Tenth Circuit: Hot dispute over Hatch chile trademark case leads to ruling that documents may be obtained from non-parties without a deposition

It’s an understatement to say that chile peppers are an important part of New Mexico’s cuisine and culture. And, as the Tenth Circuit said last week in El Encanto, Inc. v. Hatch Chile Company, Inc., New Mexico’s “Hatch Valley may be to chiles what the Napa Valley is to grapes.”

Thus, many distributors and restaurants, in New Mexico and elsewhere, advertise their use of genuine Hatch chile products. While plenty of good chile peppers are grown in other New Mexico locales, Hatch chile is the gold standard, or perhaps I should say, the “green & red” standard, for chile peppers. (Colorado also claims to grow chile peppers, but as a patriotic New Mexican, I decline to dignify those allegations with a response). But I digress…

Lately, a private corporation, the Hatch Chile Company, Inc., has attempted to trademark the word “Hatch” for its own exclusive use, an action which was certain to provoke controversy and litigation. And it did. Another chile producer, El Encanto, Inc., objected, as did the Hatch Chile Association. They argued before the Trademark Trial and Appeal Board (TTAB) that “Hatch” should not be trademarked because it refers to a geographical area, and all who sell chile products from that area should be allowed to say so.

They also argued that the Hatch Chile Company, Inc. uses the term in a misleading manner because it actually sells chiles that aren’t from the Hatch Valley. To prove this claim, El Encanto sought to compel documents from Hatch Chile Company’s suppliers in federal court by using subpoenas under Federal Rule of Civil Procedure 45 (which parties to TTAB proceedings are allowed to do).

Hatch Chile Company, apparently wishing to keep the source of its chiles a secret, objected to the subpoena, arguing that El Encanto was required to notice a deposition to obtain the documents, despite the fact that no one really wanted to conduct a deposition. The District Court agreed with Hatch Chile Company, and quashed the subpoena.

Well, on appeal you know that things aren’t going your way when the court refers to your preferred procedure as requiring a “pointless process.” As Judge Neil Gorsuch’s opinion explains, Hatch Chile Company’s argument would require “[m]onths of motion practice followed by a new subpoena and a deposition that one one really wants just to secure documents the relevance of which no one seriously disputes.”

Unsurprisingly, the Tenth Circuit held that El Encanto did not have to notice a deposition to obtain the non-party documents. The case will now return to the District Court to consider Hatch Chile Company’s objections to the scope of the subpoena, and after that dispute is resolved, this dispute will probably be resolved by the TTAB on the merits. I’ll do my best to provide further updates about this case, which is of such obvious interest to all patriotic New Mexicans.