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Becker v. Noe

United States District Court, D. Maryland

March 27, 2019

JOHN BECKER, et al. Plaintiffs,
PAUL HOWE NOE, II, el al. Defendants.


          Ellen L. Hollander United States District Judge.

         In this fraud and breach of contract case, lodged under federal and Maryland law, plaintiffs John Becker; Joan Becker; Stanley J. Sersen; Environmental Design & Resource Center, LLC ("EDRC"); and Architectural Support Group, Inc. ("ASG") filed suit against multiple defendants. They are Eco-Gen Energy, Inc. ("Eco-Gen") and four of its officers and/or advisors: Paul Howe Noe, II, "aka Paul B. Delanoe, aka Paul Boaventura-Delanoe"; Licia B. Noe, "aka Licia Boaventura-Delanoe," in her personal capacity and as trustee of the Bellagio Trust; Julia Otey; and Raoul Hamilton (collectively, the "Eco-Gen Defendants"). Id. *:¶ 6-10. Plaintiffs also sued defendants Operating Expense Consulting, LLC ("OPEX") and Ralph Warren, the managing member of OPEX (collectively, the "OPEX defendants"). Id. ¶¶ 11-12.

         The Amended Complaint (ECF 35), supported by exhibits, alleges, inter alia, that defendants engaged in a fraudulent scheme to induce plaintiffs to purchase a hybrid wind and solar powered electricity generator, called "JouleBox," as well as stock in Eco-Gen.[1] According to the Amended Complaint, defendants marketed JouleBox as a product that "can generate more electrical output than is required to power it," without using any external power source. Id. ¶ 1. However, plaintiffs maintain that the generator does not work as described. Id.

         The Amended Complaint contains five claims. Count I asserts a claim of violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), under 18 U.S.C. § 1962(c). ECF 35, ¶¶ 49-58. Count II alleges conspiracy to violate RICO, based on 18 U.S.C. § 1962(d). ECF 35, ¶¶ 59-65. In Count III, plaintiffs allege fraud. ECF 35, ¶¶ 66-70. Count IV alleges civil conspiracy. ECF 35, ¶¶ 71-74. And, Count V asserts breach of contract. ECF 35, ¶¶ 76-87. Plaintiffs seek monetary relief, including treble and punitive damages, as well as attorneys' fees and costs. See ECF 35.

         Jurisdiction is based on 28 U.S.C. § 1331, "because this action arises under the laws of the United States, namely [the RICO statute, ] 18 U.S.C. §§ \96\, et seq.;` as well as 18 U.S.C. § 1341 (mail fraud), § 1343 (fraud by wire, radio, or television), and § 2314 (transportation of stolen goals, securities, or moneys). ECF 35, ¶ 14. In addition, plaintiffs assert jurisdiction based on diversity of citizenship, pursuant to 28 U.S.C. § 1332, as well as supplemental jurisdiction under 28 U.S.C. § 1967. ECF 35, ¶ 14.

         OPEX is the sole defendant to have answered the suit. ECF 28. Warren has moved to dismiss the Amended Complaint, pursuant to Fed.R.Civ.P. 12(b)(2), for lack of personal jurisdiction (ECF 38), supported by a memorandum. ECF 38-1 (collectively, the "Warren Motion"). Plaintiffs oppose the Warren Motion (ECF 41), and submitted two exhibits. ECF 41-1; ECF 41-2. Warren has not replied, and the time to do so has expired. See Local Rule 105.6. The Eco-Gen Defendants also moved to the dismiss, pursuant to Fed.R.Civ.P. 12(b)(2), claiming lack of personal jurisdiction, and under Fed.R.Civ.P. 12(b)(6), for failure to state a claim. ECF 40. The motion is supported by a memorandum of law. ECF 40-1 (collectively, the "Eco- Gen Motion"). Plaintiffs oppose the Eco-Gen Motion (ECF 42), and defendants have replied. ECF43.

         No hearing is necessary to resolve the motions. See Local Rule 105.6. For the reasons that follow, I shall deny the Warren Motion (ECF 38). And, I shall grant the Eco-Gen Motion (ECF 40) in part and deny it in part.

         I. Factual Background[2]

         John Becker and Joan Becker (the "Beckers") are husband and wife. ECF 35, ¶ 2. They are Maryland residents. Id. Sersen, a Maryland resident, [3] is a member of EDRC and a shareholder and officer of ASG. Id. ¶ 3. EDRC, a Maryland limited liability company, filed articles of cancellation in 2017. Id. ¶ 4. However, pursuant to Md. Code (2014 Repl. Vol., 2018 Supp.), § 4A-908 of the Corporations and Associations Article ("C.A."), EDRC "continues to exist for the purpose of pursuing its claims against Defendants." Id. ASG, a Maryland corporation, "was voluntarily dissolved in 2017." Id. ¶ 5. Thereafter, pursuant to C.A. § 3-410, "Sersen became a trustee of the assets of ASG, including ASG's claims against Defendants." Id.

