United States District Court, D. Maryland
Lipton Hollander United States District Judge.
Memorandum Opinion resolves numerous motions to dismiss a
168-page Complaint filed by the State of Maryland
(“State” or “Maryland”) against
approximately sixty-five defendants. The State seeks to redress
the alleged contamination of its waters with methyl tertiary
butyl ether (“MTBE”), an oxygenate additive that
was commonly blended into gasoline in the 1980s and 1990s.
ECF 2 (Complaint).
Complaint contains eleven counts. ECF 2, ¶¶ 308,
417. The first six counts allege common law tort claims:
Strict Product Liability Based on Defective Design (Count I);
Strict Product Liability Based on Failure to Warn (Count II);
Strict Liability for Abnormally Dangerous Activity (Count
III); Public Nuisance (Count IV); Trespass (Count V); and
Negligence (Count VI). The remaining counts seek to impose
liability under various provisions of the Environment Article
(“E.A.”) of the Maryland Code (2013 Repl. Vol.,
2019 Supp.): E.A. § 4-401 et seq. (Count VII);
E.A. § 4-701 et seq. (Count VIII); E.A. §
9-301 et seq. (Count IX); E.A. § 9-401 et
seq. (Count X); and E.A. § 7-201 et seq.
motions are now pending. Defendant Total Petrochemicals &
Refining USA, Inc. (“TPRI”) moved to dismiss
the Complaint for lack of personal jurisdiction, pursuant to
Fed.R.Civ.P. 12(b)(2), and for failure to state a claim,
under Fed.R.Civ.P. 12(b)(6). ECF 333. The motion is supported
by a memorandum of law (ECF 333-1) (collectively, “TPRI
Motion”) and two exhibits. ECF 333-2; ECF 333-3. The
State opposes the TPRI Motion (ECF 357), supported by two
exhibits. ECF 357-1; ECF 357-2. TPRI has replied (ECF 377),
with an exhibit. ECF 377-1.
Duke Energy Merchants, LLC (“Duke Energy”),
George E. Warren Corporation (“Warren”), and
Guttman Energy, Inc. (“Guttman Energy”), joined
by TPRI and Hartree Partners, LP (“Hartree”),
also moved to dismiss the Complaint, pursuant to Fed.R.Civ.P.
12(b)(6), for failure to state a claim. ECF 334; see
also ECF 338 (Hartree Joinder). The motion is supported
by a memorandum of law. ECF 334-1 (collectively,
“Warren Motion”). The State opposes the Warren
Motion (ECF 358), supported by an exhibit. ECF 358-1.
Defendants filed a reply (ECF 378), as well as two exhibits.
ECF 378-1; ECF 378-2.
addition, sixty-two defendants, including Exxon Mobil
Corporation (“Exxon”), TPRI, Duke Energy, Warren,
and Guttman Energy, jointly moved to dismiss the Complaint
under Fed.R.Civ.P. 12(b)(6). ECF 335. It is supported by a
memorandum of law (ECF 335-1) (collectively, the “Joint
Motion”) and an exhibit. ECF 335-3. The State opposes
the Joint Motion. ECF 359. Defendants have replied (ECF 381),
and submitted two exhibits. ECF 381-1; ECF 381-2.
separate motion, defendant 7-Eleven, Inc.
(“7-Eleven”) joins the Joint Motion (ECF 336),
supported by a memorandum of law. ECF 336-1 (collectively,
“7-Eleven Motion”). It moves to dismiss the
Complaint for failure to state a claim. ECF 336 at 1.
Alternatively, it seeks “a more definite statement of
[the] claims against 7-Eleven, ” pursuant to
Fed.R.Civ.P. 12(e). Id. The State opposes the
7-Eleven Motion (ECF 355), supported by an exhibit. ECF
355-1. 7-Eleven has replied. ECF 379.
addition, defendant Lukoil Pan Americas LLC
(“LPA”) moved to dismiss the Complaint, pursuant
to Fed.R.Civ.P. 12(b)(2), for lack of personal jurisdiction,
and under Fed.R.Civ.P. 12(b)(6), for failure to state a
claim. ECF 342. The motion is supported by a memorandum of
law (ECF 342-1) (collectively, “LPA Motion”) and
an exhibit. ECF 342-2. The State has filed an opposition. ECF
368. LPA replied (ECF 387), with an exhibit. ECF 387-1.
PJSC Lukoil (“PJSC”) also moved to dismiss the
Complaint, pursuant to Fed.R.Civ.P. 12(b)(2), for lack of
personal jurisdiction. ECF 343. It is supported by a
memorandum of law (ECF 343-1) (collectively, the “PJSC
Motion”) and an exhibit. ECF 343-2. The State opposes
the PJSC Motion (ECF 366), with exhibits. ECF 366-1; ECF
366-2; ECF 366-3. PJSC has replied. ECF 388.
hearing is necessary to resolve the motions. See
Local Rule 105.6. For the reasons stated below, I shall grant
the PJSC Motion, and grant in part and deny in the part the
Joint Motion. I shall deny the remaining motions.
MTBE and Water Contamination
a chemical compound made by combining methanol (a derivative
of natural gas) and isobutylene (a by-product of the
gasoline-refining process). ECF 2, ¶ 103. It was
commonly blended into gasoline in the 1980s and 1990s as an
“oxygenate” and “octane enhancer” to
reduce carbon monoxide tailpipe emissions. Id.
¶¶ 107, 117-129. Compared with other oxygenates
like ethanol, MTBE was inexpensive to manufacture because it
was made from readily available refinery byproducts.
Id. ¶¶ 103, 127.
is made by processing crude oil at a refinery. Id.
¶ 105. It is then transported through pipelines, tank
ships, and barges to “common storage tanks”
located at terminals around the country. Id. ¶
106. From there, it is “transshipped” by pipeline
or other means to “secondary terminals” or
“depots, ” and then taken by trucks to gas
stations for retail sale. Id. MTBE was blended into
the gasoline at the refinery itself, or “splash
blended” at terminals by adding it to truck tanks after
those tanks were filled with gasoline from the terminal.
Id. ¶ 105. Because MTBE-enhanced gasoline is
fungible, batches were frequently comingled from different
sources during the production and distribution process.
Id. ¶¶ 99-100.
allegedly enters the environment “through disposals,
deposits, releases, leaks, overfills, spills, discharges and
evaporative releases, ” and is “principally
release[d]” while in underground storage tanks or
during delivery. Id. ¶¶ 1, 109. When
released, MTBE is highly soluble in groundwater, spreads
rapidly, does not naturally degrade, resists removal and
treatment from groundwater, and is difficult to locate.
Id. ¶¶ 2, 110-11, 113. It can also migrate
into subsurface-soil regions and penetrate into aquifers.
