UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF TEXAS

CASE NO. 20-CV-00577

EPIC TECH, LLC and WINTER SKY, LLC,

Plaintiffs,

v.

ARNO RESOURCES, LLC,

Defendant.

/

DEFENDANT’S REPLY IN SUPPORT OF MOTION TO DISMISS OR TRANSFER

Defendant Arno Resources, LLC (“Arno Resources”), by and through undersigned 

counsel, hereby submits its reply in support of its Motion to Dismiss or Transfer (ECF No. 25).

Cutting through the vitriol and ad hominem attacks on Arno Resources, its principals, and

its counsel, Plaintiffs Epic Tech, LLC and Winter Sky, LLC fail to demonstrate why their

anticipatory declaratory action should not be dismissed in favor of a pending coercive suit in the 

Northern District of Georgia where complete relief can be provided and inconsistent judgments 

avoided (the “Northern District of Georgia Action”). 

I. Dismissal Is Appropriate Based on the Anticipatory Nature of this Action. 

Plaintiffs argue first that, because they did not engage in improper “procedural fencing,” 

dismissal of their anticipatory suit would be inappropriate. Plaintiffs’ argument ignores the facts 

and relies on inapposite law. 

As to the facts, Plaintiffs did engage in improper procedural fencing. Three days before 

filing this anticipatory declaratory action—in response to Arno Resource’s demand letter enclosing 

a draft lawsuit—Plaintiffs’ counsel advised Arno Resources’ counsel in writing that he was going 

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to review the demand and draft lawsuit with his client and “get back to you with our position.” 

(ECF No. 25-1 at 5.) Contrary to what their counsel represented, Plaintiffs did not “get back to” 

Arno Resources. Instead, they ran to the courthouse. Plaintiffs completely fail to address this 

conduct in their Response. Having purposefully lulled Arno Resources into forbearing filing the 

Northern District of Georgia Action based on their suggestion that the parties were going to engage 

in good faith negotiations, Plaintiffs cannot contend that they are innocent of procedural 

gamesmanship.

As to the law, the cases relied on by Plaintiffs are inapposite and do not support their 

argument. Sherwin Williams v. Holmes Cnty., 343 F.3d 383 (5th Cir. 2003), involved a factual 

situation completely different from the one at bar. There, Sherwin Williams was faced with the 

prospect of numerous lawsuits across the State of Mississippi from various school districts seeking

damages relating to remediating lead paint. “To avoid having to litigate numerous anticipated 

suits in different state courts” id. at 386, Sherwin Williams filed a declaratory judgment action in 

federal court seeking a single declaratory judgment on four legal issues asserted to be common to 

all the suits. Under these facts, the Fifth Circuit found that Sherwin-Williams had not engaged in 

“impermissible procedural fencing” because the declaratory suit was properly brought to resolve 

issues pertinent to the suits in “one, rather than multiple, forums.” Id. (quoting Travelers Ins. Co. 

v. Louisiana Farm Bureau Fed'n, 996 F.2d 774, 777 (5th Cir. 1993)). There are no multifarious 

or multi-jurisdictional suits here requiring this Court to act as a single arbiter. Plaintiffs faced one 

suit in Arno Resources’ chosen forum and therefore had no such privilege to race to the courthouse. 

Plaintiffs can raise their affirmative defense of accord and satisfaction just as easily in the Northern 

District of Georgia Action as that could here, and, unlike Arno Resources under the reverse 

scenario, they would suffer no prejudice as a result.

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Next, Mann Mfg., Inc. v. Hortex, Inc., 439 F.2d 403 (5th Cir. 1971) did not involve an 

anticipatory declaratory suit, but rather comity concerns presented by parallel patent suits and

dueling injunctions issued in Texas and New York federal courts. In Maxum Indem. Co. v. BRW 

Floors, Inc., No. 5:15-CV-00167-RCL, 2015 WL 5881584 (W.D. Tex. Oct. 7, 2015), rather than 

finding that the declaratory suit had preempted a coercive action filed in another federal district,

as is the case here, the evidence showed the coercive action was filed in response to the declaratory 

suit. And in Fid. Bank v. Mortg. Funding Corp. of Am., 855 F. Supp. 901 (N.D. Tex. 1994), the 

district court decided to contravene the preference against anticipatory declaratory suits based on 

the special circumstances of that case, where a number of important witnesses and documents were 

located in the district and the parties had agreed to jurisdiction there. Those facts are not similar 

to the facts here where the underlying torts and associated conduct by Plaintiffs (and the nonparties named as defendants in the Northern District of Georgia Action) all occurred in Georgia.

In contrast to those cited by Plaintiffs in their 

Response, the cases Arno Resources cites in its Motion (ECF No. 25 at 7-9), and the principles of 

equity and sound judicial administration expressed therein, including TK Holdings, Inc. v. 

Ordonez, 2017 WL 2923829 (W.D. Tex. July 6, 2017), all support dismissal here. 

II. Dismissal or Transfer is Also Appropriate Based on Judicial Economy and to Avoid 

Inconsistent Judgments.