         OPEX "is a limited liability company organized under South Dakota law, with its principal office in South Dakota." ECF 35, ¶ 11. OPEX has two members: Warren and Mike Beaulieu. ECF 29 (Local Rule 103.3 Disclosure Statement) at 1. Warren "is a South Dakota resident, the managing member of OPEX, and a certified public accountant licensed in the State of South Dakota." ECF 35, ¶ 12. As the "owner" of OPEX, Warren "identifies OPEX as the U.S. Distributor for the JouleBox and the U.S. marketing company for Eco-Gen." Id. ¶ 35.

         Eco-Gen "is a Nevada corporation with its principal office in California." Id. ¶ 8. Hamilton "is a California resident and an officer of Eco-Gen." Id. ¶ 9. Otey is also "a California resident and an officer of Eco-Gen." Id. ¶ 10.

         Paul Howe Noe, II, also known as Paul B. Delanoe and Paul Boaventura Delanoe, is a California resident and an officer, owner, and board member of Eco-Gen. Id. ¶ 6. According to the Amended Complaint, "Mr. Noe legally changed his surname to Boaventura-Delanoe in 2013, but his name at birth was Paul Howe Noe, II, and he has continued to use that name even after he legally changed it." Id. However, Noe asserts that his name is Paul B. Delanoe, and that he was "incorrectly sued herein as Paul Howe Noe, II." ECF 15.

         Mr. Noe is married to Licia Boaventura Noe, a California resident. ECF 35, ¶ 7. In 2013, she "changed her name from Licia Boaventura Noe to Licia Boaventura-Delanoe." Id. Ms. Noe is a member of Eco Gen's "'board of technology advisors'" and a trustee of the Bellagio Trust, "which owns and licenses to Eco-Gen Energy, Inc. the purported intellectual property for the JouleBox." Id.

         According to plaintiffs, "Mr. Noe changed his name to conceal" his "long history of criminal fraud convictions and questionable financial practices." Id. ¶ 24 (citing ECF 35-6, Exhibit E; ECF 35-7, Exhibit F). Specifically, in 1989 Mr. Noe "was convicted of wire fraud by the U.S. District Court for the Eastern District of Pennsylvania." ECF 35, ¶ 24 (citing ECF 35-7). See United States v. Clifford D. Noe and Paul H. Noe, II, 1989 WL 5567, Crim. Nos. 87-00303-01, 87-00303-02, 1989 WL 5577 (E.D. Pa. Jan 19. 1989); United States v. Clifford D. Noe and Paul H. Noe, II, Crim. Nos. 87-00303-01, 87-00303-02, 1989 WL 5577 (E.D. Pa. Jan. 19 1989); United States v. Clifford D. Noe, Crim.No. 87-00303-01, 1990 WL67117, at *2 (E.D. Pa. May 16, 1990)). Also, plaintiffs allege that "[o]n August 1, 2003, the California Department of Insurance issued a Cease and Desist Order against Paul Noe for engaging in the unlicensed sale of insurance products" by "induc[ing] elderly clients to purchase living trusts." ECF 35, ¶ 24 (citing ECF 35-8, Exhibit G). And, they claim that in 2010, Mr. Noe was "ordered by the California Real Estate Commissioner to cease and desist from offering loan modification services and foreclosure rescue services in violation of California law." ECF 35, ¶ 24 (citing ECF 35-9, Exhibit H).

         In addition, plaintiffs maintain that Mr, Noe continued to use the name "Paul H. Noe, II" to thwart mortgage foreclosure proceedings on his home. ECF 35, ¶ 24 (citing Paul H. Noe, II v. Morg. Elec. Registration Sys., Inc., et al, Case No. 16-cv-06316 (CD. Cal. Aug. 23, 2016)). And, in 2016, he "filed multiple petitions for bankruptcy" under the name of Paul H. Noe, II. ECF 35, ¶ 24 (citing Paul H. Noe, II, No. 16-bk-23853 (Bankr. CD. Cal. Oct. 20, 2016) (dismissed on November 23, 2016, for failure to file schedules); Paul H. Noe, II, No. 16-bk-25416 (Bankr. CD. Cal. Nov. 22, 2016) (dismissed on December 12, 2016, for failure to file schedules)).

         Plaintiffs contend that beginning in 2009 and "continuing to the present day" defendants "have constituted an associated-in-fact enterprise" (the "Enterprise") under 18 U.S.C § 1961(4). ECF 35, ¶ 13. According to plaintiffs, defendants "conspired to perpetrate ... a scheme to defraud Plaintiffs through a litany of illegal acts, including mail fraud, wire fraud, interstate transportation of fraudulently acquired money and securities, and inducement of interstate travel in furtherance of a scheme to defraud." Id.