Id. ¶¶ 112, 114. For these reasons, the
State claims that MTBE “is and has been more difficult
and more expensive to remove from groundwater than other
contaminants.” Id. ¶ 114.
United States Geological Survey has reported that MTBE is the
“second most frequently detected volatile organic
chemical in groundwater in the United States.”
Id. ¶ 130. Around the United States, MTBE has
been detected in “over 20% of aquifers tested in places
where high MTBE-content gasoline was used.”
Id. MTBE has also been found in “varying
concentrations and at varying times” in public water
systems and private drinking-water wells in Maryland.
Id. ¶¶ 218, 220. According to the State,
studies have shown that MTBE “is a probable human
carcinogen, ” can cause “significant adverse
health effects when ingested, ” and “can render
drinking water putrid and unfit for human consumption.”
Id. ¶¶ 4, 137.
The History of MTBE Use and Legislative Background
1979, before defendants allegedly knew the harmful effects of
MTBE, the Administrator of the United States Environmental
Protection Agency (“EPA”) granted a waiver for
the use of 7% MTBE in unleaded gasoline, finding that MTBE as
a fuel additive did not cause or contribute to the failure of
any emission control device or system. Id.
¶¶ 117, 134; Application for Methyl Tertiary Butyl
Ether, Decision of the Administrator, 44 Fed. Reg. 12, 242,
12, 243 (Mar. 6, 1979). The market demand for MTBE and
MTBE-blended gasoline began around the same time and grew
rapidly, continuing well into the 1990s. ECF 2, ¶¶
117, 125. By 1996, MTBE “ranked second among all
organic chemicals produced in the United States, with
virtually the entire production going into gasoline.”
Id. ¶ 129.
in the MTBE market was encouraged by the 1990 Clean Air Act
Amendments, which established the Reformulated Gasoline
Program (“RFG Program”). Clean Air Act Amendments
of 1990, Pub. L. No. 101-549, 104 Stat. 2399 (1990)
(“CAA”), § 219(k). The RFG Program required
the use of reformulated gasoline containing at least 2.0%
oxygen by weight in designated ozone
“non-attainment” areas of the country, meaning
areas that do not meet the national ambient air quality
standards (“NAAQS”) for ozone. Id.
§ 219(k)(2)(B). Subsequent EPA regulations included MTBE
as one of several oxygenates to be used in the testing of
reformulated gasoline. See, e.g., Use of Alternative
Analytical Test Methods in the Reformulated Gasoline Program,
40 C.F.R. § 80.46(g), 61 Fed. Reg. 58304, 58306 (Nov.
13, 1996). Portions of Maryland were subject to the RFG
Program. ECF 2, ¶ 122.
1990 Amendments also authorized EPA's initiation of the
Oxygenated Fuel Program (“OF Program”), which
required gasoline in some metropolitan regions to contain at
least 2.7% oxygen by weight to reduce carbon monoxide during
the fall and winter months. CAA, § 219(m). The State
alleges that MTBE-blended gasoline sold in non-attainment
areas often exceeded the minimum oxygenate requirements in
the RFG and OF programs, and was even used in the regions
that were not participating in the RFG program. ECF
2, ¶ 124.
2000, the federal government recognized the dangers of the
release of MTBE into groundwater and took initial steps to
consider eliminating it as a fuel additive. See
Methyl Tertiary Butyl Ether (MTBE); Advance Notice of Intent
to Initiate Rulemaking Under the Toxic Substances Control Act
to Eliminate or Limit the Use of MTBE as a Fuel Additive in
Gasoline, 65 Fed. Reg. 16, 094 (Mar. 24, 2000). Around this
time, several states had “taken actions designed to
limit the use of MTBE in gasoline.” Id. at 16,
097. Many lawsuits alleging MTBE contamination were filed and
consolidated before the United States District Court for the
Southern District of New York. See In re Methyl Tertiary
Butyl Ether Prods. Liab. Litig. v. Atl. Richfield Co.
(In re MTBE), MDL No. 1358, 2000 U.S. Dist. LEXIS
14901, at *4 (J.P.M.L. Oct. 10, 2000).
2005, Congress passed the Energy Policy Act
(“EPACT”), which phased out the RFG oxygenate
requirement and established the Renewable Fuel Program in its
place. See Energy Policy Act of 2005, Pub. L. No.
109-58, §§ 1501, 1504, 119 Stat. 594 (2005),
codified in part at 42 U.S.C. § 7545 et
seq. The new program requires gasoline
suppliers to blend their product with renewable fuels, such
as cellulosic biomass ethanol, waste derived ethanol, and
EPACT also directly addressed the status of MTBE as an
additive to gasoline. Congress made the following findings,
id. § 1502, 42 U.S.C. § 7545:
(1) since 1979, methyl tertiary butyl ether (hereinafter in
this section referred to as “MTBE”) has been used
nationwide at low levels in gasoline to replace lead as an
octane booster or anti-knocking agent;
(2) Public Law 101-549 (commonly known as the “Clean
Air Act Amendments of 1990”) (42 U.S.C. [§] 7401
et seq.) established a fuel oxygenate standard under which
reformulated gasoline must contain at least 2 percent oxygen
by weight; and
(3) the fuel industry responded to the fuel oxygenate
standard established by Public Law 101-549 by making
substantial investments in-
(A) MTBE production capacity; and
(B) systems to deliver MTBE-containing gasoline to the
Claims and Procedural History
State initially filed suit in the Circuit Court for Baltimore
City on December 13, 2017, in its capacity as parens
patriae; as trustee of the State's natural
resources; and under the Maryland Environmental Standing Act,
Md. Code (2013 Repl. Vol., 2019 Supp.), § 1-501 et
seq. of the Natural Resources Article
(“N.R.”). ECF 2. The suit named approximately
sixty-five defendant manufacturers, marketers, and
distributors of gasoline that together “controlled all,
or substantially all, of the market in Maryland for MTBE and
MTBE gasoline” for the relevant period. ECF 2, ¶
26. Between 1995 and 2001, about 1.2 billion gallons of pure
(or “neat”) MTBE was included in the reformulated
gasoline sold in Maryland. Id. ¶ 214.
alleges that defendants knew as early as 1980 that MTBE was
harmful and could contaminate groundwater (id.
¶ 134), but refused to warn the public or to use safer
alternatives like ethanol. Id. ¶ 206. According
to Maryland, defendants “knew, or reasonably should
have known, ” that the MTBE gasoline distribution and
retail system throughout Maryland contained leaks.
Id. ¶ 204. Even so, defendants allegedly
defended and promoted MTBE, despite knowledge of its risks,
and engaged in deceptive marketing of MTBE as a clean or
environmentally friendly gasoline. Id. ¶¶
161-189, 225-232. Maryland asserts that defendants
“falsely or inadequately addressed MTBE” in their
material safety data sheets provided to customers.
