Free Opening Brief in Support - District Court of Delaware - Delaware

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IN THE UNITED STATES DISTRICT COURT FOR DISTRICT OF DELAWARE : TRI-STATE ENERGY SOLUTIONS, LLP a : Civil Action No. Delaware Limited Liability Partnership; : : Plaintiff, : JURY TRIAL DEMANDED : vs. : : KVAR ENERGY SAVINGS, INC., : : Defendant. : : : OPENING BRIEF IN SUPPORT OF DEFENDANT KVAR ENERGY SAVINGS, INC.'S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION, OR IN THE ALTERNATIVE, MOTION TO TRANSFER THIS ACTION TO THE MIDDLE DISTRICT OF FLORIDA

McCarter & English, LLP A. Richard Winchester (#2641) [email protected] Daniel M. Silver (#4758) [email protected] Renaissance Centre 405 N. King Street Wilmington, DE 19801 (302) 984-6300 McCarter & English, LLP William J. Heller [email protected] Four Gateway Center 100 Mulberry Street Newark, NJ 07102 (973) 622-4444 Attorneys for KVAR Energy Savings, Inc.

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TABLE OF CONTENTS TABLE OF AUTHORITIES ......................................................................................................... iii SUMMARY OF ARGUMENT .......................................................................................................v NATURE AND STAGE OF PROCEEDINGS ...............................................................................1 STATEMENT OF FACTS ..............................................................................................................3 A. Parties to the Delaware Litigation................................................................3 1. 2. B. C. KVAR Energy Savings, Inc.............................................................3 Tri-State Energy Solutions, LLP......................................................4

Additional Parties In Interest Not Named in the Delaware Litigation.........4 The Formation of a Relationship Between KVAR and Tri-State ................5 1. 2. 3. The Confidentiality and Non-Disclosure Agreement ......................5 The Exclusive Distributor Agreement .............................................6 The Regional Distributor Agreement...............................................6

D.

The Relationship Between KVAR and Tri-State Deteriorates ....................8 1. 2. 3. Tri-State and the Tri-State Partners' Wrongful Conduct.................8 Tri-State Files the Delaware Action ................................................9 KVAR's Florida Action Was Commenced and Prosecuted Promptly.........................................................................................10

ARGUMENT.................................................................................................................................12 I. KVAR IS NOT SUBJECT TO IN PERSONAM JURISDICTION IN THIS COURT ..................................................................................................................12 A. B. Standard of Review....................................................................................12 The Delaware Long Arm Statute Does Not Confer Jurisdiction Over KVAR ........................................................................................................13 1. 2. KVAR Does Not Transact Any Business or Perform Any Character of Work In Delaware.....................................................13 KVAR Has Not Contracted to Supply Services or Things In Delaware ........................................................................................14 i
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3. 4. II.

KVAR Has Not Caused Tortious Injury In Delaware by an Act or Omission In Delaware....................................................................15 KVAR Has Not Caused Tortious Injury In Delaware by an Act or Omission Outside of Delaware ......................................................16

ASSUMING ARGUENDO THAT THIS COURT FINDS KVAR SUBJECT TO IN PERSONAM JURISDICTION, KVAR REQUESTS THAT THIS ACTION BE TRANSFERRED TO THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF FLORIDA PURSUANT TO 28 U.S.C. 1404(A) 17 A. B. Standard of Review....................................................................................17 Both Private and Public Interest Facts Favor Transfer to Florida .............18 1. 2. C. Private Interest Factors Favor Transfer to Florida.........................18 Public Interest Factors Favor Transfer to Florida ..........................25

Transfer to the Middle District of Florida is Appropriate..........................26

CONCLUSION..............................................................................................................................27

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TABLE OF AUTHORITIES FEDERAL CASES Bank of America, N.A. (USA) v. U.S. Airways, Inc., 2005 WL. 3525680 (D. Del. Dec. 21, 2005)..........................................................25, 26 Bank of America, N.A. v. S.I.P. Assets, LLC, et al., 2007 WL. 2698192 (D. Del. Sept. 11, 2007).............................................17, 18, 25, 26 Cancer Genetics Inc. v. Kreatech Biotech. B.V., 2007 WL. 4365328 (D. N.J. Dec. 11, 2007)................................................................19 Equal Employment Opportunity Commission v. University of Pa., 850 F.2d 969 (3d Cir. 1988)...................................................................................22, 23 Jumara v. State Farm Insurance Co., 55 F.3d 873 (3d Cir. 1995)...............................................................................17, 18, 25 Kim v. Kim, 324 F. Supp. 2d 628 (E.D. Pa. 2004) .....................................................................22, 23 Kloth v. Southern Christian University, 494 F. Supp. 2d 273 (D. Del. 2007).............................................................................16 M&M Tech. v. Gurtler Chemical, Inc., 2005 WL. 293509 (D. Del. Feb. 8, 2005) ..............................................................12, 17 Marino v. Cross Country Bank, 2007 WL. 1946533 (E.D. Pa. June 29, 2007) ..............................................................18 Moore v. Little Giant Industries, Inc., 513 F. Supp. 1043 (D. Del. 1981)................................................................................14 Motorola Inc. v. PC-Telegraph, 58 F. Supp. 2d 349 (D. Del. 1999)...............................................................................17 Schering Corp. v. First Databank, Inc., 479 F. Supp. 2d 468 (D. N.J. 2007) ...................................................................... 19- 21 Sears, Roebuck & Co. v. Sears plc., 744 F. Supp. 1289 (D. Del. 1990)................................................................................15 The Source Buying Group, Inc. v. Block Vision, Inc., 2000 WL. 62972 (E.D. Pa. Jan. 14, 2000) ...................................................................20

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Wyeth & Brother Ltd. v. CIGNA International Corp., 119 F.3d 1070 (3d Cir. 1997)................................................................................. 19-22

STATE CASES Abajian v. Kennedy, 1992 WL. 8794 (Del. Ch. Jan. 17, 1992)............................................................... 13-15 Boone v. Oy Partek AB, 724 A.2d 1150 (Del. Super. 1997)......................................................................... 13-16 Carlton Investments v. TLC Beatrice International Holdings, Inc., 1995 WL. 694397 (Del. Ch. Nov. 21, 1995) ...............................................................13 Rapoport v. Litigation Trust of MDIP, Inc., 2005 WL. 3277911 (Del. Ch. Nov. 23, 2005) .......................................................22, 23 Red Sail Easter Limited Partners, L.P. v. Radio City Music Hall Productions, Inc., 1991 WL. 129174 (Del. Ch. July 10, 1991)........................................................... 15-17 Sheer Beauty, Inc. v. Mediderm Pharm. & Laboratories, 2005 WL. 3073670 (Del. Super. Oct. 27, 2005)..........................................................16 Waters v. Deutz Corp., 479 A.2d 273 (Del. 1984) ............................................................................................16

FEDERAL STATUTES 28 U.S.C. § 1404(a) .............................................................................................................1

STATE STATUES 10 Del. C. § 3104 ................................................................................................1, 12, 17, 23

OTHER AUTHORITIES Donald J. Wofle, Jr. and Michael A. Pittenger, CORPORATE AND COMMERCIAL PRACTICE IN THE DELAWARE COURT OF CHANCERY, § 3-5[a] at 3-34 (2007) ............13

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SUMMARY OF ARGUMENT I. DEFENDANT KVAR IS NOT SUBJECT TO PERSONAL JURISDICTION UNDER THE DELAWARE LONG ARM STATUTE, 10 DEL. C. § 3104. ASSUMING ARGUENDO THAT KVAR IS SUBJECT TO PERSONAL JURISDICTION IN DELAWARE, KVAR REQUESTS THIS ACTION BE TRANSFERRED TO THE MIDDLE DISTRICT OF FLORIDA PURSUANT TO 28 U.S.C. § 1404(a).

