CoStar Realty Information, Inc. et al v. Klein & Heuchan, Inc. et al

Filing 17

RESPONSE in Opposition re 11 MOTION to Dismiss for Lack of Jurisdiction MOTION to Transfer Case of Scott Bell filed by CoStar Realty Information, Inc., CoStar Group, Inc.. Replies due by 9/11/2008. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D, # 5 Exhibit E)(Sauers, William)

CoStar v

Atkinson Hunt 8-28-06

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 FOR THE DEFENDANT: 18 19 20 21 22 23 24 25 APPEARANCES: FOR THE PLAINTIFF:

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND SOUTHERN DIVISION

COSTAR REALTY INFORMATION,: INC., : Plaintiff, : v. : ATKINSON HUNT, : Defendant. : __________________________/

Civil Action No. PJM 06-655

Greenbelt, Maryland August 28, 2006 10:30 A.M.

TRANSCRIPT OF MOTIONS PROCEEDINGS BEFORE THE HONORABLE PETER J. MESSITTE UNITED STATES DISTRICT JUDGE

ALAN SAUL DALINKA, ESQUIRE HUGH J. MARBURY, ESQUIRE DLA Piper, Rudnick, Gray, Cary, US LLP 203 N. LaSalle Street, Suite 1900 Chicago, Illinois 60601 312-368-7045 KEITH R. TRUFFER, ESQUIRE Royston, Mueller, McLean & Reid, LLP 102 W. Pennsylvania Avenue, Suite 600 Towson, Maryland 21204 410-823-1800 and FRANCIS JOSEPH GORMAN, ESQUIRE MICHAEL SEAN YANG, ESQUIRE Gorman & Williams, PC Two N. Charles Street, Suite 750 Baltimore, Maryland 21201 410-528-0600 LINDA C. MARSHALL,[phone] 2

OFFICIAL COURT REPORTER:

COMPUTER-AIDED TRANSCRIPTION OF STENOTYPE NOTES

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P-R-O-C-E-E-D-I-N-G-S THE DEPUTY CLERK: Criminal Action PJM 2006-655,

Co-Star Realty Information, Inc. et al. versus Atkinson Hunt, et al. The matter is now before the Court for a motions hearing. Page 1

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CoStar v Atkinson Hunt 8-28-06 THE COURT: All right. Counsel, identify yourselves first for plaintiffs and then for defendants -- plaintiff, I guess. There's two plaintiffs, sorry. MR. DALINKA: Good morning, Your Honor. Alan Dalinka

on behalf of the two CoStar plaintiffs. MR. MARBURY: THE COURT: MR. TRUFFER: And Hugh Marbury as well. All right. And for the two defendants. Keith Truffer

Good morning, Your Honor.

on behalf of Resource Realty. MR. GORMAN: And, Your Honor, Frank Gorman here on

behalf of Atkinson Hunt and -MR. YANG: THE COURT: Resource to go first? MR. TRUFFER: THE COURT: MR. TRUFFER: Is this all right for the Court. That's fine. As long as I hear you. Michael Yang on behalf of Atkinson Hunt. All right. Does it make sense for

Your Honor, the plaintiffs have filed a

complaint in this case alleging the existence of a contract by which computer software and computer database were made available to the two defendants -Resource has filed a Motion to Dismiss those claims 3 for a number of reasons. Resource. There are two counts alleged against As to the

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One is contract, the other is fraud.

contract count, we have alleged, alleged -- we have responded that there was no such contract. There was never a meeting of

the minds as to the terms of the contract, particularly, as to the individual which appears to be at the crux of, crux of the plaintiff's complaint. Specifically, and I, I will -- at this point, Your Honor, we have submitted affidavits in, in -- along with our response. And if the Court considers appropriate to consider Page 2

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Atkinson Hunt 8-28-06

those, either for purposes of this hearing or as a Rule 56 motion, submit it for that purpose. One of the affidavits that we have submitted comes from our, our principal. And what had happened in this case, we

maintain, Your Honor, is that the contract was originally signed by our client in New Jersey with a list of five license holders, including Defendant David Atkinson. It was submitted, it was

transmitted to the plaintiff's office in Maryland and it was counter-signed at that point. However, during that transfer, a separate page, a separate page of licensed users was inserted, not that which our, my client signed, but which was later inserted, which omitted Mr. Atkinson. Mr. Atkinson was on the list of five It was inserted a new page 4

users we signed, sent to CoStar.

omitting Mr. Atkinson, came back to our client, put it in a

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drawer, went on with business.

Never discovered until the

existence of, until 2004 that Mr. Atkinson had been deleted in any way. Because of that, Your Honor, and we cited in brief to what is no more than hornbook law the idea that there must be some agreement as to specific terms of the contract in order for there to be a contract. On this very critical issue, the

identification of Mr. Atkinson as licensed user of the product, there was no such agreement as to that term. Resource submitted his name as a licensed user, for whatever reason it was omitted by the plaintiff, signed and returned to us. At that point, Your Honor, we maintain there is

no contract and that the contract claim in count one stated by the plaintiff must fall. THE COURT: By what terms do you think you were Page 3

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CoStar v Atkinson Hunt 8-28-06 operating then at that point? MR. TRUFFER: Well, Your Honor, we have -- we

understood that we were, and I'm going outside the pleadings at this point. THE COURT: operative. Just tell me what you think was the

Obviously, you were using their software. MR. TRUFFER: THE COURT: MR. TRUFFER: Absolutely, Your Honor. Pursuant to what? We were using their software. We made

it available to the five users that we thought were identified, 5 which included Mr. Atkinson. We were paying for five licenses.

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We were performing one contract that included Mr. Atkinson and CoStar was operating on a very different agreement. THE COURT: MR. TRUFFER: months. And how long did that performance go on? I believe it went on for about six And those are

That's my best recollection, Your Honor.

the reasons we believe there is not a contract and the contract claim should fall. The second element -THE COURT: Well, but I gather that plugs into your

jurisdictional argument. MR. TRUFFER: THE COURT: It does. Because the contract has a choice of law,

choice of forum clause. MR. TRUFFER: THE COURT: Yes, it does, Your Honor. Well, before you go further, let's hear

the response to where we are on that, see how we join issue. You have anything to add on that, Mr. Gorman? taking any similar position on that or what? MR. GORMAN: Yes, it's a little different, because I Are you

don't think the choice of forum clause applies or binds our Page 4

CoStar v 22 23 24 25 client at all. THE COURT: momentarily. the argument.