Id. ¶ 233.
indicated, the Complaint includes claims for strict liability
(defective design, failure to warn, abnormally dangerous
activity); public nuisance; trespass; negligence; and
violations of various State environmental statutes. The State
seeks compensatory and punitive damages and costs for
testing, cleanup, monitoring, and restoration of State
waters, as well as an injunction requiring defendants to test
and treat drinking water wells containing MTBE. Id.
Atlantic Richfield Company (“ARCO”) removed the
case to federal court under Section 1503 of the EPACT, 42
U.S.C. § 7545. See ECF 1. ARCO asserted that
jurisdiction is proper in federal court because the case is
within the court's Article III judicial powers.
Id. ¶¶ 2, 5. Specifically, ARCO claimed
that the allegations of MTBE contamination raise questions of
federal law under the CAA and EPACT, which “together
are part of a comprehensive federal scheme”
(id. ¶ 5), and that plaintiff's claims
conflict with, and are preempted by, federal law. ECF 1,
¶¶ 5-6. The Notice of Removal also raised other
potential defenses under federal water quality standards and
the Due Process and Excessive Fines Clause of the United
States Constitution. Id. Moreover, ARCO asserted
that “all defendants properly joined and served in this
action have consented to this removal.” Id.
the State moved to remand. ECF 283. In a Memorandum Opinion (ECF
346) and Order (ECF 347) of October 24, 2018, I denied the
State's motion. I concluded that removal was proper under
Section 1503 of the EPACT because the Notice of Removal
identified a colorable federal defense of preemption under
the Clean Air Act. ECF 346 at 21-33.
noted, TPRI, LPA, and PJSC have each moved to dismiss the
Complaint for lack of personal jurisdiction, pursuant to
Fed.R.Civ.P. 12(b)(2). ECF 333 (TPRI); ECF 342 (LPA); ECF 343
(PJSC). Sixty-two defendants, including TPRI, LPA, and PJSC,
have moved for dismissal for failure to state a claim,
pursuant to Fed.R.Civ.P. 12(b)(6). See ECF 335
(Joint Motion). And, a few defendants have presented
additional arguments for dismissal. See ECF 334
(Duke Energy, Warren, Guttman Energy, TPRI Supplemental
Motion to Dismiss); ECF 336 (7-Eleven Joinder and
Supplemental Motion to Dismiss); ECF 338 (Hartree Joinder);
ECF 342 (LPA Motion to Dismiss).
by addressing the motions to dismiss for lack of personal
jurisdiction. Then, I will turn to the remaining motions.
Motions to Dismiss for Lack of Personal Jurisdiction
TPRI, LPA, and PJSC have each moved to dismiss the Complaint
for lack of personal jurisdiction, pursuant to Fed.R.Civ.P.
12(b)(2). ECF 333 (TPRI); ECF 342 (LPA); ECF 343 (PJSC).
“[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); Carefirst of Md., Inc. v.
Carefirst Pregnancy Ctr's, 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)).
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. In its discretion, a court
may permit discovery as to the jurisdictional issue. See
Mylan Labs, 2 F.3d at 64. Or, the court may rule solely
on the basis of motion papers, supporting legal memoranda,
affidavits, and the allegations in the complaint.
Grayson, 816 F.3d at 268; 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, 773
F.3d at 558, 560-61. 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.
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 Md., 334 F.3d at 396. But, the court is
“not required to look solely to the plaintiff's
proof in drawing those inferences.” Mylan
Labs, 2 F.3d at 62.
State alleges that defendants are “MTBE and MTBE
gasoline manufacturers, marketers and distributors”
that “together controlled all, or substantially all, of
the market in Maryland for MTBE and MTBE gasoline” at
all relevant times. Id. ¶ 26; see also
id. ¶ 125 (“In or around January 1995,
defendants introduced into the stream of commerce in Maryland
MTBE gasoline …”). As outlined, some of the
defendants contend that this Court lacks personal
jurisdiction as to them.
Civ. P. 4(k)(1)(A) 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 Md., 334 F.3d at 396.
Therefore, in Maryland, “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.; accord Carbone v. Deutsche Bank Nat'l
Tr. Co., No. RDB-15-1963, 2016 WL 4158354, at *5 (D. Md.
Aug. 5, 2016); Mackey v. Compass Mktg., Inc., 391
Md. 117, 141 n.6, 892 A.2d 479, 493 n.6 (2006).
long-arm statute is codified at Md. Code (2013 Repl. Vol.,
2019 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 Carbone, 2016 WL
4158354, at *5; 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. The Maryland Court of Appeals has
“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” and that the “statutory
inquiry merges with [the] constitutional examination.”
Beyond Sys., Inc. v. Realtime Gaming Holding
Co., 388 Md. 1, 22, 878 A.2d 567, 580 (2005) (citing
Mohamed v. Michael, 279 Md. 653, 657, 370 A.2d 551,
553 (1977)); see also Stover v. O'Connell Assocs.,
Inc., 84 F.3d 132, 135-36 (4th Cir. 1996) (stating that
“the two inquiries essentially become one”);
accord ALS Scan, Inc. v. Dig. Serv. Consultants,
Inc., 293 F.3d 707, 710 (4th Cir. 2002).
sure, “the reach of the [long-arm] statute is as far as
due process permits . . .” Mackey, 391 Md. at
140 n.5, 892 A.2d at 492 n.5. However, the Maryland Court of
Appeals has clarified that the statutory analysis remains a
requirement of the personal jurisdiction analysis. In
Mackey, the Maryland Court of Appeals said, 391 Md.
at 141 n.6, 892 A.2d at 493 n.6 (citations omitted):
We stated recently in Beyond v. Realtime . . . that
“the purview of the long arm statute is coextensive
with the limits of personal jurisdiction set by the due
process clause of the Federal Constitution.” We did
not, of course, mean by this that it is now permissible to
simply dispense with analysis under the long-arm statute . .
. Rather, . . . we interpret the long-arm statute to the
limits permitted by the Due Process Clause when we can do so
consistently with the canons of statutory construction.
Since Mackey, the Maryland Court of Appeals has
repeatedly affirmed that “determining whether a
Maryland court may exercise personal jurisdiction over a
foreign defendant requires a two-step analysis.”