         Plaintiffs characterize the Enterprise as "a classic Ponzi scheme." Id. ¶ 20. Specifically, it "used a two-fold strategy comprised of collecting cash deposits on contracts to sell non-existent JouleBoxes, and selling stock in Eco-Gen to unsuspecting investors." Id. The Enterprise offered "special terms" to prospective purchasers as '"early adopters,' which would enable them to earn commissions on later sales." Id. Further, the Enterprise "cloak[ed] their scheme with indicia of legitimacy," by forming and registering Eco-Gen and OPEX with the Secretaries of State in Nevada, California, and South Dakota, securing trademark registration for the name JouleBox, filing a patent application for the hybrid electric generator, drafting and issuing a private placement memorandum to secure investments in Eco-Gen, and establishing websites for both companies." fef.¶21.

         On or about March 23, 2009, Hamilton and Otey, "on behalf of the Enterprise, filed articles of incorporation for Eco-Gen with the Nevada Secretary of State." Id. ¶ 22. Every year thereafter, "the Enterprise filed with the Nevada Secretary of State an annual list naming Mr. Hamilton and Ms. Otey as Eco-Gen's officers and directors." Id. (citing ECF 35-3, Exhibit B). Similarly, in November 2012, Otey, "on behalf of the Enterprise," registered Eco-Gen "to do business in California." Id. ¶ 23 (citing ECF 35-4, Exhibit C).

         In June 2013, Eco-Gen applied for "a trademark for the term 'JouleBox,' referring to it in the application as a 'hybrid wind-powered and solar-powered electricity generator.'" ECF 35, ¶ 25. On or about August 1, 2013, through counsel, the Enterprise "issued a Private Placement Memorandum ('PPM') for Eco-Gen." Id. ¶ 26. Per the PPM, "the Enterprise sought to finance its activities by selling $25 million worth of stock." Id. (citing ECF 35-10, Exhibit I). The PPM "identifies" the Noes, Hamilton, and Otey as "officers of Eco-Gen"; Mr. Noe and Ms. Noe as members of "Eco-Gen's Board of Technology Advisors"; and Ms. Noe as "'Trustee [who] oversees all [Intellectual Property] with the Bellagio Trust that owns most of the IP for the Hybrid Solar Generator."' ECF 35, ¶ 26 (citing ECF 35-10). Upon "information and belief," plaintiffs further allege that defendants "have used the PPM to solicit investments from numerous other victims." ECF35, ¶27.

         Plaintiffs allege that on November 4, 2013, Mr. Noe, "acting on behalf of the Enterprise," prepared '"Bank Wire Instructions' ... to make wire transfers of money in interstate commerce, to Eco-Gen's bank account at Bank of America, N.A., Van Nuys, California 91405 . .. ('Account No. 9291')." Id. ¶ 28. Then, on March 21, 2014, Mr. Noe, "using the name Delanoe and acting on behalf of the Enterprise, applied to the U.S. Patent and Trademark Office ('USPTO') for a patent for the JouleBox." Id. As the "purported inventor," he "assigned the purported intellectual property for the JouleBox to Licia Noe, as trustee for the Bellagio Trust." Id.

         According to plaintiffs, their first contact with defendants occurred "in or about the period from December 2014 to January 2015, when John Becker had several telephone calls with Ralph Warren .. . ." Id. ¶ 29. During the calls, "Warren made claims about the JouleBox, and the profits to be made investing in Eco-Gen and selling the JouleBox." Id.

         In February and March of 2015, Warren allegedly told Becker that Warren, his partner in OPEX, Mike Beaulieu, and others had invested in Eco-Gen stock. Id. ¶ 30. In addition, "Warren described the JouleBox as a solar hybrid generator" and represented that, because of the generator's "unique motor and generator technology," it "could produce more power than solar panels of the same size." Id. Also, "Warren represented to Mr. Becker that the JouleBox could run on its own continuously and perpetually, with only brief periods of downtime for annual maintenance." Id. Warren, identifying himself as a licensed certified public accountant, "represented that solar panels were not a necessary part of a JouleBox, but including them made it eligible for renewable solar energy tax credits." Id. And, he claimed that "the wind turbine component of the JouleBox made it eligible for renewable wind energy tax credits." Id. Acting on Warren's advice, Mr. Becker "engaged a tax accountant recommended by Mr. Warren who opined that the JouIeBox was eligible for renewable energy tax credits." Id.