Atkinson Hunt 8-28-06

All right.

We'll hear more about that

Let's hear the response though to this aspect of 6

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MR. DALINKA:

Thank you, Judge.

In this case, you have a situation where you have a defendant in Atkinson Hunt who had been denied the opportunity to get a license by CoStar because they weren't the sort of business that CoStar typically licenses. What they did here was they tried to glom on to an existing customer of CoStar; that being Resource Realty, the other defendant. Starting back in time before the contract

that's even at issue that counsel raises in this case, there was an existing agreement between CoStar and Resource Realty that was up for renewal. That's the agreement that was in place

before the contract that gives rise to the claim here and that contract also, by the way, had a Maryland choice of law and choice of forum provision. When a user such as Resource Realty enters into an agreement with CoStar, that agreement requires that they log in to a website by inserting a user i.d. and a passcode. In the

field on the screen where they do this log-in, it says your log-in is subject to the terms of use. The terms of use exist

regardless of whether any individual user has an overarching license agreement or has purchased a different license. So I want to start with the broad proposition, Judge, that each time any individual accesses the CoStar database information by inserting a user name and a passcode, a contract exist between the parties. 7 Page 5

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 rights.

CoStar v Atkinson Hunt 8-28-06 So each time Resource Realty entered into the CoStar database, which there is no dispute about in this case, they entered into an agreement. Each time Atkinson Hunt entered into The terms of use

the system, they entered into an agreement.

that were operable called for this jurisdiction, called for choice of law here in Maryland. step. The second step being the license agreement that Resource Realty did enter into. -THE COURT: Well, but on the first proposition, what Don't they refer to the agreement We disagree with the contention That's the essence of the first

are the terms and conditions?

that you're about to talk about? MR. DALINKA: Well, they further expand upon those

In fact, both the terms of use, which is what's on the

website, and when you click on the terms of use link site, counsel inserted in one of his papers the current terms of use, which are different than the ones that we quoted in the complaint that were operable during the time in the case. But

the terms of use constitute a separate agreement that sits on top of or in addition to the individual license holder's rights. The license holder's rights under the agreement that Resource Realty entered into gave them rights to certain databases. -8 The terms of use governed actual use on the CoStar

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THE COURT:

Is there a choice of forum, choice of law

clause and terms of use on the website? MR. DALINKA: Yes, Judge. And during the time at

issue here, as quoted in the complaint, those were an exclusive choice of forum in Maryland and a choice of law in Maryland. And so, our proposition is that for personal Page 6

CoStar v 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Truffer?

Atkinson Hunt 8-28-06

jurisdiction purposes, every time both defendants entered into the CoStar website, there was a choice of law and a choice of venue here in Maryland. THE COURT: MR. DALINKA: THE COURT: All right. Thank you, Judge. You want to reply to that argument, Mr.

MR. TRUFFER:

Just very briefly, Your Honor.

I think

the plaintiff's claim of harm doesn't relate to the overarching agreement that was just referred to. It's the specific At

accessing of the database by Mr. Atkinson that's at issue. least, that's what the complaint alleges throughout.

It's not

the overarching relationship, not the overarching that every individual access to the database. In so far as Mr. Atkinson is -THE COURT: I'm not sure I follow that point. He's

saying every time you access it, every time he accesses it, it's according to the terms and conditions posted on the website. And in your case, at a minimum, the additional contract, the 9 underlying contract. there. MR. TRUFFER: I apologize, Your Honor. I'm not sure I understood your point

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The point is that the fight here isn't about any time CoStar would have -- excuse me, Resource would have accessed the database in other circumstances. The claim of harm here arises Whether he is a

out of specifically Mr. Atkinson's use.

licensed user determines once and for all whether there is a contract at all. So whether there existed a different contract at different times by, by other Resource personnel, other Resource Page 7

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CoStar v Atkinson Hunt 8-28-06 licensed individuals isn't really the plaintiff's claim here. In order for this to be an actionable claim, I submit, Resource must have had some agreement by which Mr. Atkinson was excluded. THE COURT: Well, all right, let be just jump for a According to the plaintiff,

moment to Mr. Gorman's argument.

every time that Atkinson accesses the website, he's entering into an agreement too, according to the terms and conditions, including with the choice of a forum clause. argument. MR. TRUFFER: THE COURT: MR. TRUFFER: THE COURT: Mr. Gorman. I understand. Okay. I understand. I'll let Mr. Gorman -That's his

Well, you can argue that in a moment, 10

Let me just stay with this argument for now.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Dalinka.

MR. TRUFFER:

That's basically my reply, Your Honor.

I think there must be some agreement as to, we were operating under the assumption Mr. Atkinson was a licensed user. THE COURT: All right. Let's address that then, Mr.

Let's go back to that, the argument that it sounds

like, according to Mr. Truffer, a name was added and they didn't realize it. A name was subtracted and they didn't realize it. Well, first and foremost, I mean,

MR. DALINKA:

there's obviously a factual dispute between the parties as to what the list of users was. There's no dispute that there's a

problem with their documentation versus our documentation, and we believe we have the better argument. But the facts here that are particularly relevant that we don't have a dispute about, which get at again the terms of use in both the license agreement and the terms of use on the website are that passwords can't be shared and that they are limited to a single site. Page 8

CoStar v 18 19 20 21 22 23 24 25 site.

Atkinson Hunt 8-28-06

And in this case, the single site was Resource Realty And the allegation is that Resource Realty, even if Mr.

Atkinson was properly on their list, was permitted to use the passwords only at the license site, being the Resource Realty site, and we've alleged that that's not in fact what happened. He used the site at another site. In fact, we've also alleged that they shared that password around the Atkinson office. Again, another violation 11

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of both the terms of use, and the license agreement that Resource Realty specifically entered into. So all of the sharing activities that went on at Resource Realty in terms of, again, sharing it with somebody who wasn't at their licensed site, those are the violations that we've alleged are breaches of the agreement between the parties, and those are the things that give rise to the harm that CoStar claims here. THE COURT: Mr. Truffer -- before you sit down, Mr. Are

Dalinka, let me see if I understand your argument as well.

you saying that because your documentation shows that Atkinson was not a licensed user, that that voids all the other conditions in the agreement, including the sharing issues or the non-sharing issues? MR. TRUFFER: The position is, we maintain that

Atkinson was a licensed -THE COURT: moment. I know you do, but leave that aside for a

They're saying that there's reason to believe that he

was in fact not, and they can demonstrate that in a dispute of fact. But what are you saying it does to the other terms and

conditions of the agreement? MR. TRUFFER: I cannot say, Your Honor. Page 9 If there are

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CoStar v Atkinson Hunt 8-28-06 indeed other allegations that other parts of the agreement were breached, sharing for example, even if it were not with Mr. Atkinson, but we don't maintain that they go away. 12

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THE COURT:

But that's one of their arguments.