II.

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NATURE AND STAGE OF PROCEEDINGS The plaintiff, Tri-State, filed this action in the Delaware Court of Chancery not for the purpose of litigating, but for the dual purposes of: (1) pre-empting a lawsuit in the parties' agreed upon forum (Florida); and (2) using the filed Delaware action to defame the defendant in the trade. The defendant, KVAR, removed this action to this Court and hereby moves for dismissal because Delaware lacks personal jurisdiction over KVAR, or in the alternative, upon the finding of personal jurisdiction, seeks transfer to the Middle District of Florida pursuant to 28 U.S.C. § 1404(a). As set forth in more detail below, KVAR has none of the requisite contacts with the State of Delaware to give rise to long arm jurisdiction under the Delaware long arm statute, 10 Del. C. § 3104. In the event the Court finds that KVAR is subject to personal jurisdiction in Delaware, KVAR respectfully requests that this action be transferred to the Middle District of Florida, where the parties can then litigate and resolve their entire dispute in the agreed-upon forum -Florida -- which the parties agreed to in a mandatory forum selection clause at the outset of their dealings. KVAR instituted the Florida case on or about January 18, 2008, and unlike the TriState in this case, KVAR promptly effected service on all defendants in the Florida case and has sought to move that case forward. What is more, even if the forum selection clause does not control, this Delaware action is not entitled to "first-filed" status because it was commenced for improper purposes; defeating KVAR's choice of forum in Florida and securing an improper competitive advantage in the trade. The real "plaintiff" in the dispute between Tri-State and KVAR is KVAR, not Tri-State. Tri-State's decision to file the Delaware action was purely tactical and intended to pre-empt KVAR's filing of an action in Florida. One of the many facts which support this conclusion is

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that Tri-State waited four months to serve KVAR with the Complaint in this action, and such service came only after Tri-State received service of KVAR's complaint in Florida. KVAR respectfully refers this Court to its own Complaint against Tri-State in the United States District Court for the District of Florida,1 a copy of which is attached hereto is Exhibit A, and referred to herein as the "Florida Complaint." In sharp contrast to Tri-State's "bare bones" Complaint in Delaware, KVAR sued Tri-State, and other indispensable parties (Tri-State's principals), for trademark infringement, unfair competition, interference with contract and with prospective economic advantage, breach of contract and other causes of action in the United States District Court for the Middle District of Florida. Thus, the action currently pending in Florida is much broader than the present action, and already involves all of the indispensable parties necessary to resolve this dispute. In light of the foregoing, and as set forth in much greater detail infra, KVAR respectfully requests that the Court determine that it is not subject to personal jurisdiction in Delaware. In the alternative, if the Court concludes that KVAR's di minimus contacts to Delaware subject it to personal jurisdiction here, KVAR respectfully requests the Court transfer this action to the Middle District of Florida so that the complete dispute between KVAR, Tri-State, and other indispensable parties, can be resolved in one action.

1

The Florida litigation is captioned as KVAR Energy Savings, Inc. v. Tri-State Energy Solutions, et al., 08-CV0085-PCF-KRS (M.D. Fla.) (the "Florida Action").

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STATEMENT OF FACTS A. Parties To the Delaware Litigation 1. KVAR Energy Savings, Inc.

Defendant KVAR Energy Savings, Inc. ("KVAR" or "Defendant") is a corporation organized and existing under the laws of the State of Florida with its principal place of business at 413 Oak Place, Building 4-S, Port Orange, Florida 32127. Plaintiff's Verified Complaint ("Complaint") ¶ 2. KVAR does not maintain any offices or business operations in the State of Delaware, and no KVAR personnel regularly work or reside in the State of Delaware. Declaration of Gregory Taylor, ¶ 2 filed herewith (hereinafter, "Taylor Decl."). KVAR has no connection with the State of Delaware, except this most insignificant contacts through Tri-State and others affiliated with Tri-State, in whom KVAR mistakenly misplaced its trust and confidence when it contracted with Tri-State to sell KVAR products in Delaware. KVAR is a well-known manufacturer of products that improve the energy efficiency of residential and commercial buildings. Florida Complaint ¶ 21.2 Individuals and entities who use KVAR products reduce their energy costs. Id. KVAR has built a nationwide reputation as a source for quality KVARTM brand products that allow individuals and entities to save money on energy costs. Id. Since at least 1995, KVAR has manufactured and/or sold KVAR Energy Controller Units under the distinctive trademark KVARTM (the "KVARTM Mark") (collectively, "KVARTM Products"). Id. at ¶ 22. The KVARTM Mark is displayed prominently on all KVARTM Products

As exhibits "A" and "B" to the Florida Complaint are attached hereto as separate exhibits for ease of reference, they have been omitted from Exhibit A, but exhibit "C" to the Florida Complaint is included with the Florida Complaint, attached as Exhibit A. Exhibits "A" and "B" to the Florida Complaint are attached hereto as Exhibits D and B, respectively.

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as well as KVAR's website, http://kvarnrg.com. Id. at ¶ 23. Each KVARTM Product bears the KVARTM Mark and model and serial numbers that correlate to the use of the particular KVARTM product, whether for a residence, commercial or industrial building. Id. at ¶ 24. KVARTM Products have been tested and certified by leading third parties for their quality and effectiveness. Id. at ¶ 25. KVARTM Products bear the UL® certification mark that is unique to KVARTM Products. Id. KVARTM Products also have received certifications from and/or the approvals of the National Aeronautics and Space Administration (NASA) and by CSA International. Id. at ¶ 26. 2. Tri-State Energy Solutions, LLP

Defendant Tri-State Energy Solutions, LLP ("Tri-State") is a limited liability partnership organized and existing under the laws of the State of Delaware, with its principal place of business, upon information and belief, in Delaware. Complaint ¶ 3; Florida Complaint ¶ 2. It is believed that Tri-State is the alter ego of, or mere instrumentality of, Lawrence Gillen (identified in the following section).3 B. Additional Parties In Interest Not Named in the Delaware Litigation

Lawrence Gillen ("Gillen") owns Tri-State, is its co-president, and is a Delaware resident. Florida Complaint ¶ 7. Chieffo Electric, Inc. ("Chieffo Electric") is a Delaware corporation with its principal place of business, upon information and belief in Delaware. Its owner, Joseph Chieffo

("Chieffo"), likewise is a Delaware resident and is Tri-State's other co-president. One or both of Chieffo Electric and/or Chieffo are partners Tri-State. Florida Complaint ¶¶3-13. KVAR refers

3

Tri-State was formed on/about March 29, 2006 -- only after Gillen sought to become a KVAR distributor -- for the sole purpose of distributing KVAR products in Delaware. "Tri-State" paid for all KVAR products with a credit card belonging to Summit Liquors, another business owned and/or operated by Gillen, and all products shipped to "Tri-State" were shipped to Summit Liquors. Taylor Decl. ¶ 12.