         In mid March 2015, Warren arranged for Mr. Becker to travel to Van Nuys, California, "to visit the Eco-Gen facility." Id. ¶ 31. There, "Mr. Becker met with Mr. Noe and Ms. Otey, and also met another prospective salesman and investor, Mike Burkey." Id. During the visit, Mr. Becker observed a demonstration of the JouIeBox. Id. Specifically, "Mr. Noe started the JouIeBox, used a voltage meter to demonstrate that it was producing electricity, and connected several appliances to it to demonstrate its ability to power them." Id. Notably, this particular Joulebox "was installed indoors and did not have any solar panels." Id. However, according to the Amended Complaint, "Mr. Noe insisted that [the JouIeBox] was not connected to any source of external power, and represented to Mr. Becker that the JouIeBox could run on its own continuously and perpetually, with only brief periods of downtime for annual maintenance." Id. If true, JouIeBox would have been "a valuable and revolutionary product[.]" Id. But, plaintiffs maintain that such representations were "false." Id.

         Mr. Becker's visit purportedly "lasted less than two hours, during which he was not allowed to take photographs and was unable to see the bottom and one side of the JouIeBox." Id. At the conclusion of the visit, Otey told Mr. Becker "that she would send him documents that would enable him to invest in Eco-Gen[.]" Id.

         On or about March 30, 2015, via interstate commerce, Otey delivered to the Beckers the Subscription Agreement and the PPM dated August 1, 2013 (ECF 35-10), offering "to sell the Beckers 25, 000 shares of Eco-Gen stock for a purchase price of $25, 000." ECF 35, ¶ 32 (citing ECF 35-10). In addition, the document "included a financial pro forma which projected revenue of $8.7 million in 2015, growing to $29 million in 2017, and profits of $3.6 million in 2015, growing to $11.9 million in 2017." ECF 35, ¶ 32 (citing ECF 35-11, Exhibit J). The Amended Complaint alleges that such "claims about Eco-Gen's financial prospects were ... false." ECF 35, ¶32.

         Using "the wire transfer instructions prepared and provided by the Enterprise," the Beckers purchased 25, 000 shares of stock in Eco-Gen on March 31, 2015, and "transferred $25, 000 to Eco-Gen's Account No. 9291". Id. ¶ 33. On April 9, 2015, Otey informed Mr. Becker by email, i.e., wire communication in interstate commerce, "that 'the stock certificate and the signed paperwork should go out today.'" Id. ¶ 34. The Enterprise delivered the certificate to the Beckers in Maryland on or about April 16, 2015, via "mail, [or] private or commercial interstate carrier ... ." Id. The certificate was "signed by Ms. Otey as Secretary and Mr. Hamilton as President of Eco-Gen." Id.

         As a part of the Enterprise, "OPEX and Warren recruited other persons to serve as sales representatives to sell the JouleBox to business and consumers." Id. ¶ 35. Warren allegedly "told Mr. Becker that OPEX was selling JouleBoxes in other states, including California. Michigan, and Florida, among others, and also countries outside the U.S., including Saudi Arabia, the Philippines, and others." Id. In reliance on such representations, "John Becker agreed to serve as a sales representative for OPEX and the JouleBox for the Washington, D.C. / Baltimore area." Id. ¶ 36. And, Becker "made Sersen aware of the Enterprise's claims about the JouleBox." Id. In addition, "[t]he Enterprise published its false claims about the JouleBox on the Eco-Gen and OPEX websites[.]'` Id. In April and May 2015, Sersen reviewed these websites and then spoke with Warren. Id.

         On May 30, 2015, in reliance on the Enterprise's claims about JouleBox, EDRC "entered into a written Lease-Purchase Agreement with OPEX, to purchase a 60 kilowatt JouleBox for the total price of $329, 995.00." Id. ¶ 37; see ECF 41-1 ("Purchase Agreement"). Under the Purchase Agreement, EDRC agreed to "pay a deposit of $151, 385.00 to OPEX to be made by wire transfer to OPEX's account at Wells Fargo Bank, N.A., San Francisco, California . .. ('Account No.

         5334')." Id. ¶ 37; see also ECF 41-1 at 10. The Purchase Agreement required that, within 120 days of receipt of the deposit, i.e., by September 30, 2015, "OPEX would deliver and place into operation a working JouleBox at EDRC's location in Jessup, Maryland." ECF 35, ¶ 38.

         The Purchase Agreement, signed by Warren for OPEX, and by Sersen for EDRC, includes a forum selection clause. Paragraph 22 states, ECF 41-1 at 5:

This Purchase Agreement will be governed by and construed in accordance with the laws of the State of Maryland, including the Maryland Uniform Commercial Code and the Seller and Purchaser hereby attorn to the jurisdiction of the Courts in the State of Maryland.

         The Purchase Agreement was amended on May 30, 2015, and again on September 12, 2015. ECF 41-1 at 10-12. Each amendment states, in capital letters: "THIS AMENDMENT SHALL BE CONSTRUED AND GOVERNED BY THE LAWS OF THE STATE OF MARYLAND." Id. Sersen and Warren, as OPEX's managing member, signed both amendments. Id.

