CASE 0:14-cv-01888-SRN-JSM Document 1 Filed 06/11/14 Page 1 of 7

UNITED STATES DISTRICT COURT

DISTRICT OF MINNESOTA

Boveda Inc., f/k/a Humidipak, Inc., Case No.:

Plaintiff,
vs.
COMPLAINT
Ashton Distributors, Inc.,

Defendant. [Jury Trial Demanded]

COMES NOW Plaintiff Boveda Inc., f/k/a Humidipak, Inc., as and for its

Complaint against Defendant Ashton Distributors, Inc. (Ashton), states and alleges as

follows:

PARTIES, JURISDICTION AND VENUE

1. This is a declaratory judgment action pursuant to 28 U.S.C. 2201 in

which a judicial determination to declare Plaintiffs rights, status and legal relations

concerning a ripe and judiciable controversy and dispute between it and Ashton.

2. Plaintiff Boveda Inc., formerly known as Humidipak, Inc., (Humidipak)

is a Minnesota corporation with its principal place of business located at 17613

Minnetonka Blvd., Wayzata, Minnesota. At all times relating to the dispute and

controversy at issue here, Humidipak was primarily engaged in the business of

developing and manufacturing humidification systems, including for cigars.

3. Ashton is a Pennsylvania corporation with its principal place of business

located at 12270 Townsend Rd., Philadelphia, Pennsylvania. At all times relating to the

dispute and controversy at issue here, Ashton was primarily engaged in the business of
 CASE 0:14-cv-01888-SRN-JSM Document 1 Filed 06/11/14 Page 2 of 7

manufacturing and distributing cigars and distributing cigar humidification systems,

including those developed and manufactured by Humidipak.

4. This Court has subject matter jurisdiction over this action pursuant to 28

U.S.C. 1332 because it is between citizens of different states, the amount in controversy

exceeds $75,000, and there is complete diversity.

5. Jurisdiction is also proper in this State because Ashton had sufficient

minimum contacts with Minnesota such that it is subject to personal jurisdiction in the

State of Minnesota. For instance, Ashton has sales representatives that work in

Minnesota and transact business, on behalf of Ashton, in this jurisdiction.

6. Venue is proper in this Court pursuant to 28 U.S.C. 1391 because a

substantial part of the underlying actions that give rise to the claims asserted in this

Complaint originated in, and took place in, this District and Ashton is subject to personal

jurisdiction in this District.

FACTS

7. In or around June 2010, Humidipak and Ashton entered into a business

relationship pursuant to which Humidipak would sell its cigar humidification systems to

Ashton, and Ashton would purchase the same from Humidipak for Ashtons distribution

and retail sale.

8. On or about June 24, 2010, and after Ashton had already placed orders with

Humidipak for its humidification systems, Ashton requested to receive an electronic copy

of a draft contract Humidipak had previously provided to Ashton (the Initial Draft).

According to Ashton, it wanted to make a few minor changes to the Initial Draft.

2
 CASE 0:14-cv-01888-SRN-JSM Document 1 Filed 06/11/14 Page 3 of 7

9. The Initial Draft provided, among other things, that the term of the

proposed agreement would continue[s] in effect until terminated by either party, at any

time with or without cause upon thirty (30) days written notice to the other party.

10. Ashton did not execute the Initial Draft, and neither did Humidipak.

11. On June 29, 2010 Ashton informed Humidipak that it was adding

Humidipaks cigar humidification system to its accessory price list.

12. On or about July 1, 2010, and pursuant to an order Ashton placed on or

before June 22, 2010, Humidipak shipped product, including its cigar humidification

systems, to Ashton.

13. On or about July 6, 2010, Humidipak shipped additional product to Ashton

pursuant to an order Ashton placed before July 6, 2010.

14. On or about July 9, 2010, Ashton faxed to Humidipak proposed changes or

revisions to the Initial Draft, which were identified through a redlining software program

(commonly referred to as Track Changes) that underlines proposed added terms and

strikes through, or crosses out, deleted terms (the Redlined Draft).

15. The Redlined Draft proposed material, not minor, changes to the terms of

the Initial Draft.

16. For instance, the Redlined Draft proposed that the initial term of the

parties relationship would be for two years and continue in effect for additional one-year

periods unless terminated by either party upon one hundred twenty days written notice.

17. Additionally, the Redlined Draft proposed that Ashton would have the

unlimited and sole discretion to establish retail prices for Humidipaks humidification

3
 CASE 0:14-cv-01888-SRN-JSM Document 1 Filed 06/11/14 Page 4 of 7

systems.

18. Additionally, the Redlined Draft proposed unclear and ambiguous terms of

exclusivity because, in part, it referenced exhibits that were never provided.

