Are Rule 11 Sanctions Warranted If Plaintiff Names the Wrong Defendants?

Yes.

RooR International Bv and Sream, Inc (collectively "RooR") have filed dozens (more? - a recent search suggests over 100 such cases) of suits throughout Florida asserting trademark rights for purported counterfeit sales of its water pipes. 

Recently, RooR asserted such claims against Nipa Enterprise, Inc. and and Ashmaul Hosna for such alleged counterfeit sales at their store in 2016.  But Nipa and Hosna did not own the store in 2016.  Indeed, Nipa Enterprise, Inc. was not formed until 2017.  Defendants filed their Rule 11 motion after waiting for the Rule 11 safe harbor period to elapse.

RooR responded by seeking leave to file an Amended Complaint.  That Amended Complaint named different defendants, and no longer named Nipa and Hosna.  The Court then took up Nipa and Hosna's Rule 11 motion.

Nipa and Hosna claim there is no factual basis for the Complaint because they did not own the store when the counterfeit sale happened. (Doc. 34 at 2-3). Rather than deny or disputing this claim, Roor and Sream filed an Amended Complaint identical to the original Complaint, except it replaces Nipa and Hosna with new defendants. (Doc. 38). So Roor and Sream implicitly admit that the new defendants owned the store at the time of the sale—not Nipa and Hosna. On that basis, the Court concludes that the original Complaint was objectively baseless. See Busse v. Lee Cty., Fla., No. 2:07-cv-228-FtM29SPC, 2007 WL 4350863, at *2-3 (M.D. Fla. Dec. 11, 2007) (finding plaintiff’s claim, that defense counsel perpetuated fraud before she was born, objectively baseless)

RooR likely did not help itself by failing to respond to the sanctions motion:

Roor and Sream also should have known that Nipa and Hosna were the wrong parties. See Attwood v. Singletary, 105 F.3d 610, 613 (11th Cir.1997) (per curiam) (“Rule 11 requires [litigants] to make reasonable inquiries into the veracity of information filed before the court[.]”). A simple public record search could have easily fixed the error. Instead, Nipa and Hosna were named defendants for three months. RooR and Sream wasted three months of Nipa’s, Hosna’s, and the Court’s time and resources. And RooR and Sream have failed to respond as to why they did so when given the chance. The Court thus finds sanctions warranted and will award Nipa and Hosna reasonable costs and attorney’s fees. See Donaldson v. Clark, 819 F.2d 1551, 1556 (11th Cir. 1987) (Rule 11 sanctions can be “viewed as a form of cost-shifting, compensating opposing parties injured by the vexatious or frivolous litigation” or “as a form of punishment imposed on those who violate the rule[.]”).

The Court then imposed liability on plaintiffs' counsel to pay defendants' reasonable costs and attorney fees.

Motion for sanctions, granted.
RooR International Bv v. Ullah Business, Inc., Case No. 2:19-cv-222-FtM-38MRM (M.D. Fla. July 31, 2019) (J. Chappell)