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to Lawrence Gillen, Chieffo Electric and Joseph Chieffo, collectively, as the "Tri-State Partners" herein. All of the Tri-State Partners are parties to the Florida Complaint. C. The Formation of a Relationship Between KVAR and Tri-State 1. The Confidentiality and Non-Disclosure Agreement

KVAR sells KVARTM Products directly and through distributors. Florida Complaint ¶ 29. To facilitate discussions between KVAR and Gillen, Gillen entered into a Confidentiality and Non-Disclosure Agreement ("NDA") to govern and protect KVAR's trade secret, confidential and proprietary information that KVAR disclosed to one or more of the Tri-State Partners. Florida Complaint ¶ 39. The NDA is attached as hereto as Exhibit B. The NDA contains a combined choice of law and forum selection provision which provides as follows: GOVERNING LAW. This Agreement shall in all respects be interpreted, enforced and governed under the laws of the United States and the State of Florida, without reference to the principles of conflicts of law otherwise applicable therein. Recipient agrees that jurisdiction and venue for any legal action, suit or proceeding arising out of or relating to this Agreement shall rest solely with the federal or state court having jurisdiction over Volusia County, Florida. Exhibit B ¶ 9. Gillen signed the NDA. Florida Complaint ¶ 40.4 Likewise, Chieffo executed the NDA during a trip to Florida to meet with KVAR representatives (a copy of which is attached hereto as Exhibit B as well).

To the extent the Tri-State Partners and/or Tri-State argue that only Gillen and Chieffo, as individuals -- and not Tri-State -- are bound by the NDA because Gillen and Chieffo signed the NDA in their individual capacities, such argument should be summarily dismissed. As set forth below, in Section II.B. infra, this cause of action is at the very least "related to" the NDA, and therefore any action related to the NDA must be brought in Volusia County, Florida. Assuming arguendo that Gillen and Chieffo signed the NDA in their individual capacities, they cannot shed the effect of the forum selection clause by acting through an entity which they jointly own and control.

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2.

The Exclusive Distributor Agreement

After the execution of the NDA, KVAR and Tri-State entered into an Exclusive Distribution Agreement (the "Exclusive Agreement"), attached hereto as Exhibit C, under which Tri-State, and (as alleged in the Florida Complaint) the Tri-State Partners, agreed to distribute KVAR products in Delaware. Before signing into the Exclusive Agreement, Larry Gillen and Joe Chieffo traveled to Florida to meet with KVAR representatives. Taylor Decl. ¶ 8. While in Florida, all parties negotiated and signed the Exclusive Agreement. Id. ¶ 10. Exclusive Agreement occurred in Delaware. Id. Pursuant to the Exclusive Agreement, all KVAR products were priced and shipped F.O.B. KVAR plant. Exhibit C ¶ 5. Therefore title to all goods passed in Florida, and "[r]isk of loss due to damage or destruction of KVAR Products [was] borne by [Tri-State] after delivery to the carrier for shipment." Id. Importantly, the Exclusive Agreement made clear that the relationship between KVAR and Tri-State was a vendor-vendee relationship, and that Tri-State was not KVAR's agent. Id. ¶ 14 ("[Tri-State], its agents and employees shall, under on [sic] circumstances be deemed employees, agents, or representatives of KVAR."). Further, the Exclusive Agreement contained a Florida choice of law provision. Id. ¶ 24. 3. The Regional Distributor Agreement No negotiations regarding the

Two months after signing the Exclusive Distributor Agreement, whose territory was limited to Delaware, KVAR and Tri-State expanded their relationship in a May 5, 2006 Regional Distributor Agreement ("Distributor Agreement"), under which KVAR extended Tri-State's territory to include Pennsylvania and Maryland in addition to Delaware. Florida Complaint ¶ 30;

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Complaint ¶¶ 6-7. A true and correct copy of the Distributor Agreement is attached hereto as Exhibit D. Chieffo and Gillen each executed the Distributor Agreement as the co-presidents of Tri-State, and/or in their individual capacities. Florida Complaint ¶ 31. The Regional Distributor Agreement was negotiated by the parties via telephone, and was then executed by Tri-State in Delaware and by KVAR in Florida in separate counterparts. Taylor Decl. ¶ 11. The Distributor Agreement contained the same F.O.B. KVAR plant and Florida choice of law provisions as contained in the Exclusive Agreement. Exhibit D ¶¶ 5, 24. Other than expanding the Tri-State's exclusive distribution territory and enlarging Tri-State's mandatory minimum order, the Exclusive Agreement and the Distributor Agreement were the same in all material respects. Compare generally Exhibit C with Exhibit D. As would be expected in a distribution agreement, the Distributor Agreement provided KVAR with certain rights regarding Tri-State's sales efforts, including a minimum quota. Pursuant to paragraph 8 of the Distributor Agreement, KVAR was permitted to establish sales quotas, and Tri-State agreed to employ and monitor sales personnel to reach such quotas. Florida Complaint ¶ 34; Exhibit D ¶ 8. Pursuant to paragraph 9.C. of the Distributor Agreement, Tri-State, "as a minimum, shall make orders of KVAR in net wholesale value of $75,000 (Seventy-five thousand dollars) in every three-month period during the first two years . . . of the Distributor's appointment." Florida Complaint ¶ 36; Exhibit D ¶ 9.C. Similarly, Tri-State agreed to certain restrictions upon entry into the Distributor Agreement. Pursuant to paragraph 9.B. of the Distributor Agreement, Tri-State agreed "not to engage in the distribution promotion, marketing or sale of any goods or products that compete or conflict with KVAR Products." Florida Complaint ¶ 35; Exhibit D ¶ 9.B. Pursuant to paragraph 13 of the Distributor Agreement, Tri-State could "not use, authorize or permit the use of the

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name `KVAR' or any other trademark or trade name owned by KVAR as part of its firm, corporate or business name in any way...[but] Tri-State may, subject to KVAR's written prior approval, utilize KVAR's name, trademarks or logo in advertising on stationery, business card or other medium." Florida Complaint ¶ 38; Exhibit D ¶ 13. Tri-State never submitted any such materials to KVAR for review. Taylor Decl. ¶ 14. D. The Relationship Between KVAR and Tri-State Deteriorates 1. Tri-State and the Tri-State Partners' Wrongful Conduct

