Pesos, Matador Settle

It looks like Margaritagate won't be setting any legal precedents. The owners of Peso's and the Matador settled out of court last week as the trial entered its final days. In case you haven't been following the trendy Tex-Mex suit ("Flare-Up in Margaritaville," SW, Sept. 10), the controversy began when Matador owner Nate Opper—an ex-Peso's bartender—and two business partners decided to open the first of what's become five restaurants, extending down to Portland.

Peso's owner Brian Hutmacher helped his former employee, suggesting a barbecue theme and letting him use a couple of sauce recipes. But when Opper opened the original Ballard Matador on Super Bowl Sunday 2004, Hutmacher found himself standing in a restaurant with strikingly similar stucco-inspired paint, Southwest-themed metal work, and an eerily familiar menu.

Hutmacher sued Opper in January 2007. Nothing at Peso's is copyrighted or trademarked, but Hutmacher saw an opening in a 1992 U.S. Supreme Court case in which, coincidentally, a restaurant called Two Pesos filed suit against a competitor called Taco Cabana under something called "trade dress." Essentially, Hutmacher argued, Matador so closely copies Peso's in appearance and food that people mix them up or assume they have the same owners. So, the logic goes, someone who might have planned to go to Hutmacher's Queen Anne restaurant will go to a nearby Matador instead, and he'll lose business. (Ironically, Matador attorney David Lieberworth mixed up the two places to hilarious effect during the trial.)

But before the judge could rule on the case, the two parties decided to settle. Hutmacher's attorney, Daniel Woo, says the agreement is still being finalized, but so far Opper and his partners have agreed to change the look of the walls, tabletops, and bar and some of the decorations at the Ballard location—the one which most closely resembles Peso's. Additionally, the names of some menu items will be changed, and no new Matadors will open in most of Seattle or Bellevue for the next three years. On top of those changes, the parties are moving toward agreement on a cash settlement that should range from $250,000 to $285,000, with the money going to Peso's.

Lieberworth says he's happy with the outcome. Meanwhile, says Woo, "When we started the lawsuit, really money wasn't the main point. It was for changes."

Now that that's settled, might I recommend a margarita? I know a couple places.