         Pursuant to a "side agreement with EDRC," the Beckers "agreed to contribute one-third of the deposit ($50, 461)" for the purchase of the JouleBox. ECF 35, ¶ 37. Mr. Becker also "agreed to forego a commission from OPEX," so as to reduce the purchase price to $302, 770.00, "and, with ASG, pay the balance of the purchase price." Id. On June 1, 2015, following "wire transfer instructions prepared by OPEX and Warren, EDRC transferred $151, 385.00 to OEPX's Account No. 5334[.]" Id. The payment was received by mail, or interstate carrier, or wire communication in interstate commerce. Id.

         On July 28, 2015, Mr. Noe, who was in California, "communicated with Sersen and Becker in Maryland," via "video conference call," using wire, radio, or television communication in interstate commerce. Id. ¶ 39. During the call, Mr. Noe "induced Sersen to travel from Maryland to Eco-Gen's office in Van Nuys, California, where Paul Noe claimed Sersen would be able to observe the purported JouleBox prototype and Eco-Gen's manufacturing facility." Id. Sersen traveled to California in August 2015. Id. During his visit, Sersen was shown a purported "prototype," but he "was told that it was not possible to visit the manufacturing facility." Id. Such conduct, according to plaintiffs, "lull[ed]" Sersen "into believing that a working JouleBox would be manufactured and delivered soon." Id.

         As mentioned, on September 12, 2015, the Purchase Agreement was amended. Id. ¶ 40. In particular, ASG was substituted for EDRC as the contract purchaser. Id. A week later, on September 19, 2015, via interstate commerce, "the Enterprise delivered to Sersen stock certificate 1231, representing 25, 000 shares of stock in Eco-Gen, provided by Eco-Gen as an incentive to ASG as an early adopter of the JouleBox." Id. ¶4l.

         The Purchase Agreement required OPEX "to pay all costs and perform all design, permitting, and construction work required to render the JouleBox operational at ASG's facility in Jessup, Maryland." Id. ¶ 42. Plaintiffs assert that "ASG performed design and permitting work on behalf of OPEX," valued at $6, 357.50, "for which ASG was entitled to be paid" under the Purchase Agreement. Id. However, plaintiffs allege that the "amount remains unpaid." Id.

         Warren allegedly sent Sersen an email on December 4, 2015, "claiming that a test had been run on a prototype JouleBox[.]" Id. ¶ 43. Further, Warren "claim[ed] that the 'test was run for 4 or 5 days and confirm[ed] . . . that the generator produced a steady 20 kW and the battery stayed at full power throughout the test period."' Id. (ellipsis in original). According to plaintiffs, Warren sought "to lull Sersen into believing that Defendants could deliver a JouleBox that actually performed as promised and persuade Sersen to not cancel the Lease-Purchase Agreement." Id.

         By early March 2016, "the Enterprise had missed its deadline for delivering a JouleBox by six months, and Plaintiffs received reports that a potential financial backer of Eco-Gen had withdrawn[.]" Id. ¶ 44. As a result, "Plaintiffs lost confidence in the Enterprise's ability to deliver a JouleBox." Id.

         Sersen sent a letter to Warren and OP EX on March 2, 2016, with copies to Eco-Gen, Mr. Noe, Otey, and Hamilton, "demanding that OPEX refund the $151, 385.00 deposit and reimburse the $6, 3577.50." Id. ¶ 45. Then, on March 4, 2016, Sersen sent an email to Warren, with copies to Mr. Noe, Otey, and Hamilton, again "demanding the immediate return of the $151, 385.00 deposit and payment of $6, 357.50 for services rendered by ASG." Id. According to plaintiffs, under the terms of the Purchase Agreement, ASG "had an absolute right to an immediate refund directly from OPEX." Id. ¶ 46.

         Warren responded by email on March 7, 2016, stating, id.:

I met with the management of ECO-GEN Energy, Inc. today to discuss your request for a refund. They have agreed to handle your request and global release of all parties including Operating Expense Consulting, LLC. Their attorneys will contact you with the necessary paperwork and timelines.

         Despite Warren's email, the deposit was not refunded. Id. ¶ 48. Moreover, plaintiffs assert: "The Enterprise has continued to engage in its fraudulent scheme to the present day." Id. ¶ 47.

         It appears that the parties contemplated a "Global Settlement Agreement And Mutual Release," dated March 28, 2016. ECF 41-2. However, according to the exhibits provided to the court, OPEX and Warren were the only defendants to sign it. Id. at 8.