Bond v. Messerman, 391 Md. 706, 721, 895 A.2d 990,
999 (2006); see also CSR, Ltd. v. Taylor,
411 Md. 457, 472, 983 A.2d 492, 501 (2009) (stating that
personal jurisdiction analysis “entails dual
considerations”). First, the court considers
“whether the requirements of Maryland's long-arm
statute are satisfied.” CSR, 411
Md. at 472, 983 A.2d at 501 (citing Bond, 391 Md. at
721, 895 A.2d at 999; Mackey, 391 Md. at 129, 892
A.2d at 486; and Beyond, 388 Md. at 14, 878 A.2d at
576). Second, it considers “whether the exercise of
personal jurisdiction comports with the requirements imposed
by the Due Process Clause of the Fourteenth
Amendment.” CSR, 411 Md. at 473,
983 A.2d at 501 (citing Bond, 391 Md. at 721, 895
A.2d at 999; and Beyond, 388 Md. at 15, 878 A.2d at
575). Nevertheless, the Maryland Court of Appeals has, in
some situations, declined to consider the first step where
the analysis of the second step demonstrates conclusively
that personal jurisdiction over the defendant would violate
due process. See, e.g., Bond, 391 Md. at
722, 895 A.2d at 1000.
process jurisprudence recognizes “two types of personal
jurisdiction: general and specific.” CFA Inst. v.
Inst. of Chartered Fin. Analysts of India, 551 F.3d 285,
292 n.15 (4th Cir. 2009). The Fourth Circuit has explained:
General personal jurisdiction, on the one hand, requires
“continuous and systematic” contacts with the
forum state, such that a defendant may be sued in that state
for any reason, regardless of where the relevant conduct
occurred. Specific personal jurisdiction, on the other hand,
requires only that the relevant conduct have such a
connection with the forum state that it is fair for the
defendant to defend itself in that state.
Id. (citing, inter alia, Helicopteros
Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408,
414-15 (1984)) (internal citations omitted).
may exercise general jurisdiction over foreign corporations
to hear “any and all claims” against the
corporations “when their affiliations with the State
are so ‘continuous and systematic' as to render
them essentially at home in the forum State.”
Goodyear Dunlop Tires Operations, S.A. v. Brown, 564
U.S. 915, 919 (2011) (quoting Int'l Shoe, 326
U.S. at 317). In contrast, specific jurisdiction
“depends on an ‘affiliatio[n] between the forum
and the underlying controversy . . .'” Id.
(citation omitted) (alteration in Goodyear).
United States Supreme Court has long held that personal
jurisdiction over a nonresident defendant is constitutionally
permissible so long as the defendant has “minimum
contacts with [the forum state] 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
Milliken v. Meyer, 311 U.S. 457, 463 (1940)). Courts
have separated this test into individual “prongs,
” first ascertaining whether the threshold of
“minimum contacts” is met, and then considering
whether the exercise of jurisdiction on the basis of those
contacts is “constitutionally reasonable.”
ALS Scan, 293 F.3d at 712.
“minimum contacts” test is met where the
defendant has “purposefully avail[ed] himself of the
privilege of conducting business under the laws of the forum
state.” Consulting Eng'rs, 561 F.3d at
278. A determination that the defendant has established
minimum contacts with the forum state amounts to a conclusion
that “‘it is presumptively not unreasonable to
require him to submit to the burdens of litigation in that
forum as well.'” Id. (quoting Burger
King Corp. v. Rudzewicz, 471 U.S. 462, 476 (1985)).
the court must consider the prong of constitutional
reasonableness “[i]f, and only if” the minimum
contacts test is met. Consulting Eng'rs, 561
F.3d at 278. The constitutional reasonableness inquiry
permits a defendant “who purposefully has directed his
activities at forum residents” to defeat jurisdiction,
if he can “present a compelling case that the presence
of some other considerations would render jurisdiction
unconstitutional.” Burger King, 471 U.S. at
477. However, in some cases, the constitutional
reasonableness analysis can “serve to establish the
reasonableness of jurisdiction upon a lesser showing of
minimum contacts than would otherwise be required.”
indicated, general jurisdiction allows a plaintiff to bring
“any and all claims” against a party in that
jurisdiction. Goodyear, 564 U.S. at 919. But,
“the threshold level of minimum contacts sufficient to
confer general jurisdiction is significantly higher than for
specific jurisdiction.” ALS Scan, 293 F.3d at
715 (internal quotation marks omitted); accord Saudi v.
Northrop Grumman Corp., 427 F.3d 271, 276 (4th Cir.
2005). And, the Fourth Circuit has long held that
“broad constructions of general jurisdiction” are
“generally disfavored.” Nichols v. G.D.
Searle & Co., 991 F.2d 1195, 1200 (4th Cir. 1993).
determine whether there is specific jurisdiction over a
defendant, courts consider several factors. These include:
“(1) the extent to which the defendant purposefully
availed itself of the privilege of conducting activities in
the State; (2) whether the plaintiffs' claims arise out
of those activities directed at the State; and (3) whether
the exercise of personal jurisdiction would be
constitutionally reasonable.” Consulting
Eng'rs, 561 F.3d at 278 (citing ALS Scan,
293 F.3d at 715); accord Unspam Techs., Inc. v.
Chernuk, 716 F.3d 322, 328 (4th Cir. 2013); ESAB
Grp., Inc. v. Zurich Ins. PLC, 685 F.3d 376, 392 (4th
Cir. 2012); Carefirst of Md., 334 F.3d at 397.
argues that it is not properly subject either to general or
specific personal jurisdiction in this Court because it has
never manufactured, marketed, distributed, or sold MTBE
gasoline in Maryland. ECF 333-1 at 1-5. Indeed, it asserts
“there is no evidence indicating that a drop of TPRI
gasoline containing MTBE is actually in Maryland, let alone
evidence that TPRI specifically directed gasoline containing
MTBE to the State.” Id. at 5.
Complaint contains minimal allegations specific to TPRI. It
states only that TPRI is a Delaware corporation with its
principal place of business in Texas, that TPRI is qualified
to do business in Maryland, and that TPRI has a resident
agent in Maryland. ECF 2, ¶ 85. However, the exhibits
submitted by the State and TPRI shed further light on
TPRI's role in the MTBE supply chain.
exhibits show the following. TPRI is a Delaware corporation
that refines and manufactures gasoline. ECF 333-2 (Kim
Arterburn Decl.), ¶ 2. It does not have any facilities
in Maryland and has never manufactured, sold, or contracted
for the delivery of MTBE products in Maryland. Id.
¶¶ 2, 11. However, TPRI availed itself of a
distribution system for MTBE products whose network included
Maryland. That is, TPRI sold and shipped approximately 1.5
million barrels of its MTBE gasoline to third parties via the
Colonial Pipeline, a pipeline system that is dedicated to the
delivery of gasoline to Maryland, Delaware, New Jersey,
Pennsylvania, and New York. ECF 357-2 (Bruce Burke Decl.),
¶¶ 16, 27; see also ECF 333-2, ¶ 9.
