United States District Court, D. Idaho
LONE WOLF DISTRIBUTORS, INC. Plaintiff,
BRAVOWARE, INC. and SOPCOM, INC. Defendants.
MEMORANDUM DECISION AND ORDER
Lynn Winmill, Chief Judge
Court has before it plaintiff Lone Wolf's motion for
sanctions. The motion is fully briefed and at issue. For the
reasons explained below, the Court will grant the motion.
motion for sanctions, plaintiff Lone Wolf claims that
defendants misrepresented that they had no connection with an
entity named BravoTac. After Lone Wolf expended considerable
time and effort to expose the falsity of these
representations, defendants withdrew them. In this motion for
sanctions, Lone Wolf seeks reimbursement for its efforts in
uncovering the truth regarding defendants' connection to
Lone Wolf is an Idaho corporation. It makes aftermarket
firearm accessories, including a thread cap protector that
fits on the end of a gun barrel to protect the barrel's
threads from damage during transport or storage.
Wolf claims that the two defendants - Bravoware Inc. and
Sopcom, Inc., both owned by Gino Shemesh - sold counterfeit
Lone Wolf thread cap protectors over the internet through an
alter ego named BravoTac. Lone Wolf accuses the defendants of
trademark counterfeiting and unfair competition, among other
original complaint, Lone Wolf did not name either BravoTac or
Gino Shemesh as defendants. Instead, Lone Wolf claimed that
BravoTac is conducting business as an alter-ego of the two
named defendants, Bravoware Inc. and Sopcom Inc. Lone
Wolf's complaint alleged that Shemesh established a
relationship with it, an Idaho company, to become an
authorized dealer of Lone Wolf products, and then conducted
sales of counterfeit products on eBay under the pseudonym
“BravoTac, ” which was in turn an alter-ego of
the two named defendants owned by Shemesh. The complaint
alleged that the BravoTac website (1) falsely advertised 9mm
thread protectors as Lone Wolf products; and (2) advertised
that Lone Wolf parts were made in South Korea and that its
barrels were not stainless steel, both of which were false.
See Complaint (Dkt. No. 1) at ¶ ¶ 16, 17
responded on April 3, 2015, by filing a motion to dismiss
alleging that this Court lacked personal jurisdiction over
the two named defendants. Defendants argued that the two
named defendants had no contacts with Idaho, and that any
actions of BravoTac could not be attributed to them. Their
brief alleged that “[n]either defendant operates a
website. The website complained of by plaintiffs is not owned
by either defendant.” See Defense Brief (Dkt. No.
17-1) at p. 4. The brief was supported by a Declaration
of Shemesh wherein he states that “[n]either Sopcom nor
Bravoware owns the web site www.bravotac.com mentioned in the
complaint.” See Shemesh Declaration (Dkt. No.
17-2) at ¶ 9. Shemesh also states that
“[n]either Sopcom nor Bravoware was involved in any of
the activities described in the Complaint.”
Id. at ¶ 8.
Wolf responded by filing a motion seeking to do discovery on
the relationship between BravoTac and the defendants. On
April 27, 2015, the defendants opposed that motion, and in
their brief argued that discovery “would be futile
because [Lone Wolf] could never prove that BravoTac is the
‘alter ego' of either Defendant.” See
Defense Brief (Dkt. No. 18) at p. 5. Defendants filed
another Declaration from Shemesh stating that Sopcom and
Bravoware had “no subsidiaries or divisions.”
See Shemesh Second Declaration (Dkt. No. 18-1) at
¶¶ 3-4. Defendants argued in their brief that
Shemesh's statement “establishes that BravoTac
cannot be an alter ego of either company because neither has
any subsidiaries.” See Defense Brief (Dkt. No.
18) at p. 5.
attorney for the defendants, Paul Reidl, states that he
prepared these Declarations after consulting with Shemesh.
See Reidl Affidavit (Dkt. No. 42-1). Reidl discussed
the relationship between Bravoware, Sopcom, and BravoTac with
Shemesh “in multiple telephone conversations and
e-mails, ” and reviewed the Declarations
“paragraph by paragraph with Shemesh over the
telephone.” Id. at ¶ 6. Reidl states that
Shemesh told him that Sopcom and Bravoware had nothing to do
with BravoTac, and that BravoTac was Shemesh's personal
eBay seller name. Id. at ¶ 5.
conducted his own investigation into whether there was a
connection between BravoTac and the two named defendants.
Id. He explains that he was aware of the BravoTac
website but could find no connection between it and the two
named defendants in his investigation. Id. He
discovered the BravoTac d/b/a, but was told by Shemesh that
“it was a d/b/a for his eBay business and that he had
used it before Bravoware had been formed.” Id.
at ¶ 7. When Reidl searched for the d/b/a, he saw that
it was registered July 23, 2013, a date after Sopcom had been
dissolved and before Bravoware had been formed. Id.
at ¶ 8. This chronology, Reidl explains, confirmed to
him the truth of what Shemesh had told him:
Because the purpose of a d/b/a is to publicly identify the
person or entity who is doing business under that name, the
filer could not have been Sopcom (which had been dissolved)
or Bravoware (which had not yet been incorporated). It had to
have been Mr. Shemesh personally.
See Reidl Supplemental Declaration, supra, at ¶
back to Lone Wolf's motion for jurisdictional discovery,
the Court granted that motion and allowed discovery into the
following three areas:
(1) Whether BravoTac is an alter ego of Bravoware and/or
Sopcom, (2) How Shemesh [the owner of Defendants] interacted
with BravoTac, Bravoware and Sopcom, and (3) The details of
Shemesh's relationship with Lone Wolf.
See Order (Dkt. No. 23) at p. 4. As a result of
defendants' denials of any connection between them and
BravoTac, Lone Wolf's counsel traveled to a hotel in
California to take Shemesh's deposition.
hotel lobby, just thirty minutes before the deposition was
set to begin, Reidl met with Shemesh and recalls that
“[n]othing he told me was inconsistent with or
contradicted anything” that he had said earlier
concerning the relationship between BravoTac, Bravoware, and
Sopcom. See Reidl Supplemental Declaration (Dkt. No.
48-5) at ¶ 2.
deposition, the following exchange took place between Shemesh
and Lone Wolf's counsel.
Q: Have you ever filed registering a fictitious business name
in L.A. County?
A: Yes, I did.
Q: What fictitious business name was that?
Q: And who was that filed on behalf of?
. . . .
Q: Was the Bravotac eBay store used to conduct any business
for Sopcom Inc.?
A: At that time, yes.
Q: At what time are you ...