         Plaintiffs filed their initial Complaint on March 30, 2018, and they claim that soon after, on April 3, 2018, "Defendants sent Mr. Sersen a stock purchase solicitation by email, attempting to induce him to pay additional money" for stock in Eco-Gen. ECF 35, ¶ 47. The solicitation included a PPM, identifying the Noes, Hamilton, and Otey "as officers of Eco-Gen"; the Noes "as members of Eco-Gen's Board of Technology Advisors"; and Ms. Noe as '"Trustee [who] oversees all IP with the Bellagio Trust that owns most of the IP for the Hybrid Solar Generator.'" Id. (citing ECF 35-2, Exhibit A, at 24-25).[4]

         Additional facts are included in the Discussion.

         II. Legal Standards

         As noted, the Eco-Gen Defendants and Warren have moved to dismiss the Amended Complaint for lack of personal jurisdiction, pursuant to Fed.R.Civ.P. 12(b)(2). ECF 38; ECF 40. The Eco-Gen Defendants also seek dismissal of the suit for failure to state a claim, pursuant to Fed.R.Civ.P. 12(b)(6). See ECF 40.

         A. Rule 12(b)(2)

         Defendants' motions to dismiss for lack of personal jurisdiction are predicated on Fed.R.Civ.P. 12(b)(2). "[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).

         When a nonresident defendant challenges personal jurisdiction, "the jurisdictional question is to be resolved by the judge, with the burden on the plaintiff ultimately to prove grounds for jurisdiction by a preponderance of the evidence." Careftrst of `Md, Inc. v. Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390, 396 (4th Cir. 2003) (citation omitted). The burden "varies according to the posture of a case and the evidence that has been presented to the court." Grayson, 816 F.3d at 268.

         When 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 v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989). In its discretion, a court may permit discovery as to the jurisdictional issue. See Mylan Labs., Inc. v. Akzo, N. V., 2 F.3d 56, 64 (4th Cir. 1993). Or, the court may rule solely on the basis of motion papers, supporting legal memoranda, affidavits, and the allegations in the complaint. Consulting Eng'rs Corp. v. Geometric Ltd., 561 F.3d 273, 276 (4th Cir. 2009). In that circumstance, the "plaintiff need only make 'a prima facie showing of personal jurisdiction to survive the jurisdictional challenge.'" Grayson, 816 F.3d at 268 (quoting Combs, 886 F.2d at 676); see also Universal Leather, LLC v. Koso AR, S.A., 773 F.3d 553, 558, 560-61 (4th Cir. 2014). However, "'[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 Dev. Corp., 416 F.3d 290, 294 n.5 (4th Cir. 2005) (emphasis in original) (citation omitted); see Universal Leather, 773 F.3d at 558; Combs, 886 F.2d at 676.

         Plaintiffs have not asked for an opportunity to conduct discovery. In any event, neither discovery nor an evidentiary hearing is required here to resolve the motions. See generally 5B C. Wright & A. Miller, Federal Practice & Procedure § 1351 at 274 313 (3d ed. 2004, 2011 Supp.).

         B. Rule 12(b)(6)

         A defendant may test the legal sufficiency of a complaint by way of a motion to dismiss under Rule 12(b)(6). In re Birmingham, 846 F.3d 88, 92 (4th Cir. 2017); Goines v. Valley Cmty. Servs. Bet, 822 F.3d 159, 165-66 (4th Cir. 2016); McBurney v. Cuccinelli, 616 F.3d 393, 408 (4th Cir. 2010), aff'd sub nom. McBurney v. Young, 569 U.S. 221 (2013); Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). A Rule 12(b)(6) motion constitutes an assertion by a defendant that, even if the facts alleged by a plaintiff are true, the complaint fails as a matter of law "to state a claim upon which relief can be granted."

         Whether a complaint states a claim for relief is assessed by reference to the pleading requirements of Fed.R.Civ.P. 8(a)(2). That rule provides that a complaint must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." The purpose of the rule is to provide the defendants with "fair notice" of the claims and the "grounds" for entitlement to relief. Bell All Corp. v. Twombly, 550 U.S. 544, 555-56 (2007).

         To survive a motion under Rule 12(b)(6), a complaint must contain facts sufficient to "state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570; see Ashcroft v. Iqbal, 556 U.S. 662, 684 (2009) ("Our decision in Twombly expounded the pleading standard for 'all civil actions' .. . ." (citation omitted)); see also Paradise Wire & Cable Defined Benefit Pension Fund Plan v. Weil, __F.3d__, 2019 WL 1105179, at *3 (4th Cir. Mar. 11, 2019); Willner v. Dimon, 849 F.3d 93, 112 (4th Cir. 2017). But, a plaintiff need not include "detailed factual allegations" in order to satisfy Rule 8(a)(2). Twombly, 550 U.S. at 555. Moreover, federal pleading rules "do not countenance dismissal of a complaint for imperfect statement of the legal theory supporting the claim asserted." Johnson v. City of Shelby, Miss., 574 U.S.__, 135 S.Ct. 346, 346 (2014) (per curiam).