KVAR has learned that Tri-State and the Tri-State Partners committed trademark infringement, unfair competition, false advertising, misappropriation of confidential information, and other wrongful acts by using the relationship with KVAR under the Distributor Agreement to gain access to KVARTM Products and KVAR Confidential Information, and to use them outside the scope of any rights granted by KVAR, and in violation of KVAR's rights. Florida Complaint ¶ 44. As alleged in the Florida Complaint, the Tri-State and the Tri-State Partners have purchased genuine KVARTM Products, have removed the KVARTM Marks, and have re-labeled these genuine KVARTM Products under Tri-State's own brand, "Kilowatt Nanny." Id. at ¶ 45. Tri-State Partners, through Tri-State, are passing off the genuine KVARTM Products as their own, and are falsely representing the source or origin of their products. Id. KVAR never authorized Tri-State to re-brand genuine KVARTM Products as "Kilowatt Nanny." Id. Among other things alleged in the Florida Complaint, Tri-State and the Tri-State Partners are leaving the KVAR Underwriters Laboratories (UL) certification label on the genuine KVARTM Products that they are re-labeling and passing off as their own. Id. Tri-State thus falsely represents that its "Kilowatt Nanny" products are covered by the UL warranties given

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only to genuine KVARTM Products. Id. As further alleged in the Florida Complaint, Tri-State never sought UL certification for the "Kilowatt Nanny," and is falsely claiming KVAR's UL certification as its own. Id. The Florida Complaint also alleges that Tri-State and the Tri-State Partners are engaging in false advertising, by referencing the false statements about third party certifications (UL and others), by falsely claiming association with a United States Patent owned by KVAR, and in other ways as alleged in the Florida Complaint. Florida Complaint ¶ 50; id. at Ex. "C." As further alleged in the Florida Complaint, Defendants' actions have caused actual confusion in the marketplace. KVAR employees have received telephone inquiries from

consumers as to whether the "Kilowatt Nanny" is a KVARTM Product. Florida Complaint ¶ 57. KVAR employees have also been asked which KVAR distributor distributes the "Kilowatt Nanny" product and for KVAR to explain pricing discrepancies in different states associated with the promotion and offering for sale of the Kilowatt Nanny. Id. at ¶ 58. Significantly, the Florida Complaint alleges that Tri-State and the Tri-State Partners also have engaged in a pattern of activity that interferes with KVAR's existing and prospective customer relationships and contracts -- in a manner relating directly to this Delaware case. Id. at ¶ 61. 2. Tri-State Files the Delaware Action

On November 19, 2007, Tri-State filed the Complaint in this case against KVAR in the Court of Chancery of the State of Delaware. In that Complaint, which KVAR removed to this Court, Tri-State makes only two limited allegations: unspecified breach of contract and a generalized complaint that KVAR used certain "testimonials" without permission. As contrasted with the wide-ranging facts, claims, causes of action and wrongs that KVAR alleges in the

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Florida Complaint, Tri-State's Delaware Complaint is narrow and limited. Compare generally Complaint with Florida Complaint. Even more significant, it is clear that Tri-State filed the Delaware action for illegitimate reasons -- reasons unrelated to the prosecution of litigation. Both before and after filing the Delaware Complaint, Tri-State sent the Complaint to existing and potential KVAR customers. Florida Complaint ¶ 61. In the Florida complaint, KVAR has alleged that this publication of the libelous and false information contained in the Delaware Complaint was an effort by Tri-State and its principals to interfere with KVAR's business and customers, their contracts with or their prospective dealings with KVAR, and otherwise to unfairly compete with KVAR. Id. Despite circulating copies of the Delaware Complaint to non-parties who have no interest in the outcome of the Delaware Action, Tri-State waited four (4) months to serve the Complaint on KVAR. The docket sheet from the Delaware Court of Chancery, attached hereto as Exhibit E, reflects that Tri-Stated waited from November 19, 2007 until February 15, 2008 to even commence service of process on KVAR by serving the Delaware Secretary of State. KVAR did not receive formal service of process for the first time until March 18, 2008 -- four months after Tri-State filed this action, and perhaps even more significant, only two days before the Answer of Tri-State and the Tri-State Partners was due in the Florida case, which KVAR filed and promptly served while Tri-State sat on its hands. 3. KVAR's Florida Action Was Commenced and Prosecuted Promptly

KVAR filed the Florida Complaint on January 17, 2008. The Florida Complaint names Tri-State and the Tri-State Partners as defendants. In the Florida Action, KVAR alleges three violations of the Lanham Act, misappropriation of confidential information, trade libel, breach of contract, breach of the implied covenant of good faith and fair dealing, intentional interference

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with contract, prospective economic advantage and advantageous business relationships, and violation of the Florida Deceptive and Unfair Trade Practices Act. Thus, it is readily apparent that KVAR is the real injured party in this dispute, not Tri-State. The fourth count of the Florida Complaint, misappropriation of confidential information, alleges, inter alia, breaches of the NDA. Florida Complaint ¶¶ 101-106. As set forth supra, the NDA contains a forum selection clause which mandates that claims "arising out of or relating to this [NDA] shall rest solely with the federal or state court having jurisdiction over Volusia County, Florida." Exhibit B ¶ 9. Accordingly, by contractual agreement of the parties, KVAR had to file the Florida Action in either a state or federal court located in Volusia County, Florida. Further, pursuant to the choice of law clauses set forth in the NDA and the Distributor Agreement, any dispute between the parties is to be governed by Florida law. Id.; Exhibit D ¶ 24. For the reasons set forth below, KVAR respectfully requests that this Court dismiss this action for lack of in personam jurisdiction over KVAR, or in the alternative, transfer this action to the Middle District of Florida.

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ARGUMENT I. KVAR IS NOT SUBJECT TO IN PERSONAM JURISDICTION IN THIS COURT A. Standard of Review

The Court engages in a two step analysis when determining whether personal jurisdiction exists over a nonresident defendant. First, the Court must decide whether jurisdiction is

authorized by Delaware's long arm statute, 10 Del. C. § 3104 ("Section 3104"). Only if jurisdiction is proper under Section 3104 will the Court then have to engage in the second step of the analysis, which is determining whether exercising jurisdiction comports with the requirements of the Due Process Clause of the Fourteenth Amendment. M&M Tech. v. Gurtler Chem., Inc., 2005 WL 293509, at *2 (D. Del. Feb. 8, 2005). Section 3104 provides in pertinent part: (c) As to cause of action brought by any person arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any nonresident, or a personal representative, who in person or through an agent: (1) Transacts any business or performs any character of work or service in the State; Contracts to supply services or things in this State; Causes tortious injury in the State by an act or omission in this State; Causes tortious injury in the State or outside of the State by an act or omission outside the State if the person regularly does or solicits business, engages in any other persistent course of conduct in the State or derives substantial revenue from services, or things used or consumed in the State[.]5

(2) (3)

(4)

5

It is anticipated that Tri-State will not attempt to assert jurisdiction over KVAR under Sections 3104(c)(5) or (c)(6) as KVAR does not use, possess or have in interest in any real property in Delaware, nor has KVAR contracted to insure or act as a surety. Therefore, Sections 3104(c)(5) and (6) will not be addressed herein.

