United States District Court, D. Maryland
Stephanie A. Gallagher United States Magistrate Judge
Ultimate Outdoor Movies, LLC and Laura Landers
(“Plaintiffs”) filed suit against Defendants
Charles Hunter, Matthew Dias, and FunFlicks Audiovisuals
(collectively “the California Defendants”); Todd
Severn and FunFlicks, LLC (collectively, “the Severn
Defendants”); and James Gaither and NATJAY, LLC
(collectively, “the Gaither Defendants”). ECF 1.
Plaintiffs allege fraud; aiding and abetting; breach of
contract; violations of the Maryland Uniform Trade Secrets
Act, Md. Code Ann., Com. Law § 11-1201 et seq.,
and the Federal Trade Secrets Act, 18 U.S.C. § 1836;
defamation; intentional interference with contract;
violations of the Federal Wiretap Act, 18 U.S.C. § 2511,
and the Texas Wiretap Act, Tex. Civ. Prac. & Rem. Code
Ann. §123.001 et seq.; violations of the
Federal Lanham Act, 15 U.S.C. §§ 1125(a)(1)(A)-(B);
unfair competition; intentional interference with economic
relations; and civil conspiracy. ECF 21. Presently pending is
the California Defendants' Motion to Dismiss for Lack of
Personal Jurisdiction and Failure to State a
Claim. ECF 26. Plaintiffs opposed the
Defendants' Motion on December 5, 2018, and Defendants
filed a Reply. ECF 32, 45. On December 13, 2018, Plaintiffs
filed a Supplemental Opposition to Defendants' Motion,
ECF 40, which Defendants moved to strike as untimely, and in
the alternative, requested that the Court accept
Defendants' additional pages of argument in response to
Plaintiffs' supplemental arguments, ECF 49. Plaintiffs
filed a Motion for Leave to File a Supplemental Opposition on
December 27, 2018, ECF 50, and an Opposition to
Defendants' Motion to Strike, ECF 54. Defendants opposed
Plaintiffs' Motion, ECF 60, and Plaintiffs did not file a
Court held a hearing on Defendants' Motion on January 23,
2019. ECF 86. For the reasons stated below, I shall deny
Defendants' Motion to Strike Plaintiffs' Supplemental
Opposition to Defendants' Motion, ECF 49, grant
Plaintiffs' Motion for Leave to File a Supplemental
Opposition, ECF 50, and defer Defendants' Motion to
Dismiss, ECF 26, pending jurisdictional discovery, which
shall be conducted in accordance with the accompanying Order.
Defendants Matthew Dias (“Dias”) and Charles
Hunter (“Hunter”) are residents of California.
ECF 26-5 ¶ 7, 26-6 ¶ 8. Defendant FunFlicks
Audiovisuals (“FF-AV”), a company that provides
outdoor movie entertainment, was incorporated in California
and maintains its principal place of business in Bakersfield,
California. ECF 26-5 ¶¶ 3-4, 26-6 ¶¶ 4-5.
Dias is the Vice President and Chief Financial Officer of
FF-AV, ECF 26-5 ¶ 2, and Hunter is the Chief Executive
Officer of FF-AV, ECF 26-6 ¶ 3. FF-AV does not have an
office or any employees in Maryland, does not own property in
Maryland, does not have a resident agent for service of
process in Maryland, does not have a mailing address or
telephone number in Maryland, and does not maintain a bank
account in Maryland. ECF 26-5 ¶¶ 5-6, 26-6
¶¶ 6-7. Dias and Hunter have never lived in
Maryland, have never owned, rented or leased any real or
personal property in Maryland, have never worked or attended
school in Maryland, have never paid taxes in Maryland or
maintained any type of bank or securities account in the
state, and have never traveled to Maryland to participate in
any judicial proceedings or arbitrations. ECF 26-5
¶¶ 8-15, 26-6 ¶¶ 9-16.
Ultimate Outdoor Movies, LLC (“UOM”) is a
Texas-based outdoor inflatable movie screen rental company.
ECF 21 ¶ 2. Plaintiff Laura Landers (“Ms.
Landers”), a Texas resident, is the full owner of UOM.
Id. ¶ 1, 56 n.2. Ms. Landers's husband,
Darrell Landers (“Mr. Landers”) is Chief
Executive Officer and Vice President of UOM. Id.
¶ 56 n.2. Mr. Landers is not a party to this action.
Defendant Todd Severn (“Severn”) is the original
owner and creator of the outdoor inflatable movie screen
rental brand known as “FunFlicks.” Id.
