United States District Court, D. Maryland
Lipton Hollander United States District Judge.
February 10, 2017, Payments IP Pty. Ltd. (“Payments
IP”), an Australian company, sued B52 Media, LLC
(“B52”) and Jonathan W. Bierer, as personal
representative of the Estate of Lonnie Borck (collectively,
the “B52 Defendants”). ECF 1. Borck had been the
owner of B52. Id. ¶ 5. The suit is rooted in a
dispute as to the ownership of the domain name
“Funding.com” (the “Domain”).
IP alleged that, in the summer of 2016, it contracted with
the B52 Defendants to purchase the Domain. Id.
¶¶ 15-25. In December of 2016, however, Payments IP
noticed that the Domain had been placed on an
“administrative freeze” by the domain registrar,
eNom.com, because the Domain was the subject of litigation.
Id. ¶ 26. It was at that time that Payments IP
discovered that a third party, Suraj Kumar Rajwani, was
asserting ownership of Funding.com, and had filed suit in the
Superior Court of California, County of San Francisco,
against the B52 Defendants and three other parties related to
the Domain's registration. Id; see Rajwani v. B52
Media LLC et al, Case CGC-16-554684 (Cal. Super. Ct.)
(the “California case”).
IP filed for leave to intervene in the California case on
February 3, 2017. The California court granted that motion on
February 7, 2017. See ECF 43-9 at 4 (California case
docket). Three days later, on February 10, 2017, Payments IP
filed this suit, alleging six causes of action against the
B52 Defendants. ECF 1. Four days after that, Payments IP
filed its complaint in intervention in the California state
court, asserting claims very similar to those alleged in this
Court. See ECF 43-7 (Complaint in Intervention in
the California case).
particular, in the Maryland case, Payments IP's Complaint
sought a declaratory judgment as to its ownership of the
Domain. ECF 1 at 7-8. In addition, plaintiff alleged breach
of contract; fraud and deceit; rescission and restitution;
conversion; and unjust enrichment. Id. at 8-14. In
May 2017, Payments IP filed an Amended Complaint, adding Mr.
Rajwani as a defendant as to the declaratory judgment claim
only. ECF 31.
is alleged on the basis of diversity of citizenship.
Id. ¶¶ 11-15. Plaintiff alleges that B52
is a Maryland limited liability company with its principal
office in Maryland; Mr. Bierer is a citizen of Maryland; Mr.
Borck had lived in Maryland and his Estate is administered in
Maryland; Payments IP is a foreign company; and Mr. Rajwani
is a citizen of California. Id. ¶¶ 11-14.
The amount in controversy allegedly exceeds $75, 000.
Id. ¶ 14.
motions are pending. With regard to ECF 1, the B52 Defendants
filed a motion to stay this case, pending the resolution of
the California case. ECF 13 (“First Motion”).
Payments IP opposed the First Motion. ECF 18. The B52
Defendants replied. ECF 22. Payments IP subsequently sought
leave to file a surreply (ECF 23, “Motion for
Surreply”), which the B52 Defendants opposed. ECF 26.
plaintiff filed the Amended Complaint, the B52 Defendants
renewed their motion to stay. ECF 34 (“Second
Motion”). Payments IP opposes the Second Motion. ECF
40. Mr. Rajwani also filed a motion to dismiss or stay. ECF
43. His motion is supported by a memorandum of law (ECF 43-1)
(collectively, the “Rajwani Motion”), and several
exhibits. Payments IP opposes the Rajwani Motion. ECF 51.
Rawjani has replied. ECF 54 (“Reply”).
December 6, 2017, counsel for Payments IP informed the Court
that the California case had been removed to federal court.
