U.S. District Judge John G. Heyburn II confirmed on Sept. 30 an earlier magistrate's ruling that Pizza Magia was in civil contempt. Heyburn ordered the company to pay appropriate attorney's fees, according to Business First of Louisville. Those fees were not disclosed.
According to the court order, if the lawsuit makes it to trial, Heyburn will consider making the jury aware of Pizza Magia's concealment and misrepresentation. The suit is still in the discovery phase, according to the newspaper.
In October 2001 and March 2002, U.S. District Court Magistrate Judge James D. Moyer found that Pizza Magia failed to comply with a judge's order to turn over all training and operations manuals.
Papa John's filed suit in September 2000, alleging that Pizza Magia and its commissary company, PM Food Service LLC, illegally copied Papa John's operational systems and pizza products.
"We disagreed with the original ruling, we disagree with this, and at the appropriate time, if necessary, I'm sure this will be appealed," said Pizza Magia's general counsel, Charles Brooks.
Papa John's attorney, Janet Jakubowicz, said the ruling confirms that competition in the courtroom is no different than marketplace competition.
"It's OK to advocate your position or a product, but all parties have to play by the same rules," Jakubowicz said. "In this instance, the court found that Pizza Magia was not playing by the rules."
A trial date has been set for June 16.
Pizza Magia was founded by former Papa John's president Dan Holland and six other former Papa John's executives. Both companies are headquartered in Louisville, Ky.