Isn't

that the essence of their breach of contract claim? MR. TRUFFER: I don't know that's the essence of it. But my point is, all of this flows Mr. Atkinson is approved, there

It's part of it, Your Honor. from the font of Mr. Atkinson. may not be any other claim.

If Mr. Atkinson is a licensed user,

there may not be any other claim. THE COURT: MR. TRUFFER: THE COURT: MR. TRUFFER: concerned, Your Honor. THE COURT: All right. But does your contract claim Anymore on the breach of contract claim? No, Your Honor. Anything more to say on your motion then? Not insofar as the contract claim is

then flow into your choice of forum claim? MR. TRUFFER: It does, Your Honor. There's also a

claim as to the fraud count. the fraud count. THE COURT:

I mean, there's an argument as to

Well, let me hear you briefly on your

jurisdictional argument and then we'll move on to the fraud issue. Have a seat. MR. TRUFFER: In terms of jurisdiction, Your Honor,

the only claim that is apparently being made by the plaintiff here that jurisdiction is appropriate is based on that contract. If the contract does not exist for the reasons I have just 13

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argued, if it is not appropriate to enforce it for the reasons I just argued, then the jurisdictional argument goes away. Page 10

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Atkinson Hunt 8-28-06

I don't believe there's any evidence that's been submitted by the plaintiff in this case, other than the contract itself, other than the choice of forum clause. again, I don't believe -THE COURT: response to that. MR. DALINKA: Well, the servers that are at issue The personnel who had to Well, let's see what plaintiff says in I don't think,

predominantly are located in Maryland.

field the representations from the other side with regard to who was appropriately a licensed user and who weren't, some of those folks are in Maryland and some of those folks are in other places. None of them happened to be in New Jersey. CoStar's sales rep. who is responsible for this was actually in Pennsylvania, I think, and he regularly comes to Maryland for business purposes as well. But the allegation

beyond the contract term against both defendants is that they have committed tortious acts in this district by using the services of CoStar that exist in this jurisdiction. And as Resource Realty's brief recognizes, the Fourth Circuit says that the long-arm jurisdiction of this Court is co-extensive with due process. It's certainly in this case the

situation where they purposely availed themselves of a company that they knew existed in Maryland, that offered services in 14 Maryland. And that by doing the password sharing, by sharing

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the access off-site were affecting a business in the state of Maryland, and therefore jurisdiction would be appropriate here in Maryland. THE COURT: MR. TRUFFER: All right. Mr. Truffer, response to that? I'll let the

Very briefly, Your Honor.

tortious conduct part of that argument flow when I discuss the Page 11

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CoStar v Atkinson Hunt 8-28-06 fraud count, because the rest of it is a breach of contract count. Other than this particular contract, as I submitted before, I don't think there's any evidence the plaintiff has produced to show that there is any activity, systemic, continuance or otherwise by my client, Resource, a New Jersey corporation which was solicited on this contract in New Jersey, which downloaded the information in New Jersey, any contact systemic or otherwise with the state of Maryland, other than this contract. And as I said before, that rises or falls in the

weight of my initial argument. THE COURT: count. MR. TRUFFER: Fraud count is very simple, Your Honor. All right. Let me hear you on your fraud

We maintain they simply have not pled with enough specificity under Rule 9(b) to make out the claim. The rules are very clear The 15

about the particularity required for such a fraud count. allegations taken on their face allege that there was some

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misrepresentation at some point in time between unnamed parties, in unnamed documents, in unnamed e-mails over vague and conclusory allegations of what the misrepresentation was. Whether that was part and parcel of the original downloading of the information, whether it was some subsequent communication as to what the true activity was, it's not at all clear and does not permit this defendant to fairly frame a defense to that fraud claim. it. THE COURT: MR. DALINKA: Mr. Dalinka. It's our position, Judge, that the For that reason, Your Honor, we move to dismiss

allegations in the complaint more than put the defendants on notice that they made communications to CoStar about the nature Page 12

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Atkinson Hunt 8-28-06 Those facts are

of who was accessing, how they were accessing.

set forth in the complaint with enough knowledge, with enough specificity to put the defendants on knowledge (sic) who are the ones who are truly going to be the ones knowledgeable about who are the individuals within Resource Realty who are making the false and misleading representations. There's no reason to dismiss the fraud claim outright and certainly through the course of discovery, the exact details will become more than plain. THE COURT: to understand. Well, stay with this for a minute. I need

Are you saying that Resource made specific Give me specifics. 16

statements to your people about Atkinson?

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What are you talking about? MR. DALINKA: There are communications when CoStar was

dealing with this particular account regarding who the authorized users were going to be. back and forth. There are communications

When is Mr. Atkinson going to become a staff The question of whether he was truly

member at Resource Realty?

qualified to be an employee or not were facts that were communicated from Resource Realty to CoStar that CoStar relied upon in connection with the relationship, in connection with maintaining -THE COURT: wouldn't be a problem? MR. DALINKA: If Mr. Atkinson was an employee of You mean, had he been an employee, there

Resource Realty and was physically located at Resource Realty's site, this entire dispute would be of a different character. The only difference whether we'd have a dispute at all or not is whether he behaved the same way in that situation. Our

allegation is that he downloading a massive amount of data, Page 13

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CoStar v Atkinson Hunt 8-28-06 which is also a violation of the license agreement.

But this

aspect of it in terms of whether he was a proper person or not, which is the most straightforward one from our point of view wouldn't be an issue, if he was an employee -THE COURT: Are you alleging fraud though in

connection with whether he got on the list as an authorized licensee or not? 17

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MR. DALINKA:

Well, not specifically, Judge.

