United States District Court, D. Maryland
JOHN BECKER, et al. Plaintiffs,
PAUL HOWE NOE, II, el al. Defendants.
L. Hollander United States District Judge.
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.
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. 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.
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.
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.
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.
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.
Becker and Joan Becker (the "Beckers") are husband
and wife. ECF 35, ¶ 2. They are Maryland residents.
Id. Sersen, a Maryland resident,  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.
"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.
"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. ¶
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.
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.
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).
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
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."
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.
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,
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,
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.
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
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."
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.
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[.]"
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.
"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.
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.
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.
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.
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.
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.
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
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
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.
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."
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.
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."
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.
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.
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.
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.
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).
facts are included in the Discussion.
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.
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).
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.
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
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.).
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."
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,
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).
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).
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).
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
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).
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."
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
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).
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).
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)).
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).
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)).
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 ...