Further fatal to their position, Plaintiffs gloss over the risk of inconsistent verdicts and the 

issues of judicial economy when arguing against dismissal. Arno Resources has sued twelve 

defendants in the Northern District of Georgia action, including six individuals. These individuals 

are citizens of Georgia and South Carolina, and Arno Resources believes that this Court may not 

be able to obtain personal jurisdiction over most if not all of them. 

Plaintiffs do not address this dispositive point in their response brief. Indeed, they appear 

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to concede it when they grouse—without any legal or factual support—that these individuals are 

not “proper parties.” (ECF No. 29 at 8 (emphasis in original).) Of course, whether the individuals 

and other corporate defendants in the Northern District of Georgia Action are “proper parties,” 

whatever that means, will be judicially determined a later date. Until that time, the Northern 

District of Georgia Action will proceed. Thus, if this case is not dismissed, the duplication of 

judicial resources and risk of inconsistent judgments is patent. 

And, significantly, Plaintiffs do not contest that they could raise in the Northern District of 

Georgia Action their arguments relating to the settlement agreement between the parties’ 

predecessors-in-interest.1

 The Northern District of Georgia is therefore the appropriate forum for 

resolving Arno Resources’ claims.

III. The Trejo Factors Support Dismissal

Contrary to Plaintiff’s arguments, the non-exclusive discretionary factors of St. Paul Ins. 

Co. v. Trejo, 39 F.3d 585, 590-91 (5th Cir. 1994) support dismissing this declaratory action.

As to the first factor, whether there is a pending state action in which all of the matters in 

controversy may be fully litigated, Plaintiffs contend that because the Northern District of Georgia 

is a federal suit, this is “fatal to [the] Motion.” (ECF No. 29 at 13.) Not so. District courts in this 

circuit faced with parallel federal actions have analyzed this factor in the context of whether 

dismissal will leave the declaratory judgment plaintiff without a forum to present its arguments. 

See, e.g., Sport Supply Grp., Inc. v. R&G Prod., Inc., No. 3:08-CV-02031-O, 2009 WL 10677398, 

at *4 (N.D. Tex. Sept. 30, 2009) (“The lack of a parallel state action does not, by itself, necessitate 

1 Although not relevant to the issues presented in the Motion, Plaintiffs repeatedly argue in 

conclusory fashion that the settlement agreement bars Arno Resources’ claims. Yet they fail to 

explain why a settlement agreement signed in 2007 that released only claims existing at the time 

would bar a suit for torts occurring years later. 

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retaining the action. Further, the pending [Middle District of] Pennsylvania action is a proper 

consideration when evaluating this factor because declining to hear this matter will not leave SSG 

without a forum to seek resolution of its contentions. This factor weighs in favor of dismissal.”). 

Clearly, that would not be the case if this suit is dismissed because Plaintiffs could assert the same 

position as an affirmative defense in the Northern District of Georgia Action.

As to the second, third, and fourth factors, Plaintiffs baldly state that they did not file this 

suit in an inequitable effort to wrest control of the forum from Arno Resources. Yet they fail to 

rebut the evidence showing that they lulled Arno Resources into holding off on its coercive suit 

while preparing and filing their own anticipatory declaratory action.

As to the sixth and seventh factors, Plaintiffs contend that litigating the dispute will be 

more convenient and efficient in Texas. Yet Plaintiffs completely fail to address the reality that 

the Northern District of Georgia Action will proceed regardless of whether this case is dismissed, 

as at least some of the defendants in that action are likely not subject to this Court’s personal 

jurisdiction. For that reason alone, convenience and efficiency favor dismissal.

As to the seventh factor, whether this Court is called on to construe a state judicial decree, 

Plaintiffs contend that it “is not at issue here.” (ECF No. 29 at 15.) While not quite applicable, 

Arno Resources asserts two Georgia statutory claims in the Northern District of Georgia Action. 

(ECF No. 25-2.) This Court may be called to interpret and apply those statutes in the event if this 

action is not dismissed—the court in the Northern District of Georgia is plainly the appropriate 

venue for adjudicating those claims.

IV. Transfer, in the Alternative, Is Also Appropriate.

In opposing the alternative request for transfer, Plaintiffs first argue that Arno Resources 

has not satisfied the threshold question for transfer under 28 U.S.C. § 1404(a) because venue for 

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this action does not lie in Georgia. Plaintiffs ignore 28 U.S.C. § 1392(b)(2), which provides that 

an action may be brought in “a judicial district in which a substantial part of the events or omissions 

giving rise to the claim occurred, or a substantial part of property that is the subject of the action 

is situated.” A substantial part of the tortious acts giving rise to the dispute underlying this action 

occurred in the Northern District of Georgia where Plaintiffs are headquartered. And, plainly, had 

they not rushed to the courthouse, plaintiffs plainly could have brought their action as an 

affirmative defense in the Northern District of Georgia—and they still may do so.

As to application of the four private interests the Court may consider in determining 

whether to transfer this action to the Northern District of Georgia, Plaintiffs make much of the 

residence of Arno Resources’ principals in Texas. Yet they ignore that their business in located in 

Georgia, their principals are residents of Georgia, and the individual defendants are similarly 

residents of Georgia or are residents of the immediately neighboring state of South Carolina. 