What

we're alleging is that they fraudulently gave information to CoStar to maintain the license between Resource Realty and CoStar. In other words, the fraud was in the inducement to obtain the license renewal and to maintain it over time. THE COURT: Because statements were made about the

access that Atkinson had? MR. DALINKA: Who the licensed users were going to be

and the extent of that licensed use, yes. THE COURT: the renewal? MR. DALINKA: At the time of the renewal and during And this all occurred in connection with

the time of the renewal license afterward. THE COURT: the renewal? MR. DALINKA: That's my understanding, Judge, yes. In And Atkinson clearly wasn't on prior to

fact, as I said before, Mr. Atkinson had tried to become a licensee in that period before or right around the renewal. THE COURT: How had he tried to become a licensee?

You mean, directly through CoStar or through Resource? MR. DALINKA: As I understand it, he had contacts with

the CoStar representatives and made inquiries of CoStar as to whether he could become a licensee. Page 14

CoStar v 25 THE COURT:

Atkinson Hunt 8-28-06 And what was the result of that? 18

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MR. DALINKA: THE COURT: MR. DALINKA: that he is engaged in -THE COURT: MR. DALINKA: consultant.

He was denied a license. Was there a reason given? As I understand it, the type of business

Meaning what? As I understand it, he's some sort of a I

He's not in the real estate business, per se.

believe in their papers they talked about a marketing business. Those are not businesses that CoStar licenses to under its license -THE COURT: I mean, is there evidence? Are there

documents that reflect Atkinson's efforts to negotiate a direct licensing deal with CoStar? MR. DALINKA: I believe there are e-mails that my

client has and we'll produce in the course of discovery in this case. And there's going to be live testimony of people who

talked to him. THE COURT: And is it your position that Atkinson's

name came up during the renewal or didn't come up during the renewal? MR. DALINKA: Atkinson's name did not come up during It came up in connection with

the initial part of the renewal.

trying to finalize this document that counsel says came back in a different form than they agreed to it. In other words, this list of users is something that's 19 fluid with CoStar. A licensee like Resource Realty can with

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CoStar's consent change the list of license user during the term of a license. Page 15

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CoStar v Atkinson Hunt 8-28-06 The purpose being, let's say a licensed user buys a five seat license. will use the system. In other words, five employees at their site If one of the employees who is on that

five site license leaves the company, that company still has the five site license and they may want -- the five seat license. They may want a new employee, they may have hired somebody new. They would then fill that, inform CoStar as to who the new person was so that new person could be an authorized user. THE COURT: And it's CoStar's position that Atkinson

specifically was not supposed to be among those people? MR. DALINKA: It's CoStar's position that Atkinson as He was mentioned

he came to use it was not one of those people. at some point in the discussions.

I've seen, as part of my Rule

11 inquiry, the e-mail traffic that shows that they were trying to add him as a user once you got into the renewal phase. THE COURT: And your client's view was because he

wasn't an employee, he wouldn't qualify? MR. DALINKA: THE COURT: MR. DALINKA: THE COURT: MR. GORMAN: Right, correct. All right. Thank you, Judge. Mr. Gorman, let's hear from you. All right, Your Honor. Good morning. 20

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We moved to dismiss for lack of jurisdiction, not on the merits of the causes of action. But I would like to orally

move also to transfer under 1404, which is part of the motion made by Resource. We didn't make it, but when we get there, I'd

like to join in that. Let me just first address forum non-selection, although logically the Long-Arm Statute might come first, but let's address terms of use. There are two things here. Page 16 There is the license

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Atkinson Hunt 8-28-06 We're not a party to

agreement between CoStar and Resources. that. That's the first thing.

Secondly, they've sued Atkinson Hunt Corporation. Much of this discussion has been about Mr. David Atkinson individually. He's not a defendant in this case. I don't think

there's any doubt that Atkinson, not the corporation, seems to me is not involved in all the facts that we're talking about. Now, let's go to the terms of use. license agreement, the terms and conditions. record here. We have the They are in the And

I can have Mr. Yang show them to Your Honor.

then there are terms of use you see when you go online.

No one

knows on this record exactly what the online terms of use said. They haven't provided it. August of '04. But what we do know from the record here is that the agreement, the terms and conditions to the license said that the 21 jurisdiction, exclusive jurisdiction, was an agreement between the parties. That's attached to the opposition from Resources. It's not in here, what it said in

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And if you look at paragraph 17 of the printed terms and conditions of the license, it says, the parties irrevocably consent to the exclusive jurisdiction in Maryland, the parties. We don't know exactly what it said on the terms of use in August of '04 when we actually went online. But we do know

further that the CoStar documentation said that if there's any conflict or any confusion -- strike the word conflict -- that the written terms and conditions to the license prevail. THE COURT: MR. GORMAN: you'd like to see it. THE COURT: If you have it, let me see it. Page 17 I need to find that document. Okay, Mr. Yang can bring it up to you if

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CoStar v Atkinson Hunt 8-28-06 MR. GORMAN: This is the license agreement subscription form. authorized users. The second page talks about who are the The third and fourth page are the written

terms and conditions. And the first point I want to make, I think we've underlined it in red. The sentence says, To the extent a

conflict exist, and that's between the terms of use you see online or you may or may not see online, but you perhaps could see. And these written terms and conditions, the written terms

and conditions govern. THE COURT: What's the conflict? 22

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MR. GORMAN:

Well, the conflict is if you, if you go

down to paragraph 17 on the fourth page of what Mr. Yang handed you, you'll see that the second -- 17 is choice of law jurisdiction. The second sentence which begins on the right

hand margin says, The parties irrevocably consent to exclusive jurisdiction federal and state court. But there's no dispute on

this record that Atkinson Hunt, defendant in this case, is not a party. There's no dispute that Mr. David Atkinson, the So -- and we don't know what the

individual, is not a party.

terms of use say or said in August '04, which sides into another point. This website is what's called under the Zippo analogy in

the Fourth Circuit, a passive website. In more modern websites, when you see the terms and conditions, you have to say "I agree" before you can continue. You're kind of locked out. That's not the way this worked in So there's no evidence

August of '04, the way I believe it.

here that Mr. Atkinson or anybody else actually read the terms and conditions online, because you didn't have to to access the information. THE COURT: What did -- well, it is the corporate Page 18

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Atkinson Hunt 8-28-06

defendant, I guess, but let's talk about Atkinson individually for a moment. if anything? MR. GORMAN: He did not know of the license agreement. What did he sign, if anything? What did he know,

He thought he was authorized to use it, because as you see, he 23 is listed on the second page. THE COURT: MR. GORMAN: Well, did he ever see that document? He never saw it. He was told he had it

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and he was given a password.