Because most of the MTBE gasoline shipped on the Colonial
Pipeline was fungible and commingled with the products of
other suppliers, it is impossible to determine where
TPRI's MTBE gasoline was delivered. ECF 357-2,
¶¶ 22-23. However, the State's expert, Bruce
Burke, reviewed TPRI's shipment data and the number of
delivery points on the Colonial Pipeline in Maryland, and
posits that 83.7 percent of the MTBE gasoline that TPRI
shipped on the Colonial Pipeline can be tied to distribution
centers that supplied MTBE gasoline to the State.
Id. ¶ 27.
participation in the MTBE supply chain does not end there. It
also sold over three million barrels of MTBE gasoline from a
facility in New Jersey during the relevant time. ECF 357-2,
¶ 30; ECF 333-3 (Craig Watel Decl.), ¶ 3. More than
half of this gasoline was shipped to third parties, including
Shell Oil and Mobil Oil, via barge. ECF 357-2, ¶ 30; ECF
333-3 at 4-13. And, records show that Maryland received barge
shipments of gasoline from New Jersey during this time. ECF
357-2, ¶ 31. Finally, along with its manufacture and
sale of MTBE gasoline, TPRI also sold neat MTBE to numerous
nationwide distributors of gasoline, many of which supply
gasoline to Maryland. Id. ¶ 29.
the facts and allegations in the light most favorable to
Maryland, the State has made a prima facie showing that this
Court has personal jurisdiction over TPRI under
Maryland's long-arm statute. In relevant part, that
statute permits the exercise of personal jurisdiction over
one who “[c]auses 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.”
C.J. § 6-103(b)(4). The exhibits demonstrate that TPRI
deliberately participated in the regional distribution of
MTBE gasoline and that such conduct plausibly resulted in the
regular introduction of TPRI's products into Maryland.
These acts and omissions allegedly caused the State's
tortious injury-i.e., the contamination of its
waters. Accordingly, personal jurisdiction is proper under
C.J. § 6-103(b)(4).
addition, the State has made a prima facie showing that
personal jurisdiction over TPRI comports with due process. In
World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286
(1980), the Supreme Court stated, id. at 297:
[I]f the sale of a product of a manufacturer or distributor .
. . is not simply an isolated occurrence, but arises from the
efforts of the manufacturer or distributor to serve directly
or indirectly, the market for its product in other States, it
is not unreasonable to subject it to suit in one of those
States if its allegedly defective merchandise has there been
the source of injury to its owner or to others.
precisely the conduct that is plausibly shown here. TPRI sold
and shipped large volumes of its MTBE gasoline to third
parties via a pipeline dedicated to the delivery of gasoline
to Maryland and the surrounding four states. ECF 357-2,
¶¶ 16, 27. It also sold neat MTBE to nationwide
distributors-some of whom are also defendants in this
case-whose networks included Maryland. Id. ¶
29. Although the fungible nature of MTBE gasoline and the
complex gasoline supply chain make it impossible to say where
exactly TPRI's MTBE gasoline ended up, TPRI's
placement of its MTBE gasoline into the stream of commerce
plausibly resulted in the regular and anticipated-rather than
the random or fortuitous-introduction of its products in
Maryland. This constitutes purposeful availment. See In
re MTBE, 399 F.Supp.2d 325, 332 (S.D.N.Y. 2005) (finding
defendant purposefully availed itself of the privilege of
doing business in the forum states by selling large volumes
of MTBE-containing gasoline to a nationwide distributor);
see also Ainsworth v. Moffett Eng'g, Ltd., 716
F.3d 174, 179 (5th Cir. 2013) (finding personal jurisdiction
over nonresident defendant who sold 203 forklifts to
customers in the forum state through a national distributor,
consisting of approximately 1.55% of defendant's sales
during that period); Hart v. Bed Bath & Beyond.,
48 F.Supp.3d 837, 843 (D. Md. 2014) (finding personal
jurisdiction over nonresident manufacturer who sold its
“fuel gel” to national retailer with stores in
Maryland and retailer in fact sold 1, 992 bottles of the gel
in Maryland). Cf. J. McIntyre Mach. Ltd. v.
Nicastro, 564 U.S. 873, 885-86 (2011) (Breyer, J.,
concurring) (finding no personal jurisdiction over a British
company that directed marketing and sales efforts at the
United States through a distributor, but whose only contact
with the forum state was the sale of one of its machines to a
resident of that state); see also Hart, 48 F.Supp.3d
at 842 (noting that Justice Breyer's concurrence in
J. McIntyre is controlling).
courts in MTBE cases brought in other states have found
personal jurisdiction over TPRI based on the kind of conduct
shown here. See Rhode Island v. Atl. Richfield Co.
(Rhode Island MTBE), 357 F.Supp.3d 129, 146-47
(D.R.I. 2018) (finding that jurisdiction over TPRI was proper
in Rhode Island where state alleged that TPRI introduced MTBE
“into the sequence of pipelines and storage tanks
dedicated to the delivery of gasoline to Rhode
Island”); State v. Atl. Richfield Co.
(Vermont MTBE), 142 A.3d 215, 224 (Vt. 2016)
(finding plaintiff plausibly alleged that TPRI was subject to
personal jurisdiction in Vermont based on its supply of MTBE
gasoline to the nationwide distribution system).
the State's claims arise out of TPRI's contacts with
Maryland, as required for specific personal jurisdiction.
See Goodyear, 564 U.S. at 919. The State brings this
suit for the tortious manufacture, marketing, sale, and
distribution of MTBE that caused the contamination of its
waters, and TPRI's contacts with Maryland arise from its
manufacture and nationwide distribution of MTBE products.
the exercise of specific personal jurisdiction over TPRI is
constitutionally reasonable. TPRI is a national corporation
and has not shown that it would bear any unique burden
litigating this case in Maryland; it says only that it has no
presence here and is defending similar litigation in other
states. ECF 333-1 at 17. By contrast, the State has a strong
interest in trying its case against TPRI in Maryland,
alongside the other alleged tortfeasors, and where evidence
concerning its MTBE contamination will be located.
I shall deny TPRI's motion to dismiss for lack of
LPA & PJSC
LPA and PJSC are corporate affiliates, and both move to
dismiss the Complaint for lack of personal jurisdiction. ECF
342 (LPA); ECF 343 (PJSC); see also ECF 140
(Disclosure of Corporate Interest Statement of Feb. 22, 2018
filed by LPA stating that it is an indirect, wholly owned
subsidiary of PJSC). They argue that they are not properly
subject to this Court's personal jurisdiction because
they never sold or delivered MTBE gasoline in Maryland, nor
do they have any presence in Maryland. ECF 342-1 at 1; ECF
343-1 at 1-2.