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In harmony with "modern in personam jurisdiction philosophies," the subsections of Section 3104 have been separated into two categories ­ specific and general jurisdiction. Boone v. Oy Partek AB, 724 A.2d 1150, 1155 (Del. Super. 1997). Sections 3104(c)(1) through (c)(3) have been designated specific jurisdiction provisions, or "single act" provisions, and are at issue when the plaintiff's claims arise out of acts or omissions that take place in Delaware. Id. Conversely, Section 3104(c)(4) is a general jurisdiction provision, and is at issue when the plaintiff's claims are not connected with the nonresident defendant's activities in this State ­ that is, Delaware's connection with the controversy is immaterial. Id. Assessing whether Section 3104 serves as a basis for personal jurisdiction "requires the parties and the court to undertake a `metaphysical assessment of whether various acts ... qualify as contacts with this state and if they do, whose contacts are they." Donald J. Wofle, Jr. and Michael A. Pittenger, CORPORATE
AND

COMMERCIAL PRACTICE

IN THE

DELAWARE COURT

OF

CHANCERY, § 3-5[a] at 3-34 (2007) (quoting Carlton Invs. v. TLC Beatrice Int'l Holdings, Inc., 1995 WL 694397 (Del. Ch. Nov. 21, 1995)). B. The Delaware Long Arm Statute Does Not Confer Jurisdiction Over KVAR 1. KVAR Does Not Transact Any Business or Perform Any Character of Work In Delaware

Section 3104(c)(1) "requires that some act on the part of the defendant must have occurred in Delaware[.]" Boone, 724 A.2d at 1156 (emphasis supplied). It is well established that the mere contracting with an entity that is incorporated in Delaware does not provide the necessary nexus between the contract and the forum to support a finding of jurisdiction. Abajian v. Kennedy, 1992 WL 8794, at *10 (Del. Ch. Jan. 17, 1992). Further, if a manufacturer passes title to goods to a third party outside of Delaware, it is not deemed to have performed an act in this State. Boone, 724 A.2d at 1156. The mere shipment of goods into Delaware by common 13
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carrier, without more, does not constitute "transaction of business." Moore v. Little Giant Industries, Inc., 513 F. Supp. 1043, 1046 (D. Del. 1981). The act of simply signing the Exclusive Agreement and the Distributor Agreement is not sufficient to establish jurisdiction over KVAR. Abajian, 1992 WL 8794, at *10. Nor can KVAR's shipment of goods to Tri-State in Delaware serve as a sufficient basis for jurisdiction. Section 5 of both the Exclusive Agreement and the Distributor Agreement expressly provides that KVAR's products will be shipped "F.O.B. KVAR plant" (Port Orange, Florida). Exhibit C ¶ 5; Exhibit D ¶ 5. Therefore, title to KVAR's products passed to Tri-State in Florida, once KVAR placed its products in the possession of the commercial carrier. Sheer Beauty, Inc. v. Mediderm Pharm. & Lab., 2005 WL 3073670, at *2 (Del. Super. Oct. 27, 2005) (citing 6 Del. C. § 2-319). By virtue of passing title to Tri-State outside of Delaware, KVAR did not commit an act in Delaware and, as such, did not transact business in this State. Accordingly, Section 3104(c)(1) cannot serve as a basis for jurisdiction over KVAR. 2. KVAR Has Not Contracted to Supply Services or Things In Delaware

Much like Section 3104(c)(2), Section 3104(c)(2) also "requires that the defendant perform the act in this State ... Again, when a manufacturer passes title of goods to a third party outside of this jurisdiction it cannot be said the manufacturer has acted in Delaware[,]" and, as such, Section 3104(c)(2) cannot serve as a basis for personal jurisdiction over a nonresident defendant in that context alone. Boone, 724 A.2d at 1156. Once again, Tri-State cannot dispute that the shipping terms between the parties was F.O.B. Port Orange, Florida, as that is expressly stated in Sections 5 of the Exclusive Agreement and the Distributor Agreement. Exhibit C ¶ 5; Exhibit D ¶ 5. Because title passed to Tri-State in Florida, when KVAR's products were placed in the possession of the commercial carrier, and

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such transfer occurred outside of Delaware, KVAR cannot be deemed to have acted in Delaware. See Boone, 724 A.2d at 1156. Further, nor does KVAR's contracting with Tri-State give rise to an act by KVAR in Delaware. Abajian, 1992 WL 8794, at *10. In all, the mere contracting with Tri-State and the shipment of goods F.O.B. Florida does not provide the necessary nexus between the contract and the forum to support a finding of jurisdiction under Section 3102(c)(2). 3. KVAR Has Not Caused Tortious Injury In Delaware by an Act or Omission In Delaware

To find jurisdiction under Section 3104(c)(3), the defendant must have caused a tortious injury in Delaware by its acts or omissions in Delaware. Abajian, 1992 WL 8794, at *10. The mere fact that the effect of a tortious act is felt in Delaware is not sufficient. Sears, Roebuck & Co. v. Sears plc., 744 F. Supp. 1289, 1294 (D. Del. 1990). The issue of whether an adverse financial impact upon a Delaware entity constitutes a tortious injury in Delaware remains unanswered by the Courts. As stated in Abajian, 1992 WL 8794, at *10: "The fictive nature of corporations and the abstract character of some financial injuries makes application of subsection (c)(3)'s language problematic in this setting." Red Sail Easter Limited Partners, L.P. v. Radio City Music Hall Productions, Inc., 1991 WL 129174, at *5 n. 3 (Del. Ch. July 10, 1991) (leaving open the question of whether a financial impact on a Delaware corporation arising from an alleged misappropriation of trade secrets would constitute tortious injury in Delaware under Section 3104(c)(3)). Nonetheless, even if the requirement that Tri-State must have been tortiously injured in Delaware is ignored, Section 3104(c)(3) cannot serve as a basis for jurisdiction over KVAR because none of the alleged acts or omissions asserted by Tri-State in its Complaint occurred in Delaware. Tri-State's Complaint is replete with allegations that KVAR has inappropriately used Tri-State's testimonials on its own website, and has defamed Tri-State on various other websites, 15
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in an effort to support its claims of unfair competition, misappropriation of testimonials, and deceptive trade practices. However, the use of KVAR's website, which is maintained outside Delaware, and various other websites to commit an alleged tort does not give rise to an act or omission in Delaware. See, e.g., Kloth v. Southern Christian Univ., 494 F.Supp.2d 273, 279 (D. Del. 2007) (stating "[c]ourts within the Third Circuit have traditionally required `something more' than the knowledge that their website could be viewed...in a forum state before considering whether personal jurisdiction is proper."). Therefore, even assuming that KVAR caused a tortious injury to Tri-State in Delaware, KVAR has not caused the alleged injuries by an act or omission in this State. 4. KVAR Has Not Caused Tortious Injury In Delaware by an Act or Omission Outside of Delaware

As previously noted, Section 3104(c)(4) is a general jurisdiction provision, which permits the Court to exercise jurisdiction when the defendant's contacts with the forum state are unrelated to the cause of action. Boone, 724 A.2d at 1155. That is, Section 3104(c)(4) "will apply when a defendant has had contacts with this state that are so extensive and continuing that it is fair and consistent with state policy to require that the defendant appear here and defend a claim even when that claim arose outside of this state and causes injury outside of this state." Red Sail, 1991 WL 129174, at *3 (emphasis supplied). Jurisdiction under Section 3104(c)(4) is established only when there has been tortious injury to the plaintiff and either the nonresident defendant regularly does or solicits business in Delaware, carries on some other continuous course of activity in Delaware, or derives substantial revenue from goods used or consumed or from services rendered in Delaware. Waters v. Deutz Corp., 479 A.2d 273, 275 (Del. 1984).