Nearly all the substantive discovery on the issues relating to Arno Resources’ claims will be 

focused on what happened in Georgia with respect to the wrongful and improper use of its 

intellectual property. 

Plaintiffs also completely ignore the waste of judicial and party resources that will result if 

this action and the Northern District of Georgia Action proceed simultaneously. This is 

particularly so where one of the fora has jurisdiction over all the parties (the Northern District of 

Georgia Action) and the other likely has jurisdiction over only two (this Declaratory Action). 

Additionally, it is extremely wasteful for this Court to determine a discrete issue—whether Epic 

Tech and Winter Sky can avail themselves of an affirmative defense of accord and satisfaction—

rather than having the court in the Northern District of Georgia Action determine this issue in the 

context of the larger dispute and Arno Resources’ coercive claims. The practical problems that 

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make trial of a case easy, expeditious and inexpensive therefore militate in favor of transfer to the 

Northern District of Georgia.

Finally, with respect to the public interest factors, Plaintiffs contend that these are neutral 

because their affirmative defense of accord and satisfaction relies on a settlement agreement with 

a Texas choice of law provision. However, a court does not need to be uniquely versed in Texas 

law to read the settlement agreement and determine whether it bars Arno Resources’ claim. On 

the other hand, Arno Resources’ claims do require a court versed in Georgia law as at least two of 

its causes of action arise directly out of Georgia statute. In sum, the public interest is served by 

having the entire dispute decided in the Northern District of Georgia Action. 

V. Conclusion.

As demonstrated in the Motion and the instant pleading, this action is an improper, 

anticipatory suit designed solely to preempt Arno Resources action against them, deny Arno 

Resources the opportunity for complete relief against all parties, and thwart Arno Resources’

choice of forum in Northern District of Georgia. The Court should therefore exercise its discretion 

and either dismiss or transfer this complaint for declaratory relief.

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Dated: July 8, 2020 Respectfully submitted,

By:

/s/ Matthew R. Beatty

Michael L. Navarre, Esq.

State Bar No. 00792711

Matthew R. Beatty, Esq.

State Bar No. 24001169

BEATTY NAVARRE STRAMA PC

901 S Mo PAC Expy Ste 200 Bldg 1

Austin, TX 78746-5759

Tel.: 512-879-5050

mbeatty@bnsfirm.com

-andJustin B. Kaplan, Esq.

Florida Bar No. 33725

Elaine Kussurelis

Florida Bar No. 1019234

DIFALCO FERNANDEZ KAPLAN

777 Brickell Avenue, Suite 630

Miami, Florida 33131

Tel.: 305-569-9800

Fax: 866-569-0666

Jkaplan@dfkfirm.com

elaine@dfkfirm.com

Benjamin H. Brodsky, Esq.

Florida Bar No. 73748

Joshua Truppman, Esq.

Florida Bar No. 11795

BRODSKY FOTIU-WOJTOWICZ, PLLC

200 SE 1st Street, Suite 400

Miami, Florida 33131

Tel: 305-503-5054

Fax: 786-749-7644

bbrodsky@bfwlegal.com

joshua@bfwlegal.com

docketing@bfwlegal.com

Case 1:20-cv-00577-LY Document 31 Filed 07/08/20 Page 8 of 9
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CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of the foregoing was served by Notice of 

Electronic Filing generated by CM/ECF, on July 8, 2020, on all counsel or parties of record on the 

Service List below.

s/ Benjamin H. Brodsky

Benjamin H. Brodsky

SERVICE LIST

Brant C. Martin

Joseph R. Callister

Ethan A. Minshull

Jessica P. Toumani

WICK PHILLIPS GOULD & MARTIN, LLP

3131 McKinney Avenue, Suite 100

Dallas, Texas 75204

Tel: (214) 692-6200

Fax: (214) 692-6255

Attorneys for Plaintiffs

brant.martin@wickphillips.com

joseph.callister@wickphillips.com

ethan.minshull@wickphillips.com

jessica.toumani@wickphillips.com

Matthew R. Beatty, Esq.

BEATTY NAVARRE STRAMA PC

901 S Mo PAC Expy Ste 200 Bldg 1

Austin, TX 78746-5759

Tel: 512-879-5050

mbeatty@bnsfirm.com

mnavarre@bbsfirm.com

Justin B. Kaplan, Esq.

Elaine Kussurelis

DIFALCO FERNANDEZ KAPLAN

777 Brickell Avenue, Suite 630

Miami, Florida 33131

Tel.: 305-569-9800

Fax: 866-569-0666

Jkaplan@dfkfirm.com

elaine@dfkfirm.com

I further certify that a true and correct copy of the foregoing was served by e-mail, fax, 

and first-class U.S. Mail to the following parties:

Elaine Kussurelis

DIFALCO FERNANDEZ KAPLAN

777 Brickell Avenue, Suite 630

Miami, Florida 33131

Tel.: 305-569-9800

Fax: 866-569-0666

elaine@dfkfirm.com

s/ Benjamin H. Brodsky

Benjamin H. Brodsky

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