GWACS Armory, LLC v. KE Arms, LLC
| Decision Date | 09 December 2022 |
| Docket Number | 20-cv-00341-CVE-SH |
| Parties | GWACS ARMORY, LLC, Plaintiff, v. KE ARMS, LLC; RUSSELL PHAGAN; SINISTRAL SHOOTING TECHNOLOGIES, LLC; BROWNELLS, INC.; and SHAWN NEALON, Defendants, and KE ARMS, LLC, Plaintiff, v. GWACS ARMORY, LLC; GWACS DEFENSE INCORPORATED; JUD GUDGEL; RUSSELL ANDERSON; DOES I through X; and ROE CORPORATIONS I THROUGH X, Defendants. |
| Court | U.S. District Court — Northern District of Oklahoma |
Before the Court is Plaintiff GWACS Armory, LLC's (“Armory's”) motion for a protective order gag order, and sanctions against Defendants' out-of-state counsel. Armory claims Defendants have publicly disclosed confidential information in violation of a prior protective order and are otherwise attempting to prejudice Armory in the eyes of the public. Armory, however, fails to point to a single piece of evidence that was properly designated as confidential and, itself, publishes a deposition it asserts should not be disseminated. The Court further finds that the extraordinary relief of a gag order is not appropriate in this case.
The ownership and use of intellectual property for the CAV-15 monolithic polymer receiver for AR-15 assault rifles is at the center of this dispute. Among other things, Armory alleges that KE Arms, LLC (“KEA”) has breached a non-disclosure agreement, misappropriated trade secrets, and misappropriated its intellectual property rights by developing and marketing a lower that is based on Armory's protected designs. (ECF No. 2.) Armory also has claims against Brownells, Inc. (“Brownells”) and other defendants. (Id.) KEA, meanwhile, asserts that it has done nothing wrong and alleges that Armory committed various torts by informing KEA's customer, Brownells, of its claims before the lawsuit was filed. (ECF No. 49.)
Non-party Karl Kasarda (“Kasarda”) has previously filed a declaration in this litigation as the owner and manager of InRange, LLC (“InRange”), another non-party. (ECF No. 102-5 at 2 ¶ 1.) According to Kasarda, InRange is “an online video program dedicated to the study of firearms, shooting, gun culture, and history.” (Id.) While a nonparty, InRange allegedly has a pecuniary interest in the outcome of the case. According to Kasarda's declaration, in 2018, Brownells and InRange entered into an agreement where Brownells would be the exclusive retailer, and InRange the primary marketer, of a fully assembled AR-15 rifle for a project called “What Would Stoner Do” (“WWSD”). (ECF No. 102-5 ¶¶ 4, 13-14.) According to Kasarda, InRange will receive 5 percent of the retail purchase price for each firearm using the “WWSD” designation. (Id. ¶ 14; ECF No. 134-2 at 21:5-25.) KEA is manufacturing the polymer lower for this rifle (ECF No. 102-5 ¶¶ 19-20) and it appears this lower is the one Armory claims misuses its designs. Armory deposed Kasarda on April 7, 2022. (ECF No. 134-2.)
Non-party Reed Oppenheimer (“Oppenheimer”) is one of Armory's investors. At his May 27, 2022, deposition Oppenheimer testified he was funding the instant litigation, because he was an Armory investor, felt it was the right thing to do, and had “a lot of confidence in Jud [Gudgel].” (ECF No. 134-6 at 17:10-15, 78:14-20.) Oppenheimer further testified he did not attend any of the business or annual meetings for Armory and described his involvement with Armory as “remote, passive, and obscure.” (Id. at 27:19.) When asked whether he would provide additional investment to Armory “in order to conduct research and development of the CAV-15,” Oppenheimer replied “probably not” because he did not like AR-15s. (Id. at 65:25-66:7.) Similarly, when asked whether he intended to continue to invest in Armory, Oppenheimer replied “no,” because he did not like “the AR-15 business, semi-automatic weapons.” (Id. at 75:4-12.) Likewise, in response to whether he would have been interested in investing further in the AR-15 in April of 2015, Oppenheimer stated “no” and agreed this was because he had a “personal distaste for the AR-15 market.” (Id. at 76:12-18.) Oppenheimer then clarified he was specifically not interested in “the AR-15 and military style weapons to civilians.” (Id. at 76:24-77:2.)