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Even assuming that Tri-State has sufficiently alleged a tortious injury, KVAR's contacts with this state are in no way "extensive and continuing." Tri-State has failed to allege, much less make a showing, that KVAR generates substantial revenue from services or things used or consumed in Delaware. Red Sail, 1991 WL 129174, at *3. KVAR is a Florida entity, with its principal place of business in Florida, and no office or employees in Delaware. KVAR does not regularly solicit business or advertise in Delaware, and it has never commenced any legal action in Delaware. Nor has KVAR ever been named as a defendant in any action in Delaware prior to this litigation. Although KVAR does maintain a commercial website, the existence of such a website is not considered regularly soliciting business in Delaware. Motorola Inc. v. PC-Tel, 58 F. Supp.2d 349, 352 (D. Del. 1999).

Therefore, because KVAR does not have "extensive and continuing" contacts with Delaware, Section 3104(c)(4) cannot provide a basis for jurisdiction over KVAR. * * *

As set forth above, KVAR is not subject to in personam jurisdiction pursuant to the Delaware long arm statute, 10 Del. C. § 3104(c). As Tri-State cannot establish jurisdiction under any of the enumerated provisions of 10 Del. C. § 3104(c), the jurisdictional analysis ends without the need to analyze the Due Process component. M&M Tech., 2005 WL 293509, at *2. In the absence of in personam jurisdiction, KVAR respectfully requests that this action be dismissed. II. ASSUMING ARGUENDO THAT THIS COURT FINDS KVAR SUBJECT TO IN PERSONAM JURISDICTION, KVAR REQUESTS THAT THIS ACTION BE TRANSFERRED TO THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF FLORIDA PURSUANT TO 28 U.S.C. 1404(a) A. Standard of Review

On a motion to transfer, the Court evaluates whether the action, in the interests of convenience and justice, should proceed in a different forum. Bank of America, N.A. v. S.I.P. 17
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Assets, LLC, et al., 2007 WL 2698192, at *2 (D. Del. Sept. 11, 2007) (citing Jumara v. State Farm Ins. Co., 55 F.3d 873, 879 (3d Cir. 1995)). The inquiry causes the court to balance a number of factors "embracing not only the statutory criteria of the interests of justice and the convenience of the parties and witnesses, but all relevant factors, including certain private and public interests." Bank of America, N.A. v. S.I.P. Assets, LLC, et al., 2007 WL 2698192, at *2 (D.Del. Sept. 11, 2007) (quoting Jumara v. State Farm Ins. Co., 55 F.3d 873, 875 (3d Cir. 1995)). B. Both Private and Public Interest Facts Favor Transfer to Florida 1. Private Interest Factors Favor Transfer to Florida

This Court has previously held that private interests -- i.e. the personal interests of the litigants -- to be considered in the context of a motion to transfer include the plaintiff's choice of forum; the defendant's preference to litigate elsewhere; the forum where the claim arose; and the proximity of the parties, witnesses and evidence to the presiding court. See Bank of America, N.A., 2007 WL 2698192, at *2 (citation omitted); see also Marino v. Cross Country Bank, 2007 WL 1946533, at * 4 (E.D. Pa. June 29, 2007) (identifying private interest factors as plaintiff's choice of forum, defendant's preferred forum, whether the claim arose elsewhere, convenience to the parties based on their physical and financial conditions, convenience to the witnesses, the location of evidence and whether it can be produced in either forum) (citation omitted). As set forth below, all of the foregoing personal or private interest factors either strongly favor transfer to the Middle District of Florida, or are at the very least neutral, while none of the factors favor keeping this action in Delaware. (a) Tri-State's Choice of Forum Favors Florida i. Tri-State is Contractually Bound to Litigate in Florida

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As evidenced by Tri-State's filing of the Delaware Action, Tri-State now prefers to litigate in Delaware. However, Tri-State's decision to file this action in Delaware is not entitled to any deference, and despite Tri-State's choice to file in Delaware, Tri-State is contractually bound to litigate this dispute in Florida.6 First and foremost, KVAR and Tri-State contractually agreed that "jurisdiction and venue for any legal action, suit or proceeding arising out of or relating to this [NDA] shall rest solely with the federal or state court having jurisdiction over Volusia County, Florida." Exhibit D ¶ 9. Paragraph 9 of the NDA is a mandatory forum selection clause which requires disputes to be brought in Volusia County, Florida. See Cancer Genetics Inc. v. Kreatech Biotech. B.V., 2007 WL 4365328, at *4 (D. N.J. Dec. 11, 2007) (distinguishing between a permissive forum selection clause in which "parties consent to jurisdiction in a particular forum" and a mandatory forum selection clause which "designates an exclusive forum to resolve disputes"). Though Tri-State's Delaware Complaint does not refer to the NDA expressly, the dispute between the parties arises out of, and is related to, the NDA. "'Whether or not a forum selection clause applies depends on what the specific clause at issue says'...[a] clause governing claims `related to' or `concerning' the parties' agreement applies to a broader range of claims than a clause governing claims `arising under' the agreement." Schering Corp. v. First Databank, Inc., 479 F. Supp.2d 468, 470-71 (D. N.J. 2007) (citing and quoting Wyeth & Brother Ltd. v. CIGNA Int'l Corp., 119 F.3d 1070, 1075 (3d Cir. 1997)).

6

As noted in footnote 4 supra, even if Gillen and Chieffo executed the NDA in their individual capacities, they cannot escape the operation of the forum selection clause by forming an entity and then bringing a related lawsuit through that entity. KVAR maintains that Tri-State is a successor-in-interest to the NDA, and/or the alter-ego of Lawrence Gillen and Joseph Chieffo, and is therefore bound by all of the NDA provisions, including the forum selection clause. For ease of reference, Gillen, Chieffo and Tri-State will be referred to collectively as "Tri-State" in Section II.B.1.

