United States District Court, D. Maryland
MEMORANDUM OPINION AND ORDER
J. HAZEL United States District Judge
before the Court are Plaintiff Stifel, Nicolaus &
Company. Inc.'s (hereinafter. Plaintiff or
"Stifel") Motions for Leave to Conduct Limited
Jurisdictional Discovery of Defendants Longs Peak Resources.
LLC ("LPR") and Vertex Energy Partners. LLC
("Vertex"). ECF Nos. 24 and 39. A hearing on these
motions was held on October 24, 2016. See Local Rule
105.6 (D. Md.). for the reasons that follow. Plaintiffs
Motion for Leave to Conduct Limited Jurisdictional Discovery
of Defendant LPR is denied and Plaintiff's Motion for
Leave to Conduct Limited Jurisdictional Discovery of
Defendant Vertex is granted.
2014, Stifel. an investment banking firm, was engaged,
through its Director. James Lee. by Defendant Firemoon Energy
LLC ("Firemoon"), to obtain financing for
Firemoon's ventures in the oil and gas industry. ECF No.
9 ¶¶ 8-11: ECF No. 9-1. According to Plaintiff.
Stifel introduced Firemoon and its owners to Juniper Capital
Advisors ("Juniper"), a potential investor. ECF No.
9 ¶ 22. A little over a year later, two of the equity
owners of Firemoon. Everett Toombs and David Clarkson.
created a new entity called Vertex. Id. ¶ 28.
Vertex was allegedly formed for the purpose of investing in
various oil and gas properties, through a new entity to be
formed and owned jointly by Vertex and Juniper. Id.
¶ 32. This new entity would be funded with $65 million
in equity capital from Juniper. Id.
LPR was added to the case in the Amended Complaint. ECF No.
9. Plaintiff alleges that LPR was the Vertex-Juniper joint
venture envisioned when Vertex was formed and is the
recipient of the $65 million in financing from Juniper.
Id. ¶ 39. Plaintiff now claims that, despite
successfully obtaining the financing based on Stifel's
connections and efforts. Defendants never paid Plaintiff for
their services. Id. ¶¶ 49-52.
LPR and Vertex have each filed a Motion to Dismiss in this
case asking, in part, for the case to be dismissed for lack
of personal jurisdiction. ECF Nos. 18 and 32. Prior to
responding to the Motions. Plaintiff has requested permission
to conduct limited jurisdictional discovery relating to the
Court's personal jurisdiction over LPR and Vertex.
assert personal jurisdiction over a nonresident defendant,
two conditions must be satisfied: (1) the exercise of
jurisdiction must be authorized under the state's
long-arm statute: and (2) the exercise of jurisdiction must
comport with the due process requirements of the Fourteenth
Amendment." Carefirst of Maryland, Inc. v. Carefirst
Pregnancy Centers. Inc., 334 F.3d 390. 397 (4th Cir.
2003). Plaintiff relies upon section (b)(1) of Maryland's
Long-Arm Statute as the basis for the Court's personal
jurisdiction over Defendants. That section provides, in
relevant part, that "[a] court may exercise personal
jurisdiction over a person, who directly or by an agent,
[t]ransacts any business or performs any character of work or
service in the State." Md. Code. Cts. & Jud. Proc.
§ 6-103(b)(1). If Plaintiff can establish that the
Maryland Long-Arm statute is satisfied, the Court then
considers whether the exercise of jurisdiction over
Defendants would violate the Due Process Clause. This inquiry
may proceed under a theory of general or specific
Plaintiff asserts that the Court has specific jurisdiction
over Defendants, which permits a court to exercise
jurisdiction over a non-resident defendant when a cause of
action arises out of the defendant's minimum contacts
with the forum. See ECF No. 24 at 11; ECF No. 39 at
There are three factors that Courts have reviewed to guide
decision making regarding a showing of specific jurisdiction:
"(1) whether the non-forum defendant purposely directed
its activities toward residents of the forum state or
purposely availed itself of the privilege of conducting
activities therein; (2) whether plaintiff's cause of
action arises out of or results from the defendant's
forum-related contacts; and (3) whether the forum's
exercise of personal jurisdiction in the case is reasonable,
i.e. is consistent with 'fair play and substantial
justice.'" Pharmabiodevice Consulting. LLC v.
Evans. No. GJH-14-00732. 2014 WL 3741692. at *7 (D. Md.
July 28. 2014)(quoting Burger King Corp. v.
Rudzewicz, 471 U.S. 462. 477-78 (1985)). It is the
Plaintiffs burden to prove personal jurisdiction by a
preponderance of the evidence. Combs v. Bakker, 886
F.2d 673. 676 (4th Cir. 1989).
The Court may. as Plaintiff has requested, permit limited
discovery on the issue of personal jurisdiction. See
Mylan Labs., Inc. v. Akzo. N. V., 2 F.3d 56, 64 (4lh
Cir. 1993). The decision to permit jurisdictional discovery
is within the discretion of the District Court. See e.g.
Base Metal Trading. Ltd. v. OJSC "Novokuznetsk Aluminum
Factory", 283 F.3d 208, 216 n.3 (4th Cir. 2002).
order to demonstrate that they are entitled to jurisdictional
discovery. Plaintiff must, as a threshold matter, make
assertions regarding Defendants" contact with the forum
state that are more than speculative or conclusory. See
Carefirst of Maryland, Inc. v. Careftrst Pregnancy Centers.
Inc.. 334 F.3d 390. 402- 03 (4th Cir. 2003)
("'When a plaintiff offers only speculation or
conclusory assertions about contacts with a forum state, a
court is within its discretion in denying jurisdictional
discovery.'*); see also ALS Scan. Inc. v. Digital
Serv. Consultants. Inc.. 293 F.3d 707. 716 n 3 (4th Cir.
2002). Additionally. Plaintiff must make a further, concrete
proffer of the facts they wish to ascertain and a showing of
how those facts would alter the personal jurisdiction
analysis. See ALS Scan. Inc., 293 F.3d at 716 n. 3
(upholding denial of jurisdictional discovery where "ALS
Scan has failed...to proffer any further facts that it could
demonstrate that would be material to the limited
in regards to Defendant Vertex. Plaintiff asserts that
Vertex's affiliation with Firemoon establishes
jurisdiction over Vertex: specifically, that the contractual
provision through which Firemoon consented to jurisdiction
applies to Vertex and that the contacts of Firemoon's
agents with Stifel. are in effect contacts made by Vertex.
ECF No. 39 at 2. In support of this argument. Plaintiff
points to an email sent by Clarkson to Stifel in Bcthesda,
Maryland from what appears to be a Vertex email account,
suggesting contact by Vertex with Stifel in this
jurisdiction. See, e.g., ECF No. 39-4 at 3. Toombs,
via his Firemoon email account, was also included by Clarkson
on the same above-referenced email chain, raising additional
questions about the level of affiliation, if any, between the
two corporations. Id. Plaintiff proffers that
discovery may reveal further information regarding the
formation of Vertex, its affiliation with Firemoon and its
contact with Stifel ...