State argues that LPA and PJSC have waived their right to
challenge personal jurisdiction. ECF 365 at 9-11; ECF 367 at
16-17. It points out that LPA and PJSC did not file their
motions to dismiss for lack of personal jurisdiction until
October 5, 2018, weeks after they joined in the submission of
the motion to dismiss for failure to state a claim, filed by
sixty-two defendants on September 13, 2018. See ECF
335-1. Because that initial motion to dismiss did not raise
the defense of personal jurisdiction, the State argues that
LPA and PJSC have waived this defense.
defendant may waive the defense of personal jurisdiction by
failing to timely raise it in the time prescribed by
Fed.R.Civ.P. 12. Rule 12(g)(2) provides that “a party
that makes a motion under [Rule 12] must not make another
motion under this rule raising a defense or objection that
was available to the party but omitted from its earlier
motion.” Rule 12(h)(1)(A) further clarifies that a
“party waives any defense listed in Rule 12(b)(2)-(5)
[including defense of lack of personal jurisdiction] by . . .
omitting it from a motion in the circumstances described in
true, as the State asserts, that LPA and PJSC filed their
motions to dismiss for lack of personal jurisdiction after
the submission of the joint motion to dismiss for failure to
state a claim filed by them and sixty other defendants.
However, two days before the joint motion was filed, the
defendants submitted a proposed briefing schedule to the
Court. ECF 331 (Letter to Court of Sept. 11, 2018). That
letter stated that LPA and PJSC “will join in the
consolidated motion to dismiss, ” which was due on
September 13, 2018, and that “they will also
file a separate motion to dismiss based on individualized
defenses, to be due on September 27, 2018.”
Id. at 3-4. Further, it provided that the State
consented to the briefing schedule. Id. at
the State was aware of the intention of LPA and PJSC to raise
individualized defenses before the defendants submitted the
joint motion to dismiss on September 13, 2018. In light of
this advance notice to the State, and particularly because of
the early stage of this litigation, as well as the size and
complexity of the case, I conclude that LPA and PJSC did not
waive the defense of personal jurisdiction by failing to
raise it in the joint motion filed by them and sixty other
defendants. See Hamilton v. Atlas Turner, Inc., 197
F.3d 58, 60-61 (2d Cir. 1999) (observing that in determining
whether waiver or forfeiture of objections to personal
jurisdiction has occurred, “we consider all of the
State argues that the motions of LPA and PJSC should
nonetheless be denied because they are properly subject to
specific personal jurisdiction in this Court. ECF 365 at 13;
ECF 367 at 22. I address each motion in turn.
argues that this Court lacks personal jurisdiction because
the Complaint is devoid of “a single allegation against
[it].” ECF 342-1 at 3. Further, it asserts that it is a
“trading entity” that “simply has nothing
to do with the MTBE dispute.” Id. at 5.
fact, the Complaint contains few allegations specific to LPA.
It alleges only that LPA is a Delaware corporation, is
qualified to do business in Maryland, has a resident agent in
Maryland, and is “a successor in interest to relevant
assets of GPMI.” ECF 2, ¶ 62. However, the
Complaint alleges that defendants together “represent
substantially all of the Maryland market for MTBE
gasoline.” Id. ¶ 98. And, the evidence
submitted by the State and LPA shows the following: LPA is a
“trading company whose core business is buying and
selling crude oil and petroleum products such as . . .
gasoline, and gasoline components.” ECF 342-2 (Simon
Fenner Decl.), ¶ 4; ECF 365-1 (Bruce Burke Decl.),
¶ 27. It “essentially acts as a middleman.”
ECF 342-2, ¶ 5. LPA never bought, sold, blended, or
delivered MTBE products in Maryland. ECF 387-1 (Simon Fenner
Supp. Decl.), ¶¶ 2-6. In 2003 and 2004, however,
LPA sold large volumes of MTBE gasoline to several national
and regional distributors, including BP, Chevron, Hess,
Shell, and Valero. ECF 365-1, ¶¶ 28-29. Most of
these transactions involved delivery of gasoline to the
Colonial Pipeline, which is dedicated to the supply of
gasoline to Maryland, Delaware, New Jersey, Pennsylvania, and
New York. Id. ¶¶ 28, 30. Based on this
information, the State's expert concluded that LPA
supplied MTBE gasoline to Maryland during the relevant
period. Id. ¶ 30.
evidence plausibly demonstrates that LPA's contacts with
Maryland are similar to those of TPRI. That is, LPA sold and
shipped MTBE gasoline to national and regional distributors
via the Colonial Pipeline, a pipeline system dedicated to the
supply of gasoline in Maryland and the surrounding four
states. For similar reasons, therefore, the State has made a
prima facie showing that LPA is properly subject to this
Court's specific personal jurisdiction. See
supra, Section II.B.1. In particular, personal
jurisdiction is permitted under Maryland's long-arm
statute, which authorizes personal jurisdiction over any
person who “[c]auses 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.”
C.J. § 6-103(b)(4).
exercise of specific personal jurisdiction over LPA also
comports with due process. LPA sold and delivered MTBE
gasoline to large distributors along the Colonial Pipeline.
This conduct shows purposeful availment. See Vermont
MTBE, 142 A.3d at 225 (finding specific personal
jurisdiction over defendant who supplied MTBE gasoline to
distribution system whose network included the forum state);
In re MTBE, 399 F.Supp.2d at 332 (stating that
defendant “is subject to personal jurisdiction in each
of the forum states because it supplies MTBE-containing
gasoline to the national market.”). The State's
claims arise out of LPA's contacts with Maryland, as
required for specific personal jurisdiction. See
Goodyear, 564 U.S. at 919. And, LPA has not shown that
this Court's exercise of specific personal jurisdiction
over it would be unreasonable.
I shall deny LPA's motion to dismiss the Complaint for
lack of personal jurisdiction.
contends that this Court lacks personal jurisdiction over it
because it is a Russian holding company that has never been
directly involved in the supply chain for MTBE gasoline in
the United States. ECF 343-1 at 2-3. The State argues,
however, that PJSC is properly subject to specific personal
jurisdiction in this Court based on its own activities and
the activities of its indirect subsidiary, GPMI. ECF 367 at
exhibits submitted by the State and PJSC show the following.
PJSC is a Russian company that has hundreds of subsidiaries.
ECF 343-2 (Anatoly Martynov Decl.), ¶¶ 7-8. It owns
100 percent of Lukoil Americas Corporation
(“LAC”), which in turn owned 100 percent of GPMI,
a Maryland corporation, from 2000 to 2011. Id.