19. In response, and also on July 9, 2010, Humidipak asked for an electronic

version of the Redlined Draft, which Ashton said it was unable to provide at that time

because it came direct from its attorneys office and that the attorney couldnt make any

changes until the following week.

20. Ashton did not send another version of the Redlined Draft, nor did it send

an electronic version of any draft.

21. Humidipak did not execute the Redlined Draft, and neither did Ashton.

22. In fact, based on Ashtons subsequent representation that Humidipak could

ignore the Redlined Draft, the parties thereafter did just that and never executed any

written agreement between them.

23. As such, the parties relationship was a series of purchase orders and

invoices, with the understanding that Ashton would distribute Humidipaks

humidification systems purchased through these purchase orders and invoices.

24. The Redlined Draft does not constitute a writing in confirmation of an

agreement between the parties.

25. The parties never signed a distribution agreement.

26. During the course of the parties relationship, the parties never reached an

agreement regarding the term of their relationship, nor the termination of their

relationship, and they presently have a dispute concerning term and termination.

4
 CASE 0:14-cv-01888-SRN-JSM Document 1 Filed 06/11/14 Page 5 of 7

27. On or about May 29, 2014, Humidipak approached Ashton to discuss and

provide notice of Humidipaks intent to begin its own distribution and terminate the

parties relationship.

28. Ashton objected. Despite neither party ever executing the Redlined Draft

and both parties actually rejecting it, Ashton claimed that the parties are bound by the

terms contained in the Redlined Draft.

29. According to Ashton, Humidipak cannot terminate the parties relationship

or alleged agreement without 120 days prior notice, and Ashton further contends that

Humidipak remains under contract with Ashton until July, 2015.

30. Humidipak disputes Ashtons contentions.

31. Additionally, Humidipak contends that if there is a requirement for it to

provide thirty days written notice of termination to Ashton, then it provided this notice on

June 4, 2014.

32. On or about June 10, 2014, the parties discussed the matter further and

Ashton threatened to harm Humidipak in the marketplace, as well as engage in a course

of conduct that would constitute unfair trade practices and unfair competition, if

Humidipak attempted to walk away from the relationship.

COUNT I
(Declaratory Judgment)

33. Humidipak restates and incorporates each of the allegations set forth in the

preceding paragraphs herein by reference as if fully stated here.

34. As described above, an actual, substantial, and concrete controversy exists

5
 CASE 0:14-cv-01888-SRN-JSM Document 1 Filed 06/11/14 Page 6 of 7

between Humidipak and Ashton with respect to their rights and obligations, and as to the

enforceability of the unsigned and previously rejected Redlined Draft.

35. Ashtons actions and corresponding threats have created uncertainty and

insecurity in Humidipak.

36. Humidipak desires, among other things, to expedite and simplify the

ascertainment of uncertain and disputed rights, and it desires a speedy determination of

the controversy and dispute created by Ashton.

37. This live controversy and dispute between the parties is ripe for judicial

determination, and Humidipak has an interest in the outcome of the dispute and

controversy that entitles it to maintain this action.

38. Humidipak seeks a declaratory judgment in its favor as it relates to this live

controversy and dispute with Ashton, and it seeks a judicial declaration as to the rights of

the parties for purposes of guiding future conduct.

39. Pursuant to the Federal Declaratory Judgment Act (28 U.S.C. 2201 et

seq.), Humidipak is entitled to a declaration that no distribution agreement exists between

the parties, or alternately, if there is a distribution agreement between them it is the Initial

Draft rather than the Redlined Draft.

PRAYER FOR RELIEF

Based on the foregoing, Plaintiffs hereby respectfully request the Court for the

following relief:

1. An order declaring and adjudicating that no distribution agreement exists

between the parties and that Humidipak is under no obligation to engage in business with

6
 CASE 0:14-cv-01888-SRN-JSM Document 1 Filed 06/11/14 Page 7 of 7

Ashton. Further, Humidipak seeks an order declaring and adjudicating that it is under no

obligation to provide any notice of termination to Ashton.

2. In the alternative, an order declaring and adjudicating that if there is a

distribution agreement between the parties then it is the Initial Draft, not the Redlined

Draft, and that Humidipak may terminate the agreement upon thirty days written notice.

Further, Humidipak seeks an order declaring and adjudicating that it provided such notice

on June 4, 2014.

3. An order for such other and further relief as may be just and appropriate

under the circumstances.

Dated: June 11, 2014 WINTHROP & WEINSTINE, P.A.

s/David A. Davenport
David Davenport, #285109
Sofia Estrellado Lykke, #0391110

3500 Capella Tower

225 South Sixth Street
Minneapolis, Minnesota 55402
(612) 604-6400
ddavenport@winthrop.com
slykke@winthrop.com

Attorneys for Plaintiff

9174741v1