He never saw this agreement, but Given a password and

he was told he was authorized to use it. he used it. THE COURT:

Why wouldn't he by covered by their He's basically a sub-licensee,

agreement though, as a licensee? isn't he? MR. GORMAN: authorized user. THE COURT:

I wouldn't call him that.

I'd call him

Well, but the license, he's operating You mean, he

pursuant to a license where somebody is bound.

could do these things and say -- they could give it to any number of people and say, we don't know what the terms and conditions of the agreement are? Well, suppose they gave them to licensed users and they all used it illegally. Are you saying they wouldn't be

bound by any of the terms and conditions? MR. GORMAN: No, then I think the way it is is they

have to go against Resource, and Resource have a cause of action against us. THE COURT: MR. GORMAN: contract. 24 Page 19 That doesn't seem right. I mean, we're not a party to the

CoStar v 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 it? Honor. THE COURT: THE COURT:

Atkinson Hunt 8-28-06 But you're saying every user could go out

and breach 100 different ways, and they couldn't sue your people directly because they say we didn't know what the master agreement says. MR. GORMAN: Of course I'm not saying that, Your

Well, that's the thrust. My thrust is simply that we didn't see

MR. GORMAN:

the terms and conditions. THE COURT: And therefore, you say you're not bound by

MR. GORMAN:

Yes, but many employees of a company

wouldn't have a right to go into a manager's office and say, by the way, I want to see the contract you just signed with somebody because I'm your employee and I'm going to be liable. That's not the way it works. Generally the employees are

entitled to rely on the employer. THE COURT: MR. GORMAN: THE COURT: to their designations? MR. GORMAN: Absolutely. And as I say here, I believe Who is it that designates the users? Resource. All right. So you're operating pursuant

there is a conflict here because they have not shown what the terms of use said in 2004 with respect to this choice of forum, this exclusive jurisdiction. All they've shown is what this 25 And that exclusive

1 2 3 4 5

agreement said and the terms and conditions.

jurisdiction in Maryland applies only to the parties, and this Defendant Atkinson Hunt is not a party. THE COURT: Let me go back to you, Mr. Dalinka. What

about the, I gather it's the website terms and conditions he's Page 20

CoStar v 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 talking about. 2004?

Atkinson Hunt 8-28-06

Where does that refer to choice of forum as of

MR. DALINKA:

Well, let me direct Your Honor's

attention to the allegations we made in the complaint, because we did in fact set forth the terms of use that were applicable during the relevant time in the complaint starting at paragraph 18 and continuing through paragraph 23. And in these paragraphs, the first one being -- is a direct response to counsel's comment, which is that an authorized user, this is paragraph 18, the authorized user must scroll through and accept the applicable online terms of use, and then it goes on and includes the statement I referred to earlier about, quote, By using this site, you agree to our terms of use. Those are all statements that are contained in the very

field where they input the password and the user code. THE COURT: By terms of use, do you mean the terms and

conditions of the master agreement? MR. DALINKA: No, I mean the terms of use that

immediately follow in paragraph 19 of the complaint, as well as additional terms of use in the one for jurisdiction being quoted 26 in paragraph 23 of the complaint. THE COURT: And where did -- I know you alleged these,

1 2 3 4 5 6 7 8 9 10

but just out of curiosity, have you printed the terms of use that were in effect as of the time of the agreement. MR. DALINKA: My client has a copy. I've seen it. I

do not have it here with me today.

We did not include it in our

papers because we set fourth the paragraphs on the pleadings that we were most concerned about. They have submitted a more

recent version of the terms of use and I don't dispute that my client has changed the terms of use, but those changes came Page 21

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CoStar v Atkinson Hunt 8-28-06 after the time relevant to complaint. They are not set forth in the complaint. THE COURT: forum clause? MR. DALINKA: no longer exclusive. THE COURT: we're relying on? MR. DALINKA: mid-2005. THE COURT: And were the changes to the terms and I believe it's late 2004 through about And what's the operative date that you say They include a choice of forum, but it's And what, they do not include a choice of

conditions making the forum, choice of forum clause not exclusive after all that period? MR. DALINKA: THE COURT: That's my understanding, Judge. All right. Mr. Gorman. 27

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

MR. GORMAN:

If Your Honor would look at paragraph 23

of the complaint, you have it in front of you. THE COURT: MR. GORMAN: I have it. That's the key part here. It says, The

terms of use provide that the user, but there's the key word. They don't put that in quotes. irrevocably consents. It's somebody, quote,

But the issue here is, from my client's And the only thing on In other words --

perspective rather, who is that somebody.

the record is that that somebody is a party. THE COURT:

No, the terms of use in 18 and 19 refer to

the user and says, you're bound by the terms and conditions. Doesn't that arguably substitute user for parties? MR. GORMAN: Well, what they've cited here in 19 says

exactly what Your Honor said, but then you have to go say, what am I bound to? clause. Let's go look at the choice of jurisdiction

That's what's not quoted in full in paragraph 23. Page 22

CoStar v 17 18 19 20 21 22 23 24 25 though.

Atkinson Hunt 8-28-06

Paragraph 23 conspicuously omits who irrevocably consents in the terms of use you see online. user, but they don't quote it. to who is bound is the -THE COURT: Well, but you're on a Motion to Dismiss to They say it's

The only thing in the record as

MR. GORMAN:

Lack of jurisdiction.

I mean, they're

saying that we agreed to Maryland forum because of the terms of use online. That's their argument. 28

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Dalinka? filed?

THE COURT: Summary Judgment then.

Well, maybe you ought to file a Motion for I don't know how we do this on a

straight argument that, on a Motion to Dismiss that I take your allegations against their allegations. MR. GORMAN: Well, I think they have the burden to

show a prima facie case that we agree to be bound by Maryland jurisdiction, and they haven't done that. Where is the -- why

don't we have a copy of what the terms of use were in 2004 and early 2005. We should have them. We don't.

What they gave us is the agreement they entered into which says that only the parties agree to Maryland jurisdiction. THE COURT: Well, is there such a document, Mr. Why isn't that

I assume you're saying there is.

