United States District Court, D. Maryland
PATRICK KELLY, (Individually and Derivatively on Behalf of Emerald Green Ventures, LLC) Plaintiff,
JOHN POWERS, et al, Defendants.
K. Bredar, Chief Judge.
Kelly ("Plaintiff or "Kelly") instituted this
suit in the Maryland Circuit Court for Baltimore City (Case
No. 24-C-19-003016) on May 28, 2019. Kelly, individually and
derivatively on behalf of Emerald Green Ventures, LLC
("Emerald"), filed claims for inter alia,
conversion, unjust enrichment, constructive fraud based upon
breach of fiduciary duty, violation of the Maryland Uniform
Trade Secrets Act, fraud, and civil conspiracy against John
Powers, Meredith Priddy, James Tracy Taylor, Daniel Powers,
Brent Berisford, and Rx Remedies, Inc. (collectively,
"Defendants"). Defendants removed this action to
this Court on the asserted basis of federal question
jurisdiction pursuant to 28 U.S.C. §1338, (See
Notice of Removal, ECF No. 1.) Pending before the Court is
Plaintiffs Motion to Remand (ECF No. 22) and the
Defendants' Motion to Dismiss (ECF No. 15). The motions
have been briefed (see ECF Nos. 19, 24, 25) and are
ripe for disposition. No hearing is necessary. Local Rule
105.6 (D. Md. 2018). Both Plaintiffs Motion to Remand and
Defendants' Motion to Dismiss will be denied.
case presents a relatively straightforward dispute among the
parties to a business venture who had a falling out and then
one party was left behind. That party, Kelly, now seeks to
recover for injuries allegedly suffered as a result of his
business partners stealing the business out from under him.
and Taylor met in 2015 and collaborated on developing a
business utilizing Taylor's expertise in pharmacology and
toxicology and extensive research on
cannabidiol ("CBD"). (Mt. to Dismiss at 3,
ECF No. 15.) In September 2015, they formed Emerald as an
investment vehicle to develop a supply chain for CBD that
involved growing hemp plants and processing and manufacturing
the CBD oils into marketable consumer products. (Id.
at 4.) Kelly held the majority interest and Taylor a minority
interest in Emerald. (Compl. at 3.) In 2017, bioRemedies was
formed to act as the operating company for the business
venture. (Mt. to Dismiss at 4.) Emerald is the majority
member of bioRemedies. bioRemedies grows and sells full-spectrum,
CO2 extracted, hemp-derived CBD products (Compl.
at 2), using formulas developed exclusively by Taylor (Mt. to
Dismiss at 3.) Taylor originally owned the formulas, but he
assigned all of his title and interest to PT Holdings, LLC,
an entity that now owns and controls the formulas.
(Id. at 3, 11.)
to Kelly, business was booming until certain events
precipitated the Defendants entering into an illegal
conspiracy to freeze Kelly out and to steal control of
Emerald and bioRemedies. (Compl. at 3.) Around November 15,
2018, a massive crop failure in Colorado caused significant
financial losses to the business. (Mt. to Dismiss at 5.) Due
to the negative impact, Defendants insisted that Kelly inform
the investors of Emerald but he refused. (Id.)
claims that several employees and officers of Emerald and
bioRemedies resigned, and while still working for those
companies, incorporated Rx Remedies, a new entity that would
operate as a direct competitor of bioRemedies. (Compl. at
3-4.) In the process of starting up Rx Remedies, Defendants
allegedly misappropriated funds, assets, intangible assets,
customer lists, formulas, etc. and began operating the same
or substantially the same business without Kelly.
surprisingly, Defendants tell a different version of events.
Defendants claim that Kelly staged an unlawful
"coup" within bioRemedies by unilaterally deciding
that bioRemedies would focus on hemp agriculture instead of
the production of pharmaceutical grade CBD products, and that
it would be moving to a new location. (Mt. to Dismiss at 5.)
When Defendants were not "on board" with the new
business model, Defendants assert that Kelly terminated all
bioRemedies' employees except Taylor. Defendants then
moved forward, forming and operating Rx Remedies without
Standard for Remand
federal courts are courts of limited jurisdiction, a cause of
action is presumed to lie outside of that limited
jurisdiction, and the burden of establishing otherwise rests
upon the party asserting jurisdiction. Barbour v.
Int'l Union, 640 F.3d 599, 605 (4th Cir. 2011)
(en banc), abrogated on other grounds by 28 U.S.C.
§ 1446(b)(2)(B). In particular, removal statutes are to
be strictly construed, and doubts regarding the propriety of
removal should be resolved in favor of remanding the case to
state court. Id. Section 1447(c) provides for remand
if the District Court lacks jurisdiction over the matter.
Analysis of Motion to Remand
moves to remand this case to the Circuit Court on the ground
that his complaint raises no federal claims and all asserted
claims are based upon Maryland common law and/or statutory
law. He contends that the claims may be resolved without
resort to federal law; thus, a federal question is not
"necessarily raised" by the complaint and
accordingly, this Court lacks subject matter jurisdiction.
Kelly further argues that jurisdiction may not be premised
upon a federal defense. Burrell v. Bayer
Corporation, 918 F.3d 372, 381 (4th Cir. 2019) ("It
is not enough that federal law becomes relevant by virtue of
a 'defense... anticipated in the plaintiffs
complaint."' (quoting Franchise TaxBd. v.
Constr. Laborers Vacation Tr., 463 U.S. 1, 13 (1983))).
oppose the Motion arguing that the complaint, itself, asserts
breach of fiduciary duty, fraud, and civil conspiracy related
to, and conversion of, copyrighted material. In the Notice of
Removal, Defendants also point to Plaintiffs multiple
references to "intangible property, " as well as a
letter from Kelly to bioRemedies' investors informing
them of an attempt to file unauthorized trademarks on the
company name, logo and product names (see ECF No.
3). Last, Defendants ...