¶ 48. Severn operated the business as FunFlicks, LLC
(“FF-Severn”) in Maryland, from approximately
2002 to January 1, 2013. Id. During this time,
FF-Severn granted non-exclusive licenses to individuals and
small business owners, including Mr. Landers in or about
April of 2008, for the purpose of operating a business under
the FunFlicks name. Id. ¶¶ 49, 55. When
UOM was formed in 2010 under the name “Fun Flicks
Outdoor Movies of Texas, Inc., ” Mr. Landers
transferred his FunFlicks licenses to UOM. Id.
¶ 2, 56. In or about December of 2012, Mr. Landers
incorporated a separate entity in Texas, “FunFlicks,
Inc.” (“FF-Landers”). Id. ¶
58. In or about January of 2013, FF-Landers bought the rights
to the FunFlicks brand from FF-Severn through an asset
purchase agreement (“2013 APA”). Id.
¶¶ 15, 58-61.
about the fall of 2017, FF-Landers withheld payment to
FF-Severn, and the parties began negotiating a restructuring
of the 2013 APA. Id. ¶¶ 96-125. In or
about December of 2017, FF-Severn approached the California
Defendants to replace FF-Landers as the buyer of the
FunFlicks brand. Id. ¶¶ 115-125. The
California Defendants and FF-Severn executed an asset
purchase agreement (“2017 APA”), selling the
assets covered under the 2013 APA to the California
Defendants. Id. ¶ 116. The 2017 APA is governed
by Maryland law. Id. ¶¶ 118, 119, Exh. 4.
Plaintiffs allege the 2013 APA did not cover the
after-acquired property of FF-Landers and, when FF-Landers
learned of the 2017 APA, FF-Landers and FF-Severn began a
second round of negotiations to resolve their remaining
disputes over the 2013 APA. Id. ¶¶ 129,
130, 139. During negotiations, FF-Severn had control of the
www.FunFlicks.com URL, held in escrow on a separate server,
pursuant to the 2013 APA. Id. ¶ 137(1) n.4.
negotiations were ongoing between FF-Landers and FF-Severn,
Plaintiffs allege that the California Defendants contacted
Ms. Landers to discuss UOM's continuation of its license
under the FunFlicks brand. Id. ¶ 140. They also
allege that, on or about February 5, 2018, the California
Defendants executed a new licensing agreement with Defendants
James Gaither (“Gaither”) and his Maryland-based
company, NATJAY, LLC, for Gaither to operate as a FunFlicks
licensee in the Maryland territory. Id. ¶ 182.
On or about February 27, 2018, Plaintiffs allege that
Gaither, on behalf of all of the Defendants, sent an email to
all FunFlicks customers from UOM's mid-Atlantic client
list, warning clients, among other things, that a
“Texas business has been marketing outdoor movies using
the FunFlicks name without authorization.” Id.
¶ 212. On March 3, 2018, FF-Landers and FF-Severn
executed a Release and Settlement Agreement, settling their
dispute over the 2013 APA. Id. ¶¶ 245-255.
On or about March 1, 2018, FF-Severn disconnected the
FunFlicks URL link to FF-Landers's server and redirected
the domain to the California Defendants. Id.
¶¶ 259, 260. Plaintiffs allege that the California
Defendants “re-create[d] related directional protocols
on its own separate e-mail/web server” for emails sent
to “@funflicks.com.” Id. ¶¶
about April 27, 2018, a former UOM client in Maryland,
“Megan, ” received an email from Gaither in
response to Megan's inquiry sent to firstname.lastname@example.org
and addressed to “Kenneth, ” a UOM employee.
Id. ¶ 274. After receiving Gaither's
response, Megan booked her event with Gaither and NATJAY,
LLC, and not with UOM. Id. ¶¶ 275, 276,
Exh. 16. On or about June 14, 2018, Mr. Landers sent an email
to “email@example.com, ” posing as a client
seeking FunFlicks services for events in Alabama, Arizona,
California, Colorado, Connecticut, Florida, Illinois,
Indiana, Louisiana, North Carolina, and Texas. Id.
¶¶ 269, 270, Exh. 14. Mr. Landers never received
the email he sent to his former address, but the fictitious
client received a response from Severn. Id. ¶
California Defendants' Motion to Dismiss under
Fed.R.Civ.P. 12(b)(2) challenges this Court's personal
jurisdiction over them. 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); Carefirst
of Md., Inc. v. Carefirst Pregnancy Ctrs., Inc., 334
F.3d 390, 396 (4th Cir. 2003) (citing Mylan Labs., Inc.
v. Akzo, N.V., 2 F.3d 56, 59-60 (4th Cir. 1993)). When
“a district court decides a pretrial personal
jurisdiction motion without conducting an evidentiary
hearing, the plaintiff need only make a prima facie showing
of personal jurisdiction.” Carefirst of Md.,
334 F.3d at 396 (citing Combs, 886 F.2d at 676). To
determine whether the plaintiff has met this burden,
“the court must construe all relevant pleading
allegations in the light most favorable to the plaintiff,
assume credibility, and draw the most favorable inferences
for the existence of jurisdiction.” Combs, 886
F.2d at 676. The court need not “look solely to the
plaintiff's proof in drawing” all reasonable
inferences in plaintiff's favor, and may also look at the
defendant's proffered proof and assertions regarding
defendant's lack of contacts with the forum state.
