United States District Court, D. Maryland
AURA LIGHT U.S. INC., Plaintiff,
LTF INTERNATIONAL LLC, et al. Defendants. AURA LIGHT U.S. INC., Plaintiff,
LTF INTERNATIONAL LLC, et al. Defendants.
L. Russell, III United States District Judge.
MATTER is before the Court on Defendants', LTF
International LLC (“LTF International”), LTF
Lighting LLC (“LTF Lighting”) (collectively,
“LTF”), and Paul V. Palitti, Jr., Motions and
Supplemental Motions to Dismiss Complaint for Lack of
Subject-Matter Jurisdiction (ECF Nos. 5, 10 GLR-15-3198; ECF
Nos. 5, 20 JFM-15-3200). Also pending is Plaintiff's, Aura
Light U.S. Inc. (“Aura US”), Motion for Summary
Judgment (ECF No. 11, JFM-15-3200). The Motions are ripe for
disposition. No hearing is necessary. See Local Rule 105.6
(D.Md. 2016). For the reasons outlined below, the Court will
deny Defendants' Motions and Supplemental Motions to
Dismiss. The Court will also deny Aura Light's Motion for
Summary Judgment without prejudice.
US, a Delaware corporation, markets and sells lighting
products throughout North and South America. (Compl. ¶
2, ECF No. 1, GLR-15-3198). Aura U.S. is a subsidiary of a
Swedish limited liability company, Aura Light International
AB (“Aura International”), which manufactures and
resells lighting products internationally. (Id.
¶ 10). LTF International and LTF Lighting are Maryland
limited liability companies that work as wholesale
distributors and resellers of light-emitting diode (LED)
products in North America. (Id. ¶¶ 3, 4).
James Industry Group Co., Ltd. (“James”), a Hong
Kong corporation, manufactures most of the lighting products
that LTF sells. (Id. ¶ 9). Palitti provides
management services for an umbrella of affiliated companies,
including LTF. (Id. ¶ 5).
January 2015, LTF introduced Aura U.S. to James, and the
parties engaged in negotiations to create a new business
venture for the wholesale marketing, distribution, and sale
of LED and other lighting products to commercial customers
throughout North America. (Id. ¶ 11).
Ultimately, the negotiations broke down, and in May 2015, the
parties elected not to proceed with the proposed new business
venture. (Id. ¶ 12). During the period when
negotiations were ongoing, however, Defendants submitted
thirty-four purchase orders to Aura U.S. for specific
lighting products. (Id. ¶ 14; Compl. ¶ 14,
ECF No. 1, GLR-15-3200). Defendants have either refused to
accept delivery of or pay for approximately $9 million worth
of lighting products that Aura U.S. manufactured to sell to
Defendants under the purchase orders. (Compl. ¶¶
15, 21, 22, GLR-15-3198); (Compl. ¶¶ 15-18, ECF No.
October 20, 2015, Aura U.S. initiated two breach-of-contract
actions against Defendants (the “Actions”).
See Aura Light U.S. Inc. v. LTF Int'l LLC, No.
GLR-15-3198 (D.Md. filed Oct. 20, 2015); Aura Light U.S.
Inc. v. LTF Int'l LLC, No. JFM-15-3200 (D.Md. filed
Oct. 20, 2015) (“Aura II”). On November 20, 2015,
Defendants filed Motions to Consolidate the Actions and
Motions to Dismiss Complaint for Lack of Subject-Matter
Jurisdiction. (ECF Nos. 4, 5, GLR-15-3198; ECF Nos. 4, 5,
JFM-15-3200). Aura U.S. filed Oppositions to Defendants'
Motions to Consolidate and Motions to Dismiss on December 4,
2015 (ECF Nos. 6, 7, GLR-15-3198; ECF Nos. 6, 7,
JFM-15-3200). Defendants filed Replies in further support of
their Motions to Dismiss on December 21, 2015 (ECF No. 8,
GLR-15-3198; ECF No. 8, JFM-15-3200). On December 28, 2015,
Aura U.S. filed a Motion for Summary Judgment (ECF No. 11,
December 30, 2015, the Honorable J. Frederick Motz set a
February 29, 2016 deadline for jurisdictional discovery. (ECF
No. 12, JFM-15-3200). On March 28, 2016, Defendants filed an
Opposition to Aura US's Motion for Summary Judgment (ECF
No. 22, JFM-3200) and Supplemental Motions to Dismiss
Complaint for Lack of Subject-Matter Jurisdiction (ECF No.