         Nevertheless, mere "'naked assertions' of wrongdoing" are generally insufficient to state a claim for relief. Francis v. Giacomelli, 588 F.3d 186, 193 (4th Cir. 2009) (citation omitted). The rule demands more than bald accusations or mere speculation. Twombly, 550 U.S. at 555; see Painter's Mill Grille, LLC v. Brown, 716 F.3d 342, 350 (4th Cir. 2013). If a complaint provides no more than "labels and conclusions" or "a formulaic recitation of the elements of a cause of action," it is insufficient. Twombly, 550 U.S. at 555. "[A]n unadorned, the-defendant-unlawfully-harmed-me accusation" does not state a plausible claim for relief. Iqbal, 556 U.S. at 678. Rather, to satisfy the minimal requirements of Rule 8(a)(2), the complaint must set forth "enough factual matter (taken as true) to suggest" a cognizable cause of action, "even if. .. [the] actual proof of those facts is improbable and . . . recovery is very remote and unlikely." Twombly, 550 U.S. at 556 (internal quotation marks omitted).

         In reviewing a Rule 12(b)(6) motion, a court "must accept as true all of the factual allegations contained in the complaint" and must "draw all reasonable inferences [from those facts] in favor of the plaintiff." E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435, 440 (4th Cir. 2011) (citations omitted); see Reyes v. Waples Mobile Home Park Ltd. P'ship, 903 F.3d 415, 423 (2018); Semenova v. Md. Transit Admin., 845 F.3d 564, 567 (4th Cir. 2017); Houck v. Substitute Tr. Servs., Inc., 791 F.3d 473, 484 (4th Cir. 2015); Kendall v. Balcerzak, 650 F.3d 515, 522 (4th Cir. 2011), cert, denied, 565 U.S. 943 (2011). But, a court is not required to accept legal conclusions drawn from the facts. See Papasan v. Allain, 478 U.S. 265, 286 (1986). "A court decides whether [the pleading] standard is met by separating the legal conclusions from the factual allegations, assuming the truth of only the factual allegations, and then determining whether those allegations allow the court to reasonably infer" that the plaintiff is entitled to the legal remedy sought. A Soc'y Without a Name v. Comm'w of Va., 655 F.3d 342, 346 (4th. Cir. 2011), cert denied, 566 U.S. 937 (2012).

         Courts generally do not "resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses" through a Rule 12(b)(6) motion. Edwards, 178 F.3d at 243 (quotation marks and citation omitted). But, "in the relatively rare circumstances where facts sufficient to rule on an affirmative defense are alleged in the complaint, the defense may be reached by a motion to dismiss filed under Rule 12(b)(6)." Goodman v. Praxair, Inc., 494 F.3d 458, 464 (4th Cir. 2007) (en banc); accord Pressley v. Tupperware Long Term Disability Plan, 533 F.3d 334, 336 (4th Cir. 2009); see also U.S. ex rel. Oberg v. Penn. Higher Educ. Assistance Agency, 745 F.3d 131, 148 (4th Cir. 2014). However, because Rule 12(b)(6) "is intended [only] to test the legal adequacy of the complaint," Richmond, Fredericksburg & Potomac R.R. Co. v. Forst, 4 F.3d 244, 250 (4th Cir. 1993), "[t]his principle only applies . . . if all facts necessary to the affirmative defense 'clearly appear[ ] on the face of the complaint.'" Goodman, 494 F.3d at 464 (quoting Forst, 4F.3d at 250) (emphasis added in Goodman).

         "[A] court may properly take judicial notice of 'matters of public record' and other information that, under Federal Rule of Evidence 201, constitute 'adjudicative facts.'" Goldfarb v. Mayor & City Council of Bait., 791 F.3d 500, 508 (4th Cir. 2015); see also Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007); Katyle v. Penn Nat 1 Gaming Inc., 637 F.3d 462, 466 (4th Cir. 2011), cert, denied, 565 U.S. 825 (2011); Philips v. Pitt Cty. Mem. Hosp., 572 F.3d 176, 180 (4th Cir. 2009). Pursuant to Fed.R.Evid. 201, a court may take judicial notice of adjudicative facts if they are "not subject to reasonable dispute," in that they are "(1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned." And, courts may take judicial notice of publicly available records, without converting a motion to dismiss to a motion for summary judgment. See, e.g., Zak v. Chelsea Therapeutics Int'l, Ltd., 780 F.3d 597, 607 (4th Cir. 2015) ("Courts are permitted to consider facts and documents subject to judicial notice without converting the motion to dismiss into one for summary judgment."). A court may also take judicial notice of its own records. Anderson v. Fed. Deposit Ins. Corp., 918 F.2d 1139, 1141 n.1 (4th Cir. 1990).