MR. DALINKA:

Well, on a Motion to Dismiss, I didn't

think it necessary to file a photocopy of the terms of use when we have the plain statement of it in the complaint and we have Mr. Zebrak's declaration that during the relevant times the terms of use contained the choice of forum clause. I mean, I

think from a standpoint of a Motion for Personal Jurisdiction we've set forth more than ample facts to demonstrate it. Page 23

22 23 24 25

CoStar v Atkinson Hunt 8-28-06 Again, if there's going to be debate as to the terms, that goes to the merits of the case and I think we'll be fully prepared to address those at the appropriate time. THE COURT: All right. Anything further, Mr. Gorman? 29

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 counsel.

MR. GORMAN:

With all due respect, I disagree with The only way they have to

It doesn't go to the terms.

hold us in to Maryland jurisdiction, which would -- that's what our -- we moved to dismiss for lack of personal jurisdiction. THE COURT: No, it's not the only way. They can hold

you in if you are considered to be covered by the contract as well, not merely by the terms and conditions on the website. That's a supplemental argument. MR. GORMAN: Okay. Well, I think if you look at their I

pleadings, that's their only argument that they used for us. understand that's Your Honor's point, but they're saying we're

bound -- we're not part of the contract, but we're bound because of the terms of use that were on the website which no one has seen in this case. And in fact, their own document says that

what I have seen in this case controls and governs over the online terms of use. I can also go to the Long-Arm Statute argument if Your Honor wants me to. THE COURT: MR. GORMAN: Well, go ahead. Under the Long-Arm Statute, we believe

that there is no jurisdiction here under the applicable provisions of 6103 of the Maryland Courts of Judicial Proceedings. We didn't transact any business here in Maryland.

Most of these cases are just the opposite of this. And most of the cases, it's the defendant who is being sued 30 because of their presence through their website. Page 24 This is just

1

CoStar v 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 the reverse.

Atkinson Hunt 8-28-06

We've got CoStar with its website trying to bootstrap and grab the users in to this, to jurisdiction in our home state. And even on the argument we just made, but certainly It would violate

here, we have to consider due process.

fundamental notions of fair play if every time one of the millions of people clicked on to a database that they automatically said they can be sued up in Montana, Lands End up in New England, Westlaw in Minneapolis. notions -THE COURT: Well, of course if they were granted That would violate

access to a limited database and they agreed that they would be bound, what's wrong with that? MR. GORMAN: with it, but -THE COURT: That's why the licensors do it, isn't it, Well, I think that's why -- nothing wrong

because they'd have to chase all over the country after all their users. And they say in effect, look, if you use our

database and we have a dispute, we're going to have to litigate in a given forum. MR. GORMAN: And in order to do that, and under the

due process clause, they have to make darn sure that you have notice of this and you've agreed to it, and that's what's sorely lacking, Your Honor, in this case vis-a-vis Atkinson Hunt and 31 Mr. Atkinson. So we didn't transact any business here. contract to supply anything here in Maryland. We didn't

1 2 3 4 5 6

We didn't cause

any tortious injury in Maryland, and we didn't cause any tortious injury from outside the state. We just didn't do any

business here either in a general sense -Page 25

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CoStar v Atkinson Hunt 8-28-06 THE COURT: So let's assume for a minute that you used it without authorization. MR. GORMAN: THE COURT: Yes. What is that, a tort? Aren't you -- got

to allow that they made proper allegations that you used it without authorization. What have you done? You either You've done

committed a tort or you breached a contract. something. Where did you commit it? MR. GORMAN: THE COURT: unauthorized use. MR. GORMAN:

I think it's de minimis. No, it's not de minimis if it was

You can't have a tort in the air. If I went on there and just

You

have to have some damage.

inadvertently used the database, how did I damage anybody? THE COURT: That's clearly not true. You clearly,

clearly can't just say that you can use somebody's database and there's no damage, and therefore you get to do it. true. That's not

You certainly breached the -- maybe you've committed a I mean, there's all 32

conversion of property that's not yours.

1 2 3 4 5 6 7 8 9 10 11 12

sorts of theories, but I'm trying to figure out where it occurred by your logic. MR. GORMAN: Where do you think it happened? Whatever I did happened, whatever my man

did -- and by the way, my man is not a defendant -- but Hunt did, he did in New Jersey. He was sitting at a computer in New

Jersey and he accesses a database, which it happens to turn out is in Maryland. you go online. When you go online to Google, do a Google search, no one knows where the physical servers are. They're probably all No one knows where the servers are located when

over the place, but Mr. Hunt did not know where servers were. They could be anywhere. So again, to me the act of -- if Your Page 26

CoStar v 13 14 15 16 17 18 19 20 21 22 23 24 25

Atkinson Hunt 8-28-06 I don't

Honor wants to call it a tort, let's assume it is. fault your reasoning. THE COURT: MR. GORMAN: THE COURT:

Well, it sounds like something. It's definitely not a breach of contract. Well, maybe it is.

Let me hear from Mr. Dalinka on that. MR. DALINKA: As we set forth in our response brief to

the Atkinson motion, and I apologize if I've used Mr. Atkinson interchangeably with the company, but the intent of the allegations in the complaint is that the company, Atkinson Hunt, as I understand it usually acting through Mr. Atkinson himself, but the company Atkinson Hunt did the things that are alleged and that's why they are here. 33

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

With regard to the access, as we put in our -- as we put forth in our response, there's no question that Mr. Atkinson had every indication that he was dealing with a Maryland company, with a company who had fielded impact of the uses of his database. And we're not talking about, as Your Honor was observing, somebody who merely surfed on to one particular web page. We're talking about a situation where somebody took an

access user i.d. and a passcode and affirmatively clicked another button. He tried to allude to the Zippo case, which is the hallmark of the cases holding ISPs responsible. While I would

maintain, Your Honor, that Mr. Atkinson's conduct and Resource Realty's conduct is very much like the folks who had active websites, because they are actively reaching out by clicking, I accept terms of use; by clicking, here is my password and my i.d., let me in so I can access this otherwise limited resource. Page 27

18 19 20 21 22 23 24 25

CoStar v Atkinson Hunt 8-28-06 Both the defendants accessed the resources here in Maryland, affected a Maryland company. more than appropriate. THE COURT: MR. GORMAN: Personal jurisdiction is

Due process would agree with that. Final word on that from anyone? I can just give Your Honor some cases on If I can hand

the long arm jurisdiction and the due process. them up to, Your Honor. THE COURT: All right.