10, GLR-15-3198; ECF No. 20, JFM-15-3200). Aura U.S. filed
Oppositions to the Supplemental Motion to Dismiss on April
14, 2016. (ECF No. 14, GLR-15-3198; ECF No. 27, JFM-15-3200).
On April 20, 2016, Aura U.S. filed a Reply in further support
of its Motion for Summary Judgment. (ECF No. 31,
JFM-15-3200). On April 25, 2016, the Court granted
Defendants' Motions to Consolidate the Actions. (ECF No.
17, GLR-15-3198; ECF No. 32, JFM-15-3200). Finally, on May 2,
2016, Defendants filed a Reply in further support of their
Supplemental Motions to Dismiss. (ECF No. 19, GLR-15-3198).
Motions to Dismiss for Lack of Subject-Matter
Rule of Civil Procedure 12(b)(1) governs motions to dismiss
for lack of subject-matter jurisdiction. A defendant
challenging a complaint under Rule 12(b)(1) may advance a
“facial challenge, asserting that the allegations in
the complaint are insufficient to establish subject matter
jurisdiction, or a factual challenge, asserting ‘that
the jurisdictional allegations of the complaint [are] not
true.'” Hasley v. Ward Mfg., LLC, No.
RDB-13-1607, 2014 WL 3368050, at *1 (D.Md. July 8, 2014)
(alteration in original) (quoting Kerns v. United
States, 585 F.3d 187, 192 (4th Cir. 2009)).
factual challenge, the plaintiff bears the burden of proving
the facts supporting subject matter jurisdiction by a
preponderance of the evidence. U.S. ex rel. Vuyyuru v.
Jadhav, 555 F.3d 337, 347 (4th Cir. 2009). In
determining whether the plaintiff has met this burden, the
court “is to regard the pleadings' allegations as
mere evidence on the issue, and may consider evidence outside
the pleadings without converting the proceeding to one for
summary judgment.” Richmond,
Fredericksburg & Potomac R. Co. v. United
States, 945 F.2d 765, 768 (4th Cir. 1991) (citing
Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982)).
the Court applies “the standard applicable to a motion
for summary judgment, under which the nonmoving party must
set forth specific facts beyond the pleadings to show that a
genuine issue of material fact exists.” Id.
(citing Trentacosta v. Frontier Pac. Aircraft Indus.,
Inc., 813 F.2d 1553, 1559 (9th Cir. 1987)). The movant
“should prevail only if the material jurisdictional
facts are not in dispute and the [movant] is entitled to
prevail as a matter of law.” Id. (citing
Trentacosta, 813 F.2d at 1558). Unlike under the summary
judgment standard, however, the Court is permitted to decide
disputed issues of fact, Kerns, 585 F.3d at 192, and weigh
the evidence, Adams, 697 F.2d at 1219.
28 U.S.C. § 1332(a)(1) (2012), district courts
“have original jurisdiction of all civil actions where
the matter in controversy exceeds the sum or value of $75,
000, exclusive of interest and costs, and is between . . .
citizens of different States.” The parties must be
completely diverse, “meaning that ‘no party
shares common citizenship with any party on the other
side.'” Cunningham v. Twin City Fire Ins.
Co,669 F.Supp.2d 624, 627 (D.Md. 2009) (quoting
Mayes v. Rapoport,198 F.3d 457, 461 (4th Cir.
1999)). The Court construes 28 U.S.C. § 1332 strictly
and resolves any doubts against federal jurisdiction.
Trans/Air Mfg. Corp. v. Merson, 524 F.Supp.2d 718,
721 (D.Md. 2007) (citation omitted). When determining whether
there is diversity jurisdiction, the Court considers the
citizenship of the parties when the action commenced.
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