in his possession all along,
though the former was apparently the source for the latter.
Legier’s statements that he did not have the adjusted data at the
time of his initial report is, therefore, not inconsistent with
the fact that he was in possession of the summary at the time of
the initial report.

                                35
motion, based in part on its belief that the defense had in fact

been given the supplemental work papers.

     Legier testified on November 7.   His testimony referred to a

lost-profits figure that differed somewhat from the one set forth

in his supplemental report; the difference was attributable to an

adjustment to account for the fact that the jury’s verdict,

rendered earlier that day, had found Dickie in breach only with

regard to his Steakhouse restaurant, not the Palace Café.12

Tymkiw took the stand the next day and, during cross-examination,

mentioned that he had not received the work papers supporting

Legier’s supplemental report.   The judge, quite taken aback by

this revelation, then excused the jury and conferred with the

attorneys.   The judge said that she thought that the plaintiffs

had represented that the papers had been turned over and that she

would have granted the defendants’ motion in limine had she known

otherwise.   Counsel for Brennan’s stated that he thought that the

supplemental work papers had been provided, but opposing counsel

told the judge he had never received them.   The defendants

reurged their motion in limine.    The district court, recognizing

that they were now in “a heck of a mess,” gave Tymkiw a chance to

review the papers briefly to see if there was anything that he

     12
          Dickie Brennan’s Palace Café predated Dickie Brennan’s
Steakhouse. With the Palace Café out of the case, the period of
consumer confusion stretched back only to the opening of the
Steakhouse at the end of 1998. Legier therefore eliminated the
lost profits that occurred before the Steakhouse opened.

                                  36
needed to examine further.   There were several pages of

calculations, but the bulk of the 77-page packet consisted of the

adjusted convention attendance data.    The judge then gave Tymkiw

an hour in which to look at the papers and discuss them with the

defendants’ attorneys.   At the conclusion of the recess, the

parties’ argued the motion in limine again.    The judge stated

that she was going to “stick [her] neck way out” and not exclude

Legier’s testimony, directing the parties to take up the matter

in post-trial motions.

     After the verdict, the defendants pressed the issue of

Legier’s testimony once more in a written motion to alter or to

amend the judgment under Rule 59(e).    The district court denied

the motion, concluding that the defendants had not been

prejudiced by the late disclosures.    On appeal, the defendants

continue to contend that the district court erred in admitting

the testimony.   They further argue that without Legier’s

testimony, there is insufficient evidence on which the jury could

have rendered its $250,000 verdict.

B.   Analysis

     The defendants raise three related objections to Legier’s

testimony: (1) that it was unreliable and should have been

excluded under Federal Rule of Evidence 702 and Daubert, (2) that

Legier’s supplemental report was not actually “supplemental”

within the meaning of Federal Rule of Civil Procedure 26(e), and

(3) that the testimony should have been excluded under Federal

                                37
Rule of Civil Procedure 37(c)(1) because the plaintiffs failed to

disclose the work papers that supported the supplemental report.

     Turning first to the Rule 702/Daubert issue, the defendants

contend that Legier’s testimony was unacceptably unreliable

because the ultimate conclusions in his supplemental report

showed a lost profit of approximately half the size set forth in

the initial report.   This type of variance is indeed a cause for

pause, but the reason for the difference was that Legier’s

supplemental report applied the same methodology used in the

initial report to a different, more accurate set of data (i.e.,

the CFO figures) that the defendants’ own expert said should be

used.   The defendants’ brief does not offer argument on whether

Legier’s methodology was improper.   It is true, of course, that

the methodology must also be applied reliably to reliable data,

see FED. R. EVID. 702, but the important point on that score is

that the adjusted figures that formed the basis for Legier’s

actual testimony were the same data that formed the basis for

Tymkiw’s report.   We therefore conclude that the district court

did not abuse its discretion in deeming Legier’s expert testimony

sufficiently reliable.   To the extent that there was a problem

with what happened during the damages phase of the trial, we must

look elsewhere.

     The defendants’ other arguments concerning Legier’s

testimony focus not on the reliability of the testimony itself

but on the unusual course of events that led up to the testimony.

                                38
First, with regard to Rule 26(e), the defendants’ argument is

that Legier’s second report was not truly a “supplemental”

disclosure because the CFO’s adjusted attendance figures were in

Legier’s possession even before he filed his initial report.13

As the defendants present it, their argument subtly misconstrues

the office of Rule 26(e).   Rule 26(e) imposes “a duty to

supplement or correct [a] disclosure or response to include

information thereafter acquired” (emphasis added).   The rule is

properly invoked to bar evidence when a party fails to make a

required supplemental disclosure.    E.g., Alldread v. City of

Grenada, 988 F.2d 1425, 1435-36 (5th Cir. 1993).   If, as the

defendants say, the subsequent report was not really

“supplemental” but instead effectively replaced the earlier

report, the duty to supplement would not by itself provide a

reason to exclude Legier’s testimony--though there might well be

other grounds to exclude it, such as that the plaintiffs’

disclosures were untimely or otherwise violated Rule 26(a) or the

court’s scheduling order.   Cf. Sierra Club, Lone Star Chapter v.