34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 give you. MR. GORMAN: Okay. There is actually four I want to Do you want the cites on the

First it is ALS Scan.

record or just the cases? THE COURT: MR. GORMAN: If you have the cases, just hand them up. Okay. That's the one that uses the Zippo

analogy that exercise of jurisdiction depends on whether or not the sliding scale of the internet website. there's no jurisdiction. If it's passive,

If it's active, there probably is.

This again is in reverse, but I submit that CoStar has a passive website here. Secondly, we've given you CareFirst. By the way, I

should say ALS, the Motion to Dismiss was granted and then affirmed by Fourth Circuit. Next case is CareFirst of Maryland. case cited by the Fourth Circuit -THE COURT: MR. GORMAN: jurisdiction. I'm familiar with these cases. -- affirmed. Involves cases of specific Also is a another

I've highlighted some pages.

Third case is another Fourth Circuit opinion called Stover versus O'Connell Associates. This is actually a

telephone case, but the Motion to Dismiss granted by District Court, affirmed by Fourth Circuit. And lastly Diamond Health Care of Ohio. Page 28 Also a Fourth

CoStar v 24 25 Circuit case.

Atkinson Hunt 8-28-06

Motion to Dismiss by the District Court, the lack I think these 35

of jurisdiction, affirmed by the Fourth Circuit.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

four cases contain the relevant law in the Fourth Circuit. THE COURT: MR. DALINKA: Anything further, Mr. Dalinka? Well, I would certainly direct Your

Honor to the Fourth Circuit case that counsel refers to, the CareFirst of Maryland case, which on Page 397 says, quote, Even a single contact may be sufficient to create jurisdiction when the cause of action arises out of that single contact provided that the principle of fair play and substantial justice does not thereby offend it. And in this case we allege that each and every time Mr. Atkinson and Resource Realty reached out and put in their password and i.d., they have actively contacted Maryland, have interacted with Maryland and have caused injury in Maryland and it's more than fair to hale them into court here. THE COURT: MR. TRUFFER: All right. Anything further -Resource has also

Yes, Your Honor.

asked the Court to transfer this case to the state of New Jersey for convenience purposes. And I would submit, Your Honor, even

though the servers may have been in Maryland, even though the data itself may have been housed in Maryland, I don't believe there's any evidence to suggest that the off-loading it, and thus the use of it, the accessing, the computers themselves, the individuals who off-loaded, downloaded the information all are in the state of New Jersey. That's all of Resource's personnel,

that's all of Atkinson Hunt's personnel, all of their witnesses 36 there resident there. For purpose of convenience, Your Honor, these are Page 29

1 2

3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

CoStar v Atkinson Hunt 8-28-06 going to be the critical, I presume the critical individuals who are going to be involved in discovery in this case. all New Jersey people. They are

While there may be some, certainly some

individuals in Maryland in the home office, all of the damage, if one will, took place in the state of New Jersey. For that reason, Your Honor, we'd ask that you transfer this case from Maryland to New Jersey for the convenience of the parties, particularly for discovery. THE COURT: MR. DALINKA: Mr. Dalinka. Your Honor, the 1404 analysis starts

with the first point, which is jurisdiction has to be proper in the transferee jurisdiction. Under the terms of both the

license agreement that Resource entered into and the online terms of use, exclusive jurisdiction was called for in this court, not in the court in New Jersey. reason enough to deny a 1404 motion. Next, of course, plaintiff's choice always has some weight that the Court should give to it. And here, as Your That in and of itself is

Honor observed in some of your questions to my opponents, we have a situation where we have a company that has customers across the country and it should not be required to go chasing them across the country for their illegal conduct directed at the company here in Maryland. 37

1 2 3 4 5 6 7 8

Third, as we set forth in Mr. Zebrak's declaration, substantial number of CoStar's witnesses either reside in this district or regularly travel to this district. All of those

factors weigh in favor of keeping venue here, as well as the agreement points that I made earlier. THE COURT: MR. TRUFFER: MR. GORMAN: Anything further? No. I want to join in the Motion to Transfer Page 30

CoStar v 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Atkinson Hunt 8-28-06

for the venue, if you don't dismiss me. THE COURT: MR. TRUFFER: All right. Your Honor, if the Court please, just Mr. Dalinka went

one follow-up comment as to the fraud count.

into some specificity in his response to the Court as to the allegations of fraud in the case. None of those, I hasten to There's nothing

point out, anywhere stated in the complaint.

more than conclusory allegations in there, and for those reasons I would urge the Court to grant the Motion to Dismiss as to the fraud count. THE COURT: Co-Star Realty Information, Inc. and

CoStar Group, Inc. have sued Atkinson Hunt and Resource Realty in Southern New Jersey. The suit proceeds in five counts. Count two

Count one for breach of contract by the defendants. for fraud by the defendants.

Count three is for violation by

the Defendant Atkinson Hunt of 18 U.S.C., Section 1030, computer fraud. Count four alleges tortious interference with contract 38

1 2 3 4 5 6 7 8 9 10 11 12 13

and perspective business relationship by the defendant Atkinson Hunt. And count five alleges computer-related offenses under

New Jersey law by Defendant Atkinson Hunt. The matter is before the Court on the motion of Defendant Resource Realty to dismiss for lack of personal jurisdiction, for failure to state a claim and requesting transfer of venue to the state of New Jersey. The Defendant Atkinson Hunt also moves to dismiss for lack jurisdiction, presumably joins all the motions that are on the grounds that are alleged by the Defendant Resource. The essential allegations are that CoStar is a commercial real estate information services provided. licenses its software for a fee. Page 31 It

It has a licensing agreement

14 15 16 17 18 19 20 21 22 23 24 25

CoStar v Atkinson Hunt 8-28-06 by which the licensee is issued exclusive access to the real estate information database of CoStar. In August, 2004, Resource Realty signed an agreement with CoStar to license a certain number of users of the software and agreed, in essence, that it would not provide access to any third parties to the CoStar information database or otherwise share the information without permission of CoStar. There is a forum selection clause in the agreement. It provides that the, quote, This agreement shall be construed under the laws of the state of Maryland. The parties

irrevocably consent to the exclusive jurisdiction of the federal and state courts located in the state of Maryland for the 39

