United States District Court, N.D. California
TAPGERINE, LLC, a Nevada limited liability company, and TAPMEDIA, LLC, a Ukraine limited liability company; Plaintiffs,
50MANGO, INC., a Delaware corporation, and DOES 1-10; Defendants.
ORDER GRANTING MOTION FOR SANCTIONS
WILLIAM ALSUP UNITED STATES DISTRICT JUDGE
voluntary dismissal of this trade secret misappropriation
action, defendant moves for an award of attorney's fees.
For the reasons stated below, the motion is
a dispute between plaintiffs Tapgerine, LLC, and TapMedia,
LLC, and defendant 50Mango, Inc. TapMedia is a Ukraine
limited liability company with its principal place of
business in Ukraine. Tapgerine is a Nevada limited liability
company with its principal place of business allegedly in Las
Vegas, and an office in Ukraine. Defendant 50Mango, Inc., is
a Delaware corporation with its virtual principal place of
business in Redwood City, California, and its only physical
office in Ukraine.
November 8, 2016, plaintiffs commenced this civil action here
in the district court in San Francisco, alleging
misappropriation of trade secrets by 50Mango (Dkt. No. 1).
Defendant moved to dismiss for failure to state a claim and
based on forum non conveniens (Dkt. No. 17). In opposition to
the motion to dismiss for forum non conveniens, plaintiffs
asserted that all the sources of proof in this case were
located in the United States and that Ukraine was too
war-torn and unstable to provide an adequate remedy (Dkt. No.
21 at 8). In preparation for the hearing, scheduled for March
23, 2017, and to illuminate the actual extent to which the
Ukrainian parties had any presence here in the United States,
the Court sent out an order for supplemental evidence to be
submitted by March, 16, 2017 (Dkt. No. 29). The purpose of
this request was to corroborate the actual extent of any real
presence in the United States of the parties, as claimed by
of providing the Court with photographic evidence of their
presence here in the United States, plaintiffs voluntarily
dismissed the action 21 days after the request was made (Dkt.
No. 34). 50Mango then brought this motion for attorney's
fees (Dkt. No. 37). Shortly after, 50Mango filed an
administrative motion to continue the hearing on its motion
in an attempt to remedy its failure to meet and confer in
compliance with Local Rule 54-5 before making a motion for
award of attorney's fees (Dkt. No. 39). The Court denied
the administrative motion but reserved ruling on the real
issue teed up by this dispute - whether 50Mango's failure
to comply with our local rules warrants denial of its motion
to attorney's fees - pending consideration of the motion
on its merits (Dkt. No. 43). This order follows full briefing
and oral argument.
Plaintiffs' Bad Faith.
sides in this dispute are Ukraine businesses, although they
each have tiny presences here in the United States. 50Mango
contends that plaintiffs acted in bad faith when choosing the
present forum and that the only basis for plaintiffs'
choice was to force 50Mango to endure the expense and
inconvenience of litigating in the United States, rather than
in the actual situs of the parties and events - Ukraine.
its inherent power, federal court's can levy sanctions,
including attorney's fees, for bad faith. See Roadway
Exp., Inc. v. Piper, 447 U.S. 752, 766-67 (2001);
Chambers v. NASCO, Inc., 501 U.S. 32, 46
(1991). “Bad faith” encompasses a wide range of
willful conduct, including “recklessness when combined
with an additional factor such as frivolousness, harassment,
or an improper purpose.” Fink v. Gomez, 239
F.3d 989, 994 (9th Cir. 2001). Whether to impose inherent
power sanctions is “a determination that rests in the
sound discretion of the district court.” Ibid.
delving into the underlying arguments of the parties, this
order will address Tapgerine's transparent attempt to
distance itself from its purely Ukrainian co-plaintiff
TapMedia for the purposes of this motion. Tapgerine - for the
first time in this action - contends that “it is
Tapgerine and not TapMedia that has primarily suffered from
50Mango's actions” (Dkt. No. 42-1 ¶ 10).
Ironically, plaintiffs' complaint tells a different
story. According to the complaint, 50Mango's principals
were former employees of TapMedia, and furthermore, it was
TapMedia's clients and proprietary software source code
50Mango allegedly attempted to misappropriate (Compl.
¶¶ 11-17). This order therefore will evaluate
plaintiffs' bad faith in filing their complaint here in
light of 50Mango's alleged conduct towards both Tapgerine
as well as TapMedia.
argues that even though plaintiffs were aware, prior to
filing this suit, that all of the relevant people, documents,
and other evidence were located in Ukraine, plaintiffs chose
to proceed here. Moreover, 50Mango contends that, once
challenged, “plaintiffs misled their counsel into
believing 50Mango's server and relevant witnesses were
located in the United States, in a belated attempt to justify
their suit” (Dkt. No. 37 at 4).
counter that at the time of filing, they were completely
unaware of 50Mango's presence in Ukraine since all of
their information about 50Mango came from 50Mango's
website. Plaintiffs further assert that as soon as they
received information that the key ...