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In the Wyeth & Brother case, then-Circuit Judge Alito, writing for the Court, held that "[t]o say that a dispute `arises...in relation to' the [agreement] is to say that the origin of the dispute is related to that agreement, i.e., that the origin of the dispute has some `logical or casual connection' to the [agreement]." Wyeth & Brother Ltd., 119 F.3d at 1074 (emphasis original). The Wyeth & Brother Court decision then held that the forum selection clause's application to "disputes" rather than simply "claims" meant that even if the agreement containing the forum selection clause was raised only as a defense, that the forum selection clause would still operate to dictate the forum for the parties' dispute. Id. at 1076 (holding the language "any dispute `arising...in relation to'...easily encompasses a dispute in which the [agreement] is raised as a defense."); see also Schering Corp., 479 F. Supp.2d at 471 (citing Wyeth & Brother Ltd. for the foregoing proposition). Viewing Tri-State's Complaint in isolation, it is clear that the dispute between the parties is at least "related to" the NDA, as that agreement formed the basis of the KVAR-Tri-State relationship, and that the forum selection clause applies to disputes "arising out of or relating to" the NDA. Exhibit B ¶ 9. Stated another way, Tri-State cannot fairly say that its Complaint is entirely "unrelated" to the NDA. However, and perhaps more importantly, the entire dispute between KVAR and Tri-State (and the Tri-State Partners) is "related to" the NDA, as evidenced by KVAR's allegations of Tri-State and the Tri-State Partner's breach of the NDA in the Florida Action. E.g., Florida Complaint ¶¶ 106-109. If KVAR were to assert its claims in the Florida Action here as counter-claims, and bring in the indispensable parties (Gillen, Chieffo, and Chieffo Electric) necessary to resolve this dispute completely, there could be no doubt that the "dispute" between the parties was "related to" the NDA. See Wyeth & Brother Ltd., 119 F.3d at

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1074; see also generally The Source Buying Group, Inc. v. Block Vision, Inc., 2000 WL 62972 (E.D. Pa. Jan. 14, 2000). In Block Vision, the plaintiff brought suit in the Eastern District of Pennsylvania alleging breach of a promissory note. Block Vision, Inc., 2000 WL 62972, at *1. The defendant sought to transfer the action to the Southern District of Florida pursuant to the forum selection clause contained in the note. Id. The plaintiff challenged the validity of the forum selection clause contained in the note. Id. Rather than address the plaintiff's challenge to the validity of the forum selection clause contained in the note, the Court examined the dispute as a whole and determined that the dispute implicated not only the note, but also the asset purchase agreement pursuant to which the parties executed the note. Id. at *2. The asset purchase agreement contained an unquestionably valid forum selection clause designating the Southern District of Florida as the venue for disputes "related" to the asset purchase agreement. Id. The Court found that "both the [note] and the [asset purchase agreement] are inseparably implicated in the current controversy" and that transfer to the Southern District of Florida was appropriate because that is where the "parties [can] fully litigate this action." Id. The same result is appropriate here. See generally Wyeth & Brother Ltd., 119 F.3d 1070; Schering Corp., 479 F. Supp.2d 468. Tri-State brought suit alleging breach of the Distributor Agreement and three common law tort causes of action. See generally Delaware Complaint. In reality though, KVAR is the real "plaintiff" -- the truly injured party -- based on the facts set forth above and as alleged in the Florida Complaint. KVAR has alleged violations of both the NDA and the Distributor

Agreement, as well as several statutory and common law claims, and thus, as in Block Vision, "both the [NDA] and the [Distributor Agreement] are inseparably implicated in the current controversy." Block Vision, Inc., 2000 WL 62972, at *2.

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Based on the foregoing, this action should be transferred to the Middle District of Florida because Tri-State is bound by a forum selection clause to litigate this dispute in Florida. The broad forum selection clause contained in the NDA encompasses disputes "related to" the NDA which includes the present dispute. Even assuming arguendo that Tri-State's Delaware

Complaint does not implicate the NDA, the entire dispute between the parties does, and Third Circuit precedent instructs that transfer to the Middle District of Florida is appropriate. See generally Wyeth & Brother Ltd., 119 F.3d 1070. ii. Tri-State's Delaware Filing is not Entitled to "FirstFiled" Status and Therefore Transfer to Florida is Appropriate.

Second, separate and apart from the fact that Tri-State has already agreed to litigate this dispute in Florida, Tri-State's Delaware filing is not entitled to "first-filed" status. At the time Tri-State filed this action, the relationship between Tri-State and KVAR had deteriorated, and it was evident that litigation between the two entities was imminent. Accordingly, Tri-State made a tactical decision to file this action in Delaware. A tactical decision to pre-empt another party from filing suit in a less convenient jurisdiction, or the decision to file an action for nonadjudicatory purposes, will not be afforded the deference of a "first-filed" action -- the court may depart from the first-filed rule where there is evidence of "rare or extraordinary circumstances, inequitable conduct, bad faith, or forum shopping." Kim v. Kim, 324 F.Supp.2d 628, 635 (E.D. Pa. 2004) (quoting Equal Employment Opportunity Comm'n v. Univ. of Pa., 850 F.2d 969, 972 (3d Cir. 1988). Tri-State's conduct in filing the Delaware Action dictates that the Delaware Action not be treated as a "first-filed" action.7 Given the foregoing discussion on the forum

7

The Delaware Court of Chancery would likely look with skepticism on Tri-State's decision to file a suit in Delaware as well. "It is also well known that this Court takes a rather dim view of `tactical maneuvers and improper manipulation of the litigation process by parties who seek to invoke the principles of comity and efficiency

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selection clause, and the imminent likelihood that KVAR -- the real "plaintiff" in this dispute -was going to be filing suit in Florida, there can be no doubt that Tri-State filed the Delaware Action as a pre-emptive measure. Tri-State's unexplained and unreasonable delay in commencing and completing service of process evidences Tri-State's race to the courthouse in an effort to obtain "first-filed" status. The first-filed rule does not apply in instances in which "the first-filing party instituted suit in one forum in anticipation of the opposing party's imminent suit in another, less favorable forum." Kim, 324 F.Supp.2d at 635 (quoting Equal Employment Opportunity Comm'n v. Univ. of Pa., 850 F.2d 969, 976 (3d Cir. 1988)). Tri-State was clearly not ready to litigate this dispute when it filed the Delaware Complaint.8 Rather, it is evident that Tri-State filed the Complaint for dual purposes: (1) to under-cut the parties' agreed upon (and KVAR's preferred) forum -- Florida; and (2) to use the Complaint for libelous purposes. See, e.g., Florida Complaint ¶ 61 (describing Tri-States libelous conduct). The unexplained four month delay in serving KVAR with a copy of the Complaint further highlights that Tri-State filed this action for purposes other than litigating. Comparatively, KVAR filed the Florida Complaint against Tri-State and the Tri-State Partners and immediately commenced service of process. Tri-State and the Tri-State Partners were served with process in January 2008 (Florida Action [D.I. ## 9-11]), except for Tri-State Partner Lawrence Gillen who was served with process on February 24, 2008 (Id. [D.I. ## 2021]). Counsel for Tri-State and the Tri-State Partners entered his appearance on February 15, 2008 (Id. [D.I. # 12]), the very same day Tri-State commenced service of the process in the

underlying the McWane doctrine.'" Rapoport v. Litigation Trust of MDIP, Inc., 2005 WL 3277911, at *3 (Del. Ch. Nov. 23, 2005) (citation omitted). 8 As the Court of Chancery has noted, that Court will consider the parties' intention to litigate the claims. Rapoport, 2005 WL 3277911, at *3.