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

purpose of any action brought in connection with this agreement or the use of the licensed product. There were -- the allegation is that Resource Realty provided David Atkinson of Atkinson Hunt with its user profile and passwords, and that Mr. Atkinson was engage in activities of Resource Realty working as an independent contractor. Further allegation is that Atkinson had previously engaged with CoStar, discussions with CoStar about becoming a licensee, but was not authorized to be such. The argument that

is made by Resource is that on the copy of the, quote-unquote, contract that they have, Atkinson was listed as an authorized user of licensing agreement. They say that CoStar modified those terms by removing Atkinson's authorization and notify the Resource Realty of the change. And that when it signed the agreement, it understood

that Atkinson or Atkinson Hunt was authorized as a user. The matter went forward and the argument made by the plaintiff is that the authorization of Atkinson was not authorized either under the contract and that all access that in Page 32

CoStar v 20 21 22 23 24 25

Atkinson Hunt 8-28-06

fact was had by Atkinson and/or Atkinson Hunt to the database was illegal and constituted a breach of contract and/or, and a tort of one fashion, in addition to violating various computer laws. And as I said, the matter is before the Court on a number

of grounds. Now, the essential argument made by the Defendant 40 Resource Realty, as I understand it is that the contract which contains the forum selection clause presumably was altered by the plaintiffs and therefore presumably the forum selection clause is no longer viable. That although there was some kind

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

of agreement in place between the plaintiff, CoStar, CoStar entities and Resource, that it was not an agreement that would contain the forum selection clause. Let me start with the concept of a forum selection clause. Clearly, forum selection clauses are legal if And in the context of these kinds of national

reasonable.

database-type access, the idea of a forum selection clause makes eminent good sense for the reasons suggested by plaintiff's counsel that the companies that license these agreements would have to sue in 50 different jurisdictions every time there was a breach. So insisting on a forum selection clause would make

good sense. There is a dispute. The way this matter is argued

now, and this is a Motion to Dismiss, is that in fact there was a contract as alleged by the plaintiff in this case that did not authorize Atkinson or Atkinson Hunt as user. The Court takes those allegations under a Motion to Dismiss as well-pleaded, and is not in a position now to say that that is not a viable contract or that the forum selection clause is not viable. Page 33

25

CoStar v Atkinson Hunt 8-28-06 And for that purposes, the Court is easily prepared to 41 conclude that the contract in so far as Resource is concerned is properly alleged. We'll see what happens, perhaps, on a Motion

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

for Summary Judgment at some point, but for now it's properly alleged, taking the allegations in the light most favorable to the plaintiffs. also viable. And again, it's one of those issues where the jurisdictional clause is sort of intertwined with the argument on the merits and the courts ordinarily do go forward in those cases and determine that the contract has to be decided about its liability and will sort out the issue some later point. for now, well-pleaded and that certainly covers Resource. The second question is whether the, Atkinson Hunt is covered by the agreement. I would start with the basic But And that would make the forum selection clause

proposition, even if not argued by the plaintiff, that to the extent that they are operating pursuant to the license that Resource holds, that they are bound by the terms and conditions whether they knew about them or not. That would be enough to

tie in Atkinson Hunt under the master agreement and its choice of forum clause. Were that not so, again you get into this anomalous situation where every potentially user could claim who's operating pursuant to a license that it did not know what the terms and conditions were, and therefore would not be bound by what would be the very sensible forum selection clause that you 42 find in agreements like this. It's further alleged in the complaint that on the website there are specific terms and conditions that indicate that there will be a choice of forum clause every time someone Page 34

1 2 3 4

CoStar v 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Atkinson Hunt 8-28-06 And that is The

accesses the website with the password and so on.

alleged again in the Motion to Dismiss -- in the complaint. Motion to Dismiss doesn't prevail against that in terms of taking it in the best light offered by the plaintiffs.

So the Court is again prepared to conclude that from a jurisdictional standpoint, Atkinson Hunt is bound by the terms of the master agreement or as alleged by the terms of use that are posted on the website. And again, that tends to tie in the

decision on the merits with some of the jurisdictional issues where the Court ordinarily holds cases like that in. So to that extent, to the extent that any of the defendants seek to dismiss the case based on jurisdictional grounds, the Court would find that that motion is not well taken. Now, one could go through the analysis about whether in fact the Long-Arm Statute applies. This is a kind of a

thorny area that one is just getting into more and more case law on this issue. I don't really need to reach that issue because

I think we are fairly in court on the allegations as taken by the -- as made by the plaintiffs in this case that there would be a choice of forum clause that would extend not only to 43

1 2 3 4 5 6 7 8 9

resource, but to Atkinson Hunt. And that frankly is, sort of moots the issue of the Motion to Transfer, because to the extent that there is proper jurisdiction in Maryland, the Court stays here. There may or

may not be information available in New Jersey, but the fact is there's plenty of information available in Maryland too, and this is a choice that's made by the plaintiff. They've chosen

this forum and the balance of inconvenience, if you will, is not greater for the defendants than the plaintiffs in this case. Page 35

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CoStar v Atkinson Hunt 8-28-06 All the factors that would militate in favor of keeping the case here certainly do in this case. in New Jersey. As for the allegations of fraud, that's one that I would take some exception with. I think there needs to be more I don't There's no better reason to be

specificity with regard to the allegations of fraud. think they are specific enough.

I'm going to grant the Motion to Dismiss with leave to amend only as to the fraud count as to both defendants. I think you need to be more specific about who allegedly said what to whom and what circumstances, because as I read the count, it really doesn't say. I heard counsel say something more specific than what the complaint says, but I think in order to be able to plead, they need to see what that is. So, except for the issue of -44

well, I think the formal decision is the motions of the

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

defendants are granted in part, denied in part.

Granted only as

to the Motion to Dismiss the fraud count, but granted without prejudice with leave to amend in 20 days. Otherwise, the Motion I'll

to Dismiss is denied for reasons stated on the record. enter an order to that effect today, all right. get you into a scheduling order right away. All right. Thank you, counsel.

And then we'll

(Recess at 11:2:08 a.m.)

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45 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Page 37 /s/ ________________________ Linda C. Marshall, RPR Official Court Reporter CERTIFICATE OF COURT REPORTER I, Linda C. Marshall, certify that the foregoing is a correct transcript from the record of proceedings in the above-entitled matter.

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P

age 38