         C. Rule 9(b)

         To the extent that the Amended Complaint lodges claims of fraud, Fed.R.Civ.P. 9(b) is pertinent. Rule 9(b) states: "In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally."

         As a preliminary matter, claims that sound in fraud, whether rooted in common law or arising under a statute, implicate the heightened pleading standard of Fed.R.Civ.P. 9(b). See, e.g., E-Shops Corp. v. U.S. Bank N.A., 678 F.3d 659, 665 (8th Cir. 2012) ("Rule 9(b)'s heightened pleading requirement also applies to statutory fraud claims."); see also Spaulding v. Wells Fargo Bank, N.A., 714 F.3d 769, 781 (4th Cir. 2013) (stating that an MCPA claim that "sounds in fraud[] is subject to the heightened pleading standards of Federal Rule of Civil Procedure 9(b)").

         Under the rule, a plaintiff alleging a claim that sounds in fraud "'must, at a minimum, describe the time, place, and contents of the false representations, as well as the identity of the person making the misrepresentation and what he obtained thereby.'" United States ex rel. Owens v. First Kuwaiti Gen'I Trading & Contracting Co., 612 F.3d 724, 731 (4th Cir. 2010) (citation omitted). In other words, "'Rule 9(b) requires plaintiffs to plead the who, what, when, where, and how: the first paragraph of any newspaper story.'" Crest Construction II, Inc. v. Doe, 660 F.3d 346, 353 (8th Cir. 2011) (citation omitted).

         Rule 9(b) serves several salutary purposes:

First, the rule ensures that the defendant has sufficient information to formulate a defense by putting it on notice of the conduct complained of. . . . Second, Rule 9(b) exists to protect defendants from frivolous suits. A third reason for the rule is to eliminate fraud actions in which all the facts are learned after discovery. Finally, Rule 9(b) protects defendants from harm to their goodwill and reputation.

Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 784 (4th Cir. 1999) (citation omitted).

         However, by its plain text, Rule 9(b) permits general averment of aspects of fraud that relate to a defendant's state of mind. And, a "court should hesitate to dismiss a complaint under Rule 9(b) if the court is satisfied (1) that the defendant has been made aware of the particular circumstances for which she will have to prepare a defense at trial, and (2) that plaintiff has substantial prediscovery evidence of those facts." Id. Moreover, Rule 9(b) is "less strictly applied with respect to claims of fraud by concealment" or omission of material facts, as opposed to affirmative misrepresentations, because "an omission 'cannot be described in terms of the time, place, and contents of the misrepresentation or the identity of the person making the misrepresentation.'" Shaw v. Brown & Williamson Tobacco Corp., 973 F.Supp. 539, 552 (D. Md. 1997) (quoting Flynn v. Everything Yogurt, HAR-92-3421, 1993 WL 454355, at *9 (D. Md. Sept. 14, 1993)).

         D. Exhibits

         In evaluating the sufficiency of a complaint in connection with a Rule 12(b)(6) motion, a court ordinarily "may not consider any documents that are outside of the complaint, or not expressly incorporated therein ...." Clatterbuck v. City of Charlottesville, 708 F.3d 549, 557 (4th Cir. 2013); see Bosiger v. U.S. Airways, 510 F.3d 442, 450 (4th Cir. 2007). "Generally, when a defendant moves to dismiss a complaint under Rule 12(b)(6), courts are limited to considering the sufficiency of allegations set forth in the complaint and the 'documents attached or incorporated into the complaint/" Zak v. Chelsea Therapeutics Int'l, Ltd., 780 F.3d 597, 606 (4th Cir. 2015) (quoting E.I. du Pont de Nemours & Co., 637 F.3d at 448). Under limited circumstances, however, when resolving a Rule 12(b)(6) motion, a court may consider documents beyond the complaint without converting the motion to dismiss to one for summary judgment. Goldfarb v. Mayor & City Council of Baltimore, 791 F.3d 500, 508 (4th Cir. 2015).

         In particular, a court may consider documents that are "explicitly incorporated into the complaint by reference and those attached to the complaint as exhibits." Goines, 822 F.3d at 166; see also Fed. R. Civ. P. 10(c); Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007); Paradise Wire & Cable, supra, 2019 WL 1105179, at *4. However, "before treating the contents of an attached or incorporated document as true, the district court should consider the nature of the document and why the plaintiff attached it." Goines, 822 F.3d at 167 (citing N. Ind. Gun & Outdoor Shows, Inc. v. City of S. Bend, 163 F.3d 449, 455 (7th Cir. 1998)).

         Of import here, "[w]hen the plaintiff attaches or incorporates a document upon which his claim is based, or when the complaint otherwise shows that the plaintiff has adopted the contents of the document, crediting the document over conflicting allegations in the complaint is proper." Goines, 822 F.3d at 167. Conversely, "where the plaintiff attaches or incorporates a document for purposes other than the ...

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