On July 24, 2022, InRange posted a YouTube video titled “WWSD - GWACS Armory Sucks” (the “InRange Video”) in which Kasarda explains his involvement in the WWSD project and expresses his opinion on several related topics, including the merits of Armory's claims in the instant lawsuit. WWSD - GWACS Armory Sucks, YouTube, https://www.youtube.com/watch?v=p sDdUmN6tM (last visited Dec. 6, 2022). Kasarda discusses Oppenheimer's deposition testimony in the final few minutes of the video, stating that Oppenheimer made “pretty flagrant anti-AR-15 and military-style firearms comments” during the deposition, including that he “was no longer interested in manufacturing or being associated with the manufacture of any AR-15 product or military-style firearms but was willing to continue to fund the lawsuit against KE, et al.” Id. at 30:17-30:36. Kasarda then presents the following question: “If [Armory is] suing about the supposed property rights of the CAV Arms slash now GWACS Mark II lower in relation to the completely new designed KP-15 . . . what is it they're trying to acquire if it isn't to manufacture more or a new monolithic polymer lower if the person investing in them flat out says that he is against AR-15s and military-style firearms in the civilian hands?” Id. at 30:51-31:23. Kasarda offers his “interpretation” of the answer to this question by suggesting the instant lawsuit could be the result of one of the following: (1) a realization that Armory is a failure; (2) a legitimate effort “to diminish the amount of AR-15s available on the market as some form of activism in a very weird backhanded way”; or (3) a genuine belief that “they own the A1 length of pull, trap door buttstocks, QD swivels, and . . . [the] What Would Stoner Do . . . project.” (Id. at 31:27-32:26.) Kasarda ultimately concludes that no matter the reason for the litigation, Armory has “done immense harm to no benefit to [InRange], to the industry, or to . . . the consumer.” (Id. at 32:30-32:36.)
David Lane (“Lane”) holds himself out as “the Web Editor for RECOILWeb.com, the digital side of RECOIL Magazine.” http://davidlane.biz/ (last visited Dec. 6, 2022). On July 29, 2022, Lane published an article on RECOILweb.com (the “Recoil Article”), discussing the instant lawsuit and his opinion on the merits of Armory's claims. David Lane, KE Arms, Brownells, And Others Sued By Anti-AR-15 Investor, RECOIL Magazine (July 29, 2022), https://www.recoilweb.com/ke-arms-brownells-and-others-sued-by-anti-ar-15-investor-175976.html (last visited Dec. 6, 2022). Lane also explores Oppenheimer's involvement in the instant lawsuit, his contributions to federally registered political committees, and the Reed Jules Oppenheimer Foundation's annual returns. Id. Based on statements Oppenheimer made in his deposition, Lane characterizes Oppenheimer as someone who is “flagrantly against the AR-15 in the hands of civilian ownership.” Id. As “Supporting Documentation” for his article, Lane provides several links, including to the InRange video and “Russell Phagan Declaration To The Courts.” Id. The latter appears to be a link to the Declaration of Russell Phagan in Support of Defendants' Motion for Summary Judgment (ECF No. 124).
On August 1, 2022, Armory filed the instant motion. (ECF No. 134.) Armory asserts that, “[n]otwithstanding the Court's entry of a Stipulated Protective Order,” Defendants-“in apparent concert with” Karsada-published the InRange Video. (Id. at 2-3.) The InRange Video, Armory asserts, is misleading; includes references to Oppenheimer's deposition testimony; and includes the Russell Phagan Declaration (ECF No. 124), which Armory claims itself contains “information subject to the Stipulated Protective Order” (ECF No. 60). (ECF No. 134 at 3.)
Armory asserts Defendants have violated the Stipulated Protective Order, the Oklahoma Rules of Professional Conduct, and this Court's local rules for the conduct of attorneys. (Id. at 13.) For relief, Armory requests the Court enter “a protective order and ‘gag order' prohibiting the parties from disseminating information and evidence related to this case, prohibiting public harassment and oppression of Armory and/or Oppenheimer, and prohibiting the use of evidence and information in this case for any purpose other than this litigation.” (Id. at 14.) Armory also asks for “appropriate sanctions” against Defendants' out-of-state counsel. (Id.)
Despite its repeated, generalized statements of protective-order violations, Armory has offered no evidence that any protected information has been misused or disclosed. For example, Armory complains that the InRange Video and RECOIL Article link to the Russell Phagan Declaration (ECF No. 124), which it says includes information subject to the protective order. (ECF No. 134 at 3.) Armory then goes on to cite drawings attached to the Declaration and the transcript of Armory's 30(b)(6) deposition. (Id. (citing ECF No. 124-33 & 124-71).) Armory also complains that Defendants' counsel provided Kasarda with a copy of Oppenheimer's deposition transcript. (Id. at 8-9.)
As relevant to the instant motion, the Stipulated Protective Order applies to “information produced or disclosed” during this case when it is “designated with the procedures set forth” in the Order. (ECF No. 60 § 1(a).) The Order then goes on to provide methods by which a party may designate information as confidential and subject to its non-disclosure provisions. (...
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