Mylan Labs., Inc., 2 F.3d at 62. “When the
existing record is inadequate to support personal
jurisdiction over a defendant, the plaintiff is entitled to
jurisdictional discovery if it can demonstrate that such
discovery would yield ‘additional facts' that would
‘assist the court in making the jurisdictional
determination.'” FrenchPorte IP, LLC v. Martin
Door Mfg., Inc., Civil Action No. TDC-14-0295,
2014 WL 4094265, at *5 (D. Md. Aug. 14, 2014) (first quoting
Commissariat A L'Energie Atomique v. Chi Mei
Optoelectronics Corp., 395 F.3d 1315, 1323 (Fed. Cir.
2005); and then citing Toys “R” Us, Inc. v.
Step Two, S.A., 318 F.3d 446, 456 (Fed. Cir. 2003)
(“[C]ourts are to assist the plaintiff by allowing
jurisdictional discovery unless the plaintiff's claim is
exercise personal jurisdiction over a non-resident defendant,
a court must determine that (1) the exercise of jurisdiction
is authorized under the state's long-arm statute,
pursuant to Federal Rule of Civil Procedure 4(k)(1)(A); and
(2) the exercise of jurisdiction conforms to the Fourteenth
Amendment's due process requirements. Carefirst of
Md., 334 F.3d at 396. When 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 Carbone v. Deutsche Bank Nat'l Tr.
Co., Civil Action No. RDB-15-1963, 2016 WL 4158354, at
*5 (D. Md. Aug. 5, 2016); Snyder v. Hampton Indus.,
Inc., 521 F.Supp. 130, 135-36 (D. Md. 1981),
aff'd, 758 F.2d 649 (4th Cir. 1985); see
also Mylan Labs., 2 F.3d at 61 (citing Erie R.R. v.
Tompkins, 304 U.S. 64, 178 (1938)). Moreover, courts
must address both prongs of the personal jurisdiction
analysis, despite Maryland courts consistently holding that
“the state's long-arm statute is coextensive with
the limits of personal jurisdiction set out by the due
process clause of the Constitution.” Bond v.
Messerman, 391 Md. 706, 721, 895 A.2d 990, 999 (2006);
see CSR, Ltd. v. Taylor, 411 Md. 457, 472, 984 A.2d
492, 501 (2009) (noting that the personal jurisdiction
analysis “entails dual considerations”);
Carefirst of Md., 334 F.3d at 396.
the first prong, the plaintiff must identify a provision in
the Maryland long-arm statute that authorizes jurisdiction.
Ottenheimer Publishers, Inc. v. Playmore, Inc., 158
F.Supp.2d 649, 652 (D. Md. 2001). Under the second prong,
“due process requires only that . . . a defendant . . .
have certain minimum contacts . . . such that the maintenance
of the suit does not offend ‘traditional notions of
fair play and substantial justice.'” Int'l
Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)
(quoting Milleken v. Meyer, 311 U.S. 457, 463
(1940)). This “minimum contacts” analysis depends
on the number and relationship of a defendant's contacts
to the forum state, and whether the present cause of action
stems from the defendant's alleged acts or omissions in
the forum state. Id. at 316-19.
a court may exercise two types of personal jurisdiction,
“general” or “specific.”
Bristol-Myers Squibb Co. v. Superior Court of California,
San Francisco Cty., 137 S.Ct. 1773, 1780 (2017).
“General” jurisdiction is a fairly limited
concept, since it only arises where “the continuous
corporate operations within a state [are] so substantial and
of such a nature as to justify suit against [defendant] on
causes of action arising from dealings entirely distinct from
those activities.” Int'l Shoe, 326 U.S. at
318. “For an individual, the paradigm forum for the
exercise of general jurisdiction is the individual's
domicile; for a corporation, it is an equivalent place, one
in which the corporation is fairly regarded as at
home.” Goodyear Dunlop Tires Operations, S.A. v.
Brown, 564 U.S. 915, 924 (2011). In the context
of a corporation, the paradigm bases for general jurisdiction
are “the place of incorporation and principal place of
business.” Daimler AG v. Bauman, 571 U.S. 117,
137 (2014). The Daimler court clarified that while
those paradigms are not necessarily the only bases for
general jurisdiction, it would be ...