ECF 69; see Rajwani v. B52 Media LLC et al., Case
3:17-cv-06848-VC (N.D. Cal.). Mr. Rajwani moved to remand the
case to state court, see Case 3:17-cv-06848-VC at
ECF 13, and the motion to remand was granted on February 9,
2017. See Id. at ECF 22. Counsel for Payments IP
informed the Court of the remand on February 14, 2018. ECF
drafting of this Memorandum Opinion was almost completed
when, on February 16, 2018, B52 filed a Suggestion of
Bankruptcy. ECF 71. Pursuant to 11 U.S.C. § 362,
“all legal proceedings against Defendant B52 are
automatically stayed.” Id. B52's
bankruptcy filing, attached to the Suggestion of Bankruptcy
as an exhibit, lists as creditors every other party in this
case: Payments IP; Suraj Kumar Rajwani; and Jonathan Bierer.
ECF 71-1 at 5. Although the case is stayed as to B52, both
B52 and Bierer filed joint motions. Therefore, I shall refer
to them collectively in the discussion of their submissions.
hearing is necessary to resolve the pending motions.
See Local Rule 105.6. As indicated, this case must
be stayed as to B52. And, as discussed, infra, a
stay of the case is appropriate.
reasons that follow, I shall GRANT the Rajwani Motion in part
and DENY it in part. This Court is satisfied that defendants
have made a prima facie showing of personal
jurisdiction over Mr. Rajwani. However, the declaratory
judgment count shall be stayed as to Mr. Rajwani and all
other claimants, so long as the California court retains
jurisdiction over the Domain. I shall GRANT the Second Motion
as to Bierer, in his capacity as representative of the Estate
of Lonnie Borck, pending resolution of the California case.
And, I shall DENY the Motion for Surreply and DENY the First
Motion, as moot.
Rajwani has moved to dismiss the Amended Complaint under Rule
12(b)(1) and 12(b)(2), asserting that this Court lacks
jurisdiction over the Domain; that this Court lacks personal
jurisdiction over him; or, in the alternative, that the case
should be stayed pending the resolution of the California
case. ECF 43. He also claims that he moves
to dismiss under Rule 12(b)(6) (id. at 1), but his
memorandum does not address the alleged failure of the
Amended Complaint to state a claim. Because the motion to
dismiss for lack of personal jurisdiction would, if granted,
remove him from the case, I shall consider it first.
Motion to Dismiss for Lack of Personal Jurisdiction
Rajwani's motion to dismiss for lack of personal
jurisdiction is predicated on Fed.R.Civ.P. 12(b)(2). ECF 43.
“[A] Rule 12(b)(2) challenge raises an issue for the
court to resolve, generally as a preliminary matter.”
Grayson v. Anderson, 816 F.3d 262, 267 (4th Cir.
2016). Under Rule 12(b)(2), the burden is “on the
plaintiff ultimately to prove the existence of a ground for
jurisdiction by a preponderance of the evidence.”
Combs v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989);
see Universal Leather, LLC v. Koro AR, S.A., 773
F.3d 553, 558 (4th Cir. 2014).
the existence of jurisdiction turns on disputed factual
questions the court may resolve the [jurisdictional]
challenge on the basis of a separate evidentiary hearing, or
may defer ruling pending receipt at trial of evidence
relevant to the jurisdictional question.”
Combs, 886 F.2d at 676. A court may also, in its
discretion, permit discovery as to the jurisdictional issue.
See Mylan Laboratories, Inc. v. Akzo, N.V., 2 F.3d
56, 64 (4th Cir. 1993). However, neither discovery nor an
evidentiary hearing is required to resolve a motion under
Rule 12(b)(2). See generally 5B C. Wright & A.
Miller, Federal Practice & Procedure § 1351
(3d ed. 2004, 2011 Supp.). Rather, the district court may
address the question of personal jurisdiction as a
preliminary matter, ruling solely on the basis of motion
papers, supporting legal memoranda, affidavits, and the
allegations in the complaint. Consulting Engineers Corp.
v. Geometric Ltd., 561 F.3d 273, 276 (4th Cir. 2009).
circumstance, the plaintiff need only make “a prima
facie showing of a sufficient jurisdictional basis to survive
the jurisdictional challenge.” Id.; see
Grayson, 816 F.3d at 268. Of import here,
“‘[a] threshold prima facie finding that
personal jurisdiction is proper does not finally settle the
issue; plaintiff must eventually prove the existence of
personal jurisdiction by a preponderance of the evidence,
either at trial or at a pretrial evidentiary
hearing.'” New Wellington Fin. Corp. v.