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Delaware Action by serving the Delaware Secretary of State with a summons for KVAR pursuant to 10 Del. C. § 3104. Put simply, Tri-State should not be rewarded for its pre-emptive bad faith race to the courthouse. Tri-State was aware of the likelihood of litigation in Florida, and took steps to preempt that filing. It is evident from the facts as set forth above, and as alleged in the Florida Complaint, that KVAR, and not Tri-State, is the real "plaintiff" to the parties' dispute. It is also evident that Tri-State was not prepared to litigate when it filed the Delaware Action, and that but for the Florida litigation, Tri-State would not have commenced service of process in Delaware. Finally, it is evident from Tri-State's conduct that Tri-State's ulterior motive in filing the Complaint was to use the Complaint for libelous purposes. Accordingly, even assuming

arguendo that the Court does not find the binding forum selection clause to weigh in favor of transfer, Tri-State's conduct in the commencement of the Delaware litigation precludes the Delaware litigation from being afforded the deference of a "first-filed" action. The parties' contractual choice of forum, Florida, and the same choice of forum by the real "plaintiff" -KVAR -- weighs strongly in favor of transfer to Florida. (b) KVAR Strongly Prefers The Middle District of Florida

For the reasons indicated supra, KVAR strongly prefers to litigate in the Middle District of Florida. In addition to the forum selection and choice law provision favoring Florida, KVAR is a corporation organized and existing pursuant to the laws of the State of Florida, with its principal place of business located in Florida. This factor weighs strongly in favor of transfer to Florida. (c) The Dispute Arose in Both Delaware and Florida and Therefore Favors Each Jurisdiction Equally

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Viewing the allegations in each of the Florida Complaint and Delaware Complaint, it is evident that the dispute arose in both Delaware and Florida. Accordingly, this factor favors both Florida and Delaware equally.

(d)

The Proximity of the Witnesses and Evidence to the Presiding Court Favors Each Jurisdiction Equally

Viewing the dispute against the parties as a whole, it is evident that the witnesses, evidence, documents, etc. are located in both Delaware and Florida. Accordingly, these factors favors both Florida and Delaware equally. (e) Based on the Foregoing Analysis, the Private Interest Factors Favor Transfer to Florida

As set forth supra, the first two factors strongly favor transfer to Florida, and the remainder of the factors are neutral. Accordingly, transfer to the Middle District of Florida is appropriate. 2. Public Interest Factors Favor Transfer to Florida

"Among the relevant public interests are: `the enforceability of the judgment; practical considerations that could make the trial easy, expeditious, or inexpensive; the relative administrative difficulty in the two fora resulting from court congestion; the local interest in deciding local controversies at home; [and] the public policies of the fora.'" Bank of America, 2007 WL 2698192, at *2 (quoting Jumara, 55 F.3d at 879-80). The aforementioned public interest factors favor both Delaware and Florida equally, except that Middle District of Florida, with due deference to this Court, is more apt to be familiar with Florida law which governs the dispute between the parties pursuant to both the NDA and the Distributor Agreement. Exhibit B ¶ 9; Exhibit D ¶ 24. The familiarity of the trial judge with 25
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the governing law is an appropriate factor for consideration. See, e.g., Bank of America, N.A. (USA) v. U.S. Airways, Inc., 2005 WL 3525680, at *2 (D. Del. Dec. 21, 2005). Accordingly, though the public interest factors are largely neutral, the scales tip in favor of transfer to Florida because the Middle District of Florida is likely more familiar with Florida law which governs the parties dispute. See id. Practical considerations favor transfer as well. KVAR presently intends to proceed with the Florida Action regardless of whether this action is transferred to Florida, because KVAR has sued both Tri-State and the Tri-State Partners individually, filed a very comprehensive Complaint in the Middle District of Florida, and served all defendants in the Florida Action with process already. Thus, if this action is not transferred, the parties will have to litigate in two fora, while the dispute could easily be resolved in toto in the Middle District of Florida. This practical consideration weighs in favor of transfer to Florida. See id. (transferring the action based "largely on...practical considerations"). Like the private interest factors, these public interest factors further militate in favor of a transfer to the Middle District of Florida. C. Transfer to the Middle District of Florida is Appropriate

As set forth above, the private interest factors heavily weigh in favor of transfer to Florida, and the public interest factors also weigh in favor of transfer to Florida. Accordingly, transfer to Florida is appropriate under these circumstances, and KVAR respectfully requests that this Court transfer this action to the Middle District of Florida for complete adjudication. See, e.g., generally Bank of America, N.A. v. S.I.P. Assets, LLC, et al., 2007 WL 2698192 (D. Del. Sept. 11, 2007); Bank of America, N.A. (USA) v. U.S. Airways, Inc., 2005 WL 3525680, at *2 (D. Del. Dec. 21, 2005).

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CONCLUSION For the reasons set forth herein, KVAR respectfully requests the Court dismiss this action for lack of personal jurisdiction over KVAR, or in the alternative, transfer this action to the Middle District of Florida.

McCarter & English, LLP /s/ Daniel M. Silver A. Richard Winchester (#2641) [email protected] Daniel M. Silver (#4758) [email protected] Renaissance Centre 405 N. King Street Wilmington, DE 19801 (302) 984-6300 McCarter & English, LLP William J. Heller [email protected] Four Gateway Center 100 Mulberry Street Newark, NJ 07102 (973) 622-4444 Attorneys for KVAR Energy Savings, Inc. Dated: April 11, 2008

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UNITED STATES DISTRICT COURT DISTRICT OF DELAWARE : TRI-STATE ENERGY SOLUTIONS, LLP a : Civil Action No. Delaware Limited Liability Partnership; : : Plaintiff, : JURY TRIAL DEMANDED vs. : : KVAR ENERGY SAVINGS, INC., : : Defendant. : CERTIFICATE OF SERVICE I hereby certify that on April 11, 2008, I electronically filed the Opening Brief In Support of Defendant KVAR Energy Savings, Inc.'s Motion to Dismiss Defendant KVAR Energy Savings, Inc.'s Motion to Dismiss for Lack of Personal Jurisdiction, Or In The Alternative, Motion to Transfer This Action to the Middle District of Florida with the Clerk of Court using CM/ECF. I hereby certify that on April 11, 2008, I have mailed by United States Postal Service, the document(s) to the following non-registered participants: Leo John Ramunno, Esq. (# 2003) 1205 N. King Street Wilmington, Delaware 19801 (302) 654-0660 Attorney for Tri-State Energy Solutions, LLP McCarter & English, LLP /s/ Daniel M. Silver A. Richard Winchester (#2641) [email protected] Daniel M. Silver (#4758) [email protected] 405 N. King Street Wilmington, DE 19801 (302) 984-6300 Attorneys for KVAR Energy Savings, Inc.

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