Cedar Point Oil Co., 73 F.3d 546, 571 (5th Cir. 1996) (upholding

district court’s exclusion of expert testimony where initial

     13
          As pointed out earlier, Legier had the summary of
adjusted attendance totals but does not appear to have had the
adjusted raw data at the time of the initial report. The
adjusted data set certainly existed at the time of the initial
report, and indeed Tymkiw obtained it. But it is uncontradicted
that Legier thought at the time of his initial report that the
raw data from the marketing department represented a complete and
best-available source of information.

                                39
expert reports were mere outlines, though the reports were

“supplemented” after the disclosure deadline).

     The defendants frame their grievance against Legier’s

testimony most persuasively when they contend that Legier’s

supplemental report and testimony relating thereto should have

been excluded because Brennan’s did not timely turn over the

supporting work papers and calculations.   Under Rule 37(c)(1),

“[a] party that without substantial justification fails to

disclose information required by Rule 26(a) or 26(e)(1) . . . is

not, unless such failure is harmless, permitted to use as

evidence at a trial . . . any witness or information not so

disclosed.”   We can assume that Brennan’s failed in its

disclosure obligations regarding the supplemental work papers.

The decision whether the failure was justified and/or harmless is

committed to the district court’s sound discretion, which we

review for abuse.   Texas A&M Research Found. v. Magna Transp.,

Inc., 338 F.3d 394, 402 (5th Cir. 2003); United States v.

$9,041,598.68, 163 F.3d 238, 251-53 (5th Cir. 1998).

     The district judge found herself in an extremely difficult

position after the revelation that Tymkiw had not seen the

supplemental work papers.   She could have properly exercised her

discretion by excluding Legier’s testimony.   She was

understandably reluctant to do that, given that the case had

already gone on for over a week, the jury had rendered a verdict

on liability, and Legier was the only witness in the damages

                                40
phase.    To all appearances, counsel for Brennan’s honestly

thought that the papers had been turned over, although they could

not present any evidence of delivery.    In the circumstances of

this case, we cannot conclude that the district judge abused her

discretion in her response to this predicament.    Our decision is

driven largely by the reasonableness of the district court’s

assessment that the defendants were not prejudiced by the tardy

receipt of the documents.

     As noted above, the supplemental work papers consisted

largely of attendance data from the convention center--data with

which Tymkiw was already familiar since he had used it in his own

report.    The district court could well decide that the late

delivery of this information was quite harmless.    Cf.

Woodworker’s Supply, Inc. v. Principal Mut. Life Ins. Co., 170
F.3d 985, 993 (10th Cir. 1999) (upholding the district court’s

decision not to prevent the plaintiff from presenting evidence on

a previously undisclosed theory of damages where, inter alia, the

defendant knew the numbers on which the calculations were based).

Potentially of greater consequence were the relatively few pages

showing Legier’s calculations, but here too the record bears out

the district court’s assessment that the defendants were not

prejudiced.    Legier’s methodology had not changed, doubtless

easing any difficulty in understanding the calculations.    After

reviewing the work papers during the recess, Tymkiw testified on

redirect examination that the calculations showed that in certain

                                 41
years, using the lowest of Legier’s three figures, Brennan’s

Restaurant suffered no lost profits.   Tymkiw also used the work

papers to explain to the jury an aberration in Legier’s 1999

results that Tymkiw had remarked upon in earlier testimony but

had been unable to explain, repairing any deficiency in his

earlier ability to scrutinize that aspect of Legier’s report.

The defendants were given latitude to inform the jury of the

unusual circumstances surrounding Legier’s report.   Tymkiw’s

testimony, both before and after the recess, appears from the

transcript to have been extremely powerful.   In its closing

arguments, Brennan’s cited $2.2 million as the lost-profits

figure supported by Legier’s work.   The jury, which had also

heard testimony during the liability phase of the trial that some

customers actually did mistake Dickie’s restaurants for Brennan’s

Restaurant,14 awarded $250,000 in compensation for breach of the

1998 Agreement.   Significantly, neither in its post-trial motion

to amend the judgment nor in its brief here have the defendants

set forth any additional revelations from the work papers that

they would have, if given more time, unearthed and presented to

     14
          The plaintiffs’ closing argument gave roughly equal
emphasis to Legier’s expert testimony and to the testimony of
actual confusion related during the liability phase. Counsel
reminded the jury of anecdotal evidence from restaurant employees
and customers, a survey performed by the defendants that showed
that a small percentage of customers confused the restaurants,
and expert testimony that customers who actually realize that
they have confused the restaurants represent only “the tip of the
iceberg.”

                                42
the jury.    The district judge was forced to deal with a very

difficult situation that arose on the last day of trial, and we

find no abuse of discretion in her response to it.    Therefore,

while we recognize that what happened during the damages phase of

this case was irregular, we do not believe reversal is required.

                           IV. CONCLUSION

     We AFFIRM the district court’s judgment insofar as it

awarded $250,000 in damages, plus interests and costs, to

Brennan’s on its breach-of-contract claim, and we AFFIRM the

district court’s denial of the plaintiffs’ motions for judgment

as a matter of law or for a new trial on their fraudulent

inducement claim.    We REVERSE the district court’s rulings that

the 1998 Agreement bars the plaintiffs from pursuing trademark-

related causes of action against Dickie, Cousins, and Seven

Sixteen.    We REVERSE the district court’s ruling that the 1979

Agreement bars the plaintiffs from pursuing trademark-related

causes of action against Richard Sr.    The case is REMANDED for

further proceedings consistent herewith.    Each party shall bear

its own costs.

                                 43