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Kangde Xin America LLC v. Wheeler Avenue, LLC

United States District Court, D. Maryland

October 26, 2016

KANGDE XIN AMERICA, LLC, Plaintiff,
v.
WHEELER AVENUE, LLC, d/b/a OCEAN LAMINATING FILMS,

          MEMORANDUM OPINION

          Richard D. Bennett United States District Judge

         Pending before the Court is defendant Wheeler Avenue, LLC's Motion to Dismiss Amended Complaint (“Defendant's Motion”) for lack of personal jurisdiction. (ECF No. 23.) The parties' submissions have been reviewed, and no hearing is necessary. See Local Rule 105.6 (D. Md. 2016). For the reasons stated below, Defendant's Motion is DENIED.

         BACKGROUND

         Plaintiff Kangde Xin America, LLC (“KDX” or “plaintiff”) is a limited liability company organized under the laws of Maryland with its principal place of business located in Easton, Maryland. (ECF No. 21 at ¶ 1.) Defendant Wheeler Avenue, LLC (“Wheeler” or “defendant”) is a limited liability company organized under the laws of Rhode Island with its principal place of business located in Cranston, Rhode Island. (Id. at ¶ 2.) Defendant conducts business under the name “Ocean Laminating Films, ” and is engaged in the distribution of laminating films in the United States, including in Maryland. (Id. at ¶¶ 2-3.) The parties have conducted business with each other for at least four (4) years, including through a non-exclusive distributor/agent agreement. (ECF No. 21 at ¶ 10.) Plaintiff's breach of contract claims in this case are based on two transactions: (1) defendant's alleged default on a promissory note entered into by the parties in 2012; and (2) defendant's alleged failure to make payment on goods ordered and received by defendant. (Id. at ¶¶ 22-25.)

         STANDARD OF REVIEW

         A motion to dismiss under Rule 12(b)(2) of the Federal Rules of Civil Procedure for lack of personal jurisdiction challenges a court's authority to exercise its jurisdiction over the moving party. Combs v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989). The jurisdictional question is “one for the judge, with the burden on the plaintiff ultimately to prove the existence of a ground for jurisdiction by a preponderance of the evidence.” Id. A court may hold an evidentiary hearing or permit discovery as to the jurisdictional issue, but it also may resolve the issue on the basis of the complaint, motion papers, affidavits, and other supporting legal memoranda. Consulting Eng'rs Corp. v. Geometric Ltd., 561 F.3d 273, 276 (4thCir. 2009); see also Armstrong v. Nat'l Shipping Co. of Saudi Arabia, Civ. A. No. ELH-13-03702, 2015 WL 751344, *3 (D. Md. Feb. 20, 2015). In the latter situation, a plaintiff need only make “a prima facie showing of a sufficient jurisdictional basis to survive the jurisdictional challenge.” Consulting Eng'rs Corp., 561 F.3d at 276. When considering whether the plaintiff has made the requisite showing, “the court must take all disputed facts and reasonable inferences in favor of the plaintiff.” Carefirst of Maryland, Inc. v. Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390, 396 (4th Cir. 2003).

         ANALYSIS

         Sitting in diversity, this Court may exercise personal jurisdiction over the non-resident defendant if “(1) the applicable state long-arm statute, confers jurisdiction and (2) the assertion of that jurisdiction is consistent with constitutional due process. Nichols v. G.D. Searle & Co., 991 F.2d 1195, 1199 (4th Cir. 1993). Maryland courts have consistently held that the state's long-arm statute, Md. Code Ann., Cts. & Jud. Proc., § 6-103, “is coextensive with the reach of the Due Process Clause of the United States Constitution.” Perdue Foods LLC v. BRF S.A., 814 F.3d 185, 188 (4th Cir. 2016) (quoting Beyond Sys., Inc. v. Realtime Gaming Holding Co., LLC, 388 Md. 1, 878 A.2d 567, 580 (2005)). Thus, the “statutory inquiry merges with [the] constitutional inquiry.” Id. (citing Stover v. O'Connell Assocs., Inc., 84 F.3d 132, 135 (4th Cir.1996)).

         The court's jurisdiction may be general, where the defendant has continuous and systematic contacts in the forum, or specific, where defendant's contacts form the basis of the suit. Purdue, 814 F.3d at 188. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 & n. 8, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). Here, plaintiff does not allege that defendant had continuous and systematic contacts with Maryland, but, rather, asserts that this Court has specific personal jurisdiction over Wheeler based upon Wheeler's “purposeful established minimum contacts” with this forum which gave rise to this suit. (ECF No. 22 at 4-5.)

         For a court to have specific personal jurisdiction over a defendant, the defendant must have “purposefully established minimum contacts in the forum State” such “that [it] should reasonably anticipate being haled into court there.” Perdue, 814 F.3d at 189 (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985)). In determining whether specific jurisdiction exists, the court considers “(1) the extent to which the defendant has purposefully availed itself of the privilege of conducting activities in the state; (2) whether the plaintiffs' claims arise out of those activities directed at the state; and (3) whether the exercise of personal jurisdiction would be constitutionally ‘reasonable.'” Id. (quoting ALS Scan, Inc. v. Digital Serv. Consultants, Inc., 293 F.3d 707, 711-12 (4th Cir. 2002), cert. denied, 537 U.S. 1105, 123 S.Ct. 868, 154 L.Ed.2d 773 (2003)). The plaintiff must prevail on each prong to survive a motion to dismiss. Consulting Engineers Corp. v. Geometric Ltd., 561 F.3d 273, 278 (4th Cir. 2009).

         In support of its Motion to Dismiss, Wheeler argues that the non-exclusive factors set forth in Consulting Engineers do not support a finding that Wheeler has purposefully availed itself of this forum. (ECF No. 23-1 at 5-6.) These factors include:

• whether the defendant maintains offices or agents in the forum state, see McGee v. Int'l Life Ins. Co., 355 U.S. 220, 221, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957);
• whether the defendant owns property in the forum state, see Base Metal Trading, Ltd. v. OJSC, 283 F.3d 208, 213 (4th Cir.2002);
• whether the defendant reached into the forum state to solicit or initiate business, see McGee, 355 U.S. at 221, 78 S.Ct. 199; Burger King, ...

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