Flagship Resort Development Corp., 416 F.3d 290, 294 n.5
(4th Cir. 2005) (citation omitted).
deciding 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). But,
“district courts are not required to look solely to the
plaintiff's proof in drawing those inferences.”
Mylan Laboratories, 2 F.3d at 62.
Civ. P. 4(k)(1) authorizes a federal district court to
exercise personal jurisdiction over a defendant in accordance
with the law of the state in which the district court is
located. Carefirst of Maryland, 334 F.3d at 396.
Therefore, “to 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.” Id.
Maryland's Long-Arm Statute
long-arm statute is codified at Md. Code (2013 Repl. Vol.,
2017 Supp.), § 6-103(b) of the Courts & Judicial
Proceedings Article (“C.J.”). It authorizes
“personal jurisdiction over a person, who directly or
by an agent, ” id.:
(1) Transacts any business or performs any character of work
or service in the State;
(2) Contracts to supply goods, food, services, or
manufactured products in the State;
(3) Causes tortious injury in the State by an act or omission
in the State;
(4) Causes tortious injury in the State or outside of the
State by an act or omission outside the State if he regularly
does or solicits business, engages in any other persistent
course of conduct in the State or derives substantial revenue
from goods, food, services, or manufactured products used or
consumed in the State;
(5) Has an interest in, uses, or possesses real property in
the State; or
(6) Contracts to insure or act as surety for, or on, any
person, property, risk, contract, obligation, or agreement
located, executed, or to be performed within the State at the
time the contract is made, unless the parties otherwise
provide in writing.
interpreting the reach of Maryland's long-arm statute, a
federal district court is bound by the interpretations of the
Maryland Court of Appeals. See Snyder v. Hampton Indus.,
Inc., 521 F.Supp. 130 (D. Md. 1981), aff'd,
758 F.2d 649 (4th Cir. 1985); accord Mylan
Laboratories, 2 F.3d at 61. Regarding the interaction
between the two conditions for personal jurisdiction, the
Maryland Court of Appeals has stated: “Because we have
consistently held that the reach of the long arm statute is
coextensive with the limits of personal jurisdiction
delineated under the due process clause of the Federal
Constitution, our statutory inquiry merges with our
constitutional examination.” Beyond Systems, Inc.
v. Realtime Gaming Holding Co., 388 Md. 1, 15, 878 A.2d
567, 576 (2005) (citing Mohamed v. Michael, 279 Md.
653, 657, 370 A.2d 551, 553 (1977)).
Mackey v. Compass Marketing, Inc., 391 Md. 117, 141
n.5, 892 A.2d 479, 493 n.5 (2006), the Maryland Court of
Appeals clarified that it “did not, of course, mean by
this that it is now permissible to simply dispense with
analysis under the long-arm statute.” Rather, courts
must still engage in the two-step analysis: “First, we
consider whether the requirements of Maryland's long-arm
statute are satisfied.” CSR, Ltd. v. Taylor,
411 Md. 457, 472, 983 A.2d 492, 501 (2009) (citations
omitted). “Second, we consider whether the exercise of
personal jurisdiction comports with the requirements imposed
by the Due Process Clause of the Fourteenth Amendment.”
Amended Complaint, Payments IP alleges that this Court has
personal jurisdiction over Mr. Rajwani because he
“purposefully availed himself of the privilege of
conducting activities in Maryland by directly contacting and
thereafter contracting” with the B52 Defendants, and
that Payments IP's claim arises out of these events. ECF
31, ¶ 13. Furthermore, Payments IP alleges that
“Mr. Rajwani's actions have caused and continue to
cause tortious injury in ...