¶¶ 5, 14; ECF 367-2 at 67-74 (Merger Agreement of
Nov. 2, 2000); see also ECF 367-3 at 72 (stating
that “Getty is a wholly-owned subsidiary of [LAC],
which is in turn owned by [P]SC], Russia's largest
vertically integrated oil company.”). PJSC served as a
guarantor for GPMI on multiple contracts, including: (1) a
multi-year gasoline supply agreement between GPMI and BP
North America, another Maryland corporation, ECF 367-2 at
93-98 (Guaranty Agreement of Oct. 2, 2000); (2) GPMI's
lease agreement for hundreds of gas stations, including
stations in Maryland, id. at 158-77 (Guaranty
Agreement of Nov. 2, 2000); and (3) a $475 million loan GPMI
obtained in 2005, ECF 367-3 at 70, 86-112 (Guaranty Agreement
of Sept. 19, 2005). PJSC made significant other capital
contributions to GPMI. ECF 367-3 at 76 (“Furthermore,
to date [P]SC] has made over $50 million in capital
contributions to GPMI] and plans for additional contributions
going forward.”); ECF 2, ¶ 272.
also entered into a licensing agreement with GPMI to use the
Lukoil brand throughout the United States, and funded a
campaign for the rebranding of GPMI's gas stations. ECF
367-3 at 56-67 (License Agreement of Aug. 21, 2003); ECF
367-3 at 74 (Confidential Memorandum sent by PJSC and GPMI in
Aug. 2005 re $475 million loan, stating: “The
rebranding will be supported by a significant marketing and
advertising campaign (approximately $10MM per year) to be
funded by [P]SC], which should increase brand awareness as a
tier one brand and position Lukoil gasoline as a non-Middle
Eastern gasoline alternative.”). And, when GPMI became
unprofitable, PJSC allegedly orchestrated and carried out a
scheme to transfer all of GPMI's profitable assets to
another subsidiary and drive GPMI into bankruptcy. ECF 367 at
12- 16; ECF 2, ¶¶ 287-91.
however, the declaration submitted by PJSC states that PJSC
has never manufactured, distributed, sold, or purchased MTBE
in the United States (ECF 343-2, ¶ 12); never sold
gasoline in the United States, including gasoline containing
MTBE (id. ¶ 11); never owned or operated a
refinery, a petroleum product terminal, or service station in
the United States (id. ¶ 10); has no employees
and conducts no operations in the United States (id.
¶ 13); maintained its own books and records
(id. ¶ 20); and never controlled the day-to-day
operations of GPMI, including its budgeting, marketing,
operating, personnel, or sales. Id. ¶ 22.
threshold matter, I conclude that the State has not made a
prima facie showing that PJSC is subject to specific personal
jurisdiction in this Court based on its own conduct. It has
not shown that PJSC purposefully availed itself of doing
business in Maryland in any way, apart from its role as the
indirect corporate parent of GPMI, a Maryland corporation.
That alone is not enough. See Debt Relief Network, Inc.
v. Fewster, 367 F.Supp.2d 827, 830 (D. Md. 2005)
(“… it is also true that ‘a foreign parent
corporation is not subject to the jurisdiction of a forum
state merely because its subsidiary is present or doing
business there'”) (quoting Alpine View Co. v.
Atlas Copco AB, 205 F.3d 208, 218 (5th Cir. 2000));
see also Vitro Elec. v. Milgray Elec., Inc., 255 Md.
498, 502, 258 A.2d 749, 751 (1969) (“[A] forum
corporation is not construed as doing business within a state
merely because of its ownership of all of the shares of stock
of another corporation doing business in the state.”).
Moreover, PJSC's contacts with Maryland as the indirect
corporate parent of GPMI-serving as a guarantor on GPMI's
major contracts and providing capital to GPMI-do not provide
the basis for this suit. See Saudi, 427 F.3d at 276.
the question is whether PJSC is subject to personal
jurisdiction in this Court because of the activities of its
subsidiary, GPMI. It is well settled that “[a]
corporation exists as a legal entity separate and distinct
from its corporate shareholders.” Cancun Adventure
Tours, Inc. v. Underwater Designer Co., 862 F.2d 1044,
1047 (4th Cir. 1988); see United States v.
Bestfoods, 524 U.S. 51, 61 (1998) (“It is a
general principle of corporate law deeply ‘ingrained in
our economic and legal systems' that a parent corporation
. . . is not liable for the acts of its subsidiaries.”)
(citation omitted). Thus, “it is generally the case
that the contacts of a corporate subsidiary cannot impute
jurisdiction to its parent entity.” Saudi, 427
F.3d at 276.
the Fourth Circuit has observed: “‘[F]ederal
courts have consistently acknowledged that it is compatible
with due process for a court to exercise personal
jurisdiction over an individual . . . that would not
ordinarily be subject to personal jurisdiction in that court
when the individual . . . is an alter ego . . . of a
corporation that would be subject to personal jurisdiction in
that court.'” Newport News Holdings Corp. v.
Virtual City Vision, Inc., 650 F.3d 423, 433 (4th Cir.
2011) (quoting Patin v. Thoroughbred Power Boats
Inc., 294 F.3d 640, 653 n.18 (5th Cir. 2002))
(alterations in original). So, “[t]o assert
jurisdiction over a parent company based on the conduct of a
subsidiary, the court must find circumstances warranting it
to pierce the corporate veil.” Newman v. Motorola,
Inc., 125 F.Supp.2d 717, 722-23 (D. Md. 2000). The law
of the forum state determines whether the corporate veil
should be pierced to exercise personal jurisdiction over a
nonresident defendant. Burns & Russell Co. v.
Oldcastle, Inc., 198 F.Supp.2d 687, 697 (D. Md. 2002).
“Maryland generally is more restrictive than other
jurisdictions in allowing a plaintiff to pierce the corporate
veil.” Harte-Hanks Direct Mktg./Balt., Inc. v.
Varilease Tech. Fin. Grp., 299 F.Supp.2d 505, 514 (D.
Md. 2004) (citing Residential Warranty Corp. v. Bancroft
Homes Greenspring Valley, Inc., 126 Md.App. 294, 728
A.2d 783, 790-91 (1999)). The Maryland Court of Appeals has
adopted the so called “agency” test in deciding
whether to pierce the veil separating parent corporations
from their subsidiaries for jurisdictional purposes.
Mylan Labs, 2 F.3d at 61 (citing Vitro
Elec., 255 Md. at 501-03, 258 A.2d at 751-52); Haley
Paint Co. v. E.I. Dupont De Nemours & Co., 775
F.Supp.2d 790, 797 (D. Md. 2011). Under the agency test, the
court may attribute the actions of a subsidiary corporation
to the parent corporation only if the parent exerts
considerable control over the activities of the subsidiary.
Mylan Labs, 2 F.3d at 61 (citing Cannon Mfg. Co.
v. Cudahy Packing Co., 267 U.S. 333, 335-38 (1925));
see Fin. Co. of Am. v. Bank of Am. Corp., 493
F.Supp. 895, 903-08 (D. Md. 1980). The central inquiry is
“whether significant decisions of the subsidiary must
be approved by the parent.” Mylan Labs, 2 F.3d
consider various factors in determining whether the requisite
level of control exists, such as “whether the parent
and subsidiary maintain separate books and records, employ
separate accounting procedures, and hold separate
directors' meetings.” Id. In addition,
courts consider “the level of interdependence between
parent and subsidiary.” Id. (citing Harris
v. Arlen Props., Inc., 256 Md. 185, 200, 260 A.2d 22, 29
(1969)). “Finally, the court must find that [the
parent] knew, or should have known, that its conduct would
have some impact in Maryland.” Mylan Labs, at
exhibits demonstrate that PJSC exercised some control over
GPMI. PJSC contributed capital to GPMI, served as a guarantor
on GPMI's major contracts, oversaw GPMI's budget, and
shared its brand name with GPMI. But, the exhibits also show
that PJSC and GPMI existed largely as separate entities; they
maintained their own books and records, had their own boards
of directors, and did not comingle their accounts. ECF 343-2,
¶¶ 18, 20. Moreover, in the declaration submitted
by PJSC in support of its motion, its corporate
representative asserts that PJSC never exercised control over
the day-to-day operations of GPMI. Id. ¶ 22.
these facts, the State has not sustained its burden of
showing that PJSC exerted a degree of control over GPMI
greater than that of a typical parent company and, thus, that
GPMI's contacts with Maryland may be imputed to PJSC for
jurisdictional purposes. See Haley Paint Co. v. E.I.
Dupont de Nemours & Co., No. RDB-10-0318, 2012 WL
1145027, at *4 (D. Md. Apr. 3, 2012) (finding insufficient
control where evidence showed that parent company was
required to “approve the most significant contracts
entered into by [the subsidiary]” but that subsidiary
had significant autonomy in its day-to-day operations);
Newman, 125 F.Supp.2d at 723 (declining to pierce
the corporate veil where the parent and subsidiary used
consolidated financial statements and the parent had to
approve major decisions of the subsidiary because the
subsidiary was a separate corporate entity with its own
financial records and there was no allegation that subsidiary
was merely a sham company); see also Call Carl, Inc. v.
BP Oil Corp., 391 F.Supp. 367, 371 (D. Md. 1975)
(“Notwithstanding the fact that the parent may own all
of a subsidiary's stock, and interlocking directorships
may exist between the two corporations, it is axiomatic that
if a subsidiary maintains its own books and accounts, and
makes its own marketing, purchasing, management and other
policy decisions, it cannot be held to be acting as an agent
of the parent.”).
the facts in the light most favorable to the State, I
conclude that the State has not made a prima facie case for
personal jurisdiction over PJSC. The record is devoid of
facts from which sufficient minimum contacts with Maryland
may be reasonably inferred. And, the exercise of personal
jurisdiction over PJSC, a foreign corporation, would impose a
significant burden upon it. See Asahi Metal Indus. Co. v.
Superior Court of Cal., Solano Cty., 480 U.S. 102, 115
(1987) (“The unique burdens placed upon one who must
defend oneself in a foreign legal system should have
significant weight in assessing the reasonableness of
stretching the long arm of personal jurisdiction over
national borders.”). In these circumstances, subjecting
PJSC to personal jurisdiction in this Court would
“offend ‘traditional notions of fair play and
substantial justice.'” Int'l Shoe, 326
U.S. at 316 (quoting Milliken, 311 U.S. at 463).
alternative to granting PJSC's motion, the State asks the
Court for the opportunity to conduct limited jurisdictional
discovery. ECF 367 at 30-31. Specifically, the State argues
that jurisdictional discovery “into [P]SC]'s own
contacts with Maryland, as well as its role in managing GPMI,
would resolve any uncertainty about [P]SC]'s involvement
in GPMI's blending and sale of MTBE gasoline in
Maryland.” Id. at 31.
under the Federal Rules of Civil Procedure is broad in scope
and freely permitted.” Mylan Labs, 2 F.3d at
64. However, district courts “‘have broad
discretion in [their] resolution of discovery problems that
arise in cases pending before [them].'”
Carefirst of Md., 334 F.3d at 402 (quoting Mylan
Labs, 2 F.3d at 64) (alterations in Mylan
Labs). In some cases, where the record suggests some
indicia of personal jurisdiction, limited jurisdictional
discovery may be warranted to ascertain more facts. See,
e.g., Combs, 886 F.2d at 676-77
(defendants' solicitations to investors in the forum
state were sufficient to establish a prima facie case for
jurisdiction); Androutsos v. Fairfax Hosp., 323 Md.
634, 649-50, 594 A.2d 574 (1991) (defendant's
advertisement directed at forum state was indicia of personal
jurisdiction). But, “[w]hen a plaintiff offers only
speculation or conclusory assertions about contacts with a
forum state, a court is within its discretion in denying
jurisdictional discovery.” Carefirst of Md.,
334 F.3d at 402-03 (citing McLaughlin v. McPhail,
707 F.2d 800, 806 (4th Cir. 1983) (concluding that district
court did not abuse its discretion in denying jurisdictional
discovery when, “[a]gainst the defendants'
affidavits, ” plaintiff “offered nothing beyond
his bare allegations that the defendants had had significant
contacts with the [forum] state of Maryland”)).
the Fourth Circuit has said that, “where a
plaintiff's claim of personal jurisdiction appears to be
both attenuated and based on bare allegations in the face of
specific denials made by defendants, the court need not
permit even limited discovery confined to issues of personal
jurisdiction should it conclude that such discovery will be a
fishing expedition.” Carefirst of Md., 334
F.3d at 403 (citation omitted); see Unspam Tech., Inc. v.
Chernuk, 716 F.3d 322, 330 n.1 (4th Cir. 2013)
(suggesting that the court did not abuse its discretion in
denying jurisdictional discovery based on conclusory
allegations of personal jurisdiction); ALS Scan, 293
F.3d at 716 n.3 (upholding district court's refusal to
allow plaintiff to engage in jurisdictional discovery where
plaintiff's request was based on “conclusory
view, jurisdictional discovery is not warranted here. The
record lacks any plausible indicia that PJSC had minimum
contacts with Maryland or exerted so much control over its
subsidiary, GPMI, such that GPMI's contacts may be
imputed to PJSC. The State has not pointed to facts that
contradict PJSC's declaration, (ECF 343-2), outlined
earlier, nor has it suggested any reason to question its
accuracy. Although this Court “must take all disputed
facts and reasonable inferences in favor of the plaintiff,
” Carefirst of Md., 334 F.3d at 396, it is
“not required to look solely to the plaintiff's
proof in drawing those inferences, ” Mylan
Labs, 2 F.3d at 62.
I will deny the State's request for jurisdictional
discovery as an alternative to ruling on the issue of
personal jurisdiction over PJSC. And, I shall grant